turkey creek pit optimisation study adds 2 years mine

10 August 2015
ASX: AOH, FSE: A2O
TURKEY CREEK PIT OPTIMISATION STUDY ADDS 2 YEARS MINE LIFE
TO THE LITTLE EVA PROJECT AT CLONCURRY
•
Estimated oxide and sulphide resources within the optimum pit is 17.3 million tonnes
at 0.51% copper for 87,000 tonnes of contained copper
•
Potential to extend the life of the 7Mtpa Little Eva mine life up to 13.5 years
Altona Mining Limited (“Altona” or the “Company”) is pleased to announce the outcome of a pit
optimisation study for the newly discovered Turkey Creek deposit at the Company’s 100% owned
Cloncurry Copper Project near Mt Isa in Queensland.
The oxide and sulphide Mineral Resource at Turkey Creek that falls within the optimum pit is:
17.3 million tonnes at 0.51% copper for 87,000 tonnes of contained copper.
If only sulphide ore is considered then the Mineral Resource within the pit is:
10.6 million tonnes at 0.47% copper for 50,000 tonnes of contained copper.
These potentially mineable resources have not been classified as Ore Reserves. Metallurgical
testwork has been completed on sulphide mineralisation only. Metallurgical drilling, definitive testwork,
geotechnical and mine designs are required to bring the Mineral Resource to Ore Reserve status.
Altona will be undertaking these studies in coming months.
Integration of the Turkey Creek deposit into the Little Eva Project, which envisages a 7 million tonnes
per annum processing facility, has the potential to add up to 2.5 years mine life to the current 11 year
mine life.
Altona Mining Managing Director Dr Alistair Cowden said:
“The study demonstrates that mine life at Little Eva will easily exceed 11 years and that the mining
and treatment of the copper oxide mineralisation through the proposed Little Eva plant, even at low
recoveries, could add significant value to the project. Numerous deposits in the wider Cloncurry
Project have oxide caps and Altona will report on all oxide resources in coming months.”
“We expect that the proposed A$345 million Joint Venture envisaged in the recently announced
Framework Agreement with Sichuan Railway Investment Group will consider developing a significant
inventory of oxide across the project further enhancing the attractiveness of this major copper
development project.”
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At Turkey Creek the main copper sulphide mineralisation is capped by copper oxide mineralisation
from surface to depths of 25 to 45 metres. This material may be amenable to treatment through the
proposed Little Eva flotation circuit via sulphidisation or via the addition of a leach circuit.
The study highlights opportunity for a significant improvement in the project value as additional near
surface copper oxide mineralisation occurs at all the deposits in the project mine plan. This material
has not been included in the Definitive Feasibility Study (“DFS”). In the current plan the material is
mined early as pre-strip to access the copper sulphide zones and stockpiled for future treatment.
Turkey Creek is located 1.5 kilometres east of the planned Little Eva open pit mine and processing
plant and lies within granted Mining Leases.
Please direct enquiries to:
Alistair Cowden
Managing Director
Altona Mining Limited
Tel: +61 8 9485 2929
[email protected]
David Tasker
Professional Public Relations
Perth
Tel: +61 8 9388 0944
[email protected]
Jochen Staiger
Swiss Resource Capital AG
Tel: +41 71 354 8501
[email protected]
About Altona
Altona Mining Limited is an ASX listed company which recently sold its successful Outokumpu mine in
Finland and is now focussed on the Cloncurry Project in Queensland, Australia.
The Cloncurry Copper Project has Mineral Resources containing some 1.65 million tonnes of copper
and 0.41 million ounces of gold. The first development envisaged is the 7 million tonnes per annum
Little Eva open pit copper-gold mine and concentrator. Altona has completed a Framework Agreement
with Sichuan Railway Investment Group to fully fund and develop Little Eva. Little Eva is permitted
(1)
with proposed annual production of 38,800 tonnes of copper and 17,200 ounces of gold for a
minimum of 11 years. A Definitive Feasibility Study was published in March 2014.
Altona Mining is listed on the Australian Securities Exchange and the Frankfurt Stock Exchange.
