Discovery 041 2007-11

Victorian Strategic Policy Near zero greenhouse emissions

Gold Undercover Update

NOVEMBER 2007

Unearthing Victoria’s future

Executive in Focus Arthur Hood, Lihir Gold Limited

VICTORIA’S EARTH RESOURCES JOURNAL

D I S COVE RY

Goldstar Resources Walhalla Project Tubal Cain success

pmd*CRC New understanding of mineral systems

Otway Gas Project Woodside announces start of gas export

VIMP

Victorian Initiative for Minerals and Petroleum 14 Page Feature

REGULARS

Minister’s Foreword Batchelor, Minister for Energy and Resources, introduces the special ‘VIMP’ edition of Discovery Magazine.

CO NT E NTS

02 Peter

Executive in Focus 09

Arthur Hood, Lihir Gold Limited

News Updates 03

Zero Greenhouse

Tenement Updates and Contacts

04

GeoScience Victoria

36 W  hat’s

04

Victorian gas and oil sector

05

Castlemaine Goldfields success

05

Stawell wins rescue competition

06

Mutiny project in track at Cassilis

06

Adelaide hot rock conference

FEATURES Gold Undercover Update

p Victoria’s striking visual identity to underpin its

new promotional campaign

For Discovery online visit: www.dpi.vic.gov.au/minpet/discovery or to receive your free copy send your details to: Gordon Chakaodza Resources Development Officer Department of Primary Industries Phone: 03 9658 4401 Email: [email protected] PUBLISHING DETAILS Discovery is published three times a year by the Victorian Government Department of Primary Industries, Minerals and Petroleum Division, Melbourne, November 2007. ISSN Number 13282409 For more information contact: The Department of Primary Industries Level 16, 1 Spring Street, Melbourne 3000. www.dpi.vic.gov.au

happening with mineral applications and licences

37

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

ARTICLES Mineral systems in Victoria

Unearth Victoria’s wealth:

Cooperative research centre understanding

PAGE 12

PAGE 07

VIMP VIMP data release showcases the latest geoscience data

Eureka moment for Tubal Cain

Goldstar Resources Walhalla Project PAGE 08

PAGE 14

Bemax NL

New players boost Victoria’s Oil and Gas potential

PAGE 10

PAGE 15

Ballarat project on track for commercial production PAGE 16

Seismic transect sheds light on central Victorian gold potential PAGE 17

Perseverance tops up cash to offset gold shortfall PAGE 18

Maldon reveals its golden secrets PAGE 20

Gold Undercover and Rediscover Victoria Initiatives

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.

PAGE 21

This publication is copyright. No part may be reproduced by any process without the written permission of the Department of Primary Industries.

Petroleum Update

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.

PAGE 26

Undiscoverd Hydrocarbon in Victoria’s Otway Basin PAGE 22

Victoria leads carbon capture and storage research PAGE 24

Current goings-on in the state’s oil and gas industry

Geothermal in Victoria Update

The companies that secured the first round of exploration permits in Victoria

PAGE 32

Bemax production record from Murray Basin

Iluka’s Hamilton plant

Commissioning and ramp-up PAGE 11

National Mine Safety Framework

Monitoring trends and performance PAGE 34

DEPARTMENT OF PRIMARY INDUSTRIES

Rediscover Victoria in A 3D geological model for the 21st Century

3D

v A sophisticated, fully attributed 1:250,000 scale 3D geological model v Links sedimentary basins and basement terranes v Allows better understanding and predictability of mineral, geothermal and hydrocarbon systems A one-day technical workshop will be held in Melbourne in late 2007 to develop the scope of the project and to encourage industry’s long-term involvement and participation. The Rediscover Victoria Initiative is the Victorian Government's new four-year $5 million project which includes a 3D geological model and a strategic drilling project for the minerals sector. For more information, or to express interest in attending the workshop, contact: Dr Tim Rawling, 3D Modelling Manager, GeoScience Victoria Phone: +61 3 9658 4584 Email: [email protected] Visit: www.dpi.vic.gov.au/minpet/rediscovervictoria

t The Honourable

DISCOVERY JOURNAL NOVEMBER 2007

Peter Batchelor, Minister for Energy and Resources

Minister’s Foreword

pM  inister Batchelor (second from right) along with senior executives from the Department of Primary Industries at the launch of the Issues papers,

Stategic Policy for Near Zero Emissions from Latrobe Valley Brown Coal.

Welcome to the November edition of Discovery. Victoria’s resources industry is going from strength to strength with the state currently benefiting from the highest level of mineral exploration investment in more than 25 years. The Brumby Government is proud to be a part of this growth through our on-going partnerships and support of industry, and our own innovations and technology development. Victorian Initiatives for Minerals and Petroleum (VIMP) 19th Data Release One of the most significant ways the Brumby Government works with the private sector to grow the industry is the annual Victorian Initiative for Minerals and Petroleum (VIMP) data release event. At this year’s event in July, I was pleased to join more than 200 industry representatives to see the Department of Primary Industries (DPI), researchers and industry showcase their high quality geoscience data that helps industry find Victoria’s best mineral and energy prospects. Since 1994 more than $31.5 million has been invested into growing the mineral and petroleum industries through this VIMP research. From the government’s point of view, our investment has paid off. For every dollar we put into acquiring this data, research suggests we attract between $5 and $9 in additional exploration expenditure. The data has also been instrumental in the discovery of several major prospects. Recent ABS data showed record mineral exploration expenditure in Victoria reached an all time high of $82.5 million in 2006/7, the highest since records began in 1988. This year, the VIMP event also outlined the innovative work that the government, the research sector and industry are undertaking in the areas of carbon capture and storage technology and renewable geothermal energy. Near Zero Emissions While there are many exciting opportunities ahead for the energy and petroleum sector, the Brumby Government recognises that for the on-going sustainability of all industries we need to acknowledge and address the issue of climate change.

02

We also recognise that addressing this will require an investment by the Victorian Government in a variety of policy measures and innovative technologies that aim to reduce or negate greenhouse gas emissions. To this end, the Brumby Government is committed to reducing greenhouse gas emissions by 60 per cent by 2050. Central to creating our clean energy future is the protection and enhancement of the energy industry in the Latrobe Valley, one of Australia’s most important energy regions and the cornerstone of the Victorian economy. Recently, the government invited industry and the community to be involved in creating a strategic blueprint that could achieve near zero net greenhouse gas emissions from the use of brown coal from this region. In part, these opportunities are based on the introduction of carbon capture and storage (CCS) technologies which are one of the range of options the government is considering in our efforts to tackle climate change. The Victorian Government believes there are many benefits to this technology. CCS will ensure brown coal remains the major source of energy in Victoria for many decades. It will protect Victoria’s affordable electricity prices and will also provide opportunities for producing a range of value added products from brown coal. Most importantly, this technology will help secure the long-term viability and prosperity of the Latrobe Valley community and economy, and will benefit all of the state’s communities and industries. During 2008 I look forward to continuing to work with minerals and petroleum industries to continue to grow the sector, encourage exploration and investment and create new jobs across Victoria. I hope you enjoy the November edition of Discovery magazine. Our featured Executive is Arthur Hood, CEO of Lihir Gold, a leading Asia-Pacific gold producer with operations at Ballarat.

Peter Batchelor Minister for Energy and Resources

MINERALS AND PETROLEUM NEWS UPDATES

Zero greenhouse emissions to protect the environment and jobs

The cost of mining in the Latrobe Valley can be as low as a few dollars per tonne, which makes power generation using lignite a commercial proposition attracting the attention of investors. As prices rise for other, increasingly scarce energy sources such as oil and gas, Victoria’s coal reserves may become of even greater value with potential uses in other applications such as coal-to-liquids, gas-to-liquids, agricultural needs, metallurgical reductant products, activated carbon productions, minerals processing and export-quality brown coal in competition to black coal. Victorian brown coal has high moisture content, typically 60-70 per cent water. It is the inefficiency of combustion of this wet coal that creates significant greenhouse gasses. In a carbon constrained future, there is a clear need for a strategy to deliver near zero emissions from brown coal to ensure the long-term future for the Latrobe Valley. The Victorian Government is developing a Strategic Policy Framework for Near Zero Emissions from Latrobe Valley Brown Coal. This overarching framework will provide planning clarity for the long-term use of brown coal and will deliver deep cuts to Victoria’s greenhouse gas emissions. It will also demonstrate the government’s commitment to further development of the Latrobe Valley. “The innovation and development of technologies to allow for the responsible harnessing of the rich resources in Victoria will help ensure the Latrobe Valley’s long-term role as a major power generator, the future prosperity of the region and the whole state,” said Minister for Energy and Resources Peter Batchelor at the launch of the issues paper.

pT  he Strategic Policy Framework will shape the way coal is used in the long-term in the Latrobe Valley

“The proposed strategy would investigate the introduction of carbon capture and storage (CCS) or geosequestration technologies, one of the options the government is investigating to tackle climate change.” The introduction of a cap on carbon emissions and a carbon trading scheme in Australia means future coal use will, in time, be combined with carbon capture and storage. However, notwithstanding investment by the private sector, the government is expected to play a role in ensuring the best use of the coal resource, and in facilitating the transition to carbon capture and storage. The potential for CCS as an option for the reduction of carbon dioxide emissions has been technically explored. Geological studies such as that conducted by CO2CRC1 last year have investigated the suitability of various sites in Australia for geosequestration. Several have been nominated in Victoria. The geological setting of the offshore Gippsland Basin (which includes the Bass Strait oilfields) appears well suited for carbon dioxide storage. It offers both highquality storage and the potential for lower storage costs in comparison to other sites around Australia because of the proximity of major carbon dioxide sources and the permeability of reservoir rocks.

Furthermore, the region has significant storage capacity in depleting oil and gas reservoirs and deep saline aquifers, and offers a high storage security, attributable to regional ‘seals’ – impervious rocks that have retained fluids such as petroleum for millions of years.

N EWS U P DAT E S

An issues paper on the Victorian Government’s strategic policy framework for near zero emissions from brown coal was released to stakeholders in August 2007.

CO2CRC has estimated the Gippsland Basin’s storage potential, on the basis of existing studies, to be in excess of two billion tonnes. It also estimates more comprehensive studies could confirm storage capacity to be around six billion tonnes. Geologists consider the risk of leakage from appropriately assessed storage sites to be low. These storage sites or ‘zones’ have contained materials such as oil, gas and carbon dioxide for millions of years. However, it will still be necessary to demonstrate that the risks for carbon dioxide storage are manageable and acceptable. FOR MORE INFORMATION CONTACT:

Dr Helen Murphy Manager Energy Technology Energy and Earth Resources Policy Division Department of Primary Industries Phone: 03 9658 4172 Email: [email protected] 1. Review of Geological Storage Opportunities for Carbon Capture and Storage (CCS) in Victoria, CM Gibson-Poole, S.Edwards, R.P. Longford and B. Vakarelov, Cooperative Research Centre for Greenhouse Gas Technologies, January 2007.

03

MINERALS AND PETROLEUM NEWS UPDATES

GeoScience Victoria leads worldwide innovation

Victorian gas and oil sector the base for international jobs

N EWS U P DAT E S

Victoria will become the base for the international oil and gas industry with 100 new jobs to be created for petroleum sector specialists.

p Specialists from geological surveys of several different

countries attended the workshops hosted by GSV

GeoScience Victoria (GSV) recently hosted specialists from around the world to develop the next high level computer language to enable easy exchange of information between governments and industry. From 10-20 September 2007, GSV hosted a series of workshops to finalise GeoSciML, the geological data exchange standard. Twenty five specialists from the geological surveys of Canada, USA, Arizona, France, Britain, Sweden, Japan and Italy, as well as GSV, CSIRO and Geoscience Australia attended the workshops. Over the eleven day meeting, the various task groups: • finalised the geological data exchange model design, • established a set of use cases that will test the capacity to deliver geological data, • identified the software architecture requirements, and • commenced specifying content of controlled vocabularies to realize data interoperability. Geological surveys are experiencing an ever increasing digital data deluge. The exploration industry is becoming more digitally sophisticated and is no longer simply satisfied with images of data. There is a move towards digital data in standardized formats that can be used immediately in client applications.

04

Intended uses for the exchange language are for web portals publishing data for customers, exchanging data between organisations, and geoscience web services. GeoSciML is based on a model of geoscience concepts that include geological units, geological structures (faults, folds, foliations etc), and earth materials (rocks, minerals, fossils etc), as well as borehole, outcrop and sample information. The member organisations will test the capacity of the language to deliver the following products and services from multiple data sources: • geological map symbolised on age or lithology, • geological data based on a complex query, • lithology based query using the web, • use GeoSciML data to populate 3D and GIS applications, and • establish registers of web services, geological terms, symbology definitions and service profiles. The results will be demonstrated at the International Geological Congress to be held in Oslo, Norway, during August 2008. FOR MORE INFORMATION CONTACT:

Alan Willocks Manager, Geoscience Information GeoScience Victoria Phone: 03 9658 4501 Email: [email protected] Website: www.dpi.vic.gov/minpet

International oil and gas industry consulting firm Production Services Network (PSN) plans to boost Melbourne staff levels to support joint ventures of two major oil companies in Russia. PSN’s Melbourne office will supply engineering and design services to two new joint ventures headed by Shell and ExxonMobil on the Russian Pacific ocean island of Sakhalin. Aberdeenbased PSN supplies skilled people to design, construct and operate oil and gas platforms, pipelines and terminals around the world. Minister for Energy and Resources Peter Batchelor said the announcement of the 100 new Melbourne-based jobs was testimony to the experience and professionalism of the Victorian gas and oil sector and the special skill sets needed to work in difficult areas like Bass Strait. PSN is already operating in Victoria, holding a contract to supply Esso Australia with technical services for its Gippsland and Longford operations. Previously known as KBR Halliburton, PSN also worked with Woodside Petroleum on its Otway gas project near Port Campbell. Mr Batchelor said Victoria’s petroleum sector was in good shape with nearly A$2 billion in investment, 1700 construction jobs and 180 permanent jobs created since 2000. Additional investment of A$2 billion by the end of the decade would secure gas supplies at competitive prices. FOR MORE INFORMATION CONTACT:

Dave Irvine Director Production Services Network Level 16, 15 William Street Melbourne VIC 3000 Telephone: 03 9944 5500 Fax: 03 9944 5600

MIneralS and PETROLEUM NEWS UPDATES

Castlemaine Goldfields early success in a new drilling program on the Chewton anticline

Stawell wins mine rescue competition

Rescue theory and skills, first aid, breathing apparatus, firefighting, search and rescue and rope rescue were tested during eight mine rescue and emergency response exercises at the three-day event. The dramatic rescue of two miners trapped in the Beaconsfield gold mine in Tasmania in 2006 brought the skills of mine rescue teams into the living rooms of families around the world.

p Chewton anticline intercepts

Castlemaine Goldfields has had early success in a new drilling program on the Chewton anticline following a shift in exploration focus from regional drilling at Castlemaine North. A five-hole drilling program along the Chewton anticline, designed to test the strike potential of the earlier high-grade gold intersections on the anticline, has confirmed the presence of a significant mineralised fault zone less than 250 metres east of the Wattle Gully mine. Drilling provided more evidence that Wattle Gully style mineralisation lies immediately east and south of the old Wattle Gully mine the last major gold mine in the Castlemaine area. The five-hole drilling program was completed during the June 2007 quarter. It was designed to follow up on the promising results obtained from hole CHEW_0819. The fault zone, Cemetery reef, is associated with considerable quartz veining and wallrock alteration with the best new intersections seen in holes CGT_009 and CGT_011. Castlemaine Goldfields managing director Gary Scanlan said the drilling provided a valuable insight into the structure of the Cemetery fault. The next phase of drilling would continue the rigorous exploration of the overall field comprising both structural and targeted drilling in both the northern and southern areas.

p Diamond drilling at Chewton

Castlemaine Goldfields Limited holds significant exploration licences in Central Victoria, including the Castlemaine goldfield. The Castlemaine goldfield is a multi-million ounce, under-explored and under-developed field. Unlike Bendigo or Ballarat, the entire goldfield is still accessible. The Castlemaine community is located on the western side of the goldfield, with the small village of Chewton at its centre. The company holds licences that cover the complete Castlemaine goldfield and is well positioned to evaluate the whole field, a situation that until now has not occurred on this under-explored, high potential, field that has already produced 5.6 million ounces of gold. FOR MORE INFORMATION CONTACT:

Gary Scanlan Managing Director and CEO Castlemaine Goldfields Phone: 03 5472 3411 Email: [email protected]

N EWS U P DAT E S

The Stawell gold mine rescue team has defeated teams from nine other mines across the country to win the prestigious Victorian underground mine rescue competition, held in Bendigo in July.

