LONDON, Jul 26, 2011 (Dow Jones) -- Xstrata Zinc, a unit of global diversified mining group Xstrata PLC (XTA.LN) said Tuesday it has started construction to develop the high grade zinc-lead-silver Lady Loretta deposit in north-west Queensland, Australia, as a new greenfield underground mine in a A$246 million ($239 million) project.
-Work will start immediately to develop the decline and underground services and surface infrastructure.
-Mine, which is 140 kilometers north-west of Xstrata Zinc's Mount Isa operations, is planned to be operational by the end of 2013.
-Xstrata Zinc assumed sole ownership of the Lady Loretta deposit in April following the acquisition of the remaining 25% stake in the project.
-Lady Loretta contains a total mineral resource estimated at 13.7 million tons, with 17% zinc and 6% lead grade.
-Lady Loretta will produce 1 million tons per annum of zinc-lead-silver ore and an annual average of 126kt of zinc in concentrate and 40kt of lead in concentrate over its 10 year mine life.
-Expansion will extend the current open pit to the North to access an additional reserve of 2.4 million tons of ore, extending the life of the mine until 2013, during which time it will produce an additional 88kt of zinc contained and 22kt of lead.
-Lady Loretta development brings total capital expenditure on current Xstrata Zinc development projects in the Mount Isa region to A$800 million.
-Mine will create jobs for up to 230 contractors at peak of construction in 2013, followed by a similar number of permanent operational employees when operational.
-Shares closed in London Monday at 1359 pence valuing the company at GBP40.28 billion.