Hillside Project
Re-birth of the Copper Industry on the Yorke Peninsula, South Australia
Hillside Project Overview
Rex is developing its 100%-owned Hillside Project, located 12km south of the Ardrossan township on the Yorke Peninsula, South Australia. Hillside is an Iron Oxide Copper Gold (IOCG) deposit in the Gawler Craton.
Hillside is one of the largest undeveloped copper projects in Australia and currently contains a Mineral Resource of 1.9Mt of copper (Cu) and 1.5Moz of gold (Au). In July 2020, Hillside’s PEPR for Stage One of the Project was approved by the South Australian Government. Stage One has a 11-year mine life.
The Project involves the development of an open pit mine (Mine) and associated processing plant and other infrastructure (Plant) to mine and process ore, then ship the marketable concentrates. The capital expenditure for the development of the Project is estimated to be A$854M (US$598M). Capital cost estimates are within +/- 15% accuracy and the operating costs estimates are within +/- 20% accuracy.
Location and Infrastructure
The Hillside Project is approximately 150kms by road from Adelaide, with access to a significant workforce in neighbouring townships. Temporary workers’ accommodation facilities will be provided for construction at a camp in the vicinity of the Hillside mine. The camp will be built, owned and operated by a facility management company that will charge a nightly rate per person.
A section of the Yorke Highway will be realigned, and modifications and upgrades to sections of the surrounding roads to improve site access and bypass. Costs for these works have been included in the capital cost estimates.
The site has access to mains power through the network grid. Sea water will be used for processing and mining operations as per the license conditions. The transport of final product will be via trucks to Port Adelaide.
Figure 2: Location diagram of the Hillside Project, Yorke Peninsula, South Australia
Regulatory Approvals
The Hillside Mining Mineral Lease (ML), an Extractive Minerals Lease (EML) and a Miscellaneous Purposes Licence (MPL) were granted in September 2014.
In addition, the PEPR was approved in July 2020. See Rex Minerals’ ASX Announcement: Rex secures SA Government approval for Hillside PEPR, 24 July 2020
Key Characteristics
The key attributes of the Stage 1 Open Pit Project include:
General
Ownership
Rex has 100% ownership of the Project.
Project - Project development includes construction of the open pit mine, processing facility, water, power supply options and associated infrastructure. Optimised Feasibility and Definition Phase Engineering Study (OFS) economics for Stage 1 – published 14 December 2022.
Location
The Project is located on the Yorke Pennisula, South Australia, 165km (less than two hours drive) from Adelaide (capital city) and 12km south of Ardrossan township. South Australia was ranked 10th globally for investment attractiveness by the Fraser Institute in its 2021 annual survey of 84 jurisdictions.
Tenure
The Project’s Mineral Lease (ML), Extractive Minerals Lease (EML) and infrastructure corridor Miscellaneous Purposes Licence (MPL) were granted in 2014. These include options for the expansion to Stage 2 and processing of iron oxide ore. Rex owns 100% of the land of the Stage 1 operational footprint.
Approvals
All Federal and key State government approvals have been granted, and the Project has widespread support from the local community and stakeholders.
ESG
Rex has experienced leadership driving the best ESG practices, supported by a sound governance framework. Low impact design, stable jurisdiction, favourable location and strong record of local engagement.
Significant potential
The Stage 1 Mine Plan could transition into Stage 2 and beyond by year 5. The mine and potential plant expansion would significantly increase the revenue and the mine life well beyond 20 years. Stage 1 exploits only 26% of the 2022 Mineral Resource.
Geology
Regional
The Hillside Mineral Resource is located within the Moonta Subdomain of the Olympic Cu-Au Province of the eastern Gawler Craton of South Australia. This Craton also hosts the Olympic Dam, Prominent Hill, Carrapateena, and Moonta-Wallaroo deposits.
Project
The Project sits within the Pine Point Structural Corridor. The mineralisation is typically sub vertical, striking north-south. It is bounded to by felsic volcanics to the west and granites to the east. Skarns host most of the higher-grade mineralisation. There is approximately 30m of tertiary cover and oxide ore that overlays the primary sulphide orebody. The dominant primary copper sulphide is chalcopyrite with gold and reports to copper concentrate.
Resources/Reserves
Mineral Resource
Audited JORC 2012 Mineral Resource (Resource) of 337Mt at 0.56% copper and 0.14g/t gold for 1,897kt of contained copper and 1,528koz of gold (December 2022).
Ore Reserve
The Stage 1 Mine Plan contains Proved and Probable Ore Reserves of 82Mt at 0.62% copper and 0.17g/t gold for 505kt contained copper tonnes and 435kt contained gold ounces. With an increase in commodity prices in late 2020, Rex has considered a Stage 2 transition mine plan. In December 2022, the Company published an updated Ore Reserve estimate of 186Mt @ 0.53% Cu and 0.14g/t Au, containing 989kt of copper and 834kozs of gold. A decision to transition to the Stage 2 Mine Plan could occur by year 5 subject to further Board and regulatory approvals.
Mining and Production
Milestones
Commencement of pre-development activities commenced in 2022 and subject to financing, the first concentrate delivery timing is scheduled Q4 CY 2025.
Mining Method
The Stage 1 open pit operation is mined in five phases with selective ore mining and stockpiling. Average total material movement from the open pit of 65Mt per year. Life of Mine (LOM) strip ratio is 7.5:1 or (6.9:1 following pre-strip and mine development).
Processing Method
Processing utilises proven equipment and technology and includes, a gyratory crusher and single stage 11m (16MW) semi-autogenous grinding (SAG) mill with pebble crushing circuit coupled with a conventional roughing circuit and 2 stage (2.2MW & 0.5MW) regrind on concentrate. An average processing head grade of 0.62% copper and 0.17g/t gold during Stage 1 of production.
Plant Throughput
Plant throughput will commence at 6Mtpa, however the process equipment has been designed/sized for 8Mtpa to enable throughput expansion once stable operation (mining and processing) is achieved.
Mine Life
Stage 1 is one year of mine development followed by approximately 11 years of mining.
Transport
Concentrate Transport
Annual production from the Stage 1 Mine Plan is projected to average 151,500t of copper concentrate containing 42,000t of copper and 30,500oz of gold. The copper-gold concentrate will be trucked via the highway to the port of Port Adelaide.
Supporting Infrastructure
Water
Most of the water for processing is sourced from local saline bores. Additional potable water will be supplied to site by SA Water.
Power
There is mains power of 132kV within 10km of the site. Electricity will be supplied to the site via the local South Australian power grid. Electricity from the South Australia power grid is currently 68% sourced from renewable energy. Rex will explore the use of existing and potential renewable energy, to further reduce the Project’s carbon footprint, as appropriate opportunities arise.
Labour force
Direct workforce of over 400 people (over 500 during construction) with over 2,000 expressions of interest received for potential positions at the Project.