The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/632337
6 | ASIA Miner | Volume 13 • Issue 1 | 2016 Road to Success "We treated the samples in a small trial plant we built, compris- ing a trommel through which high pressure water was passed, and a small Knelson concentrator. We produced a concentrate and panned this down to get gold, which we then picked out and weighed. We knew no one would believe our results so we had a former manager of Amdel in Adelaide, QC everything. "By this method we ended up with a very accurate measure of how many grams of gold were in each cubic metre and, therefore, established a resource. It is conservative because we only picked out the coarse gold and there is a lot of fne gold you can't pick out. There can only be upside to the resource which the processing should establish. "The processing plant is based on the pilot – a simple gravity washing plant with a 120 tonne/hour trommel which breaks up the clay so the gold can fall out. Once gold is liberated from the clay the material goes into a simple high speed spinner, called a Knelson concentrator, which is very effcient at recovering gold. The heavy gold is fung out in the spinning motion and is very effective- ly trapped. The actual plant is much larger with fully automated, self-dumping Knelson concentrators. "We could never have afforded to do this work in a lab as it was an arduous process with about 800 samples tested. We learned a great deal about how the gold occurs and how it can be recovered, and we now have a high degree of confdence in our processing system. The plant is being built in in various parts of Australia and will be transported to Portia and assembled on site early in 2016." Portia's fourth owner Chris Giles is an exploration geologist who says he loves exploration because every deposit is unique. "It is rarely ever a case of 'walk up to it and there it is' as in the prospecting days of old. In most cases it is usually the third or fourth explorer to cover the ground that fnds a deposit able to be mined. "Portia is a classic case. It was picked up in the 1980s by Mar- athon Petroleum which was doing uranium exploration. They were drilling through sand and clay into a gravelly old river bed 90 metres below the surface where the water fowed and every now and then deposited uranium in what is called a roll-front deposit, of which nearby Honeymoon is an example. These ancient channels are called palaeochannels but you have no idea from the surface that they are present. Marathon drilled into the bedrock and took sam- ples so if there happened to be an ore body in the bedrock they would pick it up. Just north of Portia they picked up a copper kick in one hole. John Lynch of Werrie Gold recognised the opportunity, and invit- ed Pasminco in as joint venture partner. Pasminco followed up the copper anomalies in the late 1990s and found the gold, becoming the third company involved. Havilah acquired the property from the receivers of Pasminco in 2003, and drilled it out, establishing the gold resource that is now being mined at Portia. Economics stack up Portia is Australia's newest and probably smallest gold mine with the shortest life. There are 350,000 tonnes of gold-bearing material grading 5-6 grams/tonne for 67,000 ounces which will be mined out in a few months and will take about six months to process. Min- ing and processing should be all over by December 2016. The current gold price of around A$1500-1600 is excellent, Chris Giles says, and means that based on the current resource, Portia can generate about $80 million in revenue. "We have to pay about $3 million in royalties and the rest will be split between CMC and Havilah. Once we access the ore body it should be quite attractive and the revenue is likely to be earned in six months. "There is also the upside which is largely unknown. In the current pit we will recover about 80% of the known gold resource, but we also know from drilling there is patchy, high-grade gold in cracks and fractures in the bedrock. It's defnitely not the tip of an iceberg but after mining out the pit foor we aim to identify and dig out any rich 'patches' that may exist. Any upside will provide more cash to help advance our other larger projects in the area and will beneft CMC which has had to bear the cost of getting down there. "In a typical iceberg project you do a lot of work for perhaps 1-2 grams/tonne at a cost of around $1000 per ounce and sell at $1600 with no quick payback but if the gold price drops margins decrease. In our case we will get a quick payback once we reach the gold and the cost per ounce may be less than $100 per ounce as it is a simple plant with just a few operators." Steve Radford says he can't see any shortcomings for gold as a commodity in the near future. "There are always peaks and troughs in mining and we are fortunate to get Portia going during a trough when fuel prices are lower, parts for plant and equipment are cheaper, more quality equipment is available at lower prices, labour costs are not as expensive and there are plenty of quality tradespeople seeking work. "We went on site with one set of kit but have increased that to two. Those on site enjoy the work. We have shearers' cooks preparing home-made meals for workers. The job is on time, on target, on budget and more than 50% of the dirt has been shifted." Portia is the centrepiece of a unique mining arrangement between Havilah Resources and Consolidated Mining and Civil. The gold is free, coarse-grained and nuggetty. It will be processed in a simple gravity plant.