1
Refer to the ASX release ‘Cost Review Delivers Major Upgrade to Little Eva’ dated 13 March 2014
which outlines information in relation to this production target and forecast financial information
derived from this production target. The release is available to be viewed at www.altonamining.com or
www.asx.com.au. The Company confirms that all the material assumptions underpinning the
production target and the forecast financial information derived from the production target referred to
in the above-mentioned release continue to apply and have not materially changed.
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2.
APPENDIX 1
Turkey Creek Pit Optimisation Study
Outline and Results
Pit optimisations were undertaken by independent resource consultancy Optiro Pty Ltd. Input
parameters for the pit optimisation were based on the Company’s Little Eva Project Definitive
Feasibility Study (“DFS”). Please see ASX release date 13 March 2014 for full details of this study.
Key metallurgical recovery assumptions applied are based on preliminary sighter testwork on sulphide
ore, and hypothetical estimates for copper oxide material. A conservative 50% copper recovery has
been applied for the copper oxide material.
The design and input data of the pit optimisation study is at a scoping level. With the positive outcome
of this work, the Company now propose to commence the work required to integrate the deposit into
the Little Eva DFS and convert the Mineral Resource to an Ore Reserve. Key to the impact of Turkey
Creek is to determine the amenability of the oxide mineralisation to treatment via flotation or leach.
Detailed metallurgical testwork on the sulphide ore is required to confirm initial testwork that indicates
good recoveries using the Little Eva flotation scheme.
Two scenarios were considered to assess open pit mining potential. First both oxide and sulphide
mineralisation are processed via flotation; and secondly where only sulphide mineralisation is
processed. Recoveries via sulphidisation of oxide ore were set at an arbitrary 50%.
The results for each scenario are shown below in Table 1 and the pits for each scenario are illustrated
in Figures 2 and 3.
Table 1: Pit optimisation results
Input Parameter
Units
Rock
Waste
Strip
Revenue
Processing
Mining
NPV
Tonnes
within
pit
Grade
Total
Copper
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Oxide
Fresh
Total
Oxide
Fresh
Total
Mined
Payable
Scenario
Oxide + Sulphide
Sulphide
kt
kt
Ratio
$M
$M
$M
$M
kt
kt
45,945
28,634
1.65
445.6
158.8
167.8
110
4,768
12,542
34,336
23,751
2.24
302.5
96.5
125.3
77
0
10,585
kt
17,311
10,585
% Cu
% Cu
% Cu
t
0.62
0.46
0.51
87,482
0
0.47
0.47
49,922
t
69,654
47,693
3.
Inputs
The study is based on the March 2015 resource model (refer to ASX release “Maiden Resource
Estimate for Turkey Creek” on 18 March 2015). Pit optimisations were undertaken using an NPV
Scheduler.
The major input parameters into the optimisation process are summarised in Table 2, costs have been
obtained from Altona’s internal estimates based on previous Little Eva studies.
Metallurgical testwork currently consists of sighter work on sulphide mineralisation only. As such a
conservative copper recovery (50%) has been applied to the oxide mineralisation.
Table 2: Pit optimisation input parameters
Activity
Exchange rate
Discount rate
Initial capital allowance
Sustaining capital
Dilution
Mining recovery
Mining rate - Ore movement
Rehabilitation cost
Mining costs
Recovery, fresh copper
Recovery, oxide copper
Processing cost sulphide ore
Concentrate grade
Freight, TC, rail, port
Smelter
Refining
Royalties
Copper price
Copper price
Pit slope
Units
Cost
USD : AUD
%
AUD
AUD /yr
%
%
ktpa
AUD /t waste
AUD /t
%
%
AUD
%
$ /ton con
$ /ton con
$ /lb
%
USD /tonne
USD /lb
degrees
0.8
8
0
2.93M
6
96
7,000
0.058
3.94
96
50
9.77
25
123
75
0.075
6
6,614
$3.00
43
Deposit overview
The Turkey Creek Mineral Resource is estimated at a 0.3% cut-off grade to be 21 million tonnes at
0.59% copper for 123,300 tonnes of contained copper (refer to tables 3 and 4). For a detailed
summary of the supporting data please refer to the ASX release of 18 March 2015.
