#Official Mining Thread

[rhino]

Hillgrove ready to roll on Kanmantoo mine
Christopher Russell From: The Advertiser March 02, 2010 4:57PM

AN abandoned copper and gold mine in the eastern Adelaide Hills is about to surge back to life.
THERE'S a secluded paddock just 2km as the crow flies from the South Eastern Freeway between Mt Barker and the Callington turn-off.
Crisply dry now in late summer, its sparse vegetation masks a rock-strewn surface and blends with the remnants of an industrial past.
Fast forward just 12 months and this spot will again be bustling with activity as South Australia's newest mine begins trucking out its first loads of copper concentrate through Port Adelaide to the unquenchable markets of China.
"We're ready to roll," Hillgrove Resources managing director David Archer says of the company's flagship Kanmantoo mine. Armed with an approved mining and rehabilitation program and a bucketful of cash, Mr Archer expects that next month his board will make an in-principle final investment decision to go ahead and build the mine.

Hillgrove has a flying start with Kanmantoo. Being so close to the freeway means there's no need to build the infrastructure such as housing or airstrips required by remote sites.
The workforce - which will peak at about 300 during construction before settling at about 150 for the life of the mine - will be drawn from the local district between Murray Bridge, Strathalbyn and Mt Barker as well as from Adelaide, a comfortable commute away.
As a brownfields site - it was an operating mine in the mid-1970s - power and mains water run to the front gate.
Fortuitously, Mt Barker District Councils' Laratinga water treatment project needs to dispose of industrial quality water, giving Hillgrove ample supply for minerals processing via a 15km pipeline.
The pipeline will create opportunities for local agriculture, a big tick in the community ledger linked to Hillgrove's presence.
Community approval has been one of the biggest hurdles to overcome so any ticks are welcome. "We're in a very community-sensitive area," general manager Cam Schubert says.
"There's the local residents and then we're in the Murray-Darling catchment. So, our approvals process has been very thorough."

Hillgrove has an active consultation board bringing together the miner, government and representatives from landcare, school and other community groups.
Common concerns were over water and having up to five semi-trailers a day trundling through the township of Callington.
For water, the Mt Barker pipe provides a solution. To stop contamination, licence conditions stipulate no water leaves the site, the surrounding water table cannot be lowered and tailings will be triple-lined.
To nullify the trucks issue, Hillgrove will build a bypass road to the Princes Highway which feeds to the freeway.
Fertiliser producer Neutrog, which occupies the old mine's processing sheds, was worried about blasting. Neutrog managing director Angus Irwin lodged a formal submission on the issue but got no reply. However, he's now happy after Hillgrove spoke to him and he was contacted by Primary Industries and Resources SA last week.
Hillgrove seeks to get involved with its community where it can including sponsoring local footy side the Callington Eagles.

Another major hurdle has been financing the project.
Mr Archer spent much of 2009, seeking a venture partner before the board decided to go it alone by cashing in its shares in NSW energy explorer Eastern Star Gas.
The $171 million sale allowed Hillgrove to pay off convertible note debt and it now has more than $130 million at hand.
Hillgrove estimates it will cost $98 million to build Kanmantoo, with about half coming from its cash stockpile and half from new debt.
"We're seeing a lot of banking interest in the mining industry, particularly this sector," Mr Archer says. "There doesn't appear to be any hesitancy about Hillgrove or the Kanmantoo project."

On the ground, drill rigs will be on site this month to help finalise the pit design. Next month, Mr Schubert expects to begin civil works for site buildings. That'll be followed in May by the arrival of a processing plant bought from the Pillara Mine, some 375km east of Broome in WA, which shut in 2008.
There is a team in Pillara now, dismantling the plant in preparation for transporting it to SA. Work is being done with Abesque Engineering, a WA-based firm which constructed the Angas zinc mine at Strathalbyn and which is the preferred tenderer to build Kanmantoo.
The plant cost $11.5 million and will need another $30 million spent on transport and reassembly - but buying it has shaved $20 million off capital costs plus considerable time.
"It's in such a good condition there's very little rebuilding to be done," site manager Richard Bradey says. Built for lead/zinc processing, it uses the same flotation process Hillgrove will use to concentrate its ore from about 0.9 per cent to 24 per cent copper content.

