Discovery 038 2006-10

Strzelecki Awards

Awards for sustainable development

Victoria’s brown coal

October 2006

Energy for the future

Bendigo Mining

Commercial gold mining returns to Bendigo

VICTORIA’S EARTH RESOURCES JOURNAL

D I S COVE RY

Perseverance Corporation

Perseverance dives underground at Phoenix

Woodside Petroleum

Otway Gas project close to production

AGD Mining

Costerfield joins Victoria’s new golden age

Exploration Feature

New information and opportunities for the mineral exploration industry

REGULARS

Minister’s Foreword

CO NT E NTS

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 hanges put in place by the Bracks C Government are aimed at ensuring a long-term, robust framework for the sustainable development of our mineral and petroleum resources, as well as emerging resources, such as geothermal energy and coal seam methane.

p Bass Gas Yolla Platform in the Bass Strait

News Updates 03

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Kipper provides Victoria with new gas resources Scientists help “Resource Our Future”  ictoria rates well on Minerals V Industry Scorecard

ISSN Number 13282409 For more information contact: The Department of Primary Industries Level 16, 1 Spring Street, Melbourne 3000. www.dpi.vic.gov.au 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. This publication is copyright. No part may be reproduced by any process without the written permission of the Department of Primary Industries. ACKNOWLEDGMENTS Minerals and Petroleum Division acknowledges contributions made by private enterprise. Acceptance of these contributors, however, does not endorse or imply endorsement by the Department of Primary Industries of any product or service offered by the contributors.

32 W  hat’s

happening with mineral applications and licences

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 our guide to Minerals and Y Petroleum contacts and resources sector websites

FEATURES

ARTICLES

Strzelecki Awards

Innovation Roadmap

Awards for sustainable development in the earth resource industries PUBLISHING DETAILS Discovery is published quarterly by the Victorian Government Department of Primary Industries, Minerals and Petroleum Division, Melbourne, October 2006

Tenement Updates and Contacts

PAGE 08

Victoria’s brown coal

A roadmap to a better resources future PAGE 06

Mining Laws

Energy for the future

Victoria’s mining laws amended for the better

PAGE 10

PAGE 07

Mechanical Thermal Expression (MTE)

Origin Energy

MTE demonstration in the Latrobe Valley PAGE 12

Bendigo Mining

Commercial gold mining returns to Bendigo PAGE 14

Victoria sets exploration and gold production records PAGE 16

Perseverance Corporation

Perseverance dives underground at Phoenix PAGE 20

Woodside Petroleum

Otway Gas project close to production PAGE 22

AGD Mining

Costerfield joins Victoria’s new golden age PAGE 26 For Discovery online visit: www.dpi.vic.gov.au/minpet/discovery

BassGas project starts commissioning phase PAGE 24

Iluka Resources

Victoria’s mineral sands industry gets started in earnest PAGE 28

Indigenous Land Use Agreements

Explorers negotiate native title agreements PAGE 30

Good Vibrations

Seismic line gives explorers new information PAGE 31

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DISCOVERY JOURNAL OCTOBER 2006

Minister’s Foreword

Changes put in place by the Bracks Government are aimed at ensuring a long-term, robust framework for the sustainable development of our mineral and petroleum resources, as well as emerging resources, such as geothermal energy and coal seam methane.

The Bracks Government has allocated $2.7 million over four years to assist effective community engagement. A key aspect of the Sustainabililty Action Statement initiative is the continuation of the Strzelecki Awards in 2007. It’s a challenge to characterise the extraordinary growth in Victoria’s earth resources industry without borrowing apt phrases such as ‘resources boom’ or ‘golden resurgence’. But that’s exactly what we are witnessing, as this edition of Discovery details. The remarkable pace and breadth of exploration and development in the mining and petroleum sectors is already generating investment and jobs that demonstrate Victoria is “the place to be” for investment in earth resources. For instance, this year alone has been the biggest one-year expansion in the gold sector in more than 150 years. ABARE estimates gold production in Victoria will reach levels not seen since 1917, with over 250,000 ounces produced. Gold production will double in 2006, and is set to double again as the new generation of gold mines of Bendigo, Ballarat, Fosterville and Costerfield increase production. To encourage continued investment, the Bracks Government has initiated ‘Developing Gold Undercover’ – an investment of $9 million to increase knowledge of Victoria’s rich gold prospectivity beyond the ‘golden triangle’. But gold is only part of the mix of Victoria’s growing resources industry which will see more than $2 billion in new mining and petroleum developments come into operation this year. The discovery of massive deposits of zircon, rutile and ilmenite in the Murray Basin has sparked another major exploration and development push. The Premier recently opened Iluka’s $284 million Douglas mineral sands mine, which is set to make Victoria a leading mineral sand producer. Victoria’s vast brown coal resources are also attracting significant and renewed local and international attention.

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Recent amendments to Victoria’s mineral resources legislation reflect the Bracks Government’s commitment to supporting the sustainable development of the resources sector. The Act has been renamed the Mineral Resources (Sustainable Development) Act, and guiding principles of sustainable development have been introduced into the legislation. For the first time, the community has been recognised as a key stakeholder in Victoria’s mining law. This is achieved through the introduction of a statutory duty on mining companies to consult with their communities through the life of a project. Community engagement plans will also be introduced to provide a mechanism for companies to demonstrate their commitment to community engagement. These changes acknowledge that while mining has been a major part of the Victorian economy for generations, local communities must have the opportunity to work with companies to understand and address local issues. These changes and the Government’s ‘Our Environment, Our Future, Sustainability Action Statement (SAS)’ will help ensure that the necessary ‘on the ground’ support for local communities is provided. As part of the SAS, the Bracks Government has allocated $2.7 million over four years to assist effective community engagement, including an integrated program of policies, guidance and tools to support community engagement. A key aspect of the SAS initiative is the continuation of the Strzelecki Awards in 2007. The Strzelecki Awards for environmental and social excellence in the earth resource industries are again being offered following the success of the inaugural awards in 2005.

Monash Energy is proposing to develop advanced coal drying, gasification and geosequestration technologies and construct a $US5 billion plant that will produce large volumes of synthetic diesel fuel. Importantly, the technologies chosen by Monash Energy enable separation of CO 2 that can be transported and injected into deep underground geological formations for secure storage.

The Awards recognise the contribution individual companies make to the sustainable development of Victoria’s valuable earth resources. The 2007 Strzelecki Awards include a new award category for small operators, and the introduction of community judges for the community engagement award. We are already seeing significant advancements in the environmental and social performance as well as the economic contribution of Victoria’s earth resources sector.

The project aligns with the Bracks Government’s ‘Latrobe Valley Resources Future’ initiative, which will encourage new clean brown coal-based investment, including the production of export commodities such as low sulphur diesel, methanol, ammonia and urea.

Changes put in place by the Bracks Government are aimed at ensuring a long-term, robust framework for the sustainable development of our mineral and petroleum resources, as well as emerging resources, such as geothermal energy and coal seam methane.

In other clean energy developments, the Bracks Government has opened the state for large scale commercial exploration of Geothermal Energy Resources and called for tenders over 31 geothermal exploration permit areas. The Bracks Government is determined to support continued growth but, importantly, in a way which maximises benefits for local communities and protects the environment.

I am proud to say Victoria is well positioned to continue to grow its earth resources sector.

Theo Theophanous, Minister for Energy Industries and Resources

MIneralS and PETROLEUM NEWS UPDATES

Kipper provides Victoria with new gas resources

Discovery Magazine is on the rise Discovery covers a wide range of current and topical areas in the earth resources sector and provides informative commentary on vital projects and developments. Our readership comprises mining and engineering professionals, financiers and many others associated with the earth resources industries, including academics and consultants, from both Australia and overseas. Going strong since 1997, October’s issue is our 38th edition of Discovery and will reach more readers than ever before. We are pleased to announce that Discovery Magazine’s circulation has now increased from 3,000 to 4,000 copies. We wish all our readers the very best for the remainder of 2006 and look forward to bringing you more great stories in 2007. To view copies of Discovery online visit: www.dpi.vic.gov.au/minpet/discovery TO RECEIVE YOUR FREE DISCOVERY SEND YOUR MAILING DETAILS TO:

Roger Buckley Department of Primary Industries Level 16, Spring Street Melbourne 3000 Phone: 03 9658 4402 Email: [email protected]

N EWS U P DAT E S

Victoria’s future gas supply has been strengthened dramatically after the grant of a production licence for the Kipper gas field off the Gippsland coast.

The Kipper gas field is located 45 kilometres off the Ninety Mile Beach on the south-east Victorian coast and is one of the largest new fields to be developed in Victoria. It has the potential to supply about 10 per cent of the state’s gas requirements for about 15 years. It contains 620 billion cubic feet of gas which is likely to be used for power generation, cooking and heating once the field comes into production in a few years time. It further contains 30 million barrels of condensate/LPG. Victoria’s Minister for Energy Industries and Resources, Theo Theophanous, said, ‘The production licence for this gas field will ensure that Victorian families continue to have a steady flow of gas at one of the lowest prices in the world’. The Kipper project is just one of a host of new Victorian oil and gas developments in the past five years, including the A$200 million Casino gas project, operated by Santos which started production earlier this year and the A$250 million Minerva gas project, developed by BHP Billiton which started production in 2005. In addition, Woodside is developing the A$1.1 billion Otway gas project accessing the Geographe and Thylacine fields which is due to start production later this year, while Origin Energy has just started production from the A$750 million BassGas project accessing the Yolla field in southern Bass Strait. Early stage production has also started from the A$330 million Basker-Manta oil project operated by Anzon Australia. In 2003, the A$120 million Patricia Baleen gas project operated by Santos started production shortly after the ExxonMobil/BHP Billiton joint venture spent A$200 million to develop the Bream A gas field. Oil and gas field developments together with associated pipelines, processing plants and infrastructure continue to provide benefits to Victoria, in particular contributing to regional development in south-west and south-east Victoria. New gas and oil field development projects have resulted in excess of A$3 billion in investment for Victoria over the past few years and an estimated 3,000 construction and 200 permanent jobs. FOR MORE INFORMATION CONTACT:

Kathryn Mitchell Public Affairs Officer, Santos Ltd Phone: 08 8218 5260

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MINERALS AND PETROLEUM NEWS UPDATES

N EWS U P DAT E S

Scientists help “Resource Our Future” Many of the world’s leading earth scientists gathered in Melbourne in July to discuss the record prices for gold, copper, nickel, zinc, oil, coal and iron ore. This global phenomena has created a frenzy of activity in the mineral exploration industry, particularly in Victoria where spending on exploration is growing faster than almost every other Australian state.

There’s increasing speculation that Victoria does hold Carlin-like deposits and some geologists already see exciting similarities between Perseverance Corporation’s growing resources at Fosterville, near Bendigo and the large scale deposits of north-central Nevada.

The convention attracted special international attention as the previously separate Australian Geological Convention (AGC) and the Australian Society of Exploration Geophysicists (ASEG) Conference and Exhibition each combined at the event to create the 2006 Australian Earth Sciences Convention.

Nevada has produced 50 million ounces of gold in recent decades – worth around A$40 billion at today’s prices. Finds even a fraction of that size could transform Victoria’s regional economy and ignite the local share market. Not all geologists are yet fully convinced, but there are enough believers to have triggered an exploration rush to central Victoria. To help consolidate that message, DPI released the 18th Victorian Initiative for Minerals and Petroleum (VIMP) data in the week leading up to the convention. Victoria continues to set new records in our earth resources sector with gold production to reach levels not seen since 1917. The new set of geological data provided to the minerals and petroleum industries today will continue to spur new interest in Victoria’s newest minerals prospects.

