BHP Group's Olympic Dam operation in South Australia, where the company is now eyeing a nearby copper discovery on which it is working toward an investment decision sooner rather than later. Source: BHP Group

The planning and technical team at BHP Group's Olympic Dam copper mine is working toward an investment decision for the Oak Dam copper discovery "sooner rather than later" amid favorable commodity fundamentals, Oak Dam Project Manager Sam Hewitt told the Copper to the World conference in Adelaide, Australia, Aug. 31.

Located within the Olympic Dam iron oxide-copper-gold, or IOCG, metallogenic province, Oak Dam is 65 kilometers southeast of Olympic Dam mine and 45 kilometers from OZ Minerals Ltd.'s Carrapateena copper-gold mine.

"The underlying intent is to bring forward resource knowledge that can inform next-phase strategy and investment decision sooner rather than later — naturally on the premise of ongoing positive results," Hewitt said.

The team will undertake order-of-magnitude technical and economic studies to outline Oak Dam's value and its potential development pathways. BHP is also considering a range of strategic themes, including mining and processing alternatives and value-driver assessment, as part of "divergent thinking studies" under the evaluation, Oak Dam's project manager said.

"Our study team's challenge ultimately turns to identifying optimal configurations of infrastructure scope, timing and capital investment across the Oak Dam and Olympic Dam operations that potentially will yield the best outcomes" for both BHP and the local region, Hewitt said.

"There is potential for us to develop and deliver a modern mining operation from the outset that is an exemplar of BHP's values," the project manager said.

BHP's Oak Dam project manager Sam Hewitt. Source: BHP Group

Historical learnings

Though Western Mining Corporation conducted initial drilling on the Oak Dam target back in 1976, Oak Dam's potential is credited to BHP's discovery hole AD23, which intersected a "spectacular" 425 meters grading 3% copper, with 180 meters averaging over 6% copper, as well as associated gold and uranium, Hewitt said.

After the 2018 discovery, Hewitt said a further 12,000 meters were drilled in 2019 focusing on mineralization and true thickness, followed by 21,000 meters in 2020 targeting the mineral system's external boundaries.

Deep directional drilling was restarted in May to test the continuity of the mineralization, the true width of the high-grade zones and the extent of open depth in a staged ramp-up for "a significant drilling program," the project manager said.

"Where we stand today is based on the knowledge gained from over 41,000 meters of core from 30 drill holes that confirm the IOCG-style alteration and mineralization system hypothesis."

Broader efforts

The conference's keynote speaker, BHP Olympic Dam Asset President Jennifer Purdie, said Oak Dam's announcement, along with those from other local explorers, "tells us that there is a high likelihood of even more exciting mineral deposits here in South Australia."

Purdie estimated that about 130 companies are exploring, developing and mining for the red metal in South Australia, including Coda Minerals Ltd., whose share price rocketed by over 460% in June after reporting evidence of an IOCG system at the Emmie Bluff Deeps prospect 16 kilometers from Oak Dam.

"We are thinking about the orebodies in the region that are being uncovered through ongoing exploration programs and how they may contribute to our growth … in conjunction with the options that the Olympic Dam orebody provides," Purdie said.

She said investing in Olympic Dam positions BHP for the future, noting the strong demand for copper as a future-facing commodity has boosted prices to "the highest they have been in the last 10 years."

"Vehicle electrification and increased use of renewable energy are already accelerating the demand for copper and Olympic Dam," Purdie said.