REG - BHP Group Limited - Quarterly Activities Report
20/07/2023 07:00
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RNS Number : 5867G BHP Group Limited 20 July 2023
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Release Time IMMEDIATE
Date 20 July 2023
Release Number 13/23
BHP OPERATIONAL REVIEW
FOR THE YEAR ENDED 30 JUNE 2023
· There were two fatalities during the financial year. We are
committed to sharing the learnings from these tragic events and remain
resolute in our commitment to eliminating fatalities and serious injuries at
BHP.
· Full year production guidance was achieved for copper, iron ore,
metallurgical coal and energy coal. Nickel achieved revised guidance and
finished in line with the lower end of original guidance.
· Annual production records at Western Australia Iron Ore (WAIO) of
285 Mt (100% basis), Spence of 240 kt, and Olympic Dam for both copper of 212
kt and refined gold of 186 troy koz.
· Full year unit cost guidance(1) is expected to be achieved at
Escondida, WAIO and New South Wales Energy Coal (NSWEC). BHP Mitsubishi
Alliance (BMA) is expected to be marginally above its revised guidance range.
· Average realised prices for copper, iron ore and metallurgical
coal products were lower in the 2023 financial year compared to the prior
year. Nickel prices remained stable, while thermal coal prices were stronger,
predominantly in the first half.
· BHP completed the acquisition of OZ Minerals Ltd (OZL) on 2 May
2023(2).
· BHP has continued to make strong progress at Oak Dam in South
Australia. We have defined an Exploration Target(3) and plan to increase the
number of exploration drills from nine to eleven by the end of the 2023
calendar year.
· In Australia, BHP released its sixth Reconciliation Action Plan,
which was awarded Elevate status.
BHP Chief Executive Officer, Mike Henry:
"The financial year was marked by the deaths of Jody Byrne and Nathan Scholz.
These tragic events underscore the absolute importance of safety and we are
resolute in our commitment to eliminating fatalities and serious injuries at
BHP.
"BHP finished the year with a strong fourth quarter, increasing annual
production across the board and achieving annual records at WAIO, Olympic Dam
and Spence. WAIO shipped record volumes on the back of productivity in its
supply chain, rail network and car dumpers, while South Flank completed its
deployment of autonomous haul trucks in May and is on track to ramp up to full
production in the next 12 months. Olympic Dam's improved reliability and
productivity delivered record annual output in copper, gold and silver, and
the integration of OZ Minerals into our South Australian copper business is
expected to lift production to between 310 and 340 kt in FY24. At Escondida,
the team managed through operational challenges to deliver solid production
and position the asset to increase output further in FY24. Our Queensland coal
operations achieved strong underlying performance including the transition to
autonomous fleets at Goonyella Riverside and Daunia, offsetting the impact of
significant wet weather.
1
"Inflationary pressures impacted our business in the year, and we remain laser
focused on safety and productivity to remain competitive. Competitiveness will
be ever more important as we enter the new financial year and at a time when
there are new challenges and opportunities to resource development and global
economic volatility.
"BHP's portfolio is geared towards high quality steelmaking and growth options
in future facing commodities. The Jansen potash project in Canada remains
ahead of plan and studies for Stage 2 are progressing. Through the year, BHP
made strategic investments and exploration progress in copper and nickel
prospects globally, including Kabanga in Tanzania, Oak Dam in Australia, Filo
Mining with the Filo del Sol Project in Argentina and Chile, and Ocelot in the
United States, as well as Serbia and Peru."
Summary
Operational performance
Production and guidance are summarised below.
Production FY23 Jun FY23 Jun Q23 Jun Q23 FY24 FY24e
Q23 vs vs vs guidance vs FY23
FY22 Jun Q22 Mar Q23
Copper (kt)(i) 1,716.5 476.2 9% 3% 17% 1,720 - 1,910 0% - 11%
Escondida (kt) 1055.3 293.0 5% 1% 16% 1,080 - 1,180 2% - 12%
Pampa Norte (kt) 288.8 68.5 3% (11%) (6%) 210 - 250(ii) (27%) - (13%)
Copper South Australia (kt)(iii) 232.4 76.6 68% 38% 48% 310 - 340 33% - 46%
Antamina (kt) 138.4 36.5 (8%) (8%) 23% 120 - 140 (13%) - 1%
Carajás (kt) 1.6 1.6 - - - - -
Iron ore (Mt) 257.0 65.3 1% 2% 9% 254 - 264.5 (1%) - 3%
WAIO (Mt) 252.5 64.1 1% 1% 9% 250 - 260 (1%) - 3%
WAIO (100% basis) (Mt) 285.3 72.7 1% 1% 10% 282 - 294 (1%) - 3%
Samarco (Mt) 4.5 1.2 11% 22% 17% 4 - 4.5 (11%) - 0%
Metallurgical coal - BMA (Mt) 29.0 8.5 0% 4% 22% 28 - 31 (4%) - 7%
BMA (100% basis) (Mt) 58.0 17.0 0% 4% 22% 56 - 62 (4%) - 7%
Energy coal - NSWEC (Mt) 14.2 4.8 3% 22% 21% 13 - 15 (8%) - 6%
Nickel (kt) 80.0 22.0 4% 17% 12% 77 - 87 (4%) - 9%
i. Includes contribution of 21.5 kt from operations acquired from
OZL(2).
ii. Production guidance for FY24 is provided for Spence only. Cerro
Colorado is expected to produce ~9 kt as it transitions to closure by
31 December 2023.
iii. Comprised of Olympic Dam, Prominent Hill and Carrapateena. Refer
to the production and sales report for more details.
2
Production Jun Q23 Jun Q23 vs Mar Q23 commentary
FY23 (vs Mar Q23)
(vs FY22)
Copper (kt) 1,716.5 476.2 Higher concentrate volumes at Escondida reflect the higher concentrate feed
9%
17% grade of 0.93 per cent, and higher volumes at Copper South Australia resulted
in a BHP record for quarterly production from the refinery at Olympic Dam, and
reflect the addition of Prominent Hill and Carrapateena.
Iron ore (Mt) 257.0 65.3 Increased production at WAIO, despite unfavourable impacts from Tropical
1%
9% Cyclone Ilsa, due to strong supply chain performance and the prior period
impacts from the temporary shutdown of operations following the fatality, as
well as the tie-in activity of the Port Debottlenecking Project 1 (PDP1).
