Neptune Says It's Set To Mine Seafloor Off Nz For Gold, Copper...

Neptune Says It's Set To Mine Seafloor Off Nz For Gold, Copper


Thu, 05/01/2008 - 11:50 — NZPA
By Kent Atkinson of NZPA

Wellington, May 1 NZPA - Mining prospector Neptune Minerals Plc says it is ready to start a new mining boom on the seafloor off New Zealand.

Neptune Minerals Plc said in a statement in London that a study has confirmed the "attractive" economics of seafloor mining of gold and other valuable minerals in the Kermadec archipelago, northeast of New Zealand.

Deposits of gold, silver copper and zinc, worth up to $US2000/tonne ($NZ2610/tonne) -- off the North Island coast -- can be mined for a combined capital and operating cost of less than $US162/tonne ($NZ211).

It said that "compelling margins" are possible from seafloor mining on the site of former hydrothermal vents, known as a seafloor massive sulphide (SMS) zones.

These deposits are left on the seafloor over millions of years as minerals in the Earth's crust dissolve in super-heated fluids then drop to the seafloor when they hit cold seawater.

Metallurgical testing done for the company on a composite sample from its initial Kermadec exploration in 2006 showed an average of 11.2 parts per million of gold, 122ppm of silver, 8.1 percent copper, 0.5 percent lead and 5 percent zinc.

Initial mineral samples dredged up by scientists in 2004 contained a gold concentration of 6.1 parts per million, which was a higher concentration than some on-shore gold deposits.

The company also said today it is also embarking on a long term advanced exploration program in other New Zealand waters to define multiple SMS deposits for which it plans to also seek mining licences.

It wants to be scooping minerals off the seabed by 2010.

Including its third prospecting licence (PL39-195), for the southern part of the Kermadec Arc -- a chain of seafloor volcanoes and hydrothermal vents stretching from White Island 2500km northwest towards Tonga -- Neptune already has licences to prospect more than 63,000sq/km.

Neptune said the final report of a study for the commercial development of its NZ deposits, prepared by Genesis, a consultancy affiliated to major project manager Technip, evaluated alternative technologies for seafloor mining, ore-lifting, de-watering and surface "off-take" -- removing the valuable portion of the ore and dumping the waste back on the seafloor.

It plans to use a lot of existing marine technology from the oil and gas, marine diamond and offshore dredging industries. Neptune said it was also looking at contract mining in which a contractor would build, own and operate all the mining equipment -- reducing its need to raise capital for production assets.

Technip's recommended mining system uses a production vessel using satellite position to remain over a deposit, a big hose and an airlift pumping system connected at the seafloor to an ore-crusher and seafloor miner.

This could be used on a range of SMS deposits in multiple locations after pilot mining project.

Full production of 2 million tonnes of ore a year, over 10 years would require mining 16.2 million tonnes of ore, at a cost of $US91/tonne ($NZ118/tonne). Estimated total capital spending would be $US501 million including a separate full pilot mining system).

Neptune said its SMS deposits had a "in-ground" values ranging from $US500 to $US2000 a tonne "yielding attractive margins".

The estimated costs did not include onshore bulk-handling, metal refining and processing.

"Genesis-Technip has provided a realistic, commercially engineered solution to the challenge of seafloor mining," said Neptune chief executive Simon McDonald. "Neptune is now poised to take the next step from SMS explorer to developer.

"That pilot mining phase of commercial development of SMS mining by the end of 2010 is an achievable goal"

Neptune recently said it had found further mineral deposits was found in a former site of hydrothermal vents, known as a seafloor massive sulphide (SMS) zone on the Rumble II West seamount northeast of White Island.

He did not specify the composition of the deposit but research scientists found high concentrations of gold on the seamount in 2004.

Neptune's move to seek a mining licence are likely to trigger debate over whether mining the seabed is less intrusive and environmentally destructive than mining on land, or whether it will destroy potentially unique, uncatalogued reservoirs of biodiversity.

Neptune Minerals is listed on the London Stock Exchange's Alternative Investment Market (AIM).

http://www.guide2.co.nz/money/news/business/neptune-says-its-set-to-mine-seafloor-off-nz-for-gold-copper/11/809