"China, China and China," Mr Archer says of where that concentrate will go.
Hillgrove's largest shareholder, RBS Sempra Metals, a London Metal Exchange dealer, has an offtake agreement to take everything produced.
"We'll produce about 17,000 tonnes of copper a year in our concentrate," Mr Schubert says.
"And in the concentrate there'll also be about 8000 ounces of gold."
There is also silver in the ore but being of different mineralisation to the Gawler Craton deposits such as Olympic Dam and Prominent Hill, there is no recoverable uranium.

Mining operations, expected to be contracted to Wayville-based Exact Mining Services, will first target expanding the pit dug in the 1970s and a small satellite deposit near the planned processing plant.
Hillgrove will appoint senior project roles next quarter with the bulk of recruitment scheduled for the second half of this year.
Hillgrove has a highly prospective exploration tenement running north and south which includes many historical diggings such as Wheal Ellen near Strathalbyn which will be drilled this half year.
"No one's really applied modern exploration techniques to the area," Mr Bradey says.
He's optimistic more deposits will be found and with Kanmantoo built, these would become commercially viable.
"But the current Kanmantoo resource alone justifies the plant," Mr Archer says.
He's quietly excited that the stars have aligned.
"This project will be one of the last copper developments to go into production over the next four or five years," he says.

[Wayno]

Hillgrove ready to roll on Kanmantoo mine

"We'll produce about 17,000 tonnes of copper a year in our concentrate," Mr Schubert says.
"And in the concentrate there'll also be about 8000 ounces of gold."

By my estimate this mine will generate ~$4.5m in annual royalties, not to mention 150+ jobs. I'm unsure how long the Kanmantoo mine will run - probably 7+ years...

[Wayno]

Another Uranium Mine

It's so new it has not yet been named! I think i'll call it 'Fromey'

http://www.abc.net.au/news/stories/2010 ... ction=news

A proposal for a new uranium mine in north-east South Australia will be the subject of two public meetings this evening.

Heathgate Resources wants to expand its operations near Lake Frome.

The company operates the Beverley uranium mine and is a partner with Quasar Resources in the nearby Four Mile mine.

The proposed Beverley north mine will be situated about 10 kilometres from the existing mine and will operate as a satellite extension to it.

The new mine will use the same in-situ leaching method for resource recovery.

Heathgate says production will remain at the current capacity of 1,500 tonnes of uranium a year.

Public consultation sessions will be held this evening in Port Augusta and at Arkaroola, with an environment report and mining lease application expected to be released in the middle of the year.

[monotonehell]

If hot rocks technology comes good we wont have to think about nuclear for another 50 years. It has massive, massive potential

Bingo!

'Zac'ly. Why "waste" it, when we can sell it, and live off renewables?

[Waewick]

If hot rocks technology comes good we wont have to think about nuclear for another 50 years. It has massive, massive potential. Still at the crawling stage at the moment, wait till its up and running. SA is best suited to renewables, low population, vast multi faceted environments for solar, wind, hotrocks and wave. Cities such as Sydney or Melbourne im not so sure about though.

hot rocks is interesting I agree

but its a bit like hydrogen power, there is potential but its looking more and more likely that it won't come to fruition in the next 50 years

[Aidan]

If hot rocks technology comes good we wont have to think about nuclear for another 50 years. It has massive, massive potential. Still at the crawling stage at the moment, wait till its up and running. SA is best suited to renewables, low population, vast multi faceted environments for solar, wind, hotrocks and wave. Cities such as Sydney or Melbourne im not so sure about though.

hot rocks is interesting I agree

but its a bit like hydrogen power, there is potential but its looking more and more likely that it won't come to fruition in the next 50 years

More and more? To me it looks like less and less! After all, it's already powering Birdsville.

