The Mount Morgan Gold & Copper Project is part of the historical Mount Morgan Mine located in central Queensland, approximately 40kms south-west of the regional city of Rockhampton.
Following mining from 1882 to 1992, considerable quantities of material in the form of either tailings or other historical mineralised waste dumps remain on site. The pyrite remaining in these dumps is acid-forming and has generated a significant environmental legacy which remains today. This legacy has become the responsibility of the State of Queensland (1993) and is managed by the Department of Natural Resources and Mining (DNRM), Abandoned Mines Division.
Over the last 20 years, several mining companies have considered the reprocessing of the tailings and dumps for economic extraction of the minerals remaining. This has proven difficult as the standard processing technology forced low recoveries due to the acidic nature of the ore, the presence of cyanide consuming copper and the non-removal of acid-forming pyrite.
Carbine Resources (through acquisition partner, Raging Bull Mining Pty Ltd) entered into formal agreements in 2014 to progressively acquire the Mount Morgan Mine from current owners, Norton Gold Fields Limited.
Carbine has developed a process flow sheet to economically recover the minerals remaining in the tailings and subsequently completed the Feasibility Study in 2016 following the completion of the Pre-Feasibility Study in 2015. The Carbine flow sheet removes copper in the form of copper sulphate, pyrite in the form of unroasted iron pyrite concentrate and gold as bullion. A large part of the process flow sheet logic is based on the production of premium quality (50% sulphur) unroasted iron pyrite concentrate which enables the commencement of the reduction of acid-forming material at Mount Morgan.
As a major part of the Definitive Feasibility Study completed in 2016, Carbine has upgraded and completed the JORC 2012 Mineral Resource and Ore Reserve estimate associated with the Mount Morgan Project. Specifically, four separate Mineral Resources (No 2 Mill, Mundic, Red Oxide and Shepherds tailings dumps) have been completed containing Indicated Mineral Resources and these have been used in the development of Ore Reserves used in the Feasibility Study Base Case.
As an extension to the Feasibility Study, Carbine has also completed a 20 year mine life case (Expanded Case) which is an expansion of the Base Case at the same production rate. Significant historical production data and reconciliation of that data enables the Company to consider this case with reasonable confidence. Detailed information relating to the Feasibility Study Base Case and Expanded Case are provided in ASX Announcement dated December 8, 2016.
Based on a 1.1Mtpa operation at Mount Morgan, the key results of the Feasibility Base Case and Expanded Case are shown below:
- AuEq ozs have been determined using the AuEq grade for each case as outlined above. The AuEq calculation has been done with respect to the commodity prices shown in point 3 below and suitable metal recovery factors. Please refer to ASX Announcement: 8 December, for detailed description of calculation of Metal Equivalents used in this table.
- Project economics shown above includes the capital payment of A$2 million to Norton Gold Fields Limited at the commencement of the project to obtain ownership rights and includes deferred payment of A$13 million from future profits.
- Payback was determined using a AUD/USD FX 0.75, and with commodity prices of US$1,200/oz gold, US$60/t unroasted iron pyrite for years 1 & 2 then US$80/t for the remaining years, US$5,800/t copper. Copper sulphate revenue is based on copper LME price for approximately 25% copper grade plus A$500/t premium for copper sulphate.
- C1 is defined as the direct cash operating costs produced, net of by-product credits, divided by the amount of payable gold produced. Direct cash costs include all mining and processing costs, general and administration costs, and transport and port costs net of revenue credits from the sale of by-products (pyrite and copper sulphate).
- AISC is the “All in sustaining cost” includes C1 costs, plus royalties and sustaining capital and are presented net of by-product credits, divided by the amount of payable gold produced.