Freeport extends Grasberg's mine life
Freeport extends Grasberg's mine life
NEW ORLEANS, USA (Reuter): Freeport-McMoran Copper & Gold Inc said proved and probable recoverable reserves associated with its Grasberg copper/gold/silver deposit in Irian Jaya, Indonesia, have increased by some 600 million metric tons of ore, increasing the mine's life to about 45 years from the previously estimated 26 years.
The deposit is in the Block A area of Freeport's Jaya properties where RTZ Corp Plc. has a right to participate with a 40 percent interest in newly discovered reserves, Freeport said.
RTZ's participation is conditional on the company funding up to US$750 million for expansion of Freeport's existing mine and milling operations. RTZ would receive 100 percent of incremental cash flow attributed to the expansion until it has received an amount equal to the funds it has provided plus interest on an amount representing Freeport's 60 percent share of the costs of the expansion.
Freeport said the reserve additions average 1.18 percent copper, 1.10 grams per ton gold, and 4.54 grams per ton silver.
It said this represents an increase of 12.7 billion pounds of copper (or 57 percent), 14.2 million ounces of gold (or 43 percent), and 41.2 million ounces of silver (or 83 percent).
The new reserves are located above the 2,850 meter elevation directly beneath the Grasberg open-pit mine and also extend upward above the 3,060 meter elevation to include ores that were not minable with the open pit.
The majority of the added reserves will be mined by underground block caving techniques at the completion of open-pit mining at Grasberg, the company said.
However, studies are underway to develop alternative mining plans to allow for co-production of a high-grade (3 percent to 5 percent copper equivalents) portion of these new reserves in conjunction with the mining of the Grasberg open-pit reserve.
The Grasberg orebody remains open at depth, it said.
On Dec. 31, 1994, Freeport noted, it had total proved and probable recoverable reserves totaling 1.1 billion metric tons averaging 1.30 percent copper, 1.42 grams per ton gold and 4.06 grams per ton silver representing 28.0 billion pounds of copper, 39.6 million ounces of gold and 80.8 million ounces of silver.
The company said reserves for its mines, after adjustments that include estimates for 1995 production, now approximate an aggregate 1.7 billion metric tons averaging 1.26 percent copper, 1.31 grams per ton gold and 4.24 grams per ton silver representing 38.2 billion pounds of copper, 47.6 million ounces of gold and 108.5 million ounces of silver.