A pre-feasibility has calculated that an open cut and processing development at Prominent Hill in South Australia would cost around $530 million, including $126 million in offsite infrastructure and a $64 million pre-strip.

For its money Oxiana will annually produce 90-100,000t of contained copper in concentrate and 110-130,000 ounces of gold (plus silver), at cash costs of US55-60c/lb – after gold credit.

Oxiana managing director Owen Hegarty suggested that the project would likely have payback in the current copper price environment of around two years, and 3-5 years at longer term copper price levels.

Upside includes extensions to the resource – to the east, west, the gold zone, and at depth – as well as satellite deposits and other “Prominent Hills” in the region.

Hegarty said Oxiana was following a similar development strategy to that employed at its Sepon project in Laos – namely get the project into production and cashflow as soon as possible ahead of additional exploration and possible expansions.

Potential cost reductions highlighted by Hegarty included alternate options for the provision of power, which comprises around half of the total $126 million offsite infrastructure cost.

First production from the project is being targeted for July-October 2008.

Shares in Oxiana were off 2c at $1.175 in afternoon trade.

Disclosure: The reporter holds shares in Oxiana