DISCOVERY
ROUND THE CLOCK
V I C T O R I A ’ S
E A R T H
R E S O U R C E S
J O U R N A L
F E B R U A R Y
2 0 0 1
E
very minute your machinery is idle, costs you money. Parker Commercial Hydraulics components give you the power to ensure you extract the maximum value you expect from your plant and equipment. By giving you the power to keep running day in day out, week after week, throughout the year. With over 200 plants around the world, Parker Commercial Hydraulics’ components are compatible with all imported machinery and equipment. It’s little wonder we’re the original equipment choice of manufacturers in most countries. Parker Commercial Hydraulics are the world’s leading suppliers of OEM hydraulic components and ‘True Fit’ parts, with a network of experienced sales and technical staff to support you
INSIDE THIS ISSUE MOBILE HYDRAULICS Phone: (03) 9646 Fax: (03) 9646 2257 NEW SOUTH WALES: 9 Carrington Road, Castle Hill 2154. Phone (02) 9843 0644. Fax (02) 9842 5113
•
WEMEN STARTUP
•
GAS GROWS FASTER
•
JOE GOES FOR GOLD
VICTORIA: P.O. Box 191, 265 Ingles Street, Port Melbourne 3207.
2017.
TELFORD 1203
NEW FROM THE GEOLOGICAL SURVEY OF VICTORIA
DISCOVERY V I C T O R I A’ S
E A RT H
R E S O U R C E S
J O U R N A L
F E B R U A RY
2 0 0 1
contents WEMEN LEADS THE BASIN CHARGE
2
Production is underway at Victoria’s first mineral sands mine
A STAR RISES IN THE WEST
4
New eyes focus on Victoria’s massive brown coal deposits
JOE GOES FOR GOLD
5
Mining entrepreneur Joseph Gutnick joins the local search
GAS LINKS GROW FAST
8
Our gas pipeline network continues its rapid expansion
ACTIVITY UPSURGE FORECAST
10
Kathy Hill says a major upswing in petroleum exploration is likely
NEW PROTECTION DEAL FOR HEATH
cover picture
16
Industry and government co-operate to protect a rare resource
BENDIGO TO FAST TRACK NEW MINE DECISION
18
Victoria is emerging as the hub of a growing national network of gas pipelines. Major extensions to South Australia and Tasmania have been announced. See our story on page 8.
Promising results continue to come from the new Bendigo mine
GAS FIND - BUT IT’S NOT COMMERCIAL
21
Lakes Oil remains optimistic about finding commercial gas
GOLD MINE REHAB SHOWS THE WAY
22
They’re turning the environmental clock back at Avoca
MOBILE BOOM RATTLES THE TIN
24
Communications technology is sparking new growth in tin mining
MELBA’S DAD CARVED HIS OWN SUCCESS
26
The long mining history of Limil is something to sing about
NEW LIFE FOR WIM PROSPECT
27
New processing techniques may boost work on the WIM mineral sands
regular features MINISTER’S COLUMN
DISCLAIMER: This publication may be of assistance to you, but the State of Victoria and its officers do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.
7
Resurgence is good news for Vic
INDUSTRY NEWS
Minerals and Petroleum Victoria acknowledges contributions made by private enterprise. Acceptance of these contributions, however, does not endorse or imply endorsement by the Department of Natural Resources and Environment of any product or service offered by the contributors.
12
Latest Victorian industry news
RESOURCES MAP
14
All photographs, maps, charts, tables and written information in this publication are copyright under the Copyright Act and may not be reproduced by any process whatsoever without the written permission of the Department of Natural Resources and Environment.
Victoria's mineral, oil and gas resources
MINERAL LICENCE REVIEW The latest publication from the GSV on the Tasman Fold Belt System in Victoria combines the latest survey technology with contemporary thinking on Victoria's geological development. The result is the most comprehensive geological picture of the State since the pioneering geological mapping of Alfred Selwyn in the 1850's. The book costs $110 plus $10 p&p . The text of the book together with raster images is included on a CD-ROM . To order contact Minerals and Petroleum Business Centre, Level 8 , 240 Victoria Parade, East Melbourne , Victoria 3002. Tel (03) 9412 5020. Fax (03) 9412 5157. Email:
[email protected]
20
© Minerals and Petroleum Victoria 2001.
Who’s doing what with mineral exploration licences
Published quarterly on behalf of the Minerals and Petroleum Division of the Department of Natural Resources & Environment by RBA Communications, 86 Cooloongatta Rd, Camberwell Vic 3124 Tel: (03) 9889 1094 Fax: (03) 9889 9997 EMail:
[email protected] Editorial: Rex Banks. Advertising: Watts Media, 3 Emily Court, Mulgrave, Vic 3170 Tel: (03) 9546 9566 Fax: (03) 9546 9965. Distribution enquires to Chandri Nambiar, Manager Marketing Development, Minerals and Petroleum Division, Department of Natural Resources & Environment, Level 7, 240 Victoria Parade, East Melbourne, Vic, 3002, Tel: (03) 9412 5061 Fax: (03) 9412 5155. Website:
Australia Post Print Publication PP349472/00128. ISSN Number 13282409.
1
NEW FROM THE GEOLOGICAL SURVEY OF VICTORIA
DISCOVERY V I C T O R I A’ S
E A RT H
R E S O U R C E S
J O U R N A L
F E B R U A RY
2 0 0 1
contents WEMEN LEADS THE BASIN CHARGE
2
Production is underway at Victoria’s first mineral sands mine
A STAR RISES IN THE WEST
4
New eyes focus on Victoria’s massive brown coal deposits
JOE GOES FOR GOLD
5
Mining entrepreneur Joseph Gutnick joins the local search
GAS LINKS GROW FAST
8
Our gas pipeline network continues its rapid expansion
ACTIVITY UPSURGE FORECAST
10
Kathy Hill says a major upswing in petroleum exploration is likely
NEW PROTECTION DEAL FOR HEATH
cover picture
16
Industry and government co-operate to protect a rare resource
BENDIGO TO FAST TRACK NEW MINE DECISION
18
Victoria is emerging as the hub of a growing national network of gas pipelines. Major extensions to South Australia and Tasmania have been announced. See our story on page 8.
Promising results continue to come from the new Bendigo mine
GAS FIND - BUT IT’S NOT COMMERCIAL
21
Lakes Oil remains optimistic about finding commercial gas
GOLD MINE REHAB SHOWS THE WAY
22
They’re turning the environmental clock back at Avoca
MOBILE BOOM RATTLES THE TIN
24
Communications technology is sparking new growth in tin mining
MELBA’S DAD CARVED HIS OWN SUCCESS
26
The long mining history of Limil is something to sing about
NEW LIFE FOR WIM PROSPECT
27
New processing techniques may boost work on the WIM mineral sands
regular features MINISTER’S COLUMN
DISCLAIMER: This publication may be of assistance to you, but the State of Victoria and its officers do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.
7
Resurgence is good news for Vic
INDUSTRY NEWS
Minerals and Petroleum Victoria acknowledges contributions made by private enterprise. Acceptance of these contributions, however, does not endorse or imply endorsement by the Department of Natural Resources and Environment of any product or service offered by the contributors.
12
Latest Victorian industry news
RESOURCES MAP
14
All photographs, maps, charts, tables and written information in this publication are copyright under the Copyright Act and may not be reproduced by any process whatsoever without the written permission of the Department of Natural Resources and Environment.
Victoria's mineral, oil and gas resources
MINERAL LICENCE REVIEW The latest publication from the GSV on the Tasman Fold Belt System in Victoria combines the latest survey technology with contemporary thinking on Victoria's geological development. The result is the most comprehensive geological picture of the State since the pioneering geological mapping of Alfred Selwyn in the 1850's. The book costs $110 plus $10 p&p . The text of the book together with raster images is included on a CD-ROM . To order contact Minerals and Petroleum Business Centre, Level 8 , 240 Victoria Parade, East Melbourne , Victoria 3002. Tel (03) 9412 5020. Fax (03) 9412 5157. Email: [email protected]
20
© Minerals and Petroleum Victoria 2001.
Who’s doing what with mineral exploration licences
Published quarterly on behalf of the Minerals and Petroleum Division of the Department of Natural Resources & Environment by RBA Communications, 86 Cooloongatta Rd, Camberwell Vic 3124 Tel: (03) 9889 1094 Fax: (03) 9889 9997 EMail: [email protected] Editorial: Rex Banks. Advertising: Watts Media, 3 Emily Court, Mulgrave, Vic 3170 Tel: (03) 9546 9566 Fax: (03) 9546 9965. Distribution enquires to Chandri Nambiar, Manager Marketing Development, Minerals and Petroleum Division, Department of Natural Resources & Environment, Level 7, 240 Victoria Parade, East Melbourne, Vic, 3002, Tel: (03) 9412 5061 Fax: (03) 9412 5155. Website: Australia Post Print Publication PP349472/00128. ISSN Number 13282409.
1
MINERAL SANDS
MINERAL SANDS
would be transported through the port of Portland. This is an encouraging pointer that Portland may emerge as an export port for other mineral sands projects in the Murray Basin.
Wemen leads the basin charge
The Minister for Energy and Resources, Candy Broad, who is also Minister for Ports, said that the move was great news for Portland and would make a significant contribution to its future growth.
5
8
4 9
1
T 2
he first mineral sands project in the Murray Basin has started production, leading a parade of companies into a major new export industry for Victoria.
While the basin extends into NSW and South Australia, some of the highest grade and most accessible sand deposits lie in the Victorian region.
Murray Basin Titanium, a wholly owned subsidiary of Japan’s Nissho Iwai Corporation, and its joint venture partner, Sons of Gwalia, has already begun dredging operations at Wemen, 25 km south west of Robinvale, in Victoria’s North west.
To identify the Wemen project from the group’s other mineral sands operations in Western Australia, operated by RZM Corp, the company has created a separate corporate identity, Murray Basin Titanium, for the new project.
The mine is expected to produce 40,000 tonnes of rutile and 10,000 tonnes of zircon a year.
Based in Mildura, the new group is in the vanguard of what could become a major export industry for the state.
A separation plant, being built at Thurlo, 10 km west of Redcliffs, on the Murray River, will treat the production from the mine. It is expected to begin operations this month.
Eventually, RZM Corp plans to relocate much of the existing infrastructure at its existing operations in NSW into Victoria as the Murray Basin slowly assumes responsibility for replacing depleting mineral sands reserves.
The first stage of the Wemen project is expected to last six years before a second and larger project is contemplated based on the success of the first stage. 3
Pictures 1- 4: Production has begun at the Wemen mineral sands project operated by Murray Basin Titanium, a joint venture between Sons of Gwalia Ltd and RZM Corp. The wet mining project, under the control of the mine superintendent, Lance Faulkner, (below left) has been subject to strict environmental controls.
Several other mineral sands producers are gearing up for production from the vast resources now known to exist in the Murray Basin. 2
6 10
11
A major study into the mineral sands potential of the entire Murray Basin has found that the region could become one of the world’s major mineral sands provinces. Murray Basin Titanium announced recently that mineral sands from the Wemen deposit
7
3
Pictures 5- 11: Sand is mined using a floating bucket wheel dredge (top left) and pumped to a concentrator (pic 9) where the valuable heavy minerals are separated before being stockpiled (pic 6) prior to further processing. Members of the Environmental Review Committee (pic 10) recently visited the Wemen project as part of the ongoing monitoring of the first mineral sand project in the Murray Basin.
MINERAL SANDS
MINERAL SANDS
would be transported through the port of Portland. This is an encouraging pointer that Portland may emerge as an export port for other mineral sands projects in the Murray Basin.
Wemen leads the basin charge
The Minister for Energy and Resources, Candy Broad, who is also Minister for Ports, said that the move was great news for Portland and would make a significant contribution to its future growth.
5
8
4 9
1
T 2
he first mineral sands project in the Murray Basin has started production, leading a parade of companies into a major new export industry for Victoria.
While the basin extends into NSW and South Australia, some of the highest grade and most accessible sand deposits lie in the Victorian region.
Murray Basin Titanium, a wholly owned subsidiary of Japan’s Nissho Iwai Corporation, and its joint venture partner, Sons of Gwalia, has already begun dredging operations at Wemen, 25 km south west of Robinvale, in Victoria’s North west.
To identify the Wemen project from the group’s other mineral sands operations in Western Australia, operated by RZM Corp, the company has created a separate corporate identity, Murray Basin Titanium, for the new project.
The mine is expected to produce 40,000 tonnes of rutile and 10,000 tonnes of zircon a year.
Based in Mildura, the new group is in the vanguard of what could become a major export industry for the state.
A separation plant, being built at Thurlo, 10 km west of Redcliffs, on the Murray River, will treat the production from the mine. It is expected to begin operations this month.
Eventually, RZM Corp plans to relocate much of the existing infrastructure at its existing operations in NSW into Victoria as the Murray Basin slowly assumes responsibility for replacing depleting mineral sands reserves.
The first stage of the Wemen project is expected to last six years before a second and larger project is contemplated based on the success of the first stage. 3
Pictures 1- 4: Production has begun at the Wemen mineral sands project operated by Murray Basin Titanium, a joint venture between Sons of Gwalia Ltd and RZM Corp. The wet mining project, under the control of the mine superintendent, Lance Faulkner, (below left) has been subject to strict environmental controls.
Several other mineral sands producers are gearing up for production from the vast resources now known to exist in the Murray Basin. 2
6 10
11
A major study into the mineral sands potential of the entire Murray Basin has found that the region could become one of the world’s major mineral sands provinces. Murray Basin Titanium announced recently that mineral sands from the Wemen deposit
7
3
Pictures 5- 11: Sand is mined using a floating bucket wheel dredge (top left) and pumped to a concentrator (pic 9) where the valuable heavy minerals are separated before being stockpiled (pic 6) prior to further processing. Members of the Environmental Review Committee (pic 10) recently visited the Wemen project as part of the ongoing monitoring of the first mineral sand project in the Murray Basin.
PROSPECTING DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENT MINERALS AND PETROLEUM CONTACT LIST:
Brown coal deposits may spark new industry
MINERALS BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150 MINERALS AND PETROLEUM DIVISION: Fax: (03) 9412 7834 David Lea Executive Director Minerals and Petroleum Telephone: (03) 9412 4508 Fax: (03) 9412 4183
Mike Woollands Manager Basin Studies Telephone: (03) 9412 5135
David Wallish Business Manager Telephone: (03) 9412 5137
Bob Harms Manager Petroleum Information Telephone: (03) 9412 5053
MINERALS BUSINESS CENTRE: Fax: (03) 9412 5157
Geoff Collins Manager Petroleum Projects Telephone: (03) 9412 5095
Kim Ricketts Client Services Officer Telephone: (03) 9412 5103 GEOLOGICAL SURVEY VICTORIA: Fax: (03) 9412 5155 Phil Roberts Manager Geological Survey Victoria Telephone: (03) 9412 5035 Alan Willocks Manager - Geophysics Telephone: (03) 9412 5131 Peter O’Shea Manager Geological Mapping Telephone: (03) 9412 5093 Roger Buckley Manager Mineral Resources Telephone: (03) 9412 5025 Graham Gooding Regional Manager Ballarat Telephone: (03) 53 336 521 Guy Hamilton Regional Manager Bendigo Telephone: (03) 5444 6697 Chandri Nambiar Manager Marketing Development Telephone: (03) 9412 5061 Fax: (03) 9412 5155 PETROLEUM DEVELOPMENT: Fax: (03) 9412 5156 Kathy Hill Manager Petroleum Developments Telephone: (03) 9412 4208 Kourosh Mehin Acting Manager Petroleum Resources Telephone: (03) 9412 5074
T
Maher Megallaa Manager Acreage Release Telephone: (03) 9412 5081
MINERALS AND PETROLEUM REGULATION: Fax: (03) 9412 5152
Gutnick goes for gold at Violet Town M
he burgeoning growth in Australia’s natural gas industry has prompted the creation of a new form of gas production, with commercial coalbed methane projects now emerging in both NSW and Queensland.
ining entrepreneur, Joseph Gutnick, has acquired gold exploration leases covering 3,700 square kilometres in central Victoria as part of a major effort to locate new ore resources in the state.
But now Victoria’s vast brown coalbeds have become the focus of a new company which listed on the Australian Stock Exchange in early February.
After completing a review of the mining history of the area and plotting much of the more recent geological data and fieldwork by other companies, Mr Gutnick’s company,
The leases, covering almost the entire area between Seymour and Benalla, stretch westwards as far as Rushworth.
Wyn Davies
Rob King Manager Minerals and Petroleum Regulation Telephone: (03) 9412 5069
Eastern Star Gas has acquired three exploration licences — EL 4507, EL 4392 and EL 4510 — over the western portion of Victoria’s brown coal deposits. They stretch from the western outskirts of Melbourne to the Maddingly brown coal mine near Bacchus Marsh in the northwest, to Colac and the Barwon River Valley in the southwest, and to the Anglesea open cut brown coal mine in the southeast.
George Buckland Manager Minerals and Petroleum Tenements Telephone: (03) 9412 4778
A draft prospectus prepared by the company notes that: “The largest accumulation of coal in these licence areas is in the Melbourne trough of the Port Phillip Basin. This brown coal deposit is the largest in Australia outside of the Gippsland Basin.
Graeme McLaughlan Manager, Northern Region Chief Mining Inspector Telephone: (03) 5444 6689
“A potential gas resource of 0.5 trillion cubic feet could occur in this area alone. This potential gas resource is located close to the Melbourne market and adjacent to existing pipeline infrastructure.”
John Mitas Manager, Southern Region Chief Inspector of Quarries Telephone: (03) 9412 5083
The prospectus adds that the Anglesea brown coal deposit was being mined at a rate of approximately one million tonnes a year (by Alcoa) and the retrieved coal used to generate electricity.
Doug Sceney Environmental Manager Telephone: (03) 9412 5107
“The same coalbeds that outcrop in the Anglesea coal mine are known from existing drilling results to extend in EL 4510 (now owned by Eastern Star),” it adds. “This area of coal development is also an attractive gas exploration target.”
Horacio Haag Manager, Petroleum Operations, Safety and Environment
Johnson’s Well Mining NL, has embarked on a 500-square kilometre geochemical sampling program. Using augers to drill for soil samples, the survey is the first step in a major project to identify gold resources which may lie under the thin alluvial cover in much of the region. While outcropping gold areas such as Ballarat
“Large areas in the north of Victoria are under thin cover that would have obscured gold mineralisation from 19th century prospectors.”
The company is aiming to issue 50 million shares at 20 cents each to raise $10 million. Eastern Star Gas is led by Dr Wynford Davies, the non-executive chairman. Dr Davies was previously the managing director of Queensland Nickel. The managing director is Denis Morton, formerly managing director of junior petroleum company, Stirling Resources NL.
MINERALS AND PETROLEUM POLICY: John Lambert Manager Minerals and Petroleum Policy Telephone: (03) 9412 5068
The acquisition of a tenement block of this size, within such a historically important gold province that has seen little modern exploration, presents a wonderful opportunity for the company.
Interest is also being shown in the potential of Victoria’s vast Gippsland brown coal deposits for coalbed methane production.
INFORMATION: Janne Bonnett Manager Minerals and Petroleum Reference Centre Telephone: (03) 9412 5022 Fax: (03) 9412 5157
Exploration licence applications for coalbed methane from brown coal have been lodged by another company, CBM Resources, over the eastern LaTrobe Valley and Gippsland coast.
Above: Johnson’s Well Mining staff reviewing plans in the field. Above left: Folded and faulted sandstone and shale typical of the host rocks for Victorian gold.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr W ynford Davies, Chairman Telephone (02) 9232 6550
4
In its annual report to shareholders, Mr Gutnick, who is chairman of Johnson’s Well, said the move into Victoria was a major development for the company. “The decision to focus on gold exploration in this region is based on the view that Victoria, which is recognised as one of the world’s major gold provinces, had been grossly underexplored in the 20th century,” Mr Gutnick said.
Eastern Star Gas directors note that, “There has been no previous brown coalbed methane exploration activity in the area or anywhere else within Australia.”
Telephone: (03) 9412 5101
and Bendigo immediately attracted early miners, much of Victoria’s gold potential is masked by cover which would have defeated their early efforts.
Left: Locality plan for the Violet Town project.