The ability to operate in confined areas while concentrating on saving lives makes mine rescue teams a highly valued commodity within the mining industry. Minerals Council of Australia Assistant Director for Safety and Health, Megan Davison, said the competition provided practical training experience to members of mining operations, encouraging them to apply teamwork to build skills vital to any emergency rescue squad. “This highly-regarded national event is designed to improve the safety and health of all people involved in the mining industry and provide realistic and practical training to the mine site rescue teams,” she said. “This competition also fostered strong team spirit, competitiveness and goodwill among the rescue teams, with 190 people attending the presentation.” Ms Davison said the competition remained an important part of the MCA’s health and safety strategy. “Our goal of zero fatalities and injuries remains the minerals industry’s top value and commitment,” she said. Teams in the Victorian underground mine rescue competition included: Ballarat Goldfields, VIC; Lihir Ltd, VIC; Fosterville Gold Mine, Perseverance Corporation Ltd, VIC; Stawell Gold Mine, Perseverance Corporation Ltd, VIC; Oscar 1, Country Fire Authority, VIC; Cadia Valley Operations, Newcrest Mining Ltd, NSW; Endeavour, CBH Resources Limited, NSW; Northparkes, Rio Tinto Ltd, NSW; Peak Goldmine, Peak Gold Ltd, NSW; Perilya Broken Hill, Perilya Ltd, NSW; and Golden Grove, Oxiana Ltd, WA. FOR MORE INFORMATION CONTACT:

Megan Davison Assistant Director for Safety and Health Minerals Council of Australia Phone: 03 9629 1851 Fax: 03 9629 8603 Website: www.minerals.org.au/victoria

05

MINERALS AND PETROLEUM NEWS UPDATES

Adelaide conference reveals hot rock energy potential

Victoria has 12 geothermal exploration permits (totalling 73,396 square kilometres) which have been awarded to five companies, representing 42 per cent of all gazetted geothermal acreage in Australia.

N EWS U P DAT E S

FOR MORE INFORMATION CONTACT:

Jim Driscoll Geologist Geoscience Victoria Phone: 03 9658 4535 Fax: 03 9658 4555 Email: [email protected]

p The presentation about Victoria’s geothermal

activities sparked several enquiries from delegates

Victoria’s geothermal energy potential was showcased at the Hot Rock Energy conference in Adelaide in August in a presentation on the ‘Geothermal journey in Victoria: From legislation to exploration’, by GeoScience Victoria geologist Jim Driscoll. The conference, regarded as Australia’s premier annual geothermal gathering, heard presentations from all 27 geothermal companies exploring for geothermal resources in Australia. More than 120 delegates participated, including representatives of state, territory and federal government agencies, geothermal and oil industry service providers, financial representatives from a variety of banking and finance organisations, petroleum industry representatives and overseas geothermal experts. GeoScience Victoria’s geothermal prospectivity report from 2006, an updated temperature database and depth to 150°C geothermal map, as well as copies of all presentations given at the July DPI geothermal workshop were distributed at the conference. A banner, explaining Victoria’s geothermal potential, was displayed. The success of DPI’s sponsorship can be measured in part by the large number of inquiries and conversations initiated by the delegates who responded to Victoria’s promotional information. Feedback suggested many Australian companies were interested in Victoria’s geothermal exploration scene and its energy market. A workshop organised by the Australian Geothermal Energy Group was convened on August 3, with representatives from the 48 members in attendance. The group has a common interest in sharing information to commercialise Australia’s geothermal resources at maximum pace and minimum cost in Australia’s competitive energy markets.

06

Mutiny project on track at Cassilis Exploration and development work to resurrect mining at the Cassilis gold mine project at the historic Swifts Creek gold field has been boosted by the continuity of gold mineralisation within the Cassilis system. Exploration work in the June 2007 quarter involved a refurbishment of the historic Shamrock adit and development of the Cassilis reef by 12 metres along strike from the end of the historical workings. Mutiny Gold, which now controls the Cassilis project near Swifts Creek in Victoria’s eastern highlands, extended the strike length of the Cassilis reef to 90 metres at average grade of 11g/t Au at one-metre width. The new development heading, which is one kilometre along the Shamrock adit from the portal and 500 metres below surface, provided a favourable drilling platform to target the high-grade Snake, Blacksmith and Crisp reef complex located in a hanging wall position to the north-east of the Cassilis reef. Mutiny achieved early success by intersecting four significant gold bearing quartz reefs from the company’s first part of the Phase 1 drill program. This drilling was at the Shamrock level, which at 500 metres below the surface makes it the deepest level of recorded gold mineralisation at the Cassilis mine. Five holes of the Shamrock drilling program have been completed and logged, and assay results have been returned for four holes. The holes were designed to test the depth and gain a better understanding of the spatial relationship between the Snake, Blacksmith and Crisp reefs, the company said in its June quarter report.

The first reef intersected in drilling was parallel to the Cassilis reef. This reef, 0.65 metres wide, was intersected in four holes producing assay values of up to 42g/t Au over a width of 0.55 metres. The company said the geological model was becoming increasingly robust for targeting gold mineralisation within the reef system at Cassilis. The Snake reef was intersected in holes MCU 003 and MCU 005. Intersections of one metre produced an assay value of 9.76g/t Au in MCU 003, while 0.9 metre produced 22g/t Au in MCU 005. “The extremely promising information gained from this first round of drilling has resulted in the company planning extensions to a number of holes at the level of the Shamrock adit, both to further delineate the Snake reef and provide additional strike length to this vertically extensive gold reef,” Mutiny said. “Further drilling will also aim to follow up on the newly-identified high-grade reef intersected in close proximity to the Cassilis reef. Mutiny’s focus is on the development of its gold tenements to become a profitable, low-cost producer of gold. The company controls two gold fields in eastern Victoria that contain more than 70 old workings and several significant old mines. FOR MORE INFORMATION CONTACT:

John Greeve Managing Director Mutiny Gold Ltd Phone: 08 9368 2722 Email: [email protected]

2006–07 has been a pivotal year in preparing the pmd*CRC for transition from research within its portfolio to delivery in the context of exploration mineral systems. Much of the activity is structured around the ‘5 Questions’ approach that defines mineral systems.

Minerals systems in Victoria Cooperative research centre understanding

The project has benefited from a project team predominantly drawn from sponsors, with their local knowledge proving to be a key to its success. “The 3D model is assured of ongoing development for research groups and industry since Dr Tim Rawling, who ran the Tasmanides T5 Project for the CRC, accepted the position of 3D modelling manager at Geoscience Victoria,” Dr Haydon said. Over the next four years Dr Rawling will build on the 3D model developed in the T5 project in Victoria. The project, which will run in conjunction with a targeted co-funded drilling program designed to increase the geological understanding and resource potential of Victoria, will be funded by GSV. Other longstanding initiatives, which include two projects under the supervision of Professor Chris Wilson at University of Melbourne, have focused on the Victorian mining industry. One project is T6 at Stawell with sponsor Perseverance Corporation, which has been integrating structural geology and

t Draft version of the T5 Victoria

model viewed from the Southeast. The model contains surfaces representing all of the major faults, granites (red) and lithological surfaces on the mainland as well as the offshore basin basement and major stratigraphic surfaces. The colourmap in the offshore basins represent depth.

A new understanding of mineral systems in Victoria is close to being delivered by the cooperative research centre for predictive mineral discoveries, the pmd*CRC, headquartered in Victoria at the School of Earth Sciences, University of Melbourne. The pmd*CRC is in its final year of a seven-year term and is finalising a broad range of projects, including four with sponsor groups in Victoria. 2006–07 has been a pivotal year in preparing the pmd*CRC for transition from research within its portfolio to delivery in the context of exploration mineral systems. Much of the activity is structured around the ‘5 Questions’ approach that defines mineral systems. Leader of the pmd*CRC, Dr Bob Haydon, told Discovery: “Excellent progress has been made in terms of providing answers to these research questions and delivering preliminary outcomes through a range of seminars, workshops and industry meetings.” The four Victorian projects address key aspects of understanding mineral systems in Victoria. The Tasmanides T5 project has been successful in constructing a 3D model of the geological and geophysical framework of the state. The results from Victorian seismic lines 1 and 2 under the T13 project have been incorporated into the Victorian 3D model with numerous fault and lithology surface geometries recently included.

geochemical alteration within well-constrained 3D and 4D frameworks to help mineral targeting in the Stawell belt. Data from this project, now in its final stages, has already been fed into the wider Victorian 3D model. The fourth Victorian project, T7 is investigating targeting mineral deposits at Fosterville and is sponsored by Perseverance through the CRC. The research team, led by Chris Wilson and his students have integrated field, geochronological and geophysical data in a collaborative effort, to develop 4-dimensional geological models of the crust at a range of scales, to predict the location and control of mineral deposits at Fosterville. Data from this project will be integrated into the Tasmanides project at a later date. This collaboration among the CRC research groups and sponsors, including industry and government in Victoria, clearly demonstrates the success the pmd*CRC has had in contributing to shifting exploration thinking into a mineral systems framework. This is expected to pay dividends for the industry in future. FOR MORE INFORMATION CONTACT:

Dr Bob Haydon Chief Executive Officer pmd*CRC Phone: 03 8344 8351 Email: [email protected]

07

DISCOVERY JOURNAL NOVEMBER 2007

u Undergraoud drilling.

Inset: Schematic of Eureka Bulk Sample August update

Goldstar Resources Walhalla Project Tubal Cain success gives Goldstar a Eureka moment A potentially significant new Victorian gold mine is emerging in Victoria’s eastern ranges as Goldstar Resources continues to produce strong exploration results from its Walhalla region project. Goldstar Resources NL has announced a 57 per cent increase in the modelled quartz reef/breccia tonnage at its Tubal Cain Project in Victoria to over 3.6 million tonnes, providing a strong basis to advance it towards the next stage of evaluation. The upgraded geological model has confirmed Tubal Cain has the potential to underpin a large-scale, long-life project for Goldstar, providing the next source of gold production after the Eureka Project. Recent drilling has significantly improved the confidence level in the top 600 metres of the deposit, resulting in over 2.3 million tonnes of quartz reef zone now being classified with a medium-to-high level of geological confidence. The geological model has also been extended down to 1,000 metres, resulting in the overall quartz reef zones estimated to contain between 3.6 million and 4.1 million tonnes. The dyke bulge remains open at depth with drilling stopped at 1,000 metres only due to the limitations of the drill rig. Follow up drilling is being planned. Tubal Cain is substantially larger than the Eureka Project, located 5 kilometres to the south, where Goldstar recently estimated a revised quartz reef tonnage of 720,000 tonnes to a depth of 550 metres. As with the previous geological model, the new model for Tubal Cain incorporates conservative assumptions including a significant adjustment for historically mined material. The latest drilling program also targeted a potential location for a Tubal Cain Bulk Sample Program (TCBSP). Geological logging has confirmed the presence of five unmined reef zones in the target area below the known historic workings. A near vertical diamond drill hole, GRT011 – the deepest drilled to date by Goldstar in the Walhalla field – was drilled in the central portion of the Tubal Cain dyke bulge in the 2007 June quarter. Geological logging of the drill core has confirmed that the dyke bulge and potentially mineralised zones extend to a depth of at least 1,000 metres. This represents a significant expansion of the dyke bulge compared with the 2.3 million tonne, 600 metre-deep geological model for Tubal Cain announced in February this year. The latest drilling has also confirmed the presence of the previously identified package of 27 quartz reef/breccia zones to a depth of 600 metres and identified at least eight reef zones below this level. “This significant deep diamond drill hole had provided the first definitive test of the depth potential of the dyke bulges within the Walhalla field, reinforcing the evidence of historical production from deposits such as Morning Star,” Goldstar’s Managing Director 08

Goldstar Resources NL has announced a 57 per cent increase in the modelled quartz reef/breccia tonnage at its Tubal Cain Project in Victoria to over 3.6 million tonnes, providing a strong basis to advance it towards the next stage of evaluation.

Andrew King said. “Importantly, the hole has confirmed that the dyke bulge continues to a depth of at least 1,000 metres and has highlighted the repetition of the suite of high-grade quartz reef structures below the previously confirmed level of 600 metres. “This has significantly upgraded the long-term production potential of the Tubal Cain project and reinforced the importance of the dyke bulges to our growth and development strategy. “We plan to accelerate the evaluation and development of other significant deposits in the Walhalla field such as Tubal Cain to provide a pipeline of development and production opportunities that can leverage off the infrastructure developed at the nearby Eureka project.” The recent Eureka bulk sample program (EBSP) was so successful, Goldstar has now started a full feasibility study into a mine, expected to be complete by early next year. Goldstar now says it has enough information to calculate an upgraded geological model, from which a fully diluted mining model has been established. The geological model has been calculated to contain 720,000 tonnes of quartz reef material, a 67 per cent increase on the previous figure of 430,000 tonnes. The model has been extended from 300 to 550 metres, which is the current depth to which drilling has been completed. The underground drilling, to be completed by October, is continuing to improve the grade prediction for the model, Mr King said. The latest drilling results have provided further confidence in the Eureka bulk sampling program and Eureka pre-feasibility study estimations. Eureka is now estimated to contain between 800,000 and 900,000 tonnes of ore to a depth of 550 metres, with an estimated grade range of 8-12g/t Au. FOR MORE INFORMATION CONTACT:

Andrew King Managing Director Goldstar Resources NL Phone: 08 9321 1577 Website: www.goldstarnl.com.au

EXECUTIVE IN FOCUS Arthur Hood, Lihir Gold Limited

LGL is well positioned for rapid growth Lihir Gold Limited (LGL), one of the largest gold producers in the Asia-Pacific region, produced 651,000 ounces of gold in 2006 and is on track to produce more than 800,000 ounces this year.

A$1.2 billion in new equity through an entitlements offer and institutional placement. The funds were predominantly used to Under the leadership of Managing Director close out the company’s and Chief Executive Officer, Arthur Hood, LGL hedge book, repay its has grown from its earlier single-mine status gold loan facility and and become a major regional gold player in retire outstanding debt. its own right. With its well established flagship “The restructure gold operation in Papua New Guinea and the means we are now fully promising central Victorian Ballarat Goldfields leveraged to the gold project in its portfolio, LGL is well positioned price, which is very attractive to global investors. for future growth. We also have the financial flexibility to fund growth initiatives on Lihir Island and to advance LGL, which has a combined workforce of the development of our Ballarat project,” more than 3,000 employees and business Mr Hood said. partners and more than 30,000 shareholders, LGL moved from being a single-mine business is best known for its world-class gold mine on to a diversified gold company when it completed Lihir Island in Papua New Guinea’s New Ireland a merger with Ballarat Goldfields NL in March province. The Lihir Island gold deposit boasts 2007. Ballarat Goldfields holds the mining 40 million ounces of gold in resource and 23.6 million ounces in reserves, ranking it among licences for most of the historic Ballarat gold region in Victoria, which has produced about the largest individual international gold mines. 12 million ounces of gold over the past 150 Despite the potential of the Lihir Island mine, years. Ballarat Goldfields is now developing a until recent years the commercial performance mine to extract the significant gold deposits that of LGL had failed to live up to expectations. remain beneath the old mine workings. That is, until Arthur Hood assumed the reins “With the successful completion of the Ballarat of the company in October 2005 as LGL’s first merger and the capital raising, we’ve already independently appointed chief executive officer, following a decade-long management agreement got some runs on the board. There is no doubt, however, that the best is yet to come from LGL,” with major shareholder Rio Tinto Ltd. Mr Hood, who has had a 30-year career in the Mr Hood said. Mr Hood entered the gold mining industry in mining industry, said there had been a genuine 1989 when he joined Placer Pacific, a subsidiary step-change in LGL’s operational performance of large Canadian gold miner Placer Dome and corporate maturity over the past 22 months (acquired by Barrick Gold Corporation in 2006). of independent management. The company He remained with Placer Dome for more than has been on a sharp growth trajectory since his 18 years, holding a number of senior roles appointment, most apparent by a surge in the including managing director of Placer Dome company’s market capitalisation from Niugini, general manager of Misima Mines Ltd A$1.9 billion when Mr Hood joined to its current in Papua New Guinea and managing director of level of A$5.5 billion. This makes LGL one of Australia’s largest publicly listed gold miners and Placer Dome Tanzania Ltd. “Placer Dome was the perfect training ground positions it comfortably within the S&P/ASX 100. for the unique challenges I face every day as the “Operationally, we are performing better than CEO of LGL,” Mr Hood said. “I was fortunate ever. We have extracted efficiencies across the enough to spend around 12 years operating in business and made tangible improvements to PNG on the Porgera and Misima gold operations, the mining and processing functions on Lihir which gave me an invaluable insight into the Island,” Mr Hood, 54, told Discovery. country’s operating environment.” “We recently commissioned a flotation circuit With his strong leadership skills, broad in the plant, which puts us on track to deliver a mining experience and detailed understanding 20 per cent increase in gold production this year of Papua New Guinea, Mr Hood became the to between 800,000 and 830,000 ounces. prime candidate for the role of CEO of LGL. “We are also keeping a lid on costs by His mandate from the board was to grow harnessing geothermal steam reserves on the the company by pursuing value-generating island to generate electricity, which reduces our opportunities both on and off the island. His first reliance on expensive heavy fuel oil power.” port of call was to substantially strengthen the In May this year Mr Hood led the company company’s management, and he assembled through a major financial overhaul, raising a team of highly-experienced mining executives based on Lihir Island and in the newly-established corporate office in Brisbane.