Am I missing something?

[Wayno]

I thought Geodynamics was already powering the town of Innamincka (in outback SA) by hot rock technology?

[rhino]

It's so new it has not yet been named! I think i'll call it 'Fromey'

10km north of the original Beverley mine - I'm guessing it'll be called 6-mile.

[mattblack]

I thought Geodynamics was already powering the town of Innamincka (in outback SA) by hot rock technology?

Innamincka it is. Its not connected to the grid. Makes it ideal for proof of technology with low population. 1 problem is that its going to take a bucket of $ to connect to roxby which I think is the closest connection, which is wwhere the gov. need to step in. There are many sites under investigation up there though so once its in place let the money start flowing once SA starts exporting lekky.

[waz94]

I thought Geodynamics was already powering the town of Innamincka (in outback SA) by hot rock technology?

No not yet. It was all set to go after "proof of concept" was all proven at the start of last year. They built the test power plant and were only weeks from commissioning it, when one of the deep production wells blew apart (to put it bluntly) due to hydrogen embrittlement (whereby the steel casing cracked and causing steam to escape, which isnt a good thing in a closed system).

Basically, they had to call in a team to plug the well and 12 months later they are still assessing what to do. They have continued on with drilling other wells but this particular well has been put on hold, and as this was the well that was due to power Innamincka they will be on diesel generators for some time.

Unfortunate incident, especially as a shareholder, but they have learnt some lessons and hopefuly it wont happen again in other wells.

Proof of concept is there just still working on the infrastructure.

Hot rocks technology will be online within the next 5 to 10 years. Other SA companies like Petratherm are very close as well. Hot rocks is already developed overseas so not sure why it would be another 50 years Capitalist. Australia not that far behind

[Wayno]

Pre-election push for cash?

Mining companies are just like any other industry lobby group - they come out of the woodwork just before an election!

ABC Online:

Miners call for $650m 'leg up'

South Australia's peak mining body says the state's resource potential will not be realised unless the major political parties make serious commitments to supporting growth in the mining industry.

The Chamber of Mines and Energy says announcements by the Labor and Liberal parties in the lead up to the state election are missing the main game.

Chief executive Jason Kuchel says at least $650 million needs to be invested in infrastructure and workforce development over the next five years.

"A lot of the smaller projects just simply can't afford the many of hundreds of millions of dollars worth of infrastructure without the Government looking to put in some dollars up-front, with the view of course of recouping that money," he said.

"But we do need a leg up, so to speak."

[AG]

Expanding on the article Wayno posted:

Mining wants $650m boost

* Daniel Wills, Lauren Novak
* From: The Advertiser
* March 06, 2010 12:01AM

EXPANSION of the state's mining sector will be stalled and the economy prevented reaching "top gear" unless the next government invests $650 million for new infrastructure, industry leaders say.

South Australian Chamber of Mines and Energy chief executive Jason Kuchel said Labor and the Liberals were "missing the main game".

Major new investment was needed to support exploration, power, roads, water and training over the next five years, he said.

Mr Kuchel said a "national resurgence in natural resources" was looming but the state risked missing out on the full benefit. "There is only so much individual companies can do in building infrastructure," he said.

"It really needs a co-ordinated effort and a serious investment of government as well as private sector funds, to kick start the projects."

Mr Kuchel said the industry wanted a "leg-up" and not a "hand-out" "Many smaller projects can pay for infrastructure through user charges, but are not in a position to make the capital investment upfront for major infrastructure," he said.

Mineral Resources Development Minister Paul Holloway said Labor's "core" campaign promise to create 100,000 new jobs included specific plans to provide training places to meet mining and engineering needs.

Opposition mines spokesman Mitch Williams said the Liberals would "put our money where our mouth is" in support of facilities at Port Bonython and a regional infrastructure development fund.

