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Mine extension boosts OZ Minerals shares

AAP logoAAP 14/11/2016 Ethan James

Shares in OZ Minerals rose more than six per cent following the mining company's decision to extend the life of its Prominent Hill copper and gold mine in outback South Australia.

Oz Minerals on Tuesday announced that the mine will operate until at least 2028 after increasing its underground ore reserve estimate by more than 40 per cent.

"The growth in our underground mining operations will see Prominent Hill remain one of Australia's largest sources of copper," OZ Minerals chief executive Andrew Cole said.

OZ Minerals shares rose as much as 6.5 per cent to $8.00 at the start of trade on the Australian Securities Exchange, before closing up 36 cents, or 4.8 per cent, to $7.87.

That's more than double the price of $3.42 in late September.

RBC Capital Markets mining analyst Paul Hissey said OZ Minerals' move to extend the mine's life was not a significant technical or financial risk, with the company's share price more likely to be driven by factors including movements in the copper price.

OZ Minerals this month signed a partnership with traditional land owners, the Kokatha people, to proceed with the $1 billion Carrapateena copper project about 160km north of Port Augusta.

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