The Turkey Creek deposit, while copper dominated, is interpreted as part of the broader iron-oxidecopper-gold (IOCG) style mineral system typical of the Cloncurry district. The neighbouring Little Eva
deposit is a more typical IOCG deposit with similarities to the major Ernest Henry deposit located 70
kilometres to the southeast.
The deposit extends over 1.8 kilometres in length. Mineralisation occurs at surface, is exposed in
subcrop, and is confirmed through drilling in the main zone to 140 metres vertical depth below surface.
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4.
Copper occurs predominantly as primary sulphides in fresh rock and as secondary oxide minerals
(malachite) within a near surface cap. Copper sulphide mineralisation is dominated by disseminated
chalcocite and bornite, with minor chalcopyrite, both disseminated and in carbonate veinlets.
Mineralisation is interpreted to be stratabound, hosted within a sequence of interbedded
metasediments (biotite-schists, biotite-scapolite metasediments and marble). The host rocks are
altered to carbonate and albite-hematite dominated assemblages.
The mineralised zone has a simple tabular geometry that displays strong continuity along strike and
down dip. The true width of mineralisation varies from approximately 10-30 metres (southern end) to
30-50 metres (northern end). The main portion of the deposit is oriented north-south and dips 60° to
the east. At its northern end, the strike of the mineralisation and host stratigraphy is folded sharply
east and dips steeply south. Within the broader mineralised sheet there is an upper and lower zone of
stronger copper mineralisation.
The broad widths and geometry (60° dips) of the Turkey Creek mineralisation lends itself to open pit
mining with relatively low strip ratios (Figure 3).
Confidence in the geological interpretation of the deposit is moderate to high. The spatial extent and
geometry of the deposit is well constrained by geological surface mapping and detailed logging of RC
chips, supported by soil geochemistry and geophysical interpretation. Reverse circulation drilling is
typically on a spacing of approximately 100 metres along strike and 50 metres down dip.
The deposit remains open to the east and down dip. Within the northern folded oxide pit the resource
is yet to be fully defined. Both additional drilling in this area and the completion of metallurgical
testwork on the oxide copper zones, where a conservative 50% recovery has been applied, has the
potential to further extend the pits. Drilling and testwork is planned to address these areas.
Table 3: Turkey Creek - Total Mineral Resource reported above a range of cut-off grades
Cut-off Grade
% Copper
Tonnes
(million)
30.3
0.1
26.5
0.2
23.6
0.25
R
21.0
0.3
16.7
0.4
12.5
0.5
8.3
0.6
R
Mineral Resource reported cut-off grade.
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Grade
Copper
(%)
0.47
0.52
0.55
0.59
0.65
0.71
0.80
Contained
Copper
(tonnes)
142,400
137,800
129,800
123,300
108,500
88,700
66,400
5.
Table 4: Turkey Creek deposit - Total Mineral Resource reported above a cut-off grade of 0.3%
copper
Oxide
Measured
Indicated
Inferred
Sulphide
Measured
Indicated
Inferred
All
Measured
Indicated
Inferred
Total
Tonnes
(million)
Copper
(%)
Gold
(g/t)
Contained
Copper
(tonnes)
5.2
0.2
0.64
0.61
-
32,800
1,300
13.0
3.5
0.55
0.54
-
71,000
18,200
17.7
3.4
21.0
0.59
0.58
0.59
-
103,800
19,500
123,300
Note: Totals may not match sub-totals due to rounding.
Figure 1: Location of Cloncurry Project
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6.
Figure 2: Plan of maximum NPV pit shells for the with sulphide-oxide (blue) and sulphide only
(orange) recovery scenarios
Figure 3: Cross section looking north through the main zone of Turkey Creek showing pit
shell in the main sulpdide zone of deposit
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7.
Figure 4: Location of Turkey Creek within the central portion of the Cloncurry Project
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8.
