BHP (ASX:BHP) has released its initial estimate of the Oak Dam prospect in South Australia, revealing a substantial underground copper and gold deposit. Located 65 kilometres from the company’s massive Olympic Dam mine, the deposit contains an estimated 1.3 billion tonnes of copper and gold.
While impressive, Oak Dam is not as large as Olympic Dam, the world’s fourth-largest copper deposit and largest uranium deposit. Additionally, Oak Dam lacks the diverse mineral composition of Olympic Dam, which includes copper, gold, uranium, and silver.
However, Oak Dam is still a significant find. With a grade of 0.66% copper and 0.33% gold, the deposit currently totals over 1.3 billion tonnes. Further exploration is expected to increase this figure, as mineralisation remains open to the north and at depth.
BHP has also identified a higher-grade area within Oak Dam, totaling 220 million tonnes with a grade of 1.96% copper and 0.68% gold (at a 1% copper cutoff). This could potentially be the target for an initial mining operation.
Olympic Dam, on the other hand, boasts reserves of over 2.9 billion tonnes, with additional mineralisation below the current mine in the Olympic Dam Deeps. The average grade of the Deeps is 1% copper, compared to the known mineralisation’s grade of 1.2% copper.
Earlier this year, BHP sought approvals to construct an access shaft system for Oak Dam, enabling more targeted drilling and exploration. The company has now expanded this initiative to include improved access to the Deeps area at Olympic Dam.
According to BHP’s announcement on Tuesday, the Oak Dam reserve estimate is based on drilling and assaying completed as of April 28, 2024, and estimation completed on July 24, 2024.
“Approximately 158 kilometres of drilling has been conducted for the Oak Dam Mineral Resource, with nominal drillhole spacing ranging from 80 metres to over 200 metres perpendicular to the interpreted orebody orientation. Resource definition and advanced exploration activities continue at Oak Dam,” BHP stated.
The estimate of 1.3 billion tonnes is based on a non-selective block caving mining method, where a large area is mined beneath the mineralisation and collapsed. The material is then processed and transported to the surface. Some companies employ a selective system to target higher-grade areas.
BHP indicated that the timeframe for potential development of an underground mine at Oak Dam is currently unknown. Further resource development and mining studies are necessary.
Exploration efforts have outlined the primary area of the Oak Dam resource, which extends approximately 1,600 metres along the strike, with a maximum across-strike extent of 900 metres (including a barren core). The deposit has a vertical extent of approximately 1 kilometre, beginning at a depth of 760 metres.
BHP believes that the mineralisation at Oak Dam is open at depth and to the north of the classified resource. Faults may truncate certain facets of the deposit, and there is potential for offset mineralisation in other locations. Ongoing work aims to define the full extent of the system.
With Oak Dam, BHP now has four copper/gold mines, including Olympic Dam with its uranium and silver deposits. The Deeps area beneath Olympic Dam is considered a separate mining target. Additionally, BHP operates the former OZ Minerals operations at Prominent Hill and Carapateena.
The company is currently expanding both Prominent Hill and Carapateena, extending their mine lives into the mid to late 2030s.
