Copper and gold miner OZ Minerals will continue to hunt for takeovers as it advances the $2 billion Carapateena project.
The company also reiterated its full year copper production target, despite a third quarter output dip.
OZ Minerals it would concurrently push ahead with its newly acquired Carapateena copper and gold project in South Australia, where exploration was ramping up, and hunt for potential acquisitions.
“At this stage, I think we’ll be able to do both,” chief executive Terry Burgess told a teleconference on Wednesday.
Mr Burgess said OZ Minerals might have a sufficient cash balance and cashflow from Prominent Hill to self-fund development of Carapateena, but this depended on future commodity prices.
A planned underground mine development at Carapateena is expected to cost about $1 billion while a processing plant should cost another $1 billion.
“It’s a possibility that the bulk if not all of the requirements for Carapateena could be self-funded,” he said.
“One of the ideas that we have is maybe start in the upper portion of the orebody. That will cost us less capital but give us a faster cashflow, which could then fund the deeper mining, but we’re crystal ball gazing at this stage.”
Mr Burgess said the company’s $750 million business development budget would be kept aside for acquisitions and not be used for general business activities.
“We need to be ready to look at opportunities,” he said.
OZ Minerals has been seeking acquisitions since mid 2009.
OZ Minerals also said it would achieve its annual copper production guidance of 100,000 tonnes to 110,000 tonnes, regardless of a 2.8 per cent drop in output of the metal in the September quarter compared to the same period last year.
Gold production fell 18.4 per cent in the third quarter of this calendar year to 36,064 ounces, reflecting the treatment of lower grade gold ores.
OZ Minerals said the focus at its flagship Prominent Hill mine in SA was copper production, so it occasionally reduced the amount of gold ore in the processing plant “feed blend” to achieve copper targets.
Forecast full year gold production is between 150,000 ounces and 160,000 ounces.
Shares in the miner closed up 25 cents, or 2.2 per cent, at $11.61.
