Aurelia Metals has paused the prefeasibility study for its Nymagee copper asset after receiving less than favorable testwork results.
The company announced this week that recent testwork indicates that ore from Nymagee, located in New South Wales, is contaminated with talc and pyrrhotite, making the base metal recoveries estimated in a previously announced scoping study “unlikely” to be achievable.
On top of the contamination itself, the work index of ore tested was higher than the scoping study had estimated, which led to lower throughput rates and higher power consumption. As such, there were higher operating and capital costs than expected, putting a dent in the company’s estimates of economically recoverable resource tonnes.
“In light of recent metallurgical testwork results from Nymagee, we believe the decision to defer further work on the Nymagee PFS is financially and technically prudent,” Aurelia Chairman and Acting CEO Cobb Johnstone said in a statement.
“Aurelia plans to undertake further exploration and project scoping work at Nymagee and if successful may revisit the development potential of this asset in the future.”
While plans at Nymagee are currently on hold, the company has broadened its horizons with an expanded exploration budget of $15 million for the 2020 financial year, which Johnstone said is an increase of over 100 percent. The budget from the year previous has been $4 million with actual spending being closer to $8 million based on successful exploration that was achieved.
According to Aurelia, the company’s primary exploration targets will be the Federation and Dominion discoveries near its Hera deposit, line-of-lode targets at the Peak gold mine, regional exploration and near-mine targets at Hera and Nymagee.
Despite the disappointment at Nymagee, Johnstone went on to highlight that drilling over the last year at Hera, in combination with a reduced cost structure at the mine, will likely see the operation’s lifespan extended to 2023.
“This mine life extension, combined with a number of highly prospective nearby targets, provides us with confidence on the long term future of the Hera operation.”
Aurelia shares were up 3.45 percent by the end of Wednesday (June 5), closing on the ASX at AU$0.60. As of Tuesday (June 4), copper was trading at US$5,803 per tonne on the London Metal Exchange.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.