Metallurgical coal (Mt) 29.0 8.5 Increased production driven by increased yield, improved truck productivity
0%
22% and favourable weather conditions, partially offset by the commencement of a
second longwall move at Broadmeadow.
Energy coal (Mt) 14.2 4.8 Higher volumes as a result of additional stripping volumes, decreased
3%
21% proportion of washed coal, favourable weather conditions, and improvement in
truck productivity with record quarterly annualised truck hours.
Nickel (kt) 80.0 22.0 Higher volumes due to improved mining performance at Mt Keith, increased third
4%
12% party purchases and inventory drawdowns enabling increased concentrate
production, partially offset by a heavy rain event in April 2023.
Summary of disclosures
BHP expects its financial results for the second half of the 2023 financial
year to reflect certain items summarised in the table below. The table does
not provide a comprehensive list of all items impacting the period. The
financial statements are the subject of ongoing work that will not be
finalised until the release of the financial results on 22 August 2023.
Accordingly, the table below contains preliminary information that is subject
to update and finalisation.
Description H2 FY23 Classification(ii)
impact
US$M(i)
For the 2023 financial year, unit costs at Escondida and WAIO are expected to - ↑ Operating costs
be towards the upper end of guidance ranges, and unit costs at NSWEC are
expected to be in line with the revised guidance range (at guidance exchange
rates)
Unit costs at BMA are expected to be marginally above the revised guidance
range (at guidance exchange rates)
Note: Australian dollar and Chilean peso were weaker than guidance rates in
the period(iii)
Unit costs will not include any costs relating to the review of employee
entitlements and allowances.
Review of employee entitlements and allowances ~280 ↑ Operating costs - Group and Unallocated
Transaction and integration costs associated with the OZL acquisition ~100 - 150 ↑ Operating costs - Group and Unallocated
Increase to depreciation and amortisation expense relative to H1 FY23, ~100 - 200 ↑ Depreciation, amortisation and impairments
predominantly at WAIO, and includes the contribution of the OZL assets
acquired during the period
3
The Group's adjusted effective tax rate for the 2023 financial year is - Taxation expense
expected to be in the lower half of the guidance range of 30 to 35 per cent
Working capital decrease relating to net price impacts, and provisions 950 - 1,050 ↑ Operating cash flow
relating to employee entitlements and allowances
Decrease in cash tax paid relative to H1 FY23 1,600 - 1,700 ↑ Operating cash flow
Gross dividends received from equity-accounted investments ~250 ↑ Investing cash flow
Capital and exploration spend is expected to be approximately US$7.1 bn, below - ↑ Investing cash flow
full year guidance of approximately US$7.6 bn, primarily driven by favourable
FX
Gross dividends paid to non-controlling interests ~650 ↓ Financing cash flow
Payment of the H1 FY23 dividend ~4,600 ↓ Financing cash flow
Acquisition of OZL ~6,000 ↓ Investing cash flow
Net debt acquired through OZL acquisition ~1,000 ↑ Net debt
The Group's net debt balance at 30 June 2023 is expected to be between US$11 - Net debt
and US$11.5 bn and is expected to remain towards the upper end of our target
range of US$5 to US$15 bn in the near term
Financial impact on BHP Brasil of the Samarco dam failure Refer footnote(iv) Exceptional item
The financial impact is expected to primarily relate to amortisation of
discounting on the provision and the impact of foreign exchange
Revaluation of deferred tax balances following the substantive enactment of ~250 - 300(v) Exceptional item
the Chilean Royalty Bill
i Numbers are not tax effected and comparisons are against the
31 December 2022 financial results, unless otherwise noted.
ii There will be a corresponding balance sheet, cash flow and/or
income statement impact as relevant, unless otherwise noted.
iii Average exchange rates for FY23 of AUD/USD 0.67 (guidance rate
AUD/USD 0.72) and USD/CLP 864 (guidance rate USD/CLP 830).
iv Financial impact is the subject of ongoing work and is not yet
finalised. See Iron ore section for further information on Samarco.
v To reflect an increase to the mining tax rates in Chile.
Average realised prices
The average realised prices achieved for our major commodities are summarised
below.
Average realised pricesi H2 FY23 H1 FY23 FY23 FY22 FY23 H2 FY23 H2 FY23
vs vs vs
FY22 H2 FY22 H1 FY23
Copper (US$/lb)(ii) 3.80 3.49 3.65 4.16 (12%) (5%) 9%
Iron ore (US$/wmt, FOB) 99.88 85.46 92.54 113.10 (18%) (11%) 17%
Metallurgical coal (US$/t) 273.08 268.73 271.05 347.10 (22%) (36%) 2%
Hard coking coal (US$/t)(iii) 276.22 270.65 273.59 366.82 (25%) (37%) 2%
Weak coking coal (US$/t)(iii) 250.38 252.12 251.13 296.51 (15%) (35%) (1%)
Thermal coal (US$/t)(iv) 157.21 354.30 236.51 216.78 9% (48%) (56%)
Nickel metal (US$/t) 23,652 24,362 24,021 23,275 3% (14%) (3%)
i Based on provisional, unaudited estimates. Prices exclude
sales from equity accounted investments, third party product and internal
sales, and represent the weighted average of various sales terms (for example:
FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional
pricing and finalisation adjustments.
ii Does not include sales from assets acquired through the
purchase of OZL.
iii Hard coking coal (HCC) refers generally to those metallurgical
coals with a Coke Strength after Reaction (CSR) of 35 and above, which
includes coals across the spectrum from Premium Coking to Semi Hard Coking
coals, while weak coking coal (WCC) refers generally to those metallurgical
coals with a CSR below 35.
iv Export sales only. Includes thermal coal sales from metallurgical
coal mines.
4
The large majority of iron ore shipments were linked to index pricing for the
month of shipment, with price differentials predominantly a reflection of
market fundamentals and product quality. Iron ore sales for the June 2023 half
year were based on an average moisture rate of 6.6 per cent. The large
majority of metallurgical coal and energy coal exports were linked to index
pricing for the month of scheduled shipment or priced on the spot market at
fixed or index-linked prices, with price differentials reflecting product
quality. The large majority of copper cathodes sales were linked to index
price for quotation periods one month after month of shipment, and three to
four months after month of shipment for copper concentrates sales with price
differentials applied for location and treatment costs.
