#Official Mining Thread

[Wayno]

The opposition needs to watch out here, I think they are reading into the report far too much and if it ends up being a massive expansion as expected the opposition will look like complete idiots.

Fairly sure the Opposition knows the "real action" (that is, big royalty increases) will occur well after the next election. So their scare mongering will pay some dividends in the short term.

To put it in context - if BHP today announced their expansion plans, it would still be 2 years BEFORE it starts production (a million tonnes of overburden has to be removed every day for 2 years to get at the mineral core), and then another 6+months before shipping and big royalties are due...

[rhino]

From Adelaide Now:

September 17, 2008 11:30am

THE first new metal mine in the Adelaide Hills for more than 50 years will provide a $29 million annual boost to the South Australian economy, Premier Mike Rann says.
Mr Rann today officially opened Terramin Australia's Angas zinc, lead and silver mine near Strathalbyn, south of Adelaide.
The mine already has delivered its first $1 million shipment of lead concentrate and has created 150 new jobs.
"Australia's mining industry had its origins in the Adelaide Hills in the early days of South Australian settlement and so it is reassuring this part of the state is again helping to drive our economy," Mr Rann said.
"The new mine has created jobs during the construction and operational phases and is providing significant economic benefits, especially for the Strathalbyn community."
Terramin executive chairman Kevin Moriarty said the support of the local community was a key ingredient in the success of the project.
"Many local citizens and businesses gave us encouragement and support," he said.
"Some of them who previously worked in more remote mines now work at Angas and can go home each night, instead of once a fortnight."

[Wayno]

Another SA miner strikes paydirt

Expect to hear more about this one. Close proximity to other mines is always good (sharing of infrastructure costs)...

http://steelguru.com/news/index/2008/09 ... sults.html

Monax Mining declares manganese and iron ore results
Monax Mining Limited has reported highly encouraging manganese and iron ore assay results from its maiden drilling program at the Jamieson Tank and Pollinga Prospects within the company's 100% owned Waddikee tenement on the Eyre Peninsula in South Australia.

The project is 55 kilometers west of OneSteel's iron ore mines on the eastern Eyre Peninsula and 55 kilometers north of Centrex's Wilgerup hematite project.

Monax believes that beneficiation is likely to upgrade the manganese and iron and efficiently remove the silica from the ore. Elevated levels of silica are expected to be the result of interstitial chart layers diluting the manganese and iron mineralization. The manganese and iron mineralization has a considerably higher density as compared to chart and should be easily beneficiated via a simple gravity separation process.

Iron ore is in the form of magnetite BIF and may be amenable to separation from manganese via magnetic beneficiation. Monax is in the process of undertaking beneficiation testing to demonstrate that a commercially acceptable product can be generated from the current drill results.

The location of the maiden drilling program focused on manganiferous outcrop identified from ground surveys, with the deepest hole drilled to 109 meters down hole. Manganese and iron ore mineralization has now been confirmed over a strike length in excess of 2.5 kilometers however the mineralization potential remains open at depth and along strike.

[Wayno]

And now we're producing more oil...

The Cooper Basin is potentially very big from an oil perspective. VicPet didn't try too hard and are delivering 2000 barrels a day from a test hole. I know it does not sound like much, but it should spur the desire for further drilling...

http://www.scandoil.com/moxie-bm2/news/ ... il-p.shtml

Victoria's Growler-3 flows at 2,040 barrels of oil per day on production test
Published Sep 23, 2008
Victoria Petroleum N.L. (Vicpet) as operator for the PEL 104/PRL 15 Joint Venture, in South Australia’s Cooper Basin, advises that following completion as an oil production well, the Growler-3 well on cased hole production test has flowed oil to the tanks at a rate of 2,040 barrels per day.

