Overview
Stage 1 of the Mount Morgan Mine Project involving production of gold from tailings re-treatment is ready to proceed to development.
On 19 October the Company announced a $40.5 million capital raising with the second of two tranches subject to the approval of shareholders at the AGM scheduled for 30 November. The capital raising provides financial muscle for Norton to move its large capital projects forward with confidence, including the Mount Morgan Mine Project. Further advice will be given following the AGM .
Norton acquired the project in late 2007, completed a detailed feasibility study, and has refurbished the Kundana plant for relocation to Mount Morgan in support of the project.
Historically, Mount Morgan was in production from 1883 to
1981 and for a time was the largest gold mine in the world
- over 8 M oz of gold were produced from 41 M tonnes of ore and 345 kt of copper.
Over the period 1981 to 1991, 28 M tonnes of tailings were
re-treated before operations were suspended due to low gold
prices and high cyanide costs. The Mount Morgan tenements
incorporate 30 mining leases of around 677.5 hectares is wholly owned by Norton.
The project is in two stages
Stage 1: Relocate and reassemble the Kundana plant on site with minimal re-engineering but allowing for subsequent optimisation and expansion. The plant will draw on a large mineral inventory comprising well defined tailings and other stockpiles established from previous mining activity. Ore is milled, soluble copper is separated and then pyrite is floated off. Gold recovery is via a twin-stream (pyrite and float tails) conventional carbon-in pulp circuit. Stage 1 will process 1 Mtpa to deliver 35,000 oz pa of gold for a total cash cost of less than A$650 per oz. The budgeted capital investment is $31.7 million. A series of optimisation initiatives is planned to lift recovery and reduce operating costs.
Stage 2: Add extraction, cleaning and drying circuits to produce pyrite and copper. The Asian pyrite market is potential off takers. Off-take agreements are anticipated once Stage 1 is in operation. The low level of arsenic in Mount Morgan’s pyrite makes it attractive to this market.
In support of the project we have dismantled and refurbished
the Kundana Plant at Paddington and will re-establish this
at Mount Morgan on project go-ahead.
Mineral Resource
A program covering the first three areas for exploitation
has defined a Mineral Resource of 8.3 Mt at 1.23 g/t of gold
for 326,000 oz..
A follow up program is underway to better define
the best 8 M additional tonnes to support a 12-year operation.
We estimate there is a total of 12 Mt of tailings, 6 Mt of
slag, and a portion of the 93 Mt of mullock potentially
suitable for processing.
Operations
Mining will be by conventional truck and loader. Services and infrastructure for the site are largely in place. Processed tailings will be stored in a new Sandstone Gully tailings dam.
Project management
Norton has appointed an experienced project manager and secured services of three companies with significant experience in process plant construction and refurbishment. A core operations team has been formed and is involved with project design and set-up.
Future developments
The Mount Morgan Mine project is a significant development project for Norton. It will be a showcase of the Company’s technical capability to design, build and bring into operation a development project while working effectively with key stakeholders in an environmentally sensitive location.
Once Stage 1 is up and running the plan is to extend the project to copper and pyrite (Stage 2).
Environment, community and heritage
The proposed development and operations will assist in rehabilitation of the site. Importantly, the Queensland Government retains liability for environmental rehabilitation arising from previous mining activities.
The project is adjacent to the town of Mount Morgan, 36 km south-west of Rockhampton, Queensland. Mining is central to the area's history. The project will deliver significant benefits to the local economy and provide employment opportunities and increased opportunities for small business. It is expected to create 50 direct and 200 indirect jobs.
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