5
PROSPECTING DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENT MINERALS AND PETROLEUM CONTACT LIST:
Brown coal deposits may spark new industry
MINERALS BUSINESS CENTRE: Level 8, 240 Victoria Parade, East Melbourne Vic 3002 Australia Tel: +613 9412 5020 Fax: +613 9412 5150 MINERALS AND PETROLEUM DIVISION: Fax: (03) 9412 7834 David Lea Executive Director Minerals and Petroleum Telephone: (03) 9412 4508 Fax: (03) 9412 4183
Mike Woollands Manager Basin Studies Telephone: (03) 9412 5135
David Wallish Business Manager Telephone: (03) 9412 5137
Bob Harms Manager Petroleum Information Telephone: (03) 9412 5053
MINERALS BUSINESS CENTRE: Fax: (03) 9412 5157
Geoff Collins Manager Petroleum Projects Telephone: (03) 9412 5095
Kim Ricketts Client Services Officer Telephone: (03) 9412 5103 GEOLOGICAL SURVEY VICTORIA: Fax: (03) 9412 5155 Phil Roberts Manager Geological Survey Victoria Telephone: (03) 9412 5035 Alan Willocks Manager - Geophysics Telephone: (03) 9412 5131 Peter O’Shea Manager Geological Mapping Telephone: (03) 9412 5093 Roger Buckley Manager Mineral Resources Telephone: (03) 9412 5025 Graham Gooding Regional Manager Ballarat Telephone: (03) 53 336 521 Guy Hamilton Regional Manager Bendigo Telephone: (03) 5444 6697 Chandri Nambiar Manager Marketing Development Telephone: (03) 9412 5061 Fax: (03) 9412 5155 PETROLEUM DEVELOPMENT: Fax: (03) 9412 5156 Kathy Hill Manager Petroleum Developments Telephone: (03) 9412 4208 Kourosh Mehin Acting Manager Petroleum Resources Telephone: (03) 9412 5074
T
Maher Megallaa Manager Acreage Release Telephone: (03) 9412 5081
MINERALS AND PETROLEUM REGULATION: Fax: (03) 9412 5152
Gutnick goes for gold at Violet Town M
he burgeoning growth in Australia’s natural gas industry has prompted the creation of a new form of gas production, with commercial coalbed methane projects now emerging in both NSW and Queensland.
ining entrepreneur, Joseph Gutnick, has acquired gold exploration leases covering 3,700 square kilometres in central Victoria as part of a major effort to locate new ore resources in the state.
But now Victoria’s vast brown coalbeds have become the focus of a new company which listed on the Australian Stock Exchange in early February.
After completing a review of the mining history of the area and plotting much of the more recent geological data and fieldwork by other companies, Mr Gutnick’s company,
The leases, covering almost the entire area between Seymour and Benalla, stretch westwards as far as Rushworth.
Wyn Davies
Rob King Manager Minerals and Petroleum Regulation Telephone: (03) 9412 5069
Eastern Star Gas has acquired three exploration licences — EL 4507, EL 4392 and EL 4510 — over the western portion of Victoria’s brown coal deposits. They stretch from the western outskirts of Melbourne to the Maddingly brown coal mine near Bacchus Marsh in the northwest, to Colac and the Barwon River Valley in the southwest, and to the Anglesea open cut brown coal mine in the southeast.
George Buckland Manager Minerals and Petroleum Tenements Telephone: (03) 9412 4778
A draft prospectus prepared by the company notes that: “The largest accumulation of coal in these licence areas is in the Melbourne trough of the Port Phillip Basin. This brown coal deposit is the largest in Australia outside of the Gippsland Basin.
Graeme McLaughlan Manager, Northern Region Chief Mining Inspector Telephone: (03) 5444 6689
“A potential gas resource of 0.5 trillion cubic feet could occur in this area alone. This potential gas resource is located close to the Melbourne market and adjacent to existing pipeline infrastructure.”
John Mitas Manager, Southern Region Chief Inspector of Quarries Telephone: (03) 9412 5083
The prospectus adds that the Anglesea brown coal deposit was being mined at a rate of approximately one million tonnes a year (by Alcoa) and the retrieved coal used to generate electricity.
Doug Sceney Environmental Manager Telephone: (03) 9412 5107
“The same coalbeds that outcrop in the Anglesea coal mine are known from existing drilling results to extend in EL 4510 (now owned by Eastern Star),” it adds. “This area of coal development is also an attractive gas exploration target.”
Horacio Haag Manager, Petroleum Operations, Safety and Environment
Johnson’s Well Mining NL, has embarked on a 500-square kilometre geochemical sampling program. Using augers to drill for soil samples, the survey is the first step in a major project to identify gold resources which may lie under the thin alluvial cover in much of the region. While outcropping gold areas such as Ballarat
“Large areas in the north of Victoria are under thin cover that would have obscured gold mineralisation from 19th century prospectors.”
The company is aiming to issue 50 million shares at 20 cents each to raise $10 million. Eastern Star Gas is led by Dr Wynford Davies, the non-executive chairman. Dr Davies was previously the managing director of Queensland Nickel. The managing director is Denis Morton, formerly managing director of junior petroleum company, Stirling Resources NL.
MINERALS AND PETROLEUM POLICY: John Lambert Manager Minerals and Petroleum Policy Telephone: (03) 9412 5068
The acquisition of a tenement block of this size, within such a historically important gold province that has seen little modern exploration, presents a wonderful opportunity for the company.
Interest is also being shown in the potential of Victoria’s vast Gippsland brown coal deposits for coalbed methane production.
INFORMATION: Janne Bonnett Manager Minerals and Petroleum Reference Centre Telephone: (03) 9412 5022 Fax: (03) 9412 5157
Exploration licence applications for coalbed methane from brown coal have been lodged by another company, CBM Resources, over the eastern LaTrobe Valley and Gippsland coast.
Above: Johnson’s Well Mining staff reviewing plans in the field. Above left: Folded and faulted sandstone and shale typical of the host rocks for Victorian gold.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr W ynford Davies, Chairman Telephone (02) 9232 6550
4
In its annual report to shareholders, Mr Gutnick, who is chairman of Johnson’s Well, said the move into Victoria was a major development for the company. “The decision to focus on gold exploration in this region is based on the view that Victoria, which is recognised as one of the world’s major gold provinces, had been grossly underexplored in the 20th century,” Mr Gutnick said.
Eastern Star Gas directors note that, “There has been no previous brown coalbed methane exploration activity in the area or anywhere else within Australia.”
Telephone: (03) 9412 5101
and Bendigo immediately attracted early miners, much of Victoria’s gold potential is masked by cover which would have defeated their early efforts.
Left: Locality plan for the Violet Town project.
5
PROSPECTING
REGULAR FEATURE
Cuttings on the side of country roads provide a useful guide to identifying geological features across the state. But where potential gold deposits lie under recent alluvial cover (below) the geological detective work becomes more complex, requiring sophisticated new exploration tools to pinpoint drilling locations.
Resurgence is good news for Vic
“Johnson’s is confident that the latest exploration and geological interpretation techniques will lead to the discovery of large gold deposits in the tenement area.”
T
he Bracks Government has appreciated and supported the need for continuing responsible development of the petroleum, mining and extractive industries.
In its latest quarterly report, Johnson’s Well reported that it had begun fieldwork in the tenement area concentrating on road cuttings and areas of outcrop on its Violet Town project.
It is rewarding to see the higher levels of activity in these sectors, particularly in the petroleum exploration and mineral sands areas.
“Of particular interest were the old gold workings, more deformed structural zones and areas of intense quartz veining.
In this issue of Discovery you will read that petroleum exploration is again on the rise and may well see its most active season for a decade.
“The regional geology and geophysics have been synthesised with the aim to better understand the areas under alluvial cover.” Mr Gutnick said the geochemical survey of the region, allied with the geological synthesis, would allow the company to better understand the areas under cover. This would then allow the company to follow the initial program with more detailed sampling and drilling. Mr Gutnick said meetings with state politicians and local councils had already begun with a view to establishing a “sound working relationship” with local communities and individuals who may be affected by the company’s planned exploration activities.
The encouragement of investment in petroleum exploration, both on and offshore, has been an important focus of the early implementation of the government’s Minerals and Petroleum Policy Statement which I delivered in Parliament in June last year. Victoria encouraged and provided major assistance to the Commonwealth for the joint offshore release of the deeper water areas.
Since the gold rush of the 1800s, few major new gold resources have been located in Victoria, although the Victorian Government's recent intensive program of aeromagnetic and gravity surveys over much of the state under the Victorian Initiative for Minerals and Petroleum has provided all explorers with a major boost.
These areas have excited considerable interest among major global and domestic explorers and the ultimate bidding response will attract the attention of the industry internationally.
A company spokesman said the provision of the data free of charge by the government was a major incentive which drew Johnson's Well to Victoria.
In addition, the work has increased in pace to ensure that the large volumes of critical petroleum data acquired during the past 30 years of exploration and development are being preserved and made retrievable to today’s new explorers.
He added that any decision on the next stage of exploration by the company in Victoria had yet to be decided by the company’s board of directors.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Peter Harold, Investor Relations Manager Johnson's Well Mining Telephone (03) 9234 1133 Or visit:www.jwm.com.au
6
This activity arises from a number of factors, including the high world oil price. The construction of major gas infrastructure in the last two to three years, including the Eastern Gas Pipeline to New South Wales (completed in September 2000), has also exposed the area to new markets.
The release of these deepwater and other areas was supported by comprehensive ‘VIMP’ reports which I am advised are being well received by the industry.
Victoria is seeing these policies bear fruit through the influx of new companies investing in the region. Following the acquisition of costly new reflection seismic data in western Victoria, the Origin/Woodside/CalEnergy consortium is putting forward exploration wells for drilling this year and Strike Oil is proposing both wells and seismic data acquisition.
search by independent Australian and international companies including Santos, Eagle Bay, and OMV. Onshore, Santos has enjoyed success in the Port Campbell region and is producing small but highly profitable fields as well as engaging in exploration activities. New entity, Essential Petroleum, is also looking forward to moving to an active exploration phase. Lakes Oil continues its longterm quest in onshore Gippsland and has been drilling. Esso and BHPP, encouraged by high oil prices and profits as well as breakthroughs in exploration technology, have now proposed to drill their first wildcat exploration well for several years. They are also proposing the largest threedimensional seismic program in the region’s history, covering 3500 square kilometres over much of the northern Gippsland production license and areas.
Victoria’s resource industries are substantial wealthgenerators through direct and indirect employment, local industry supply, as well as direct revenue from royalties. In the policy statement, I spoke of the Government’s commitment to developing these industries and the substantial wealth generating capability they have for the state through direct and indirect employment, supplying local industry, as well as direct revenue from royalties. Importantly, these industries have provided exposure to some of the nation’s most gifted business and scientific intellects and expertise. The exploration stage is so important for the long-term future of the industry and it is very encouraging to see the return to higher levels of activity. I wish these explorers every success.
Woodside is also active in the offshore Gippsland area and has been joined in the 7
Candy Broad Minister for Energy and Resources
PROSPECTING
REGULAR FEATURE
Cuttings on the side of country roads provide a useful guide to identifying geological features across the state. But where potential gold deposits lie under recent alluvial cover (below) the geological detective work becomes more complex, requiring sophisticated new exploration tools to pinpoint drilling locations.
Resurgence is good news for Vic
“Johnson’s is confident that the latest exploration and geological interpretation techniques will lead to the discovery of large gold deposits in the tenement area.”
T
he Bracks Government has appreciated and supported the need for continuing responsible development of the petroleum, mining and extractive industries.
In its latest quarterly report, Johnson’s Well reported that it had begun fieldwork in the tenement area concentrating on road cuttings and areas of outcrop on its Violet Town project.
It is rewarding to see the higher levels of activity in these sectors, particularly in the petroleum exploration and mineral sands areas.
“Of particular interest were the old gold workings, more deformed structural zones and areas of intense quartz veining.
In this issue of Discovery you will read that petroleum exploration is again on the rise and may well see its most active season for a decade.
“The regional geology and geophysics have been synthesised with the aim to better understand the areas under alluvial cover.” Mr Gutnick said the geochemical survey of the region, allied with the geological synthesis, would allow the company to better understand the areas under cover. This would then allow the company to follow the initial program with more detailed sampling and drilling. Mr Gutnick said meetings with state politicians and local councils had already begun with a view to establishing a “sound working relationship” with local communities and individuals who may be affected by the company’s planned exploration activities.
The encouragement of investment in petroleum exploration, both on and offshore, has been an important focus of the early implementation of the government’s Minerals and Petroleum Policy Statement which I delivered in Parliament in June last year. Victoria encouraged and provided major assistance to the Commonwealth for the joint offshore release of the deeper water areas.
Since the gold rush of the 1800s, few major new gold resources have been located in Victoria, although the Victorian Government's recent intensive program of aeromagnetic and gravity surveys over much of the state under the Victorian Initiative for Minerals and Petroleum has provided all explorers with a major boost.
These areas have excited considerable interest among major global and domestic explorers and the ultimate bidding response will attract the attention of the industry internationally.
A company spokesman said the provision of the data free of charge by the government was a major incentive which drew Johnson's Well to Victoria.
In addition, the work has increased in pace to ensure that the large volumes of critical petroleum data acquired during the past 30 years of exploration and development are being preserved and made retrievable to today’s new explorers.
He added that any decision on the next stage of exploration by the company in Victoria had yet to be decided by the company’s board of directors.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Peter Harold, Investor Relations Manager Johnson's Well Mining Telephone (03) 9234 1133 Or visit:www.jwm.com.au
6
This activity arises from a number of factors, including the high world oil price. The construction of major gas infrastructure in the last two to three years, including the Eastern Gas Pipeline to New South Wales (completed in September 2000), has also exposed the area to new markets.
The release of these deepwater and other areas was supported by comprehensive ‘VIMP’ reports which I am advised are being well received by the industry.
Victoria is seeing these policies bear fruit through the influx of new companies investing in the region. Following the acquisition of costly new reflection seismic data in western Victoria, the Origin/Woodside/CalEnergy consortium is putting forward exploration wells for drilling this year and Strike Oil is proposing both wells and seismic data acquisition.
search by independent Australian and international companies including Santos, Eagle Bay, and OMV. Onshore, Santos has enjoyed success in the Port Campbell region and is producing small but highly profitable fields as well as engaging in exploration activities. New entity, Essential Petroleum, is also looking forward to moving to an active exploration phase. Lakes Oil continues its longterm quest in onshore Gippsland and has been drilling. Esso and BHPP, encouraged by high oil prices and profits as well as breakthroughs in exploration technology, have now proposed to drill their first wildcat exploration well for several years. They are also proposing the largest threedimensional seismic program in the region’s history, covering 3500 square kilometres over much of the northern Gippsland production license and areas.
Victoria’s resource industries are substantial wealthgenerators through direct and indirect employment, local industry supply, as well as direct revenue from royalties. In the policy statement, I spoke of the Government’s commitment to developing these industries and the substantial wealth generating capability they have for the state through direct and indirect employment, supplying local industry, as well as direct revenue from royalties. Importantly, these industries have provided exposure to some of the nation’s most gifted business and scientific intellects and expertise. The exploration stage is so important for the long-term future of the industry and it is very encouraging to see the return to higher levels of activity. I wish these explorers every success.
Woodside is also active in the offshore Gippsland area and has been joined in the 7
Candy Broad Minister for Energy and Resources
GAS DEVELOPMENTS
Gas links grow fast
T
Victoria’s rapidly expanding gas pipeline network is set to link the state with both South Australia and Tasmania to add to the existing NSW gas pipeline grid connection. The growing number of interstate gas pipeline connections is helping to create a national gas grid, a way of delivering greenhouse friendly natural gas to the whole country.
he rapidly expanding natural gas pipeline network radiating from Victoria is set to grow even faster with two more interstate links moving towards construction.
Duke Energy has confirmed plans to build a new gas pipeline from the Longford gas hub in Gippsland to Tasmania, and has already secured foundation customers to support the $380 million project. They include Australian Bulk Minerals, which operates an iron ore pellet plant near Stanley on Tasmania’s north west coast and power generator, Hydro Tasmania, which have both agreed to buy gas when it comes ashore in Tasmania. Meanwhile, the South Australian Government is moving towards a short list of gas pipeline builders to construct a new line linking the Victorian gas grid with Adelaide to overcome a major shortfall looming in the South Australian market within the next few years. Gas supplies in the Cooper Basin in northeastern SA and south-west Queensland are running low and will have to be bolstered by supplies from interstate if SA is to avoid gas shortages. Victoria is a natural supplier to the market. Victoria’s western region gas pipeline network already stretches to the SA border and is linked directly into the main grid supplied from both Bass Strait and the Otway Basin fields in the Warrnambool region. Duke Energy, which last year completed the Longford to Sydney gas pipeline, now plans to start construction of the line to Tasmania in mid-2001. Duke Energy President, Bruce Williamson, said the Tasmanian Government was working on the appointment of a gas reticulator to sell gas in Hobart, Launceston and other areas of the state. Onshore surveys and environmental assessment studies were already underway in Tasmania. “The offshore pipeline construction contract will be let in early 2001 with the onshore construction contract to be let by mid 2001,” he added. Mr Williamson said that the pipeline would provide open third party access to any other party wanting to transport gas to Tasmania and would offer competitively-priced gas to industry, business and households.
The 305 km offshore pipeline will rest on the seabed of Bass Strait, while the 430 km onshore pipeline will stretch to Port Latta in the north west, and to Hobart in the south. The pipeline is expected to be completed in the first half of 2002. Gas will be sourced from Esso Australia and BHP Petroleum in Victoria. These were the only companies able to demonstrate adequate long-term reserves and supply competitively priced gas to meet DEI’s timetable, Mr Williamson said. He added that an extensive community consultation program was now well underway. “In the short term, we expect construction of the pipeline will employ about 900 people,” he said. “In the longer term, experience in other parts of Australia indicates that where gas enters a market for the first time, growth and jobs follow.” The pipeline will start at Longford in Victoria, cross Bass Strait, and come ashore in the region north of George Town (near Launceston).
“We will be working closely with all of the various community and government stakeholders over the coming months to ensure selection of the best possible pipeline route within the identified corridor,” he said. Mr Williamson said the project was the most complex project Tasmania had encountered in decades, but the benefits were numerous. “There are significant infrastructure, legislative and regulatory considerations to be
addressed prior to the introduction of this new form of energy to the state but DEI has the resources and experience to make this project a reality,” he said. DEI, a wholly owned subsidiary of Duke Energy, is one of the world’s major international energy companies offering energy trading and marketing, risk management, natural gas and power development expertise and operations services across Latin America, Europe and the Asia Pacific.
“We have now reached agreement on a commercial arrangement.” Gas will be a very important backup for Hydro Tasmania’s hydro-electric system in the leadup to Basslink.
“At the moment, our oil-fired Bell Bay power station provides our backup in the event of prolonged drought,” Mr Willis said. But, he added: “With world oil prices the way they are and Australia’s weak dollar, oil is a very expensive power generation option. So converting Bell Bay to gas makes very good commercial sense for Hydro Tasmania.
DEI’s Asia Pacific energy portfolio includes 1585 km of natural gas pipelines in operation and under construction, 780 gross megawatts of thermal power generation, and energy trading and marketing located in Australia, New Zealand and Indonesia.
“On a broader scale, the advent of gas will make the overall energy market more competitive and, once we have Basslink as well, the total energy market in Tasmania will be on the same footing as in mainland Australia.”
Hydro Tasmania’s chief executive, Geoff Willis, said the project was an important plank in Tasmania’s development and would stimulate new development and help expand existing industries.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Michelle Barry, Public Relations manager Duke Energy International Telephone: 0414 790 480 or visit www.duke-energy.com.au
“We have been negotiating with Duke for some, time on the conversion and use of our Bell Bay power station for the gas project,” Mr Willis said. 8
Basslink is an undersea electricity connection between Tasmania and Victoria which will offer two-way power sharing between the states.
9
GAS DEVELOPMENTS
Gas links grow fast
T
Victoria’s rapidly expanding gas pipeline network is set to link the state with both South Australia and Tasmania to add to the existing NSW gas pipeline grid connection. The growing number of interstate gas pipeline connections is helping to create a national gas grid, a way of delivering greenhouse friendly natural gas to the whole country.
he rapidly expanding natural gas pipeline network radiating from Victoria is set to grow even faster with two more interstate links moving towards construction.
Duke Energy has confirmed plans to build a new gas pipeline from the Longford gas hub in Gippsland to Tasmania, and has already secured foundation customers to support the $380 million project. They include Australian Bulk Minerals, which operates an iron ore pellet plant near Stanley on Tasmania’s north west coast and power generator, Hydro Tasmania, which have both agreed to buy gas when it comes ashore in Tasmania. Meanwhile, the South Australian Government is moving towards a short list of gas pipeline builders to construct a new line linking the Victorian gas grid with Adelaide to overcome a major shortfall looming in the South Australian market within the next few years. Gas supplies in the Cooper Basin in northeastern SA and south-west Queensland are running low and will have to be bolstered by supplies from interstate if SA is to avoid gas shortages. Victoria is a natural supplier to the market. Victoria’s western region gas pipeline network already stretches to the SA border and is linked directly into the main grid supplied from both Bass Strait and the Otway Basin fields in the Warrnambool region. Duke Energy, which last year completed the Longford to Sydney gas pipeline, now plans to start construction of the line to Tasmania in mid-2001. Duke Energy President, Bruce Williamson, said the Tasmanian Government was working on the appointment of a gas reticulator to sell gas in Hobart, Launceston and other areas of the state. Onshore surveys and environmental assessment studies were already underway in Tasmania. “The offshore pipeline construction contract will be let in early 2001 with the onshore construction contract to be let by mid 2001,” he added. Mr Williamson said that the pipeline would provide open third party access to any other party wanting to transport gas to Tasmania and would offer competitively-priced gas to industry, business and households.