At 30 June 2023, the Group had 342 kt of outstanding copper sales that were
revalued at a weighted average price of US$3.77 per pound. The final price of
these sales will be determined in the 2024 financial year.
In addition, 354 kt of copper sales from the 2022 financial year were subject
to a finalisation adjustment in the 2023 financial year. The provisional
pricing and finalisation adjustments will decrease Underlying EBITDA by
US$243 million in the 2023 financial year and are included in the average
realised copper price in the above table.
Corporate update
BHP released its sixth Reconciliation Action Plan
(https://www.bhp.com/news/media-centre/releases/2023/06/bhp-releases-reconciliation-action-plan)
in June 2023, which has been recognised with 'Elevate' status from
Reconciliation Australia. Some examples of the commitments made in the plan
include increasing Indigenous representation across our Australian workforce
to a target of 9.7 per cent by the end of the 2027 financial year, and a
target to achieve an A$1.5 billion spend with Traditional Owner and Indigenous
businesses in aggregate across our Australian assets.
Portfolio
On 2 May 2023, BHP announced the completion of the OZL acquisition
(https://www.bhp.com/news/media-centre/releases/2023/05/completion-of-oz-minerals-acquisition)
. The acquisition strengthens BHP's portfolio in copper, nickel and uranium
and is in line with our strategy to pursue value adding growth in future
facing commodities. The cash payment by BHP was funded using a combination of
BHP's existing cash reserves and the proceeds of a debt facility.
In June 2023, BHP agreed to invest an additional C$30 million in Filo Mining
Corp via a private placement. The proceeds from BHP's investment will be used
by Filo for exploration and development of the Filo del Sol project, located
in San Juan Province, Argentina and adjacent Region III in Chile, and for
working capital and general corporate purposes.
Decarbonisation
In the June 2023 quarter, BHP held a briefing updating on its progress and
plans
(https://www.bhp.com/news/media-centre/reports-presentations/2023/06/operational-decarbonisation-investor-presentation)
to achieve its medium and long-term operational decarbonisation target and
goal and released two Prospects updates on the Pathways to decarbonisation
which are available on the BHP website: The many, many roads to Paris
(https://www.bhp.com/news/prospects/2023/05/pathways-to-decarbonisation-episode-six-the-many-many-roads-to-paris)
and the electric smelting furnace
(https://www.bhp.com/news/prospects/2023/06/pathways-to-decarbonisation-episode-seven-the-electric-smelting-furnace)
.
Copper
Production
FY23 Jun Q23 FY23 Jun Q23 Jun Q23
vs vs vs
FY22 Jun Q22 Mar Q23
Copper (kt) 1,716.5 476.2 9% 3% 17%
Zinc (t) 125,048 38,822 1% 41% 64%
Uranium (t) 3,406 813 43% 5% (2%)
Copper - Total copper production increased by nine per cent to 1,717 kt.
Production for the 2024 financial year is expected to be between 1,720 and
1,910 kt.
5
Escondida copper production increased by five per cent to 1,055 kt primarily
due to higher concentrator feed grade of 0.82 per cent, compared to 0.78 per
cent in the 2022 financial year. The positive impact of the higher grade was
partially offset by the impact of road blockades across Chile in the December
2022 quarter, which reduced availability of some key mine supplies. Full year
production came in at the low end of revised guidance largely as a result of
measures implemented to manage geotechnical events in a high grade section of
the Escondida pit. These included a resequencing of the mine plan, resulting
in lower than anticipated volumes of mined ore and increased processing of
lower grade stockpiles through the concentrators. Production is expected to
increase to between 1,080 and 1,180 kt for the 2024 financial year and
reflects both an expected increase in concentrator feed grade and an expected
increase in concentrator throughput compared to the 2023 financial year.
Pampa Norte copper production increased by three per cent to 289 kt including
a record 240 kt at Spence and 49 kt at Cerro Colorado. This was largely a
result of higher concentrator throughput at the Spence Growth Option (SGO),
partially offset by lower production at Cerro Colorado as it transitions
towards closure. The concentrator plant modifications, which commenced in
August 2022, remain on track to be completed in the 2023 calendar year.
Expected capital expenditure for the concentrator modification works remains
unchanged at approximately US$100 million. Production for Spence is expected
to be between 210 and 250 kt for the 2024 financial year, with planned higher
concentrator grade and concentrator throughput but lower stacking grade for
cathodes. Cerro Colorado continues to transition towards planned closure by
December 2023, with production for the six months until closure expected to be
approximately 9 kt. We are continuing to closely monitor previously identified
Spence Tailings Storage Facility anomalies.
Following the completion of the acquisition of OZL, we have established the
Copper South Australia business. Production from Copper South Australia was
232 kt, comprised of full year production from Olympic Dam of 212 kt and two
months of production(2) from Prominent Hill and Carrapateena of 8 kt and 12 kt
respectively. Olympic Dam delivered record BHP copper production as a result
of continued strong concentrator and smelter performance following the major
smelter maintenance campaign (SCM21) in the prior year. Record annual gold and
silver production was also achieved following the implementation of
debottlenecking initiatives in the prior year, 27 per cent higher than the
previous gold production record.
Integration activity is underway, including the transfer of small volumes of
copper concentrate from Prominent Hill to Olympic Dam for processing. Copper
South Australia production of between 310 and 340 kt is expected for the 2024
financial year.
Antamina copper production decreased by eight per cent to 138 kt reflecting
the expected lower copper feed grades, partially offset by higher throughput.
Zinc production was one per cent higher at 125 kt, reflecting higher
throughput. Copper production of 120 to 140 kt and zinc production of between
85 and 105 kt is expected for the 2024 financial year.
Following the acquisition of OZL, Carajás produced 1.6 kt of copper and 1.2
troy koz of gold(2).
Iron ore
Production
FY23 Jun Q23 FY23 Jun Q23 Jun Q23
vs vs vs
FY22 Jun Q22 Mar Q23
Iron ore (kt) 257,043 65,295 1% 2% 9%
Iron ore - Total iron ore production increased by one per cent to 257 Mt.
Production for the 2024 financial year is expected to be between 254 and 264.5
Mt.
