news article

Batavia hopes Deflector will get it back in race



Spinifex JOHN PHACEAS



In about four months time, Batavia Mining boss Greg Durack expects to become a fully fledged member of one of the most exclusive clubs in WA’s exploration sector.
That’s when Batavia expects to confirm its much-maligned Deflector gold-copper deposit at Gullewa contains a gold equivalent resource of more than one million ounces.
What’s more, Mr Durack believes achieving the magic million-ounce mark will also pave the way for Batavia to give the all-clear to develop the project and start production by mid-2007.
If Batavia achieves both objectives it will represent a dramatic turnaround for project which has suffered more than its share of misery in the recent past.
The Gullewa project, 220km east of Geraldton, struggled until early 2003 under Menzies Gold until it was forced to close when copper-rich sulfide ore was mistakenly fed into the oxide gold treatment plant.
With no money coming in the door, Menzies was forced to call in administrators.
But a deal between Menzies and major creditor Hallmark Gold resulted in the creation of Batavia in mid-2003.
Batavia initially tried to fast-track a feasibility study into reopening Gullewa in 2004 but was stumped by the difficult metallurgy of the big Deflector gold-copper deposit which made recovering commercial quantities of both the copper and gold near impossible.
Though Mr Durack has a passion for the fast lane as a well-known racer of drag-bikes, the metallurgist and former manager of Normandy Mining’s big Kaltails venture at Kalgoorlie had no problem taking his foot off the gas at Gullewa to focus on getting the basics right first.
The company has subsequently spent the last year drilling, doubling the gold equivalent resource to 775,000 ounces at an average grade of 9.12 grams per tonne to a depth of 300m.
A further $1.3 million RC-diamond program is set to kick off next month to extend the resource to 400m depth, which Mr Durack said should lead to a new resource estimate of one million ounces by the end of June.
It has also been working on the metallurgy to find an economic solution to treating the copper-rich material.
Mr Durack said Batavia had now identified a process capable of recovering over 40 per cent of the copper and 80 per cent of the gold from the difficult oxide and transitional material in the top 75m of the deposit.
Half the gold would be extracted in a gravity circuit to produce bullion, with the remainder to be recovered in a saleable concentrate averaging almost 25 per cent copper and 66gpt gold.
Flotation would also recover 92 per cent of the copper and 89 per cent of gold from the primary ore.
“When I joined the company, I knew the metallurgy would make us or break us,” he said. “We now have a solution to produce a saleable concentrate from all three ore types.”
Mr Durack’s confidence in Gullewa’s prospects have been backed by investors, with the stock nearly doubling from 3.6¢ in late December to 6.3¢ on Friday.
Last week, Patersons Securities also agreed to underwrite Batavia’s 5¢ June 2006 options to raise $7.9 million and arranged a $1 million placement to Malaysia’s Phoenix Gold Fund at 5¢. Phoenix will also receive 20 million options convertible at 5¢ in June.
The funds will be used to complete the current pre-feasibility study by the middle of next month and move straight into bankable studies.
Mr Durack expected a development decision would be made in July or August.