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One of the major conference topics, which centred global interest closely on Victoria, was the question of whether the state could host large-scale disseminated gold deposits, deposits similar to the famed Carlin style deposits which have made Nevada America’s leading gold-producing state.

He also stated that, ‘based on our latest VIMP data we are now inviting expressions of interest to tender for gold at Woods Point – Walhalla and also to explore for base metals at Benambra, near Omeo.’ Mr Theophanous explained that VIMP also had a number of new products to help attract industry investment in Victoria. These included new information indicating a potential 30 million ounces of undiscovered gold north of Bendigo; possible gold indicators around Rupanyup, north-east of Horsham and the release of a new nickel map of Victoria for prospectors.

DPI was the Gold sponsor of the Australian Earth Sciences Convention, which was officially opened by Minister for Energy Industries and Resources, Theo Theophanous and attracted 1200 delegates from around the world. The conference theme‘ Resourcing Our Future’, focused on mineral and energy resources, environmental and engineering geosciences, geodynamics of Earth’s evolution and resourcing and innovation.

He said, ‘studies have shown that every dollar we put into developing our minerals and petroleum maps attracts between A$5 and A$9 in exploration expenditure’.

Minister for Energy Industries and Resources, Theo Theophanous, stated the new data added to the best and most comprehensive geophysical data of any mainland state or territory in Australia and indicated that finding new mineral deposits would boost Victoria’s economy and create new jobs – particularly in regional areas.

Victoria rates well on Minerals Industry Scorecard Victoria has rated highly in the Minerals Council of Australia’s (MCA) National Scorecard of Mining Project Approval Processes for the mining industry, which measures capacity constraints on the minerals industry’s growth and development. The scorecard was presented at this year’s Minerals Week activities in a forum which explored regulatory requirements in the mining and minerals industries and opportunities to create greater value. Access to private land in Victoria was rated higher than all other states, while the state was also rated strongly in the areas of mining exploration tenure and cultural heritage. Specifically, the system for deciding compensation for private land holders was viewed favourably, as was the native title process. Speakers at the Regulatory Efficiency Forum in May 2006, presented ideas for a national approach to reform of the complex and sometimes inconsistent and costly national and state-based licensing and project approval processes. The National Scorecard rates specific areas of the project approval process in each jurisdiction to identify areas of leading practice and areas for improvement.

The Scorecard builds on the MCA’s ‘National Audit of Regulations Influencing Mining Exploration and Project Approval Processes’, released in February this year and covers a range of important regulatory issues including tenure, environmental impact assessment, land access, water management, and native fauna and vegetation management. Project approval processes are benchmarked, firstly, on the quality of policy and regulation design and, secondly, on the quality of implementation and administration.

Community engagement a key objective of mining legislation change The importance of Victorian communities in the rapidly expanding. Victorian resources industry has been enshrined in amendments to the State’s Mineral Resources Development Act, now known as the Mineral Resources (Sustainable Development) Act 1990. The significant changes the government has made will ensure that the community is recognised as a key stakeholder in Victoria’s mineral law for the first time. This will occur through the introduction of a statutory duty on mining companies to consult with their communities through the life of a project. Community engagement plans are also being introduced to enable miners to document their commitments to community engagement. These legislative changes acknowledge that while mining has been a major part of the Victorian economy for generations, local communities need to have the opportunity to work with companies.

That audit concluded that the minerals industry is dogged by excessively complex, conflicting and/or overlapping, regulatory requirements across governments and regulatory agencies which increase costs or restrict or delay exploration and mining project approvals.

FOR MORE INFORMATION CONTACT:

Chris Fraser Executive Director, Victoria Minerals Council of Australia Phone: 03 9629 1851 www.vic.minerals.org.au

Minerals and Petroleum Division staff will be provided with additional training to improve their communication and engagement skills, while expert support will be provided to improve the management of community issues to allow the early identification of potential problems. A key aspect of the SAS initiative is the continuation of the Strzelecki Awards for sustainable development in the earth resource industries - including the introduction of community judges for the Gold Award for Community Engagement. The Strzelecki awards encompass three key criteria: • • •

The Scorecard also indicated areas of improvement for Victoria including Crown land access and water management, which the government is working to address. The Scorecard shows that while there are variations between jurisdictions in the quality of individual aspects of the project approvals process, in aggregate there is no standout of excellence across States, Territories or Federal systems. As well, processes generally scored higher for their design than for their ongoing administration.

As part of the SAS, the Department of Primary Industries was granted A$2.7 million over four years to assist community engagement. The funding will allow DPI to pursue a range of initiatives to increase the Department’s capacity and effectiveness in engagement through: the appointment of specialist staff to coordinate community engagement activities within the Minerals and Petroleum Division, the development of guidelines, fact sheets and other tools to assist proponents and communities and improving the DPI’s communication with communities through better web-based resources and more support for operation specific Environment Review Committees.

N EWS U P DAT E S

MIneralS and PETROLEUM NEWS UPDATES

Operational management; Management of the natural environment; and Community engagement.

The awards aim to build industry and community understanding and assist in promoting good practice across the industry in all elements of triple- bottomline sustainable practice. These changes, and the Victorian Government’s Our Environment, Our Future, Sustainability Action Statement (SAS), launched recently by Victorian Environment Minister, John Thwaites, will help ensure that the necessary ‘on the ground’ support for local communities is provided. This will be supported through access to quality information and tools to support meaningful community engagement.

FOR MORE INFORMATION CONTACT:

Doug Sceney Manager Sustainability Minerals and Petroleum Regulation Phone: 03 9658 4433 Email: [email protected]

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DISCOVERY JOURNAL OCTOBER 2006

Ballarat Mining u Underground working

Innovation Roadmap A roadmap to a better resources future Developing Victoria’s resources takes much more than simply drilling a well or digging a hole. It is not surprising that the development of entire new industries takes even more effort and planning so the Victorian Government has created an Innovation Roadmap to lead the way forward for the expansion of the state’s earth resources industries.

As part of the Victorian Government’s Provincial Statement, entitled ‘Moving Forward’, the Innovation Roadmap project has established a vision and development pathway for technology in the resources sector, a key and growing sector for provincial Victoria. Since 1999, there has been more than A$4 billion spent on new projects in Victoria. These include new gold projects at Ballarat, Bendigo and Costerfield, mineral sands operations near Hamilton, brown coal operations in the Latrobe Valley, major new offshore gas projects in the Otway and Bass basins off the state’s south coast and a major new offshore oil project in Bass Strait. The list of new resources sector developments in Victoria is as impressive for its variety as its length. The list continues as well with another A$5.5 billion worth of resources projects currently on the drawing board in Victoria. The Innovation Roadmap has been developed as an adjunct to the highly successful VIMP and Gold Undercover projects which have been partly responsible for the big increase in interest in Victoria’s mineral and energy potential. The target of much of the Gold Undercover work and the new exploration is to unlock the potentially large, undiscovered gold resource adjacent to Victoria’s Golden Triangle that is covered by a blanket of recent sediments. There the potential prize is 80 million ounces of gold with a current day value of over A$60 billion. Specifically the Innovation Roadmap is designed to identify strategic research and development priorities as well as exposing the barriers to investment in Victoria. The Innovation Roadmap has targeted the gold, mineral sands, coal, stone construction materials, gas and oil sectors. A consultant (STEM Partnership) was commissioned to undertake the studies required to develop the Innovation Roadmap with the final report, completed in August. The work was jointly funded with more than A$250,000 and strongly supported by the government departments including Primary Industries; Innovation; Industry and Regional Development and Sustainability

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and Environment; together with industry groups Minerals Council of Australia ‘Victorian Division’; Cement Concrete & Aggregates Australia; Origin Energy; BHPBilliton and research providers CSIRO, University of Melbourne, Monash University and University of Ballarat. The broad focus on sharing and applying knowledge in the resources industry has the potential to deliver better exploration, development and processing efficiency, improved environmental performance and community support. The government’s aim is to facilitate a more coordinated approach to research and technology development to benefit Victoria’s earth resources sector and the community.

The Innovation Roadmap has targeted the gold, mineral sands, coal, stone construction materials, gas and oil sectors. The need for greater coordination emerged from the joint industry, government and research provider workshop held in May, 2004. The road maps identified key innovation pathways across the whole resources value chain, from geosciences, extraction, processing and environmental technologies and social and community sciences. A total of 34 priority areas of innovation were deemed as having high importance to the success of the industry in Victoria, covering cross sector issues such as reducing the dependence on water, protecting the environment, community partnerships with industry, finding new resources, quality people as the primary resource, and zero fatalities, zero injuries and zero incidents. Priority innovation areas within each of the commodity groups were also identified. The STEM Partnership held five focus workshops in 2005 with over 100 participants to prepare the production of the final report. Copies of the report are available from www.dpi.vic.gov.au/minpet.

FOR MORE INFORMATION CONTACT:

Roger Buckley Minerals Development Manager Department of Primary Industries Phone: 03 9658 4402 Mobile: 0419 252 723

Bendigo Mining u Regeneration at Bendigo

Mining Laws Victoria’s mining laws amended for the better Minister for Energy Industries and Resources, Theo Theophanous, said the requirement for community consultation would be enshrined in legislation, and would make sure environmental, economic and community concerns raised by local residents and businesses were addressed.

The mining industry has welcomed sweeping changes to Victoria’s Mineral Resources Development Act passed by the Victorian Parliament in August 2006. The Minerals Council of Australia said it was encouraged by the changes which enhance community consultation processes and clarifies regulation of the industry, particularly in relation to the 100 metre rule which was subject to an independent inquiry in 2005. Chairman of the Victorian State Council of the MCA, Richard Laufmann, said, ‘We are very pleased with the inclusion of sustainable development principles in the amendment Bill and that this will form the basis for government decision making under the Act’. He added, ‘Such an approach is consistent with the Australian minerals industry’s commitment to sustainable development and its operational framework, Enduring Value 1, for implementation at exploration, mining and minerals processing sites’. Minister for Energy Industries and Resources, Theo Theophanous, said the requirement for community consultation would be enshrined in legislation, and would make sure environmental, economic and community concerns raised by local residents and businesses were addressed. ‘Most mining companies already work well with local residents and businesses and are sensitive to their needs, but formal consultation should be part of every project’. This initiative is an important element of the Bracks Government’s Sustainability Action Statement: Our Environment Our Future where A$2.7 million will be invested to encourage effective communication between mining companies and their local communities. Mr Laufmann said that, ‘Community engagement is integral to the industry’s commitment to sustainable development.’ He further emphasised that the business case for community consultation is strong. He stated that the mining industry considered such consultation essential to earning and maintaining a social licence to operate. He added that this, in itself, is more enduring than a regulatory licence, as important as that is. ‘We are delighted that the Victorian Government

has committed significant resources to ensuring the effective implementation of these provisions for community consultation’, he said. The amendment Act introduces changes to the 100 metre rule arrangements to resolve significant uncertainty created by a 2004 decision of the Victorian Civil and Administrative Tribunal (VCAT) regarding landowner consent for work within 100 metres of a house. In general, however the MCA said that, ‘The changes to incorporate codes of practice into licensing conditions and to introduce accredited third party assessments of rehabilitation liabilities is “good regulation” and will help bring the Victorian mining laws into modern regulatory practice. The amendments deliver a balanced response to improve the operation of the mining laws in that they will provide increased certainty for mining project investors and protection of the rights of neighbours and introduce steps to ensure communities are effectively consulted on mining projects’. FOR MORE INFORMATION CONTACT:

Chris Fraser Executive Director, Victoria Minerals Council of Australia Phone: 03 9629 1851 www.vic.minerals.org.au

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DISCOVERY JOURNAL OCTOBER 2006

The earth resources industries are some of Victoria’s most significant economic drivers. This year alone, over A$2 billion in new mining and petroleum developments are scheduled to come into operation across Victoria.