6
WAIO achieved record production of 253 Mt (285 Mt on a 100 per cent basis),
reflecting continued strong supply chain performance, including improved rail
performance and increased car dumper utilisation. This was partially offset by
the temporary suspension of operations following the fatality in February,
unfavourable weather impacts from Tropical Cyclone Ilsa in the June 2023
quarter and the ongoing planned tie-in of PDP1, which remains on track to be
completed in the 2024 calendar year.
South Flank remains on track to ramp up to full production capacity of 80 Mtpa
(100 per cent basis) by the end of the 2024 financial year. Current year
performance has contributed to record annual production at the Mining Area C
hub and record WAIO lump sales. Additionally, the deployment of autonomous
haul trucks at South Flank was completed in May 2023.
WAIO also achieved record shipments for the year, which was inclusive of sales
of of 249 Mt (281 Mt on a 100 per cent basis) and inventory in China of almost
4 Mt for portside sales.
WAIO production is expected to increase to between 250 and 260 Mt (282 and
294 Mt on a 100 per cent basis) in the 2024 financial year.
Samarco production increased by 11 per cent to 4.5 Mt (BHP share), as a result
of higher concentrator throughput. Production for the 2024 financial year is
expected to be between 4 and 4.5 Mt (BHP share).
In May 2023, Samarco announced it had agreed with its shareholders and a group
of Samarco's financial creditors to a restructure of the company's financial
debts. The agreement was entered into following a 2-month court-supervised
settlement process. The proposed terms are subject to approval by a majority
of Samarco's creditors, ratification by the Judicial Reorganisation Court and
the entry into definitive debt restructure documents. Samarco, BHP Brasil,
Vale, and creditors are working together to implement the restructure terms to
resolve Samarco's judicial reorganisation process.
Coal
Production
FY23 Jun Q23 FY23 Jun Q23 Jun Q23
vs vs vs
FY22 Jun Q22 Mar Q23
Metallurgical coal (kt) 29,020 8,477 0% 4% 22%
Energy coal (kt) 14,172 4,765 3% 22% 21%
Metallurgical coal - BMA production of 29 Mt (58 Mt on a 100 per cent basis)
was in line with the prior period. The significant wet weather experienced in
the first three quarters(4) was offset by strong underlying operational
performance, in particular, continued improvement in truck productivity at
Goonyella and Daunia following the completion of their transitions to
autonomous fleet. Production for the period was further supported by a
drawdown of raw coal inventory and improved labour availability compared to
the prior period.
Production for the 2024 financial year is expected to be between 28 and 31 Mt
(56 and 62 Mt on a 100 per cent basis).
The near tripling of top end royalties by the Queensland Government makes
Queensland the highest coal taxing regime in the world. Given the negative
impact this has on investment economics and the increase in sovereign risk, we
will not be investing in any further growth in Queensland, however we will
sustain and optimise our existing operations.
7
Energy coal - NSWEC production increased by three per cent to 14.2 Mt driven
by an improvement in weather conditions in the second half of the year and an
uplift in truck productivity compared to the prior year. Additional deployed
capacity into a new mining area also resulted in an uplift in prime stripping
volumes. Production for the 2024 financial year is expected to be between 13
and 15 Mt.
Higher quality products made up 77 per cent of sales, compared to 89 per cent
in the prior period, reflecting the impacts of the change in export market
conditions and the commencement of domestic sales under the NSW Government
Coal Market Price Emergency (Directions for Coal Mines) Notice in the June
2023 quarter. The reservation allocation for the 2024 financial year is
expected to be 0.7 Mt in line with the Directions.
Other
Nickel production
FY23 Jun Q23 FY23 Jun Q23 Jun Q23
vs vs vs
FY22 Jun Q22 Mar Q23
Nickel (kt) 80.0 22.0 4% 17% 12%
Nickel - Nickel West production increased by four per cent to 80 kt due to an
increased proportion of concentrate and matte products and inventory
drawdowns. This was partially offset by the slower than planned ramp up of the
refinery following planned maintenance in the December 2022 quarter and a
heavy rain event at the Mt Keith operations in early April 2023 impacting mine
progression.
During the year, Nickel West has experienced ongoing issues with the quality
and volume of ore deliveries from Mincor Resources containing high levels of
arsenic, and in March advised that it would no longer accept off-specification
product. In the second half, Nickel West purchased more third-party products
compared to the first half, including higher cost third party concentrate to
offset the impact of the ore supply issues.
Production is expected to be between 77 and 87 kt for the 2024 financial year,
weighted to the second half of the year due to planned refinery maintenance in
the first half.
The West Musgrave nickel project in Western Australia is in early stages of
execution following the final investment decision by OZL in September 2022
(prior to the acquisition by BHP).
Potash - Our major potash project under development at Jansen is tracking to
the accelerated plan with first production still targeted for the end of the
2026 calendar year, compared to the initial target of the 2027 calendar year.
In the June 2023 quarter, we completed all piling activities for the mill and
storage facilities. During the 2024 financial year, we will transition from
civil works into steel and equipment installation on the surface and
underground, as well as continuing with equipment procurement. Port
construction will also continue. The feasibility study for Jansen Stage 2
continues to progress and is on track to be completed during the 2024
financial year.
Projects
Project and Capital expenditure US$M Initial production target date Capacity Progress
ownership
Jansen Stage 1 5,723 End-CY26 Design, engineering and construction of an underground potash mine and surface Project is 26% complete
(Canada) infrastructure, with capacity to produce 4.35 Mtpa.
100%
8
Minerals exploration
Minerals exploration and evaluation expenditure increased by 37 per cent for
the year ended 30 June 2023 to US$350 million, of which US$294 million was
expensed.
At BHP's recently identified copper porphyry mineralised system, Ocelot,
located in the Miami-Globe copper district of the United States, the final
hole of a 6-hole program was completed in May 2023. The project remains at an
early exploration stage and data from the recent drill program will be used to
update the overall resource range estimation at Ocelot.
At Oak Dam in South Australia, we have defined an Exploration Target(3) (refer
to Appendix 1) and commenced the next phase of drilling as we work towards
defining a first Mineral Resource(5). In line with the environmental approvals
received in March 2023, we plan to increase from nine drill rigs to eleven and
to establish core processing facilities and an accommodation camp of up to 150
rooms by the end of the 2023 calendar year. We are continuing community and
stakeholder engagement in preparation for submission of our application to
convert the Oak Dam tenement from an exploration licence to a retention
lease, enabling progression of an early access decline.
