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| Rio Tinto's Winu copper-gold project in Western Australia. |
Rio Tinto has delayed first production at its West Australian Winu copper-gold discovery by a year to 2024, but its joint venture partners whose projects are expected to feed into the asset are unfazed amid the major's exploration ramp-up in the Paterson region.
The miner said Jan. 19 in its fourth-quarter 2020 production results that first ore from Winu, its first major copper discovery in the past three years, is now due in 2024. Winu's 503 million-tonne maiden resource was declared in July 2020.
Rio Tinto previously flagged in its third-quarter 2020 production results that though engagement with traditional owners had resumed following easing of COVID-19 travel restrictions in Western Australia, that engagement was "likely to take longer than originally forecast, and hence may have an impact on first targeted production of 2023."
Australia's federal government invoked Commonwealth Biosecurity Act powers in the first quarter of 2020 to prevent the entry or spread of COVID-19 into designated areas, including Western Australia's north, to protect vulnerable indigenous Australians in remote communities.
Rio Tinto said in its latest quarterly production report that 90 kilometers of drilling was completed on Winu in 2020, and that it will continue engaging traditional owners in 2021 through on-country heritage surveys, monitoring and agreement making.
First ore at Winu, which Rio Tinto designated as being in the "studies" stage, is scheduled for 2024 subject to "regulatory approvals, traditional owner and other consents and COVID-19 restrictions."
Though construction was originally slated to start in the second quarter of 2021, the company would not confirm the revised construction schedule when contacted by S&P Global Market Intelligence on Jan. 19.
Rio Tinto also noted in the Jan. 19 statement the expansion of its ground holdings in Western Australia's Paterson region, with a farm-in joint venture signed in August 2020 with Sipa Resources Ltd. adjoining Winu and the Citadel joint venture tenements it is exploring with Antipa Minerals Ltd..
Antipa Executive Chairman Stephen Power said Rio Tinto's commitment of just over A$2 million on the Citadel copper-gold project immediately adjacent to Winu at the start of 2020, but then spending A$12.6 million on it by the end of the year, showed the expandable nature of its commitment to exploration.
By December 2020, Rio Tinto had committed to an even greater spend on Citadel for 2021, agreeing to A$13.8 million for the year.
Unfazed by delay
Power told Market Intelligence that "there's not much to read into" Winu's delay, while Sipa Managing Director Pip Darvall said his company "wouldn't see that as a cause for concern."
Power said that the Calibre deposit at Citadel has a higher average grade than Winu and does not have some of Winu's metallurgical issues, "so we think it's a good candidate" to feed into Winu and even improve the Rio Tinto discovery's net present value and start-up capital expenditures.
Darvall said in an interview that the 90 kilometers Rio Tinto drilled in 2020 at Winu "gives you a picture of the commitment they've made to the district," along with the Sipa joint venture on its Paterson North copper-gold project that is earlier-stage and without a JORC resource.
He said Paterson North's proximity to Winu — and the gold-dominant Ngapakarra prospect Rio Tinto identified in 2020 that is 2 kilometers east of Winu and is even closer to Sipa's tenement boundary — gives his company confidence about the potential for a deposit to be found on its own ground.
"Anything that was found on our ground would obviously add to the economic viability of what they've got at Winu, and their other joint venture ground," Darvall said. "The good thing from an exploration perspective is [Rio Tinto] clearly needs more resources to ensure Winu's viability, so that's going to encourage them to redouble their efforts on the exploration front."