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Bronzewing paying dividends for View
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Monday, January 07, 2008
Colin Jacoby
VIEW Resources has announced gold production from its Bronzewing mine in Western Australia's northern Goldfields increased by 45% for the December quarter over the previous quarter.
The Perth-based company produced 25,400oz of gold during the December quarter, up from 17,500oz in the September quarter, with 10,300oz produced in December.
View managing director Tim Gooch said the turnaround at Bronzewing in the last quarter, and in particular during December, was attributable to the company achieving more consistent ore supplies from four sources.
"This has had an immediate impact on throughput, head grade, recoveries and ultimately gold output," he said.
Gooch said the company would continue to build stockpiles of ore over the next few months and ensure that throughput and production remained consistent.
"What is most heartening is that the key feasibility study assumptions are reporting as modelled and this gives us confidence as the project moves forward," he said.
Bronzewing's production target is 120,000oz gold per annum, with ore mined from two underground declines, Discovery and Calista, and two openpits, Success and Central.
The company treated 172,631 tonnes of ore at 1.96 grams per tonne through the plant in December with an average recovery of over 93% as the processing facility moved towards its full rated capacity of 2.2
million tonnes per annum.
View anticipates overall costs will start to fall in line with the finishing up of Discovery underground capital development program and the main waste pre-strip at the Central openpit.
Gooch said the company had managed many of the challenges faced in the ramp-up period at Bronzewing.
"We believe the project is on track to consolidate production in 2008 and therefore strengthen the company's cashflows," he said.
"This will enable View to renew its focus on exploration and consolidation, adding further value to the Bronzewing gold project and the company well into the future."
Shares in View gained 1c to 25c in morning trade.
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Small wins
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Monday, January 07, 2008
THINKING small can often revive prospects that seem close to expiring with half a dozen examples in minerals ranging from nickel to diamonds. By John McIlwraith
The fabled Kambalda nickel belt, the discovery of which launched the Australian industry, was facing serious problems six years ago, with Western Mining Corporation struggling with rising costs and historically low prices.
The company made a decision to dispose of the mines in the area, but keep the lucrative processing phase of their operations.
Former WMC chief executive Hugh Morgan recalls that the company decided that these mines absorbed an inordinate amount of management time, each requiring a very focused effort as the mines went deeper, while the nickel price, which fell as low as $US1.70 a pound, was often below production costs.
He denies that WMC (which no longer exists, having been taken over by BHP Billiton) abandoned the mines.
Instead it passed them on to small operators that were able to devote time and energy to each mine, while WMC secured the rights to process their ore at its nearby plants.
"We struggled to break even in a market where few companies around the world were making money out of nickel, and the disposal of the mines has proved to be a sensible move," Morgan said.
The Kambalda nickel province flourishes today, with prices soaring in recent times to about $US20/lb and at the time of writing still five or six times the figure WMC coped with at the turn of the century.
Kambalda has produced more than 1.2 million tonnes of nickel since it was discovered 39 years ago.
Apart from a brief period in the late 1990s, when WMC closed some mines when prices were low, production has averaged more than 35,000 tonnes of nickel annually, making it a major global force in the industry.
The major participant now is Mincor, which began with the acquisition of the Mitel mine in 2001.
It is now one of Australia's biggest producers, having mined 74,000t of contained nickel. It has five Kambalda mines, is a partner in a sixth under development and is undertaking feasibility studies into two others.
Mincor's objective by next year is to have steady production of 20,000t of nickel a year – a satisfactory outcome from the WMC strategy pursued nearly a decade ago.
The company has increased its ore reserves and now holds a significant part of the Kambalda province.
Another nickel prospect, launched by one of the world's biggest mineral processing companies, is also flourishing under new owners Western Areas NL.
The Finnish giant Outokumpu, which had provided the technology for WMC's nickel treatment when Kambalda was developed, acquired a 50% interest in the Forrestania Project in 1989 and the balance two years later.
It mined an open cut on the Digger Rocks deposit, producing a concentrate that was exported to Finland. It also worked the Flying Fox deposit until August 1999 and produced a total of 3.7Mt of nickel at a grade of 1.46%.
Seven years ago Outokumpu entered into a joint venture to explore the project area for gold and nickel but the junior partner was placed in administration in 2002 and Western Areas finalised an agreement with Outokumpu in April 2002 to earn a 75% interest.
In 2003 Western Areas acquired all of the Forrestania Project from Outokumpu and later completed another agreement to earn up to 100% in the precious metals rights (gold and silver) on the leases.
During this period Western Areas found the Daybreak nickel deposits and further mineralisation at Flying Fox.
In 2003 it announced an intersection of 7.8% nickel, leading to a spectacular increase in its share price.
The company says Flying Fox is one of the world's highest grade nickel mines, with a life of at least 10 years and costs (estimated some time ago) of $US2.20/lb – a fraction of the current price.
Western Areas also has extensive Canadian interests.
The iron ore industry has also contributed its share of "second chances".
An executive of Portman Mining said many years ago that securing the Koolyanobbing deposits was a little like finding a bargain gathering dust on a high shelf in a hardware store.
It was too small to attract major mining companies, yet required only a modest investment, $10 million, to generate initial sales.
Koolyanobbing was a forerunner to the iron ore boom of the late 1960s, which created the Pilbara industry.
It was part of a tough deal offered by the Western Australian Government in 1960 to BHP, which was seeking new sources of iron ore: Build a steel plant at Kwinana, south of Perth, said the State Government, and you can mine the ore.
The irony was that a short time after the deal was concluded the immensity of the Pilbara discoveries became apparent – Koolyanobbing had been largely an unnecessary project. Mining ceased and the town was abandoned.
The blast furnace and associated facilities at Kwinana, which were never able to compete with bigger BHP plants elsewhere, were closed soon after the mine.
Portman had a similar experience in the Pilbara. BHP Minerals ceased operations on Cockatoo Island in June 1986, and the only venture that was attempted there soon after was the unsuccessful launching of a holiday resort by Eileen Bond.
Portman mined ore there for some years. Although Koolyanobbing has faced difficulties since, and the future of any venture on Cockatoo Island is in doubt, both have justified the modest investment a small company such as Portman could afford.
Other examples of missed opportunities, or bargains picked up by low cap companies, include:
• Kimberley Diamond successfully mined the Ellendale fields years after they were abandoned by the Argyle consortium;
• The two giant iron ore deposits of the Pilbara were both missed by exploration teams. Hamersley geologists walked over the area where BHP later mined Mt Newman, BHP parties did the same at Mt Tom Price, later Hamersley's richest mine;
• European explorer Uranerz held the ground where the Argyle diamond mine now operates; the Argyle consortium kept its discovery secret until the Uranerz leases expired;
• Earlier, when the Argyle consortium found signs of diamonds at Ellendale, it discovered the ground was held by Mt Isa Mining, which was searching for lead and zinc. Like they were characters in a spy drama, staff were warned not to keep a diary, as if they were likely to fall into enemy hands. The secret held, and the area was pegged by the diamond explorer on Easter Day 1977;
• An alert geologist examined old drill cores from the Boddington area, which had been explored for bauxite. The result – one of Australia's biggest gold mines; and
• Gold prospectors combed the Kambalda area for years without realising it would be one of the world's great nickel provinces.
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The key factor in the last four examples was that geologists searching for one suite of minerals are often blind to the potential to find others.
* This report, first published in the November 2007 edition of Australia's Mining Monthly magazine
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