Premium Features :Goldstar starts singing in the hills of...

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Goldstar starts singing in the hills of Gippsland
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Thursday, 2 November 2006
Tim Treadgold

THE hills of Gippsland are alive, not with the sound of music, but the sound of mining. More than 90 years after the original miners marched out of Victoria's eastern gold province, a modern crew has returned, complete with some smart ideas about how to pick up what the old-timers left behind. By Tim Treadgold

Goldstar Resources, the company behind the return to the once-prolific goldfields around the isolated hamlet of Walhalla, is using brain power, rather than brute force, to get at the rich but narrow quartz veins that run through the remarkably steep hills of the region.

If it gets the technology right, including an experimental "external decline", Goldstar might have found a way to eventually extract the estimated 3.5 million ounces of gold still in the hills.

The proof, obviously, is in demonstrating that a different approach will work, a job made harder by a series of embarrassing failures in Victoria's famously "nuggetty" gold country by Bendigo Mining and Ballarat Goldfields.

But during a recent site visit, MiningNews.net was treated to a demonstration as to how Goldstar proposes to work (and re-work) the hills around Walhalla.

"We're not going to force the mine," said Goldstar chief executive Andrew King. "It is a difficult area to work, but the [gold] grades are excellent. What we've got to do is prove that we have a viable mining technique and then steadily grow the business."

The plan, which started with an extensive drilling campaign to pinpoint areas of swelling in the quartz veins (so called dyke bulges), involves accessing the ore via a series of adits driven into the sides of the hills.

Ore will then be pulled out at a number of points, starting as low as creek level at the bottom of a hill, loaded into a skip and hauled to the top where an ancient road system (little more than goat and/or firefighting tracks) provide a route out for trucks hauling ore to a crushing and processing circuit.

The decline, or skipway (see attached photographs), is essentially little more than an upmarket meccano set, rated to carry loads of around 10 tonnes, and perhaps a little more.

For most Australian gold mines, 10t loads would be far too small. But, when the ore being extracted is rich, and can assay more than 20 grams to the tonne, the financial equation starts to make sense.

The problem, which dogs all nuggetty gold fields, is knowing the average grade in the veins, which is why the current work at the Eureka prospect within Goldstar's great Walhalla project area, is to conduct a trial mining exercise that will test the proposed mining and haulage methods, and the nature of the multiple vein systems.

If the trial is successful, Goldstar has a big picture plan of extending its external decline system across its tenements, re-visiting a number of dyke bulges first found in the late 19th century, with more being identified now by a busy drilling program.

Eureka, the trial mine target, contains at least 430,000t of quartz reef material, and almost certainly a lot more given the nature of the vein system.

A second target, called Tubal Cain, is still being drilled but is already looking bigger than Eureka with a potential resource of 1.1 million tonnes of reef material identified to a depth of 300m.

"We're very happy with progress," King said. "The skipway is going faster than anticipated. Results at Tubal Cain and Eureka have been better than expected.

"The skipway is shaping as the value-added asset to the project. It will enable us to go into some of the steeper areas of this region with ease. It's showing that we can put a piece of highly productivity machinery into play in a difficult area."

The trial mine being developed will initially enter the Eureka hillside via an old adit, which is currently being widened. Ground conditions are excellent, with few signs of rock falls despite the last miners having left the area in 1914, at the outbreak of world war one.

The fact that few returned is not a criticism of the gold potential of the Walhalla region. It is more a comment on available mining methods at the time, problems with high rainfall and the high water table, and severe isolation caused by the difficult hill terrain.

Simply getting mine equipment into the area was a major logistics operation that was deemed uncommercial because much of the easy gold had been mined between the region's discovery in 1863 and 1914. Historians write that the gold ran out. In truth, it was a case of the miners who walked out.

Goldstar's plan is to enter through the widened Western Adit, which will expose mining crews to between four and six quartz veins within the swarm of nine found so far to run through the Eureka hill. Hand-held air leg drills are starting the process, with jumbo rigs to follow.

Once mined, the trial material will be carted to a quarry for crushing, sampling and detailed analysis. Underground mining will continue through the December quarter with results available progressively. During the first quarter of 2007, Goldstar will know a lot more about the ore body and the gold content of the reef system

While trial mining is underway, the government approvals process will run in parallel, along with a feasibility study – all leading to full-scale construction possibly starting in mid-2007, and first commercial production in early 2008.

King said the skipway was currently designed to haul 400,000t of material a year, but the design could be changed to suit the mining process, as well as being extended over greater distances.

"The great thing about the work we're doing at Eureka is that 80% of the expenditure on the bulk sample program is setting us up for production," he said.

"We're doing mine design and plant design now to come up with a few options for once the bulk sample is completed.

"We can see a sequence of potential dyke bulge mining developments along the Ross Creek line."

"We've got the Walhalla Proprietary in the hip pocket. Tubal Cain is already down to 600m and we can't see why it won't go down to 900m. Eureka, we believe could be somewhat similar, and then up to the north you've got a number of targets with potential."