Strzelecki Awards Awards for sustainable development in the earth resource industries

The Strzelecki Awards for sustainable development in the earth resource industries are again being offered following the huge success of the inaugural awards in 2005.

The awards, which recognise and encourage innovation in Victoria’s earth resources sector, are open to both large and small-scale operators in the mining, exploration, petroleum and extractive industries. Offering the opportunity to showcase the organisation and strengthen partnerships between government, industry and the community, the Strzelecki Awards recognise the contribution individual companies make to the sustainable development of Victoria’s precious earth resources. The earth resource industries are some of Victoria’s most significant economic drivers. This year alone, over A$2 billion in new mining and petroleum developments are scheduled to come into operation across Victoria. With a number of significant milestones being achieved in the Victorian goldfields, this is the biggest one-year expansion in the gold sector in more than 150 years. There have been significant advancements in minimising the impact of earth resources development on the natural environment and local communities. Last year alone, mining companies spent more than A$382 million on environmental rehabilitation programs, taking the accumulated balance of financial provisions for rehabilitation to A$2.8 billion statewide. Furthermore, the industry made over A$160 million in direct contributions to communities through scholarships, sponsorships, sporting facilities and cultural heritage projects. Award categories include the Gold Award for Industry Best Practice which is awarded for excellence in the operational management of environmental impacts associated with exploration and/or development sites, this award is sponsored by EPA Victoria. The Gold Award for Community Engagement recognises excellence in the effective engagement of the community in the development of the earth resources sector, sponsored by the Department for Victorian Communities.

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p Iluka Resources Revegetation

The Gold Award for Management of the Natural Environment recognises excellence in the protection, enhancement or rehabilitation of natural environments or landscapes. The Platinum award is a discretionary award that may be presented to a company which has addressed all aspects of sustainable development. The 2007 Strzelecki Awards will also include a new discretionary award for small operators. The Gold Award for Small Business will be awarded for excellence in any one aspect of sustainable development by small business in the earth resource industries. The awards are named in honour of Polish explorer and mineralogist Sir Pawel Edmund de Strzelecki (1797–1873) who travelled extensively in Australia in the 1830s. Through his interest in geology and ecology Strzelecki published one of the first palaeontologic studies of Australia, providing geological history and images of samples collected during his 1000 kilometre journey across south-eastern Australia. Strzelecki advocated the rational use of natural resources, while still protecting the natural environment. Today DPI’s Minerals and Petroleum Division has 130 staff in five branches across Victoria and is responsible for the sustainable development of Victoria’s minerals, petroleum and extractive industries, advocated so early by Strzelecki. The 2005 winner of the Gold Award for Community Engagement was mineral sands miner, Iluka Resources for their Douglas project. General Manager for the Iluka Murray Basin project, Peter Beilby, said winning the award was a major event for the company. ‘Winning the Strzelecki award was a huge accomplishment for Iluka’. ‘As a new industry and company to Victoria, it has boosted our reputation and credibility for community engagement in the state’, Mr Beilby said.

Karkarook Park t Readymix/Boral Joint Venture - Platinum Award winner, 2005 Strzelecki Awards

p Bendigo Mining Environmental monitoring

Mr Beilby added that the award had also ’promoted our sustainable development commitments with local communities by providing examples contained in the award submission, and facilitated and improved access arrangements both within government and local communities when proposing new projects’. The Victorian mining industry has strongly endorsed the Strzelecki Awards. Chris Fraser, the Executive Director of the Victorian division of the Minerals Council of Australia said, ’The awards recognise the minerals industry’s strong commitment to responsible resource development. The industry deserves this recognition for its ready embrace of the “triple bottom line” of sustainable development, which integrates financial, social and environmental considerations in decision-making’. Mr Fraser emphasised the minerals sector’s commitment to sustainable development was a fundamental component of maintaining its ‘social licence to operate’ as a complement to regulatory licences and approvals from local, state and federal governments. ‘This social licence includes a commitment to engage stakeholders to identify and address their concerns; develop and implement programs which minimise the social and environmental impact of their operations; maintain open and transparent reporting about social and environmental impacts; and to implement Enduring Value, the Australian Minerals Industry Framework for Sustainable Development. In practical terms this commitment is underlined by a major contribution to communities across the country’, he said. Previous winners in the Strzelecki Awards also included Loy Yang Power, which won the Gold Award for Industry Best Practice. The award was given for Loy Yang Power’s development of an ISO 1400-compliant Environmental Management System which sets out an environmental policy, objectives and targets, and roles and responsibilities for environmental management. It also includes procedures to ensure the management of significant environmental issues, including greenhouse gas emissions, air and water quality, geological stability, land management, flora and fauna and fugitive dust.

p Loy Yang Power Tree planting

Loy Yang Power has received Accredited Licensee status with the Victorian EPA, affording a higher degree of self-regulation in recognition of excellence of performance and processes. The Gold Award for Management of the Natural Environment and the Platinum Award was won by the Readymix/Boral Pty Ltd joint venture for work at its Karkarook Park project. Minister Theo Theophanous said that since gold was officially discovered in Victoria in 1851, the economic and social development Strzelecki Awards of Victoria has been driven by its natural Entry forms and criteria endowment of earth will be available from resources. 12 October 2006. He said, ‘The earth Entries close on resources industries 7 March 2007. – mining, extractive or quarrying, and Entry forms and information petroleum and are available from the Banksia natural gas, as well Environmental Foundation at: as emerging earth www.banksiafdn.com resources industries such as geothermal Phone: 03 9684 4667 energy projects – are vital to the prosperity of all Victorians’. Mines, quarries and petroleum projects in the modern social environment must meet stringent, ever growing environmental and safety requirements, be subject to rigorous public assessment processes and be increasingly accountable to the community for their performance, Mr Theophanous said.

2006

23 09

DISCOVERY JOURNAL OCTOBER 2006

Coal gasification and liquefaction are two processes attracting attention for the future development of major new brown coal-based energy projects.

Victoria’s brown coal Energy for the future

Victoria’s massive brown coal resources hold the potential to power the state for decades, not only as the base for electricity generation, but for a range of liquid fuel products, petrochemicals and other chemical uses. However to fully utilise this vast energy source, located in the Latrobe Valley, more sophisticated technologies that can unlock its energy value while meeting modern environmental standards will have to be employed. The present practice of digging brown coal out of the ground and shovelling it into power station furnaces will eventually have to make way for newer technologies. Coal gasification and liquefaction are two processes attracting attention for the future development of major new brown coal based energy projects. Neither technology is new but economics now make the largescale application of the processes more commercially viable. Gas derived from coal was first used in Melbourne in 1849 to provide lighting in a baker’s shop in Swanston Street. The first commercial ‘gas works’ became operational in 1856 as Melbourne developed a system of gas-based street lighting. By 1892 there were 50 commercial gas works across Victoria. Brown coal was first discovered west of Melbourne in 1857 and the Latrobe Valley deposits were identified in the early 1870s but the ‘wet’ brown coal was unsuitable for conversion in the gas works. The brown coal of the Latrobe Valley contains about 60 per cent of water as it is mined, limiting its commercial value and increasing the difficulty of using it for industrial applications. Various early attempts to commercialise Victorian brown coal struggled as the local product competed with imported NSW black coal. Significantly, in June 1924 the Yallourn A Power Station transmitted the first electricity to Melbourne. In the early 1950s, the Metropolitan Gas Company applied for

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financial assistance to build a gas plant in Morwell using imported German gasification technology. The Morwell Gasification Plant opened in December 1956 and began supplying Melbourne with medium heating value gas. However, the subsequent discovery of the Bass Strait oil and gas fields forced the closure of the Morwell plant and reticulation of natural gas across the state eventually forced the closure of all the coal based gas works in Victoria. Now, rapidly rising energy prices and the advent of new energy processing technologies, have caused a major rethink about the uses and applications of Victorian brown coal. Gasification Gasification is the efficient transformation of the energy in coal into a clean, usable gas. It involves the partial combustion of the coal, using oxygen (or air) and steam, and allows the direct removal of the solid ash. Coal contains elements including carbon, hydrogen, oxygen, nitrogen, sulphur, water, ash and chlorine. The product gas can be pure hydrogen, or tailored as a mixture of carbon monoxide and hydrogen in a ratio suitable for the synthesis of methanol, Fischer Tropsch liquids (diesel), ammonia, as well as various derivative products like dimethylether, propylene and urea. The synthesis gas is also an energy stream and, being produced at pressure, can be used via a gas turbine to generate electricity. The three stages of converting wet brown coal to a synthesis gas provide discreet by-product and waste streams. Water could be recycled to steam production; ash can be used as an inert road-making material and the carbon dioxide can be captured in a near pure form, suitable for geosequestration. Another path to the long term use of Victoria’s brown coal is the Integrated Gasification and Combined Cycle (IGCC) process which offers much higher efficiencies in power generation. This process also separates the carbon dioxide which can then be removed and potentially stored in the deep sandstones under the Bass Strait oil and gas fields. Coal gasification also opens up the much broader international markets for export commodities for products like synthetic diesel, LPG, methanol, DME, propylene, ammonia and urea.

Victoria’s brown coal deposits represent a massive ‘Stranded Energy Asset’ which, if developed, would offer major financial benefits to the state.

Images courtesy of The World Coal Institute

Most of these products have traditionally been produced from conventional petroleum products but the rapid rises in global crude oil prices is forcing consumers to seek alternative sources of supply. Victorian brown coal has two key economic advantages. It is low cost to mine and its mining costs are virtually independent of the price of oil. Official forecasts of a 60 per cent increase in world primary energy demand over the next 30 years highlight the necessity of minimising greenhouse gas emissions. The Monash Energy project in the Latrobe Valley proposes to utilise coal gasification technology to produce about 60,000 barrels a day of ultra-clean synthetic diesel. Monash Energy also aims to separate a concentrated stream of CO2 that can be transported to injection wells in deep underground geological formations for secure storage.

The core of the project is a large scale commercial plant in the Latrobe Valley, drawing coal from its own mine and then drying and gasifying the coal for conversion into transport fuels. Around the world there are Gas to Liquids (GTL) projects and even Coal to Gas to Liquids (CGL) projects, but very few combine CGL with carbon capture and storage. Nearly all the brown coal currently mined in Victoria is used for power generation and at forecast growth rates in electricity demand, only two per cent of the Latrobe Valley coal resource will be utilised over the next 25 years. Victoria’s brown coal deposits represent a massive ‘Stranded Energy Asset’ which, if developed, would offer major financial benefits to the state. The wet nature of the state’s brown coal means it is currently unsuitable for direct export, other than for small quantities of briquettes and char. The application of drying technologies may change this in the future. But as the decline of oil and gas production from Bass Strait continues, Victoria will have to find alternate energy sources which lie within the confines of more stringent emission controls. Gasification of brown coal offers a potential solution. FOR MORE INFORMATION CONTACT:

Cliff Kavonic Director Business Development and Technology Minerals and Petroleum Division Phone: 03 9658 4405 Email: [email protected]

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DISCOVERY JOURNAL OCTOBER 2006

Mechanical Thermal Expression (MTE) is an efficient process which heats and squeezes more than 70 per cent of the water from brown coal before it is burnt in power station furnaces or gasified.