The Government yesterday continued its attack on Liberal policy costings, accusing the party of possibly breaching electoral laws by accepting designs for its planned stadium free.

Architect Paul Pruszinski and his staff did not charge for designs for a city stadium and a rebuilt RAH, which have formed the basis of Liberal policy.

Transport Minister Patrick Conlon said such a gift to political parties must be disclosed under federal laws. It appeared the Liberal Party had failed to do so.

He has referred the matter to the Electoral Commissioner but called for the Opposition to reveal how much the work was worth and if there might be an alterior motive for providing it free.

Mr Pruszinski, who is not a member of the Liberal Party, said he "wouldn't have a clue" how much the plans were worth but he provided them to "save Adelaide". He said putting a hospital on the "only" piece of riverfront land left in the city would halt growth and "if Adelaide doesn't grow, my company doesn't grow".

"At no point have they (the Liberal party) said we're getting the job or have we put our hand up to say can we have the job," Mr Pruszinski said.

Opposition finance spokesman Rob Lucas said the Liberal Party had complied with the law. He labelled the Government attack "slimy". "If anything is required to be declared we will declare it, the same way as Labor," he said.

[skyliner]

Anyone heard of any recent developments with ODX? The only one I've come across was linked to the 'Paydirt' conference on uranium - in Hilton on I think 1/3/10. There Rann was giving around $6m (huge) towards ODX development. It is certainly not shut down as a possibility but postponed a little in current understanding.

SA - STATE ON THE MOVE

[Wayno]

Anyone heard of any recent developments with ODX? The only one I've come across was linked to the 'Paydirt' conference on uranium - in Hilton on I think 1/3/10. There Rann was giving around $6m (huge) towards ODX development. It is certainly not shut down as a possibility but postponed a little in current understanding.

The next official step is publication of BHP's supplementary EIS, due mid-2010, closely followed by angst from minority groups (about desal & port locations).

Bottom line: we won't see any detailed timelines/plans until the environmental impact concerns are done and dusted.

[Wayno]

Deep Drilling R&D
I was chatting with some mining industry mates last night over a few drinks. They talked about a new company being setup in Adelaide focused on R&D for "deep drilling technology". Should result in 20-50 local jobs in the short term (more in the long term once production starts and their R&D scope expands). Further, it will provide further global recognition that SAs mining industry is more than simply a dig it up and ship it out operation.

As we know, the 'good stuff' in outback SA is located waaay underground (compared to other Australian States), so this company will definitely help us in that respect.

Here's the article from AdelaideNow ==> http://www.adelaidenow.com.au/business/ ... 5846094838

ADELAIDE will be home to a new $105 million Cooperative Research Centre for deep-exploration technologies.

The CRC will be based at Boart Longyear's Adelaide headquarters and will be headed up by geothermal company Petratherm director Richard Hillis.

The CRC will run three key research programs that will look at:
* TECHNOLOGIES that can drill faster and more safely.
* IMPROVING the timeliness of data from exploration holes during drilling, either in real time via down-hole sensors or through on-site sample analysis.
* IMPROVING the use of geology and geophysics for targeting deep mineral deposits.

The CRC also plans to develop Australia's first national drilling training and testing facility in SA.

It has been funded with $1 million from Primary Industries and Resources SA plus in-kind support, $20 million in industry funding, $28 million in federal government funding and $50 million in university, CSIRO and industry in-kind support.

Dr Hillis said mineral exploration was increasingly directed towards deposits at depth. SA is a good example of this, with the Olympic Dam copper, gold and uranium deposit, the Prominent Hill copper/gold ore body and the Carrapateena copper/gold deposit all at considerable depth.

"The CRC aims to reduce the risk and the cost of deep exploration," Dr Hillis said.

"The CRC's work also has the potential to provide important information and technology assistance to the geothermal industry. Many of the problems related to cheaper, faster drilling of hard rocks are shared by the minerals and geothermal industries."