Recent announcements regarding the South Australian mineral and energy resources sectors
On this page
This update covers the August 2017 period and is compiled from information publicly released by companies and Ministerial news releases.
Readers should refer to the latest information available on company websites, particularly in regard to making any forward investment decisions.
- Alliance Resources
- Archer Exploration
- Ausmex Mining Group – PNX Metals
- Boss Resources
- Minotaur Exploration – OZ Minerals
- OZ Minerals – Kokatha Aboriginal Corporation
- OZ Minerals
- Terramin Australia
- Thor Mining
- Tyranna Resources
- WPG Resources
Alliance Resources is looking to increase its interest in the Wilcherry Project joint venture from 51% to approximately 80% by June 2018 by funding the entire financial year 2018 program and budget (ASX release 24 August 2017). This follows Trafford Resources’ (a wholly owned subsidiary of Tyranna Resources) decision not to contribute.
Further high-grade gold results have been reported from the latest drilling at the Weednanna prospect, part of the Wilcherry Project joint venture (ASX release 28 August 2017). The drilling program, completed in June 2017, was designed to test the geometry and plunge continuity of three high-grade gold shoots (Targets 1, 2 and 3). Best results include:
- 60 m at 5.65 grams per tonne (g/t) from 47 m, including 9 m at 15.57 g/t Au from 63 m and 8 m at 13.38 g/t Au from 99 m (17WDRC032)
- 16 m at 7.66 g/t Au from 81 m, including 8 m at 12.90 g/t Au from 88 m (17WDRC030)
- 30 m at 2.95 g/t Au from 53 m (17WDRC029)
- 41 m at 1.62 g/t Au from 44 m (17WDRC031).
- 7 m at 12.15 g/t Au from 153 m, including 4 m at 18.81 g/t Au from 154 m (17WDRC046).
The results confirm the geometry and continuity along strike of the high-grade gold shoots. Further drilling is planned in October 2017.
Gold assays have been reported from Archer Exploration’s wholly owned Blue Hills copper project (ASX release 11 August 2017). The re-analysis of reverse circulation drill samples has revealed that previously identified intervals of copper mineralisation also contain gold. Best results include:
- 1 m at 0.76 g/t Au (BHRC 1710)
- 10 m at 0.15 g/t Au (BHRC 1711)
- 6 m at 0.12 g/t Au (BHRC 1716)
- 5 m at 0.24 g/t Au (BHRC 1710).
Archer interprets the presence of gold with copper as evidence of a potentially large intrusive-related copper–gold system, which is different to other copper deposits in the area.
Ausmex Mining Group – PNX Metals
Ausmex Mining has executed a binding term sheet with PNX Metals for an option to enter into a farm-in and joint venture on PNX’s Burra tenements (ASX release 7 August 2017). These include the area surrounding the Burra and Monster mine, the Princess Royal and Eagle Vale prospects, and Mongolata Goldfield.
BHP has reported that despite Olympic Dam copper production dropping 18% from financial year 2016 to 166,000 tonnes (t), its future focus is on delivering an extensive program of works that will lay the foundations needed to support long-term growth objectives (BHP presentation 4 August 2017).
BHP will invest $600 million in financial year 2018 on developing both the Olympic Dam underground mine and surface infrastructure with three key areas to benefit:
- Around 20% of the capital expenditure will support the opening of the Southern Mine Area (SMA), expanding underground operations into the high-grade and previously untouched part of the Olympic Dam ore body. This expenditure is in addition to $250 million spent to the end of the previous financial year developing the SMA.
- The next largest investment is focused on enabling underground development in the existing Northern Mine Area footprint.
- Around 40% of the funding is directed towards asset investment this financial year across a wide range of infrastructure and programs on site. The smelter campaign is the single most important part of investment for this year, with the $350 million program of works spread across financial years 2017 and 2018. Starting in late August and expected to run for more than 100 days, the campaign will see 1,300 contractors on site working 24/7 to dismantle, rebuild and upgrade all major components of the smelter.
The Olympic Dam heap leach trial has moved into the full demonstration phase in Adelaide and is on track for completion in financial year 2019. This as an important next step in considering the application of heap leach technology at Olympic Dam, potentially enabling production to expand to over 450,000 tonnes per annum.
In an ASX release on 31 July 2017 Boss Resources reported completion of preparatory drilling for its field leach trial (FLT) at the Honeymoon deposit. Excellent grade results confirmed the site selection for the FLT and the high grade of the Honeymoon deposit in general. Significant intercepts include:
- 7.75 m at 3,705 ppm pU3O8 from 109 m (BFW002)
- 9.25 m at 1,376 ppm pU3O8 from 106.25 m (BFW003)
- 6.50 m at 1,808 ppm pU3O8 from 109.25 m (BFW004)
- 7.00 m at 1,414 ppm pU3O8 from 108.25 m (BSC005).