Mechanical Thermal Expression (MTE) MTE demonstration in the Latrobe Valley

Fire and water don’t mix and when your furnace fuel is about 65 per cent water, by volume, the prospects for an efficient combustion process are not good. That is why the Latrobe Valley power generators and the Victorian and Federal governments are working on ways to lower the water content of Victoria’s brown coal to improve its thermal efficiency. Reducing the water content will produce dramatic improvements in the fuel’s ability to produce heat and equally impressive reductions in the emission of greenhouse gases. Victoria relies on the Latrobe Valley for 90 per cent of its electricity generation. Burning brown coal contributes 55 per cent of Victoria’s greenhouse gas emissions, but a new process of removing water from brown coal cheaply and efficiently could significantly reduce this contribution. Mechanical Thermal Expression (MTE) is an efficient process which heats and squeezes more than 70 per cent of the water from brown coal before it is burnt in power station furnaces or gasified. In a conventional boiler plant, part of the fuel is burnt to provide the energy to evaporate water from the brown coal. By reducing the water content of brown coal, the MTE technology can substantially increase fuel efficiency and thus reduce greenhouse gas emissions.

A new $6.3 million pilot plant to test the process, developed by a team from the Cooperative Research Centre (CRC) for Clean Power Lignite, is being built near the Loy Yang A Power Station in the Latrobe Valley. The Victorian Government contributed $2.4 million towards the project which is also being funded by the Australian Greenhouse Office, Loy Yang Power, International Power Hazelwood, International Power Mitsui, TRUenergy and NRG Flinders. The project is also being supported by Alstom Power, GHD and Monash University. Speaking at the official launch of the MTE plant, Victoria’s Minister for Energy Industries and Resources, Theo Theophanous, said the plant represented the start of an exciting technology that could dramatically reduce emissions from Victoria’s coal-fired power plants.

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MTE Launch p Dr Peter Jackson, CEO, CRC for Clean Power from Lignite, The Hon Peter McGauran, Federal Minister for Agriculture, Fisheries and Forestry, and Member for Gippsland, The Hon Theo Theophanous, Victorian Minister for Energy Industries and Resources and Ian Nethercote, CEO, Loy Yang Power at the sod-turning ceremony marking the start of site works at the MTE Pilot Plant Project

‘To ensure that our local power industry remains sustainable, we have to find new ways to reduce emissions from our brown coal power generators. So far, this technology has been successfully demonstrated on a laboratory scale, and with the construction of the demonstration plant, we expect to see the first dried coal in early 2007’, said the Minister. The pilot plant aims to prove that MTE can efficiently dry brown coal. Using dried coal in a purpose-built power station is expected to deliver massive gains over existing power stations in the Latrobe Valley. Coupled with new and emerging brown coal generation technologies, MTE could reduce brown coal emissions by a third or more and increase the thermal efficiency of these plants to around 40 per cent, equivalent to the best black coal-fired power stations. According to Dr Peter Jackson of the CRC for Clean Power from Lignite Wind-Up Team, reducing the water content of the coal fed to all of the Latrobe Valley power stations by 50 per cent would cut emissions of carbon dioxide by 9 million tonnes per year. If the demonstration plant is successful, a commercial scale pilot plant may be in place by 2008. On the launch of the MTE plant, the Australian Minister for the Environment and Heritage, Senator Ian Campbell, said, ‘Coal-fired power stations contribute significantly to Australia’s greenhouse gas emissions. We recognise the impacts of meeting our energy needs on the environment and we are investing heavily in developing and commercialising new clean technologies to minimise these impacts’. Victoria’s abundance of brown coal gives the state a major advantage over other states, which face potential energy shortages through rising oil and steaming coal prices.

MTE Process t Artists impression of the new MTE plant being constructed

Figures from Short Description of MTE Process

To take advantage of the abundant brown coal, new technologies to reduce its impact on the environment need to be developed while new ways of utilising the coal, apart from power generation, also need to be developed.

Process steam 150–200oC satd (5 –16 bar) Coal slurry heater

Raw coal

Process water 150–200oC Ram 1

Ram 2

Ram 1 Compression

Ram 2 Compression

MTE Process Flow diagram

To take advantage of the abundant brown coal, new technologies to reduce its impact on the environment need to be developed while new ways of utilising the coal, apart from power generation, also need to be developed. Coal gasification is one major process by which brown coal could be utilised in major industrial developments. To assist in commercialising a range of potential new developments the Victorian Government recently removed the exemption on mining on one of the Latrobe Valley’s key coalfields.

Dewatered coal

Ram 1 Discharge

Ram 2 Withdrawn

Removing the exemption allows Monash Energy to apply for a mining licence ahead of a potential development of its brown coal gasification and liquefaction project. FOR MORE INFORMATION CONTACT:

Dr Peter Jackson CRC for Clean Power from Lignite Wind-up Team Phone: 03 9905 2629. Email: [email protected]

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DISCOVERY JOURNAL OCTOBER 2006

Bendigo Mining produced its first gold bar on July 13, 2006 as the entire project moved into the commissioning phase.

Bendigo Mining Commercial gold mining returns to Bendigo

The first commercial gold bar in 52 years has been poured at Bendigo’s new Kangaroo Flat processing plant, with Victoria’s newest major gold project continuing the state’s resurgence as one of the country’s most important mining centres. Bendigo Mining produced its first gold bar on July 13, 2006 as the entire project moved into the commissioning phase. The company has also produced some highly encouraging exploration results with the discovery of the Railway Reef and the extension of two previously known reefs. ‘We’re off and running. We are in a strong position with no gold hedging, a strong gold price, and more than sufficient funds to see us through the commissioning period,’ said Bendigo Mining Managing Director, Doug Buerger. The first gold bar from the Kangaroo Flat Mine marks the first gold production from the Bendigo goldfield since 1954. The 250 ounce (7.5 kg) dore bar was produced during commissioning of the Kangaroo Flat processing plant. ‘Commercial production for 2006–07 year is planned to commence after September and generate some 70,000 to 90,000 ounces of gold. However, we remain committed to starting commercial production as early as possible’, Mr Buerger said. Bendigo Mining has confirmed that cost of the South Mine ore processing plant had risen from the original A$53 million quote but Mr Buerger said, ‘We view the small overrun as a fair result, given the current environment of cost inflation and very tight supply of labour, materials and equipment’. Bendigo Mining is developing one of the world’s largest and highest-grade new gold projects. And this mine is just one of four major new gold mines in production or being developed in the state. ‘We have fully commissioned the ‘front-end’ of the circuit and parts of the gold room and as a direct result, a small quantity of gold was successfully produced in July’ Mr Buerger said. Dry and wet commissioning of the ‘back end’ of the circuit including gravity, flotation, leaching and tailings handling, and full ore commissioning is set to be completed by the end of September 2006. The official opening of the processing plant is scheduled for October.

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Bendigo Mining p Doug Buerger, Managing Director and fellow workers with the first gold bar u

First gold pour

The current capital cost for the Kangaroo Flat ore processing plant was revised to A$60–65 million in the June quarterly report. Bendigo Mining is re-developing the Bendigo goldfield which originally produced over 22 million ounces of gold. Today the field is estimated to contain high-grade gold mineralisation with more than 11 million ounces still available beneath the historic workings. Once fully developed, the new Bendigo project is planned to produce around 600,000 ounces of gold a year for nearly 20 years. Initially the mine will produce 70,000 to 90,000 ounces of gold rising to 200,000 ounces a year after three years, with full-scale production of 600,000 ounces annually by about 2012. The project is being developed in two phases as the central portion of the ore body is located directly under the City of Bendigo and the mineralised system is at least 10 kilometres long. Bendigo Mining plans to access the ore body, from depths of between 750 metres to 1,500 metres, from both the southern and northern ends of the field, with decline ramp access and a dedicated process plant at each end. The Kangaroo Flat mine is planned to ramp up to a design rate of 200,000 ounces per year of gold over the next three years with the Eaglehawk Mine planned to add 400,000 ounces per year of gold from 2011–12. Initial production from the Kangaroo Flat Mine will produce ore at a grade that could vary from 7 to 9 grams of gold per tonne. The gold head grade will determine the cash operating cost which could fluctuate between A$400 per ounce to just over A$500 per ounce according to estimates by Bendigo Mining. Volatility in grade and cash costs is expected to reduce as operations move into a steady production state over the course of the year.

Today the field is estimated to contain high-grade gold mineralisation with more than 11 million ounces still available beneath the historic workings. Once fully developed, the new Bendigo project is planned to produce

STOP PRESS

around 600,000 ounces of gold a year for nearly 20 years.

In its June quarterly report Bendigo Mining said, ‘The performance of the crushing circuit and high pressure grinding rolls has met expectations. The “front-end” of the circuit and parts of the gold room are now essentially fully commissioned’. The company also indicated development of 1,233 metres was a 10 per cent increase on that achieved in the previous quarter, adding that in June, a new record rate of development of 504 metres was achieved. Development of the mine’s first ore production areas has now begun in earnest. Bendigo Mining also said in its June quarterly report that the initial ore development into the Shywolup (D3), Greater Garrard (S3) and Upper S3 (S3) reefs had started.

Steve Bracks, Premier of Victoria, will be officially opening the Bendigo Mine on Friday 20th October at Bendigo Mining’s Kangaroo Flat site, accompanied by Minister Theophanous.

Stoping was due to begin in August 2007 but before that 5,400 tonnes of development ore was stockpiled on the surface, increasing surface stocks to around 15,500 tonnes of broken ore. Bendigo Mining has largely completed pre-operational activities at the Eaglehawk mine with the box cut for the decline portal and noise bund construction now expected to occur in the December quarter, subject to receiving planning permission. FOR MORE INFORMATION CONTACT:

Tim Churcher General Manager, Corporate Development Bendigo Mining Ltd Phone: 03 5447 1834 Mobile: 0419 543 139 Email: [email protected] 15

Department of Primary Industries

New Victorian exploration uncovers new prospects Victoria’s exploration boom will soon set new records as explorers continue to flock to the state seeking gold, base metals, mineral sands and petroleum resources. The state’s lack of modern exploration, combined with high commodity prices and very strong prospectivity give explorers and their investors the best chance in a century to discover major new commercial mineral deposits.

Victoria sets exploration and gold production records

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n the first three quarters of the 2005–06 financial year, mineral exploration expenditure in Victoria reached a record A$54.2 million, already exceeding the full 2004–05 record year by more than five per cent. Australian Bureau of Statistics (ABS) figures show that Victoria continues to enjoy its share of the mineral commodities boom. The ABS figures also show that Victoria is now a clear second behind only Western Australia for investment in gold exploration. A big improvement in gold production, thanks to strong results from the Stawell and Fosterville mines, pushed up Victorian gold output while new gold production at Costerfield and Bendigo will continue the state’s march up the national production tables. Latest report from The Australian Bureau of Agriculture and Resource Economics (ABARE) estimates gold production in Victoria will soon reach levels not achieved since 1917, with over 250,000 ounces produced in the year. Exciting exploration results all around the state are beginning to reveal a pattern of discoveries which could lead to a rapid expansion of Victoria’s mining industry. Beaconsfield Gold has begun reaping exciting results from its Stavely exploration project near the Grampians in the state’s west. The company has created a wave of interest in the area south of the Grampians by discovering a large gold anomaly and a potentially significant copper resource. Early drilling at the Stavely project encouragingly produced some ore grade gold intersections with more work needing to be done to determine the significance of the discovery. A diamond drilling rig started a six hole program in March 2006 with a second drilling rig mobilised to start a reverse circulation program of around 3,600 metres in April. Results are 16

still to be released but expectations for future exploration success are held for the region. In the state’s east, Goldstar Resources is also having major success with its drilling program in the mountains surrounding Walhalla. Goldstar recently reported continued success, at the Walhalla gold project, by concluding a scoping study on the bulk sampling program which is planned for the Eureka dyke bulge. There was further exploration success at the Walhalla Proprietary and Tubal Cain dyke bulges. To the north of the state, all eyes are focussed on the area north of Bendigo where a host of local and international companies have taken up exploration tenements over the majority of the region. South African group, Goldfields, have already turned up some promising drill results at Lockington while majors like Barrick and Newcrest have also joined the fray. Juniors like Pacrim Energy, Range River Resources and the newly-listed Panaegis Gold, are all crowding into the area. Most are searching for Carlin style, disseminated gold deposits, and even some West Australian juniors like Oroya have crossed the Nullarbor to grab their slice of the action. Together they have pegged a range of prospects stretching from Nagambie to the Murray River. At an exploration seminar in July hosted by the Minerals Council of Australia, Professor Phillips, outlined the key features of Carlin style deposits, which were named after the deposit originally found in Nevada USA. He demonstrated the visual and structural similarities between the Nevada deposits and ores from the Fosterville region near Bendigo. Elsewhere in the state, Anglo American and Inco Ltd, have continued their exploration in the state’s west to search for nickel. Importantly, this could be an entirely new industry for Victoria if successful.