FOR MORE INFORMATION CONTACT:

Joe Dowling

General Manager Corporate Affairs Lihir Gold Ltd Phone: 07 3318 3308 Email: [email protected]

Mr Hood said from the outset his management team’s core focus was on increasing gold output and reducing expenses, which in 2006 – his first full year in the top job – saw LGL deliver record gold production and higher profitability in a challenging cost environment. While the Lihir Island operation powered ahead under Hood’s revitalized strategy, he also directed the company to a momentous step forward in its corporate evolution with the first expansion in its history beyond the Papua New Guinea mine. “Bringing Ballarat on board has been a very exciting development for us and shows we have reached a new level of maturity as a company. Ballarat will be a very valuable and productive asset in our portfolio. “It’s a long-life operation which will start adding to our production from next year, initially at the rate of about 100,000 ounces per annum, before climbing to 200,000 ounces in 2009. It will be the long awaited renaissance in the Victorian gold mining industry.” According to Mr Hood, the outlook for LGL over the coming years is very strong. The company has plans to expand processing capacity on Lihir Island to more than one million ounces per annum by 2010. “We are in the latter stages of an A$7.5 million feasibility study investigating the expansion, with the results due in early 2008. Expanding production on Lihir is a logical move for us. It means we will bring forward revenues, achieve economies of scale, reduce unit costs and boost shareholder returns. It will take us a lot closer towards realising the full potential of the Lihir Island asset.” Combined with the anticipated Ballarat gold output, LGL is set to double its production base from 2006 levels to about 1.25 million ounces per annum within four years. “As an unhedged, debt-free producer with a growing production profile we are primed to reap the benefits of a buoyant gold price. I am very optimistic about what the future holds for LGL,” Mr Hood said.

09

DISCOVERY JOURNAL NOVEMBER 2007

u Ouyen district

tenements

Bemax NL’s Murray Basin operations Bemax production record from Murray Basin Production of heavy mineral concentrate from Bemax NL’s Murray Basin operations in New South Wales has continued to run at record levels, with new exploration continuing to expand the company’s position in Victoria. Bemax reported in its June quarter report that exploration drilling in northern Victoria near Ouyen had identified a significant high grade deposit, now known as Kulwin North. That discovery is likely to add to Bemax’s position as the world’s fourth largest producer of heavy minerals and consolidate the future of the Murray Basin as a mineral sands province of world significance. Bemax has 67.5 million tonnes of heavy mineral resources over an area of 7,000 square kilometres in the Murray Basin – resources expected to sustain commercial mining for up to 60 years. The company’s major Murray Basin production stems from the Pooncarie area in NSW mines, principally the Gingko mine (which became the first commercial mining operation in the area in 2005) and the Snapper mine. The Ginkgo mine contains 5.8 million tonnes of heavy mineral, with an excellent suite of products including zircon. Production at the Ginkgo mine started in December 2005. New production is expected to start at the nearby Snapper mine, just north of Mildura, in the next few months. Metallurgical test work on the Snapper ore continued during the June quarter with the ore characterisation test work completed in preparation for the bulk sample pilot scale test work program to begin. This testing is required to confirm the process design for the Snapper Mine Wet Concentrator and additional mineral processing circuits at the Broken Hill mineral separation plant, the company told the Australian Stock Exchange. During the June quarter, 14,866 metres of exploration and development drilling were completed, concentrating on the Carstairs and Neckaboo licences in NSW and the Ouyen licence in Victoria. The Kulwin north deposit was discovered near Ouyen during the quarter. The southern portion of the Kulwin deposit was previously drilled out on a 200-metre grid pattern. This defined a resource, based on a three per cent heavy mineral cut-off, which was two kilometres in length, 86 metres wide, three metres thick and averaging 21 per cent heavy mineral.

10

Bemax has 67.5 million tonnes of heavy mineral resources over an area of 7,000 square kilometres in the Murray Basin – resources expected to sustain commercial mining for up to 60 years.

Bemax’s latest drilling on three new lines extended the resource a further three kilometres to the north within the Ouyen licence. Similar grades, widths and thicknesses to those defined in the southern part of the deposit were encountered on each of the lines. A new licence application (ELA 5031) was also submitted for an area in southern Victoria adjacent to the Nathan and McKenzie deposits and Bemax has been awarded priority for the area. Bemax continues to aggressively explore its Murray Basin tenements in NSW and northern Victoria, which covers an area greater than 7,000 square kilometres. FOR MORE INFORMATION CONTACT:

Tony Shirfan Managing Director Bemax Ltd Phone: 07 3210 7900 Fax: 07 3210 7999 Email: [email protected] Website: www.bemax.com.au

u Douglas mining unit

Iluka starts production from Hamilton plant Commissioning and ramp-up of the Iluka projects Victoria’s long awaited bonanza from the heavy mineral sands deposits of the Murray Basin has started to emerge, with the successful commissioning and ramp-up of the Iluka Resources Ltd projects in the state’s west. Iluka has booked the first earnings contribution from the project producing 48,000 tonnes of zircon and 22,000 tonnes of rutile in the financial year ended June 30. In the current financial year Iluka is aiming to produce 110,000 tonnes of zircon and 70,000 tonnes of rutile. The three-stage project is now producing at capacity with the Hamilton mineral separation plant completed and commissioned earlier this year. The Hamilton plant will be the base of operations for the existing mine and mobile wet concentration plant, which will initially extract a concentrate, for processing at Hamilton. Iluka has now embarked on a full feasibility study for its stage two Murray Basin development, which is expected to be completed by the end of 2007. Stage two will exploit the deposits of the northern Murray Basin which constitute about two-thirds of the company’s known Murray Basin resources base. This project will allow the mineral separation plant at Hamilton to be “fully loaded” with feed from the Douglas area and northern deposits. Mining at Douglas is expected to continue until at least 2012, although Iluka’s known resources elsewhere in the Murray Basin suggest mining will continue until at least 2020. The stage two development will involve estimated capital spending of about $180 million. The project involves building a mobile wet concentrator plant and overburden stripping, mining and infrastructure for the first deposits at Kulwin, 30 kms from Ouyen. The first production is expected in early 2009 and will lift Iluka’s Murray Basin zircon production to between 120,000 and 130,000 tonnes and rutile production to between 180,000 and 200,000 tonnes a year. For the longer term the major component of Iluka’s brownfield exploration strategy is focused on the west Balranald region of the Murray Basin. Recent drilling has focused on this area and has so far yielded the largest part of Iluka’s Murray Basin resource inventory (44 million tonnes of heavy mineral) within an overall 12,000 sq kms tenement holding. The West Balranald area discoveries are categorised by large, high grade (greater than 10%) deposits although these are typically deeper than the existing operations at Douglas and Kulwin. Overburden depths of up to 70 metres are being experienced at the Balranald prospects, according to Iluka. In its mid-2007 financial report, Iluka reported increased production across all of its products, with zircon production increasing 17.0 per cent to 257,000 tonnes, rutile up 15 per cent

to 96,000 tonnes and synthetic rutile production up 13.2 per cent to 261,000 tonnes. Iluka reported that the Murray Basin provided its initial production and revenue contribution as the mineral separation plant at Hamilton was commissioned. However, the company reported that delays in a number of planned shipments from Western Australia and Murray Basin – due to the tight shipping market and port congestion at Geraldton, WA – meant that total sales volumes increased only marginally, up 0.4 per cent, compared with the previous corresponding half. The company said the deferred sales volumes were expected to be made up in the second half of the year. “The Murray basin operation made its first contribution to revenues and earnings before interest and tax production,” it said. “The Murray Basin operations are performing to expectations and are expected to contribute approximately 110,000 tonnes of zircon and 70,000 tonnes of rutile production in 2007.” On the exploration front, Iluka reported that in the west Balranald area it had tested up to 20 magnetic anomalies, with the discovery of anomalous zones coinciding with heavy mineral strands. Current exploration is designed to delineate the new resources with recent exploration success expected to increase JORC compliant resources in the area. The recently announced Minsk Prospect north of Swan Hill also shows great promise, with a high grade (greater than 10 per cent HM) core over 120 metres wide and 2 to 5 metres thick. In the first half of the year Iluka also conducted a major internal review of its business strategy. This started after the appointment of David Robb as managing director, with the principal objective of improving Iluka’s underlying business performance. Mr Robb said the detailed review of Iluka’s business had covered three main areas. “A detailed bottom-up five-year regional business planning exercise, an integrated business planning overlay to prioritise capital development and asset deployment decisions and work on a range of specific work streams, including the reconfiguration of the South West (WA) business,” he said. Mr Robb said modelling of the company’s future showed a strong reliance on the growing Murray Basin operations for future earnings growth. “The measures being pursued to enhance the financial performance of the company are multi-faceted and include: the reconfiguration of the south-west business; the development of Murray Basin stage two and the Jacinth-Ambrosia zircon deposits (in South Australia) in a capital-efficient manner.” FOR MORE INFORMATION CONTACT:

David Robb Managing Director, ILuka Resources Ltd Phone: 08 9360 4713 or Dr Robert Porter General Manager, Investor Relations and Corporate Affairs ILuka Resources Ltd Phone: 08 9360 4751 Mobile: 0407 391 829 Email: [email protected]

11

Gold Undercover Unearth Vic The ‘Developing Gold Undercover’ initiative has been framed to unlock the secrets of Victoria’s vast gold potential. Its aims are to deliver the geoscience data and techniques that give the best chance of exploration success in covered areas.

Revealing the ground beneath our feet

D

etailed gravity and modern magnetotelluric (MT) data has been collected along the route of the central Victorian seismic transect, which was completed in June 2006 as part of Victoria’s Gold Undercover initiative. Together, the package of seismic, MT and gravity data will significantly update the regional-scale 3D geological model of Victoria

being built as part of a Cooperative Research Centre for Predictive Mineral Discovery (pmd*CRC) project, due for completion in early 2008. In turn, this model will feed into a more comprehensive 3D geological model of Victoria being constructed within the DPI Rediscover Victoria initiative, running over four years from July 2007 to June 2011. In the last two decades, GeoScience

Victoria (GSV) has undertaken worldclass 2D surface geological mapping throughout Victoria. The state also has been comprehensively covered by regional scale airborne magnetic and radiometric surveys, and ground gravity surveys. These surveys, together with the new data, will better determine the geometries and nature of key bounding faults and internal structures within the Stawell, Bendigo and Melbourne zones and the relationship of gold and other mineral deposits to regional structure in the Gold Undercover project area. The MT data, collected along the central part of the seismic transect, is being processed at the Korea Institute of Geosciences and Mineral Resources under a joint venture agreement with GSV and Monash University. The brightly-coloured preliminary pseudosections show data to about 20 to 25 kilometres deep, and give an indication of sub-surface structure based on lateral and vertical variations in electrical resistivity. Gravity data were collected at 200-metre station intervals along the seismic transect. Variations in the measured values are associated with variations in rock density and hence rock type. To aid the interpretation of gravity data within the project area, about 800 density measurements have been collated and 460 new determinations made from more than 50 separate rock types. A Gold Undercover report detailing the density measurement results is available on the DPI website: www.dpi.vic.gov.au/minpet/ goldundercover. FOR MORE INFORMATION CONTACT:

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

12

p Location map of central Victorian seismic transect showing gravity and MT coverage, together with pseudosections of gravity and MT data

A three year, $9 million initiative

ctoria’s wealth Hylogging project

S

pectral data from near-infrared to short-wave infrared electromagnetic radiation (NIR-SWIR) can be used to quickly identify hydrous minerals in the field and in the laboratory. Certain minerals absorb short wave infrared radiation at characteristic wavelengths that allow these minerals to be rapidly identified and, in some instances, for information on their composition or crystallinity to be obtained. Examples of alteration minerals for which the technique is ideally suited include white micas and chlorite, and a variety of clay minerals. The HyLoggingTM systems group at CSIRO’s Division of Mining and Exploration has developed a number of automated infrared spectral devices for the continuous scanning of diamond drill core (HyLoggerTM) and chip samples from exploration drill holes (HyChipsTM). The group has developed an infrared scanner to operate in the thermal infrared range (TIR-Logger) and is in the process of developing a new generation

p Figure 1 Representative SWIR spectra from the Fosterville deposit

of HyLoggerTM and HyChipsTM spectral analysers. Diamond drill core samples collected as part of the Gold Undercover lithogeochemistry program have been analysed using the HyChipsTM analyser at the CSIRO North Ryde facility. The results support previous studies using portable field instruments (e.g. PIMA) that indicated a shift in white mica composition associated with sericite alteration around central Victorian gold deposits (Figure 1). This change in composition is revealed by shifts in the wavelength position of the main absorption peak at about 2,200 nm that can be correlated with the arsenic content of the samples (Figure 2), which is a reliable indicator of proximity to a mineralised structure. The shift in peak wavelength is interpreted to reflect a change in mica composition from phengitic to more muscovitic, and may correlate with an inferred increase in potassium of the rocks hosting central Victorian gold deposits.

GeoScience Victoria conducted a HyLoggingTM trial in August using a HyChipsTM device (Figure 3). This trial involved the scanning of diamond drill core from seven central Victorian gold deposits in order to confirm the preliminary spectral results and, more importantly, to determine the lateral extent of alteration that can be detected using infrared spectral analysis. HyLoggingTM, if successful, raises the possibility of automated logging of exploration drill core and chips to define hydrothermal alteration associated with gold mineralisation. The technique can also be used for a wide variety of other deposit types, such as volcanichosted massive sulphide deposits, epithermal gold deposits and porphyry copper systems. FOR MORE INFORMATION CONTACT:

Paul McDonald Manager, Resources GeoScience Victoria Phone: 03 9658 4531 Email: [email protected] Website: www.dpi.vic.gov.au/minpet/goldundercover

p Figure 2 Plot of white mica composition, as indicated by the wavelength of p  Figure 3 Hylogging trial at DPI’s the main AlOH absorption peak, versus the arsenic content of the samples Core Library

Hydrogeochemistry project

G

eoScience Victoria has developed a project to test the application of hydrogeochemistry as an exploration tool for gold in Victoria. Previous work in Victoria has shown groundwater is useful as a geochemical exploration sample medium in areas where deep weathering profiles or significant thicknesses of transported regolith obscure potential gold and base metal deposits (Giblin, A. 2001). The Gold Undercover Hydrogeochemistry project will involve the analysis of existing CSIRO hydrogeochemical data (about 1,000 samples) from Victoria, as well as additional data to be collected from groundwater and exploration bores in the Gold Undercover project area. Much of the interpretation will be in collaboration with DPI hydrogeologists

and will add considerable value to the existing borehole and groundwater databases. An initial hydrogeochemistry pilot project in the Lockington area has illustrated the difficulty of sampling bedrock aquifers through overlying tertiary aquifers. Ten groundwater bores (both public and private) were sampled and analysed for gold, arsenic and antimony. Gold analyses were carried out at Actlabs in Canada using high-resolution inductively coupled plasma mass spectroscopy, with a detection limit of 0.1 ng/L (ppt). Although gold levels were very low (0.2 to 1 ng/L), 1 ng/L appears to be locally anomalous for gold in the Lockington context. The pilot study concluded that, to be useful, it was necessary to sample basement aquifers. The hydrogeochemistry project will trial specific sampling of bedrock aquifers

following diamond drilling at gold prospects and from existing groundwater bores that have penetrated the basement. This will allow direct sampling of groundwaters that have interacted with basement sulphide mineralisation where the overlying aquifers have been cased off. The results of the new project will be released as a Gold Undercover report in mid-2009. They will provide a new perspective and an additional tool for mineral explorers when targeting gold and other commodities. FOR MORE INFORMATION CONTACT:

Paul McDonald Manager, Resources GeoScience Victoria Phone: 03 9658 4531 Email: [email protected] Website: www.dpi.vic.gov.au/minpet/goldundercover

Giblin, A. 2001. Groundwaters; Geochemical Pathfinders to Concealed Ore Deposits (Handbook). CSIRO Exploration and Mining.