Competent Persons Statement and ASX Compliance
Competent Persons Statement: The information in this report that relates to Exploration Targets,
Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr
Alistair Cowden, BSc (Hons), PhD, MAusIMM, MAIG and Mr Roland Bartsch, MSc. BSc (Hons). Dr
Cowden and Mr Bartsch are full time employee of the Company and have sufficient experience which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Cowden and Mr
Bartsch consent to the inclusion in the report of the matters based on their information in the form and
context in which it appears.
Little Eva Project production target and forecast financial information: Information in this release
refers to a production target and the forecast financial information derived from a production target as
disclosed to the market in the ASX release “Cost Review Delivers Major Upgrade to Little Eva” dated
13 March 2014, which is available to be viewed at www.altonamining.com or www.asx.com.au. The
Company confirms that all the material assumptions underpinning the production target and the
forecast financial information derived from the production target referred to in the above-mentioned
release continue to apply and have not materially changed.
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9.
Table 3: Summary of Mineral Resource estimates for the Cloncurry Project
TOTAL
DEPOSIT
Tonnes
Grade
Cu
%
COPPER-GOLD DEPOSITS
Little Eva
105.9
0.52
A
Ivy Ann
7.5
0.57
A
Lady Clayre
14.0
0.56
A
Bedford
1.7
0.99
Sub-total
129.1
0.53
COPPER ONLY DEPOSITS
A
Blackard
76.4
0.62
A
Scanlan
22.2
0.65
Turkey
21.0
0.59
Creek
Longamundi
10.4
0.66
A
million
A
Legend
Great
A
Southern
A
Caroline
Charlie
A
Brown
Sub-total
TOTAL
Au
g/t
0.09
0.07
0.20
0.20
0.10
CONTAINED
METAL
Copper
Gold
Tonnes
tonnes
million
MEASURED
ounces
INDICATED
Grade
Cu
%
Tonnes
Au
g/t
546,000
43,000
78,000
17,000
684,000
295,000
17,000
85,000
11,000
409,000
37.1
37.1
0.60
0.60
475,000
143,000
-
27.0
-
123,000
-
69,000
0.09
0.09
Grade
Cu
%
million
INFERRED
Tonnes
Au
g/t
45.0
5.4
3.6
1.3
55.3
0.46
0.60
0.60
1.04
0.49
0.68
-
6.6
18.4
-
-
-
-
0.08
0.08
0.24
0.21
0.09
million
Grade
Cu
%
Au
g/t
23.9
2.1
10.4
0.4
36.7
0.50
0.49
0.54
0.83
0.51
0.10
0.06
0.18
0.16
0.12
0.60
0.65
42.7
3.8
0.59
0.60
-
17.7
0.59
3.4
0.58
-
-
-
-
10.4
0.66
-
17.4
0.54
94,000
-
-
-
-
-
17.4
0.54
-
6.0
0.61
37,000
-
-
-
-
-
6.0
0.61
-
3.6
0.53
19,000
-
-
-
-
-
3.6
0.53
-
0.7
0.40
3,000
-
-
-
-
-
0.7
0.40
-
157.7
286.8
0.61
0.57
963,000
1,647,000
409,000
27.0
64.1
0.68
0.63
42.7
98.0
0.62
0.55
88.1
124.8
0.59
0.57
0.04
0.04
0.05
0.05
A
This information was prepared and first disclosed under the JORC Code 2004 Edition. It has not been updated since to comply with the JORC Code 2012 on
the basis that the information has not materially changed since it was last reported. All other resources classified and reported in accordance with JORC Code
2012 edition.
Note: Tonnages are dry metric tonnes and have been rounded, hence small differences may be present in the totals.
See ASX release of 23 October 2007 and 26 July 2011 (Longamundi, Great Southern, Caroline and Charlie Brown), 23 April 2012 (Bedford, Ivy Ann and Lady
Clayre), 03 July 2012 (Blackard and Scanlan), 22 August 2012 (Legend), 27 May 2014 (Little Eva) and 18 March 2015 (Turkey Creek) for full details of
resource estimation. Little Eva is reported above a 0.2% copper lower cut-off grade, all other deposits are above 0.3% lower copper cut-off grade.
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10.

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