Havilah Resources, which is developing its Portia gold mine near Broken Hill for production start-up in coming weeks, is targeting a 2016 go-ahead mining decision for its much larger neighbouring Kalkaroo Copper-Gold Project.
The company completed a feasibility study for Kalkaroo in 2010 and last week released an updated mining study report.
The company’s managing director Dr Chris Giles said Kalkaroo was one of Australia’s largest undeveloped copper and gold resources, with a JORC measured and indicated resource inventory of 620,000 tonnes of copper and 2 million ounces of gold.
“We have continued to steadily advance and de-risk the Kalkaroo project, 100km northwest of Broken Hill, with significant positive advances made in a number of material respects. Subject to timely permitting and financing being in place, we hope to be able to bring the Kalkaroo mine on stream as the Portia gold mine is winding down in the second half of 2016,” he said.
Key milestones recently achieved have included:
• Removal of land access risk by acquisition of the surrounding 550sqkm Kalkaroo station.
• Major progress in mine permitting following submission and public exposure of a comprehensive Mining Lease Proposal document for the Kalkaroo mining operation.
• Markedly improved gold recoveries in sulphide ores indicated by new metallurgical testing, potentially adding more than 300,000 ounces to total gold production.
• Many new economic grade ore intercepts that either confirm existing mineralization or indicate new mineralized positions outside of the current resource, based on additional drilling.
Dr Giles said key technical advances, especially in open pit optimization, mine design and metal recoveries, have allowed formulation of conceptual financial models for various Kalkaroo mining scenarios and funding options.
“In particular, high capital start-up and lower capital start-up options have been considered in some detail. Such alternatives are possible for Kalkaroo because of a combination of two unique physical characteristics of the deposit, namely, a distinctive and mappable vertical zonation in mineralization types and the exceptionally long (3km) strike of the main ore zone.
“This allows sequential mining of various mineralization types to optimize processing plant utilization and also provides the opportunity for in-pit waste dumping as mining progressively moves along the main ore zone.
“At current metal prices and exchange rates the conceptual financial models indicate that in both cases the project can generate positive economic returns after return of all investment capital. With significant gold credits Kalkaroo has a natural hedge because prices of these two metals often move in opposite directions in response to the same external economic factors, as has happened over the past few months,” he said.
During the next 12 months Havilah plans to further de-risk the project which will assist it in attracting the necessary mine development financing.