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BIL
BIBLT
BIL - BHP Billiton Plc - Major investment and reserve increase at Escondida
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
14 February 2012
06/12
MAJOR INVESTMENT AND RESERVE INCREASE AT ESCONDIDA
BHP Billiton today approved a total investment of US$2.6 billion in two
projects that will underpin higher production at Escondida over the next
decade.
Organic Growth Project 1 (OGP1) will replace the Los Colorados concentrator
with a new 152,000 tonne per day (tpd) plant and allow access to higher grade
ore located underneath the existing facilities. Construction will begin in
February 2012 with commissioning anticipated the first half of the 2015
calendar year. The project will cost US$3.8 billion, (US$2.2 billion BHP
Billiton share) and is expected to create up to 7,000 jobs during the
construction phase.
BHP Billiton also approved the Oxide Leach Area Project (OLAP) which creates
a new dynamic leaching pad and mineral handling system that will include
several overland conveyers. The new pad will maintain oxide leaching
capacity at current levels following the exhaustion of the existing heap
leach in the 2014 calendar year. OLAP is expected to cost US$721 million
(US$414 million BHP Billiton share) with commissioning anticipated in the
middle of the 2014 calendar year. Approximately 2,500 jobs will be created
during the construction phase.
In addition, BHP Billiton announced a 17 per cent increase in the Mineral
Resources and a 25 per cent increase in the Ore Reserves at Escondida
following successful brownfield exploration and accelerated in-fill
development drilling programs. The Reserve increase also reflects the
approval of OGP1, as most lower grade sulphide ore is now expected to be
treated through the flotation circuit with an associated increase in process
recoveries.
A new resource at Chimborazo, based on more than 115,000 metres of drilling
averaging 530 metres in depth, was also declared. The resource is being
evaluated as potential feed for Escondida`s Sulphide Leach processing
facilities.
BHP Billiton Base Metals President, Peter Beaven, said: "We expect the
completion of the current Escondida Ore Access and Laguna Seca
debottlenecking projects, and a strong recovery in ore grades, to support a
substantial recovery in Escondida copper production to over 1.3 million
tonnes per annum in the 2015 financial year.
"Looking ahead, the success of our brownfield exploration program suggests
there are sufficient resources at Escondida to sustain production at current
levels for more than a century. OGP1 is the first of a series of potential
projects that could substantially expand processing capacity at Escondida and
help ensure it remains the world`s leading copper operation for decades to
come."
Escondida is located 3,100 meters above sea level, 170km South-East of the
City of Antofagasta in Chile. It is owned by BHP Billiton (57.5%), Rio Tinto
(30.0%), JECO Corporation (10.0%) and JECO 2 Ltd (2.5%). BHP Billiton
operates the Escondida mine.
Escondida
Mineral Resources (100%)(a)
As at 31 December 2011
Measured Resource
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(c) Oxide 57.5 81 0.72
Sulphide 3,892 0.72
Mixed 101 0.87
Indicated Resource
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(c) Oxide 57.5 69 0.65
Sulphide 3,091 0.55
Mixed 58 0.80
Inferred Resource
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(c) Oxide 57.5 63 0.49
Sulphide 6,557 0.50
Mixed 24 0.61
Total Resource
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(c) Oxide 57.5 213 0.63
Sulphide 13,540 0.57
Mixed 183 0.81
As at 30 June 2011
Total Resource
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(c) Oxide 57.5 183 0.78
Sulphide 11,544 0.59
Mixed 221 0.70
Ore Reserves (100%)(d)
As at 31 December 2011
Proved Ore Reserve
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(e) Oxide 57.5 78 0.97
Sulphide 2,820 0.81
Sulphide 1,150 0.49
Leach
Probable Ore Reserve
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(e) Oxide 57.5 40 0.88
Sulphide 2,157 0.59
Sulphide 835 0.44
Leach
Total Ore Reserve
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(e) Oxide 57.5 118 0.94
Sulphide 4,977 0.71
Sulphide 1,985 0.47
Leach
As at 30 June 2011
Total Ore Reserve
Deposit(b) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Escondida(e) Oxide 57.5 121 0.87
Sulphide 2,012 0.97
Sulphide 3,540 0.50
Leach
Chimborazo
Mineral Resources (100%)(f)
As at 31 December 2011
Measured
Resource
Deposit(g)(h) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Chimborazo(i) Sulphide -- --
Leach 57.5
Indicated
Resource
Deposit(g)(h) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Chimborazo(i) Sulphide 57.5 139 0.50
Leach
Inferred
Resource
Deposit(g)(h) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Chimborazo(i) Sulphide 57.5 84 0.60
Leach
Total
Resource
Deposit(g)(h) Ore Type BHP Billiton Millions of dry % TCu
interest % metric tonnes
Copper
Chimborazo(i) Sulphide 57.5 223 0.54
Leach
(a) Competent Persons - Luis Soto (MAusIMM).