In addition, we have commenced exploratory drilling beneath the Olympic Dam
mine, at depths between 900m and 1,500m, with nine surface exploration rigs.
In June 2023, BHP signed a Sales and Purchase Agreement to acquire 100 per
cent of Ragnar Metals Sweden AB, for a cash payment of A$9.8 million. Ragnar's
assets include the Granmuren Nickel project, an early-stage nickel-copper
tenement package located 110 km north-west of Stockholm, Sweden. BHP intends
to undertake additional drilling to determine whether the known mineralisation
has continuous high grade nickel sulphide and to test additional targets.
The inaugural BHP Xplor accelerator program was completed, with a number of
the early-stage mineral exploration companies selected for further investment.
Applications for the program's second year will open at the end of
August 2023.
Elsewhere, we continue to progress exploration activities in Australia,
Canada, Chile, Ecuador, Peru, Serbia and the United States.
9
Variance analysis relates to the relative performance of BHP and/or its
operations during the 12 months ended June 2023 compared with the 12 months
ended June 2022, unless otherwise noted. Production volumes, sales volumes and
capital and exploration expenditure from subsidiaries are reported on a
100 per cent basis; production and sales volumes from equity accounted
investments and other operations are reported on a proportionate consolidation
basis. Numbers presented may not add up precisely to the totals provided due
to rounding.
The following footnotes apply to this Operational Review:
1 2023 financial year unit cost guidance: Escondida
US$1.25-1.45/lb, WAIO US$18-19/t, BMA US$100-105/t and NSWEC US$84-91/t; based
on exchange rates of AUD/USD 0.72 and USD/CLP 830.
2 Throughout this report, production volumes for the operations
acquired from OZL are for the period of 1 May to 30 June 2023, whilst the
acquisition completion date was 2 May 2023.
3 An Exploration Target is a statement or estimate of the
exploration potential of a mineral deposit in a defined geological setting
where the statement or estimate, quoted as a range of tonnes and a range of
grade (or quality), relates to mineralisation for which there has been
insufficient exploration to estimate a Mineral Resource.
4 803mm of rainfall recorded at Moranbah for the year ended 30
June 2023 compared to 648mm in the prior year.
5 The potential quantity and grade of an Exploration Target is
conceptual in nature and as such there has been insufficient exploration to
estimate a Mineral Resource, and it is uncertain if further exploration or
analysis will result in the estimation of a Mineral Resource.
The following abbreviations may have been used throughout this report: cost
and freight (CFR); cost, insurance and freight (CIF); dry metric tonne unit
(dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne
(kg/t); kilometre (km); megawatt (MW); metre (m); millimetre (mm); million
tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb);
thousand ounces (koz); thousand tonnes (kt); thousand tonnes per annum (ktpa);
thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
In this release, the terms 'BHP', the 'Group', 'BHP Group', 'we', 'us', 'our'
and 'ourselves' are used to refer to BHP Group Limited and, except where the
context otherwise requires, our subsidiaries. Refer to note 28 'Subsidiaries'
of the Financial Statements in BHP's 30 June 2022 Appendix 4E for a list of
our significant subsidiaries. Those terms do not include non-operated assets.
On and from 2 May, the BHP Group includes OZ Minerals Limited and its
subsidiaries referred to in note 17 of their Financial Statements in its
Annual Report for the year ended 30 December 2022. Notwithstanding that this
release may include production, financial and other information from
non-operated assets, non-operated assets are not included in the BHP Group
and, as a result, statements regarding our operations, assets and values apply
only to our operated assets unless stated otherwise. Our non-operated assets
include Antamina and Samarco. BHP Group cautions against undue reliance on any
forward-looking statement or guidance in this release, particularly in light
of the current economic climate and significant volatility, uncertainty and
disruption arising in connection with COVID-19. These forward-looking
statements are based on information available as at the date of this release
and are not guarantees or predictions of future performance and involve known
and unknown risks, uncertainties and other factors, many of which are beyond
our control and which may cause actual results to differ materially from those
expressed in the statements contained in this release.
Further information on BHP can be found at: bhp.com (http://www.bhp.com/)
10
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Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
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11
Production summary
Quarter ended Year to date
BHP Jun Sep Dec Mar Jun Jun Jun
interest 2022 2022 2022 2023 2023 2023 2022
Copper(1)
Copper
Payable metal in concentrate (kt)
Escondida(2) 57.5% 233.5 203.1 208.3 200.8 220.5 832.7 802.6
Pampa Norte(3) 100% 28.2 28.6 32.5 32.0 32.2 125.3 111.2
