Mining News Article 21 October 2015

Dirty deeds done very profitably

GIVEN Mike Trumbull has spent the better part of 3-4 decades in mining trying to make big dollars with the companies he’s worked-for by digging holes, it’s got to be seen as ironic that he’s now looking at having his biggest win from doing the opposite … filling holes back in with dirt.

• Michael Quinn
• 21 Oct 2015

Trumbull, a mining engineer whose worked for pretty much all the big Australian miners over a career that began in the 1970s, is the executive chairman of Nagambie Resources, a company part-reinventing itself as a landfill provider near Melbourne.


Nagambie has two pits mined for gold in the 1990s that are considered perfect for dumping sulphidic fill (from building and civil construction projects) into.

Sulphidic fill is known as PASS because of the potential for the sulphides to break down into acids and sulphates if stored above ground – an obvious deleterious environmental impact.

Nagambie’s pits are perfect for PASS because they have lots of water in them, and by being stored below the water line, the PASS is rendered benign.

The good news is the water in the pits is not much good for anything else. According to Trumbull it is too salty to be potable, and for the same reason it is no good for agricultural purposes.

The two pits have capacity to store 6.2 million tonnes of PASS, meaning very good news for Nagambie shareholders given PASS is costing about $A150 per tonne to store at various sites around Melbourne.

Trumbull points out that it will cost about $10/t to truck, so the notional price in terms of the opportunity for Nagambie, is in the order of $140/t.

However Trumbull isn’t saying Nagambie will get $140/t for PASS sent its way.
“We have to be attractively less than $140/t,” is what he is saying.

A recent example he gave to shareholders was for a CBD high rise development in Melbourne that has around 200,000t of PASS expected to need to find a home in the first half of 2016.

“Storage of this PASS in Melbourne landfill sites could cost around $30 million plus trucking,” Trumbull said. “The additional trucking costs to Nagambie mine of around $2 million could mean that the Nagambie site, provided the company bid a storage cost that was attractively less than $28 million, would be the preferred site both in terms of cost and environmental outcome.”

Trumbull further pointed out that potential PASS in the excavations of all currently approved high rise buildings in the Melbourne CBD and Fisherman’s Bend amount to millions of tonnes.

And then there’s planned medium term projects like the Melbourne Metro Rail project involving five new underground rail stations and two 9km rail tunnels.

So seemingly no shortage of PASS, and according to Trumbull, there are no other suitable sites like Nagambie’s pits elsewhere within reach of Melbourne.

Nagambie will only have to spend about $50,000 getting both pits ready – one is essentially ready now – with haul roads, truck-tip areas and fencing all that’s needed.

Trumbull expects the sites to have all approvals in place by March next year.

But while Trumbull had all the answers on the positives of this venture, he couldn’t explain why the market was valuing Nagambie at less than $15 million this week.

“The numbers are boggling,” he said. “I guess the market is not as efficient as I was taught in university.

“This is better than mining. We will make a lot of money filling holes”.