The Kanmantoo project is located in the Adelaide Hills region of South Australia with potential for copper-gold and silver-lead-zinc mineralisation.
We are mindful that we are operating in and around local landowners and communities and it is our greatest wish to see all benefit from our presence.
The Kanmantoo project is located in the Adelaide Hills region of South Australia, an area which has recorded production of over 39,000 tonnes of copper metal, but remains one of the most under explored and prospective base metal provinces in Australia, showing outstanding potential for copper-gold and silver-lead-zinc mineralisation.
The project contains the old Kanmantoo Copper Mine pit, which was in operation from 1970 until 1976, but work by Hillgrove since 2004 has proved up an additional Indicated and Inferred Mineral Resource of 32.2 million tonnes grading 0.9% copper (292,200 tonnes metal) and 0.2g/t gold (191,100onnces), with a positive Definitive Feasibility Study (DFS) completed in December 2007.
Since completion of the DFS, work has continued on further optimizing and improving the project. This work has included additional drilling and internal company modelling for a mine plan based on ore amenable to conventional treatment methods and production of an export grade concentrate.
The project’s location, 55 kilometres by road from Adelaide’s CBD, brings significant inherent operating and capital cost advantages. The mine will have access to low cost grid power, water from the nearby town of Mount Barker, matched by ready 50-minute access to a major capital city. The mine is close to the export port of Port Adelaide and three kilometres from the main dual carriageway South Eastern Freeway that leads to Adelaide. The mine’s location in the Adelaide Hills is one of South Australia’s most attractive settings which will also help attract a high quality workforce.
The Kanmantoo Project has outstanding potential as one of the few remaining “brownfield” copper-gold opportunities in Australia. With licensing and planning now virtually completed, Hillgrove is seeking to partner with a group with the aim of bringing the mine into production by early 2011.
The Government of South Australia stands behind the development of a vigorous mining industry and has implemented an exceptionally supportive regulatory environment. A Mining Lease for the Project has been granted by Primary Industries and Resources South Australia (PIRSA), with the associated Mining and Rehabilitation Plan (MARP) expected to be settled by the end of 2009. The mine will be operated by Hillgrove, who will provide management and technical control, with mining operations initially outsourced to a specialist contractor.
With a large stock of local housing plus schools and hospitals nearby the project is not burdened by the capital costs suffered by the traditional remotely sited mine. It is likely the project will attract a high calibre and enjoy very low staff turnover in comparison to more remotely located peers. Approximately 150 personnel, 70 of whom will be contractors, will staff the mine.
Ample water is available to operate the mine, with the majority of its process water coming from recycled water from the District Council of Mt Barker’s Laratinga Water Treatment Plant via a 15km pipeline, providing environmental and other benefits through sustainable water resources management. The project will also use low cost grid sourced power with electricity supply arrangements well advanced with Electranet.
Most of the major elements of the Outotec SAG Mill have been delivered apart from the mill shell which is due in late 2009, however Hillgrove recently acquired the Western Australian Lennard Shelf Project’s Pillara float plant and associated mine equipment. This key purchase affords time and cost savings which will significantly reduce the projects capital expenditure. Either Mill has significant upside capacity from the planned run-of-mine throughput of 2.0 million tonnes per annum to more than 2.5 million tonnes per annum, allowing for growth in the reserves through additional discoveries. Abesque Engineering has been commissioned to dismantle, transport and reconstruct the plant at Kanmantoo in 2010 and items excess to our requirements are currently being sold.
The potential for further discoveries and growth of the global copper/gold resource at Kanmantoo is high. The deposit appears to remain open along strike and down dip where additional drilling could materially increase the resource inventory. The Project’s regional prospects range from grass roots in nature to those with significant intercepts and resources, which it is hoped will also add additional resources. Further additions to the Mineral Resources at depth and along strike of the open pit, if converted to Ore Reserves, would result in expansion of the open pit or subsequent or concurrent underground mining and increases in the mining rate.
In addition, extensive garnet mineralisation is associated with the copper/gold resource at Kanmantoo. This garnet by-product has the potential to add another significant revenue stream to potential future cash flows thereby maximising the use of the resource and making the South Australian mine potentially one of the three largest industrial garnet producers in the world. Full studies are yet to be completed, but it is believed the deposit could support annual garnet production between 100,000 to 200,000 tonnes per annum.
The Kanmantoo mine development is poised to go into production in early 2011, with virtually all pre-development work now completed for what will be Australia’s latest mid-sized copper mine.
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