Copper South Australia(4) 100% 19.9 19.9
Antamina 33.8% 39.6 37.1 35.2 29.6 36.5 138.4 149.9
Carajas(5) 100% 1.6 1.6
Total 301.3 268.8 276.0 262.4 310.7 1,117.9 1,063.7
Cathode (kt)
Escondida(2) 57.5% 55.8 49.6 49.7 50.8 72.5 222.6 201.4
Pampa Norte(3) 100% 49.0 42.0 44.2 41.0 36.3 163.5 170.0
Copper South Australia(4) 100% 55.7 49.7 54.4 51.7 56.7 212.5 138.4
Total 160.5 141.3 148.3 143.5 165.5 598.6 509.8
Total copper (kt) 461.8 410.1 424.3 405.9 476.2 1,716.5 1,573.5
Lead
Payable metal in concentrate (t)
Antamina 33.8% 181 228 114 169 146 657 1,118
Total 181 228 114 169 146 657 1,118
Zinc
Payable metal in concentrate (t)
Antamina 33.8% 27,576 32,685 29,929 23,612 38,822 125,048 123,200
Total 27,576 32,685 29,929 23,612 38,822 125,048 123,200
Gold
Payable metal in concentrate (troy oz)
Escondida(2) 57.5% 45,770 38,236 48,402 48,954 53,503 189,095 166,972
Pampa Norte(3) 100% 8,198 5,521 3,875 8,152 9,263 26,811 28,870
Copper South Australia(4) 100% 32,736 32,736
Carajas(5) 100% 1,153 1,153
Total 53,968 43,757 52,277 57,106 96,655 249,795 195,842
Refined gold (troy oz)
Copper South Australia(4) 100% 26,080 47,184 43,280 49,086 46,479 186,029 119,517
Total 26,080 47,184 43,280 49,086 46,479 186,029 119,517
Total gold (troy oz) 80,048 90,941 95,557 106,192 143,134 435,824 315,359
Silver
Payable metal in concentrate (troy koz)
Escondida(2) 57.5% 1,311 1,210 1,510 1,346 1,008 5,074 5,334
Pampa Norte(3) 100% 262 252 245 409 412 1,318 1,011
Copper South Australia(4) 100% 201 201
Antamina 33.8% 1,212 1,190 923 801 971 3,885 5,078
Total 2,785 2,652 2,678 2,556 2,592 10,478 11,423
Refined silver (troy koz)
Copper South Australia(4) 100% 145 295 261 277 256 1,089 743
Total 145 295 261 277 256 1,089 743
Total silver (troy koz) 2,930 2,947 2,939 2,833 2,848 11,567 12,166
Uranium
Payable metal in concentrate (t)
Copper South Australia(4) 100% 776 817 943 833 813 3,406 2,375
Total 776 817 943 833 813 3,406 2,375
Molybdenum
Payable metal in concentrate (t)
Pampa Norte(3) 100% 71 34 216 407 333 990 71
Antamina 33.8% 249 262 348 229 333 1,172 798
Total 320 296 564 636 666 2,162 869
13
Production summary
Quarter ended Year to date
BHP Jun Sep Dec Mar Jun Jun Jun
interest 2022 2022 2022 2023 2023 2023 2022
Iron Ore
Iron Ore
Production (kt)(6)
Newman 85% 14,063 14,053 16,172 11,925 14,795 56,945 57,041
Area C Joint Venture 85% 27,685 26,971 26,302 25,284 28,818 107,375 94,431
Yandi Joint Venture 85% 6,409 5,497 5,613 4,941 5,359 21,410 38,922
Jimblebar(7) 85% 15,005 17,404 17,720 16,575 15,102 66,801 58,782
Samarco 50% 1,000 1,148 1,095 1,048 1,221 4,512 4,071
Total 64,162 65,073 66,902 59,773 65,295 257,043 253,247
Coal
Metallurgical coal
Production (kt)(8)
BHP Mitsubishi Alliance (BMA) 50% 8,183 6,662 6,952 6,929 8,477 29,020 29,142
Total 8,183 6,662 6,952 6,929 8,477 29,020 29,142
Energy coal
Production (kt)
NSW Energy Coal 100% 3,919 2,622 2,851 3,934 4,765 14,172 13,701
Total 3,919 2,622 2,851 3,934 4,765 14,172 13,701
Other
Nickel
Saleable production (kt)
Nickel West 100% 18.8 20.7 17.7 19.6 22.0 80.0 76.8
Total 18.8 20.7 17.7 19.6 22.0 80.0 76.8
Cobalt
Saleable production (t)
Nickel West 100% 110 238 93 175 246 752 632
Total 110 238 93 175 246 752 632
1 Metal production is reported on the basis of payable
metal.
2 Shown on a 100% basis. BHP interest in saleable production is
57.5%.
3 Includes Spence and Cerro Colorado. Refer to the Production and
Sales Report for more details.
4 Includes Olympic Dam and two months of production from Prominent
Hill and Carrapateena from 1 May 2023, following the acquisition of OZL on 2
May 2023. Refer to the Production and Sales Report for more details.
5 Includes two months of production from 1 May 2023, following the
acquisiton of OZL on 2 May 2023.
6 Iron ore production is reported on a wet tonnes
basis.
7 Shown on a 100% basis. BHP interest in saleable production is
85%.
8 Metallurgical coal production is reported on the basis of saleable
product. Production figures may include some thermal coal.
Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.
14
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile(1)
Material mined (kt) 115,409 110,248 101,987 106,170 95,451 413,856 454,243
Concentrator throughput (kt) 34,318 32,894 33,911 33,309 30,750 130,864 133,868
Average copper grade - concentrator (%) 0.88% 0.83% 0.76% 0.78% 0.93% 0.82% 0.78%
Production ex mill (kt) 239.5 214.6 212.8 210.0 228.9 866.3 835.8
Production
Payable copper (kt) 233.5 203.1 208.3 200.8 220.5 832.7 802.6
Copper cathode (EW) (kt) 55.8 49.6 49.7 50.8 72.5 222.6 201.4
- Oxide leach (kt) 17.5 15.2 17.6 14.7 29.3 76.8 57.6
- Sulphide leach (kt) 38.3 34.4 32.1 36.1 43.2 145.8 143.8
Total copper (kt) 289.3 252.7 258.0 251.6 293.0 1,055.3 1,004.0
Payable gold concentrate (troy oz) 45,770 38,236 48,402 48,954 53,503 189,095 166,972
Payable silver concentrate (troy koz) 1,311 1,210 1,510 1,346 1,008 5,074 5,334
Sales
Payable copper (kt) 230.4 196.7 216.0 197.3 220.3 830.3 798.1
Copper cathode (EW) (kt) 58.9 45.9 53.5 43.8 78.0 221.2 202.5
Payable gold concentrate (troy oz) 45,770 38,236 48,402 48,954 53,503 189,095 166,972
Payable silver concentrate (troy koz) 1,311 1,210 1,510 1,346 1,008 5,074 5,334
1 Shown on a 100% basis. BHP interest in saleable production is
57.5%.
