The rise of Vango is well timed...ABC report into Aust. Gold production

The rise of Vango is well timed...ABC report into Aust. Gold production.

If all goes well this year, Vango can buck the trend. No need for deep drilling. We remain the 'low hanging fruit'

http://www.abc.net.au/news/2018-03-...-deeper-looking-for-major-discoveries/9495184

Australia's major gold miners digging deeper underground in hunt for major discoveries
By Jarrod Lucas
about 8 hours ago
Updated

Photo: Australian gold miners are exploring deeper underground for the precious metal. (ABC Goldfields-Esperance: Jarrod Lucas)
The search for major gold discoveries in Australia is heading deeper than ever before, pushing technology and drillers to their limits in some of the country's most remote locations.

The challenge of digging deeper is underlined by two major gold mining operations in Western Australia's remote northern Goldfields.

The owners of Australia's deepest gold mine, the historic Gwalia mine near Leonora, have announced expansion plans that will enable mining to advance more than 2km below the surface.

Gold miner Northern Star Resources has also begun drilling what is set to be the deepest diamond-drill hole in Australian mining history.

Breaking the 3km barrier to test signs of Zodiac
Contractor DDH1 Drilling is working on the hole at the Jundee operations near Wiluna, 950 kilometres north-east of Perth, as Northern Star looks to firm up a significant new gold discovery called Zodiac.

Zodiac, just 800 metres east of existing underground workings, is described by Northern Star's executive chairman Bill Beament as a "game-changer of enormous proportions" for Jundee, which has produced more than 7 million ounces of gold over the past 22 years.

Photo: Gold in a drill core unearthed from deep drilling at the Jundee gold mine. (Supplied: Northern Star Resources)
Drilling will take about two months to complete and should reach more than 3km below the surface when finished.

The planned depth of the Jundee hole is 3,100 metres, which would better the previous Australian record of 3011.5 metres at Kalgoorlie-Boulder's world-famous Super Pit gold mine in 2015.

Deeper drilling 'increasing' with surface deposits rare
DDH1 Drilling managing director Murray Pollock, who got his start in the industry as an offsider during WA's 1960s nickel boom, said precision was key, and drillers must be almost "surgical" when working at those depths.

"At those depths you're right on the edge of drill rod capacity," he said.

"Things can go wrong quickly. It really requires a lot of attention and monitoring of what's happening to produce a good result."

Photo: DDH1 Drilling crews work at the Gruyere gold project, 200 kilometres north-east of Laverton. (ABC Goldfields-Esperance: Jarrod Lucas)
While breaking the 3km barrier is rare in Australia, it is nothing compared with Africa, where 5,000-metre holes are not uncommon because of the difference in geology.

Deeper exploration is symptomatic of a bigger problem in the Australian gold sector, which has picked most of the low-hanging fruit in terms of major gold discoveries starting on the surface.

Mr Pollock said deposits were becoming harder and more expensive to find.

"I think we will see an increasing number of deeper holes drilled," he said.

"There are not many new, high-grade ore bodies being found close to surface, but these old mining areas around the Goldfields just prove they have the life and the legs, and it's just a matter of keeping going."

Photo: St Barbara's senior resource geologist Adrian Diaz and driller Alexander Phillips at the Gwalia deep drilling site in January. (Supplied: St Barbara)
Australia's deepest mine to reach beyond 2km
DDH1 Drilling is also working on a deep drill hole at Gwalia, which is expected to cost about $1.6 million, stretch 2.95km from its collar to the target and take four months to complete.

Photo: The proposed crushing circuit that would be installed 1,400 metres below the surface at the Gwalia gold mine. (Supplied: St Barbara)
The mine owners, ASX-listed St Barbara, have also revealed plans to dramatically change the mining method at the underground operation, with Gwalia progressing more than 2km below the surface.

Gwalia was famously managed by former US president Herbert Hoover in the 1890s and restarted a decade ago.

It is considered one of the deepest trucking mines in the world, with a haulage distance of more than 10km to the surface.

The new mining plan is to introduce hydraulic hoisting — a technique where gold-bearing ore is crushed underground into a sand-like material and pumped to the surface as a slurry.

The move away from trucking is set to extend the mine life of Gwalia until at least 2031, which is good news for the 350-strong workforce.

Photo: The Gwalia gold mine near Leonora has been mined since the 1890s and the old shaft is now the only timber headframe remaining in Australia. (ABC Goldfields-Esperance: Jarrod Lucas)
"What it delivers is a wonderful life of mine, which means we can speed up production," St Barbara managing director Bob Vassie said.

"You can see we're looking to have a very long-term future there at Gwalia."

A final investment decision on the $100 million mass extraction project is expected by December.

It comes after St Barbara last year approved the $100 million Gwalia extension project, which involves adding additional ventilation shafts and cooling infrastructure over the next three years so it can mine deeper.

Golden discoveries needed to spur sector growth
Since the discovery of gold at Bathurst in 1851, which was quickly followed by Victorian gold rushes, more than 1,600 significant mineral deposits have been found in Australia.

The current rate of discovery remains high, with more than 230 deposits found in the past decade alone, including 46 gold discoveries.

Photo: Kalgoorlie-Boulder's Super Pit gold mine is Australia's second-biggest producer of the precious metal behind the Boddington operations in WA's south-west. (ABC Goldfields-Esperance: Jarrod Lucas)
MinEx Consulting managing director Richard Schodde, who is also adjunct professor at the University of Western Australia's Centre of Exploration Targeting, released a report into the 40-year outlook for the Australian gold industry in October.

The report found Australia had 76 gold mines that produced more than 10,000 ounces in 2016, pouring a combined 9.6 million ounces, the equivalent of 302 tonnes.

Professor Schodde predicted output from those mines was likely to halve over the next eight years, and only four mines were likely to be still open by 2057.

He suggested that by 2032, more than half of Australia's gold production would come from mines that were yet to be discovered.

Photo: Australia's gold production is expected to halve by 2057 unless there are new discoveries. (ABC Goldfields-Esperance: Jarrod Lucas)
Australian gold output could halve by 2057
Professor Schodde predicted by 2057 — factoring in existing mines, new projects and exploration success — Australia's gold production would fall from 9.7 million ounces last year to 4.7 million ounces.

Over the same period, revenues are projected to fall from $15.8 billion to $7.3 billion, the number of active mines will decline from 71 to 47, and the number of workers directly employed will drop from 28,000 to 7,300.

Professor Schodde said the average depth of new gold discoveries between 2010 and 2016 was 60 metres, but he believed the move to exploring under progressively deeper cover would only get worse over time for Australia and Canada.

Photo: Haul trucks line up to carry loads of gold-bearing ore out of the Kalgoorlie-Boulder Super Pit. (ABC Goldfields-Esperance: Jarrod Lucas)
Discovery rates or productivity must increase, or both
Association of Mining and Exploration Companies chief executive Warren Pearce said deeper drilling was a sign of things to come.

"Discoveries these days are becoming more and more difficult, and the next major resource finds are going to be at greater depth," he said.

"We're looking at a situation over a 40-year outlook that says our production is going to halve unless we're able to either increase our rate of discovery by 200 per cent, or increase our productivity by 200 per cent.

"The reality is that production will start to drop unless we make really large new discoveries.

"That's where Northern Star's 3km drill hole is really exciting, because it means that companies are really striving to find that next big discovery and make that next big push for the resource sector and Australia."