13

VIMP

Victorian Initiative for Minerals and Petroleum Victoria’s mineral and petroleum exploration boom has received another major boost with the release of the latest geoscience data collated by the Minerals and Petroleum division of DPI. The VIMP section provides an overview of company presentations from the minerals, petroleum and energy industries as well as a summary of new opportunities in Victoria.

VIMP launches wealth of new information The 19th Victorian Initiative for Minerals and Petroleum (VIMP) event attracted a crowd of more than 200 explorers, investors, scientists and government employees to hear a selection of presentations by and for the resources industry.

The annual event provided an opportunity for DPI to showcase Victoria’s potential for discovery of a variety of minerals, petroleum and energy resources including gold, oil, gas and geothermal ‘hot spots’. Minister for Energy and Resources, Peter Batchelor, explained new ways the Victorian Government supports exploration through the Rediscover Victoria initiative, which includes funding for drilling and the creation of a new 3D geological model of Victoria. GeoScience Victoria displayed posters about the newest geological findings. The day included a mix of presentations by DPI executives and geoscientists, as well as Victorian exploration and mining companies.

14

Presentations also included carbon capture and storage technology and renewable geothermal energy exploration. Geothermal exploration has become a topic of major new interest in Victoria with five separate companies recently awarded exploration permits to seek new sources of geothermal energy. Several of those companies are now planning public share floats to raise capital necessary for comprehensive exploration programs. The gold and minerals industry in Victoria is also undergoing a significant boom period with record expenditure on exploration, reaching an all-time high of $82.5 million in 2006–07. The VIMP program has played a major role in promoting the prospectivity of Victoria in recent years helping lift the state’s profile from a relative mining and energy backwater to a position of prominence in the Australian resources industry. Offshore oil and gas projects worth around $5 billion have been or are still under construction in Victorian waters while millions more is being spent developing Victoria’s mineral sands, gold and base metals industries.

p The 19th VIMP event attracted record numbers of delegates

p The poster presentations were well received by Victorian and interstate visitors

Throughout the recent resources sector renaissance the VIMP program has received national accolades for its work in developing relevant, new, pre-competitive geoscience data for the industry to use as a base for significant new company based exploration programs. FOR MORE INFORMATION CONTACT:

Paul McDonald Manager, Resources GeoScience Victoria Phone: 03 9658 4531 Email: [email protected] Website: www.dpi.vic.gov.au/minpet/vimp-release

New players boost Victoria’s oil and gas potential A major influx of new oil and gas explorers into Victoria has dramatically improved the chances for the discovery of new petroleum reserves around the state’s turbulent southern coastline. Nexus Energy, one of the new breed of explorers and petroleum developers which have moved into the state in recent years, believes the excitement of offshore exploration in Victoria could soon be translated into a string of new discoveries. Speaking at the recent launch of the latest Victorian Initiative for Minerals and Petroleum (VIMP) data package, Nexus Energy’s Engineering and Business Development Manager, Keith Edwards said exploration success rates in Victoria had risen quickly in recent years as new players emerged on the oil and gas scene. Mr Edwards said between 1965 and 2000 a total of 178 oil and gas exploration wells were drilled in offshore Victorian waters for the discovery of just 19 fields – a success rate of just 10.6 per cent. That period was dominated by the presence of Esso and BHP, which collectively controlled the majority of Victoria’s offshore exploration acreage and resulted in the discovery of several billion barrels of oil and about 15 trillion cubic feet of gas. Mr Edwards said the Esso/BHP successes were vital for the early development of the Bass Strait fields, where big companies were essential to manage the high cost of the fledgling offshore oil and gas exploration industry and to develop the vital offshore and associated onshore infrastructure, to produce the oil and

gas. Between 2001 and 2007, another 27 offshore wells were drilled, Mr Edwards said, with up to 16 fields likely to be declared commercially viable for development. The figure represented a success rate of close to 60 per cent, and was a reflection of the influx of new companies prepared to execute new and innovative exploration strategies and theories to find commercially viable hydrocarbon reserves. Mr Edwards conceded that some of the fields likely to be declared commercial were discovered in earlier times by the Bass Strait pioneers, but in some cases new development ideas had allowed the projects to be taken forward. He also illustrated the rising interest in exploration in Victoria’s southern waters. The area held under exploration lease had been quadrupled in Victoria as the state was ‘invaded’ by a host of new explorers. That was also reflected by the volume of 3D seismic data which had been acquired in recent years, which had also quadrupled the amount of seismic data available in 1994. The improved quality of seismic data, new ideas from new exploration companies and rising oil prices improving project economics were all major factors in the rising exploration and subsequent success rates in offshore Victoria, Mr Edwards told Discovery.

“The improved quality of seismic data, new ideas from new exploration companies and rising oil prices improving project economics were all major factors in the rising exploration and subsequent success rates in offshore Victoria”

p Derek on the Ocean Patriot drilling rig taken during the drilling of Longtom-3

p Ocean Patriot during the drilling of Longtom-3

FOR MORE INFORMATION CONTACT:

Keith Edwards Engineering and Business Development Manager Nexus Energy Ltd Phone: 03 9660 2351 Fax: 03 9654 9303

15

Ballarat project on track for commercial production Progress on the underground mine in the June quarter was a record 1,064 metres, including a record month of 402 metres. The development rates reflect continued refinement of work practices, some better ground conditions and greater flexibility as more work faces become available, the company reported to the Australian Stock Exchange. General Manager of the Ballarat operation, Wojciech Ozga, said a seamless transition for the project followed the merger between LGL and Ballarat Goldfields NL in March 2007. “Our key focus has been on underground development and resource definition drilling. The development plan we announced in September 2006 is progressing as planned under the LGL umbrella,” he said. While development at Ballarat East is focused on the main access headings – the Woah Hawp and Prince declines – underground development resources are being used to access nearby identified mineralised structures and ore resources to prepare them for mining. Material taken from a mineralised structure, intersected in the Prince decline, has been mined as ore as part of trial mining. Further definition drilling was completed on the Woah Hawp 218 ore block to refine the geological interpretation prior to stope design and mining. From these structures 2,032 tonnes have been mined and placed on the ROM pad ready for processing. Access into a further mineralised structure, First Chance 176 level ore resource, began in June, with trial mining scheduled to begin in the September quarter. Major work on key infrastructure projects is continuing, including ventilation raises, power upgrades, dewatering, office and change-house facilities and planning for an on-site assay laboratory. Construction of a fibrecrete batch plant was completed and is 16

Lihir Gold Limited’s (LGL) Ballarat gold project is on track to begin commercial gold production during the second half of 2008. The company reported solid development progress in the first half of 2007 at its Ballarat East mine site, about 100 kilometres west of Melbourne.

Significant assay results received during the quarter include the following: Hole

From

To

Length (m)

BEU159

267

276

9

BEU162B

254

264

BEU162C

187

188

BEU162D

197

BEU161

394

BEU168 BEU168A

Grade (g/t)

Intersection

6.8

Thresher (Scandinavian)

10

8.9

Mako (First Chance)

1

144.4

Tiger (First Chance)

198

1

27.4

Gummy (First Chance)

395

1

24.9

Thresher (First Chance)

374

375

1

26.8

White Pointer (First Chance)

373

382

7.9

9.5

Whale Shark (First Chance)

BEU182

272

284

8.9

5

Mako (Scandinavian)

BEU169A

268

270

2

9.8

Whale Shark (First Chance)

*All intersections adjusted to true width

This material is being stockpiled on-site before completing the leach circuit. Site preparations have begun, with civil works under way. Resource definition drilling, with diamond drill rigs in the Sulieman and Woah Hawp declines, continues to intersect mineralised structures with numerous occurrences of visible gold. p Progress on the Ballarat underground mine is speedily moving ahead

subject to pre-commissioning. Preliminary works are under way on a major ventilation intake shaft at Golden Point, following final government approval in July. The company has ordered long lead items and the off-site fabrication of the head frame is more than 70 per cent complete. Site civil works have begun, with contractors mobilised on site. The shaft effectively provides the “lungs” of the mine and represents an important milestone in the underground development progress. In the process plant, construction of the stage two leaching circuit is advancing, with off-site fabrication of the ancillary equipment close to completion. Stage two involves introducing a small ball mill and an InLine leach reactor to extract fine grained gold associated with the sulphide concentrate.

Lengthy assay turnaround time has presented a challenge for the project, with a major backlog of work at laboratories delaying the processing of drillhole samples. LGL is now considering building an assay laboratory on-site to address the problem. Overall, good progress continues to be made at Ballarat East and the project remains on target to begin commercial rates of production in the second half of 2008.

VIMP Seismic transect sheds light on central Victorian gold potential q Captions to come

The last of a series of data interpretation workshops for the 2006 central Victorian seismic transect was held in September 2007.

Interpretation of the seismic data in conjunction with other geoscience datasets has enabled geologists from the partner organisations to predict the position of rock types deep in the earth’s crust which may have been the source of the gold now found in the central Victorian goldfields of the Bendigo and Stawell region.

p J umbo operator preparing rock bolt

In addition the data has enabled the geologists to trace the position of fault lines that acted as pathways for fluids to carry the gold and deposit it, between 440 and 380 million years ago, in what would eventually become the goldfields we see today. A better understanding of the distribution of gold source rocks and fluid pathways provided by the seismic data will allow geologists and explorers to better pinpoint the location of potential new gold resources in the region. The seismic data, collected during May and June 2006, was funded by the Commonwealth and State Governments with industry partners. Results from the seismic data interpretation workshops will be included in the 3D geological model being constructed by GeoScience Victoria. It is planned to release final data interpretations at a public workshop in early 2008. The new data should help increase investment in exploration for minerals and petroleum in country Victoria.

pP lant Operator checking crushed ore

The company also hosted an Open Day in May, with approximately 200 people visiting the site. Visitors were offered walking and coach tours of the surface facilities and had the opportunity to view displays and demonstrations of mobile mining equipment. Six prize winners took a trip down the mine as part of the activities. Ballarat Goldfields also decided to use its Open Day as a fundraiser for the KIDS Foundation.

FOR MORE INFORMATION CONTACT:

Peter O’Shea Manager, Minerals Geoscience GeoScience Victoria Phone: 03 9658 4525 Email: Peter.O’[email protected] p Loading Toro 40t truck underground

FOR MORE INFORMATION CONTACT:

Joe Dowling General Manager Corporate Affairs Lihir Gold Ltd Phone: 07 3318-3308 Email: [email protected]

17

Perseverance tops up cash to offset gold shortfall

At Fosterville, gold production for the June quarter was 16,248 ounces at a cash cost of $620 per ounce, contributing to a 2006–07 full-year production of 76,706 ounces at a cash cost of $530 per ounce.

Victoria’s biggest gold miner, Perseverance Corporation, has raised $A26.5 million through a placement of shares to institutional and sophisticated investors after revealing that gold production from the Fosterville and Stawell gold mines had fallen below expectations in the 2006–07 financial year. Together, the Fosterville and Stawell mines produced 189,192 ounces at a cash cost of $497 per ounce for the year ending June 2007. At Fosterville, gold production for the June quarter was 16,248 ounces at a cash cost of $620 per ounce, contributing to a 2006–07 full-year production of 76,706 ounces at a cash cost of $530 per ounce. The Stawell mine performed far better, producing 25,570 ounces at a cash cost of $574 per ounce in the June quarter and 112,486 ounces at a cash cost of $474 per ounce for the year. But on July 2 this year, Perseverance revealed production for the June quarter would be below expectations and its financial position had been adversely impacted by the shortfall and other factors. On July 12, Perseverance announced it had completed a placement of securities to long-term major shareholders of the company to raise $26.5 million to stabilise the group. A total of 177 million fully paid ordinary shares at five per share, with one attaching option per share, were issued in the placement. Cash from the capital raising will be applied across the company, with operations receiving $9 million. Another $10 million will be applied as working capital while an accelerated drilling program costing $3 million will be funded from the raising, with the remaining $4.5 million kept as a contingency fund.

18

p 2007 June quarter tenement plan

VIMP

p Fosterville gold mine plant at night

After the completion of the capitalraising, Perseverance managing director Graeme Sloan resigned from the board. Perseverance chairman John Quinn paid tribute to Mr Sloan’s “tireless efforts” over his five stints at the company, which was now seeking a replacement. Perseverance also revealed it was proposing a study to validate the current Fosterville mine plan for the near term and determine such changes as may be beneficial to the life of mine plan. In its June quarter report, Perseverance outlined a hectic schedule of mine development and exploration drilling at both Stawell and Fosterville. At Stawell, drilling of the underground target Golden Gift-6 intersected significant mineralisation including 5.1 m @ 35.0 g/t Au and 2.7 m @ 8.0 g/t Au each from a different hole 100 metres apart. This has given the company confidence that substantial new ore resources at the mine could be unveiled. At Fosterville, Perseverance said lower than expected gold production was caused by delays in accessing the higher grade Phoenix ore blocks, lower underground grades associated with ore production from areas around the ore-body margins and the treatment of stockpiled lower-grade, transitional material. Sulphide ore production from Ellesmere north pit at Fosterville was completed to below design depth early in the June 2007 quarter. Mining of the Harrier open pit progressed with production now into fresh sulphide ore. Wet weather late in the quarter restricted access to the higher grade sulphide ore and exacerbated geotechnical conditions in some sections of the pit wall, requiring minor cut-backs to maintain wall stability, the company reported. Mining of the Harrier pit, subject to weather and pit stability issues, is expected to be completed in the September quarter. Total ore mined from open pits for the quarter was 183,256 tonnes at an average grade of 2.39 g/t Au.

Development of the Phoenix and Falcon underground operations at Fosterville resulted in 1,634 metres of advance for the quarter. Performance was affected late in the quarter by low manning levels and some ground rehabilitation work in areas adjacent to the Falcon pit floor. Staff levels returned to normal by the end of the quarter. Underground ore production totalled 106,003 tonnes @ 3.51g/t Au, substantially below the grade of underground ore mined in the previous quarter which averaged 5.4g/t. Most of the production was sourced around the margins of the Phoenix ore body whilst the main declines were advanced towards the top of the main wider highgrade ore zones. Stoping in the Falcon and Phoenix ore bodies has reached about 150 metres below the surface (the 5,020 level). Work is under way to determine the practicality of accessing the wider, highergrade areas of the Phoenix ore body earlier than previously planned. At Stawell, underground mining was affected by equipment maintenance difficulties late in the quarter and lower than expected grades from development and one of the main stoping areas. However, the mine still managed to generate production of 162,725 tonnes @ 4.8g/t Au and ore grades are expected to improve in line with target grades in the current quarter. Development into the GG3 and Lower GG5 ore bodies progressed as planned with the aim of establishing the first GG3 stope early in the September quarter. Development of the GG5 area is expected to be completed in the December quarter. At the year’s end, Perseverance held cash and gold on hand worth $14.8 million. A total of 45,294 ounces of gold were sold for the quarter, at an average price of A$731 per ounce. In September, Perseverance announced further high grade drill intercepts that extend the in-mine Golden Gift-6 zone at Stawell, high grade drill intercepts that identify a new mineralised position adjacent to existing and planned development at Fosterville

and positive development results from Fosterville’s Phoenix orebody. Follow-up drilling of Stawell’s GG6 zone has returned further high grade results including 24.7 m at 7.1g/t Au, 11.3 m at 13.1g/t Au and 8.2 m at 8.0g/t Au. Drilling has indicated Golden Gift-6 mineralisation along approximately 150 metres of strike and over 100 metres vertically. The mineralisation remains open up dip to the south, down dip to the north and below the current drilling. Resource definition drilling in Fosterville’s Phoenix orebody has intersected a previously unrecognised mineralised position, called the Shamrock, which is associated with the Fosterville fault and offset from the Phoenix orebody by up to 30 metres. Significant intercepts are 12.4 m at 23.2g/t Au, 11.7 m at 18.9g/t Au and 12.3 m at 10.4g/t Au. It has been confirmed along a strike of 150 metres, over a height of 30-50 metres and with widths up to 10 metres. The mineralisation remains open along strike and can be easily and quickly accessed from existing and planned Phoenix development. Ore development has now commenced in a more typical part of the Phoenix orebody. A 70-metre section on the 4,980 level of the Phoenix orebody has returned full-face grades up to 37.1g/t Au, with average full-face grades of 18.0g/t Au. This face grade is well in excess of reserve indications for this section of the Phoenix orebody and supports the company’s conviction that the Phoenix orebody will be robust once operations are established in the core of the orebody. Of the recent work at Stawell and Fosterville, Executive General Manager Mark Mitchell said: “our management and people are pleased with the work that has put the operations on a more secure footing. The recent resource definition and development results give added confidence in the recently completed mine plan.” FOR MORE INFORMATION CONTACT:

Mark Mitchell Executive General Manager Perseverance Corporation Phone: 03 5442 77551 Email: [email protected]

19

Maldon reveals its golden secrets

Gold exploration at Maldon, in central Victoria, is revealing new, potentially rich lodes that could form the basis of a significant new mine operating in one of the state’s biggest goldfields.