15
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Pampa Norte, Chile
Cerro Colorado
Material mined (kt) 3,604 3,179 583 172 145 4,079 17,280
Ore stacked (kt) 4,259 4,373 4,119 3,567 3,928 15,987 15,035
Average copper grade - stacked (%) 0.55% 0.54% 0.56% 0.57% 0.53% 0.55% 0.58%
Production
Copper cathode (EW) (kt) 14.7 12.8 12.2 12.0 12.2 49.2 55.0
Sales
Copper cathode (EW) (kt) 16.2 13.3 12.2 10.9 14.1 50.5 54.8
Spence
Material mined (kt) 26,749 26,956 26,980 24,858 25,622 104,416 95,968
Ore stacked (kt) 5,099 5,577 5,155 4,947 5,625 21,304 20,483
Average copper grade - stacked (%) 0.66% 0.70% 0.66% 0.60% 0.58% 0.64% 0.66%
Concentrator throughput (kt) 6,311 6,433 7,602 7,290 6,927 28,252 24,843
Average copper grade - concentrator (%) 0.66% 0.63% 0.60% 0.61% 0.61% 0.61% 0.64%
Production
Payable copper (kt) 28.2 28.6 32.5 32.0 32.2 125.3 111.2
Copper cathode (EW) (kt) 34.3 29.2 32.0 29.0 24.1 114.3 115.0
Total copper (kt) 62.5 57.8 64.5 61.0 56.3 239.6 226.2
Payable gold concentrate (troy oz) 8,198 5,521 3,875 8,152 9,263 26,811 28,870
Payable silver concentrate (troy koz) 262 252 245 409 412 1,318 1,011
Payable molybdenum (t) 71 34 216 407 333 990 71
Sales
Payable copper (kt) 28.1 26.0 22.0 38.7 38.6 125.3 109.5
Copper cathode (EW) (kt) 35.4 29.1 33.4 25.1 28.3 115.9 114.5
Payable gold concentrate (troy oz) 8,198 5,521 3,875 8,152 9,263 26,811 28,870
Payable silver concentrate (troy koz) 262 252 245 409 412 1,318 1,011
Payable molybdenum (t) 25 25 216 492 367 1,100 25
16
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Copper (continued)
Metals production is payable metal unless otherwise stated.
Copper South Australia
Olympic Dam
Material mined(1) (kt) 2,477 2,412 2,264 2,317 2,356 9,349 8,834
Ore milled (kt) 2,436 2,570 2,687 2,433 2,755 10,445 7,687
Average copper grade (%) 2.15% 2.13% 2.08% 1.95% 2.00% 2.04% 2.14%
Average uranium grade (kg/t) 0.56 0.58 0.58 0.59 0.55 0.58 0.57
Production
Copper cathode (ER and EW) (kt) 55.7 49.7 54.4 51.7 56.7 212.5 138.4
Payable uranium (t) 776 817 943 833 813 3,406 2,375
Refined gold (troy oz) 26,080 47,184 43,280 49,086 46,479 186,029 119,517
Refined silver (troy koz) 145 295 261 277 256 1,089 743
Sales
Copper cathode (ER and EW) (kt) 55.8 45.9 56.8 50.5 59.5 212.7 139.1
Payable uranium (t) 1,031 272 1,127 683 1,275 3,357 2,344
Refined gold (troy oz) 24,622 49,542 41,900 47,300 49,182 187,924 118,979
Refined silver (troy koz) 87 320 233 307 270 1,130 685
Prominent Hill(2)
Material mined (kt) 661 661
Ore milled (kt) 1,228 1,228
Average copper grade (%) 0.77% 0.77%
Production ex mill (kt) 16.3 16.3
Production
Payable copper (kt) 8.2 8.2
Payable gold concentrate (troy oz) 17,432 17,432
Payable silver concentrate (troy koz) 44 44
Sales
Payable copper (kt) 15.7 15.7
Payable gold concentrate (troy oz) 28,856 28,856
Payable silver concentrate (troy koz) 87 87
Carrapateena(2)
Material mined (kt) 880 880
Ore milled (kt) 856 856
Average copper grade (%) 1.52% 1.52%
Production ex mill (kt) 30.1 30.1
Production
Payable copper (kt) 11.7 11.7
Payable gold concentrate (troy oz) 15,304 15,304
Payable silver concentrate (troy koz) 157 157
Sales
Payable copper (kt) 11.9 11.9
Payable gold concentrate (troy oz) 15,242 15,242
Payable silver concentrate (troy koz) 155 155
1 Material mined refers to underground ore mined, subsequently hoisted or
trucked to surface.
2 Includes two months of production and sales from 1 May 2023, following
the acquisiton of OZL on 2 May 2023.
17
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%) (kt) 64,026 63,865 68,750 57,939 62,894 253,448 246,904
Concentrator throughput (100%) (kt) 13,131 13,858 14,272 12,349 13,897 54,376 52,496
Average head grades
- Copper (%) 1.02% 0.93% 0.86% 0.88% 0.88% 0.89% 0.98%
- Zinc (%) 1.05% 1.09% 0.99% 1.06% 1.25% 1.10% 1.11%
Production
Payable copper (kt) 39.6 37.1 35.2 29.6 36.5 138.4 149.9
Payable zinc (t) 27,576 32,685 29,929 23,612 38,822 125,048 123,200
Payable silver (troy koz) 1,212 1,190 923 801 971 3,885 5,078
Payable lead (t) 181 228 114 169 146 657 1,118
Payable molybdenum (t) 249 262 348 229 333 1,172 798
Sales
Payable copper (kt) 40.7 37.6 34.7 32.4 34.5 139.2 148.2
Payable zinc (t) 30,847 33,820 29,127 25,851 37,629 126,427 125,915
Payable silver (troy koz) 1,230 1,015 850 768 747 3,380 4,816
Payable lead (t) 363 130 91 181 143 545 1,208
Payable molybdenum (t) 205 250 298 297 227 1,072 660
Carajas, Brazil(1)
Material mined (kt) 103 103
Ore milled (kt) 100 100
Average copper grade (%) 1.71% 1.71%
Production ex mill (kt) 6.6 6.6
Production
Payable copper (kt) 1.6 1.6
Payable gold concentrate (troy oz) 1,153 1,153
Sales
Payable copper (kt) 2.1 2.1
Payable gold concentrate (troy oz) 1,688 1,688
1 Includes two months of production and sales from 1 May 2023, following
the acquisiton of OZL on 2 May 2023.
18
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.
Western Australia Iron Ore, Australia
Production
Newman (kt) 14,063 14,053 16,172 11,925 14,795 56,945 57,041
Area C Joint Venture (kt) 27,685 26,971 26,302 25,284 28,818 107,375 94,431
Yandi Joint Venture (kt) 6,409 5,497 5,613 4,941 5,359 21,410 38,922
Jimblebar(1) (kt) 15,005 17,404 17,720 16,575 15,102 66,801 58,782
Wheelarra (kt) - - - - - - -
Total production (kt) 63,162 63,925 65,807 58,725 64,074 252,531 249,176
Total production (100%) (kt) 71,660 72,135 74,292 66,163 72,717 285,307 282,773
Sales
Lump (kt) 20,006 19,561 20,375 18,021 20,022 77,979 72,345
Fines (kt) 44,308 42,696 44,121 41,183 42,904 170,904 178,343
Total (kt) 64,314 62,257 64,496 59,204 62,926 248,883 250,688
Total sales (100%) (kt) 72,796 70,276 72,688 66,580 71,172 280,716 283,943
1 Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil
Production (kt) 1,000 1,148 1,095 1,048 1,221 4,512 4,071
Sales (kt) 991 1,146 1,097 1,111 1,160 4,514 3,995
19
Production and sales report
Year to date
Quarter ended
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Coal
Coal production is reported on the basis of saleable product.