Let’s not forget about recent positive petroleum prospects. Following on from the major Woodside Otway, Santos Casino and Origin BassGas developments, Nexus recently announced an intersection of 98 metres of gross gas sand (vertical thickness) in four reservoir units over a 414 metre interval within the Admiral Formation from its Longtom 3 well in the offshore Gippsland Basin.

Exciting exploration results all around the state are beginning to reveal a pattern of discoveries which could lead to a rapid expansion of Victoria’s mining industry. The Victorian Government is also encouraging the exploration boom by making prospective land available through its Walhalla Woods Point gold and Benambra base metal tenders. Alternative energy resources such as geothermal energy have also been encouraged with the offer of 31 exploration permits across the state. Current exploration levels suggest Victoria may soon host some major new discoveries, further expanding a growing resources industry in the state.

Leviathan Resources Continuing regional exploration success

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ictoria’s major gold miner, Leviathan Resources, has lifted output from the Stawell mine, producing 26,571 ounces of gold in the June quarter, a seven per cent improvement over the March quarter. Recent highlights include production from the higher grade ore from the Golden Gift ore body, as well as success from its multi-pronged exploration effort. Production is expected to rise further in the current quarter, with Leviathan also concentrating on the future with big exploration programs around the Stawell mine and around the state. The advanced Wildwood and Wal Wal prospects have now been included in the near mine exploration program in recognition of their prospectivity and proximity to existing mine infrastructure at the Stawell Gold Mine. At Wildwood, Leviathan recently completed a resource definition drilling program to improve confidence in the inferred 25,000 ounce oxide ore resource. The program was a major success and Leviathan has now applied for a mining licence for the Wildwood prospect. The Wildwood drilling program produced significant gold intersections including 12.3 m @12.5 g/t Au from 35 m forcing Leviathan to reappraise the prospect, particularly the eastern flank of the basalt dome where the maximum depth of drill testing is only 80 metres below surface. Drilling in the later part of this year will seek more mineralisation and incremental ore shoots down-plunge and along strike of the current resource areas. At Wal Wal drilling over the northern end of the target returned anomalous gold values along a strike length of 1.2 kilometres on the western flank of a 3 kilometre basalt dome.

One diamond hole was drilled on the northwest flank of the basalt dome intersecting 0.8 metres at a grade of 6 grams of gold per tonne from a depth of 179.3 metres downhole. Leviathan’s regional exploration program is searching for large-scale gold deposits beneath covered extensions of the historical goldfields at Stawell, Ballarat and Bendigo. Exploration in the June quarter advanced the West Ballarat, Bendigo North and Stawell South targets. At the company’s West Ballarat joint venture, where Leviathan holds a 70 per cent equity share, a total of 10 diamond holes and 44 reverse circulation and aircore holes tested 3 targets on the Glenfine basalt dome. Diamond drilling of the west flank of the dome intersected Stawell-style volcanogenic-hosted mineralisation. Structural modelling will be used to develop targets for the next round of drilling. At Glenfine North, detailed gravity and drilling has defined a 7-kilometre long basalt dome with mineralised hanging wall structures. Broadly-spaced traverses of RC/aircore drilling defined several Au-As anomalies associated with quartz veining on sandstone/black shale interfaces close to the basalt contacts on both

flanks of the dome. A 4-hole follow-up diamond drilling program intersected mineralised quartz reefs, some with visible gold, on each margin of the basalt dome. At Bendigo North, Leviathan conducted a first pass aircore drilling program testing a large gravity anomaly at Tandarra, 40 kilometres directly along strike from the Bendigo line of mineralisation under shallow (30-100 metres deep) non-mineralised cover rocks. The program defined encouraging goldarsenic anomalism in holes on several widelyspaced traverses. One diamond hole was drilled beneath the peak aircore gold-arsenic geochemistry result with the hole revealing similar fold structures, rock-types, quartz veining and alteration to the Bendigo Goldfield. For More Information Contact:

Kevin Wilson Managing Director Leviathan Resources Ltd Phone: 03 9678 1100 Email: [email protected]

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Range River Gold

Goldstar Resources

Turns up new excitement

Bulk sample to test Walhalla’s credentials

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G

ange River Gold Ltd has continued to return positive exploration results with its innovative exploration program around Ararat, where Australia’s biggest local gold miner, Newcrest Mining Ltd is earning a 70 per cent interest. As part of a deal to earn its stake in the project, Newcrest recently completed a 72-hole air core drilling program. That program confirmed earlier anomalous intercepts and a follow-up program was concentrated at Langi Logan, Sarsparilla Hill and Petticoat Gully. At Petticoat Gully, encouraging results of 9 m @ 0.97 g/t Au with 1,558 ppm Arsenic from 62 m and 5 m @ 1.2 g/t Au with 1,840 ppm from 108 metres respectively in adjacent holes has confirmed the area as the primary target for further drilling. Range River revealed in its June quarter report that Langi Logan remains a key target area given the strong secondary gold anomalism and ferruginous quartz veining encountered in two holes. The best result included a result of 1 m @ 0.73 g/t Au and 5,400 ppm from the bottom of the hole. Newcrest is currently planning further drilling programs in the key target areas. At the company’s Kingston and Summerfield properties no activity was undertaken in the June quarter. In the quarter, John Pizzey resigned as a director and Owen Hegarty, current Managing Director of Oxiana Ltd was reappointed as Chairman. Neil Phillips was appointed General Manager Exploration and Geoscience in June 2006.

For More Information Contact: Michael Beer Managing Director Range River Gold Ltd Phone: 03 8614 1500 18 Email [email protected]

old mining could soon return to the picturesque town of Walhalla in Victoria’s mountainous eastern ranges after explorer Goldstar Resources committed A$5.2 million to the extraction of a bulk sample to test the ore’s grade and characteristics. Goldstar has completed a scoping study on the bulk sampling program for the Eureka dyke bulge and reported more exploration success at the Walhalla Proprietary and Tubal Cain dyke bulges prospects. The company also revealed a major advance in enhancing the regional exploration potential of the company’s licences. In the June quarter, Goldstar advanced its multi-pronged approach to unlocking the value of the Walhalla area by advancing a mine development concept, initially at Eureka, as well as enhancing the potential of the broader project through regional exploration. Goldstar’s approval of the Eureka bulk sampling project is the biggest step in the area for many years. Following receipt of all the required regulatory approvals for the Eureka bulk sampling project Work Plan, three months ahead of Goldstar’s original schedule, work started on surface and civil works at Eureka. The bulk sample program will involve the extraction of a bulk sample from the quartz reefs, dyke and sediments within the Eureka dyke bulge. It will zero in on the central portion of the feature, about 100 metres below the Eureka ridge line and 180 metres from the entrance to the old Western adit. Goldstar will seek to extract ore from 4 to 6 of the high-grade quartz reefs of the known 8 reefs which have been identified by drilling. At least 400 metres of tunnelling will be undertaken along these reefs to obtain representative samples.

Mined material will be removed via the Western adit and then transported to Stockade Flat utilising an innovative skipway haulage system. The skipway is a significant innovation that was developed by Goldstar to allow ore to be safely hauled up the steep hills in the area, which prevent normal trucks from easily moving into the bush. The skipway system will facilitate efficient and cost-effective material haulage up steep slopes with minimal environmental impact, overcoming one of the most challenging operational aspects of the Gippsland environment. The Eureka Skipway will have a haulage capacity of approximately 400,000 tonnes a year, far in excess of what is needed for the bulk sampling program, but which could be used for a future commercial mining project. Being fully transportable, the skipway represents a highly efficient and flexible production system that can be moved from mine to mine in the region if Goldstar locates multiple ore bodies in the area. Contracts for fabrication of the skipway system and crushing material have been awarded, based on competitive bids, to local Gippslandbased companies. Underground extraction of the bulk sample is beginning in the September quarter and is scheduled to continue, along with metallurgical testing, throughout the December quarter. For More Information Contact: Andrew King Managing Director Goldstar Resources NL Phone: 08 9321 1577

Beaconsfield Gold Stavely project shows gold and copper promise

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eaconsfield Gold has excited a wave of interest in the Grampians area where it has discovered a large gold anomaly and a potentially massive copper resource. Early drilling at Beaconsfield Gold’s Stavely project south of the Grampians has produced some ore grade gold intersections, but more work needs to be done to determine the significance of the discovery. In mid-2005 Beaconsfield Gold chose to broaden its exploration activities beyond its Beaconsfield mine in Tasmania and acquired a large holding in western Victoria. On the basis of previous exploration results, Beaconsfield Gold was principally interested in the Stavely region’s potential to contain largescale hydrothermal/plutonic mineralising systems with gold and base metal deposits. The company’s Stavely project now comprises 1,180 square kilometres of contiguous tenements, providing control over a region stretching 30 kilometres east to west and 60 kilometres north to south. In the December quarter last year, Beaconsfield conducted an extensive soil sampling program which defined a strong, very coherent, gold-in-soil anomaly over the full 4.8 kilometre length tested. Beaconsfield Gold Chief Executive Officer, Bill Colvin, said in the company’s June quarterly report lodged with the Australian Stock Exchange, that drilling to test the anomalies encountered in the soil sampling program had confirmed that gold mineralisation is present in the primary rocks below the oxide zone. The ‘first-pass’ reconnaissance drilling program, started in the March quarter on the Fair View prospect, produced highly encouraging results with a series of shallow, vertical, aircore holes drilled over a total of 3,800 metres to an average depth of 23 metres. Several areas of high level anomalism were encountered throughout the prospect

with several ore grade results recorded at the northern and southern extents of the soil anomaly. Now a follow up program has produced even more significant results. In the company’s June quarterly report a six-hole program of angled diamond drill holes, designed to determine the stratigraphy under the soil anomaly, was drilled to follow up the earlier program. This was followed up by a program of around 3,600 metres of RC drilling in 51 holes to a depth of about 130 m to further test the anomaly. More significant drilling results were 9 m @ 3.0 g/t Au from 24 m, including 1 m @ 20,8 g/t Au from 32 m and 3 m @ 3.9 g/t Au from 45 m including 1m @ 8.1 g/t Au from 46 m. The company reported that, “The mineralisation appears to be associated with both the host sandstone zone and also volcanic intrusives within the sandstone. This confirms the previously unrecognised prospectivity of the tenement package for gold within sandstone’. Further assessment of these results is continuing and a program of follow-up exploration will be undertaken in the next field season. At the nearby Balbeggie prospect 5 kilometres west of Fair View, Beaconsfield has now settled on a work plan with the Department of Primary Industries to undertake a major soil sampling program similar to that conducted at Fair View. The soil sampling program should be completed during the September quarter. Previous exploration at Balbeggie identified quartz float assaying up to 22 g/t gold and Beaconsfield Gold geologists sampled a road cutting south-east of Balbeggie which averaged 0.2 g/t gold over approximately 30 metres. Planning is also continuing for an aircore program at Thursday’s Gossan, located approximately 5 kilometres north-north-west of the Fair View Prospect.