Alliance Resources Ltd has reported the discovery of at least two new goldbearing reefs that could accelerate plans for an early return to commercial gold production. Drilling into the Ladies reef intercepted 2.75 metres at 22.1 grams of gold per tonne (g/tAu). The results came from a hole drilled west from the Union Hill exploration decline, targeting the Ladies and Day Dawn reefs. A follow-up diamond drilling program to define the extent of the mineralisation at Ladies reef – which could have the potential to supply early mill feed to Alliance’s

p Alliance Board & Management: (L to R) Ian Pamensky (Finance Manager), Tony Lethlean (director), Steve Johnston (CEO), John Dunlop (Chairman), Ian Gandel (director)

gold processing plant at the Maldon gold project – has been built into the company’s exploration program. The newly-discovered mineralisation was similar to historical offshoots from Linscott and Eaglehawk reefs at the Maldon project. Alliance also reported high-grade drill results from the Eaglehawk reef, with the best results including 0.65 metres at 63.7g/tAu, 2 metres at 12.89 g/tAu and 5.25 metres at 4.13g/tAu. “This new and outstanding find at Ladies reef demonstrates the significant potential for new production from Maldon,” Alliance’s managing director Steve Johnston said. “Coming so soon after the high-grade Eaglehawk results, it both highlights the importance of our progress with the Union Hill decline and justifies our persistence.

20

“The Union Hill decline is crucial to our plans for near-term production and Ladies reef, which can be accessed from this decline, represents an additional potential source of high-grade feed for our whollyowned facility.” Alliance is deepening the decline to provide access for underground exploration ahead of a return to commercial production. The Maldon goldfield is one of Victoria’s most productive reef goldfields behind Bendigo, Stawell and Ballarat, with 1.75 million ounces of recorded primary production at an average recovered grade

p Ladies Reef intercept Jul 2007

of 28 g/t. Alliance’s tenements cover the majority of the gold field and Alliance owns a fully permitted and operational CIP gold treatment plant at Maldon. In its June quarter 2007 report to the Australian Stock Exchange, Alliance reported that the Union Hill decline had advanced 750 metres from commencement. The decline is designed to parallel the Eaglehawk reef, the main producing reef at Maldon, in order to access the Alliance South mineralisation for trial processing through the company’s

VIMP gold treatment plant. The decline is also being used as a platform for underground drilling of the Day Dawn target to the west as well as drilling for possible remnant mineralisation within the Eaglehawk reef to the east. The recent drilling program confirmed that a significant mineralised zone had been discovered at the Ladies reef, associated with its east-bounding (“wall”) fault. The company said that drill intersection lengths, were likely to be close to true width, as

p Development at Maldon

DDH 136 was drilled at a high angle to the interpreted reef dip. The high-grade intercepts in the Ladies reef were in an area well away from known historical workings, as the system was mined mainly to shallow depths 250 metres northwest of the drill section. The newly identified mineralisation is about 30 metres lower than the decline at that point, approximately 140 metres to the west and 100 metres below surface. This lode is a new discovery in Ladies reef. It has the potential to be readily developed from the existing decline and, if proved, to provide early mill feed for Alliance’s fully permitted Maldon treatment plant. Alliance plans follow-up drilling of Ladies reef from the decline, to enable the extent and geometry of the mineralisation to be assessed. During the quarter, diamond drilling also tested the Eaglehawk reef near historical stopes in the Alliance ore shoot where past production produced 39,000 ounces from 71,000 tonnes of ore. While the primary purpose of the drilling was to find the original stopes for a proposed dewatering bore, the drilling also tested for remnant gold mineralisation. “Two holes and two wedges were drilled and all confirmed the structural model of Eaglehawk reef in this area,” the company said. FOR MORE INFORMATION CONTACT:

Steve Johnston Chief Executive Officer Alliance Resources Limited Phone: 03 9697 9090 Fax: 03 9697 9091 Email: [email protected]

Gold Undercover and Rediscover Victoria Initiatives Several major initiatives are underway in Victoria to help explorers locate new, commercially attractive mineral deposits of gold, base metals and industrial minerals, as well as oil, gas and coal deposits. Significant geoscience initiatives underway in Victoria include the three-year, $9 million Gold Undercover initiative, which started in July 2006, and the four-year, $5 million Rediscover Victoria initiative, which kicked off in July this year. Gold Undercover is designed to deliver the new geoscience data and techniques required to discover Victoria’s potentially large, undiscovered gold resources, presently concealed under cover. At the 19th Victorian Initiative for Minerals and Petroleum (VIMP) event in July, geoscientists working on Gold Undercover projects presented results of the programs’ first in the form of technical presentations or poster displays on 3D geological model management, MT survey data, detailed gravity data from the Bendigo Zone, resource assessment from the Bendigo Zone north, classification of gold deposits, exploration models, and primary lithogeochemical alteration haloes. The Rediscover Victoria Strategic Drilling project is designed to stimulate drill testing of geologic targets. It aims to stimulate new drilling programs in greenfield areas and areas previously seen as too risky or having limited prospectivity. The Victorian Government will reimburse exploration companies a capped amount of their direct drilling costs incurred on exploration drill holes that meet a strict set of criteria. The application process and selection criteria are currently being developed and calls for drilling proposals are expected in the December quarter 2007. A second project under the initiative, the 3D Victoria project, aims to accelerate the development of an integrated 3D geological map or model of onshore and offshore Victoria at 1:250000 scale. The model will include all major lithostratigraphic boundaries and faults for all of the onshore and offshore post-Permian basins (Gippsland, Otway and Murray), Palaeozoic basins and basement and regolith (where appropriate). It will build on existing work carried out by the GSV, pmd*CRC,

p DPI’s Chief Scientists Sir Gustav Nossal AC CBE and Dr. Graham Mitchell AO have their eyes on the gold bars

universities and industry and will incorporate all available open file 3D datasets, provide a scientifically robust 3D representation of the state’s geology for visualisation and analysis, and enable explorers to carry out and refine their own predictive modelling to better target prospective areas. The applications of such a model in the exploration for undiscovered precious and base metal systems or oil and gas accumulations are clear. However, the integrated nature of the model will also provide a rare opportunity to analyse complex resource system interactions such as the potential exchanges between geosequestration and oil and gas extraction activities within a basin as well as the effects on the groundwater system, salinity and subsidence. A one-day technical workshop is to be held in Melbourne in November 2007 to develop the scope of the 3D Victoria project and encourage industry’s long-term involvement and participation. FOR MORE INFORMATION VISIT:

www.dpi.vic.gov.au/minpet/rediscovervictoria www.dpi.vic.gov.au/minpet/goldundercover KEY CONTACTS:

Larry Stewart Manager Strategic Geoscience Phone: 03 9658 4536 Email: [email protected] or Peter O’Shea Manager Minerals Geoscience Phone: 03 9658 4525 Email: Peter.O’[email protected]

21

Undiscovered Hydrocarbon in Victoria’s Otway Basin

The geochemical compositions of the discovered hydrocarbons in the Shipwreck Trough in the eastern offshore Otway Basin vary systematically with both proximity to large displacement fault systems and with the thermal maturity of the underlying source systems.

Work by GeoScience Victoria has shown the most important critical success factors in the Otway Basin (Figure 1) are fault seal integrity and the hydrocarbon generation-migration history.

22

Interplays between these two factors determine, at a first-order, where commercial and non-commercial hydrocarbon accumulations occur. Many trap-bounding faults in the Otway Basin leak, especially where these faults are sub-parallel to the principal horizontal stress – Sh’max’ (oriented along approximately 130˚) and have dips which exceed 50-55˚. Consequently, numerous residual gas fields or dry structures in the basin have been drilled. Examination of regional 1, 2- and 3D hydrocarbon generation processes for the hydrocarbon source rocks belonging to the Austral 1 (Late Jurassic to earliest Cretaceous fluvio-lacustrine shales of the Casterton Formation and Crayfish Subgroup), Austral 2 (Early Cretaceous fluvial and coaly facies of the Eumeralla Formation) and Austral 3 (Late Cretaceous to earliest Paleocene fluvio-deltaic sedimentary facies) petroleum systems have revealed that more than 99 per cent of the commercial hydrocarbons and strong shows that occur in Victoria belong to the Austral 2 petroleum system (Figure 2). Moreover, commercial accumulations occur exclusively where the top of the Austral 2 (Eumeralla Formation) source system is experiencing peak hydrocarbon generation, and importantly has reached peak maturity in the Late Tertiary, and sub-crops the Late Cretaceous Waarre C reservoir sands (Figure 3). Migration distances typically appear very short and are probably mostly vertical: up critically stressed fault segments which extend through the generating source interval (Figure 4). Lateral migration distances are very restricted, usually less than 500 metres and up to a maximum of 3,000 metres. The limited

p Figure 1: Tectonic elements of the eastern Otway Basin (modified from O’Brian et al., 2006)

p Figure 2: Wells drilled in the Otway Basin which intersected strong gas and/or oil shows or commercial quantities of hydrocarbons. Colour scheme for wells relates to whether the hydrocarbons were sourced from the Austral 1 (dark blue), Austral 2 (red) or mixed Austral 1-2 (light blue) petroleum system.

VIMP

p Figure 3: Seismic line extending across the Port Cambell Embayment and Shipwreck Trough. The location of the peak generation window (depth window between 2,500-3,500m) is shown, as are the observed relative variations in wet gas composition and CO2 content. Simple migration pathways for Austral 2 and 3 gas and CO2 are indicated.

p Figure 4: Peak maturity (2,500-3,500m subsurface) for the Austral 2 petroleum system in the Victorian part of the Otway Basin. Locations of wells that have intersected significant quantities of Austral 2 sourced hydrocarbons are indicated in red; interpreted mixed (Austral 1 and 2) sourced hydrocarbons are shown in light blue. Surface shown is derived from seismic data and shows the maturity of an Austral 2 Eumeralla Formation source system located at the top of the Otway Group.

lateral migration is probably the result of the complex and tortuous nature of the migration pathways within the highly faultcontrolled Waarre C reservoir sands. Commercial accumulations within the Otway Basin are thus restricted to areas where the hydrocarbon charge rates exceed the rate of hydrocarbon loss through fault-related leakage. This observation has allowed the potentially prospective areas of the Otway Basin – that is areas where the Austral 2 system is currently at peak hydrocarbon generation – to be accurately determined and mapped out. Using the deterministic relationship between the volume of hydrocarbons

discovered in the Shipwreck Trough to the total area of the mature Austral 2 source system, an estimate of the “efficiency of accumulation” (in billions of cubic feet of gas per square kilometre of mature source system) has been calculated and applied to the wider basin. This deterministic petroleum systems approach yielded a maximum undiscovered gas potential for the Austral 2 system in the Victorian Otway Basin and adjacent Tasmanian sector of 3.696 TCF. This compares to the USGS’s probabilistic Seventh Approximation methodology, which, when applied by GeoScience Victoria, yielded estimates of 2.224 (at P50), 2.731 (at P90) and 1.849

(at P10). Overall, the Victorian Otway Basin’s undiscovered resource potential would appear to lie between 1.849 and 3.696 TCF. The geochemical compositions of the discovered hydrocarbons in the Shipwreck Trough in the eastern offshore Otway Basin vary systematically with both proximity to large displacement fault systems and with the thermal maturity of the underlying source systems. Significantly increased hydrocarbon wetnesses are observed along the Mussel-Tartwaup Fault Zone (in the La Bella, Geographe, Thylacine gas fields) and may relate to the contribution of a minor, more liquids-prone Turonian (Waarre-Flaxman Austral 3) source system to the dominant Austral 2 hydrocarbon inventory (Figure 4). These fields also have moderate but not high (8-12 per cent) CO2 contents; the CO2 has probably migrated from deep magmatic sources up the large displacement faults system to the reservoir level. In contrast, the fields located inboard from the major Turonian faults, on the Mussel Platform “proper”, such as Minerva, Pecten and Casino, are significantly drier geochemically and have been sourced solely from the Austral 2 Eumeralla Formation source rock system. These fields also contain essentially no CO2, probably in part because of the absence of suitable vertical conduits from the magmatic sources. Traps within the Otway Basin spatially associated with large displacement Turonian faults have both significant CO2 contents and more importantly, large trapped volumes of CO2. A similar relationship also exists in the Gippsland Basin (along the Rosedale Fault) and as far west as the Duntroon Sub-basin (at Greenly-1). In the Victorian Otway Basin, traps which have very high CO2 contents, such as Boggy Creek, are invariably small – and often contain less than 10-15 billion cubic feet of gas – perhaps indicating that the gas compositions of small structures are the most easily affected by CO2 migrating up the fault systems. The Thylacine gas field provides some insights into the relationships between trap size, gas composition and the total volume of CO2 in the trap. Thylacine is a large trap (greater than 500 billion cubic feet) but has CO2 contents between only 8-12%. Even so, the Thylacine accumulation contains more than 40 times as much CO2 as does the CO2 accumulation at Boggy Creek. The large volumes of CO2 which have entered Thylacine have only affected the total gas composition minimally because of the large trap volume. FOR MORE INFORMATION CONTACT:

Dr Geoffrey W. O’Brien Manager Energy Geoscience GeoScience Victoria Level 9, 55 Collins Street Melbourne, Victoria 3000 Phone: 03 9658 4537 Email: Geoff.O’[email protected]

23

Victoria leads carbon capture and storage research

“Greenhouse concerns will require a portfolio of responses ... CCS, nuclear, energy efficiency and renewables are all part of the mix,” Prof Kaldi said. “For as long as we use fossil fuels for base-load power, CCS is the only technology that can make deep cuts in emissions.”

p Otways CCS pilot project concept

Victoria is leading the way in research into greenhouse gas abatement technologies, with a range of projects underway to reduce the state’s emissions. Professor John Kaldi, Chief Scientist at the Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) at the University of Adelaide’s Australian School of Petroleum, believes Victoria is the place to be for Carbon Capture and Storage (CCS) research and development, with a string of projects being developed under the Energy Technology Innovation Strategy (ETIS). These include the world’s first carbon storage research demonstration project, the Otway Basin carbon dioxide underground storage project, where gas injection is due to start late this year. 24

Other projects include the post-combustion carbon capture R&D project by International Power at the Hazelwood power station, the pre-combustion capture R&D project operated by HRL at Loy Yang power station and the carbon capture, coal to liquids and carbon storage project proposed by Monash Energy. In addition, a basin-scale storage screening study has been completed, confirming that Victorian geology has significant potential for CCS, although further research is required to firm up site selections. Professor Kaldi told delegates at the recent launch of new data from the highly successful Victorian Initiative for Minerals and Petroleum (VIMP) program that energy security would take precedence over greenhouse concerns in the future. He said unlike most other energy resources,

coal was abundant in most user countries and likely to remain as the fuel of choice (or necessity) in developing countries, especially China and India, with or without CCS. But public perception and ensuing laws in OECD countries meant CCS was likely to underpin coal’s future. “Greenhouse concerns will require a portfolio of responses ... CCS, nuclear, energy efficiency and renewables are all part of the mix,” Prof Kaldi said. “For as long as we use fossil fuels for base-load power, CCS is the only technology that can make deep cuts in emissions.” He added that the Intergovernmental Panel on Climate Change had concluded CCS could significantly decrease the overall cost of mitigation and that global storage capacity was likely to be sufficient for needs for this century. But he conceded CCS had to be economically viable as a mitigation

VIMP

p CO2 geological storage options

option compared to other technologies. Costs, though, were coming down. “While there is more work to be done, CCS is feasible in many of the areas where it is required and associated business opportunities will be plentiful,” Prof Kaldi said. The professor said the public perception was that climate change and global warming was real, happening now and caused by greenhouse gas emissions from burning fossil fuels. Already, industry was positioning for a carbon-constrained world, and carbon capture and storage was the most likely technology to mitigate the problem. The CO2CRC Otway project is a carbon storage demonstration project seeking to prove the efficacy of taking high concentrations of carbon dioxide and storing it deep underground in geologically secure structures. The project has a budget of $30 million, with $17 million contributed by governments, $6.5 million by industry and $6.5 million from the CO2CRC. The objective is to demonstrate the geological storage, monitoring and verification of CO2 under Australian conditions. Stage one will

transport CO2 from a CO2 well to a nearby depleted gas field. The gas will be injected, stored at a 2-kilometre depth and monitored extensively. Stage two involves the injection, storage and monitoring of CO2 into a saline aquifer. Also under ETIS, two major large scale precommercial demonstration projects have also been announced in Victoria. One, by International Power at the Hazelwood power station, involves a brown-coal-drying and subsequent CO2 capture project. The A$369 million project involves retrofitting a 200-megawatt boiler at Hazelwood to install the brown coal drying technology as well as the CO2 capture and diversion into a carbonation plant. The carbonation plant is due to be installed in 2008 while the coal-drying phase will be completed by the end of 2009 and if successful ready for potential retrofit to the existing power stations and new plant. HRL will build an integrated drying gasification combined cycle (IDGCC) plant ($750m). The objective is to reduce CO2 emissions by 40 per cent from the brown coal-fired power plant. Construction will begin this year and is expected to be completed in 2009.

