Oxiana (OXR) announced today that it has approved a $200 million expansion at its Sepon copper project in Laos in order to increase copper output by as much as 30%.
The gold and copper explorer said that by 2010, copper production will be increased from 60,000 to 80, 000 tonnes per annum.
"This expansion is of suitable design and scale to support further potential expansion to Oxiana's target of 100,000 tonnes per annum," said Oxiana managing director Owen Hegarty.
"Oxiana earns a premium over LME (London Metal Exchange) copper prices as a direct consequence of producing copper metal rather than concentrate, and benefits further from the proximity to major end-users in Thailand, Vietnam, Malaysia and China."
Oxiana's Sepon copper project commenced production in 2005, and in 2007 will produce 60,000 to 63,000 tonnes of copper metal cathodes.
Oxiana said the expansion is likely to decrease overall life-of-mine operating costs by about 10 per cent and the incremental cost to produce the additional copper will be less than US50 cents per pound.
"This expansion will continue to ensure the operating cost competitiveness of the Sepon mine," Oxiana said.
"The potential for discovery of additional copper Resources in the Sepon area remains high"
"Many target areas remain to be tested and recent drilling results, including those from the newly discovered Pha Bing deposit, indicate that further high grade copper mineralisation like that at Khanong and Thengkham is likely to be discovered elsewhere in Oxiana's tenement."
Oxiana said the Sepon Copper project has been an outstanding investment for the company, having already generating earnings before interest taxes, depreciation and amortisation of US$750 million.
Despite the news, Oxiana fell 4 cents to $3.89.