‘This program is intended to follow-up previous shallow intersections of copper-gold mineralisation associated with a smaller scale secondary (supergene) chalcocite blanket’, Beaconsfield Gold reported. Previous drill intersections range up to 6 m at 3.0% copper and 1.1 g/t gold from 22 m depth, equivalent to approximately 12 g/t gold at current prices. Mr Colvin said that the Stavely project also contains interesting zinc prospects with volcanogenic massive sulfide potential and an interesting nickel prospect to the east of Thursday’s Gossan. The Stavely project area contains one of Australia’s larger copper anomalies associated with a porphyry copper complex which has previously returned significant drill intersections such as 229 m @ 0.22 per cent copper. In its March quarter report Beaconsfield Gold said that the previously identified ‘Thursday’s Gossan’ prospect, contains a 3 kilometre long, bedrock copper anomaly which has recorded copper values of greater than 2,000 parts per million (0.2%). The deposit has been previously explored by major exploration companies interested primarily in very large scale porphyry-type mineralisation. But Beaconsfield Gold is primarily interested in copper-gold mineralisation which is associated with a smaller scale, secondary (supergene), chalcocite blanket at relatively shallow depths. For More Information Contact: Bill Colvin Chief Executive Officer Beaconsfield Gold Ltd Phone: 03 9909 7401 E-mail: [email protected]

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DISCOVERY JOURNAL OCTOBER 2006

In its June quarter report to the Australian Stock Exchange, Perseverance Corporation reported that development of the Phoenix and Falcon underground declines remains on target, with a total of 530 metres of underground development completed in the quarter.

Perseverance Corporation Perseverance dives underground at Phoenix

An important new phase in Victoria’s modern gold industry has begun just east of Bendigo with the start of underground mining at Perseverance Corporation’s Fosterville project.

The Fosterville mine began mining ore from the underground operations in the Phoenix ore body in August to provide a third source of gold ore for the project. Mining is continuing at the open pit mines on the Ellesmere and Ellesmere North ore bodies to provide multiple sources of ore for the processing plant. In the June quarter, 222,000 tonnes of ore at an average grade of 3.1 grams of gold per tonne of ore (g/t Au), was mined from the Ellesmere pit which has now reached an average depth of 50 metres. Work in the southern end of the pit was temporarily stopped to allow a cut back of the south-east wall, which will provide access to additional ore identified during grade control drilling, allowing the pit floor to be deepened. As a result, most of the ore mined in the June quarter came from the northern end of the pit which, although closer to the surface, is lower grade. Pre-stripping of the Ellesmere North pit was accelerated to provide ore in the December quarter this year, allowing the mining of multiple ore sources within the two pits and providing greater flexibility in mill feed grade. In its June quarter report to the Australian Stock Exchange, Perseverance Corporation reported that development of the Phoenix and Falcon underground declines remains on target, with a total of 530 metres of underground development completed in the quarter. Underground development rates are expected to accelerate after a new underground drilling machine arrived at the mine in August. The Fosterville mine produced 90,790 ounces of gold in the year to June 30, 2006, reflecting the treatment of lower grade transition ore while the Ellesmere pit is being extended. In the financial year ending 30 June 2007, Perseverance expects to produce 100,000 ounces of gold increasing to approximately 130,000 ounces in subsequent years when the underground mine becomes fully operational. 20

Perseverance Corporation p Schematic of underground declines u First cut into the new Falcon Portal at the Fosterville Gold Mine

In the June quarter, the ore processing plant treated a record 234,000 tonnes, up 14 per cent from the previous quarter. Exploration On the exploration front Perseverance has also had a successful year. Drilling at Wirrawilla resulted in further high-grade intersections which have significantly extended the known mineralisation, while drilling on the Farley’s prospect has identified a broad zone of mineralisation substantially upgrading the potential of the area. Perseverance operated three diamond drill rigs for most of the quarter with a fourth rig added to the fleet late in June. The additional rig began the first sulfide focused exploration program on the company’s exploration licence to the south of the Fosterville mining licence area. Perseverance spent A$1 million on exploration in the quarter bringing the full year expenditure to around A$4 million. The intense drilling effort concentrated on a mineralised structure which was intersected by the Phoenix decline. This discovery has been interpreted as the near surface expression of the Pegasus Fault which was previously identified with a limited number of drill holes 600 metres down dip at the 4450 level. This information and recent interpretation of the structure has reinforced Perseverance’s view that the Pegasus Fault is a major mineralised structure with significant potential to contribute to further mineral resources. In the southern area, drilling extended the Wirrawilla Zone to more than 800 metres along strike with economically significant mineralisation consistently intersected over the entire length. The company reported that interpretation of the main Wirrawilla Zone has indicated the strong potential to develop additional

p Minister Theophanous and Mr Allan Stewart unveil the plaque to commemorate the new Falcon Portal

major ore shoots at depth. Work to date indicates reverse displacement on the main fault is some 200 metres. Drilling to test the down dip and along strike potential of the main and other mineralised faults in the Wirrawilla area continued in the September quarter. In the northern area the Farley’s and Sharkey’s deposits have also produced solid results. Perseverance reported that, ‘The existence of a very broad and at times high-grade zone of mineralisation has significantly

upgraded the potential of the Farley’s area in the north of the Fosterville mining licence.’ As a result of a re-interpretation of the geology in the Farley’s/ Sharkey’s area, a number of new target areas have been identified. Together with recent drilling this has extended the known mineralised zones from Farley’s northwards towards the Sharkey’s oxide pit A shale unit capping mineralisation at relatively shallow depths below surface may be masking what could be a large low-grade zone of mineralization at shallow depths. Previous geological and resource modelling of the Farley’s area has demonstrated a series of coherent mineralised zones associated with the major Sharkey’s Fault. The recent performance of Perseverance Corporation has also begun to alert investors to the prospectivity of Victoria’s resources sector. Sydney-based investment research group, Fat Prophets principal, Gavin Wendt, believes Perseverance is a solid performer. FOR MORE INFORMATION CONTACT:

Graeme Sloan Managing Director/CEO Perseverance Corporation Limited Phone: 03 5439 9000 Email: [email protected]

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DISCOVERY JOURNAL OCTOBER 2006

The Thylacine and Geographe fields are expected to supply 950 billion cubic feet of raw gas (which is equivalent to 885 petajoules of sales gas) 12.2 million barrels of condensate and 1.7 million tonnes of LPG over the life of the project.

Woodside Petroleum Otway Gas project close to production The massive investment surge in Victoria’s minerals and petroleum sector will receive its biggest boost in more than a decade when Woodside’s Otway Gas Project starts production shortly. The A$1.1 billion project is the state’s largest single resources development project since the heyday of the Bass Strait petroleum boom.

The first gas production from the project is expected by the end of this year and follows the commencement of both the A$200 million Casino offshore Otway Basin Gas Project and the A$750 million BassGas Project which accesses gas from southern Bass Strait. The Woodside-operated Otway Gas Project is based on the development of the Thylacine and Geographe gas fields, off Victoria’s south-west coast, which were discovered in 2001. In Woodside’s June quarter report, the company said the project was well advanced with start-up expected by the end of 2006. Offshore platform construction is almost complete and is expected to be finalised at the end of the third quarter of 2006. Offshore drilling activities and the onshore gas plant installation works are also approaching completion. The Thylacine and Geographe fields are expected to supply 950 billion cubic feet of raw gas (which is equivalent to 885 petajoules of sales gas) 12.2 million barrels of condensate and 1.7 million tonnes of LPG over the life of the project. The fields are estimated to contain sufficient natural gas to provide more than 10 per cent of current annual demand in south-eastern Australia over the next 10 years, enhancing security of supply and increasing competition in Victorian and South Australian energy markets. The project will initially produce about 60 petajoules of sales gas a year with first gas expected by the end of 2006 from the Thylacine field. The Geographe field will then be connected to the main offshore pipeline before the end of the decade to add to supplies later in the project’s life.

Woodside Petroleum pT  op: The Woodside-operated Otway gas plant under construction in Port Campbell. Above left: Guardian Platform. Above right: Installation of the Thylacine well head platform which was completed in March 2006

Condensate from the project will go to Shell’s Geelong refinery, while liquefied petroleum gas is expected to be sold to distributors operating in Victoria. TRUenergy, has bought Woodside’s share of gas from the fields, taking up to 30 petajoules of gas a year for about 10 years. The Otway Gas Project is the biggest of a number of major new offshore gas projects currently being developed or which have recently come into production in the offshore Otway Basin region of south-west Victoria. These include the A$250 million Minerva Gas Project, operated by BHP Billiton, the A$200 million Casino gas project operated by Santos, and the BassGas project operated by Origin Energy, incorporating the Yolla gas field which is located further south. The Geographe and Thylacine fields are being developed to meet rising demand for gas in south-eastern Australia, which is predicted to grow steadily over the next 15 years. The project development involves: • Drilling of production wells into the reservoirs in the Geographe and Thylacine fields which are about 55 kilometres and 70 kilometres south of Port Campbell respectively;

22

The Otway Gas Project is the biggest of a number of major new offshore gas projects currently being developed or which have recently come into production in the offshore Otway Basin region.

• A 70 kilometres offshore raw gas pipeline running from Thylacine via Geographe to a shore crossing at the Rifle Range at Port Campbell, installed using horizontal directional drilling technology; • An 11.5 kilometres onshore raw gas pipeline running underground from the shore crossing to the gas plant; • A well-head platform 70 kilometres from shore at Thylacine in a water depth of 100 metres; and • A gas processing plant next to the TRUenergy’s Iona gas plant, about 6 kilometres from Port Campbell. Joint venture partners in the project include Woodside 51.55 per cent, Origin Energy Resources Limited 30.75 per cent, Benaris International NV 12.7 per cent and CalEnergy Gas (Australia) 5 per cent. In the June quarter, exploration efforts centred around the Thylacine South-1 appraisal well which was started on March 17, 2006.

The Thylacine South-1 well, which has its surface location in production licence T/L2, targetted an exploration prospect in the adjacent T/30P permit and reached a total depth of 3,245 metres. The well encountered a gross reservoir section of gassaturated sandstones about 223 metres thick. Pressure data obtained in the well have indicated the presence of two separate gas pools. Woodside plans to develop the upper pool in the third quarter of 2006 by drilling a deviated development well from the Thylacine platform as part of the current Otway development project. The deeper pool is considered non-commercial. FOR MORE INFORMATION CONTACT:

Nicole Turner Community Relations Manager Woodside Petroleum Phone: 1800 678 151 Email: [email protected]

23

DISCOVERY JOURNAL OCTOBER 2006

BassGas will supply about 10 per cent of Victorian gas demand for 15 years, increasing security, competitiveness and diversity of gas supply.

Origin Energy BassGas project starts commissioning phase

Origin Energy’s BassGas project in Bass Strait has started production with the commissioning of most facilities completed. Raw gas from the Yolla A platform in Bass Strait was introduced to the onshore processing plant at Lang Lang, south-east of Dandenong in Victoria in early May and the first gas was exported to the Victorian gas grid in the same month. The sale of liquids from the project started in June and by September was building towards full production.

