Updated DFS delivers bigger and better Cloncurry Copper Gold Project

Altona Mining Limited (“Altona” or “the Company”) today announces an update of the Definitive Feasibility Study (“DFS”) of the Cloncurry Copper Project (“Project”), 90 kilometres north-east of Mt Isa in Queensland, Australia.

Altona Managing Director, Dr Alistair Cowden said, “We are delighted with the study update which results in annual operating surplus before tax and sustaining capital of approximately A$141 million. This highlights the value that will be released once the project is developed.”

The study has been completed to provide an up to date status of the Project which consolidates and integrates all technical work of prior studies with a number of significant developments since the initial DFS in May 2012 and the update to the DFS in March 2014 that impact on costs, revenues and design. They include:

• New Resource estimates and geological/geotechnical models for the Little Eva and Bedford deposits. Please note these new estimates have not yet been used to generate new Ore Reserve estimates.
• Mineral Resource and Ore Reserve estimates for the Turkey Creek deposit
• Metallurgical testwork of Turkey Creek ore
• Inclusion of the Turkey Creek deposit in mine plan
• Re-design and re-location of infrastructure and waste dumps to accommodate Turkey Creek pit
• A reduction in engineering and construction costs
• Updated cost estimates
• Updated Environmental Authority to reflect inclusion of Turkey Creek
• Changes to macro-economic assumptions.

The study also identified a number of areas for improvement to be addressed in project optimisation:

• Reserve expansion through converting Inferred Resources below Little Eva pit to Indicated Resources
• RC drilling for better definition of grade control, dilution and ore loss
• Updated Little Eva Resource model
• Geotechnical model constructed indicating opportunity for improvement in mine design
• Little Eva pit optimisation and design using lower current mining costs and upgraded Resource model
• Resource upside at satellite pits
• Consideration of higher plant throughput if Reserve increase warrants expansion
• Increased water resources to support higher throughput.

The study also recommends examining the opportunity of expanding production by inclusion of copper-only deposits not considered in the DFS.

Compared to the 2014 DFS, this study has delivered material improvements:

• Reserves up 14% from 375kt copper to 426kt copper
• Mine life up 27% from 11 years to 14 years
• Life of mine revenue up 24% from A$2.9 billion to A$3.6 billion
• NPV (pre-tax) up 34% from A$346 to A$462 million
• IRR (pre-tax) up 24% from 29% to 36%.

The Project comprises a large scale open pit mine at Little Eva and five satellite pits; Turkey Creek, Bedford North and South, Lady Clayre and Ivy Ann. Ore will be processed at a 7 million tonnes per annum processing plant adjacent to Little Eva and Turkey Creek. The Little Eva pit has a low strip ratio of 1.8:1 (excluding pre-strip). The Project has an initial 14 year life.

The Little Eva processing plant will have a technically simple crushing, grinding and flotation circuit resulting in the pre-production capital cost including pre-strip, processing plant and associated infrastructure being A$288 million. The operation will produce 150,000 tonnes per annum of readily marketable, clean copper-gold concentrate containing an average of 39,000 tonnes per annum copper and 17,200 ounces per annum gold for the first 5 years of full production. High metal recoveries of 96% copper and 85% gold are achievable at a coarse grind size of 212 microns. The mill feed grade averages 0.6% copper and 0.1g/t gold excluding marginal grade stockpiles.

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