Metals X is planning to spend $163 million to sharpen up the performance of the Nifty copper mine, nearly three years after it bought the Pilbara operation from Indian business Aditya Birla Minerals.
In a release to the ASX today, Metals X said it would spend $16 million on exploration, $120 million on sustaining capital and $27 million on project capital expenditure.
That will enable production of 2.5 million tonnes annually by March quarter 2021.
The $27 million of capital investments will include $4.9 million on paste plant reticulation and tailings retrieval, $6.9 million on ventilation and $4 million on electrical work.
Sustaining capital will be spent on ensuring adequate access to new mining areas.
The announcement follows a power outage at the underground mine in March.
Metals X managing director Damien Marantelli, who was appointed to the role in November, said performance at the mine had suffered from legacy issues, poor planning and bad decision making.
“Nifty was purchased by Metals X to take advantage of the installed infrastructure, the substantial copper endowment of the mine and the significant geological upside that was recognised at the time,” Mr Marantelli said.
“The key fundamentals driving that decision have not changed.
“Nifty has the processing capacity to achieve the targeted production rates, a life-of-mine offtake partner, a substantial existing resource base and strong exploration upside.
“We now have the right team and the right plan in place to unlock Nifty’s considerable value.”
The plan will be funded by cash flow and using a $US 20 million debt facility.
Shares in MetalsX dropped 1.8 per cent to be 27.5 cents each.