The Growler-3 well has been successfully completed over a 19 metre thick Birkhead sand oil zone and tied into the main Growler Oil Field production facility 800 metres to the east. Growler-3 was drilled as an appraisal well on the Growler Oil field to test the 16 metre oil column discovered in the Jurassic Birkhead Formation in Growler-1. Growler-3 is 600 metres northwest of Growler-1 and was interpreted to be a flank test of the Growler Oil Field as currently mapped. Growler-3 was drilled on an 80 acre spacing to the west of Growler-1. Growler-3 is the second successful Growler well in the current drilling program after the successful Growler-4 development well.

At the P50 level, the Growler structure is mapped at the P50 level as a four way dip closed feature covering approximately 900 acres located on the western margin of the Cooper Basin. The P50 oil-in-place for the Growler structure alone is estimated to be 5.7 million barrels and most likely recoverable oil is estimated to be 1.4 million barrels.

Vicpet’s Managing Director, John Kopcheff, commenting on the production testing results for Growler-3 and the previous development well Growler-4 said, “Vicpet is pleased to have completed the Growler-3 well as a strong oil producer with Growler-4 yet to come. While we won’t be producing Growler-3 at such high rates, such good results for the two Growler development wells, Growler-3 and Growler-4 are very encouraging for future development of the Growler Oil Field.”

“With the close proximity of the wells to the existing Growler production facilities, we anticipate bringing Growler-4 on stream as well in October 2008, following the necessary regulatory approvals. Vicpet believes that the target of 1,000 barrels of oil per day gross production from the Growler oil Field is now quite achievable by end 2008 from what we have seen.”

“The drilling rig that drilled and completed Growler-3 and Growler-4 is now drilling at the Warhawk-1 exploration site in the adjacent permit PEL 111, 8.5 kilometres to the north of the Growler Oil Field production facilities. The target for Warhawk-1 is the same Birkhead sandstone oil productive in the Growler Oil Field wells.

[UrbanSG]

Parts of an article from the Business Spectator website today (discusses the more long term strategy for Olympic Dam ie staged development):

Why BHP will go hostile
24 Sep 2008

Robert Gottliebsen

The DVD transcript below of an exclusive interview between Robert Gottliebsen and BHP Billiton chairman Don Argus and CEO Marius Kloppers, which is being posted to BHP shareholders, reveals that BHP believes that the fall in mineral prices is a correction. Robert Gottliebsen explains why he believes BHP is preparing to go hostile in its Rio bid.

Ten lessons about BHP from the Argus/Kloppers interview with Robert Gottliebsen

1) The most important lesson from my Argus-Kloppers interview is that BHP Billiton is convinced that the recent fall in commodity prices is a correction and does not reflect a fundamental change in direction.

When the interview took place on July 30, the prices of oil copper and other minerals were still strong. Both Kloppers and his predecessor Chip Goodyear have based their strategies on the belief that the extended bull market for commodities would be interrupted by a series of major corrections.

That view is set out clearly the interview transcript, and so what happened in the weeks that followed did not surprise either Argus or Kloppers. And in the final week of September when the transcript was filed with the stock exchange copper and oil had regained some of their lost ground underlining the BHP long-term view.

5) In the interview cuts it is clear that BHP does not think the original WMC plan to process all its uranium and copper metal in South Australia will work. While copper metal will still be produced in South Australia, Kloppers wants much of the advanced processing to take place elsewhere. Olympic Dam’s reserves are monumental but it is clear from the Kloppers remarks that the big Olympic Dam growth will not come until China greatly increases its nuclear power capacity. This is a project that will probably not deliver the forecast huge rewards until well into the next decade. But the rewards will be massive and will transform the South Australian economy.

10) Most analysts don’t agree with Kloppers and Argus (or Skinner and Albanese) on the minerals outlook. The analysts believe that mineral prices are going to suffer an extended setback in coming years. Most assume an extended price setback in calculating the value of both stocks. Leaving aside 2008-09 profit forecasts, BHP earned $US2.75 in the 2007-08 year which converts to $A3.27 on the basis of an 84 US cent Australian dollar. The profit will be a lot higher in the current year but at $37.90, BHP is on a price earnings ratio of around 11.6 with big profit rises likely in 2008-09 and beyond. It does not have a growth share rating.