The statement of Mineral Resources has been produced in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves, December 2004 (the JORC Code). The Mineral Resource, presented
on a 100 per cent basis, is based on information compiled by the above named
Competent Person and represents an estimate as at 31 December 2011. All of
the Mineral Resource information is inclusive of Mineral Resources that have
been converted to Ore Reserves (i.e. Mineral Resources are not additional to
Ore Reserves). Mr. Soto is a full time employee of Minera Escondida Ltda., is
a member of AusIMM, and has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity he
is undertaking to qualify as a Competent Person as defined in the JORC Code.
Mr. Soto consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
(b) %TCu - per cent total copper.
(c) The change of mineral resource from the statement as at 30 June 2011,
apart from production depletion, is mostly due to a revised estimate that
includes of nearly 300,000 metres of additional drill hole data. The new data
includes exploration drilling in an area known as Escondida Este that
increases the size of the Escondida deposit, and in-fill drilling that
improves confidence on the estimate, increasing Measured Resources by
approximately 32% compared to the previous estimate.(FY11 BHP Billiton Annual
Report Measured Resource 3,089Mt@0.75%TCu).
(d) Competent Person - Americo Zuzunaga (MAusIMM).
The statement of Ore Reserves has been produced in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves, December 2004 (the JORC Code). The Ore Reserves, presented on a
100 per cent basis, are based on information compiled by Mr. Zuzunaga and
represents an estimate as at 31 December 2011. Mr. Zuzunaga is a full time
employee of Minera Escondida Ltda., is a member of AusIMM, and has sufficient
experience relevant to the style of mineralisation and type of deposit under
consideration and to the activity he is undertaking to qualify as a Competent
Person as defined in the JORC Code. Mr. Zuzunaga consents to the inclusion in
this report of the matters based on his information in the form and context
in which it appears.
(e) The change of Ore Reserves from the statement as at 30 June 2011, apart
from production depletion, is due in part to changes and increased confidence
in the Mineral Resources as a result of new drilling information, and in part
due to approval of the OGP1 project that doubles flotation capacity beyond
closure of the Los Colorados mill compared to prior reserve estimates. This
additional capacity will improve copper recovery of lower-grade sulphide ore
as a result of the ability to preferentially treat this material through the
flotation circuit rather than Sulphide Leach, as reflected in the change in
ore types from the previous report.
(f) Competent Person - R. Turner (MAusIMM).
The statement of Mineral Resources has been produced in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves, December 2004 (the JORC Code). The Mineral Resource, presented
on a 100 per cent basis, is based on information compiled by the above named
Competent Person and represents an estimate as at 31 December 2011. Mr.
Turner is a full time employee of Golder Associates S.A., is a member of
AusIMM and has sufficient experience relevant to the style of mineralisation
and type of deposit under consideration and to the activity his is
undertaking to qualify as a Competent Person as defined in the JORC Code. Mr.
Turner consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
(g) Mineral Resources for the Chimborazo Deposit are declared using a cut-off
grade of 0.3% TCu and constrained to an open pit limit.
(h) %TCu - per cent total copper.
(i) Chimborazo is a newly declared Mineral Resource, based on an estimate
from more than 115,000 metres of drilling that averages 530 metres in depth
and located on nominal grid spacings of 75 to 150 metres. It is located 15
kilometres northwest of the Escondida mine within Minera Escondida Ltda.
property limits, and is being evaluated as potential leach feed to
Escondida`s Sulphide Leach processing facilities. Chimborazo is a porphyry
copper-style deposit and a related hydrothermal breccia system that underlies
an average thickness of 100 metres of leached cap and gravel overburden. The
mineral resource is largely contained in a secondary chalcocite enrichment
zone and local enargite, forming a sub-horizontal mineralized body of
approximately 500 x 1000 metres in the horizontal dimension by 50 to 200
metres thickness.
Further information on BHP Billiton can be found at: www.bhpbilliton.com
Sponsor: Absa Capital (the investment banking division of Absa Bank Limited,
affiliated with Barclays Capital)
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BHP Billiton Limited ABN 49 004 028 077
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Members of the BHP Billiton Group which is headquartered in Australia
Date: 14/02/2012 07:05:39 Produced by the JSE SENS Department.
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