re: mini bsg? This article explains most of the details about the King Island Scheelite Project and may be of interest to u ROSCO_P.
King Island scheelite mine’s new nexus
By John Kennedy
King Island Scheelite (KIS) is planning to resume mining at its famous deposit at Grassy on Tasmania’s King Island in Bass Strait.
The deposit was mined almost continuously from 1917 until the mine closed in 1990 because of low tungsten prices. Total production over the mine life was 9Mt grading 0.60% WO3.
At closure, a remaining underground resource of more than 6Mt was estimated together with an interpreted continuation of the deposit under the sea to the south east called the Terodo prospect. This was when the mine was owned by Geopeko, its parent Peko Wallsend having earlier taken over the original listed King Island Scheelite company before it was absorbed by North Broken Hill, which in turn fell to Rio Tinto!
Even though no holes were drilled, Geopeko saw the potential in Terodo for a further 14Mt grading 1.0% WO3.
The current King Island Scheelite (until adoption of the current name in October last year formerly GTN Resources) acquired 100% of the property from Australian Tungsten, which itself acquired the titles and project from Rio Tinto in 2002.
The original option consideration was the completion of a preliminary feasibility study (PFS) that showed that re-development would be optimised by extending the old open pit mine rather than resuming underground operations.
The proposed open pit has a measured 4.1Mt grading 0.91% WO3, sufficient for a 10-year mine life at 400,000tpa.
A long-term mine life of over 30 years is possible through a combination of open pit and future underground mine developments.
KIS directors say they expect to achieve financial closure on the re-development of the mine by June with construction complete by January 2007 and a first concentrates shipment by the June quarter of 2007.
The period through to June will see completion of detailed design with long lead mining equipment items identified and ordered ahead of the financial close off.
The metallurgy of the deposit is well known from previous mining and KIS says additional floatation and an artificial scheelite plant can lift overall recovery to in excess of 90%.
The company says advances in processing are expected to deliver improved performance and lower capital and operating costs.
The King Island concentrates are well known and are already being countenanced by western world consumers seeking a non-Chinese production source.
They have minimal impurities and can ship in 20t containers packed in one- and two-tonne Bulka-bags.
KIS directors say the project will be a reliable, low cost producer.
The capex for the project initially put at $25m is now considerably higher. The original PFS identified a cash operating cost of about $US41 a metric tonne unit (mtu) and a payback of about two years at a $US75 a mtu tungsten price.
While a long term concentrate price of $US75 a mtu is assumed, other greenfield tungsten projects under consideration in Vietnam and Portugal assume $US100 a mtu in their feasibility studies, while the current spot price is $US215, which has risen astronomically on strong Chinese demand and recognition that China’s mines, long the dominating producers, have significant production and reserve problems.
China as the source of 80% of the world’s tungsten production has seen its number of producing mines halve to about 118 in the last two years.
This is due to declining resources, restructuring and government restrictions, including a focus on meeting burgeoning local demand with the growth in steel production and a focus on conserving resources and value adding.
KIS directors say western world consumers will need to secure reliable supplies from low cost western world producers and build on their technical leadership to create higher value added products.
They add that a real opportunity exists for low cost reliable western suppliers like KIS to enter into long term off-take contracts for high purity concentrates or readily processed concentrates.
KIS directors say while the project is potentially highly leveraged on the China growth story it is a strong project on a brownfields site.
The company says the project is likely to have a competitive low cost position with risks identified and manageable and relatively modest capital needs.
QOL
queensland ores limited