The BassGas project is one of the largest offshore gas projects developed in southern Australian waters recently. It has resulted in a A$750 million investment in Victoria along with some 200–300 jobs during construction and 20–30 ongoing permanent jobs during operation. The project, which will drain the Yolla field, holds estimated reserves of 307 billion cubic feet of gas, equivalent to 324 petajoules of sales gas, 14 million barrels of condensate and 800,000 barrels of oil. When fully commissioned, the project will have capacity to produce 23 petajoules of sales gas a year along with around 1 million barrels of condensate and 70,000 tonnes of LPG. BassGas will supply about 10 per cent of Victorian gas demand for 15 years, increasing security, competitiveness and diversity of gas supply.

24

Commercialisation of the gas reserves began after the Safe Astoria offshore accommodation vessel, which was moored alongside the Yolla A platform to allow critical elements of the offshore remediation work to be finalised, was released in late June following the successful completion of that work. By July 2006, the plant was being prepared to ramp-up production and sales as the final commissioning of the project through to performance testing continued. All gas produced will be purchased by Origin Energy to supply markets in south-eastern Australia, while the condensate is being exported to the Shell refinery in Geelong and the LPG sold to a variety of customers. The BassGas project comprises an offshore platform at the Yolla gas field, a sub-sea pipeline to the coast near Kilcunda, an onshore pipeline to a gas plant near Lang Lang and a sales pipeline from the gas plant to join the Victorian Principal Gas Transmission Pipeline near Pakenham. However the project has been beset by a number of challenges, principally a cost blow-out from the original estimate of A$450 million, caused by the need to modify the gas processing plant to include additional facilities that remove impurities from the gas. A dispute between Origin Energy and Clough Engineering in relation to the cost overrun is currently in arbitration.

STOP PRESS

Steve Bracks, Premier of Victoria accompanied by Minister Theophanous will be launching the BassGas Project on 16 October 2006 at the Lang Lang gas processing plant.

Origin Energy p Yolla Platform in Bass Strait t Lang Lang processing plant

In a statement to the Australian Stock Exchange, Origin Energy said that the arbitration is proceeding and the quantum of the claim that has been made by the BassGas joint venture in this arbitration is currently in the order of A$100 million. The BassGas project is a partnership between Origin Energy as operator (42.5%), AWE Petroleum (30.0%), CalEnergy (15.0%) and Wandoo Petroleum (an affiliate of Mitsui) (12.5%). FOR MORE INFORMATION CONTACT:

Angus Guthrie Manager, Investor Relations Origin Energy Phone: 02 8345 5558

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DISCOVERY JOURNAL OCTOBER 2006

AGD Mining told the Australian Stock Exchange in its June quarterly report that the plant was 95 per cent complete and that all open-cut and major earthworks, including an access road, creek diversion and evaporation pond, were completed and the underground portal had commenced.

AGD Mining Costerfield joins Victoria’s new golden age

Costerfield’s rich gold and antimony ore, initially discovered in 1860, is once again being produced after commercial mining resumed from the area in August this year. Victorian Minister for Energy Industries and Resources, Theo Theophanous, officially opened the mine in early August in a ceremony attended by mining industry officials and representatives of the Chinese metals company buying the majority of the Costerfield product.

Booming antimony prices, driven by surging demand from China has underpinned the reconstruction of the Costerfield project, while the rising gold price has sparked a remarkable resurgence in the Victorian gold industry. Antimony metal prices were quoted at around A$4,500– A$4,700 per tonne early this year but by late July had climbed to A$5,300–A$5,400 per tonne. The reopening of the Costerfield mine, about 8 kilometres north-east of Heathcote, was marked by a simple ceremony at the mine’s newly refurbished processing plant. AGD Mining, now a subsidiary of London Stock Market-listed Cambrian Mining plc, spent more than A$12 million to create a processing plant designed to produce gold bullion and a high grade gold and antimony concentrate, which will be shipped in bulk to China for smelting into separate metals. Initially discovered in 1860, the Costerfield area has been worked intermittently over several periods during the past 146 years. AGD now plans to mine about 70,000 tonnes of ore annually to produce 21,000 ounces of gold and about 3,300 tonnes of antimony metal a year. The high-grade concentrate will contain about 60 per cent antimony and 80 grams of gold per tonne. The concentrate will be sold to China’s Zhongnan Antimony & Tungsten Trading Co Ltd. AGD Mining told the Australian Stock Exchange in its June quarterly report that the plant was 95 per cent complete and that all open-cut and major earthworks, including an access road, creek diversion and evaporation pond, were completed and the underground portal had commenced. 26

A total of 5,300 tonnes of ore, grading 31.6 g/t gold and 9.9 per cent antimony was stockpiled awaiting the completion of the processing plant. AGD Managing Director, Adrian Molinia, told shareholders in the quarterly report that the portal of the underground mine had advanced 13 metres by the end of June and by the end of July the mine was only 20 metres from the first ore body. The open cut was backfilled and rehabilitation was in progress at the end of the quarter, Mr Molinia said. During the opening ceremony in August AGD Chairman, Ray Taylor, told guests that the Costerfield mine and processing plant had proceeded safely with no lost time through injuries. Mr Taylor said that while Costerfield only had ore reserves for three years of mine life, exploration was proving highly successful. Mr Taylor said that the mine would pay around A$600,000 in royalty payments to the Victorian Government per annum and would generate export earnings of about A$20 million per annum. Mr Taylor said that the mine project had been developed on time and on budget but he added that the majority of the work had been conducted by local contractors, mostly from the Bendigo area. Victorian Minister for Energy Industries and Resources, Theo Theophanous said that while Costerfield was not as big as some other mines being developed in the area, it would provide 40 to 50 local jobs. Mr Theophanous added that more than A$4 billion had been invested in the Victorian resources sector since 1999 and A$2.5 billion of new projects are coming on stream this year.

AGD now plans to mine about 70,000 tonnes of ore annually to produce 21,000 ounces of gold and about 3,300 tonnes of antimony metal a year.

AGD Mining p Costerfield Project t Minister for Energy Industries and Resources, The Hon Theo Theophanous, Chen Jianquan, General Manager, Hunan Chenzhou Mining Industrial Co., Ray Taylor, Chairman, AGD Mining, John Magnussen, General Manager, AGD Mining, Chen Zhikai, President, Hunan Zhongnan Antimony & Tungsten Trading Co. and John Byrne, CEO, Cambrian Mining at the Costerfield Mine opening

The Minister said that Victoria was on track to soon be producing 250,000 ounces of gold a year, the highest rate since 1917. ‘This is an exciting time for gold producers. We’ll soon have production close to the peak of the 1800s … add that to the mineral sands and natural gas projects, it’s a great time to invest in Victoria,’ the Minister said. In the quarterly report, Mr Molinia said that total expenditure on plant refurbishment at the end of March was A$4.1 million; he also said that the process plant is on budget. Antimony is one of the less actively traded metals which rarely occurs in its native metallic form in nature. Most of the antimony mined each year comes from China, which supplies over threequarters of the world total. Some antimony is produced as a by-product of smelting ores of other metals, mainly gold, copper and silver, in the United States, Canada and Australia. Antimony is used in chemicals used to impregnate plastics, textiles, rubber, and in other materials as a flame retardant for use as fireproofing.

Antimony is also mixed with other metals, such as lead, to make the lead harder and stronger for use in lead-acid batteries. Alloys such as Babbitt metal (an alloy of antimony, tin, copper, and sometimes lead) are useful as soft machine bearings. Antimony is also alloyed with tin to make pewter and it was popular for use in the manufacture of printers metal for printing newspapers and magazines, although it is mostly used now in pigments in plastics, paints, rubber, and for a wide variety of minor uses, including medicines and fireworks.

FOR MORE INFORMATION CONTACT:

Adrian Molinia Managing Director AGD Mining Ltd Phone: 03 9663 5355 Email: [email protected]

27

DISCOVERY JOURNAL OCTOBER 2006

The development of the A$280 million Douglas mineral sands project has helped cement Victoria’s role as Australia’s new home of the mineral sands industry.

Iluka Resources Victoria’s mineral sands industry gets started in earnest Victoria’s newest multi-million dollar mining industry has been opened with an official ceremony at Iluka Resources Ltd’s Douglas mineral sands mine, north of Hamilton. The Douglas project started commercial operations in June this year, marking the beginning of large-scale mineral sands production in Victoria. Iluka Resources, at its three-part Douglas project, is building a major new mine, a wet concentrator plant (WCP) and a mineral separation plant (MSP).

The project was officially opened by Victorian Premier, Steve Bracks, who stated the project would generate A$1.5 billion worth of export sales and lead to more jobs and infrastructure for local residents. ‘The Douglas mineral sands project brings 150 more long-term jobs in the area and an upgrade to local road, water and power infrastructure. Western Victoria is our new frontier for the exploration and recovery of mineral sands,’ Mr Bracks said. The mine is expected to produce almost 250,000 tonnes of heavy mineral concentrate and 69,000 tonnes of rutile, which is used in paints and plastics and will also recover about 130,000 tonnes of zircon, used in glazes for ceramic tiles. Mining operations at the Douglas project have already started with almost 100,000 tonnes of heavy mineral concentrate stockpiled, awaiting completion of the mineral separation plant. Commissioning of the mining unit plant and the wet concentrator plant started in November 2005 and was brought on line by the end of 2005. Bill Bissett, Iluka’s Executive General Manager of Global Operations said at the opening that, ‘Today’s event signifies a key milestone for Iluka – it represents the start of a sustained presence in the State of Victoria for potentially many decades to come. As our exploration work continues in the broader Murray Basin region, I envisage Iluka’s operating base in Victoria will gradually expand and to one day equal our West Australian presence’. Minister for Energy Industries and Resources, Theo Theophanous, stated the discovery of mineral sands at Douglas was due in part to geophysical and geological data produced 28

Official opening p The Premier Steve Bracks congratulating Iluka’s General Manager Murray Basin, Mr Peter Beilby after the official unveiling of the plaque. Iluka’s Global Operations Manager, Mr Bill Bissett is in the background

by the Department of Primary Industries. He said export-oriented minerals projects have revitalised parts of Victoria not previously known for their mineral resource deposits. ‘There are about A$20 billion worth of mineral sands deposits in the Murray Basin area, including the Ouyen project which is currently undergoing an environmental impact assessment. Western Victorian towns such as Douglas, Hamilton, Horsham and Stawell are being revitalised partly because of our minerals boom,’ the Minister said. Mr Bracks indicated the opening of the Douglas project could not have come at a better time. ‘2006 is shaping up to be an exciting year for our mining industry. We are expecting the single biggest expansion of Victorian mining and petroleum industries since the 1850s gold rush’, said the Premier. Mr Bracks further stated that the new minerals rush in Victoria will happen from the Wimmera and the Mallee, through the Central Goldfields and south-west, to Gippsland. The Douglas Project Iluka Resources Ltd purchased the Douglas project when it acquired Basin Minerals in 2002. It committed A$284 million to the Douglas project in June 2004. This included a A$200 million engineering, procurement and construction (EPC) contract to Roche Mining for the design, procurement and construction of plant and infrastructure for the Douglas mine, including a wet concentrator plant and mining unit plant as well as the mineral separation plant (MSP) at Hamilton. Major construction activities, including earth works and the Rocklands water pipeline started in 2004. Construction of a shiploading facility and storage facilities at the Port of Portland form part of the overall project. FOR MORE INFORMATION CONTACT:

Robert Porter General Manager, Investor Relations, Iluka Resources Phone: 08 9360 4751 Email: [email protected]

Site Tour p The Premier Steve Bracks, (second from left) with Minister for Energy Industries and Resources, Theo Theophanous, (second from right) and the Hon David Hawker, Federal Member for Wannon

Minister for Energy Industries and Resources Theo Theophanous stated the discovery of mineral sands at Douglas was due in part to geophysical and geological data produced by the Department of Primary Industries.

