In an update today the company said the project would start immediately, with the second decline linking existing underground development and the open pit.
The work will lift peak capacity of the underground by about 30% to 3.5-4 million tonnes per annum, with cost declines helping OZ further reduce cut-off grades.
“Prominent Hill’s underground mine is proving itself to be an excellent asset and we want to invest in its future,” managing director and CEO Andrew Cole said.
“Once the second decline is complete in the next two years, truck efficiencies in the underground will increase and we will see other major benefits in terms of ventilation and contingency planning.”
The decline will cost about $A12 million and will be 1.4km long. Byrnecut has been selected as the contractor and work is scheduled to finish in the fourth quarter of 2017.
Along with boosting output the project will bring forward underground production during the years 2018-2022, with the scheduling coming alongside forecasts for the open pit to finish in 2018.
Along with building the second decline OZ said it would spend about $4 million this year on resource to reserve conversion.