The 305 km offshore pipeline will rest on the seabed of Bass Strait, while the 430 km onshore pipeline will stretch to Port Latta in the north west, and to Hobart in the south. The pipeline is expected to be completed in the first half of 2002. Gas will be sourced from Esso Australia and BHP Petroleum in Victoria. These were the only companies able to demonstrate adequate long-term reserves and supply competitively priced gas to meet DEI’s timetable, Mr Williamson said. He added that an extensive community consultation program was now well underway. “In the short term, we expect construction of the pipeline will employ about 900 people,” he said. “In the longer term, experience in other parts of Australia indicates that where gas enters a market for the first time, growth and jobs follow.” The pipeline will start at Longford in Victoria, cross Bass Strait, and come ashore in the region north of George Town (near Launceston).
“We will be working closely with all of the various community and government stakeholders over the coming months to ensure selection of the best possible pipeline route within the identified corridor,” he said. Mr Williamson said the project was the most complex project Tasmania had encountered in decades, but the benefits were numerous. “There are significant infrastructure, legislative and regulatory considerations to be
addressed prior to the introduction of this new form of energy to the state but DEI has the resources and experience to make this project a reality,” he said. DEI, a wholly owned subsidiary of Duke Energy, is one of the world’s major international energy companies offering energy trading and marketing, risk management, natural gas and power development expertise and operations services across Latin America, Europe and the Asia Pacific.
“We have now reached agreement on a commercial arrangement.” Gas will be a very important backup for Hydro Tasmania’s hydro-electric system in the leadup to Basslink.
“At the moment, our oil-fired Bell Bay power station provides our backup in the event of prolonged drought,” Mr Willis said. But, he added: “With world oil prices the way they are and Australia’s weak dollar, oil is a very expensive power generation option. So converting Bell Bay to gas makes very good commercial sense for Hydro Tasmania.
DEI’s Asia Pacific energy portfolio includes 1585 km of natural gas pipelines in operation and under construction, 780 gross megawatts of thermal power generation, and energy trading and marketing located in Australia, New Zealand and Indonesia.
“On a broader scale, the advent of gas will make the overall energy market more competitive and, once we have Basslink as well, the total energy market in Tasmania will be on the same footing as in mainland Australia.”
Hydro Tasmania’s chief executive, Geoff Willis, said the project was an important plank in Tasmania’s development and would stimulate new development and help expand existing industries.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Michelle Barry, Public Relations manager Duke Energy International Telephone: 0414 790 480 or visit www.duke-energy.com.au
“We have been negotiating with Duke for some, time on the conversion and use of our Bell Bay power station for the gas project,” Mr Willis said. 8
Basslink is an undersea electricity connection between Tasmania and Victoria which will offer two-way power sharing between the states.
9
OIL EXPLORATION
OIL EXPLORATION
Activity upsurge forecast
• Providing for special access authorisations and retention leases;
Figure 2 - Pipelines and Permits November 2000
• Providing production licenses for the life of the field rather than 15 years; • Recognition of gas storage; and • Clarification of data submission requirements The regulations replace the 1992 regulations and align with the new Act.
By Kathy Hill Manager Petroleum Developments, Minerals and Petroleum Victoria
Victoria’s Minister for Energy and Resources, Candy Broad, has announced that a review of the 1967 Pipelines Act will also take place in this term (See ministerial statement, June 2000).
A
Gas marketing and development
major upswing in petroleum exploration drilling in Victoria is predicted for this year. This follows increased activity in 2000, after a couple of flat seasons.
The Minerva-Incitec project, which was to provide gas from the 1993 Minerva discovery as feedstock for a proposed Incitec/BHP fertiliser plant near Geelong, was deferred indefinitely in response to depressed fertiliser prices.
Three wells were drilled onshore in the Gippsland Basin during the 1999/2000 fiscal year and two more in the onshore Otway Basin.
The Western Underground Gas Storage Facility (WUGS), operated by Texas Utilities and using the Iona Field, has been producing gas into the SW Pipeline since July 1999.
But the forecast for this calendar year is for a major upswing in both on and offshore exploration drilling as companies bring forward commitments to capture rig availability.
The facility supplied up to 130 TeraJoules a day (TJ/d) but compressors installed in the Spring of 2000 will enable injection rates of up to 200 TJ/d.
Wells will be drilled both in the Gippsland and Otway Basins offshore and onshore. Projections are for the best exploration drilling year in a decade, contingent on several board-level approvals within individual companies (see Fig. 1).
The Eastern gas pipeline, extending 795 km from Longford (near Sale) to Horsley Park, just north of Sydney, was commissioned in August 2000, in time for the Olympics. Capacity is currently 65 PetaJoules a year (PJ/yr) but can be increased to 110 PJ. Total project cost was approximately $490 million.
Development drilling peaked in Gippsland last year at 44 wells, although the rate is expected to fall to nine overall in 2001 as the major workover campaign by Esso/BHP draws to its end. While the deregulation of the Australian gas industry has stimulated onshore gas developThe growth in natural gas demand, driven by the expanding natural gas pipeline network, is being translated into new gas exploration drilling activity across the state, both onshore and offshore.
Figure 1 - Exploration wells, Victoria (1984/85 - 1999/00) Gippsland Offshore
Otway Offshore
Gippsland Onshore
Otway Onshore
Murray
20
ment, changes to the Victorian Petroleum Act 1998, which came into effect on December 1, 1999 and the supporting Petroleum Regulations 2000, which were put in place in July last year, have streamlined the operation of petroleum exploration in the state.
18
16
14
The Petroleum Act 1998 replaced the 1958 Act and introduced many fundamental changes including:
12
10
• Enshrining competitive tendering for acreage and transparency in the award process;
8
• Permits being awarded for five-year terms subject to renewal for a further five years with 50% relinquishment, then full relinquishment 10 years after initial award. This replaces the much shorter two-year initial term, with one-year renewal;
6
4
2
0
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
10
97/98
98/99
99/00
• Providing greater clarity for land access and compensation;
Figure 3 Gippsland Basin- Oil and Gas Fields, Permits and Pipelines
Contracted maximum daily quantities are falling from 991 TJ/d in 2000 to 861 TJ/d in 2001 and down to 848 TJ by 2005 providing some more potential for new market participants (See VENCorp Annual Gas Planning Review November 2000, available on the VENCorp website). An existing contract to supply liquefied natural gas (LNG) ends in December, 2002, providing an additional need for peak-demand day supply after that time. New connections to the market include Colac, west of Melbourne, and a 13.5 km proposed connection to the Loy Yang B plant for gas-fired power generation for auxiliary firing. Duplication of the Brooklyn to Corio pipeline in the western Melbourne–Geelong area is also planned. Duke received major project facilitation status from the Commonwealth for the Longford to Bell Bay (Tasmania) pipeline and recently approved the project at board level. First gas from the Longford plant is proposed for winter 2002 (subject to approvals). A pipeline from the Bream A is being planned to produce the Bream Gas Cap starting in 2002, which could supply Tasmania. Other pipeline projects that have been under consideration include a pipeline from Iona to
South Australia for power generation, which could be supplied by Minerva, other Otway Basin or Bass Strait gas. New fields under consideration for development include OMV’s Patricia Baleen Field in Gippsland (Figure 3), subject to board approval in Austria. This low CO2 highmethane gas field could produce gas to a small plant in the Orbost area for transmission to the Victorian or NSW markets. The project is preparing its joint State/Commonwealth environmental assessment. 11
The Kipper field, the largest discovered field not completely owned by the Esso/BHP joint venture, has been remapped using new highquality 3D seismic and confirmed, with earliest production as soon as 2004/5. The field straddles the Esso/BHP L/9 production license. Other potential gas field developments in the next five years include Woodside’s Basker/Manta/Gummy field complex south of Kipper, the Santos nearshore Golden Beach field, the Shell Sole field to the east and the Turrum gas field under the Marlin field.
OIL EXPLORATION
OIL EXPLORATION
Activity upsurge forecast
• Providing for special access authorisations and retention leases;
Figure 2 - Pipelines and Permits November 2000
• Providing production licenses for the life of the field rather than 15 years; • Recognition of gas storage; and • Clarification of data submission requirements The regulations replace the 1992 regulations and align with the new Act.
By Kathy Hill Manager Petroleum Developments, Minerals and Petroleum Victoria
Victoria’s Minister for Energy and Resources, Candy Broad, has announced that a review of the 1967 Pipelines Act will also take place in this term (See ministerial statement, June 2000).
A
Gas marketing and development
major upswing in petroleum exploration drilling in Victoria is predicted for this year. This follows increased activity in 2000, after a couple of flat seasons.
The Minerva-Incitec project, which was to provide gas from the 1993 Minerva discovery as feedstock for a proposed Incitec/BHP fertiliser plant near Geelong, was deferred indefinitely in response to depressed fertiliser prices.
Three wells were drilled onshore in the Gippsland Basin during the 1999/2000 fiscal year and two more in the onshore Otway Basin.
The Western Underground Gas Storage Facility (WUGS), operated by Texas Utilities and using the Iona Field, has been producing gas into the SW Pipeline since July 1999.
But the forecast for this calendar year is for a major upswing in both on and offshore exploration drilling as companies bring forward commitments to capture rig availability.
The facility supplied up to 130 TeraJoules a day (TJ/d) but compressors installed in the Spring of 2000 will enable injection rates of up to 200 TJ/d.
Wells will be drilled both in the Gippsland and Otway Basins offshore and onshore. Projections are for the best exploration drilling year in a decade, contingent on several board-level approvals within individual companies (see Fig. 1).
The Eastern gas pipeline, extending 795 km from Longford (near Sale) to Horsley Park, just north of Sydney, was commissioned in August 2000, in time for the Olympics. Capacity is currently 65 PetaJoules a year (PJ/yr) but can be increased to 110 PJ. Total project cost was approximately $490 million.
Development drilling peaked in Gippsland last year at 44 wells, although the rate is expected to fall to nine overall in 2001 as the major workover campaign by Esso/BHP draws to its end. While the deregulation of the Australian gas industry has stimulated onshore gas developThe growth in natural gas demand, driven by the expanding natural gas pipeline network, is being translated into new gas exploration drilling activity across the state, both onshore and offshore.
Figure 1 - Exploration wells, Victoria (1984/85 - 1999/00) Gippsland Offshore
Otway Offshore
Gippsland Onshore
Otway Onshore
Murray
20
ment, changes to the Victorian Petroleum Act 1998, which came into effect on December 1, 1999 and the supporting Petroleum Regulations 2000, which were put in place in July last year, have streamlined the operation of petroleum exploration in the state.
18
16
14
The Petroleum Act 1998 replaced the 1958 Act and introduced many fundamental changes including:
12
10
• Enshrining competitive tendering for acreage and transparency in the award process;
8
• Permits being awarded for five-year terms subject to renewal for a further five years with 50% relinquishment, then full relinquishment 10 years after initial award. This replaces the much shorter two-year initial term, with one-year renewal;
6
4
2
0
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
10
97/98
98/99
99/00
• Providing greater clarity for land access and compensation;
Figure 3 Gippsland Basin- Oil and Gas Fields, Permits and Pipelines
Contracted maximum daily quantities are falling from 991 TJ/d in 2000 to 861 TJ/d in 2001 and down to 848 TJ by 2005 providing some more potential for new market participants (See VENCorp Annual Gas Planning Review November 2000, available on the VENCorp website). An existing contract to supply liquefied natural gas (LNG) ends in December, 2002, providing an additional need for peak-demand day supply after that time. New connections to the market include Colac, west of Melbourne, and a 13.5 km proposed connection to the Loy Yang B plant for gas-fired power generation for auxiliary firing. Duplication of the Brooklyn to Corio pipeline in the western Melbourne–Geelong area is also planned. Duke received major project facilitation status from the Commonwealth for the Longford to Bell Bay (Tasmania) pipeline and recently approved the project at board level. First gas from the Longford plant is proposed for winter 2002 (subject to approvals). A pipeline from the Bream A is being planned to produce the Bream Gas Cap starting in 2002, which could supply Tasmania. Other pipeline projects that have been under consideration include a pipeline from Iona to
South Australia for power generation, which could be supplied by Minerva, other Otway Basin or Bass Strait gas. New fields under consideration for development include OMV’s Patricia Baleen Field in Gippsland (Figure 3), subject to board approval in Austria. This low CO2 highmethane gas field could produce gas to a small plant in the Orbost area for transmission to the Victorian or NSW markets. The project is preparing its joint State/Commonwealth environmental assessment. 11
The Kipper field, the largest discovered field not completely owned by the Esso/BHP joint venture, has been remapped using new highquality 3D seismic and confirmed, with earliest production as soon as 2004/5. The field straddles the Esso/BHP L/9 production license. Other potential gas field developments in the next five years include Woodside’s Basker/Manta/Gummy field complex south of Kipper, the Santos nearshore Golden Beach field, the Shell Sole field to the east and the Turrum gas field under the Marlin field.
REGULAR FEATURE
REGULAR FEATURE
Industry News PLACER DOME COMES TO VICTORIA One of the world’s major gold producers, Canadian based Placer Dome Inc, has moved into Victoria seeking new gold deposits, attracted by the strong potential for new discoveries in one of the world’s major gold provinces. Placer Dome has joined Sedimentary Holdings in a joint venture on ground near Beaufort in central Victoria seeking gold targets associated with the black shale formations in the area. A small, truck-mounted scout drilling operation has begun as part of a broad scale geological program. Placer Dome produces about three million ounces of gold a year from operations in Africa, South America, the USA, Papua New Guinea and South East Asia. The Sedimentary joint venture is Placer Dome’s first involvement in Victoria. The company told Discovery it had been pleasantly surprised by the enthusiasm that had greeted the company’s move into the state. A company spokesman said Placer Dome had been attracted to Victoria by the vast amount of geological information provided to the industry from the large-scale mapping and aerial surveying conducted by the Geological Survey of Victoria under the Victorian Initiative for Minerals and Petroleum.
ALLIANCE RETURNS TO VICTORIAN GOLD Alliance Gold Mines, former operator of the Maldon gold mine and processing plant, has returned to Victorian gold exploration after a brief foray into the technology sector.
Alliance invested in a new health care company called Allmed Technologies Limited last March, but the collapse of the technology sector caused the company to reject the deal and return to gold. Alliance bought into the historic DunollyMoliagul and Maryborough gold fields in central Victoria last December after securing the rights to a potential resource of over 180,000 ounces of gold in the region through a deal with Ballarat Goldfields NL. The fields were originally owned by Highlake Resources but went to Ballarat when the two companies merged in 1999. Alliance now plans to reactivate its mothballed Maldon treatment plant to process selected ore zones within the newly acquired areas, initially focusing on the Harvest-Home resource at Dunolly-Moliagul to provide economic mill feed. The project could pave the way for other ore resources in the region to be processed at Maldon,with the plant operating as a central facility for a number of gold resources within trucking distance. Under the agreement with Ballarat, Alliance has secured the right to acquire the HarvestHome project, Dunolly-Moliagul exploration licences, as well as the Maryborough and Campbelltown projects. The projects host potential resources of more than 180,000 ounces. Alliance managing director, Peter Andrews, said the initial focus would be to establish that the central zone of the Harvest-Home resource would provide economic mill feed. Located within 50 kilometres of the Maldon plant, the project area has a significant alluvial gold mining history and is prospective for shear-hosted, open-pittable deposits. Mining consultants, Snowden, have estimated a resource of 750,000 tonnes at 2.49 g/t gold containing 60,000 ounces for the Harvest prospect. “We plan to immediately commence a due diligence program, including some low level exploration to confirm the economic viability of the prospective central zone at HarvestHome,” Mr Andrews said. “If we decide to Scout drilling by Placer Dome Inc near Beaufort in central Victoria is the first stage of a potentially much larger project by the international gold producer. Geologist, Gary Sparks, was brought to Victoria by the company to conduct the first pass drilling program.
12
Industry News proceed, we will acquire the tenements from Ballarat on a royalty basis.”
deposit and nearby targets that show signs of additional mineralisation..
“As part of this process, we intend to form a joint venture to offset some of the financial risk, contributing due diligence funding and the Maldon plant to the joint venture, with other financial parties and local technical and contracting groups sharing the risks and the gold proceeds with Alliance and Ballarat,” he added.
The start of the new program was conditional on an acceptable extension of the option agreement under which Austminex had gained access to the Benambra lease from the administrator of Denehurst Ltd, the mine’s former operator.
The Maldon plant can treat 250,000 tonnes of ore a year and is suited to treating ores in the Dunolly-Moliagul and surrounding gold fields. The plant is located at Porcupine Flat, where it has been on care and maintenance for over 18 months. “We believe this could be the first of several Victorian gold resources to be mined and treated in this way,” Mr Andrews said. “This is a very positive step for the state’s gold industry and could lead the way for new projects in the region.”
BENAMBRA LOOKS FOR MORE The reopening of the Benambra base metal mine eastern Victoria has been deferred while a new a exploration drilling program is conducted in a bid to locate more ore resources. The project, which involves the mine being reconfigured from its former status as a copper mine into a new life as a primary zinc producer, has to be scaled-up to achieve sufficient economies of scale to justify its re-opening. Since listing on the Australian Stock Exchange late last year, the new operating company, Austminex NL, has continued its Benambra Mine re-opening study. But in its latest quarterly report to the Australian Stock Exchange the company said, that, “Despite positive technical outcomes, the mine re-opening study shows that rising fuel prices, weaker zinc prices and the impact of a deteriorating global economic outlook on base metal price forecasts, makes the likelihood of achieving an acceptable rate of return from the current mineral resources at Benambra too uncertain.” The report added: “Financial modelling indicates that an economically robust project under prevailing circumstances requires economies of scale that only additional mineral resources and consequent ore reserves can provide.” As a result, the Austminex board has now approved an immediate start to a new exploration program to test extensions of the Wilga
In the latest quarterly report, covering the three months to December 31, Austminex said metallurgical testwork on the Wilga and Currawong deposits, incorporating concentrate regrind tests, had confirmed that higher recoveries and concentrate metal grades could be achieved than the rates obtained by the previous mine operator. Austminex has also determined that, to successfully operate the Benambra mine, ultrafine grinding would be a necessary component of the ore-processing circuit. Flotation tests are examining the benefits of regrinding the ore to a size of 15 and 10 microns, Mr Robinson said. Austminex faces a number of challenges in eventually re-opening the Benambra mine. “Our work to date has confirmed that the key issues we face in re-establishing mining operations at Benambra are achieving acceptable metallurgical outcomes from the complex, fine-grained ores at Wilga and Currawong, negotiating a superior tailings closure strategy with the Victorian Department of Natural Resources and Environment and a level of environmental bonding that is economically sustainable by the project,” Mr Robinson said.
HELP FOR EAST TIMOR INDUSTRY Experience in Victoria’s mining and petroleum industries is helping Egidio de Jesus (left) with the task of establishing and regulating viable resource-based industries in East Timor. Egidio visited Victoria recently through the East Timor Training Partnership, initiated by DNRE, to provide training for East Timorese in public administration in the natural resources and environment areas. He visited many of Victoria’s mining and petroleum operations while looking at how our extractive, mining and petroleum industries are operated and regulated.
SONS OF GWALIA INCREASES MINERAL SANDS INFLUENCE Intense corporate activity has continued to surround the Murray Basin mineral sands province with industry newcomer, Sons of Gwalia Ltd, acquiring a 20 per cent stake in explorer, BeMaX Resources. Bemax announced a share placement to Sons of Gwalia and a simultaneous rights issue to shareholders, fully underwritten by Johnson Taylor Potter Corporate Finance Ltd. The initial placement to Sons of Gwalia was for 10% of the company, with the shares issued at 24 cents each. Sons of Gwalia will fully sub-underwrite the rights issue. The rights issue was made to shareholders on the basis of one ordinary share at 24 cents each for every seven fully paid ordinary shares held at January 31. Shareholders who participate in the rights issue will also receive one free option, exercisable at 20 cents and expiring on September 30, for every two new ordinary shares subscribed for. BeMaX also plans to place additional shares with Gwalia after the rights issue at a minimum price of 24 cents/share and a maximum price of 30 cents/share, depending upon the market price of the shares, to allow Gwalia to reach 19.9 % in BeMaX. The deals will raise $7 million to fund the company’s feasibility study on the Ginkgo mineral sands project in southern NSW, ongoing exploration in the Murray Basin and working capital. Sons of Gwalia Ltd is active in the Murray Basin through its 50% participation in the Murray Basin Titanium Joint Venture (with RZM Nissho Iwai), which owns significant tenements in the northern region of the basin. Sons of Gwalia and RZM are currently commissioning the first Murray Basin mineral sands operation (the Wemen project) situated in northern Victoria (see our story on page 2). In a statement to the ASX, BeMaX directors said, “The Board believes the agreement with Gwalia represents a significant step towards the realisation of the value in the Ginkgo project for all shareholders, as it will provide the company with the funds required to complete the Ginkgo project feasibility study. “The agreement preserves for all shareholders their participation in the considerable upside which the Board believes exists in the company’s Murray Basin assets.” 13
The resumption of zinc and copper mining at Benambra in north-east Victoria, has focussed attention on the sensitive environment of the region.