In mid-August Boss reported that FLT infrastructure had been constructed and the trial had commenced (ASX release 17 August 2017). The commissioning of the FLT, which incorporates both a wellfield leach trial and ion exchange pilot plant, is an integral part of the definitive feasibility study and represents a significant milestone in the staged development of Honeymoon.
Latest results from Marmota’s current Aurora Tank drilling program at the Goshawk prospect show high-grade gold intersections at shallow depth, with over 500 m of mineralisation open on several cross-sections (ASX release 2 August 2017). Best results include:
- 12 m at 14.4 g/t Au from 24 m, including 4 m at 40.2 g/t Au from 32 m (17AT021)
- 20 m at 2.5 g/t Au from 16 m, including 4 m at 10.2 g/t Au from 32 m (17AT011)
- 4 m at 10.3 g/t Au from 16 m (17AT029)
- 4 m at 9.3 g/t Au from 16 m (17AT042)
- 12 m at 5.4 g/t Au from 40 m, including 4 m at 9.3 g/t Au from 44 m (17AT022).
Minotaur Exploration – OZ Minerals
A new ground electromagnetic geophysical survey has been initiated by Minotaur Exploration and joint venture partner OZ Minerals and is expected to take up to 8 weeks to complete (ASX release 2 August 2017). The survey will further investigate the potential for iron sulfide – copper–gold (ISCG) type mineralisation of sections of the Skylark Shear Zone (SSZ) across areas ranging from 10 to 25 km from OZ’s Prominent Hill copper–gold mine. It comprises three parts:
- 15 km section of the SSZ northwest of Prominent Hill mine across multiple structures
- small infill-extension survey at ‘Bellatrix East’ to better define the EM anomaly highlighted there in 2016, just east of ISCG mineralisation intersected in hole DD16TUR016 at Bellatrix (ASX release 2 December 2016)
- 3 km section at the southeastern end of the SSZ.
Minotaur reports that anomalous responses derived from the electromagnetic data could indicate the presence of conductive sulfide minerals (such as pyrrhotite and chalcopyrite; the latter a copper sulfide form), providing new drill targets.
OZ Minerals – Kokatha Aboriginal Corporation
A major milestone for OZ Minerals’ Carrapateena copper–gold project was achieved with the Kokatha native title holders voting to pass the Native Title Mining Agreement at a meeting in early August in Port Augusta attended by about 150 Kokatha common law holders (The Advertiser 11 August 2017). The new agreement builds on the foundations of the Partnering Agreement it signed with the Kokatha Aboriginal Corporation in late 2016.
OZ managing director Andrew Cole said, ‘Our partnering approach with the Kokatha was an integrated cross-sectoral approach based on principles of equity, transparency and mutual benefit.
‘Fundamental to creating the trust required for this relationship was making sure we engaged with the Kokatha early – so there was time to build understanding and for them to help define our path. This approach is something we aim to continue throughout the life of the Carrapateena project’.
Kokatha Aboriginal Corporation chairperson Chris Larkin welcomed the partnership stating, ‘This is a great opportunity for the Kokatha people and we are looking forward to continuing our partnership with OZ Minerals to maximise the benefits for the local community’.
In an ASX release on 24 August 2017 OZ Minerals announced that board approval had been given to commence development of the approximately $916 million Carrapateena copper–gold mine with the feasibility study update confirming the economic robustness of the project.
Since the prefeasibility study, the net present value of Carrapateena has increased 18% to approximately $910 million due to increased metal production, higher consensus commodity prices and removal of concentrate treatment plant costs. Over the past 12 months, additional test work, including a continuous flotation pilot plant, has improved confidence in a consistent and predictable downgrade of impurities from ore to concentrate.
Project development is planned to progress in two phases. Phase One is scheduled to begin in September 2017 with construction of the accommodation village and airstrip and continuing development of the dual access decline. Phase Two, subject to mining lease approval, is scheduled to commence in the second quarter of 2018 and includes construction of the processing plant and other above-ground infrastructure, installation of the underground materials handling system, and construction of the tailings storage facility, Western Access Road and power line. Commissioning is expected in the fourth quarter of 2019.
The feasibility study was based on a 4.25 million tonnes per annum (Mtpa) operation over 20 years to produce an average of 65,000 t of copper and 67,000 oz of gold per annum at all-in sustaining costs of US99c per pound, putting Carrapateena in the bottom quartile of global copper producers.
Associated with approval announcement and feasibility study update was the release of a new ore reserve estimate that has increased by 13% to 79 Mt at 1.8% Cu, 0.7 g/t Au and 8.5 g/t Ag.
OZ Minerals also reported that development of the access decline has now reached a total of 2,594 m and the second conveyor decline has broken through to the completed box cut on schedule.
