Golden Cross has been stalking Australia for more than 10 years, pegging exploration tenements with undoubted potential. However, timing and commodity pricing have, until now, foiled any attempts to take a discovery into development.
The company’s 105 million tonne Copper Hill deposit, grading 0.33% copper and 0.33 gram per tonne gold, has been deemed too low grade and therefore too marginal to be developed by many.
Golden Cross managing director Kim Stanton-Cook agrees the grades are low, but is confident the project setting and metallurgical factors will prove the difference between a moneymaker and a money pit.
“Copper Hill is one of those projects that people have previously failed to appreciate,” Stanton-Cook told RESOURCESTOCKS while onsite at Copper Hill.
“It can be made to work despite the fact that it is a relatively low-grade deposit, and if we can produce 30,000t of copper a year and 60,000-80,000 ounces of gold each year at reasonable costs, then GCR will be a company that people can invest in.”
Stanton-Cook was reluctant to speak of the economics required to make Copper Hill work before completing a scoping study, but said the cost indicators to this point gave him every confidence in the project.
Copper Hill is near the regional centre of Orange, adjacent to the Mitchell Highway, and just 45km north of Newcrest’s massive 281Mt Cadia Valley gold-copper mine.
In essence the project has access to a ready workforce, established infrastructure and a proven geological setting (Copper Hill and Cadia both occur on the Molong Volcanic Belt) – an awesome position for any potential operation.
“We can see an economic model that’s rational and reasonable, that doesn’t require outrageous copper and gold prices because we’ve got a low strip ratio, good metallurgy and good infrastructure,” Stanton-Cook said.
“You couldn’t make this thing work if it was sitting out 40km from Alice Springs – you wouldn’t even think about it – but because of where it is it can be made to work.”
The prize within the established infrastructure is a decommissioned railway “in quite good nick”, which runs up to the base of Copper Hill.
“From there, it is just a simple matter of refurbishing the rail to allow us to take the product the 5km down to the trans-Australia line at Molong. That’s one alternative, the other is that we may simply truck the product down to the line,” Stanton-Cook said.
He said other major advantage the project had was its metallurgical qualities. Metallurgical work returned so far has been excellent, and when combined with a very low strip-ratio, it equals cost-efficient ore processing.
“We’ve got very encouraging results from our earlier metallurgical work and we’ve got more to do,” Stanton-Cook said.
“We’re hoping to achieve high recoveries and we’re fairly confident that with that material, we will have a relatively high grade and very clean concentrate. We’d be looking to produce concentrate at 30% copper and around 60gpt gold.
“We’re looking at better than 90% recoveries for both copper and gold – the initial studies showed high 90s for copper and low 90s for gold – and we will be looking at getting a mill that will be recovering better than 90% for both metals.
“It’s very clean and there’s no indication we’ll have any contaminants, which should make it attractive to buyers.”
Stanton-Cook was in the midst of site tours for potential offtake partners and other would-be suitors for the project when he spoke to RS and said “all options were on the table”.
The presence of infrastructure and a solid processing outlook are vital for Copper Hill’s development into a producing mine down the track. But Stanton-Cook is not counting his chickens.
Rather, he insists the focus for the time being remains on a 15,000m RC (reverse circulation) drilling program in progress, which is concentrated on proving up the resource and identifying possible extensions.
A scoping study will be completed in tandem with that drilling. Both the drilling and scoping study are expected to be tied up by the start of October, with a pre-feasibility complete by the end of the year.
“If everything is positive, then we look forward to doing a full feasibility stretching right through 2007,” Stanton-Cook said.
He said the project would receive intensive drilling throughout 2007 to reach the bankable stage.
“We really need to get the drill density up to the point where we’ve got measured and indicated resources. At the moment, we’ve got 75% inferred and 25% indicated resources, and a nominal drill spacing of 100m by 50m that needs to come down to 50m by 50m and, at places, 50m by 30m to get us to the status that we would like to be.”
Permitting, approvals and engineering process will be started in 2007 and the start-up date for mining is set for 2010.
The mine life is 10-15 years, however, with a number of early stage nearby exploration targets yet to be seriously tested, Golden Cross is hopeful of extending the mine’s existence. The company holds 15km of contiguous tenements along the Molong Volcanic Belt within the Copper Hill project area.
“I’ve said from the outset that we would continue to explore Copper Hill to add value,” Stanton-Cook said.
“It is our hope that we will be able to add to the existing resources as we go along but at this stage, we’re unable to point to a particular target and say what it might add because all the previous work, and work we’ve done, has been preliminary.
“There’s been soil sampling, there’s been shallow RAB [rotary air blast] drilling – some of that hasn’t been terribly effective – and we need to go back and do some deeper drilling in some of those areas.”
The current infill program has already branched the resource out further, with hole 107 hitting mineralisation that has not been included in the optimised pit. That hole hit 196m grading 0.8gpt gold and 0.46% copper from 154m with more assays to come.
“When we’re drilling this infill program, we’re adding to the project, not just confirming it, and we’re coming up with quite good numbers in Copper Hill terms.
“All these infill holes are adding to the resource and adding to our confidence in the project.”
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