SHELL’S GEELONG REFINERY GOES LEAD FREE The Geelong oil refinery, owned by Shell Australia, has stopped producing leaded petrol in the latest of a series of developments to improve Australia’s fuel quality standards. Shell is now producing lead free super grade fuel, intended for use as a replacement fuel for older cars which use super grade leaded fuel. Refinery manager, Karel Pronk, said making Geelong refinery lead-free was one of the plant’s key environmental initiatives for 2000. “We are striving to make our production cleaner and greener,” he added. The move follows the Federal Government’s decision to ban lead in petrol by 2002. Leaded fuel is currently being phased out worldwide due to health concerns. About one in four Victorian cars use leaded petrol. An additive in Shell lead free super lubricates the parts on older cars known as the ‘soft’ exhaust valve seats and helps stop them from wearing down. Shell’s Geelong refinery produces about 250 million litres of Shell lead free super a year for markets in Victoria, South Australia, Queensland and Tasmania.
BENDIGO TRAGEDY A young miner was tragically killed in Bendigo on February 1. Patrick Thomas Stevens, 19, of Tarnagulla died when he became trapped in machinery while working 400 metres underground and died from severe crush injuries to his torso. The incident at Bendigo Mining’s Carshalton site is still being investigated.
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Industry News PLACER DOME COMES TO VICTORIA One of the world’s major gold producers, Canadian based Placer Dome Inc, has moved into Victoria seeking new gold deposits, attracted by the strong potential for new discoveries in one of the world’s major gold provinces. Placer Dome has joined Sedimentary Holdings in a joint venture on ground near Beaufort in central Victoria seeking gold targets associated with the black shale formations in the area. A small, truck-mounted scout drilling operation has begun as part of a broad scale geological program. Placer Dome produces about three million ounces of gold a year from operations in Africa, South America, the USA, Papua New Guinea and South East Asia. The Sedimentary joint venture is Placer Dome’s first involvement in Victoria. The company told Discovery it had been pleasantly surprised by the enthusiasm that had greeted the company’s move into the state. A company spokesman said Placer Dome had been attracted to Victoria by the vast amount of geological information provided to the industry from the large-scale mapping and aerial surveying conducted by the Geological Survey of Victoria under the Victorian Initiative for Minerals and Petroleum.
ALLIANCE RETURNS TO VICTORIAN GOLD Alliance Gold Mines, former operator of the Maldon gold mine and processing plant, has returned to Victorian gold exploration after a brief foray into the technology sector.
Alliance invested in a new health care company called Allmed Technologies Limited last March, but the collapse of the technology sector caused the company to reject the deal and return to gold. Alliance bought into the historic DunollyMoliagul and Maryborough gold fields in central Victoria last December after securing the rights to a potential resource of over 180,000 ounces of gold in the region through a deal with Ballarat Goldfields NL. The fields were originally owned by Highlake Resources but went to Ballarat when the two companies merged in 1999. Alliance now plans to reactivate its mothballed Maldon treatment plant to process selected ore zones within the newly acquired areas, initially focusing on the Harvest-Home resource at Dunolly-Moliagul to provide economic mill feed. The project could pave the way for other ore resources in the region to be processed at Maldon,with the plant operating as a central facility for a number of gold resources within trucking distance. Under the agreement with Ballarat, Alliance has secured the right to acquire the HarvestHome project, Dunolly-Moliagul exploration licences, as well as the Maryborough and Campbelltown projects. The projects host potential resources of more than 180,000 ounces. Alliance managing director, Peter Andrews, said the initial focus would be to establish that the central zone of the Harvest-Home resource would provide economic mill feed. Located within 50 kilometres of the Maldon plant, the project area has a significant alluvial gold mining history and is prospective for shear-hosted, open-pittable deposits. Mining consultants, Snowden, have estimated a resource of 750,000 tonnes at 2.49 g/t gold containing 60,000 ounces for the Harvest prospect. “We plan to immediately commence a due diligence program, including some low level exploration to confirm the economic viability of the prospective central zone at HarvestHome,” Mr Andrews said. “If we decide to Scout drilling by Placer Dome Inc near Beaufort in central Victoria is the first stage of a potentially much larger project by the international gold producer. Geologist, Gary Sparks, was brought to Victoria by the company to conduct the first pass drilling program.
12
Industry News proceed, we will acquire the tenements from Ballarat on a royalty basis.”
deposit and nearby targets that show signs of additional mineralisation..
“As part of this process, we intend to form a joint venture to offset some of the financial risk, contributing due diligence funding and the Maldon plant to the joint venture, with other financial parties and local technical and contracting groups sharing the risks and the gold proceeds with Alliance and Ballarat,” he added.
The start of the new program was conditional on an acceptable extension of the option agreement under which Austminex had gained access to the Benambra lease from the administrator of Denehurst Ltd, the mine’s former operator.
The Maldon plant can treat 250,000 tonnes of ore a year and is suited to treating ores in the Dunolly-Moliagul and surrounding gold fields. The plant is located at Porcupine Flat, where it has been on care and maintenance for over 18 months. “We believe this could be the first of several Victorian gold resources to be mined and treated in this way,” Mr Andrews said. “This is a very positive step for the state’s gold industry and could lead the way for new projects in the region.”
BENAMBRA LOOKS FOR MORE The reopening of the Benambra base metal mine eastern Victoria has been deferred while a new a exploration drilling program is conducted in a bid to locate more ore resources. The project, which involves the mine being reconfigured from its former status as a copper mine into a new life as a primary zinc producer, has to be scaled-up to achieve sufficient economies of scale to justify its re-opening. Since listing on the Australian Stock Exchange late last year, the new operating company, Austminex NL, has continued its Benambra Mine re-opening study. But in its latest quarterly report to the Australian Stock Exchange the company said, that, “Despite positive technical outcomes, the mine re-opening study shows that rising fuel prices, weaker zinc prices and the impact of a deteriorating global economic outlook on base metal price forecasts, makes the likelihood of achieving an acceptable rate of return from the current mineral resources at Benambra too uncertain.” The report added: “Financial modelling indicates that an economically robust project under prevailing circumstances requires economies of scale that only additional mineral resources and consequent ore reserves can provide.” As a result, the Austminex board has now approved an immediate start to a new exploration program to test extensions of the Wilga
In the latest quarterly report, covering the three months to December 31, Austminex said metallurgical testwork on the Wilga and Currawong deposits, incorporating concentrate regrind tests, had confirmed that higher recoveries and concentrate metal grades could be achieved than the rates obtained by the previous mine operator. Austminex has also determined that, to successfully operate the Benambra mine, ultrafine grinding would be a necessary component of the ore-processing circuit. Flotation tests are examining the benefits of regrinding the ore to a size of 15 and 10 microns, Mr Robinson said. Austminex faces a number of challenges in eventually re-opening the Benambra mine. “Our work to date has confirmed that the key issues we face in re-establishing mining operations at Benambra are achieving acceptable metallurgical outcomes from the complex, fine-grained ores at Wilga and Currawong, negotiating a superior tailings closure strategy with the Victorian Department of Natural Resources and Environment and a level of environmental bonding that is economically sustainable by the project,” Mr Robinson said.
HELP FOR EAST TIMOR INDUSTRY Experience in Victoria’s mining and petroleum industries is helping Egidio de Jesus (left) with the task of establishing and regulating viable resource-based industries in East Timor. Egidio visited Victoria recently through the East Timor Training Partnership, initiated by DNRE, to provide training for East Timorese in public administration in the natural resources and environment areas. He visited many of Victoria’s mining and petroleum operations while looking at how our extractive, mining and petroleum industries are operated and regulated.
SONS OF GWALIA INCREASES MINERAL SANDS INFLUENCE Intense corporate activity has continued to surround the Murray Basin mineral sands province with industry newcomer, Sons of Gwalia Ltd, acquiring a 20 per cent stake in explorer, BeMaX Resources. Bemax announced a share placement to Sons of Gwalia and a simultaneous rights issue to shareholders, fully underwritten by Johnson Taylor Potter Corporate Finance Ltd. The initial placement to Sons of Gwalia was for 10% of the company, with the shares issued at 24 cents each. Sons of Gwalia will fully sub-underwrite the rights issue. The rights issue was made to shareholders on the basis of one ordinary share at 24 cents each for every seven fully paid ordinary shares held at January 31. Shareholders who participate in the rights issue will also receive one free option, exercisable at 20 cents and expiring on September 30, for every two new ordinary shares subscribed for. BeMaX also plans to place additional shares with Gwalia after the rights issue at a minimum price of 24 cents/share and a maximum price of 30 cents/share, depending upon the market price of the shares, to allow Gwalia to reach 19.9 % in BeMaX. The deals will raise $7 million to fund the company’s feasibility study on the Ginkgo mineral sands project in southern NSW, ongoing exploration in the Murray Basin and working capital. Sons of Gwalia Ltd is active in the Murray Basin through its 50% participation in the Murray Basin Titanium Joint Venture (with RZM Nissho Iwai), which owns significant tenements in the northern region of the basin. Sons of Gwalia and RZM are currently commissioning the first Murray Basin mineral sands operation (the Wemen project) situated in northern Victoria (see our story on page 2). In a statement to the ASX, BeMaX directors said, “The Board believes the agreement with Gwalia represents a significant step towards the realisation of the value in the Ginkgo project for all shareholders, as it will provide the company with the funds required to complete the Ginkgo project feasibility study. “The agreement preserves for all shareholders their participation in the considerable upside which the Board believes exists in the company’s Murray Basin assets.” 13
The resumption of zinc and copper mining at Benambra in north-east Victoria, has focussed attention on the sensitive environment of the region.
SHELL’S GEELONG REFINERY GOES LEAD FREE The Geelong oil refinery, owned by Shell Australia, has stopped producing leaded petrol in the latest of a series of developments to improve Australia’s fuel quality standards. Shell is now producing lead free super grade fuel, intended for use as a replacement fuel for older cars which use super grade leaded fuel. Refinery manager, Karel Pronk, said making Geelong refinery lead-free was one of the plant’s key environmental initiatives for 2000. “We are striving to make our production cleaner and greener,” he added. The move follows the Federal Government’s decision to ban lead in petrol by 2002. Leaded fuel is currently being phased out worldwide due to health concerns. About one in four Victorian cars use leaded petrol. An additive in Shell lead free super lubricates the parts on older cars known as the ‘soft’ exhaust valve seats and helps stop them from wearing down. Shell’s Geelong refinery produces about 250 million litres of Shell lead free super a year for markets in Victoria, South Australia, Queensland and Tasmania.
BENDIGO TRAGEDY A young miner was tragically killed in Bendigo on February 1. Patrick Thomas Stevens, 19, of Tarnagulla died when he became trapped in machinery while working 400 metres underground and died from severe crush injuries to his torso. The incident at Bendigo Mining’s Carshalton site is still being investigated.
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Victoria’s mineral, oil and gas resources
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Victoria’s mineral, oil and gas resources
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CONSERVATION NEWS
Far left: Anglesea Heath park ranger Kate McMahon explains the region’s unique features to Alcoa’s general manager of Victorian operations, Peter Burgess. Alcoa has operated a coal mine and power station in the heathland since the early 1960’s, providing a useful buffer which has protected much of the region’s natural flora and fauna.
The heath is also home to one of the last remaining populations of the critically endangered New Holland Mouse and the Powerful Owl, of which only about 50 nesting pairs are thought to remain in Victoria. In a speech at the launch of the heath protection strategy recently, Peter Burgess, Victorian operations general manager for Alcoa World Alumina, said protection of the heath was a major part of Alcoa’s operating strategy for the area. “At first glance the heath looks fairly drab but you only need to take a few steps into it to see the beauty. It’s the sort of place that sneaks up on you,” Mr Burgess told the gathering at Anglesea. “I’ve been here a number of times – and each time I’ve visited I’ve admired the surroundings, learning more as I go. It takes time in the heath to gain an understanding of
New protection deal for heath O
ne of Victoria’s most important coastal heathland reserves, the Anglesea Heath, will be protected and restored under a major new program initiated by aluminium producer Alcoa of Australia, one of Australia’s biggest mining and industrial companies and the Victorian Department of Natural Resources and Environment.
restoration of the area with the work and staffing to be funded jointly between Alcoa and Parks Victoria. The Anglesea Heath contains a large array of native Victorian plants but is best known for its wild populations of the Anglesea grevillea and Anglesea slender orchid, both only found in the area.
its beauty.” Alcoa operates a brown coal mine at Anglesea to fuel its 150 megawatt power station which provides electricity for the Alcoa aluminium smelter at Point Henry, near Geelong. Mr Burgess said the deal between industry and government was unique. “We are entering into a unique and what we consider to be a most important partnership with the Department of Natural Resources and Environment,” he said.
In 1961 the then Mines (Aluminium Agreement) Act, 1961 allowed Alcoa to build a power station which started producing power in the late 1960s. The Act gave Alcoa access, through a lease, to explore for and mine brown coal within the Anglesea Heath until 2011, with an option to renew the lease for an additional 50 years.
Seventeen years ago the Anglesea Heath was a blackened ruin, a victim of the devastating Ash Wednesday fires which rushed across much of Victoria’s western districts. Under a deal announced late last year between Alcoa and the Victorian Government, measures to protect and restore degraded areas of the heath have been established. The agreement provides protection for the heath with day-to-day management by Parks Victoria rangers. An Alcoa project officer will work with Parks Victoria rangers to oversee the protection and 16
association with universities and these focus on the Anglesea Heath. Those research programs are providing valuable data for the present and the future management,” Mr Burgess said.
The brown coal Alcoa found in the area is low in moisture and high in energy, making it a very efficient power generation fuel, providing Alcoa with the opportunity to build substantial Victorian assets which now generate exports from the state worth more than $624 million last year.
Anglesea coal mine manager, Chris Rolland, said that the first major work undertaken with the funding, as well as cash from Parks Victoria and the Corangamite Catchment Authority, was to extensively upgrade the Cecil Track.
Alcoa directly employs about 2000 people thoughout Victoria with about 1200 at its Point Henry and Anglesea operations. It employs another 6,000 in a range of sectors supplying energy, goods and services. Mr Burgess said Alcoa’s Victorian operations pumped well over $1,000 million into the Australian and Victorian economy each year. Alcoa’s sales of alumina and aluminium last year totalled $2.6 billion, but the company has long taken a leading role in rehabilitation of its mines and industrial sites around Australia.
“The track was unusable, but meandered through a part of the heath which provided a showcase of the region’s unique attractions,” Mr Rolland said. “Most of the work centred around a river crossing (Marshy Creek) which was being destroyed by uncontrolled traffic which was widening the crossing as each track became degraded.” Now a concrete ford that controls the crossing point and doesn’t interfere with water flow has been built, with the remaining money spent on resurfacing the track.
It is still the only mining company in the world on the United Nations’ Global Roll of Honour, an award granted for excellence in rehabilitating the jarrah forests of Western Australia where Alcoa mines bauxite. “We apply our lessons in rehabilitation across all our operations – as well as in the Landcare projects that we support in Victoria and Western Australia – and those lessons are used here,” Mr Burgess said. He said, “This lease covers more than 7200 hectares and our current operations occupy about 7 per cent of that. Initially, we didn’t go out deliberately in the early days to protect the heath and were prevented from doing so by the very Act that established the area as a mining lease. We kept to the area we needed to mine and worked at that as a best-practice operation – including rehabilitating areas after mining.”
The area, a diverse and spectacular haven for flora and wildlife, covers 7,200 hectares of largely untouched natural coastal heath on Victoria’s rugged south-west coast near Anglesea.
Left: The Blotched Sun-orchid is just one of the heath’s vulnerable species. Picture courtesy of John Eichler. The heathland, (middle) is also one of the few remaining habitats for the Powerful Owl (below), of which less than 50 nesting pairs are known to exist in Victoria. Picture courtesy of Ed McNabb.
Several old gravel pits on the heath that were eroding badly and resisting earlier rehabilitation attempts were also reclaimed. Gravel from the area was placed on Cecil Track, which in turn made rehabilitation of the old gravel pit area easier, due to easier slope angles.
to discuss proposed additions to the National Heritage-listed area within the Anglesea Heath. “During these discussions it was agreed there was a need for a more strategic approach to the management of the heath,” Mr Burgess said.
“But the local community’s strong and diverse interests in the heath was the impetus behind Alcoa and the Department of Natural Resources and Environment approving the agreement partnership for managing the Anglesea Heath.
A consultative committee including Alcoa, Parks Victoria, Surf Coast Shire, The Anglesea and Aireys Inlet Society for the Protection of Flora and Fauna (ANGAIR), the Geelong Environment Council, and staff from the School of Biology and Chemical Sciences at Deakin University at Geelong all contributed the management plan.
“In 1996, Alcoa and DNRE gathered a group of key stakeholders and environmental experts
“As well as community involvement, there are a number of research programs operating in
17
Alcoa has also used NHT funding (through ANGAIR) to rehabilitate another gravel pit site and plans to use the remainder of funds on identified track closures and other areas that been damaged by indiscriminate recreational vehicle use. “We have carried out many projects already, funded internally, that have covered rehabilitation of despoiled areas, track closures and maintenance and signage,” Mr Rollands added. F O R M O R E I N F O R M AT I O N C O N TA C T:
Joan McGovern Public Relations and Landcare Manager Victorian Operations, Alcoa Telephone (03) 5245 1257 or 0438 303 417 (mobile) [email protected]
CONSERVATION NEWS
Far left: Anglesea Heath park ranger Kate McMahon explains the region’s unique features to Alcoa’s general manager of Victorian operations, Peter Burgess. Alcoa has operated a coal mine and power station in the heathland since the early 1960’s, providing a useful buffer which has protected much of the region’s natural flora and fauna.
The heath is also home to one of the last remaining populations of the critically endangered New Holland Mouse and the Powerful Owl, of which only about 50 nesting pairs are thought to remain in Victoria. In a speech at the launch of the heath protection strategy recently, Peter Burgess, Victorian operations general manager for Alcoa World Alumina, said protection of the heath was a major part of Alcoa’s operating strategy for the area. “At first glance the heath looks fairly drab but you only need to take a few steps into it to see the beauty. It’s the sort of place that sneaks up on you,” Mr Burgess told the gathering at Anglesea. “I’ve been here a number of times – and each time I’ve visited I’ve admired the surroundings, learning more as I go. It takes time in the heath to gain an understanding of
New protection deal for heath O
ne of Victoria’s most important coastal heathland reserves, the Anglesea Heath, will be protected and restored under a major new program initiated by aluminium producer Alcoa of Australia, one of Australia’s biggest mining and industrial companies and the Victorian Department of Natural Resources and Environment.
restoration of the area with the work and staffing to be funded jointly between Alcoa and Parks Victoria. The Anglesea Heath contains a large array of native Victorian plants but is best known for its wild populations of the Anglesea grevillea and Anglesea slender orchid, both only found in the area.
its beauty.” Alcoa operates a brown coal mine at Anglesea to fuel its 150 megawatt power station which provides electricity for the Alcoa aluminium smelter at Point Henry, near Geelong. Mr Burgess said the deal between industry and government was unique. “We are entering into a unique and what we consider to be a most important partnership with the Department of Natural Resources and Environment,” he said.
In 1961 the then Mines (Aluminium Agreement) Act, 1961 allowed Alcoa to build a power station which started producing power in the late 1960s. The Act gave Alcoa access, through a lease, to explore for and mine brown coal within the Anglesea Heath until 2011, with an option to renew the lease for an additional 50 years.
Seventeen years ago the Anglesea Heath was a blackened ruin, a victim of the devastating Ash Wednesday fires which rushed across much of Victoria’s western districts. Under a deal announced late last year between Alcoa and the Victorian Government, measures to protect and restore degraded areas of the heath have been established. The agreement provides protection for the heath with day-to-day management by Parks Victoria rangers. An Alcoa project officer will work with Parks Victoria rangers to oversee the protection and 16
association with universities and these focus on the Anglesea Heath. Those research programs are providing valuable data for the present and the future management,” Mr Burgess said.
