OceanaGold’s long dreamed of goal of reopening the rich Blackwater mine on the Reefton goldfield has moved a step nearer with an extensive report advocating the project to be technically and economically viable. BY LINDSAY CLARK.
A comprehensive 220-page preliminary economic assessment report compiled by OceanaGold and a number of consultants says a new deep Blackwater mine could produce about 55,000 to 60,000 ounces of gold annually over a 10-year mine life.
But the usual levels of confidence in estimated mineral resources standard required for mining projects are not possible at Blackwater because normal resource confirmation drilling from the surface would be simply too expensive.
So the report recommends OceanaGold spend an initial US$76 million in the first two years to develop an underground decline down alongside the unmined section of the reef. From there resource confirmation can be carried out. The company could meet these initial underground exploration costs from its own cash flow if it chose. Then a decision would be made on a full go-ahead with mining.
Blackwater’s remarkable single quartz vein Birthday Reef is almost one kilometre long along strike but with a width of less than a metre. The reef was discovered in 1905 and by the time the mine was closed by a collapsed shaft in 1951 it had reached 710 metres in depth and produced 740,400 ounces of gold. When closed there was every sign the reef went deeper.
OceanaGold was intrigued enough to drill some deep exploration said in January he expects 2015 to bring “more very strong results” with higher gold production from its New Zealand and Philippines mines and again generating significant free cash flow.
The most interesting aspects of the report are the proposals for a blend of new and old mining methods to mine the difficult narrow reef; and a plan to build a new gold processing plant at the mine mouth entry.
Until now the practical details of how the deep reef would be mined have been overlooked.
Now the OceanaGold report has put forward a practical plan.
A 3.3 kilometre long twin decline would give access from a portal on the Snowy River flats where a US$20 million processing plant would be built instead of using the gold concentrate plant at the company’s Globe-Progress mine a few kilometres north.
Each of the two decline tunnels would be four metres by four metres in size, one mainly for access, the other for ventilation.
The first use of the declines would be to give access for building an exploration drive alongside the reef. This would allow an exploration drilling platform to carry out 25 metre by 50 metre spaced drilling, eventually covering the first 200 metres below the old level 16.
This should prove up enough ore resource for the first four years of life for the new mine and increase confidence about reserves.
Conventional mechanised development mining equipment would be used to move rock and ore to the surface. An Atlas Copco ST1030 loader with a 10 tonne payload plus a Sandvik TH320 20 tonne payload haul truck are suggested as key equipment.
A spiral decline from the end of the access decline would be built down to within 100 metres of the reef. The spiral would give access to new development levels each 100 metres downwards along the 900 metre length of reef and about 20 to 30 metres out from the reef. Cross-cut tunnels every 60 metres would give access to the gold ore.
Because the reef is known historically to vary in width from 0.2 metres to over 2.5 metres (an average of 0.64 metres wide), the ore drive will be about three metres wide.
The ore drive would be mined using the resue or split-face mining method. Miners working on the ore drive will use air-leg drills (handheld pneumatic drills supported on a leg) to lay explosives in the bluey-white coloured reef along the roof of the drive.
A two metre-deep slice of ore will fall with the blast onto a flat marker bed of cemented slurry on the floor of the ore drive.
Miners would use a rope-drawn scraper to scrape the ore to a central ore pass where it will drop to a truck for carrying to the surface.
The greywacke sandstone rock on each side of where the reef has been will then be blasted out. This rock will provide a floor in the stope once flattened and cemented for the next round of ore.
The split face firing of ore and surrounding rock, though labour intensive, will reduce dilution of the ore stream for later processing. Less waste rock is shifted out of the mine and the stope spaces are filled efficiently.
Whether OceanaGold decides to press on with the Blackwater project remains to be seen.
The assessment report says the most critical knowledge gaps for the project are associated with dewatering the historical underground workings.
Many other safety questions will need to be considered including rock stress movement from earthquakes.