The Monash Energy commercial project will cost far more, at an estimated range of A$6 to $7 billion in its final form. The project is a brown coal to hydrocarbon liquids project with associated carbon capture and storage facilities. It is proposed to store the captured CO2 in gippsland basin sediments in Bass Strait. FOR MORE INFORMATION CONTACT:

Prof John Kaldi Chief Scientist Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) Australian School of Petroleum University of Adelaide Phone: 08 8303 4291 Email: [email protected]

25

petro DISCOVERY JOURNAL NOVEMBER 2007

Otway Gas Project In September 2007, Woodside announced the start of gas export from the Otway gas project. Commencement of production from the Woodside-led Otway gas project has further enhanced the status of Victoria’s Otway Basin as a major new gas hub servicing growing south-east Australian energy markets. The A$1.1 billion development follows the earlier Otway Basin gas field developments in waters offshore from Port Campbell in western Victoria – Minerva (BHP Billiton-2005) and Casino (Santos-2006). Those developments and completion of the Otway project – along with planning for the development of the Henry gas field (Santos) – have improved the security of the gas supply and competitiveness for energy users. The Otway project involved the development of the Geographe (expected to come on line by the end of the decade) and Thylacine gas fields, 55 and 70 kilometres offshore respectively, from Port Campbell. Construction and development work involved a remotelyoperated platform, offshore and onshore pipelines and a gas processing plant built six kilometres north of Port Campbell. The fields are forecast to supply 885 petajoules of sales gas, 12.2 million barrels of condensate (light oil) and 1.7 million tonnes of liquid petroleum gas (LPG). In practical terms, that means the gas fields are capable of supplying more than 10 per cent of south-east Australia’s current annual demand for more than 10 years. Initially, raw gas from Thylacine, which sits in waters administered by Tasmanian authorities, is being processed at the onshore gas plant, with the smaller Geographe to be tapped later in the life of the project. By August 2007, the onshore gas plant had taken commissioning gas ahead of receiving the first gas from the offshore Thylacine wellhead platform. Final regulatory approvals are in place and first gas sales followed in September 2007. Like most resource projects, the Otway project has felt cost pressures and delays. But Woodside has forecast the final cost to be less than 20 per cent over budget. Partners in the project are Australia’s biggest pure oil and gas group Woodside (51.55 per cent and operator), Origin Energy Resources (30.75 per cent), Benaris International Pty Ltd (12.7 per cent) and CalEnergy Gas (Australia) Ltd (5 per cent). Thylacine and Geographe were discovered in 2001. An exploration well on Thylacine found a 281 metre thick gas column. That discovery was followed by the Thylacine-2 appraisal well, which found a 230 metre gas column. The Geographe-1 exploration well discovered gas in a 240 metre gross column. Significantly,

26

the discoveries came as Victoria was being connected to three states by pipeline networks, creating a much more secure gas supply for all involved. The commissioning process at the Otway project began in July 2007, with the gas supplied from TRUenergy’s neighbouring Iona gas plant. Much care was taken during the commissioning process given it involved the introduction of hydrocarbons and the sequential start-up of production systems. Woodside said that, at all times, testing and assurance checks were undertaken before moving to the next phase of commissioning. Temporary offices used during the construction phase of the gas plant have been removed or relocated. In keeping with best operating practice, there are no offices or accommodation within the immediate vicinity of the operating plant. All operations, including the running of the offshore platform, are conducted from a control room in an administration centre in Waarre Road, about 200 metres from the plant. Meanwhile, at the offshore platform, Thylacine gas was introduced to provide fuel for the platform’s generators ahead of production starting. A remotely operated vehicle had already been dispatched along the offshore pipeline work to ensure its integrity ahead of gas being sent to shore. The Otway project produces three products: sales gas, LPG and condensate. Gas produced is being distributed to the Victorian transmission system via the South West Pipeline to Melbourne, as well as to Adelaide via the South East Australian (SEA) Gas Pipeline. Condensate is to be transported by truck from the Otway gas plant to Shell’s oil refinery at Geelong by the logistics company Toll. A dedicated route has been agreed with the relevant shires and government agencies. About five to eight dedicated truck movements are expected on a daily basis for the condensate deliveries which, in a small way at least, will reduce Australia’s growing dependency on imports. LPG processing will start once gas and condensate production levels are stabilised. The LPG will be trucked to local markets in Victoria, with about 8-13 dedicated truck movements expected each day. Consultation with the community and other stakeholders has been a priority in the Otway gas project’s development. The offshore gas production industry is relatively new in an area known internationally for its stunning scenery. Woodside has run a consultation program with various stakeholders since the project was first conceived. Regular updates to the Community Reference Group, a construction progress newsletter and advertising in the local media have all been part of the consultation

p The unmanned wellhead production platform

at the Thylacine field

process. The joint partners have also supported community events during the construction phase and plan to continue to do so during the operational phase. In 2007, the joint venture has sponsored the Brophy Youth Enterprise project, the Timboon Railway Music Festival and the Port Campbell Swim Series. Elsewhere in the offshore Otway Basin, the Santos-led Casino gas joint venture has reported strong production of 43 petajoules of gas in the year to June 2007. That was 23 per cent more than original contracted volumes for the project. The adjacent Henry gas discovery has also been declared commercially viable. Front end engineering and design work has started, with a development decision expected before the end of December. First production is forecast for the first quarter of 2009, adding new capacity and flexibility to the existing Casino production system. FOR MORE INFORMATION CONTACT:

Tony Johnson Woodside media contact Phone: 08 9348 5034 Mobile: 0417 916 638 Email: [email protected]

oleum A high level of activity in exploration and development of petroleum in Victoria is highlighted by nearly $A3 billion in investment, 1,700 construction jobs and 180 ongoing jobs since 2000.

BassGas project provides Victoria with gas security Victoria’s newest major gas project, BassGas, is making a big impact on the security of the state’s natural gas supplies, and helping meet recent unprecedented local demand. Victorians switched on their gas heaters in record numbers this past winter, one of the coldest in recent memory. But thanks to projects like BassGas the gas flowed seamlessly to provide unprecedented security of supply for the state. The BassGas project involves the development of petroleum resources in the Bass Basin, including the Yolla and White Ibis fields and several exploration targets. After a troubled beginning, the project is now operating at its design capacity of 60 terajoules a day (TJ/d). The project collaborators, led by Origin Energy and AWE Ltd, are looking beyond the original offshore gas reserves contained in the Yolla gas field in the hope p BassGas plant, Lang Lang Victoria of developing new fields utilising the existing to exploration permits close to the offshore offshore infrastructure. production permit. Additional work is also being Interpretation of the Shearwater 3D seismic undertaken on the nearby White Ibis gas field survey – acquired over the nearby Trefoil and the Gentoo/Rockhopper complex. AWE discovery and adjacent exploration leads in reported initial 2P resource estimates for the offshore permit T/18P – is almost complete. Trefoil and Gentoo/Rockhopper features, which Well locations for a potential drilling program are located in T/18P, of 420 petajoules of gross are now being considered, and planning is recoverable gas volumes with associated in progress to acquire a substantial seismic liquids totaling 27 million barrels. These program in the newly-awarded permit T/44P. estimates are based on the existing wells in the The T/RL1 Retention Lease around the Yolla area and interpretation of the high quality 3D gas field production licence was renewed seismic data, acquired during 2006. The joint during the June quarter. venture has its focus on gas commercialisation, In its quarterly report to the Australian including the potential for the acceleration of Stock Exchange, AWE Ltd reported gas the next phase of drilling in the Bass Basin, output from the BassGas project reached stabilised rates above contract levels during the because of these encouraging volumes of recoverable gas. quarter. Increased liquid recoveries were also The Bass Basin, geologically similar to the associated with the higher gas rates. Gross gas neighbouring prolific Gippsland Basin, contains production from the BassGas project during significant discoveries of gas and condensate the June quarter averaged 55 TJ/d, the rate and is under-explored, even by Australian required to meet gas sales agreements. standards. The original Yolla gas discovery was AWE reported recent gas production had made in 1985 when Yolla-1 encountered gas stabilised at rates of 15 to 20 per cent above stacking onshore pipeline prior intervals. to laying The Yolla-1 in five separate reservoir this level, and noted that the recovery of well was production-tested at rates of up to 15 condensate and LPG from the Lang Lang million cubic feet of gas per day and the Yolla-2 gas plant has also improved, with recovery appraisal well was drilled in 1998 to test the rates now at design levels. AWE’s share of lateral and vertical extent of the gas pools. The production for the quarter was 1,501 TJ of gas, 68,592 barrels of condensate and 4,468 tonnes initial appraisal well provided sufficient evidence that a commercial field was present. of LPG. Following AWE’s acquisition of Premier Oil’s During the quarter, the BassGas joint venture Australian assets, a development concept was advised that the first stage of an arbitration reviewed and accepted by the joint venture, process related to delays in completing the and in 2001 and 2002 gas sales contracts project had been determined in favour of the were executed to allow the BassGas project to BassGas joint venture partners. The second proceed. Proved and probable gas reserves for stage of the hearing is unlikely to be held until the Yolla field were estimated at 333 Petajoules, April 2008. with approximately 28 million barrels of gas Scoping studies on the Trefoil gas and condensate field were the main activities related liquids, in the form of condensate and LPG.

The BassGas project consists mainly of two gas production wells Yolla-3 and Yolla-4, and an offshore, unmanned wellhead platform connected by a gas pipeline to the gas processing facility at Lang Lang. The offshore facilities were designed to incorporate additional production wells from the Yolla fields and also to tie-in other gas discoveries in the region. Gas and gas liquids are produced from the offshore wells, and water is removed prior to their injection into the offshore pipeline and transportation to Lang Lang. The pipeline is a 14-inch steel line buried in the onshore section between Lang Lang and Kilcunda, while the offshore pipeline sits on the sea bed. The shore crossing at Kilcunda was drilled beneath the pristine beach to ensure protection of the sensitive coastline. Gas and gas liquids are separated into their sales components at the Lang Lang gas facility. The BassGas project is expected to generate gross revenues in excess of A$1.5 billion over the estimated 15-year life of the project. The project’s revenues are largely underpinned by contracted gas sales to Origin Energy, LPG sales to Elgas Limited and condensate sales to Shell Australia. Project partners now include Origin Energy Australia (operator) (42.5 per cent), AWE Ltd (30 per cent), CalEnergy (15 per cent) and Wandoo Petroleum (12.5 per cent) FOR MORE INFORMATION CONTACT:

Tony Wood External Affairs Manager Origin Energy Ltd Phone: 03 9652 5506 Email: [email protected]

27

petro DISCOVERY JOURNAL NOVEMBER 2007

Bass Strait: Victoria’s petroleum hub

Natural gas supplies to Victoria and other Australian east coast markets have been strengthened by significant new additions to reserves in the Bass Strait fields, operated by ExxonMobil. ExxonMobil revealed in August it had added more than 300 billion cubic feet of gas to the known Bass Strait reserves through a combination of seismic surveys, drilling and other evaluation programs. The addition came on top of the 700 billion cubic feet added to reserves in 2005, ExxonMobil Australia’s Chairman, Mr Mark Nolan said. But the company is not stopping there. It has already embarked on a program to test much deeper structures beneath the currentlyproducing fields, seeking even greater gas reserve increases. “We have added approximately one trillion cubic feet of gas to existing resources in Gippsland since 2004 – enough gas to power a city of a million people for 20 years,” Mr Nolan said. While these additions to gas resources will help meet growing energy demand in eastern Australia, they are also important from an environmental perspective.” Mr Nolan said natural gas could produce up to 70 percent less greenhouse gas emissions than coal in power generation and also uses up to 80 percent less water. Additions to the ExxonMobil resource base had strengthened an already-extensive foundation, underpinning the long-term competitiveness of the Gippsland gas business in supplying gas to south-eastern Australia. “As an indication of our confidence in the substantial gas resource remaining in the basin, we are planning to begin a comprehensive formation evaluation study to look into the untested deeper basin gas potential under our existing fields,” Mr Nolan said. Esso Australia Resources Pty Ltd operates the Gippsland Basin fields on behalf of a 50-50 joint venture with BHP Billiton. While ExxonMobil looks for new gas resources in Bass Strait, it also has been drilling around the margins of existing oil fields in a bid to extend known resources. The program has been a huge success, with ExxonMobil Australia adding about 30,000 barrels a day to liquids production since 2005. Liquids production from the Gippsland operations averaged 127,000 barrels a day in 2006. To date, the drilling program has involved an investment of about $300 million to drill wells at the Kingfish, Bream, Halibut and Fortescue fields. This follows an earlier investment of about $100 million in seismic recording and reprocessing.

28

ExxonMobil revealed in August it had added more than 300 billion cubic feet of gas to the known Bass Strait reserves through a combination of seismic surveys, drilling and other evaluation programs.

p Kingfish Platform Structure

Mr Nolan said the drilling program had significantly extended the life of the Bass Strait fields, which previously were entering a sharp production decline as they aged. “The results so far give us confidence that there is today more than 20 years left of oil production in Bass Strait,” Mr Nolan said. “For example, the Kingfish field – Australia’s largestever oil field, from which over one billion barrels of crude has been produced – continues to be one of our most important oil producers 40 years after its discovery.” He said improvements in technology, particularly related to seismic processing and analysis and drilling accuracy, were integral to the success of the oil production enhancement program. “As a result, we have been able to more precisely firm up targets, and also go back over older areas to identify and extract more oil.” To help ExxonMobil maintain its place as Victoria’s largest natural gas supplier, the company is planning to extend the Longford gas plant near Sale in Gippsland. The Victorian Government recently found no additional Environment Effects Statement (EES) were needed to assess the effects of the proposed gas conditioning plant at Longford. “After careful consideration and advice from the Minister for Environment and Climate Change, and the Minister for Energy and Resources, I am satisfied that an EES is not

required in this instance,” Victorian Minister for Planning Justin Madden said. “The proposed site for the proposed plant consists of cleared agricultural land with no landscape, biodiversity, cultural heritage or water body features of established environmental significance. I am satisfied greenhouse gas emissions will be readily assessed once the proposed plant design is finalised and that the Environmental Protection Authority approval process will be satisfactory in assessing suitable means to reduce these emissions.” “In the longer-term, there may be an opportunity to implement technologies to capture and store carbon dioxide emissions from facilities such as the proposed Esso plant. However, full commercialisation of this technology is not complete and hence they don’t warrant in-depth assessment in this case.” The proposed plant will be built on flat land currently used for grazing, to the immediate east of the existing Longford gas plant. It will involve construction of a gas processing plant, as well as connections to the existing offshore pipelines and connections to the existing plant. FOR MORE INFORMATION CONTACT:

Rob Young External Affairs Manager ExxonMobil Phone: 03 9270 3443 Fax: 03 9270 3494 Email: [email protected]

oleum Apache set to join Bass Strait drilling rush

A new Bass Strait drilling rush could unlock substantial new oil and gas reserves in areas that have been producing for several decades and in virgin locations with potential for a whole new style of fields. Apache Corporation, an international oil and gas production and exploration company based in the United States, is set to begin a major new drilling campaign after acquiring interests in five exploration permits in Bass Strait. Apache, founded in 1954 and today ranked among the world’s top independent oil and gas companies, has been operating in Western Australia for more than 14 years. Apache is a significant producer of oil and gas in WA, operating numerous conventional offshore platforms, monopods and gas plants. Its most intensive production area is based on Varanus Island, off the WA coast, where it has a significant oil and gas processing and shipping facility. Apache has extensive knowledge of the requirements of offshore drilling in Australia, having drilled more than 100 wells using five different drilling rigs in Australian state and Commonwealth waters in the past five years. Now it is bringing that expertise and knowledge to the hunt for new oil and gas reserves in Victorian waters. Apache is now one of the largest acreage holders in the Gippsland Basin, having recently acquired interests in five permits: VIC/P42, VIC/P45, VIC/P54, VIC/P58 and VIC/P59. Gippsland now forms an integral part of Apache’s exploration strategy. Apache wants to drill up to 10 wells in the Gippsland Basin during 2008, using both jackup and semi-submersible drilling rigs (in shallow and deep waters, respectively), as part of its exploration drilling programme. But Apache is not just focusing on the more traditional-style oil and gas fields in its drilling program. The company is using its well known expertise in extracting new reserves from established fields to push the boundaries of traditional exploration in the Gippsland Basin area. Apache believes a number of different play types are present at several different stratigraphic levels, over which it has already conducted regional and prospect/lead specific mapping and geological studies. The primary target is the Top Latrobe section – the structure which, to date, has yielded the biggest oil and gas-producing fields in Bass Strait.

p Apache exploration permits in Gippsland Basin

But Apache will also probe the deeper, less commonly-explored sections such as the Golden Beach and Volador formations. The Gippsland Basin also presents a variety of potential hydrocarbon trap styles and offers the possibility of stacked plays. Apache believes its primary exploration challenge in the Gippsland Basin is depth conversion. The company’s approach is to use a variety of geophysical methods to address the critical risks it sees in accurately finding its planned exploration wells. In modern oil and gas exploration, seismic surveys are used to unlock the secrets of the earth’s layers to pick the right locations to drill. But in the Gippsland Basin the nature of the subterranean geology stacking onshore pipeline prior to laying can often distort the data produced from seismic surveys, requiring highly complex analysis to produce an accurate picture of the earth before drilling proceeds. With offshore wells costing many millions of dollars, detailed preparation is required to minimise the risk of failures. In 2007 Apache acquired more than 1,140 square kilometres of new 3D marine streamer seismic data in the Gippsland Basin and will process the data through pre-stack depth migration. Apache plans to merge these new data with older 3D seismic data sets to develop a more accurate earth model.

p Western Trident

In addition to the 3D seismic data, Apache acquired a scanning 3D controlled source electro-magnetic survey. This survey covers 928 square kilometres and is the first application of this technology in Australia. The Gippsland Basin has become a strategic core area for Apache. It believes the area can provide the company with a slate of excellent opportunities, leading to future reserves and production growth. FOR MORE INFORMATION CONTACT:

Shelley Burnaby Joint Venture Coordinator Apache Energy Limited Phone: 08 9422 7401 Email: [email protected]

29

petro DISCOVERY JOURNAL NOVEMBER 2007

Recognising the potential of Discovery Bay High

New exploration and a better understanding of geology are helping to further unlock the hydrocarbon potential of Victoria’s offshore Otway Basin.

p Figure 1: Essential Petroleum Resources Limited has significant interests in acreage over the eastern Morum Sub-basin, including the Discovery Bay High, central Otway Basin.

Heightened activity follows recent discoveries of offshore natural gas fields brought into production. While commercial oil discoveries have so far eluded explorers, significant gas discoveries will help to meet the rising demand for energy on Australia’s east coast. Exploration in the Otway Basin has shown larger hydrocarbon accumulations are more likely to be discovered offshore than onshore. This has been demonstrated by the recent discovery of the Casino, Henry, Martha and Halladale gas fields off the south-west Victorian coast, adjacent to Port Campbell. Offshore the Shipwreck Trough and Pecten High in the eastern part of the basin have reported combined gas reserves of more than 1.6 trillion cubic feet (TCF). Onshore, the Port Campbell Embayment in the eastern part of the Basin and the Penola Trough in the north-west have produced about 0.2 TCF of gas.

30

The potential to realise further significant offshore hydrocarbon discoveries is being planned by Essential Petroleum Resources Ltd (“Essential Petroleum”), a junior oil and gas exploration company listed on the ASX (Code: EPR). The company is focused exclusively on opportunities in the Otway Basin and has one of the largest portfolios of prospective Otway Basin acreage with interests in four onshore tenements and two offshore tenements. Essential Petroleum holds interests in the offshore permits VIC/P46 (25 per cent) and VIC/P50 (100 per cent), as shown in Figure 1 above Onshore, the company has acquired an interest in the Killanoola oil discovery in PRL 13 (20 per cent) in the Penola Trough hydrocarbon province, and more recently has been awarded an interest in a new exploration permit, PEP 168 (50 per cent), in the Port Campbell embayment gas province. The company also has interests in western Victoria in PEP 151 (75 per cent) and in PEP 150 (20 per cent) which contains the Lindon oil discovery.

The Discovery Bay High, Otway Basin, Victoria Essential Petroleum is testing new models for oil and gas accumulations that include small to medium-sized onshore oil and gas prospects and potentially very large offshore oil and gas plays on the continental margin. The company’s analysis of the Discovery Bay High recognises the potential for a new hydrocarbon province to the west of the Pecten High in the offshore Otway Basin. Essential Petroleum has identified the Discovery Bay High as a feature with major influence on the size of potential hydrocarbon traps and sediment distribution in the offshore, central part of the Otway Basin. Following an earlier period of extension that formed the Penola Trough, a major offset in the Late Cretaceous extension occurred between the Tartwaup Fault and the Mussel Fault in the central Otway Basin, giving rise to the Discovery Bay High.

oleum The offset divides the Late Cretaceous section of the Otway Basin into the Morum Sub-Basin to the west and the Nelson Sub-Basin to the east, as illustrated in Figure 2. The depositional histories of the two sub-basins are significantly different in the Late Cretaceous section as evidenced by the sandier Morum Sub-Basin relative to the Nelson Sub-Basin during that period. The large structural closures and the expected presence of reservoir quality sands and sealing shale sequences make the Discovery Bay High at the eastern end of the Morum Sub-Basin an ideal geological setting for hydrocarbon entrapment. Essential Petroleum is in the fortunate position of having exposure to the entire onshore and offshore influence of the Discovery Bay High, particularly through its interests in the offshore permits, VIC/P46 and VIC/P50. VIC/P46, Offshore Otway Basin, Victoria

p Figure 2: Late Cretaceous extension is transferred from the Tartwaup Fault to the Mussel Fault separating the

Morum Sub-basin in the west, from the Nelson sub-basin in the east (adapted from Figure C28 “Sherbrook Group isochron” in Woollands and Wong, 2001).

cretaceous marine source rock is present offshore in the Morum Sub-Basin, then there is great upside potential for oil. Fermat and Bernoulli are ideally located to trap oil migrating out of the Morum Sub-Basin. Prospect selection for drill testing will depend on the results of the Bernoulli seismic survey. A drilling rig has been contracted to drill either Fermat or Bernoulli. Subject to regulatory and joint venture approval, one or other of these exciting prospects will be drilled in the second half of 2008.

In the offshore Victorian part of the Morum Sub-Basin, Essential Petroleum holds a 25 per cent interest in the VIC/P46 permit. Beach Petroleum Limited is the operator, holding a 50 per cent interest in the permit, and Mitsui E&P Australia Pty Ltd holds a 25 per cent interest. The Fermat and Bernoulli prospects are the focus of the company’s exploration in VIC/P46. VIC/P50, A recently acquired 3D seismic survey over Offshore Otway Basin, Victoria Bernoulli was designed to resolve the structural complexities associated with the horst hosting The VIC/P50 permit, in which Essential the Bernoulli, Kepler and Joule prospects. The Petroleum has 100 per cent interest, provides Fermat and Bernoulli prospects target the Late exciting high-risk and high-reward deep-water Cretaceous Waarre and Flaxman formation exploration opportunities in the Otway Basin. reservoirs that host the Shipwreck Trough, Exploration in water depths of greater than Pecten High and Port Campbell Embayment 500 metres is an emerging frontier with many gas fields. The prospects are on the western large discoveries in excess of 500 MMBOE side of the Discovery Bay High, where upper stands for in recent years. Advances in drilling Waarre and Flaxman sands are expected to be technology have enabled exploration to move deposited. out to the continental shelf margin where The Fermat prospect arises from the pinchout potentially prolific turbidite fan complexes are of Waarre C and Flaxman C sands into the deposited. footwall of the Normanby half-graben. The A number promising stacking onshoreofpipeline prior todeep layingwater shelf Bernoulli prospect is a large but structurally margin opportunities have been identified in complex prospect. Although the closure VIC/P50 from seismic acquired by Essential is robust at the Waarre reservoir level, the Petroleum. Two of these – the Curie prospect extensive 3D seismic survey will allow the and the Descartes prospect – have been prospectivity of Bernoulli to be compared more matured to prospect status through the completely with that of the structurally simpler acquisition of over 1,000 kilometres of modern Fermat prospect. The 3D seismic survey was 2D seismic data. Curie is a large faulted rollover completed in June 2007 and will be processed in the upper late cretaceous section, while the and interpreted by the first quarter of 2008. Descartes prospect is an interpreted Oligocene Fermat and Bernoulli have a combined turbidite fan complex. estimated P50 recoverable resource potential The two prospects are potentially very large, of greater than 2 TCF gas. However, if an early with a current estimated P50 recoverable oil

resource of approximately 750 MMBbls at Curie and 800 MMBbls at Descartes (200 MMBbls in VIC/P50). More recently, two strong leads have been identified. Oliphant and Euclid are exciting additions to Essential Petroleum’s Discovery Bay High prospects and leads inventory. Both prospects have the potential to host large volumes of oil. The Oliphant structure is a four-way dip closure of Waarre C sands sealed by a thick marine shale. The prospect is at the southern extent of existing seismic and requires additional seismic acquisition to mature to prospect status. Euclid is a large low-stand fan within the Belfast Formation. The prospect is sealed by thick marine shales and the reservoir is juxtaposed against the source rocks of the Eumeralla Formation. Additional seismic surveys are required to examine the internal properties of the fan before this most promising lead can be matured to prospect status. The prospective recoverable resource in these two leads is estimated to be 200 MMBbls of oil at Oliphant and 750 MMBbls at Euclid. Essential Petroleum is well positioned in the Otway Basin, with quality exploration acreage and an exciting prospect inventory, to potentially play an important role in the growing Australian energy market. The company has identified significant offshore prospects associated with the Discovery Bay High and is working towards unlocking this hydrocarbon potential. FOR MORE INFORMATION CONTACT:

John Remfry Chief Executive Officer Essential Petroleum Phone: 03 9699 3009 Fax: 03 9699 3009 Email: [email protected]

31

DISCOVERY JOURNAL NOVEMBER 2007

Geothermal

Following a public tender process, 5 companies have accepted offers of permits for geothermal energy exploration in Victoria. The exploration permits cover an area of 74,000 km2 with over $64 million in expenditure committed over five years.

Hot Rock Ltd

Torrens Energy Ltd

Hot Rock Ltd is aiming to identify, appraise and develop low-emission, commercially sustainable geothermal energy projects in Australia and internationally.

Torrens Energy Ltd has a portfolio of 16 geothermal exploration licences (GELs) in South Australia and the recently granted GEP5 permit in Victoria, located in the geological region known as the Melbourne Zone.

Greenearth Energy Limited was awarded GEP10, 12 and 13, covering 19,000 square kilometres in May 2007. The permits cover the Latrobe Valley, the area to the east of Lorne as far as Melbourne and to the north covering the region around Daylesford.

The Melbourne Zone is a structural area that contains heat producing basement (the Selwyn Block), granite intrusions, possible high heat flow related to recent volcanics and a thick cover of insulating sediments. The area begins within the city limits of Melbourne and lies in the heart of infrastructure and markets. For an area to be prospective for commercial geothermal energy resources three key factors are needed: a) An active heat source (high heat flow), b) insulating sedimentary cover over the heat source, and, c) proximity to infrastructure and market (the national power grid). The presence of the Selwyn Block is a real positive for geothermal potential in the Melbourne Zone. Elsewhere the occurrence of Proterozoic Basement has given rise to zones of high heat flow due to the presence of radiogenic elements in the crust such as uranium, thorium and potassium. Victoria is also dotted with granitic rocks of younger age, which have the potential to generate high heat flow. The ‘newer volcanics’ event spans the time from the Pliocene (about five million years ago) to Recent (in the past 10,000 years), and contains about 400 volcanic centres. The presence of residual anomalous heat flow associated with these centres is currently unclear. In addition to a heat source, an adequate insulating blanket of sedimentary rocks is required to create high temperatures at depths of 3-5 km. Some rocks make better thermal blankets than others, such as mudstones, siltstones, shales and limestone. The Melbourne Zone contains thick accumulations of Silurian to Devonian sediments. Torrens Energy will begin to explore by mapping key target areas for the existence of thick insulating sediments, followed by an assessment of the heat flow in the Melbourne Zone. Torrens Energy will then drill shallow heat flow exploration holes in key locations to enable modelling of the temperatures at depths of between 3-5 km below the surface. Should initial data collection prove favourable, Torrens Energy will begin development assessment processes with the aim of producing large scale, emissions free, baseload power for Melbourne and the national electricity market.

Greenearth Energy has committed to spending a minimum of $8.5 million over five years as part of its winning tender for the Victorian permits, but is planning to carry out a significantly more aggressive work program that is likely to see the company spend more. The program could include drilling one or more deep wells to a depth of 3-5 km as part of its regional exploration program Greenearth was founded in 2006 with support from backers including Lakes Oil and Victoria Petroleum. The company has exclusive access to an extensive existing database of information gained from Lakes Oil’s exploration and drilling activities over the last 25 years. The original idea for Greenearth Energy came from Lakes Oil’s 2004 drilling of the Trifon-2 oil exploration well, which encountered hot, saline water at about 2,000 m that flowed to the surface at about 90°C. Since being awarded its permits, Greenearth Energy has participated in the drilling of the Boola Boola-2 well (GEP12) in joint venture with Lakes Oil. Greenearth Energy agreed to pay to extend Lakes Oil’s planned drilling operations from 1,500-2,200 m. Technical problems forced the abandonment of the well at a depth of 1,850 m, but Greenearth Energy was able to gain vital temperature and coring data to a depth of 1,700 m. This enabled the company to assess temperature gradients and thermal conductivity for a portion of the total costs. Greenearth Energy’s ultimate goal is to reach commercialisation and to develop geothermal power. Initially the company will target the shallower ‘wet’ conventional geothermal systems. But the company is excited at the prospect of having Hot Dry Rock potential within its permits. An independent geological assessment, commissioned by the company, suggested that temperatures in the Latrobe Valley may reach as high as 225°C at 5 km depth. But this theory remains untested because there have been no deep wells drilled to Basement in the Latrobe Valley. In the meantime, Greenearth Energy is designing a comprehensive geophysical and geothermal modelling program using the results of its planned 3D magnetotelluric, seismic and receiver function pilot programs in the Latrobe Valley. This will assist the company to consolidate its planned deep well drilling program.

Hot Rock was granted four geothermal exploration permits [GEPs] in the Otway Basin in south-west Victoria, covering 18,294 square kilometres, as part of the Victorian Government’s competitive tender which closed in October 2006. The company is also evaluating several projects in Europe, Asia and the USA. Hot Rock Ltd selected the Otway Basin because previous drilling had shown that anomalous temperatures existed and may be suitable for binary plant electricity generation. Managing Director Mark Elliott said the company would focus its exploration and appraisal of geothermal resources within areas of high geothermal gradients adjacent to existing energy delivery infrastructure, power transmission lines and significant industry. The projects would focus on both Hot Wet Rock and Hot Dry Rock targets. The first priority was to target hydrothermal water at temperatures greater than 150°C at depths of less than 4,000 metres. Oil well and waterbore data from sandstone units in the Otway Group sediments encouragingly showed relatively high water temperatures, Mr Elliott said. Hot Rock Ltd directors believe the Otway Basin potentially contains sufficient geothermal energy to generate electricity. Mr Elliott confirmed Hot Rock Ltd’s geothermal exploration permits – GEP6, 7, 8 and 9 – were selected on the basis of specific geological technical characteristics, which meet the company’s focus on areas with relatively high geothermal gradient for existing wells, (i.e. greater than 1,000-metre depth and fitting commercial considerations such as proximity to transmission lines, infrastructure and industry). At this early stage, the directors of Hot Rock Ltd will focus on identifying geothermal energy resources capable of producing geothermal energy suitable for electricity generation, however direct use of hot water for industry will be also considered. Data from water and gas wells indicate temperatures of about 150°C exist at depths of 3,000 metres, which may equate to commercial geothermal energy resources. The targeted areas are regarded by Hot Rock Ltd as prospective for predominantly Hot Dry Rock resources, but the company is also looking for shallower hot aquifers for Hot Wet Rocks. FOR MORE INFORMATION CONTACT:

Mark Elliott Managing Director Hot Rock Ltd Phone: 07 3857 7552 Email [email protected] 32

FOR MORE INFORMATION CONTACT:

Chris Matthews Chief Executive Officer Torrens Energy Ltd Phone: 08 8373 1822 Email: [email protected]

Greenearth Energy Ltd

FOR MORE INFORMATION CONTACT:

Rob King Director Greenearth Energy Phone: 03 9620 7299 Email: [email protected]

Exploration Update Granite Power Ltd

Geogen Pty Ltd

Victorian geothermal energy hopeful, Granite Power Ltd, is hoping new technology will provide the solution to the economically-viable conversion of natural heat in the earth’s crust into sustainable, renewable and emission free electricity.