Terramin Australia’s wholly owned subsidiary Terramin Exploration had entered into a joint venture agreement with Environmental Copper Recovery (ECR) for the potential development of a low-cost in situ recovery copper project near Kapunda, about 90 km north of Adelaide (ASX release 2 August 2017). The joint venture will investigate the potential to extract the copper from shallow oxide ores in and around the historic Kapunda mine workings. ECR can earn up to 75% of the project by spending a total of $6 million, with Terramin retaining 25% interest and 1.5% net smelter royalty in respect to all metals extracted from the joint venture area. ECR has agreed to spend $300,000 within the first year and each subsequent year.
South Australia based Thor Mining has agreed to acquire an interest in the Terramin Exploration – ECR Kapunda copper deposit (ASX release 2 August 2017). Thor’s initial $1.8 million investment into ECR will be used to fund field test work and feasibility activities at Kapunda over the next 3 years. In turn ECR has entered into an agreement to earn, in two stages, up to 75% of the rights over metals which may be recovered via in situ recovery.
Tyranna Resources, manager of the Western Gawler Craton Joint Venture with WPG Resources, has commenced a second phase reverse circulation drilling campaign at the Typhoon gold prospect (ASX release 7 August 2017). A total of 2,000 m is planned focusing on strike extensions to the northeast and southwest as well as testing a parallel structure to the south. The first phase drill program resulted in multiple drillholes intersecting shallow high-grade gold intercepts (ASX release 6 July 2017).
An increased understanding of geological controls at WPG Resources’ Tarcoola gold mine is providing exploration opportunities (ASX release 9 August 2017). Drilling programs are being developed for a number of near-pit targets including:
- Morning Star – historical intersect of 6 m at 13.56 g/t Au from 53 m
- Forgotten Prince
- SW Eclipse.
Other targets include:
- Lonely Heart – historical intersect of 4 m at 36 g/t Au from 8 m
- Genie Bar
- Lady Luck
- Pirate Patch – 7 m at 4.21 g/t Au from 1 m trench sample.
Recent drilling at the Warrigal prospect has confirmed the induced polarisation anomaly is caused by sulfides. Significant quantities (1–5%) of sulfides (pyrite) were encountered in every hole, ranging from 17 to 53% of the length of the holes. Best results include:
- 3 m at 10.11 g/t, including 2 m at 14.84 g/t (17WARC005).
Ministerial news releases
Review identifies 82 recommended changes to South Australia’s mining laws
Tom Koutsantonis, Minister for Mineral Resources and Energy
8 September 2017
A comprehensive review of South Australia’s mining laws has recommended 82 changes to the existing laws and policies following widespread consultation with community and industry. The recommendations balance the requests from landowners, communities, business and environment advocates for substantial reforms to the Mining Act 1971, Opal Mining Act 1995, and the Mines and Works Inspection Act 1920. The state government has begun drafting legislation that reflects the 82 recommendations, and is scheduling a further round of regional community information sessions that will commence late September.
Outside of the recommendations, two issues remain to be considered (native title and the financial assurance scheme) by various expert panels and consultative bodies before further amendments can be recommended.
- Read the news release on the Minister's website
- Read more about the submissions and recommendations
- Read more about recommended changes to native title laws relating to mining
Gas exploration company relocates to Adelaide to strike it rich in the Cooper
Martin Hamilton-Smith, Minister for Investment and Trade
1 September 2017
ASX-listed oil and gas exploration company Strike Energy announced plans today to relocate its corporate office and headquarters from Sydney to Adelaide, creating 85 new full-time jobs in the state’s resources industry while reinforcing its reputation as the focus of the national gas sector. With the company’s primary focus being the rapid commercialisation of a world-scale gas resource in South Australia’s Cooper Basin, Adelaide presented an ideal choice to base its head office. The South Australian Government will contribute $990,000 to support the job creation project via the Economic Investment Fund.
A new chapter for the people of Whyalla
Premier Jay Weatherill
1 September 2017
Premier Jay Weatherill today welcomed the beginning of a new chapter for the people of Whyalla at a ceremony to mark the official handing over of the steelworks and mine to new owner GFG Alliance. The event brings to an end 16 months of uncertainty for workers, their families, supply chain businesses and the broader Whyalla community. Importantly, GFG Alliance Executive Chairman Sanjeev Gupta has said the company will make major capital investments in its Whyalla operations. The state government has also committed $50 million to be invested in Whyalla’s steel-making capacity to help ensure the long-term security of thousands of local steelmaking and mining jobs, and is in discussions with GFG about the nature of that investment.
- Read the news release on the Premier's website
- Read more about it via links from the GFG Alliance website
OZ Minerals approve $916 million investment in major copper project
Premier Jay Weatherill
24 August 2017
The South Australian Government today welcomed OZ Minerals’ decision to invest $916 million in Carrapateena, Australia’s largest undeveloped copper project. The Carrapateena Project will create up to 1,000 new jobs in regional South Australia during the construction and operation phases of its 20-year plus mine life as well as opportunities for Aboriginal employment and supply contracts in the Upper Spencer Gulf. Approval has already been granted under the Mining Act for the accommodation village and airstrip while the mineral lease application is still under assessment by the state and federal governments.