Re: #Official Mining Thread
Posted: Wed Mar 03, 2010 3:27 pm
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.
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.