[Wayno]

Parts of an article from the Business Spectator website today (discusses the more long term strategy for Olympic Dam ie staged development):

Why BHP will go hostile
24 Sep 2008
5) In the interview cuts it is clear that BHP does not think the original WMC plan to process all its uranium and copper metal in South Australia will work. While copper metal will still be produced in South Australia, Kloppers wants much of the advanced processing to take place elsewhere. Olympic Dam’s reserves are monumental but it is clear from the Kloppers remarks that the big Olympic Dam growth will not come until China greatly increases its nuclear power capacity. This is a project that will probably not deliver the forecast huge rewards until well into the next decade. But the rewards will be massive and will transform the South Australian economy.

and the serious argy-bargy commences, i wonder how Media Mike Rann will react to this...

[UrbanSG]

From the adelaidenow website today:

Upgrade for Prominent Hill

CAMERON ENGLAND, CHIEF BUSINESS REPORTER
September 24, 2008 12:30pm

THE amount of copper and gold at OZ Minerals' Prominent Hill mine has received a hefty upgrade, providing a possible boost to production and the life of the project.

OZ Minerals said today the amount of copper at the $1.08 billion SA mine had been increased by 35 per cent to 2.5 million tonnes, and the amount of gold had doubled to 7.4 million ounces.

The majority of the new resources are contained within the central lower copper-gold area, two resources west of the current mining plan and another to the east.

The central lower area is currently the subject of a feasibility study to evaluate the viability of underground mining, which would extend the mine life from about 2018 to 2030.

The resource in the planned open pit area remained similar to previous estimates. Another deposit 1km to the West of the current mine, which has returned excellent drilling results including 51m at 3.45 per cent copper, has not been included in the current resource upgrade, providing the scope for further resource additions.

The company said the deposit remained open in most directions, "and intensive drilling continues to extend known mineralisation and discover new zones''.

OZ Minerals executive general manager exploration Tony Manini said the company had always been optimistic about the prospectivity of the area, "and the expanded resources we are releasing today show that our optimism is being rewarded''.

The company's public affairs manager, Matthew Foran, said plans had not been made to mine the new western and eastern areas as yet.

"However they do add an extra option in terms of ultimately expanding Prominent Hill either from underground, or another pit, or an extension to the existing pit. "Such studies will be carried out along with further drilling.''

Mr Foran said the western copper and gold deposit was particularly interesting "as it is a new area that is open in all directions and is relatively close to the surface''.

The company is on track to start commissioning at Prominent Hill next month, when the crushing circuit will start operation, with production to start before the end of the year.

The company expects the mine to produce 110,000-120,000 tonnes of copper and 80,000-85,000 ounces of gold in 2009.

Fat Prophets rated OZ Minerals shares a "buy'', saying while the low zinc price had battered the stock, its moves to increase copper production in lieu of zinc at its Golden Grove mine in Western Australia and the recent confirmation of expected production from Prominent Hill boded well.

"The stock is likely to be volatile for a few more months yet. However, from a longer term viewpoint we believe the stock is good buying around current levels.''

OZ Minerals was trading up 5.5c at $1.75 at 1300 AEST.

[UrbanSG]

From adelaidenow:

New uranium mine to boost exports by $200m
CAMERON ENGLAND, CHIEF BUSINESS REPORTER
September 25, 2008 11:30pm

SOUTH Australian uranium exports are set to jump by more than $200 million a year following a decision to mine the world-class Four Mile uranium deposit in the state's east.

The deposit's owner, Quasar Resources, has decided to start mining it in January, 2010, subject to regulatory approval.

It will be the third largest in Australia in production terms, after Ranger in the Northern Territory and Olympic Dam in SA's Far North.

Another mine planned for SA, Honeymoon, near Broken Hill, is on hold, while there are several other uranium mines being considered both in SA and nationally.

