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SPOTLIGHT: “Metallurgical disaster” may get time to shine

19 Aug 2014
By Haydn Black

The Mount Gunson project along South Australia's Olympic Dam copper trend is well known, well understood and widely regarded as a “dog of a project”, but ifTorrens Mining's director Mike Collings has anything to do with it that conventional wisdom is about to get turned on its head.

Torrens, which Collings formed with well-known mining identities Steve Shedden and Peter Wright after Collings got “twitchy” in retirement, builds on a pedigree of Perth's Resource Management Group, a company which revitalised unwanted assets like the Radio Hill and Sally Malay nickel projects, added value by innovation, and steered them towards production.

Collings came across the old Mt Gunson copper project, which was languishing away inside mineral sands-focused Gunson Resources (GUN), knowing that for more than 40 years the project had been regarded as a metallurgical disaster.

Problem


“It is one of these rather perverse projects where there is no dispute about the ore, the quantity or the grade, but the problem is in the processing,” Collings said.

It was US-born, ex-Kalgoorlie resident and proponent of the CVL (Continuous Vat Leach) system, Frank Trask, who first suggested that the Mt Gunson orebodies might be amenable to cyanide leaching.

After ruling out acid leaching because of the carbonaceous gangue of the orebody, the team decided to reach into the bottom of the box and trial a cyanide leaching process that had successfully been used on similar ores in the US back in the 1960s.

“This process was designed and used in the mid-1960s at White Pine near Lake Superior, where they have the same issues with fine grained carbonaceous copper ores,” Collings explained.

Mt Gunson's issue is that the Windabout and MG 14 orebodies are shallow, and hosted in a barely metamorphosed black lagoonal mud, a very fragile carbonaceous material that would be great if it was buried at depth for oil generation, but because it sits so close to the surface does not play well with a conventional flotation process.

“This fine grained shaley material is what defeated them in the past, as in the flotation process the sericite and other micron-sized gangue components were entrained with the bubbles and they just couldn't get a clean concentrate of anything but the cobalt,” Collings said.

“The best they could get was less than 60% recovery into a 20% copper concentrate.”

Cyanide appears to work a treat.

Initially it doesn't seem to make sense.

Cyanide costs $2,200 per tonne and you need about three times as much per tonne of copper, so at a $7,000/t copper proce the economics don't work, but initial laboratory testwork shows that not onlt does the process works, but that over 80% of the cyanide can be recovered and recycled, which is a key determinant of the economics of the project.

Tests on composite samples taken from some earlier drilling showed that compared to the unsaleable low-grade copper-cobalt concentrate that was produced using conventional sulphide flotation, Torrens was able to secure recoveries of 75-85% copper.

New thinking



“You have to think outside the box,” Collings said.

“If you are just thinking conventionally it won't work. This project will only work because someone suggests something new. That has been proved over the years.”

Over the next three months of laboratory test work Torrens is going to see if recoveries can be increased above 90% on a consistent basis.

“At the moment there's about 20% of the copper we can't get out, but most appears to be cyanide soluble according to the assays where they use stronger cyanide, so our next set of tests will be looking at how we can recover that copper," Collings said.

"We think it could be as simple as raising the leach temperature. That's what we’re working towards, and if we can get 90% plus copper recoveries, great.”

Because the leach process takes less than five hours it means the plant can use smaller tanks than typical gold plants, which translates into significant savings in capital and operating costs.

Collings is convinced that the process has been proven for both orebodies, and with the completion of the scoping study he is keen to move the project forward.

Feasibility



Torrens is marching towards pre-feasibility, but Collings has already calculated some back-of-the-envelope numbers that are promising, and, as with its metallurgical process it is looking at doing things differently in the mining area.

MG 14 has a JORC classified indicated resource of 1.62 million tonnes averaging 1.4% copper, 397 parts per million cobalt and 14 grams per tonne silver at 0.5% copper cut off, while Windabout has a pre-2000 JORC indicated resource of 18.7 million tonnes averaging 1% Cu, 500 ppm Co and 10 g/t Ag at 0.5% Cu cut off.

