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This article was in todays West Australian

HOT COPPER PRICES FAIL TO DEFLECT THE JINX AT BATAVIA PROJECT

The jinx that has dogged successive efforts to develop the Deflector gold project at Gullewa in WA’s Murchison has struck again, with booming copper prices still not enough to bring the project to fruition.
Junior explorer Batavia Mining revealed on Friday it has decided to defer completion of a feasibility study at the Deflector copper-gold deposit after a blow-out in expected construction costs from $13.8 million to $26.3 million because of runaway equipment and material costs.
Batavia said forecast operating costs had also blown out from $136 a tonne to $146 a tonne, because of escalating labour costs caused by WA’s critical skilled labour shortage.
Last of all, Batavia revealed a significant reduction in the grade of the mining reserve to 1.4 million tonnes grading 3.91 grams per tonne gold and 1.08 per cent copper compared to earlier scoping study estimates of 1.4 million tonnes at 6.25gpt gold and 1.32 per cent copper.
To counter the latest hurdles, Batavia said it would look at ways to enhance the projects viability, including a possible doubling of throughput rates to 500,000 tonnes a year to improve economies of scale and reduce unit operating costs.
It will also consider further infill drilling to upgrade shallow inferred resources to measured status so that more ounces can be included in the mining schedule. Batavia also believes there is a potential to add resources to the south of the current Deflector orebody and elsewhere at the company’s Gullewa tenements, 220km east of Geraldton.
Batavia has previously hoped Deflector will be in production by the middle of next year. Investors reacted poorly to Friday’s news, wiping almost 40 per cent off the company’s market value.
Batavia managing director Greg Durack said the initial results of the feasibility study were disappointing, Deflector remained “a valuable asset with an extensive recourse inventory”. “Our focus now is to improve the projected financial returns by pursuing enhancements at a number of levels, including our recently enhanced regional exploration strategy,” he said.
Batavia also remained in good financial shape with cash reserves of $7.9 million and a 12.5 per cent stake in uranium explorer Thor Mining worth more than $5 million.
Notwithstanding Batavia’s upbeat outlook, the latest problems at Gullewa continue the project’s rotten run of bad luck in recent years.
The Gullewa project was an intermittent producer under Menzies Gold until early 2003 when it was forced to close after copper-rich sulphide ore was mistakenly fed into the oxide gold treatment plant.
With no money coming in, Menzies was forced to call in administrators. A deal between Menzies and major creditor Hallmark Gold resulted in the creation of Batavia in mid 2003.
Batavia tried to fast-track a feasibility study into reopening Gullewa in 2004 but was stumped by the difficult metallurgy of the Deflector gold-copper deposit, which made recovering commercial quantities of both the copper and gold near impossible.
Batavia reactivated its development plans early this year after extensive drilling doubled resources to more than 775,000 ounces of gold equivalent