The Four Mile deposit is expected to produce about three million pounds of uranium oxide a year, worth about $207 million at yesterday's uranium price.

The mine will have a lifespan of more than 10 years based on the current resource of 32 million pounds at the Four Mile West deposit.

But Alliance Resources, which owns a 25 per cent stake in the project, has previously set an exploration target of 30-47 million pounds for Four Mile East, meaning either the mine's production or longevity could be greatly increased.

Alliance said yesterday Quasar planned to construct a pre-processing plant close to the Four Mile deposits, with final processing and packaging done at the existing Beverley uranium mine near Arkaroola.

The mine will employ the in situ leach-mining method used at Beverley, which involves pumping a mildly acidic solution into the aquifer which contains the uranium, then extracting the mineral from the solution once it is pumped to the surface.

While some environmental groups have criticised this method, saying it could contaminate groundwater, Heathgate Resources' environmental impact statement into the Beverley mine says the process is low impact and is regularly monitored by authorities.

[skyliner]

Anyone got any access to a copy of BHP Billiton's announcement about Olympic Dam? (Supposed to happen Oct. 1). I heard only briefly when passing the TV a comment on a $6bn plan for OD being an issiue for the BHP takeover of Rio.

SA - STATE ON THE RISE.

[Wayno]

Anyone got any access to a copy of BHP Billiton's announcement about Olympic Dam? (Supposed to happen Oct. 1). I heard only briefly when passing the TV a comment on a $6bn plan for OD being an issiue for the BHP takeover of Rio.

SA - STATE ON THE RISE.

are you sure it's been released - i've not heard anything at all...

[skyliner]

Wayno, not sure it has - just presumed it would have been published. All I know is what I said in the last post.

Can't wait for the statement to be made!

SA - STATE ON THE MOVE

[frank1]

Wayno, not sure it has - just presumed it would have been published. All I know is what I said in the last post.

Can't wait for the statement to be made!

SA - STATE ON THE MOVE

yeah i can't wait either it will shut that fkn opposition leaeder up about putting too much faith in the minning boom. what a tool.

[mattblack]

Theres a BHP general meeting in London on 23 October and another one is in Melbourne 27 November. The anouncement will surely be made at one of these?

[Wayno]

Theres a BHP general meeting in London on 23 October and another one is in Melbourne 27 November. The anouncement will surely be made at one of these?

I suspect there will be a separate announcement, with Marius Kloppers & Mike Rann both on a podium smiling and shaking hands...

[Wayno]

SA top of the heap
This might not seem very exciting, but it certainly helps bring investment dollars to our state...well done by the govt to minimise the red tape..

http://www.theaustralian.news.com.au/st ... 89,00.html

DESPITE the export dollars that pour into Western Australia, it has been ranked the riskiest state for resources development in a survey of more than 3000 global mining and energy executives.

The state, which lost a $25 billion liquefied natural gas plant to Darwin last month because of site uncertainty, was ranked poorly because of land access, environmental red tape, land claims and labour relations, according to ResourceStocks magazine in its annual world risk survey.

Australia as a whole came fourth on the list of least risky countries, up from eighth last year. Finland was voted least risky, followed by Canada and Botswana.

South Australia was ranked Australia's top state, followed by the Northern Territory, NSW, Tasmania, Queensland, Victoria and Western Australia.

"The explosion of red and green tape combined with difficult indigenous affairs in WA has seen its former reputation as Australia's mining capital collapse to become the most risky jurisdiction in the country," Association of Mining and Exploration Companies chief executive Justin Walawaski said.

Results for different states were given for the first time this year. South Australia's pro-uranium Government and a program to expand exploration led it to the first spot.

According to the risk survey, Southeast Asian countries rate poorly on red tape and African countries tended to suffer because of poor infrastructure, red tape and sovereign risk issues.

The survey rates countries on 10 categories of investment risk, including sovereign risk, civil unrest, natural disasters and labour relations.