The brown coal Alcoa found in the area is low in moisture and high in energy, making it a very efficient power generation fuel, providing Alcoa with the opportunity to build substantial Victorian assets which now generate exports from the state worth more than $624 million last year.
Anglesea coal mine manager, Chris Rolland, said that the first major work undertaken with the funding, as well as cash from Parks Victoria and the Corangamite Catchment Authority, was to extensively upgrade the Cecil Track.
Alcoa directly employs about 2000 people thoughout Victoria with about 1200 at its Point Henry and Anglesea operations. It employs another 6,000 in a range of sectors supplying energy, goods and services. Mr Burgess said Alcoa’s Victorian operations pumped well over $1,000 million into the Australian and Victorian economy each year. Alcoa’s sales of alumina and aluminium last year totalled $2.6 billion, but the company has long taken a leading role in rehabilitation of its mines and industrial sites around Australia.
“The track was unusable, but meandered through a part of the heath which provided a showcase of the region’s unique attractions,” Mr Rolland said. “Most of the work centred around a river crossing (Marshy Creek) which was being destroyed by uncontrolled traffic which was widening the crossing as each track became degraded.” Now a concrete ford that controls the crossing point and doesn’t interfere with water flow has been built, with the remaining money spent on resurfacing the track.
It is still the only mining company in the world on the United Nations’ Global Roll of Honour, an award granted for excellence in rehabilitating the jarrah forests of Western Australia where Alcoa mines bauxite. “We apply our lessons in rehabilitation across all our operations – as well as in the Landcare projects that we support in Victoria and Western Australia – and those lessons are used here,” Mr Burgess said. He said, “This lease covers more than 7200 hectares and our current operations occupy about 7 per cent of that. Initially, we didn’t go out deliberately in the early days to protect the heath and were prevented from doing so by the very Act that established the area as a mining lease. We kept to the area we needed to mine and worked at that as a best-practice operation – including rehabilitating areas after mining.”
The area, a diverse and spectacular haven for flora and wildlife, covers 7,200 hectares of largely untouched natural coastal heath on Victoria’s rugged south-west coast near Anglesea.
Left: The Blotched Sun-orchid is just one of the heath’s vulnerable species. Picture courtesy of John Eichler. The heathland, (middle) is also one of the few remaining habitats for the Powerful Owl (below), of which less than 50 nesting pairs are known to exist in Victoria. Picture courtesy of Ed McNabb.
Several old gravel pits on the heath that were eroding badly and resisting earlier rehabilitation attempts were also reclaimed. Gravel from the area was placed on Cecil Track, which in turn made rehabilitation of the old gravel pit area easier, due to easier slope angles.
to discuss proposed additions to the National Heritage-listed area within the Anglesea Heath. “During these discussions it was agreed there was a need for a more strategic approach to the management of the heath,” Mr Burgess said.
“But the local community’s strong and diverse interests in the heath was the impetus behind Alcoa and the Department of Natural Resources and Environment approving the agreement partnership for managing the Anglesea Heath.
A consultative committee including Alcoa, Parks Victoria, Surf Coast Shire, The Anglesea and Aireys Inlet Society for the Protection of Flora and Fauna (ANGAIR), the Geelong Environment Council, and staff from the School of Biology and Chemical Sciences at Deakin University at Geelong all contributed the management plan.
“In 1996, Alcoa and DNRE gathered a group of key stakeholders and environmental experts
“As well as community involvement, there are a number of research programs operating in
17
Alcoa has also used NHT funding (through ANGAIR) to rehabilitate another gravel pit site and plans to use the remainder of funds on identified track closures and other areas that been damaged by indiscriminate recreational vehicle use. “We have carried out many projects already, funded internally, that have covered rehabilitation of despoiled areas, track closures and maintenance and signage,” Mr Rollands added. F O R M O R E I N F O R M AT I O N C O N TA C T:
Joan McGovern Public Relations and Landcare Manager Victorian Operations, Alcoa Telephone (03) 5245 1257 or 0438 303 417 (mobile) [email protected]
BENDIGO GOLD
BENDIGO GOLD
Bendigo to fast track new mine decision endigo Mining plans to fast track a decision on full-scale development of the New Bendigo gold field, with a view to making a decision on full-scale mining by early 2002.
B
Left: Bendigo Mining’s ore crushing and stacking plant could soon be put to work processing new ore from the underground workings. Bulk sampling has proved the validity of the ‘ribbon repeat’ theory proposed by Bendigo Mining which could lead to the discovery of economically viable new ore reserves.
In a report to the Australian Stock Exchange late in January, the company's managing director Doug Buerger said: “We are raising funds to advance the decline down to the gold bearing reefs and to do the planning necessary for a production decision.”
Right: Mining was integral to Bendigo’s development in the 1800’s but could again become a powerful economic force in the region. The Swan decline has now reached 550 metres below the city.
• clearly demonstrate the existence of unmined ribbons beneath historically mined lines of reef;
A report on the status of its exploration program on the Bendigo goldfield has again increased confidence in the size and grade of reefs and shown that the geological model holds across the extent of Peter Phillip the field. “This improves our ability to target the position of new ribbons, reduces risk and cost, and boosts confidence in the successful development of a longlife low-cost gold mine,” Mr Buerger said. Drilling has now identified eight gold-bearing reefs in the vicinity of the Swan Decline. Significant intersections include 13.5 m @ 58.1 gAu/t, 13 m @ 11 gAu/t, 16.3 m @ 20.3 gAu/t and 9m @ 55.9 gAu/t. That has doubled the number of previously known, unmined ribbon structures which Bendigo Mining had identified late last year. This, combined with the typical size of the reefs of 10 metres wide and 30 metres high, “is very encouraging for the prospect of production,” Mr Buerger said. “The similarities between the historically mined reefs and the newly discovered reefs are significant. “The reefs previously mined on the Deborah and Sheepshead lines yielded 650,000 ounces at a recovered grade of 14 gAu/t. Our new reefs lie below those previously mined and everything points to them being of a similar size and grade.” The new reefs are close to the Swan Decline and will form the basis for initial gold production. The key points of the exploration status report suggest that the eight new gold-bearing reefs discovered so far on the Deborah and Sheepshead lines of reef are of the same size and tenor of gold mineralisation as the shallower, historically mined reefs. The report suggested that the gold bearing reefs are large, with shapes amenable to modern bulk-mining methods.
• show that the ‘repeat ribbon’ theory is robust; • demonstrate that the spatial controls are so well understood that new unmined ribbons can be consistently intersected by drilling; • demonstrate that the 10 million ounce potential of the New Bendigo is a robust figure; • develop the means of predicting mined grade from drilling by correlating bulk sampling with fan drilling. It also found that there is now a high degree of predictability of the mineralised structures giving Bendigo Mining the ability to find new targets and to be confident of the success of ongoing exploration. Mr Buerger said that a bulk sampling program conducted late last year had proven that the actual gold grade is significantly higher than that generally indicated by drilling, because of the extreme ‘nugget effect’ at Bendigo. Economic grades are indicated by a combination of the presence of gold-associated minerals, alteration of the surrounding rocks and modest drill-indicated grades. Bendigo Mining had originally estimated the gold resource potential of the New Bendigo to be 10 million ounces, but that was upgraded to 12.3 million ounces last year after intensive drilling and bulk sampling efforts. Now the Bendigo Mining board believes that even the 12.3 million ounce might be conservative. The company’s directors have agreed to raise money for a new, year-long drilling program, aimed at putting the New Bendigo field on an accelerated path towards production. Bendigo Mining’s pre-Christmas bulk sampling program revealed the likely commercial prospects for future mining on the field. Bulk samples, along with intensive diamond drilling on the Deborah and Sheepshead lines 18
of reef in November, revealed four new ‘ribbon’ structures missed by earlier generations of miners. Assays of drill samples taken from the four newly-discovered ribbon structures have produced ‘ore grade’ intersections. Reporting to the ASX then, the company said: “Preliminary fire assay results have identified what are considered ore grade intersections such as 9 metres @ 21.4 gAu/t, 13 metres @ 5.1 gAu/t and 13 metres @ 8.0 gAu/t within the reefs.” Those drilling results and the latest results released late in January, have provided additional confirmation of the validity of the ‘repeat ribbon’ geological model which augers well for eventual gold production from the Swan Decline. In late-January, the decline had reached the St Anthony reef, 550 metres below surface, where development work to enable the collection of a series of 70 tonne bulk samples was carried out. The samples will be used to correlate the latest drilling results and provide additional certainty about the location and volume of potential gold resources. At the company’s annual meeting in late November, Bendigo Gold chairman, Peter Philip, previously the chairman of US gold giant, Newmont Mining Corp, said Bendigo’s short-term objectives were to:
12.3 million ounces. But, while enthusiasm in Bendigo remains high, the lack of sharemarket interest in gold companies has hurt the company’s prospects for raising new capital to continue the project. Mr Philip said: “Bendigo Mining NL is one of the few stocks that has held the line during this difficult period. But as we move forward, raising the required capital on reasonable terms may be difficult.” The Swan Decline now extends 3,520 metres from the portal at the Carshalton site in Kangaroo Flat, putting the tunnel more than 550m below King Street in central Bendigo. Now that Bendigo Mining is concentrating on bulk sampling, the associated development headings off the main decline are much smaller. These tunnels measure 3m x 3.5m compared to 5m x 5.5m in the main decline which is intended to accommodate ore-haul trucks when mining starts. Smaller equipment is now being used to access the quartz-bearing rock.
Mr Philip said Bendigo Mining had accessed one new ribbon from the Swan Decline and located, through drilling, three new ribbons in the vicinity of the decline (This has now been overtaken by the latest exploration work). Mr Philip told shareholders, “The area we are testing from the decline represents less than 5 per cent of a 70 square kilometre goldfield, so we also drilled to test for new ribbons under two lines of reef up to 8km from the decline. This drilling targeted and intersected four new ribbons. These results demonstrate that the ‘repeat ribbon’ theory applies over most of the field and that we can predict their location and drill into them.” Shortly before the annual meeting, drilling in the Deborah line of reef produced an intersection of ‘bonanza grade’ ore, prompting a quick rethink of priorities for the company. But bulk sampling was critical as the ‘nuggetty’ nature of the Bendigo field makes drill intersections of gold bearing ore an unreliable guide to overall grade. Mr Philip also told shareholders that: “A comprehensive study of historical mining records and modeling the unmined reefs below the most productive anticlines has determined that there is a high probability of the New Bendigo having 12.3 million mineable ounces.” However, the company now expects to be able to increase the potential gold resource beyond 19
Only a small proportion of this material will be treated at the New Moon Plant at Eaglehawk. Underground drilling at Bendigo is now taking place from three locations along the decline path, with drilling crews working around the clock shifts, 7 days a week. Meanwhile, dewatering of the old workings is continuing with pumping from the decline as well as the Red White and Blue Consolidated, New Moon and Carshalton shafts. The water is pumped to evaporation ponds at Woodvale. Repairs to the walls of the old ponds at Woodvale have been completed although heavy rain late last year delayed the work. F O R M O R E I N F O R M AT I O N C O N TA C T:
Doug Buerger, managing director Bendigo Mines NL Telephone: 03 5447 1834 Or visit www.bmnl.com.au
BENDIGO GOLD
BENDIGO GOLD
Bendigo to fast track new mine decision endigo Mining plans to fast track a decision on full-scale development of the New Bendigo gold field, with a view to making a decision on full-scale mining by early 2002.
B
Left: Bendigo Mining’s ore crushing and stacking plant could soon be put to work processing new ore from the underground workings. Bulk sampling has proved the validity of the ‘ribbon repeat’ theory proposed by Bendigo Mining which could lead to the discovery of economically viable new ore reserves.
In a report to the Australian Stock Exchange late in January, the company's managing director Doug Buerger said: “We are raising funds to advance the decline down to the gold bearing reefs and to do the planning necessary for a production decision.”
Right: Mining was integral to Bendigo’s development in the 1800’s but could again become a powerful economic force in the region. The Swan decline has now reached 550 metres below the city.
• clearly demonstrate the existence of unmined ribbons beneath historically mined lines of reef;
A report on the status of its exploration program on the Bendigo goldfield has again increased confidence in the size and grade of reefs and shown that the geological model holds across the extent of Peter Phillip the field. “This improves our ability to target the position of new ribbons, reduces risk and cost, and boosts confidence in the successful development of a longlife low-cost gold mine,” Mr Buerger said. Drilling has now identified eight gold-bearing reefs in the vicinity of the Swan Decline. Significant intersections include 13.5 m @ 58.1 gAu/t, 13 m @ 11 gAu/t, 16.3 m @ 20.3 gAu/t and 9m @ 55.9 gAu/t. That has doubled the number of previously known, unmined ribbon structures which Bendigo Mining had identified late last year. This, combined with the typical size of the reefs of 10 metres wide and 30 metres high, “is very encouraging for the prospect of production,” Mr Buerger said. “The similarities between the historically mined reefs and the newly discovered reefs are significant. “The reefs previously mined on the Deborah and Sheepshead lines yielded 650,000 ounces at a recovered grade of 14 gAu/t. Our new reefs lie below those previously mined and everything points to them being of a similar size and grade.” The new reefs are close to the Swan Decline and will form the basis for initial gold production. The key points of the exploration status report suggest that the eight new gold-bearing reefs discovered so far on the Deborah and Sheepshead lines of reef are of the same size and tenor of gold mineralisation as the shallower, historically mined reefs. The report suggested that the gold bearing reefs are large, with shapes amenable to modern bulk-mining methods.
• show that the ‘repeat ribbon’ theory is robust; • demonstrate that the spatial controls are so well understood that new unmined ribbons can be consistently intersected by drilling; • demonstrate that the 10 million ounce potential of the New Bendigo is a robust figure; • develop the means of predicting mined grade from drilling by correlating bulk sampling with fan drilling. It also found that there is now a high degree of predictability of the mineralised structures giving Bendigo Mining the ability to find new targets and to be confident of the success of ongoing exploration. Mr Buerger said that a bulk sampling program conducted late last year had proven that the actual gold grade is significantly higher than that generally indicated by drilling, because of the extreme ‘nugget effect’ at Bendigo. Economic grades are indicated by a combination of the presence of gold-associated minerals, alteration of the surrounding rocks and modest drill-indicated grades. Bendigo Mining had originally estimated the gold resource potential of the New Bendigo to be 10 million ounces, but that was upgraded to 12.3 million ounces last year after intensive drilling and bulk sampling efforts. Now the Bendigo Mining board believes that even the 12.3 million ounce might be conservative. The company’s directors have agreed to raise money for a new, year-long drilling program, aimed at putting the New Bendigo field on an accelerated path towards production. Bendigo Mining’s pre-Christmas bulk sampling program revealed the likely commercial prospects for future mining on the field. Bulk samples, along with intensive diamond drilling on the Deborah and Sheepshead lines 18
of reef in November, revealed four new ‘ribbon’ structures missed by earlier generations of miners. Assays of drill samples taken from the four newly-discovered ribbon structures have produced ‘ore grade’ intersections. Reporting to the ASX then, the company said: “Preliminary fire assay results have identified what are considered ore grade intersections such as 9 metres @ 21.4 gAu/t, 13 metres @ 5.1 gAu/t and 13 metres @ 8.0 gAu/t within the reefs.” Those drilling results and the latest results released late in January, have provided additional confirmation of the validity of the ‘repeat ribbon’ geological model which augers well for eventual gold production from the Swan Decline. In late-January, the decline had reached the St Anthony reef, 550 metres below surface, where development work to enable the collection of a series of 70 tonne bulk samples was carried out. The samples will be used to correlate the latest drilling results and provide additional certainty about the location and volume of potential gold resources. At the company’s annual meeting in late November, Bendigo Gold chairman, Peter Philip, previously the chairman of US gold giant, Newmont Mining Corp, said Bendigo’s short-term objectives were to:
12.3 million ounces. But, while enthusiasm in Bendigo remains high, the lack of sharemarket interest in gold companies has hurt the company’s prospects for raising new capital to continue the project. Mr Philip said: “Bendigo Mining NL is one of the few stocks that has held the line during this difficult period. But as we move forward, raising the required capital on reasonable terms may be difficult.” The Swan Decline now extends 3,520 metres from the portal at the Carshalton site in Kangaroo Flat, putting the tunnel more than 550m below King Street in central Bendigo. Now that Bendigo Mining is concentrating on bulk sampling, the associated development headings off the main decline are much smaller. These tunnels measure 3m x 3.5m compared to 5m x 5.5m in the main decline which is intended to accommodate ore-haul trucks when mining starts. Smaller equipment is now being used to access the quartz-bearing rock.
Mr Philip said Bendigo Mining had accessed one new ribbon from the Swan Decline and located, through drilling, three new ribbons in the vicinity of the decline (This has now been overtaken by the latest exploration work). Mr Philip told shareholders, “The area we are testing from the decline represents less than 5 per cent of a 70 square kilometre goldfield, so we also drilled to test for new ribbons under two lines of reef up to 8km from the decline. This drilling targeted and intersected four new ribbons. These results demonstrate that the ‘repeat ribbon’ theory applies over most of the field and that we can predict their location and drill into them.” Shortly before the annual meeting, drilling in the Deborah line of reef produced an intersection of ‘bonanza grade’ ore, prompting a quick rethink of priorities for the company. But bulk sampling was critical as the ‘nuggetty’ nature of the Bendigo field makes drill intersections of gold bearing ore an unreliable guide to overall grade. Mr Philip also told shareholders that: “A comprehensive study of historical mining records and modeling the unmined reefs below the most productive anticlines has determined that there is a high probability of the New Bendigo having 12.3 million mineable ounces.” However, the company now expects to be able to increase the potential gold resource beyond 19
Only a small proportion of this material will be treated at the New Moon Plant at Eaglehawk. Underground drilling at Bendigo is now taking place from three locations along the decline path, with drilling crews working around the clock shifts, 7 days a week. Meanwhile, dewatering of the old workings is continuing with pumping from the decline as well as the Red White and Blue Consolidated, New Moon and Carshalton shafts. The water is pumped to evaporation ponds at Woodvale. Repairs to the walls of the old ponds at Woodvale have been completed although heavy rain late last year delayed the work. F O R M O R E I N F O R M AT I O N C O N TA C T:
Doug Buerger, managing director Bendigo Mines NL Telephone: 03 5447 1834 Or visit www.bmnl.com.au
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GEOFFREY J MCDERMOTT BURNS RESOURCES PTY LTD ILUKA MIDWEST LIMITED ILUKA MIDWEST LIMITED FLITEGOLD PTY LTD ALCASTON MINING NL KRALCOPIC PTY LTD MADDINGLEY BROWN COAL PTY LTD P G M MANAGEMENT PTY LTD ALLEGIANCE EXPLORATION PTY LTD ALLEGIANCE EXPLORATION PTY LTD GLENELG MINING PTY LTD SIROCCO RESOURCES NL BASIN MINERALS HOLDINGS NL VICTORIAN GYPSUM PTY LTD VICTORIAN GYPSUM PTY LTD MINES AND RESOURCES AUSTRALIA PTY LTD MURRAY BASIN TITANIUM PTY LTD PROVIDENCE GOLD AND MINERALS PTY LTD STRAND MINERALS NL
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20
Lakes Oil Ltd’s Trifon-1 and Gangell-1 wells sought to find gas below the basin’s traditional reservoir, the Latrobe Group. While gas flowed to the surface in both wells, the volumes were too small to justify any commercial development. Trifon 1 was abandoned on December 29 after reaching a total depth of 2570 metres and encountering several minor gas producing zones. A total of four drill stem tests were conducted on the well, three of those tests flowing gas to surface, although at rates not sufficient to support commercial operations. Further gas indications were also noted on the gas recorder at numerous levels as the well was being drilled according to Lakes Oil chairman, Rob Annells. “Several of the recorded indications were substantial enough to have been tested under normal circumstance. However, the well bore had become severely washed out during drilling and this option was not available to us.” Mr Annells told the Australian Stock Exchange. Mr Annells said, “Lakes is very encouraged by the results of this well.” Gangell-1, which reached a depth of 2350 metres, was drilled immediately after Trifon 1 with more gas indications. At the time Discovery magazine went to press, Lakes Oil had requested the plugging and abandonment, as well as temporary suspension of the Gangell-1 well on January 27 after conducting a total of nine drill stem tests.
