The copper is in the pre-filter press feed tank and will be sent to the concentrate press over the coming days, ending the company's 10-year dependence on its Prominent Hill copper-gold mine as its sole source of income. 

 

It aims to produce 20,000-25,000 tonnes copper and 35,000-40,000 ounces gold at C1 cash costs of US$1.80 per pound, with costs higher in the first half of the year due to the mine's fixed costs, but they should fall as the production increases.

 

The company will now begin a year-long ramp-up towards 4.25Mt per annum throughput rate - assuming the sub-level caving operations perform as expected.

 

RBC Capital Markets analyst Paul Hissey has cautioned investors that the most critical risks remain for the development.

 

Several other mines have suffered setbacks at the project execution stage in recent years, and ramp-up issues at Carrapateena could hurt OZ's stock given RBC ascribes around 75% of OZ's valuation to Carrapateena.

 

"Initial guidance parameters for 2020 indicate downside to our estimates for both copper production and cash costs," he said, reiterating his underperform rating.

 

OZ will release refined guidance in January, and Hissey said the information could indicate a further drag to cashflow and earnings.

 

OZ is pursuing a larger sub-level cave footprint and optimised mine design that expected to enable a faster 12-month ramp-up than the original 18-month schedule OZ CEO Andrew Cole said.

 

"The streamlined mine design with an expanded footprint will improve cave establishment, reduce risk during the ramp-up phase and may enable future annual throughput expansion opportunities as we continue to assess options to expand capacity above 4.25Mtpa," he said. 

 

A block cave expansion scoping study looking at increasing both the life and production capacity of Carrapateena from 2025 is expected to be completed next year.

 

It could support future annual throughput expansion opportunities that could see production exceed 100,000tpa from the middle of the 2020s.

 

Carrapateena contains an estimated 5.2Mt of copper and 7.4 Moz of gold.

 

It was famously discovered by Rudy Gomez, who originally explored the area in the late 1980s for salt.

 

After a JV with MIM and Terramin Australia ended in 2004, Gomez gained some funding support from the SA taxpayer, combined with his superannuation and money from friends to hit the jackpot: 178m at 1.83% copper and 0.64 grams per tonne gold from 476m in the second of two holes.

 

OZ purchased the project in 2011 for $325 million, with Gomez believed to have pocketed $130 million.

 

Carrapateena's development began with decline works in mid-2016, was formally approved in August 2017, with first development ore mined in April 2019.