Both deposits would take little work to upgrade to the new JORC standard, before conversion into a mining reserve.

The deposits are flat lying and have been extensively drilled with MG 14 on 50 metre centres and Windabout on 100m centres.

The ore varies in thickness but averages about 2-3m.

The overburden is dune sand, soft sandstone and shales, and the geotechnical work to date indicates that it will all probably be easily excavated without drill and blast.

MG 14 will be the first deposit developed given it is shallower and higher grade than Windabout.

Collings – a geologist and mining engineer by training – believes it can be mined by cribbing some ideas from the coal industry.

“It's a coal seam to all intents and purposes, so why not treat it like one?” he said.

MG 14 is just 20 metres below the surface, and the free-dig overburden should be relatively cheap to removes using conventional excavator and trucks.

Torrens proposes to use a surface miner to remove the ore, a similar approach to Fortescue Metals Group (FMG) at Christmas Creek, though the copper ore is much softer and less abrasive than the iron ore.

Using the surface miner should minimise dilution, maximise extraction, and make grade control easier and cheaper. Also, the crushed product will not need a primary crusher, eliminating further capital costs.

Windabout is larger, but sits deeper at 70m and has a higher strip ratio of 20:1.

There it is intended that the overburden would be removed using a bucket wheel excavator (BWE).

The pit would work as a classic strip mine, with the majority of the waste stockpiled at the back of the pit after the ore is extracted.

“The combination of the BWE and the surface miner should mean high efficiency and low unit cost ore production at Windabout, which we will need at these high strip ratios.” Collings said.

Location


Mt Gunson is well located with regional power lines and a substation and scheme water in the immediate area, sealed roads, rail, and even an airstrip. Torrens hopes to use some of the surplus accommodation at Woomera, about 45km north of the mine, which would save the costs of setting up a camp at the mine site.

“It ticks all the boxes,” Collings said.

“It's a good, medium-sized copper project. It's not a giant like Olympic Dam, but people need to stop thinking bigger is always better.

“You don't need to be a Rio Tinto or a BHP, because you can do well out of a substantial, long-term producer like Mt Gunson.”

The Mt Gunson project has a total JORC resource of about 145,000t of copper, 15 Mlb of cobalt and 4.5Moz of silver.

With a 1Mtpa operation – about 8,500 t of copper, 1.1 Mlb of cobalt and silver credits annually – it will have a minimum 12 year mine life.

Based on the preliminary schedules, the project will be cash positive after about 3.5 years.

“It's an attractive prospect. There's no kite-flying or drilling a few holes and hoping for the best, this is actually something that will work.”

Earn-in


Torrens is earning 51% of the project from Gunson by undertaking the metallurgical testwork to trigger the option, and subsequently spending $2.5 million and delivering a bankable feasibility study within 18 months of the end of the option period.

“Gunson is being very supportive of this work, and is obviously very keen that it should progress,” Collings said.

While the two deposits sit within an area excised from an earlier JV between Gunson and Noranda Pacific (who have now withdrawn from the deal), Collings is optimistic that a deal can be negotiated with Gunson Resources to gain access to all the lease area which may contain similar deposits.

“For example, there is a project called Emmie Bluff, 35 km to the north, but on Gunson’s EL that is about the same size as Windabout, but it is 400m down, and has a higher copper grade.”

It was discovered during drilling for deep basement mineralisation and has not been well studied, but it does indicate other black shale-hosted copper orebodies may be found in the area.

“This style of deposit is similar in style to the Zambian Copper Belt, and they can be well over 20Mt,” Collings said.

“I believe this will really starts a new generation of copper mining in this area.

“Not an Olympic Dam, perhaps, but a nice steady producer with a long projected life.”

Torrens is looking to raise some cash to advance its studies, although he is not wedded to the idea of taking the project to IPO.

“This project is going to make a lot of money for someone, I think we've basically proved that already,” he said.