Mr Annells said, “Although no commercial hydrocarbons were discovered in either the Trifon or Gangell wells, the results represent a geological success. Gas has been successfully recovered to surface in both wells and the core cut during the drilling of Gangell has confirmed our “fan” model. We are disappointed that the gas, although apparently present in large quantities, was in a reservoir which lacked permeability.” The best result from the Gangell-1 well was a gas flow of 23,000 cubic feet of gas a day from drill stem test number 3 over the uphole interval 1885-1940 metres which also produced 1650 metres of water from the drill string. The company now has two more prospects named ‘Hurson’ and ‘O’Hara’, which Mr Annells hopes
may solve the reservoir problems encountered in the latest wells. Mr Annells said, “Lakes will now re-interpret the existing seismic over both of these prospects with a view to drilling them during the second half of the 2001 calendar year subject to rig availability and financing.” Lakes Oil now believes it has upgraded the potential to discover commercial hydrocarbons in the onshore Gippsland basin. The company believes it has proved its theory that gas is present in structures below the Latrobe formation and is now reviewing all the existing seismic within its Gippsland permits to identify Early Cretaceous age (Strzelecki Formation) and Late Cretaceous age (Golden Beach Formation) alluvial fans, formed as sediments originally shed from fault scarps. “These fans are similar in style to that of the Kipper Field, located in the offshore portion of the Basin,” consulting geologist, Jack Mulready found in a study last year. F O R M O R E I N F O R M AT I O N C O N TA C T:
Robert J. Annells, Executive Chairman, Lakes Oil NL Level 11, 500 Collins St Melbourne Vic 3000 Tele: (03) 9629 1566 Fax: (03) 9629 1624 e-mail: [email protected] Web site: www.lakesoil.com.au
VICMIN2001 The third conference on Recent Developments in Victoria’s Geology and Mineralisation
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Wildcat drilling by Lakes Oil in the Trifon 1 and Gangell 1 wells near Seaspray in East Gippsland has overturned many long held theories about where gas might be found in the Gippsland Basin. The wells proved that gas exists below the LaTrobe formation, the region’s main hydrocarbon zone.
wo new gas wells in the onshore portion of the Gippsland Basin near Seaspray, aimed at proving a new style of onshore hydrocarbon play, have produced non-commercial gas flows.
April 26, University of Ballarat Fitting in with Victoria’s celebrations of the 150th anniversary of the discovery of gold, Victoria’s premier geological technical conference will be held close to the original discovery site and major centre of gold production - in Ballarat. A post-conference dinner will be held at the famous Sovereign Hill historic gold village followed by the world-acclaimed sound and light show ‘Blood on the Southern Cross’. A tour of geological and historic points of interest around Ballarat and Clunes (site of the first economic gold discovery in Victoria) will be conducted on the day after the conference.
The conference will feature speakers from the Geological Survey, Monash and Ballarat Universities, and from Industry. Topics to be presented include: • Mineral sands in the Horsham region • Developments in the New Bendigo goldfield • Sediment-hosted disseminated gold mineralisation at Daylesford • Tectonic and economic implications of mafic dykes in the Victorian gold province • The gold potential of the basalt covered Clunes-Creswick area • Stawell Gold Mine - Exploration concepts to ore reserves
21
• The Belltopper deposit at Malmsbury And others. A bulletin in the AIG series with full papers will be available to all persons attending. The oral program will be supported by an extensive poster display covering topics under research or of geological interest.
Monitor the AIG website at www.aig.asn.au for further details as they become available. Or contact Don Cherry, Secretary AIG Victoria Branch, email: [email protected] to be placed on the mailing list.
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SURR SURR
BALLARAT DUNOLLY
DATAFAST TELECOMMUNICATIONS LTD TALAGER PTY LTD
18/12/2000 19/12/2000
18/12/2000 19/12/2000
ML 1209
CANC
MATLOCK
MARTIN EXPLORATION PTY LTD
04/10/2000
04/10/2000
20
Lakes Oil Ltd’s Trifon-1 and Gangell-1 wells sought to find gas below the basin’s traditional reservoir, the Latrobe Group. While gas flowed to the surface in both wells, the volumes were too small to justify any commercial development. Trifon 1 was abandoned on December 29 after reaching a total depth of 2570 metres and encountering several minor gas producing zones. A total of four drill stem tests were conducted on the well, three of those tests flowing gas to surface, although at rates not sufficient to support commercial operations. Further gas indications were also noted on the gas recorder at numerous levels as the well was being drilled according to Lakes Oil chairman, Rob Annells. “Several of the recorded indications were substantial enough to have been tested under normal circumstance. However, the well bore had become severely washed out during drilling and this option was not available to us.” Mr Annells told the Australian Stock Exchange. Mr Annells said, “Lakes is very encouraged by the results of this well.” Gangell-1, which reached a depth of 2350 metres, was drilled immediately after Trifon 1 with more gas indications. At the time Discovery magazine went to press, Lakes Oil had requested the plugging and abandonment, as well as temporary suspension of the Gangell-1 well on January 27 after conducting a total of nine drill stem tests.
Mr Annells said, “Although no commercial hydrocarbons were discovered in either the Trifon or Gangell wells, the results represent a geological success. Gas has been successfully recovered to surface in both wells and the core cut during the drilling of Gangell has confirmed our “fan” model. We are disappointed that the gas, although apparently present in large quantities, was in a reservoir which lacked permeability.” The best result from the Gangell-1 well was a gas flow of 23,000 cubic feet of gas a day from drill stem test number 3 over the uphole interval 1885-1940 metres which also produced 1650 metres of water from the drill string. The company now has two more prospects named ‘Hurson’ and ‘O’Hara’, which Mr Annells hopes
may solve the reservoir problems encountered in the latest wells. Mr Annells said, “Lakes will now re-interpret the existing seismic over both of these prospects with a view to drilling them during the second half of the 2001 calendar year subject to rig availability and financing.” Lakes Oil now believes it has upgraded the potential to discover commercial hydrocarbons in the onshore Gippsland basin. The company believes it has proved its theory that gas is present in structures below the Latrobe formation and is now reviewing all the existing seismic within its Gippsland permits to identify Early Cretaceous age (Strzelecki Formation) and Late Cretaceous age (Golden Beach Formation) alluvial fans, formed as sediments originally shed from fault scarps. “These fans are similar in style to that of the Kipper Field, located in the offshore portion of the Basin,” consulting geologist, Jack Mulready found in a study last year. F O R M O R E I N F O R M AT I O N C O N TA C T:
Robert J. Annells, Executive Chairman, Lakes Oil NL Level 11, 500 Collins St Melbourne Vic 3000 Tele: (03) 9629 1566 Fax: (03) 9629 1624 e-mail: [email protected] Web site: www.lakesoil.com.au
VICMIN2001 The third conference on Recent Developments in Victoria’s Geology and Mineralisation
MINING LICENCES GRANTED
ABBREVIATIONS: SURR - SURRENDERED, CANC - CANCELLATION CAN/AM - CANCELLED/AMALGAMATED
T
Wildcat drilling by Lakes Oil in the Trifon 1 and Gangell 1 wells near Seaspray in East Gippsland has overturned many long held theories about where gas might be found in the Gippsland Basin. The wells proved that gas exists below the LaTrobe formation, the region’s main hydrocarbon zone.
wo new gas wells in the onshore portion of the Gippsland Basin near Seaspray, aimed at proving a new style of onshore hydrocarbon play, have produced non-commercial gas flows.
April 26, University of Ballarat Fitting in with Victoria’s celebrations of the 150th anniversary of the discovery of gold, Victoria’s premier geological technical conference will be held close to the original discovery site and major centre of gold production - in Ballarat. A post-conference dinner will be held at the famous Sovereign Hill historic gold village followed by the world-acclaimed sound and light show ‘Blood on the Southern Cross’. A tour of geological and historic points of interest around Ballarat and Clunes (site of the first economic gold discovery in Victoria) will be conducted on the day after the conference.
The conference will feature speakers from the Geological Survey, Monash and Ballarat Universities, and from Industry. Topics to be presented include: • Mineral sands in the Horsham region • Developments in the New Bendigo goldfield • Sediment-hosted disseminated gold mineralisation at Daylesford • Tectonic and economic implications of mafic dykes in the Victorian gold province • The gold potential of the basalt covered Clunes-Creswick area • Stawell Gold Mine - Exploration concepts to ore reserves
21
• The Belltopper deposit at Malmsbury And others. A bulletin in the AIG series with full papers will be available to all persons attending. The oral program will be supported by an extensive poster display covering topics under research or of geological interest.
Monitor the AIG website at www.aig.asn.au for further details as they become available. Or contact Don Cherry, Secretary AIG Victoria Branch, email: [email protected] to be placed on the mailing list.
SPECIAL FEATURE
SPECIAL FEATURE
Gold mine rehab shows the way T
hey’re turning the environmental clock back 147 years in the AvocaAmphitheatre region of central Victoria.
When the Blue Wash was exposed, it was dug by excavator and trucked to the ore stockpile at the plant site. Blue Wash was usually in the range of 1.5 to 4 metres thick, and approximately 15 mm of basement was excavated to recover any settled gold.
The company began alluvial mining at Amphitheatre, 13 kilometres southwest of Avoca, in 1992. During the next eight years, it extended its operations to the nearby Mountain Hut, Belfast and Wildebeest deposits to produce a total of 28,095 ounces of gold.
With the progressive mining technique used, the pits were backfilled as mining advanced which resulted in a final land surface very close to the original. Tailings in above-ground storage dams were capped with overburden and the walls battered prior to topsoiling and planting.
Falling gold prices during the nineties and tight profit margins forced the company to develop new gravity concentration methods and innovative mining practices to cut production costs.
Sedimentary Holdings managing director, Rob Devereux, said the final rehabilitation work was a model for other companies which might want to open shallow alluvial mines in Victoria. The company’s rehabilitation work was made more difficult because the area had been extensively mined since the 1850s as successive waves of diggers moved into the region seek-
A form of strip mining evolved where mining progressed in strips 80 metres wide in increments of 30 metres per pit. This form of mining continued, with some modification, for the life of the project. Topsoil was pushed off by a bulldozer and stockpiled for use in rehabilitation. The average four to eight metre thickness of cycle two material was pushed by bulldozer to backfill the preceding pit.
Sedimentary Holdings Ltd, the last mining company to work the area, claims that its final rehabilitation work is a model for other company's wanting to open shallow alluvial mines in Victoria.
The project also established a good reputation as a model for dry alluvial mining with rehabilitation of disturbed areas an integral part of the operation. However, despite considerable success in these areas, mining operations were shut down in April last year.
The alluvial mining operation at Amphitheatre was based on mining and processing the higher grade ‘Blue wash’ alluvial gravel delineated by drilling by an earlier company.
ing the shallow alluvial gold and later moving deeper following the leads beneath shallow cover and leaving thousands of shallow shafts and associated mullock heaps in their wake. Long before Sedimentary Holdings moved in, the Crown Land areas and much of the private farmland had been degraded and was of low conservation value due to clear felling of the original forests and the left-over mine holes and mullock heaps which changed the soil and topography. Damage and destruction of the under storey and ground vegetation had been caused by grazing sheep and native animals, as well as
Geology of the Avoca alluvials The alluvials generally were deposited in three cycles with the first, and deepest cycle, commonly known as the ‘Blue Wash’. This Mesozoic age gravel, the oldest of the gravel units, overlies an eroded shale/siltstone basement and is generally less than five metres thick.It is the principal source of alluvial gold at Amphitheatre. The early diggers shafts generally extend down to basement and the Blue Wash was extracted in horizontal drives.The same Blue Wash also represented the major source of gold for Sedimentary with the best grade material generally in the bottom half to one metre of the gravel. Overlying the Blue Wash is a younger, Tertiary-age quartz sand gravel which is far more widespread than the cycle 1 Blue Wash. The basal quartz gravels overlying the cycle 1 gravel still contained gold and were mined at Amphitheatre as ‘Top Wash’ to produce gold and gravel products. An area of Top Wash at Belfast was of sufficient grade to feed the main plant. The youngest gravels occur in the present drainage system and are weakly stratified containing flat sandstone cobbles with angular and rounded quartz clasts. They were extensively mined along the Avoca River flat and adjoining gullies in the goldrush.
22
Sedimentary Holdings managing director, Rob Devereaux, has presided over the dramatically successful rehabilitation at the Amphitheatre mining operations. Seed collected locally has ensured the integrity of the species used in the rehabilitation program.
Mr Devereux said the overriding consideration in contouring the rehabilitated landform was that it be compatible with the surrounding natural landscape.
Some landholders negotiated special compensation deals for items such as new dams, or retention of dams which were constructed for the mining operation. Mr Devereux said landowners recognised that the compensation rate was attractive for lowvalue grazing land, that rehabilitation would improve land previously blighted with shafts and mullock heaps, and that their land would be returned in a more productive condition.
Other alluvial discoveries in the area included Beaufort in 1854, Mountain Hut and Lamplough in 1858 and Landsborough, in 1862. Gold production during the early years from the shallow alluvial deposits was not recorded but, as the rich alluvial deposits became exhausted, miners followed the leads or palaeochannels, deeper underground. Deep lead mining started near Beaufort in 1865 and at Avoca in 1866. Mining regulations of the day placed significant restrictions on the size of the claim which could be held by individual miners and the legacy of this intensive shallow mining is thousands of shafts and associated mullock heaps spread along kilometres of old drainage channels on what is now privately-owned farmland or Crown land around the township of Amphitheatre. Evidence of a sophisticated water distribution system comprising dams and several kilometres of water races still exists at Mountain Hut West. The region then lay idle for almost a century until a hydraulic sluicing operation operated from 1906 to 1909. The next major activity started in September 1951, when the Central Victorian Gold Dredging Company NL started operating with the refurbished Newstead dredge, along the flats and terraces of the present Avoca River within the Amphitheatre lead. The operation planned to treat two million cubic yards of alluvium a year for 10 years, but the dredge sank in April, 1957 and operations ceased. After dredging 8 km along the riverbank, the project produced 26,869 ounces of gold from 5 million bank cubic metres of material. In 1980, Cyprus Gold Australia Corporation was granted EL892 covering the Belfast deep leads and the undredged area of the Avoca River flats upstream towards Amphitheatre.
In November 1991, the former Climax mining lease was forfeited and awarded to Sedimentary. An operation was subsequently established and produced gold continuously until economic resource depletion caused its closure in March, 2000.
Consequently, the main thrust of Sedimentary Holdings’ rehabilitation work was aimed at improving the conservation value of these blocks and re-establishing a representative species mix.
After mining, the rehabilitation included contouring and topsoiling of the disturbed areas and replanting the land to pasture or trees if applicable and replacement of fences.
Alluvial gold was discovered at Avoca and then Amphitheatre early in 1853, causing a large influx of miners to the area in 1854 with the population of Amphitheatre reportedly reaching 6,000 in 1858.
Cyprus entered a joint venture with Climax Mining in 1984 leading to the Belfast leads and the Avoca channel being drilled. Sedimentary Holdings entered a joint venture in 1989 with Sandy and Elizabeth Gray of Avoca who had established a plant at Moonambel.
periodic gravel extraction. Erosion also had seriously damaged the top soil layer.
Before the company began exploration work in 1992, it held detailed discussions with landowners to obtain a landowner compensation agreement. Rehabilitation of the disturbed areas was planned and the cost calculated long before mining began at any of the areas disturbed.
Amphitheatre history
collect and is naturally a primary coloniser.
Topsoil was respread from stockpiles, although the amount of topsoil varied widely and, in many of the gravel reserve areas, was virtually non-existent. In areas barren of topsoil, principally on Crown land which had been degraded by gravel extraction, the replanted trees grew well on the clean gravelly soil. A flora survey described the existing vegetation and proposed a seed mix for replanting, that would, in time, evolve into a similar forest type. Acacias were included in the mix as they were components of the understory but also to give rapid infilling and provide nitrogen for eucalypt growth. Yellow Box (Eucalyptus Melliodora), a minor component of the original vegetation was not included in the seed mix as the seed is difficult to
Good regrowth of Yellow Box from seed naturally occurring in the topsoil has already occurred at both the Moonambel and Amphitheatre sites. Plant growth from seed was typically very good. Tree growth at the rocky bare Moonambel site has been spectacular, particularly the Blue gums in the mix. Trees sown at Mountain Hut in August 1997 have developed into trees up to 6 metres tall by December 2000, boosted by a period of hot, dry weather which aided germination and growth. On the gravel reserves, where there was sparse topsoil, the eucalypts and wattles germinated well over winter/spring 1999, especially in the rip lines that trapped moisture and provided a warmer microclimate, Mr Devereux said. Early pasture sowing on rehabilitated areas at Amphitheatre used perennial pasture seed mixes recommended by the Department of Natural Resources and Environment. The seed mixes were consistent with the “Avoca Catchment Salinity Management 23
Plan” and stock was kept off sown areas until the pasture was fully established. A recent visit by a Discovery reporter to the Avoca mining sites revealed dramatic pasture and native tree regrowth in rehabilitated areas. There is virtually no sign of mining activity in the areas where final rehabilitation is complete, while other recent restoration work is already showing promising results. While grazing in some pasture areas has not yet resumed, another season of consolidation should result in significantly improved pasture growth. Importantly, landowners in the areas affected by the mining operation are strongly supportive of the project which has set new standards for co-operation between the mining industry and rural landowners. F O R M O R E I N F O R M AT I O N C O N TA C T:
Rob Devereux, Managing director Sedimentary Holdings NL Telephone (03) 9329 9884
SPECIAL FEATURE
SPECIAL FEATURE
Gold mine rehab shows the way T
hey’re turning the environmental clock back 147 years in the AvocaAmphitheatre region of central Victoria.
When the Blue Wash was exposed, it was dug by excavator and trucked to the ore stockpile at the plant site. Blue Wash was usually in the range of 1.5 to 4 metres thick, and approximately 15 mm of basement was excavated to recover any settled gold.
The company began alluvial mining at Amphitheatre, 13 kilometres southwest of Avoca, in 1992. During the next eight years, it extended its operations to the nearby Mountain Hut, Belfast and Wildebeest deposits to produce a total of 28,095 ounces of gold.
With the progressive mining technique used, the pits were backfilled as mining advanced which resulted in a final land surface very close to the original. Tailings in above-ground storage dams were capped with overburden and the walls battered prior to topsoiling and planting.
Falling gold prices during the nineties and tight profit margins forced the company to develop new gravity concentration methods and innovative mining practices to cut production costs.
Sedimentary Holdings managing director, Rob Devereux, said the final rehabilitation work was a model for other companies which might want to open shallow alluvial mines in Victoria. The company’s rehabilitation work was made more difficult because the area had been extensively mined since the 1850s as successive waves of diggers moved into the region seek-
A form of strip mining evolved where mining progressed in strips 80 metres wide in increments of 30 metres per pit. This form of mining continued, with some modification, for the life of the project. Topsoil was pushed off by a bulldozer and stockpiled for use in rehabilitation. The average four to eight metre thickness of cycle two material was pushed by bulldozer to backfill the preceding pit.
Sedimentary Holdings Ltd, the last mining company to work the area, claims that its final rehabilitation work is a model for other company's wanting to open shallow alluvial mines in Victoria.
The project also established a good reputation as a model for dry alluvial mining with rehabilitation of disturbed areas an integral part of the operation. However, despite considerable success in these areas, mining operations were shut down in April last year.
The alluvial mining operation at Amphitheatre was based on mining and processing the higher grade ‘Blue wash’ alluvial gravel delineated by drilling by an earlier company.
ing the shallow alluvial gold and later moving deeper following the leads beneath shallow cover and leaving thousands of shallow shafts and associated mullock heaps in their wake. Long before Sedimentary Holdings moved in, the Crown Land areas and much of the private farmland had been degraded and was of low conservation value due to clear felling of the original forests and the left-over mine holes and mullock heaps which changed the soil and topography. Damage and destruction of the under storey and ground vegetation had been caused by grazing sheep and native animals, as well as
Geology of the Avoca alluvials The alluvials generally were deposited in three cycles with the first, and deepest cycle, commonly known as the ‘Blue Wash’. This Mesozoic age gravel, the oldest of the gravel units, overlies an eroded shale/siltstone basement and is generally less than five metres thick.It is the principal source of alluvial gold at Amphitheatre. The early diggers shafts generally extend down to basement and the Blue Wash was extracted in horizontal drives.The same Blue Wash also represented the major source of gold for Sedimentary with the best grade material generally in the bottom half to one metre of the gravel. Overlying the Blue Wash is a younger, Tertiary-age quartz sand gravel which is far more widespread than the cycle 1 Blue Wash. The basal quartz gravels overlying the cycle 1 gravel still contained gold and were mined at Amphitheatre as ‘Top Wash’ to produce gold and gravel products. An area of Top Wash at Belfast was of sufficient grade to feed the main plant. The youngest gravels occur in the present drainage system and are weakly stratified containing flat sandstone cobbles with angular and rounded quartz clasts. They were extensively mined along the Avoca River flat and adjoining gullies in the goldrush.
