Value at depth - gold mining in Australia

Materials World magazine
1 Aug 2011
gold mining

The escalating price of gold is encouraging companies to revisit exploration targets and mines in the
expectation that high prices will transform their economics, and that there may be more gold to be found.
Michael Forrest talks to Dr Greg Partington, Director of Operations at Auzex Resources, Brisbane, Australia.

Gold is found in many geological environments,
including Archean/ Proterozoic greenstone
belts, which account for around 35% of
global gold production. Bringing these together is
Australian exploration company Auzex Resources
Ltd, which, with its joint venture partner AIM-listed
GGG Resources Ltd, is bringing into production
its Bullabulling project in Western Australia.
Partington explains, ‘The company has an emphasis
on brownfield sites that with careful evaluation can
be brought into production at low cost, and
the eastern goldfields in Western Australia offer
many opportunities’. Bullabulling is located in the
Norseman-Wiluna Archaean greenstone belt,
a classic terrain of ultramafic and mafic volcanic
and intrusive, felsic volcanic and sedimentary
rocks separated by deformed and metamorphosed
granites. It is host to some of the largest gold and
nickel deposits in Western Australia. This assemblage
is typical of the early crustal processes that resulted
in the building of continental crust.

Checking data

Auzex acquired the Bullabulling tenements in April
2010 from Jervois Mining Ltd and immediately set about examining the large amount of data relating to
the tenement area. Gold was first discovered here in
1893 during the eastern goldfields rush, when some
714t of ore was mined at an average grade of 29.5g/t
from near surface. Over the next 100 years, a
number of companies exploring for gold and nickel
acquired and released exploration tenements as price
and market took their toll. However, in 1993, Resolute
Mining Ltd acquired the property and began
exploration. This led to mining between 1995-1997,
processing ore through a conventional carbon in pulp
leach facility. Resolute mined 7.9Mt at a grade of
1.45g/t, mainly from near surface laterites, for
371,000oz of gold. At the time, the gold price
average was around US$350. They also conducted
an assessment of the bedrock of the two operational
mines, Bullabulling project's Bacchus North and
South. This revealed a higher gold recovery than had
been predicted through exploration drilling, possibly
on account of higher density pre-production drilling
leading to the identification of high-grade areas. The
company left a legacy of 13,000 drill holes extending
over 362,000m, of which nearly 133,000m related to
diamond core and rotary air core drilling. These drill
holes were validated and cross-checked to become compliant with the JORC code for resources and
reserves by Auzex. Resolute estimated 9.3Mt at a
grade of 1.44g/t for 431,000oz of gold remained in
the Inferred and Indicated categories.

Partington continues, ‘This resource is of
paramount importance in the development of the
project’. Indeed, it allowed Auzex to move rapidly
ahead with the project with the minimum of resource
drilling for a JORC-compliant resources statement
that was announced in July 2010, which resulted in a
total resource estimation of 1,981,600oz at an
average grade of 1.48g/t using a cut-off grade of
0.7g/t. A validation diamond drill programme was
carried out to confirm this resource estimate and
target known mineralisation between the Bacchus
and Phoenix open pits of previous operations,
provide detailed structural information relating to
gold mineralisation and to map the full extent of
the Bullabulling shear zone. Partington explains, ‘The
new geological model we are following will
expand geological knowledge of the gold-bearing
system at Bullabulling’.

It’s all in the geology

The geology of the eastern goldfields is marked by
a north north-west regional trend of folding and
elongate granites separated by anastomosing shear
zones that divide the area into tectonic domains.
Bullabulling is located at the eastern margin of the
Coolgardie domain. The style of mineralisation is
typical of those of orogenic greenstone-granite
geology in that they are mainly lode type that do not
follow any particular rock type, but are the result of
fluid flow that follows active deformation and
metamorphism. As a result the gold mineralisation
can occur in any lithology and at any depth. Of
particular note are structural controls related or
adjacent to regional scale features that have been a
conduit for gold-enriched hydrothermal fluids.

Past exploration and mining has focused on a
number of occurrences within the Bullabulling shear
zone. The initial mining was undertaken at shallow
depths of around 40m, with the majority taking place
in the Phoenix and Bacchus pits. Here gold is found
in surface laterites, in the underlying supergene
weathered material and as primary mineralisation in
bedrock. The deepest pit was 80m. Resolute Mining
recovered most of the gold (about 371,000oz from
7.9Mt of ore at 1.45g/t gold) from the laterite and
supergene material for processing in the cyanide
plant. In 2002, Jevois Mining also recovered a small
amount of gold through heap leaching of the oxidised
laterite and supergene ore. In the eight other gold
occurrences in the trend, exploration has only
touched the upper oxidised horizons.

‘There is large resource and continuous
mineralisation extending 6km over the Bullabulling
shear zone that extends laterally and vertically. This
will be the focus of our on-going exploration,’ says Partington. Auzex is also encouraged by recent highgrade
drill intersections at depth within the known
mineralisation envelope. In the recent seven-hole
diamond core drill validation programme that
extended over 1,396m, values of 15m at 1.64g/t from
126m, including 4m at 4.91g/t from 132m; 14m at
1.67g/t from 77m, including 4m at 4.41 g/t from 87m
and 1.69g/t from 144m, including 1m at 37.4g/t from
144m were recorded. These are high grades in
relation to the mined grades of past operations, and
indicate that there is a lot more gold in the shear
system than has been previously recognised.

Looking ahead

Auzex will announce another resource statement in
the near future as it moves towards a bankable
feasibility study for delivery at year end. ‘The current
2,000,000oz is sufficient for an extended mine life,
although we expect to find more as we extend
exploration at depth,’ says Partington. Some
indication of what can be found is illustrated by 3D
modelling, which indicates increasing grade and
continuity at the 66m and 110m depth images
beneath the Bacchus and Phoenix pits. This follows
the model for the mineralisation on the Coolgardie
domain linked to the extensive shear zones and their
conduits. The irregular gold distribution at surface
is a result of the subsequent groundwater movement
in the supergene zone and the variable nature
of laterisation. Today’s gold price and the
computational power of 3D modelling show that
much more may be expected from these traditional
gold fields, even after 100 years of exploration.

Further information

Dr Greg Partington, Director of Operations,
Auzex Resources, 18 Anaconda Place, Sorrento,
Western Australia 6020.