BHP Mitsubishi Alliance (BMA), Australia
Production(1)
Blackwater (kt) 1,751 1,283 1,160 1,107 1,505 5,055 5,834
Goonyella (kt) 2,429 1,780 1,997 2,185 2,348 8,310 8,360
Peak Downs (kt) 1,366 1,325 1,480 1,251 1,424 5,480 4,944
Saraji (kt) 1,168 1,020 1,243 1,007 1,326 4,596 4,614
Daunia (kt) 472 324 441 607 617 1,989 1,491
Caval Ridge (kt) 997 930 631 772 1,257 3,590 3,899
Total production (kt) 8,183 6,662 6,952 6,929 8,477 29,020 29,142
Total production (100%) (kt) 16,366 13,324 13,904 13,858 16,954 58,040 58,284
Sales
Coking coal (kt) 6,734 5,615 5,872 5,372 7,448 24,307 23,358
Weak coking coal (kt) 1,118 600 727 710 1,064 3,101 3,411
Thermal coal (kt) 765 267 428 104 364 1,163 2,280
Total sales (kt) 8,617 6,482 7,027 6,186 8,876 28,571 29,049
Total sales (100%) (kt) 17,234 12,964 14,054 12,372 17,752 57,142 58,098
1 Production figures include some
thermal coal.
20
Production and sales report
Quarter ended Year to date
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
NSW Energy Coal, Australia
Production (kt) 3,919 2,622 2,851 3,934 4,765 14,172 13,701
Sales
Export (kt) 3,923 2,441 2,862 3,667 4,693 13,663 14,124
Domestic(1) (kt) - - - - 201 201 -
Total (kt) 3,923 2,441 2,862 3,667 4,894 13,864 14,124
1 The domestic sales are made under the NSW Government Coal
Market Price Emergency (Directions for Coal Mines) Notice
2023.
Quarter ended Year to date
Jun Sep Dec Mar Jun Jun Jun
2022
2022
2022
2023
2023
2023
2022
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Mt Keith
Nickel concentrate (kt) 48.0 42.6 39.6 38.8 44.5 165.5 195.8
Average nickel grade (%) 16.1 17.0 15.5 16.5 16.2 16.3 14.6
Leinster
Nickel concentrate (kt) 76.0 66.8 47.9 68.4 71.1 254.2 305.2
Average nickel grade (%) 10.3 9.9 9.4 8.6 8.5 9.1 9.3
Saleable production
Refined nickel(1) (kt) 11.7 17.5 10.8 13.2 13.1 54.6 57.6
Nickel sulphate(2) (kt) 0.5 1.2 0.4 0.9 0.7 3.2 1.6
Intermediates and nickel by-products(3) (kt) 6.6 2.0 6.5 5.5 8.2 22.2 17.6
Total nickel (kt) 18.8 20.7 17.7 19.6 22.0 80.0 76.8
Cobalt by-products (t) 110 238 93 175 246 752 632
Sales
Refined nickel(1) (kt) 11.7 18.1 10.2 13.0 13.1 54.4 57.7
Nickel sulphate(2) (kt) 0.5 0.8 0.5 0.9 0.8 3.0 1.3
Intermediates and nickel by-products(3) (kt) 6.4 1.8 7.7 5.7 9.5 24.7 16.1
Total nickel (kt) 18.6 20.7 18.4 19.6 23.4 82.1 75.1
Cobalt by-products (t) 110 238 93 175 246 752 632
1
High quality refined
nickel metal, including briquettes and powder.
2
Nickel sulphate crystals produced from nickel
powder.
3
Nickel contained in matte and by-product
streams.
21
Appendix 1
The Oak Dam Exploration Target, shown in Table 1, was determined using the BHP
internal process of Range Analysis based on 49 drill roles (~61km of
drilling). Refer to "BHP Results for the half year ended 31 December 2022,
Appendix 1 - Explanatory Notes and JORC table 1
(https://www.bhp.com/-/media/documents/media/reports-and-presentations/2023/230221_bhpresultsforthehalfyearended31december2022.pdf#page=72)
" for previously reported Exploration Results.
Table 1: Oak Dam Exploration Target.
Low High
Tonnes (Mt) 500 1,700
Grade (Cu%) 0.8 1.1
The potential quantity and grade of an Exploration Target is conceptual in
nature and as such there has been insufficient exploration to estimate a
Mineral Resource. It is uncertain if further exploration or analysis will
result in the estimation of a Mineral Resource.
The target is interpreted as IOGC style of mineralisation based on exploration
results from the Oak Dam project. Currently, drilling is at varying degrees of
spacing.
Target ranges were compiled within a facilitated process called Range
Analysis, in which potential volumes and grades are determined over a range of
assumptions on continuity and extension that are consistent with available
data and genetic models of IOCG copper style of mineralisation.
The target remains open at depth, to the south, and west of "Hardy Hill fault"
as per cross section on figure 1 below.
Figure 1: Oak Dam geology schematic W-E cross section looking north showing
mineralisation is open to the west of Hardy Hill fault, at depth and to the
south.
Intended activities for exploration target testing
BHP is currently running nine drill rigs at Oak Dam, with eleven rigs expected
by November 2023.
A 150-room camp, including a drilling core processing facility, will be
constructed on the tenement in 2023 to support the drilling program.
Competent Persons Statement
The information in this report that relates to Exploration Targets is based on
information compiled by Dr. Kathy Ehrig, a Competent Person who is a Fellow of
The Australasian Institute of Mining and Metallurgy and a Fellow of the
Australian Institute of Geoscientists.
Dr. Kathy Ehrig has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the 'Australasian Code for Reporting of Exploration Results. Dr.
Kathy Ehrig consents to the inclusion in the report of the matters based on
her information in the form and context in which it appears.
22
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