22
Sedimentary Holdings managing director, Rob Devereaux, has presided over the dramatically successful rehabilitation at the Amphitheatre mining operations. Seed collected locally has ensured the integrity of the species used in the rehabilitation program.
Mr Devereux said the overriding consideration in contouring the rehabilitated landform was that it be compatible with the surrounding natural landscape.
Some landholders negotiated special compensation deals for items such as new dams, or retention of dams which were constructed for the mining operation. Mr Devereux said landowners recognised that the compensation rate was attractive for lowvalue grazing land, that rehabilitation would improve land previously blighted with shafts and mullock heaps, and that their land would be returned in a more productive condition.
Other alluvial discoveries in the area included Beaufort in 1854, Mountain Hut and Lamplough in 1858 and Landsborough, in 1862. Gold production during the early years from the shallow alluvial deposits was not recorded but, as the rich alluvial deposits became exhausted, miners followed the leads or palaeochannels, deeper underground. Deep lead mining started near Beaufort in 1865 and at Avoca in 1866. Mining regulations of the day placed significant restrictions on the size of the claim which could be held by individual miners and the legacy of this intensive shallow mining is thousands of shafts and associated mullock heaps spread along kilometres of old drainage channels on what is now privately-owned farmland or Crown land around the township of Amphitheatre. Evidence of a sophisticated water distribution system comprising dams and several kilometres of water races still exists at Mountain Hut West. The region then lay idle for almost a century until a hydraulic sluicing operation operated from 1906 to 1909. The next major activity started in September 1951, when the Central Victorian Gold Dredging Company NL started operating with the refurbished Newstead dredge, along the flats and terraces of the present Avoca River within the Amphitheatre lead. The operation planned to treat two million cubic yards of alluvium a year for 10 years, but the dredge sank in April, 1957 and operations ceased. After dredging 8 km along the riverbank, the project produced 26,869 ounces of gold from 5 million bank cubic metres of material. In 1980, Cyprus Gold Australia Corporation was granted EL892 covering the Belfast deep leads and the undredged area of the Avoca River flats upstream towards Amphitheatre.
In November 1991, the former Climax mining lease was forfeited and awarded to Sedimentary. An operation was subsequently established and produced gold continuously until economic resource depletion caused its closure in March, 2000.
Consequently, the main thrust of Sedimentary Holdings’ rehabilitation work was aimed at improving the conservation value of these blocks and re-establishing a representative species mix.
After mining, the rehabilitation included contouring and topsoiling of the disturbed areas and replanting the land to pasture or trees if applicable and replacement of fences.
Alluvial gold was discovered at Avoca and then Amphitheatre early in 1853, causing a large influx of miners to the area in 1854 with the population of Amphitheatre reportedly reaching 6,000 in 1858.
Cyprus entered a joint venture with Climax Mining in 1984 leading to the Belfast leads and the Avoca channel being drilled. Sedimentary Holdings entered a joint venture in 1989 with Sandy and Elizabeth Gray of Avoca who had established a plant at Moonambel.
periodic gravel extraction. Erosion also had seriously damaged the top soil layer.
Before the company began exploration work in 1992, it held detailed discussions with landowners to obtain a landowner compensation agreement. Rehabilitation of the disturbed areas was planned and the cost calculated long before mining began at any of the areas disturbed.
Amphitheatre history
collect and is naturally a primary coloniser.
Topsoil was respread from stockpiles, although the amount of topsoil varied widely and, in many of the gravel reserve areas, was virtually non-existent. In areas barren of topsoil, principally on Crown land which had been degraded by gravel extraction, the replanted trees grew well on the clean gravelly soil. A flora survey described the existing vegetation and proposed a seed mix for replanting, that would, in time, evolve into a similar forest type. Acacias were included in the mix as they were components of the understory but also to give rapid infilling and provide nitrogen for eucalypt growth. Yellow Box (Eucalyptus Melliodora), a minor component of the original vegetation was not included in the seed mix as the seed is difficult to
Good regrowth of Yellow Box from seed naturally occurring in the topsoil has already occurred at both the Moonambel and Amphitheatre sites. Plant growth from seed was typically very good. Tree growth at the rocky bare Moonambel site has been spectacular, particularly the Blue gums in the mix. Trees sown at Mountain Hut in August 1997 have developed into trees up to 6 metres tall by December 2000, boosted by a period of hot, dry weather which aided germination and growth. On the gravel reserves, where there was sparse topsoil, the eucalypts and wattles germinated well over winter/spring 1999, especially in the rip lines that trapped moisture and provided a warmer microclimate, Mr Devereux said. Early pasture sowing on rehabilitated areas at Amphitheatre used perennial pasture seed mixes recommended by the Department of Natural Resources and Environment. The seed mixes were consistent with the “Avoca Catchment Salinity Management 23
Plan” and stock was kept off sown areas until the pasture was fully established. A recent visit by a Discovery reporter to the Avoca mining sites revealed dramatic pasture and native tree regrowth in rehabilitated areas. There is virtually no sign of mining activity in the areas where final rehabilitation is complete, while other recent restoration work is already showing promising results. While grazing in some pasture areas has not yet resumed, another season of consolidation should result in significantly improved pasture growth. Importantly, landowners in the areas affected by the mining operation are strongly supportive of the project which has set new standards for co-operation between the mining industry and rural landowners. F O R M O R E I N F O R M AT I O N C O N TA C T:
Rob Devereux, Managing director Sedimentary Holdings NL Telephone (03) 9329 9884
SPECIALIST METALS
SPECIALIST METALS
Mobile boom rattles the tin T
he growing use of mobile phones and computers has created a demand boom for specialist metals and minerals used to produce various electronic equipment. Once regarded as a low-value industrial metal, tantalum, often associated with tin mines, has emerged as a major new commodity driven by demand from the electronics sector. Tantalum is used primarily in capacitors, without which, no circuit board is complete. A global shortage of tantalum (Ta2O5) in the past two years has forced the price from around $US40 a pound to well over $US100 a pound, with recent sales at close to $US180 a pound. That has caused mining companies
to take a new look at old tin mines with a view to resuming production of their tantalum content.
mining area with potential for the discovery of primary pegmatite hosted and alluvial tantalum/tin deposits.
One early Victorian tin mine could shortly become the focus of attention of one of Australia’s fastest growing tantalum producers, Australasian Gold Mines, operator of the newly expanded Dalgaranga tantalum project in Western Australia.
The remaining licence area covers six known primary pegmatite hosted tantalum/tin deposits, three of which were formerly mined for tin by shallow open cuts.
Australasian Gold Mines NL bought an option over the Mt Alwa tin and tantalum project in the Walwa Tin Field early this year.
Each of the six prospects has been percussion or diamond drill tested. However, numerous other targets have been identified that were not drill tested by previous explorers.
The Mt Alwa project covers 51 square kilometres and is 100 kilometres east of Wodonga, in Victoria’s glorious high country.
The Mt Alwa deposit was mined as an open pit from 1962 to 1968, with the open pit measuring 200 metres long, 100 metres wide and 20 metres deep.
In the 1960s, Mt Alwa was a producing tin
Percussion drill testing of the pegmatite dur-
ing the late 1960’s through to early 1980’s intersected significant tantalum/tin mineralisation adjacent to and beneath the open pit in a series of stacked flat-lying pegmatites varying from three to 15 metres thick. No drilling went deeper than 70 metres and little or no exploration has been completed in the area since the early 1980’s. Early percussion drilling results have never been followed up. Australasian Gold Mines managing director, Michael Fotios, said: “Significant potential exists for immediate extensions to the pegmatite or for repetitions. “Mineralisation has been identified in the six prospects within a north south zone of pegmatite intrusions measuring 2.5 by 1.2 kilometres.” Mr Fotios said the resource potential adjacent to and beneath the Mt Alwa pit alone, identified by previous exploration, was for 8.64 million tonnes grading 50 to 100 grams of tantalum per tonne and up to and 1,600 grams per tonne of tin.
A tantalum boom, driven by the surge in mobile phone and electronic component usage, has created new interest in re-opening old tin mines, which often produced large volumes of tantalum. The Mt Alwa tin mine, near Albury, in northern Victoria, is being explored by Perth-based Australasian Gold Mines. Managing director, Mike Fotios, (below right) said an exploration work program had already been submitted to the Victorian Government.
Exploration at other targets within the project had returned significant tantalum results including 15.1 metres at 172 g/t Ta2O5 and 950 g/t Sn from a channel sample across a bench at the Mt Alwa south prospect.
mence subject to lodgement of a $5000 bond and approval of the work program.
Assays of tin concentrates produced in the 1960’s from one open pit returned 8.1 % tantalum and indicated that significant tantalum was being produced as a by product of the tin mining operation.
Drilling to accurately define the tantalum resources on the licences began in November. Meanwhile, the company has applied to the NSW authorities for leases covering the conceptual regional extensions of the Walwa tin/tantalum mineralisation.
In those early days, long before mobile phones, tantalum was a considered a nuisance or penalty mineral in tin concentrates.
It has applied for a 1009 square km exploration licence that would cover several known tin and tantalum bearing pegmatites which extend sporadically from near the township of Jingellic northwards for 15 km.
Reverse circulation drilling at the Redbank prospect, 1.2 kilometres north of Mt Alwa, has intersected values up to 10 metres at 193 g/t Ta2O5 and 624 g/t Sn in a near-surface, flatlying pegmatite. Numerous other percussion drill holes at this prospect intersected similar grades of tantalum mineralisation, Mr Fotios said. “Participation in the Mt Alwa project is consistent with the company’s previously stated diversification into tantalum,” Mr Fotios added. “Australasian Gold Mines considers tantalum an emerging commodity that is linked to the booming electronics (ie. communications and computing) industry and is continuing to evalu24
ate other tantalum targets to add to its portfolio.” Mr Fotios said a work program to explore the tenements had been submitted to the Department of Natural Resources and Environment in Victoria. Access to the land covered by freehold properties is subject to the completion of standard compensation agreements. The balance of the tenements cover vacant Crown land on which exploration can com25
Mr Fotios said that the company also was completing an extensive data compilation exercise in order to convert all previous mapping and sampling data into digital format.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Michael Fotios, Managing director Australasian Gold Mines NL Telephone 08 9386 7211 or visit www.australasiangold.com.au
SPECIALIST METALS
SPECIALIST METALS
Mobile boom rattles the tin T
he growing use of mobile phones and computers has created a demand boom for specialist metals and minerals used to produce various electronic equipment. Once regarded as a low-value industrial metal, tantalum, often associated with tin mines, has emerged as a major new commodity driven by demand from the electronics sector. Tantalum is used primarily in capacitors, without which, no circuit board is complete. A global shortage of tantalum (Ta2O5) in the past two years has forced the price from around $US40 a pound to well over $US100 a pound, with recent sales at close to $US180 a pound. That has caused mining companies
to take a new look at old tin mines with a view to resuming production of their tantalum content.
mining area with potential for the discovery of primary pegmatite hosted and alluvial tantalum/tin deposits.
One early Victorian tin mine could shortly become the focus of attention of one of Australia’s fastest growing tantalum producers, Australasian Gold Mines, operator of the newly expanded Dalgaranga tantalum project in Western Australia.
The remaining licence area covers six known primary pegmatite hosted tantalum/tin deposits, three of which were formerly mined for tin by shallow open cuts.
Australasian Gold Mines NL bought an option over the Mt Alwa tin and tantalum project in the Walwa Tin Field early this year.
Each of the six prospects has been percussion or diamond drill tested. However, numerous other targets have been identified that were not drill tested by previous explorers.
The Mt Alwa project covers 51 square kilometres and is 100 kilometres east of Wodonga, in Victoria’s glorious high country.
The Mt Alwa deposit was mined as an open pit from 1962 to 1968, with the open pit measuring 200 metres long, 100 metres wide and 20 metres deep.
In the 1960s, Mt Alwa was a producing tin
Percussion drill testing of the pegmatite dur-
ing the late 1960’s through to early 1980’s intersected significant tantalum/tin mineralisation adjacent to and beneath the open pit in a series of stacked flat-lying pegmatites varying from three to 15 metres thick. No drilling went deeper than 70 metres and little or no exploration has been completed in the area since the early 1980’s. Early percussion drilling results have never been followed up. Australasian Gold Mines managing director, Michael Fotios, said: “Significant potential exists for immediate extensions to the pegmatite or for repetitions. “Mineralisation has been identified in the six prospects within a north south zone of pegmatite intrusions measuring 2.5 by 1.2 kilometres.” Mr Fotios said the resource potential adjacent to and beneath the Mt Alwa pit alone, identified by previous exploration, was for 8.64 million tonnes grading 50 to 100 grams of tantalum per tonne and up to and 1,600 grams per tonne of tin.
A tantalum boom, driven by the surge in mobile phone and electronic component usage, has created new interest in re-opening old tin mines, which often produced large volumes of tantalum. The Mt Alwa tin mine, near Albury, in northern Victoria, is being explored by Perth-based Australasian Gold Mines. Managing director, Mike Fotios, (below right) said an exploration work program had already been submitted to the Victorian Government.
Exploration at other targets within the project had returned significant tantalum results including 15.1 metres at 172 g/t Ta2O5 and 950 g/t Sn from a channel sample across a bench at the Mt Alwa south prospect.
mence subject to lodgement of a $5000 bond and approval of the work program.
Assays of tin concentrates produced in the 1960’s from one open pit returned 8.1 % tantalum and indicated that significant tantalum was being produced as a by product of the tin mining operation.
Drilling to accurately define the tantalum resources on the licences began in November. Meanwhile, the company has applied to the NSW authorities for leases covering the conceptual regional extensions of the Walwa tin/tantalum mineralisation.
In those early days, long before mobile phones, tantalum was a considered a nuisance or penalty mineral in tin concentrates.
It has applied for a 1009 square km exploration licence that would cover several known tin and tantalum bearing pegmatites which extend sporadically from near the township of Jingellic northwards for 15 km.
Reverse circulation drilling at the Redbank prospect, 1.2 kilometres north of Mt Alwa, has intersected values up to 10 metres at 193 g/t Ta2O5 and 624 g/t Sn in a near-surface, flatlying pegmatite. Numerous other percussion drill holes at this prospect intersected similar grades of tantalum mineralisation, Mr Fotios said. “Participation in the Mt Alwa project is consistent with the company’s previously stated diversification into tantalum,” Mr Fotios added. “Australasian Gold Mines considers tantalum an emerging commodity that is linked to the booming electronics (ie. communications and computing) industry and is continuing to evalu24
ate other tantalum targets to add to its portfolio.” Mr Fotios said a work program to explore the tenements had been submitted to the Department of Natural Resources and Environment in Victoria. Access to the land covered by freehold properties is subject to the completion of standard compensation agreements. The balance of the tenements cover vacant Crown land on which exploration can com25
Mr Fotios said that the company also was completing an extensive data compilation exercise in order to convert all previous mapping and sampling data into digital format.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Michael Fotios, Managing director Australasian Gold Mines NL Telephone 08 9386 7211 or visit www.australasiangold.com.au
QUARRYING
BASIN NEWS
Melba’s dad carved his success
New life for WIM prospect
I
n industry newcomer believes it has overcome the processing problems which have prevented development of Victoria’s massive WIM-style mineral sands deposits near Horsham.
Limestone has been quarried at David Mitchell’s Lilydale operations for 122 years, producing a wide range of industrial and agricultural products and helping the company expand its operations nationally.
n the past two centuries, Victorians have embraced natural stone as a favorite building material with many of our historic buildings created from the state’s abundant resources of limestone, sandstone and bluestone.
But Victoria is where the story started with the original Cave Hill quarry still supplying around 250,000 tonnes of material a year to feed the lime kilns and the processing plant.
But one early Scottish stonemason, looking for a new source of limestone for building purposes, went on to create a business which has endured and prospered for more than a century. The limestone deposits of Lilydale, discovered by David Mitchell in 1878, were the foundation of the company bearing his name to this day.
The three lime kilns are fired by natural gas which allows a more controlled and efficient burning process than earlier fuel types which included firewood cut from the local forests and, later, black coal from the south Gippsland region and, even later, Bunker C type heavy fuel oil.
David Mitchell is one of Australia’s biggest producers of lime products, marketed under the company flagship brand name, Limil. Originally, the Lilydale quarries were created to cut marble and limestone blocks for building purposes. But the company has dramatically expanded its operations and now produces a wide range of building, agricultural and industrial lime products from almost every state in Australia. The success of the David Mitchell business also created another major international benefit for Australia. With his business prospering, David Mitchell established a large and stately home, still standing in Lilydale today. It was in that home that he reared a daughter Helen, who went on to international fame and acclaim as the singer, Dame Nellie Melba. Born in the Melbourne suburb of Richmond on May 19, 1861, Helen Mitchell lived there for many years and at Lilydale. She sang at the Richmond public hall when she was six and became a skilled pianist and organist, but did not study singing until after her marriage to Charles Nesbitt Armstrong in 1882. She appeared in Sydney in 1885 and in London in 1886 before studying in Paris. She made her operatic debut as Gilda in Verdi’s Rigoletto in 1887 in Brussels under the name Melba, derived from her home city of Melbourne. Until 1926, she sang in the principal opera houses of Europe and the United States, particularly Covent Garden and the Metropolitan Opera. She was created a Dame of the British Empire in 1918 before returning in 1926 to Australia, where she became president of the Melbourne Conservatorium. Melba toast and the dessert, Peach Melba, were named after her following
her death on February 23, 1931 in Sydney. While his famous daughter carved out an international career, David Mitchell was carving his own niche, cutting limestone in Lilydale and converting it into building stones and other valuable building products. The original quarries opened on March 26, 1878 with the limestone subsequently used in the manufacture of EMU brand cement and burnt lime products. In those days, the Cave Hill site was also used for the manufacture of cheese, bacon and soap. At nearby Coldstream and at St Huberts Estate at Rutherglen, grapes were grown for wine production to be eventually cellared at Burnley and supplied amongst others, to the Governor of Victoria. Today, David Mitchell Limited (DML), formed from the original David Mitchell Estate, has interests in many parts of Australia. DML manufactures lime and limestone products in far north Queensland at Ootann near Chillagoe, and at Woodstock, outside of Townsville. The output from these kilns feeds the alkali requirements of major gold mines in north Queensland. The same Quicklime products are used in the sugar mills from Mosman through the Herbert area down to the Burdekin region. The installation of a lime hydrator plant at DML’s Woodstock plant has enabled the company to export hydrated lime out of Townsville to the burgeoning mining industry in the Pacific rim. 26
After mining, the lime is crushed and sent to the kilns from where it is selected after strict quality control for hydration. The lime is passed through a Knibb’s continuous hydrator and mill which ensures a uniformly fine particle size. From there the Limil brand product is bagged or sold in bulk to a wide range of industries. Lime is used in many applications in the steel and aluminium smelting industry and in agriculture, water treatment and, in Victoria’s Dandenong ranges area, it is finding increasing use in the expanding grape growing and wine industry. Limestone is a sedimentary rock composed principally of calcite calcium carbonate (CaCO3). Crushed to varying diameters, it is used as landscaping spalls, roadbase, aggregates, screenings, foundry flux or toppings. Crushed limestone has an attractive appearance and a bonding quality superior to comparable materials. Ground into its finer forms, limestone can be used for acid neutralisation, Aglime, mineral fillers and a host of other uses. The Lilydale plant also supplies the wellknown Lilydale toppings gravel which is used extensively for pathways.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Geoff Clements, National marketing manager David Mitchell Limited Telephone (03) 9285 4822 or visit www.davidmitchell.com.au
A
Zirtanium Ltd, a subsidiary company of GDM Resources, says that test work has shown it is possible to process the fine-grained deposits satisfactorily, overcoming some of the mineral beneficiation problems experienced by their discoverer, CRA Ltd (now Rio Tinto Ltd) in the 1980s. The WIM deposits contain massive volumes of high quality, but extremely fine-grained, minerals. The small grain size and the accompanying difficulties in processing the mineral, forced CRA to abandon the discoveries in 1997 after spending more than $60 million drilling, sampling and researching ways to overcome the processing problems. In a draft prospectus, currently being completed, Zirtanium noted that the mineral sands industry is one of the most profitable in the resources sector. Zirtanium directors said that while Australia’s traditional mineral sands reserves are being depleted, the Murray Basin, occupying an area of approximately 300,000 square kilometres, is likely to be the next major mineral sands province to be exploited in the world. Two main styles of mineral sand deposits have been identified in the Murray Basin. There are large, fine-grained, sheet-type deposits (WIM style) and the coarse-grained, narrow ribbon-type deposits (beach style). More than 65 individual, coarse-grained deposits of economic significance have been identified with a total contained heavy mineral content of 44 million tonnes with an estimated value of more than $13 billion at current prices. The deposits over which Zirtanium holds exploration licences – Jackson (WIM 200) and Donald (WIM250) – fall into the finegrained category with a total in-situ heavy mineral content of 60 million tonnes. Zirtanium directors believe the Murray Basin will allow Australia’s continued dominance of the global mineral sands industry as it has good access to modern infrastructure with a well-developed network of roads, railways, towns, power, water and communications. The Jackson and Donald deposits are well situated on the southern side of the Murray Basin closer to the major port of Portland than most other economically significant deposits.
