ORE production has started at Xstrata Copper's $300 million Mount Margaret Mining operation south west of Cloncurry, following the official start of mining activities last month, with ore now being trucked to Ernest Henry Mining for processing.
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Xstrata Copper purchased the Mount Margaret mining tenements last year for $175 million and Ernest Henry Mining general manager Myles Johnston said it would invest a further $124 million in the operation over the next five years.
"Mount Margaret is progressing on target with personnel and machinery gradually ramping up in line with the ore production schedule.
"Approximately four million tonnes of material have been mined since we started the pre-strip in July," Mr Johnston said.
Mount Margaret Mining would boost Ernest Henry Mining's production profile over a five year period, strengthening the economics of their operations and taking immediate advantage of the available installed capacity of the concentrator and associated infrastructure, he said.
"The Mount Margaret Mining operation demonstrates our commitment to continue investing in North Queensland and sustaining our operations, which contribute significant economic benefits to the region and the state."
Ore was being trucked to the Ernest Henry operation where it would be temporarily stockpiled prior to processing, which would commence in late September.
"Mount Margaret ore has a different composition to ore from Ernest Henry and will be treated separately through the concentrator using a different reagent scheme and settings to achieve maximum grades and recoveries," Mr Johnston said.
"Our Mount Margaret workforce has now grown to 220 people and we expect to reach our full contingent of 300 employees in the first quarter of 2013.
"Our current open pit mining fleet includes two excavators and eight haul trucks, with another three excavators arriving in September and additional trucks and equipment coming online from 2013 in line with our production schedule.
"Next month, we also expect to complete construction of the administration building, amenities and maintenance workshop, with additional supporting infrastructure completed by the end of this year."
Mr Johnston said in total the Mount Margaret operation would add an additional 20 million tonnes of ore to Ernest Henry's existing production profile throughout its five year life, producing around 140,000 tonnes of copper, 83,000 ounces of gold and 560,000 tonnes of magnetite in concentrate over that time.
Xstrata planned to continue exploration at Mount Margaret to identify any additional ore resources for future development.