Iluka Resources p The Premier Steve Bracks and Minister for Energy Industries and Resources, Theo Theophanous looking out over the Douglas mine site from a 73E CAT 50 tonne Dump Truck

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DISCOVERY JOURNAL OCTOBER 2006

Smoking Ceremony u  Bendigo, 24 June 2006

Indigenous Land Use Agreements Explorers negotiate native title agreements

‘History will show that Captain Cook didn’t get our consent, but the Minerals Council of Australia did.’

Two significant regional Indigenous Land Use Agreements (ILUAs) were signed in June between the Minerals Council of Australia, the Dja Dja Wurrung People, and the Wadi Wadi, Wamba Wamba and Barapa Barapa Peoples of central and north-central Victoria. The agreements were signed at a ceremony in Bendigo in June.

The Regional ILUAs allow explorers to easily enter into an agreement with the native title claimants in central and north-central Victoria, which satisfies licensing requirements and provides tangible benefits to the traditional owners of the land. The agreements provide land access for industry and the opportunity for indigenous people to translate rights into positive financial and training outcomes. A ceremony starting with a traditional ‘welcome to country’ greeting followed by dancing and a smoking ceremony was held at Lake Weeroona between representatives of the native title claim groups from the Dja Dja Wurrung, Wadi Wamba Barapa, Native Title Services Victoria, the Minerals Council of Australia, the Victorian mining industry, the National Native Title Tribunal and the Victorian Government. Chris Fraser, executive director of the Minerals Council of Australia, Victorian Division, said, ‘The agreements are important both locally and nationally and demonstrate what can be achieved between people of good will’. Graham Atkinson, chair of both NTSV and of the Dja Dja Wurrung native title group, said, ‘We congratulate the Minerals Council of Australia for the manner in which they approached these negotiations. The Regional ILUAs simplify the process for all’. Wadi Wamba and Barapa people’s representative, Gary Murray, said, ‘History will show that Captain Cook didn’t get our consent, but the Minerals Council of Australia did. That shows you what happens when people of good obtain the free, prior and informed consent of traditional owners acting professionally and in good faith. We wish them well’.

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MTE Launch p Top left: Chris Fraser, Executive Director, Minerals Council of Australia (Victorian Division) and Melanie Stutsel, Director, Environmental and Social Policy MCA, speaking at the launch Top right: Aunty Carmel Barry, Dja Dja Wurrung Elder Bottom right: Bobby Nicholls, Chairperson of Dja Dja Wurrung Clans Corporation Bottom left: Graeme Neate, President of the National Native Title Tribunal

Victorian exploration activity is booming with capital expenditure reaching record levels in the past two years. Victoria, through its innovative approach to native title issues, has overcome many of the obstacles currently hindering the minerals exploration industry in other parts of Australia. FOR MORE INFORMATION CONTACT:

Chris Fraser Executive Director, Victoria Minerals Council of Australia Phone: 03 9629 1851 www.vic.minerals.org.au

Seismic Traverse u Three seismic trucks working north-central Victoria

Good Vibrations Seismic line gives explorers new information A major reflection seismic line across north-central Victoria, to provide a wealth of base-line data designed to assist mineral explorers, has been completed ahead of schedule. Data acquisition along the transect took a total of three weeks to complete. The project was designed to generate new information on the nature of the earth’s crust in the Stawell, Bendigo and Melbourne structural zones and was carried out along mostly unmade roads using Australian National Seismic Imaging Resource (ANSIR) truck-mounted vibroseis equipment. The central Victorian seismic transect project started on May 12 through a collaborative project between Geoscience Australia, GeoScience Victoria (on behalf of the Victorian Government), the Cooperative Research Centre for Predictive Mineral Discovery and industry partners Leviathan Resources, Perseverance Corporation Ltd, Ballarat Goldfields PL and Goldfields Australasia PL. The transect, which acquired data over a distance of 395 km, from north of Stawell to Cobram, was completed ahead of schedule on June 5. The project will provide critical data for a research-driven 3D geological model of central Victoria, which is designed to provide new insights on the controls to gold mineralisation beneath the surface. It is hoped the project will also act as a catalyst for new collaborative research and attract new exploration investment to the state. Data quality throughout the acquisition phase of the survey was excellent, with preliminary data clearly able to image major structures in the middle and lower crust. Data processing and interpretation will be carried out and a project completion report provided to project partners and made public in July 2007.

The project will provide critical data for a research-driven 3D geological model of central Victoria, which is designed to provide new insights on the controls to gold mineralisation beneath the surface.

t

 Seismic equipment in a control truck

q

entral VIC Seismic IVI C Hemi60 Vibroseis truck

FOR MORE INFORMATION CONTACT:

Peter O’Shea Manager Minerals Geoscience GeoScience Victoria Phone: 03 9658 4525 Email: Peter.O’[email protected] 31

Mineral Exploration Tenements New applications and grants during June–August 2006

Granted

N

Applications Current 50

100 Kilometers

T E N E M E NT U P DAT E

0

Exploration Licences Granted

Exploration Licence Applications Title EL4975 EL4976 EL4977 EL4978 EL4979 EL4980 EL4981 EL4982 EL4983 EL4984 EL4985 EL4986 EL4987 EL4988 EL4989 EL4990 EL4991 EL4992 EL4993 EL4994 EL4995 EL4996

Primary Ownwer Tatterson, Tim Marlow, Alan Gerald Goldalot Pty Ltd Goldalot Pty Ltd Niplats Australia Pty Ltd Hopefield Pty Ltd Oroya Mining Ltd Castlemaine Goldfields Ltd Basin Minerals Holdings Pty Ltd Oroya Mining Ltd Fiddlers Creek Gold Mining Co Pty Ltd Leviathan Resources Ltd Reliance Minerals Ltd Swancove Enterprises Pty Ltd Swancove Enterprises Pty Ltd Swancove Enterprises Pty Ltd Swancove Enterprises Pty Ltd Ironbark Mining Pty Ltd New Ballarat Consolidated Pty Ltd Panaegis Gold Mines Ltd Ballarat South Gold Ltd Leviathan Resources Ltd

Application Date 06-06-06 13-06-06 26-06-06 26-06-06 29-06-06 30-06-06 13-07-06 14-07-06 21-07-06 28-07-06 31-07-06 02-08-06 09-08-06 10-08-06 10-08-06 10-08-06 10-08-06 10-08-06 21-08-06 22-08-06 24-08-06 24-08-06

Title EL4363 EL4509 EL4532 EL4753 EL4949 EL4952 EL4955 EL4967 EL4969 EL4970 EL4972 EL4973 EL4974 EL4979

Primary Owner Glenelg Mining Pty Ltd Waygara Mines Pty Ltd Austpac Resources NL Arem Mining NL Iluka Resources Ltd Purus Energy Ltd Niplats Australia Pty Ltd P S & G F Forwood Pty Ltd Niplats Australia Pty Ltd Bemax Resources NL Mount Rommel Mining Ltd Leviathan Resources Ltd Castlemaine Goldfields Ltd Niplats Australia Pty Ltd

Complete mineral, petroleum and extractive tenement details are available from www.dpi.vic.gov.au/minpet/geovic 32

Application Date 24/8/98 19/6/00 23/11/00 12/8/03 21/3/06 27/3/06 6/4/06 4/5/06 4/5/06 4/5/06 12/5/06 16/5/06 18/5/06 29/6/06

Grant Date 12/7/06 23/8/06 12/7/06 14/6/06 14/6/06 12/7/06 12/7/06 12/7/06 12/7/06 26/7/06 9/8/06 9/8/06 26/7/06 23/8/06

Information at DPI Department of Primary Industries 16th Floor, 1 Spring Street (GPO Box 4440) Melbourne Victoria Australia 3001 T: (613) 9658 4440 F: (613) 9658 4760 [email protected]

Minerals & Petroleum Business Centre Kim Ricketts

Resources Sector Websites Business Development and Technology Cliff Kavonic

Director, Business Development and Technology

T: (613) 9658 4405 [email protected] John Lambert

Manager, Science & Technology Development

T: (613) 9658 4401 [email protected] Roger Buckley

Tenements Registration Officer

Minerals Development Manager

T: (613) 9658 4454 [email protected]

T: (613) 9658 4402 [email protected]

Executive

Petroleum Development Manager

Geoff Collins

Executive Director, Minerals and Petroleum

T: (613) 9658 4406 [email protected]

T: (613) 9658 4411 [email protected]

Minerals Development Manager

GeoScience Victoria

T: (613) 9658 4407 [email protected]

Dr. Richard Aldous

Kathy Hill

Director, GeoScience Victoria

T: (613) 9658 4562 [email protected] Alan Willocks

Manager, GeoScience Information

T: (613) 9658 4501 [email protected]

Kathy Friday

Sean Rooney

Manager, Coal Development

Hywel Thomas

Manager, Energy Resources GeoScience

T: (613) 9658 4538 [email protected]

Minerals and Petroleum Regulation Phil Roberts

Director, Minerals and Petroleum Regulation

T: (613) 9658 4457 [email protected]

University of Ballarat Geology Department www.ballarat.edu.au/ard/sci-eng/geology University of Melbourne School of Earth Sciences www.earthsci.unimelb.edu.au

Government Australian Governments Geoscience Portal www.geoscience.gov.au Department of Business, Industry and Resource Development, Northern Territory www.minerals.nt.gov.au

Department of Industry, Tourism and Resources www.industry.gov.au

Manny Hemman

Manager, Information Development

Policy Development

T: (613) 9658 4531 [email protected]

Seismology Research Centre www.seis.com.au

Information and Development

T: (613) 9658 4525 peter.o’[email protected] Manager, Resources

RMIT Department of Civil and Chemical Engineering www.rmit.edu.au/eng/civil-chem

Department of Industry and Resources, Western Australia www.doir.wa.gov.au

T: (613) 9658 4571 [email protected]

Paul McDonald

Monash Earth Sciences www.earth.monash.edu.au

T: (613) 9658 4739 [email protected]

Manager, Minerals GeoScience

Peter O’Shea

Academic

Jennifer Wolcott

Director, Natural Resources Policy

T: (613) 9658 4458 [email protected]

Corporate Communications Damia Ettakadoumi

Communications Adviser

T: (613) 9658 4081 [email protected]

Department of Natural Resources and Mines, Queensland www.nrm.qld.gov.au/mines Department of Primary Industries, New South Wales www.minerals.nsw.gov.au Department of Primary Industries, Victoria www.dpi.vic.gov.au Environment Australia www.environment.gov.au Geoscience Australia www.ga.gov.au Mineral Resources Tasmania www.mrt.tas.gov.au

Manager, Minerals and Petroleum Tenements

Primary Industries and Resources, South Australia www.pir.sa.gov.au

T: (613) 9658 4439 [email protected]

Peak Bodies

George Buckland

John Mitas

Manager, Minerals and Extractive Operations

T: (613) 9658 4422 [email protected] Doug Sceney

Manager, Sustainable Development

T: (613) 9658 4433 [email protected] Terry McKinley

Manager, Petroleum Operations Safety and Environment

T: (613) 9658 4414 [email protected]

CO NTAC TS

Minerals and Petroleum Division

Australian Petroleum Production and Exploration Association www.appea.com.au Cement Concrete and Aggregrates Australia www.concrete.net.au Construction Material Processors Association www.cmpavic.asn.au Minerals Council of Australia (Vic) www.minerals.org.au/victoria Prospectors and Miners Association of Victoria www.pmav.asn.au

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