When it comes to geothermal exploration, Queensland-based geothermal exploration company Geogen Pty Ltd plans to take a different approach to many other companies.

The company, in conjunction with the University of Newcastle, has just patented a novel heat exchanger applicable for geothermal power generation. The federal government is contributing $1.2 million to develop the concept, which aims to utilise lower temperature source rocks than more conventional geothermal systems. The heat exchanger applies a regenerator technology which operates in a ‘supercritical state’ to generate power. “Access to this technology means that we can make lower temperature rocks economic,” Granite Power managing director Stephen de Belle told Discovery. “It’s partly for this reason that we selected our areas in Victoria.” Granite Power sees potential for the technology in a host of geothermal applications and has secured exploration tenements in Victoria, New South Wales, South Australia, Queensland and Western Australia. The company also plans a radically different approach to testing the commercial viability of its technology. It aims to build a mobile, 5 MW (megawatt) power station which will operate directly from the exploration area. If rocks of sufficient temperature are located near a market, Granite Power plans to demonstrate its technology by operating the power plant to generate electricity direct into the local grid. “When we do our testing we will be able to generate electricity and sell it so the reservoir assessment process will be a part of the exploration process,” Mr de Belle said. The demonstration plant is expected to cost approximately $20 million, but in normal operating conditions a plant of about 120 MW is expected to be constructed consisting of three 40 MW units. The company’s heat exchanger technology can operate at temperatures of about 150°C, much lower than some other geothermal power projects currently under consideration. To finance the project and the exploration Granite Power is currently preparing a prospectus to allow the company to raise cash and list on the Australian Stock Exchange. FOR MORE INFORMATION CONTACT:

Stephen de Belle Managing Director Granite Power Phone: 02 8252 6100 Email: [email protected]

While all other geothermal companies in Australia are targeting geothermal hydrothermal or Hot Dry Rocks – radioactive granites underlying sedimentary basins at depths of a few kilometres – Geogen is pinpointing very shallow, high-grade geothermal heat, specifically for base-load power generation. Geogen was formed in 2005 by experienced consulting geologist Bob Kitch and former Beyond 2000 science and technology television presenter Andrew Carroll to develop geothermal exploration opportunities throughout Australia and internationally. Geogen managing director and principal geologist Bob Kitch is Bendigo born and a highly-regarded economic geologist with more than 37 years experience in the Australian and south-west Pacific exploration and mining industries, including BHP Minerals and Gold Mines, Utah Development Company, Newmont Australia and Uranerz Australia. The pair’s wholly-owned company Geogen Victoria now holds the largest contiguous

“If it’s successful, then the world’s cleanest and most cost effective form of renewable energy will become available to all Australians for thousands of years.” Another major difference between Geogen and other geothermal exploration companies is the manner in which it intends to develop and fund its discoveries. Mr Carroll said Geogen was a private explorer and intended to stay that way for the time being. “The real value in Geogen is the unique geothermal model, the proximity to major markets throughout Australia and overseas and our decision not to ask Australian taxpayers and mumand-dad investors to fund the early exploration work,” Mr Carroll said. “Geogen is all about finding near-infinite sources of high-grade geothermal heat for the cheapest and most sustainable clean and renewable generation of base-load power.” “Victoria has all the ingredients to make that happen quickly.” FOR MORE INFORMATION CONTACT:

Bob Kitch Managing Director and Principal Geologist Geogen Pty Ltd Phone: 07 3378 3745 Email: [email protected]

Victoria: Geothermal Exploration Permits Hot Rock Ltd Torrens Energy Ltd Greenearth Energy Ltd Granite Power Ltd Geogen Pty Ltd

geothermal exploration acreage package in Australia – 18,350 square kilometres. The company’s permit areas – GEP1, 2 and 3 – are located in Victoria’s central highlands, with one serious target just 60 kilometres from Melbourne and directly under the national power grid. “Geogen has a 200/2000 geological model for the Victorian exploration areas. That means we expect to find more than 200°C of heat at less than 2,000 m of depth,” Mr Kitch told Discovery. “That is very shallow compared with other geothermal models and is more than enough to run very significant base load geothermal power stations. “Equally significant is our proximity to the second largest energy market in Australia.” 33

DISCOVERY JOURNAL NOVEMBER 2007

Regulations Update Data collection and analysis to monitor trends and performance

Tailings Storage Facilities Audits 2007 – the results are in An audit of 38 separate mine and quarry Tailings Storage Facilities (TSF) across Victoria in the second quarter has found that, overall, such facilities are operating in good condition. However, two aspects requiring attention were found in and around TSFs – environmental monitoring and stormwater management. A lack of record keeping for operator inspections and maintenance was also identified as an area requiring greater diligence and these issues have now been highlighted for the necessary improvements. Since the November 2004 release of the Management of Tailings Storage Facilities Guidelines, adoption of the recommended documentation for contemporary management of TSF had been voluntary on existing sites, and only mandatory for new proposals. The Minerals and Petroleum Regulation Branch (MPR) frequently undertakes targeted audits to support its regulatory activities and to provide extension and education opportunities for industry. The audit assessed 138 elements for conformance with the guidelines, divided into three components: • physical inspection of the tailings/ slimes storage facility • review of TSF management documentation, and • specific management practices related to cyanide use, applicable to only a small subset of mines.

34

p Chief  Inspector and Director of Mines

on an underground inspection

Overall, the physical inspection revealed TSFs were in good condition across the state. But the audit found that none of the existing sites had undertaken complete voluntary compliance with the guidelines’ recommendations. Therefore, a majority of sites do not have the critical control documentation for TSF management. MPR will now undertake a campaign to assist operators to develop and implement critical control documentation to match the scale and complexity of the TSF and the site, over time. This documentation includes: • inspection and maintenance record keeping • risk assessment completed for TSF (including cyanide issues) • emergency response plan for TSF (including cyanide issues) • operations manual for TSF (including cyanide issues) • environmental monitoring (including cyanide issues) • TSF monitoring for key elements (including cyanide issues) • closure plan (including cyanide issues) • annual reporting up to date and schedule 15 transfer reports for mines up to date • annual audits required and completed

MPR plans to progressively address the issues identified during the audit through work plan variations, and replacing work plans that are obsolete or have been lost. Results of the audits have been communicated to operators so that attainment programs can be negotiated. MPR inspectors are available to advise operators on voluntary conformance with the guidelines. FOR MORE INFORMATION CONTACT:

Cynthia Crowe Principal Petroleum and Geothermal Environment Adviser Department of Primary Industries Victoria Phone: 03 9658 4419 Fax: 03 9658 4499 Email:[email protected]

p Embankment  failure of a water dam

The National Mine Safety Framework, designed to create a consistent legislative and regulatory approach to the industry across all states and territories, has been launched across the nation.

p All  work plans must now include plans for engaging the community

Engaging communities and stakeholders in mining Earlier this year the Victorian Government, through amendments to the Mineral Resources (Sustainable Development) Act 1990, legislated that mining companies must formally engage local communities about proposed mining projects as well as during all stages of operations. Mine operators submitting new mining work plans and variations to existing work plans from 1 October will be required to submit community engagement plans for approval as part of their work plan. Mining companies that engage and contribute to social wellbeing generally receive better financial return in the longer term and may experience other benefits including: building and maintaining community support for projects, more readily gain project approval and approved land access as well as the opportunity to enlist local knowledge which can enhance project outcomes. While it is recognised that mining is a valuable part of the Victorian economy, local community concerns are also important. If local concerns are not addressed, they can cause serious disruptions to operations. Through this legislative amendment, the government is optimistic that the mining industry will recognise the community

as key stakeholders. The Minerals and Petroleum Division of the Department of Primary Industries (DPI) has embraced Community Engagement as one of its priority focus areas and believes that investing in community engagement initiatives for Victoria’s earth resource sector will encourage effective communication between mining companies and local communities. Victorian Energy and Resources Minister Peter Batchelor said the government was in a unique position to encourage dialogue between communities and industry, and increase community confidence that environment and social priorities can coexist with mining industries. “The process for mining companies to document and consider their community engagement approach is a positive step in sustainable development in Victoria,” Mr Batchelor said. To assist industry to meet the new legislative requirement, DPI has created a draft guideline for community engagement plans which outline key areas specified in the legislation and align with best practices standards in Australia and internationally.

National Mine Safety Framework Launched

FOR MORE INFORMATION CONTACT:

John Mitas Manager, Minerals and Extractive Operations Department of Primary Industries Phone: 03 9658 4422 Email: [email protected]

Bonnie Baird Community Engagement Program Manager Department of Primary Industries Phone: 03 9658 4408 Email: [email protected]

Made up of seven strategies focusing on key areas in all jurisdictions, the framework includes more consistent data collection and analysis to monitor trends and performance and better target accident prevention strategies. The initiative also develops the skills and competency of safety and health management in the industry. Victoria’s Minister for Energy and Resources Peter Batchelor launched the public consultation process in Melbourne with Federal Industry, Tourism and Resources Minister Ian MacFarlane in June. The Ministerial Council on Mineral and Petroleum Resources, established a steering group with representatives from the workforce, industry and governments to guide the development and implementation of the framework. To contribute to the steering group visit www.industry.gov.au/minesafety. FOR MORE INFORMATION CONTACT:

35

Mineral Exploration Tenements New applications and grants during June – September 2007

Applications

N

Granted Current

T E N E M E NT U P DAT E

0

36

Exploration Licence Applications Tenement EL5062 EL5063 EL5064 EL5065 EL5066 EL5067 EL5068 EL5069 EL5070 EL5071 EL5072 EL5074 EL5075 EL5076 EL5077 EL5078 EL5079 EL5080 EL5081 EL5082 EL5083 EL5084 EL5085 EL5086 EL5087 EL5088 EL5089 EL5090 EL5091 EL5092 EL5093 EL5094 EL5095 EL5096 EL5097

Primary Owner Mutiny Gold Ltd Iluka Resources Ltd Highlake Resources Pty Ltd Highlake Resources Pty Ltd Highlake Resources Pty Ltd Highlake Resources Pty Ltd Highlake Resources Pty Ltd Swancove Enterprises Pty Ltd St Barbara Ltd Pacific Resources Mining Corporation P/L Beadell Resources Ltd BTB Mining Pty Ltd BTB Mining Pty Ltd Newcrest Operations Ltd Goldstar Resources NL Goldstar Resources NL Morning Star Gold NL Sierra Minerals Ltd Leichhardt Resources Pty Ltd Leichhardt Resources Pty Ltd Mineral Sands Ltd Mineral Sands Ltd Marathon Resources Ltd Marathon Resources Ltd Blue Gum International Pty Ltd St Barbara Ltd Mineral Sands Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd Gold Fields Australasia Pty Ltd

50

100 Kilometers

Exploration Licence Applications Application Date 6/6/07 7/6/07 8/6/07 8/6/07 8/6/07 8/6/07 8/6/07 13/6/07 14/6/07 18/6/07 18/6/07 22/6/07 22/6/07 27/6/07 2/7/07 2/7/07 2/7/07 24/7/07 10/8/07 10/8/07 13/8/07 13/8/07 20/8/07 20/8/07 29/8/07 30/8/07 31/8/07 4/9/07 4/9/07 4/9/07 4/9/07 4/9/07 4/9/07 4/9/07 4/9/07

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

Tenement EL5098 EL5102 EL5103 EL5104 EL5105 EL5106 EL5107 EL5108 EL5109 EL5110 EL5111 EL5112

Primary Owner Brady, John M World Minerals Pty Ltd World Minerals Pty Ltd World Minerals Pty Ltd Rex Minerals (Victoria) Ltd St Barbara Ltd Gold Fields Australasia Pty Ltd Providence Gold & Minerals Pty Ltd Blue Gum International Pty Ltd Swancove Enterprises Pty Ltd Uranium Oil & Gas Ltd Uranium Oil & Gas Ltd

Application Date 4/9/07 18/9/07 18/9/07 18/9/07 19/9/07 19/9/07 19/9/07 19/9/07 25/9/07 25/9/07 25/9/07 25/9/07

Exploration Licences Granted Tenement EL4572 EL4998 EL5001 EL5007 EL5012 EL5014 EL5015 EL5017 EL5033 EL5035 EL5045 EL5046 EL5052 EL5055 EL5056 EL5060 EL5071 EL5076

Primary Owner Perseverance Exploration Pty Ltd Swancove Enterprises Pty Ltd Swancove Enterprises Pty Ltd St Barbara Ltd St Barbara Ltd St Barbara Ltd St Barbara Ltd Uranium Oil & Gas Ltd Syndicated Resources Exploration Pty Bendigo Mining Ltd Jabiru Metals Ltd Marlow, Alan Gerald Perseverance Mining Pty Ltd Kimba Resources Pty Ltd Kimba Resources Pty Ltd Navarre Discovery No 1 Pty Ltd Pacific Resources Mining Corporation P/L Newcrest Operations Ltd

Application Date 18/4/01 26/9/06 5/10/06 6/11/06 6/11/06 6/11/06 6/11/06 30/11/06 15/2/07 13/3/07 27/3/07 27/3/07 20/4/07 27/4/07 27/4/07 21/5/07

Grant Date 20/6/07 13/9/07 13/9/07 1/8/07 1/8/07 1/8/07 1/8/07 29/8/07 6/6/07 6/6/07 20/6/07 29/8/07 18/7/07 13/9/07 13/9/07 18/7/07

18/6/07 27/6/07

26/9/07 29/8/07

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] Roger Buckley

Minerals Development Manager

T: (613) 9658 4402 [email protected] Geoff Collins

Tenements Registration Officer

Petroleum Development Manager

T: (613) 9658 4454 [email protected]

T: (613) 9658 4406 [email protected]

Executive

Minerals Development Manager

Kathy Friday

Executive Director, Minerals and Petroleum

T: (613) 9658 4407 [email protected]

T: (613) 9658 4411 [email protected]

Manager, Coal Development

GeoScience Victoria

T: (613) 9658 4739 [email protected]

Dr. Richard Aldous

Kathy Hill

Director, GeoScience Victoria

T: (613) 9658 4562 [email protected]

Sean Rooney

Information Development Manny Hemman

Manager, Information Development

Manager, Geoscience Information

T: (613) 9658 4571 [email protected]

T: (613) 9658 4501 [email protected]

Policy Development

Alan Willocks

Peter O’Shea

Manager, Minerals Geoscience

T: (613) 9658 4525 peter.o’[email protected] Paul McDonald

Manager, Resources

T: (613) 9658 4531 [email protected] Dr. Geoff O’Brien

Manager, Energy Resources Geoscience

T: (613) 9658 4538 geoff.o’[email protected]

Jonathan Darby

Manager, Earth Resources Policy

T: (613) 9658 4855 [email protected]

Corporate Communications Damia Ettakadoumi

Communications Adviser

T: (613) 9658 4081 [email protected]

Academic Monash Earth Sciences www.earth.monash.edu.au RMIT Department of Civil and Chemical Engineering www.rmit.edu.au/eng/civil-chem Seismology Research Centre www.seis.com.au 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 and Resources, Western Australia www.doir.wa.gov.au Department of Industry, Tourism and Resources www.industry.gov.au 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

Manager, Strategic Geoscience

Geoscience Australia www.ga.gov.au

T: (613) 9658 4536 [email protected]

Mineral Resources Tasmania www.mrt.tas.gov.au

Larry Stewart

Director, Minerals and Petroleum Regulation

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

T: (613) 9658 4457 [email protected]

Peak Bodies

Minerals and Petroleum Regulation Phil Roberts

David Boothroyd

Acting Manager, Minerals and Petroleum Tenements

T: (613) 9637 9734 [email protected] 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

37