Mining News Article : CRB

Came across this 2 days ago:

Mount Morgan in Carbine sights

THE famous old Mount Morgan mine in Queensland has been involved of two or three illustrious companies in its time and with Carbine Resources the latest to arrive on the scene, could one of the grand old ladies of the Australia’s mining history be about to nurture another?

• Michael Quinn
• 30 Mar 2016
• 8:54
• Feature

Mount Morgan
It is an early question to be sure. Carbine hasn’t even completed a feasibility study so any dropping of names like BP Oil or Peko Wallsend does seem rather overblown to put it mildly.
But, it’s not a question completely without foundation.
In an analyst note earlier this month brokerage Patersons described it as a potential “company maker”, and with cash costs put at $US234 per ounce (in a pre-feasibility study completed last year), a sense of the opportunity at hand is immediately created.
What Carbine is aiming to do it re-treat the tailings at a project that over 100 years of operations produced about 8.5 million ounces of gold and 400,000 tonnes of copper.
Given that history, the potential for retreatment of tailings at Mount Morgan has unsurprisingly been looked at before.
But whereas previous contenders apparently looked at the potential for just the gold, Carbine is aiming to recover the copper from the tailings first, before then capturing the gold (and pyrite too).
As described by Patersons, in the first part of the circuit resin technology is used to take out the copper (as copper sulphate), with the gold then going through a standard CIL circuit for recovery.
“Previous operators have tried to recover the gold only and been hampered by the copper mineralisation which increases the consumption of cyanide resulting in higher reagent costs and lost revenues,” Patersons said. “We are comfortable with the use of resin technology which has been around for many years in Russia for processing gold and more recently in uranium operations throughout the world over the past 10 years.”
It is the positive impact of the revenues from the copper and pyrite that make the financial case so compelling – with sales contracts for the two already in place.
“These by-product credits significantly reduce operating costs, making the project potentially one of the lowest cost gold operations in Australia,” Patersons said. “Based on our estimates, the initial project would generate some $A60 million of free-cash in the first year of operations and $33 million over the life of the project.”
Carbine was capitalised this week at $26 million, with the project potentially having required initial capex of $60 million or so.
With only 8 million tonnes of the 40Mt of mineralised tailings being targeted – meaning a notional project life of eight years – there is opportunity seen for another 5-6Mt, after which Carbine could look to target the 28Mt of partially mineralised waste in the main open pit (which would involve dredging).
There is also estimated to be 250,000oz of gold equivalents remaining in the historic open pit.
And then there are the opportunities outside of Mt Morgan, with the original idea behind the company that brought the Mt Morgan opportunity to Carbine being to target a number of government-owned tailings dumps requiring metallurgical solutions.
Carbine’s managing director Patrick Walta is a qualified metallurgist who was involved in the formation of private group Raging Bull Mining, set-up to identify tailings opportunities in Australia.
For now though it is all about completion of the feasibility at Mt Morgan.
Carbine has an estimated $1.8 million cash, with feasibility work pegged for completion in June.
Carbine hosted a site tour earlier this month featuring both buy and sell-side analysts.
Shares in Carbine Resources have more or less tripled in value so far this year.
Still, Patersons for one has been valuing the stock someway north of current levels.
Perhaps the most appropriate analogy for Carbine shareholders and would-be investors to consider is Kaltails, the tailings retreatment venture on the outskirts of Kalgoorlie said to have been very profitably operated by Normandy Mining for a decade or so beginning in the early 1990s.
Kaltails is certainly an analogy that would ‘resin-ate’ for all involved with Carbine!