The term ‘mineral sand’ refers to deposits of minerals of specific gravity of 3.0 or more which have been concentrated by water or wind action. A variety of heavy minerals are concentrated in mineral sand deposits with the minerals of prime economic significance including the titanium minerals, rutile and ilmenite along with leucoxene. Australia is a major supplier of rutile, zircon and ilmenite. Australia’s mineral sands output peaked in the 1970s when it accounted for 90% of the world rutile production, 30% of the world ilmenite production and 60% of the world zircon production. But by 1999, production in Australia had decreased to 26% of the total titanium feedstock (ilmenite and rutile) compared to South Africa 25%, Canada 16% and USA 12%. Australia, however, continues to be the main zircon pro27
ducer controlling 36% of the world market, followed by South Africa 31% and the USA 19%. The decline in Australia’s dominant position has been due to the steady increase in demand for both titanium feedstock and zircon combined with the depletion of Australian deposits and competition from new overseas operations, particularly in South Africa. World demand for both titanium feedstocks and zircon is expected to grow at an average rate of 2.5% to 3% a year over the next decade with the medium-term outlook for tight supply. That outlook provides a solid backdrop for Zirtanium’s plans to develop the WIM discoveries. Between 1983 and 1998, CRA spent over $60 million on drilling, sampling and analysis of the WIM deposits. Work by CRA subsidiary, Wimmera Industrial
QUARRYING
BASIN NEWS
Melba’s dad carved his success
New life for WIM prospect
I
n industry newcomer believes it has overcome the processing problems which have prevented development of Victoria’s massive WIM-style mineral sands deposits near Horsham.
Limestone has been quarried at David Mitchell’s Lilydale operations for 122 years, producing a wide range of industrial and agricultural products and helping the company expand its operations nationally.
n the past two centuries, Victorians have embraced natural stone as a favorite building material with many of our historic buildings created from the state’s abundant resources of limestone, sandstone and bluestone.
But Victoria is where the story started with the original Cave Hill quarry still supplying around 250,000 tonnes of material a year to feed the lime kilns and the processing plant.
But one early Scottish stonemason, looking for a new source of limestone for building purposes, went on to create a business which has endured and prospered for more than a century. The limestone deposits of Lilydale, discovered by David Mitchell in 1878, were the foundation of the company bearing his name to this day.
The three lime kilns are fired by natural gas which allows a more controlled and efficient burning process than earlier fuel types which included firewood cut from the local forests and, later, black coal from the south Gippsland region and, even later, Bunker C type heavy fuel oil.
David Mitchell is one of Australia’s biggest producers of lime products, marketed under the company flagship brand name, Limil. Originally, the Lilydale quarries were created to cut marble and limestone blocks for building purposes. But the company has dramatically expanded its operations and now produces a wide range of building, agricultural and industrial lime products from almost every state in Australia. The success of the David Mitchell business also created another major international benefit for Australia. With his business prospering, David Mitchell established a large and stately home, still standing in Lilydale today. It was in that home that he reared a daughter Helen, who went on to international fame and acclaim as the singer, Dame Nellie Melba. Born in the Melbourne suburb of Richmond on May 19, 1861, Helen Mitchell lived there for many years and at Lilydale. She sang at the Richmond public hall when she was six and became a skilled pianist and organist, but did not study singing until after her marriage to Charles Nesbitt Armstrong in 1882. She appeared in Sydney in 1885 and in London in 1886 before studying in Paris. She made her operatic debut as Gilda in Verdi’s Rigoletto in 1887 in Brussels under the name Melba, derived from her home city of Melbourne. Until 1926, she sang in the principal opera houses of Europe and the United States, particularly Covent Garden and the Metropolitan Opera. She was created a Dame of the British Empire in 1918 before returning in 1926 to Australia, where she became president of the Melbourne Conservatorium. Melba toast and the dessert, Peach Melba, were named after her following
her death on February 23, 1931 in Sydney. While his famous daughter carved out an international career, David Mitchell was carving his own niche, cutting limestone in Lilydale and converting it into building stones and other valuable building products. The original quarries opened on March 26, 1878 with the limestone subsequently used in the manufacture of EMU brand cement and burnt lime products. In those days, the Cave Hill site was also used for the manufacture of cheese, bacon and soap. At nearby Coldstream and at St Huberts Estate at Rutherglen, grapes were grown for wine production to be eventually cellared at Burnley and supplied amongst others, to the Governor of Victoria. Today, David Mitchell Limited (DML), formed from the original David Mitchell Estate, has interests in many parts of Australia. DML manufactures lime and limestone products in far north Queensland at Ootann near Chillagoe, and at Woodstock, outside of Townsville. The output from these kilns feeds the alkali requirements of major gold mines in north Queensland. The same Quicklime products are used in the sugar mills from Mosman through the Herbert area down to the Burdekin region. The installation of a lime hydrator plant at DML’s Woodstock plant has enabled the company to export hydrated lime out of Townsville to the burgeoning mining industry in the Pacific rim. 26
After mining, the lime is crushed and sent to the kilns from where it is selected after strict quality control for hydration. The lime is passed through a Knibb’s continuous hydrator and mill which ensures a uniformly fine particle size. From there the Limil brand product is bagged or sold in bulk to a wide range of industries. Lime is used in many applications in the steel and aluminium smelting industry and in agriculture, water treatment and, in Victoria’s Dandenong ranges area, it is finding increasing use in the expanding grape growing and wine industry. Limestone is a sedimentary rock composed principally of calcite calcium carbonate (CaCO3). Crushed to varying diameters, it is used as landscaping spalls, roadbase, aggregates, screenings, foundry flux or toppings. Crushed limestone has an attractive appearance and a bonding quality superior to comparable materials. Ground into its finer forms, limestone can be used for acid neutralisation, Aglime, mineral fillers and a host of other uses. The Lilydale plant also supplies the wellknown Lilydale toppings gravel which is used extensively for pathways.
F O R M O R E I N F O R M AT I O N C O N TA C T:
Geoff Clements, National marketing manager David Mitchell Limited Telephone (03) 9285 4822 or visit www.davidmitchell.com.au
A
Zirtanium Ltd, a subsidiary company of GDM Resources, says that test work has shown it is possible to process the fine-grained deposits satisfactorily, overcoming some of the mineral beneficiation problems experienced by their discoverer, CRA Ltd (now Rio Tinto Ltd) in the 1980s. The WIM deposits contain massive volumes of high quality, but extremely fine-grained, minerals. The small grain size and the accompanying difficulties in processing the mineral, forced CRA to abandon the discoveries in 1997 after spending more than $60 million drilling, sampling and researching ways to overcome the processing problems. In a draft prospectus, currently being completed, Zirtanium noted that the mineral sands industry is one of the most profitable in the resources sector. Zirtanium directors said that while Australia’s traditional mineral sands reserves are being depleted, the Murray Basin, occupying an area of approximately 300,000 square kilometres, is likely to be the next major mineral sands province to be exploited in the world. Two main styles of mineral sand deposits have been identified in the Murray Basin. There are large, fine-grained, sheet-type deposits (WIM style) and the coarse-grained, narrow ribbon-type deposits (beach style). More than 65 individual, coarse-grained deposits of economic significance have been identified with a total contained heavy mineral content of 44 million tonnes with an estimated value of more than $13 billion at current prices. The deposits over which Zirtanium holds exploration licences – Jackson (WIM 200) and Donald (WIM250) – fall into the finegrained category with a total in-situ heavy mineral content of 60 million tonnes. Zirtanium directors believe the Murray Basin will allow Australia’s continued dominance of the global mineral sands industry as it has good access to modern infrastructure with a well-developed network of roads, railways, towns, power, water and communications. The Jackson and Donald deposits are well situated on the southern side of the Murray Basin closer to the major port of Portland than most other economically significant deposits.
The term ‘mineral sand’ refers to deposits of minerals of specific gravity of 3.0 or more which have been concentrated by water or wind action. A variety of heavy minerals are concentrated in mineral sand deposits with the minerals of prime economic significance including the titanium minerals, rutile and ilmenite along with leucoxene. Australia is a major supplier of rutile, zircon and ilmenite. Australia’s mineral sands output peaked in the 1970s when it accounted for 90% of the world rutile production, 30% of the world ilmenite production and 60% of the world zircon production. But by 1999, production in Australia had decreased to 26% of the total titanium feedstock (ilmenite and rutile) compared to South Africa 25%, Canada 16% and USA 12%. Australia, however, continues to be the main zircon pro27
ducer controlling 36% of the world market, followed by South Africa 31% and the USA 19%. The decline in Australia’s dominant position has been due to the steady increase in demand for both titanium feedstock and zircon combined with the depletion of Australian deposits and competition from new overseas operations, particularly in South Africa. World demand for both titanium feedstocks and zircon is expected to grow at an average rate of 2.5% to 3% a year over the next decade with the medium-term outlook for tight supply. That outlook provides a solid backdrop for Zirtanium’s plans to develop the WIM discoveries. Between 1983 and 1998, CRA spent over $60 million on drilling, sampling and analysis of the WIM deposits. Work by CRA subsidiary, Wimmera Industrial
BASIN NEWS
Minerals, discovered that the separation and concentration of the titanium minerals and zircon did not produce products acceptable to the end users.
Geological Survey of Victoria heads for the high country
Proposed schematic mining system
Metallurgical test work by CRA later confirmed that the “ high titanium minerals can be agglomerated, ilmenite can be upgraded to synthetic rutile or to a high grade acid soluble titania and that zircon can be upgraded to a new premium grade product”
New geology maps and interpretations covering the Bogong 1:100 000 map area.
CRA’s approach was to produce one titanium product consisting of agglomerated synthetic rutile, rutile and leucoxene from a bulk flotation process. But by 1998, CRA quit the project eventually relinquishing tenure to the Jackson and Donald deposits.
The next exciting project in the continuing detailed mapping program of the G.S.V.
• The region is home to the Harrietville, Glen Wills and Mitta Mitta gold/tin fields and the Granite Flat porphyry gold–copper deposit.
Zirtanium is taking a different approach to the WIM deposits, primarily by planning early production at a rate which allows all mineral products to be sold using high-grade portions of the deposit.
• The project team consists of Vince Morand, Kylie Wohlt, David Taylor, Ross Cayley, Bruce Simons, Simon Maher and April Westcott. • Field mapping commenced February 2001 and is scheduled to be completed by September 2002.
The company plans to use spirals to produce a bulk heavy mineral concentrate and then aims to separate the heavy mineral content into magnetic and non-magnetic components.
Project objectives
This approach will reduce capital expenditure by mining only the high-grade zones initially. To test the concept, Zirtanium bulk sampled both the Jackson and Donald deposits, taking 4 tonne samples, to determine the nature of the mineralised zone and to assess the bulk heavy mineral grade against that returned from previous drilling. These samples were sent for metallurgical test work, which involved heavy mineral separation using gravity, flotation, magnetics and electrostatics. The company believes that its preliminary test work shows that acceptable separation and recoveries of heavy minerals could be achieved, not withstanding their fine-grained nature. Subsequently, Zirtanium has contracted CSIRO to apply its heat and leach process (HL) to the zircon to reduce the uranium and thorium to levels within market specification. This has been accomplished, along with significant reduction in other impurities. Zirtanium reports that recent metallurgical test work on the titanium products show that outstanding technical issues may be dealt with in the following ways: • Material bulk: that spirals are totally effective before froth flotation in reducing the feed bulk by approximately 85% • Magnetics: That both roasting and differential froth flotation may be effective in removing the contaminated chromite from illmenite • Non magnetics: The tests demonstrate that rutile agglomeration effectively produce a suitable grain size from the finer product, which will satisfy market specification and
• to increase the coverage of new generation geological mapping across eastern Victoria, leading to a complete east-west transect of new mapping through the Lachlan and Delamerian fold belts in Victoria;
that relatively low pressure acid leaching may be effective in reducing the silicone content to acceptable levels in leucoxene. A recent scoping study by Zirtanium proposes a 10 million tonne per annum mining operation for the project in the central high-grade portion of the Jackson deposit using dry-mining techniques. The study was developed on a mining system operating on 1,000m wide panels, with overburden removal and mining progressively completed in 200m advancing segments. The figure above shows the proposed schematic mining system. Contract mining would be carried out using an excavator. Two mobile combination belt-feeder and pulping units positioned ahead of the operating ore face would prepare the ore for pumping to the wet processing plant (WPP) located alongside the mining panel. The WPP would deslime the ore using cyclones and separate the heavy minerals from the sand by spirals. This is a major change to CRA’s approach, which was to use flotation as the primary concentration method rather than WPP, concentrate upgrading (CUP) and mineral separation (MSP) plants. Slimes from the WPP would be dewatered and co-deposited with sand and allowed to settle behind the advancing face. CRA WIM150 pilot plant tailings were successfully redeposited and rehabilitated using this co-deposition method. The heavy mineral concentrate (HMC) from the WPP will require further upgrading to remove excess sand and some of the trash minerals. The CUP would use wet, high-intensity mag28
• to enhance understanding of the stratigraphy and structure of the poorly known Ordovician metasediments which host a number of historic gold fields including Mount Wills and Harrietville and thereby help unravel the complex geological history of eastern Victoria; netics and shaking tables to produce a magnetic (ilmenite) and non-magnetic (rutile, leucoxene and zircon) concentrate. The proposed WPP and CUP operations involve conventional mineral sand technology adapted and further refined for the recovery of fine-grained heavy minerals. Zirtanium believes that the application of this technlogy has been successfully demonstrated by Zirtanium’s test work. Magnetic and non-magnetic concentrate would be transported to Portland to separate the individual mineral products. Portland offers a deep-water port and all the necessary infrastructure. Zirtanium directors said that a combination of conventional mineral sand dry mill technology and flotation has the potential to yield quality products at high recoveries. While this combination of processes has yet to be thoroughly tested, initial test work is said to be encouraging. F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr Mark Elliott Managing director, Zirtanium Ltd Telephone: (07) 3832 2505
• to better understand the timing and structural controls on orogenic gold mineralisation, as well as gain a better understanding of magmatic–hydrothermal mineralisation associated with granites and dykes. This will be done with the aim of enhancing the prospectivity of the Bogong area.
Products • Geological data collected at 1:25 000 will be compiled for publication at 1:50 000 scale. • A geophysical interpretation map at 1:100 000. • The maps will be accompanied by a report detailing the geology, geophysical character and prospectivity of the area. • A GIS package containing the digital information relevant to the area (including mining and open-file company exploration data). We welcome any feedback or contributions you may wish to make to the project. If you would like further information on any aspect of the project, please contact Peter O’Shea (Manager, Geological Mapping– 03 9412 5093).
BASIN NEWS
Minerals, discovered that the separation and concentration of the titanium minerals and zircon did not produce products acceptable to the end users.
Geological Survey of Victoria heads for the high country
Proposed schematic mining system
Metallurgical test work by CRA later confirmed that the “ high titanium minerals can be agglomerated, ilmenite can be upgraded to synthetic rutile or to a high grade acid soluble titania and that zircon can be upgraded to a new premium grade product”
New geology maps and interpretations covering the Bogong 1:100 000 map area.
CRA’s approach was to produce one titanium product consisting of agglomerated synthetic rutile, rutile and leucoxene from a bulk flotation process. But by 1998, CRA quit the project eventually relinquishing tenure to the Jackson and Donald deposits.
The next exciting project in the continuing detailed mapping program of the G.S.V.
• The region is home to the Harrietville, Glen Wills and Mitta Mitta gold/tin fields and the Granite Flat porphyry gold–copper deposit.
Zirtanium is taking a different approach to the WIM deposits, primarily by planning early production at a rate which allows all mineral products to be sold using high-grade portions of the deposit.
• The project team consists of Vince Morand, Kylie Wohlt, David Taylor, Ross Cayley, Bruce Simons, Simon Maher and April Westcott. • Field mapping commenced February 2001 and is scheduled to be completed by September 2002.
The company plans to use spirals to produce a bulk heavy mineral concentrate and then aims to separate the heavy mineral content into magnetic and non-magnetic components.
Project objectives
This approach will reduce capital expenditure by mining only the high-grade zones initially. To test the concept, Zirtanium bulk sampled both the Jackson and Donald deposits, taking 4 tonne samples, to determine the nature of the mineralised zone and to assess the bulk heavy mineral grade against that returned from previous drilling. These samples were sent for metallurgical test work, which involved heavy mineral separation using gravity, flotation, magnetics and electrostatics. The company believes that its preliminary test work shows that acceptable separation and recoveries of heavy minerals could be achieved, not withstanding their fine-grained nature. Subsequently, Zirtanium has contracted CSIRO to apply its heat and leach process (HL) to the zircon to reduce the uranium and thorium to levels within market specification. This has been accomplished, along with significant reduction in other impurities. Zirtanium reports that recent metallurgical test work on the titanium products show that outstanding technical issues may be dealt with in the following ways: • Material bulk: that spirals are totally effective before froth flotation in reducing the feed bulk by approximately 85% • Magnetics: That both roasting and differential froth flotation may be effective in removing the contaminated chromite from illmenite • Non magnetics: The tests demonstrate that rutile agglomeration effectively produce a suitable grain size from the finer product, which will satisfy market specification and
• to increase the coverage of new generation geological mapping across eastern Victoria, leading to a complete east-west transect of new mapping through the Lachlan and Delamerian fold belts in Victoria;
that relatively low pressure acid leaching may be effective in reducing the silicone content to acceptable levels in leucoxene. A recent scoping study by Zirtanium proposes a 10 million tonne per annum mining operation for the project in the central high-grade portion of the Jackson deposit using dry-mining techniques. The study was developed on a mining system operating on 1,000m wide panels, with overburden removal and mining progressively completed in 200m advancing segments. The figure above shows the proposed schematic mining system. Contract mining would be carried out using an excavator. Two mobile combination belt-feeder and pulping units positioned ahead of the operating ore face would prepare the ore for pumping to the wet processing plant (WPP) located alongside the mining panel. The WPP would deslime the ore using cyclones and separate the heavy minerals from the sand by spirals. This is a major change to CRA’s approach, which was to use flotation as the primary concentration method rather than WPP, concentrate upgrading (CUP) and mineral separation (MSP) plants. Slimes from the WPP would be dewatered and co-deposited with sand and allowed to settle behind the advancing face. CRA WIM150 pilot plant tailings were successfully redeposited and rehabilitated using this co-deposition method. The heavy mineral concentrate (HMC) from the WPP will require further upgrading to remove excess sand and some of the trash minerals. The CUP would use wet, high-intensity mag28
• to enhance understanding of the stratigraphy and structure of the poorly known Ordovician metasediments which host a number of historic gold fields including Mount Wills and Harrietville and thereby help unravel the complex geological history of eastern Victoria; netics and shaking tables to produce a magnetic (ilmenite) and non-magnetic (rutile, leucoxene and zircon) concentrate. The proposed WPP and CUP operations involve conventional mineral sand technology adapted and further refined for the recovery of fine-grained heavy minerals. Zirtanium believes that the application of this technlogy has been successfully demonstrated by Zirtanium’s test work. Magnetic and non-magnetic concentrate would be transported to Portland to separate the individual mineral products. Portland offers a deep-water port and all the necessary infrastructure. Zirtanium directors said that a combination of conventional mineral sand dry mill technology and flotation has the potential to yield quality products at high recoveries. While this combination of processes has yet to be thoroughly tested, initial test work is said to be encouraging. F O R M O R E I N F O R M AT I O N C O N TA C T:
Dr Mark Elliott Managing director, Zirtanium Ltd Telephone: (07) 3832 2505
• to better understand the timing and structural controls on orogenic gold mineralisation, as well as gain a better understanding of magmatic–hydrothermal mineralisation associated with granites and dykes. This will be done with the aim of enhancing the prospectivity of the Bogong area.
Products • Geological data collected at 1:25 000 will be compiled for publication at 1:50 000 scale. • A geophysical interpretation map at 1:100 000. • The maps will be accompanied by a report detailing the geology, geophysical character and prospectivity of the area. • A GIS package containing the digital information relevant to the area (including mining and open-file company exploration data). We welcome any feedback or contributions you may wish to make to the project. If you would like further information on any aspect of the project, please contact Peter O’Shea (Manager, Geological Mapping– 03 9412 5093).
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VICTORIA: P.O. Box 191, 265 Ingles Street, Port Melbourne 3207.
2017.
TELFORD 1203
