Tag Archives: mine development

OZ Minerals Carapateena copper-gold mine ramp up begins

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OZ Minerals says it has now produced its first saleable copper-gold concentrate from the Carapateena underground mine, in South Australia, just over two years since the board approved the development.

The company said the first concentrate had been produced into the pre-filter press feed tank at the mine, with the achievement meeting the December quarter 2019 schedule mapped out when Board approval was given in August 2017.

Pre-production capital cost at first saleable concentrate is around A$970 million ($669 million) with 2019 growth capital spend on track for guidance of A$540-$570 million, the company said.

OZ Minerals commented: “Sufficient saleable concentrate is expected to be produced to the filter feed tank over the coming days to then complete our first concentrate press. Over 280,000 t of development ore is stockpiled on the surface as the mine now enters a faster circa 12-month ramp-up towards reaching a 4.25 Mt per annum throughput rate by the end of 2020, dependent upon the cave performing as expected.”

Chief Executive Officer, Andrew Cole, said: “This project began three years ago with initial decline works kicking off in Q3 (September quarter) 2016 followed by Mining Lease approval in April 2018 and first underground development ore in April this year.

“Today’s milestone represents the collaboration, support and hard work of a great many people including our operations and construction teams and the large number of contractors involved.”

He said the company’s key operational focus remains on underground development as the company ramps up the mine.

“The streamlined mine design with an expanded footprint will improve cave establishment, reduce risk during the ramp-up phase and may enable future annual throughput expansion opportunities as we continue to assess options to expand capacity above 4.25 Mt annually,” he said.

The company said this ramp-up period would allow it to test and optimise the plant throughout the first half of 2020 leading to gradual throughput and recovery increases to drive progressively higher output in the second half of the year. The now larger sub-level cave footprint along with an optimised mine design is expected to enable a faster cave ramp-up, provided the cave performs as modelled, the miner added, explaining that this would see the target 4.25 Mt/y run rate reached by end-2020 and the potential for a throughput boost.

Cole concluded: “Although we announce first saleable concentrate today, we have already commenced a block cave expansion scoping study looking at increasing both the life and production capacity of Carrapateena from 2025.”

Capital expenditure in 2020 will include permanent mine development, the circa-50 km Western Access Road construction and completion of conveyor installation and crusher, OZ said.

Production for 2020, as the ramp up progresses, is expected to be in the range of 20,000-25,000 t of copper and 35,000-40,000 oz of gold.

Pure Gold makes its electric investment case

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Newmont Goldcorp’s Borden development may have stolen the mine electrification limelight in the last 12-24 months in Ontario, Canada, but with this all-electric mine close to starting up, another project in the province is laying the groundwork to follow in its footsteps.

The Madsen project is a former-operating underground gold mine situated in the renowned Red Lake region. Since acquisition, Pure Gold Mining has been adding ounces to the 43-101 reserve and resource categories, while rehabilitating the old workings to generate a viable plan to re-start mining.

The February feasibility study outlined an economically sound project, costing C$95 million ($72 million) in upfront capital and returning an after-tax net present value (5% discount) of C$247 million using a gold price of $1,275/oz. This study included details of a mining and development fleet made up of a combination of diesel and battery-powered load and haul equipment.

With mine electrification still high on IM’s agenda following the inaugural Electric Mine conference in April, in Toronto, Dan Gleeson spoke with Pure Gold President and CEO, Darin Labrenz, to find out more about the company’s electric equipment plans.

IM: You recently raised C$47.5 million to continue development work and carry out further exploration at Madsen. Can you breakdown how much will go towards exploration/development?

DL: We’ve closed two raisings this year. The one earlier in the year was a C$5.2 million flowthrough raise designated for exploration. Those funds will go towards a drilling program in the order of 12,000 m directed towards those resources and discoveries that lie outside of the feasibility study mine plan…with the goal of being able to bring them into a future mine plan.

The C$47.5 million is what I would call the ‘equity component’ of a project financing package. Some of it may ultimately go into exploration.

Then, in August, we announced the $90 million project financing package with Sprott Resource Lending Corp comprised of a credit facility for $65 million, and a $25 million callable gold stream. This allows us even more flexibility on how we want to explore the exciting tenement as well as other opportunities.

IM: What type of development work is going on at Madsen currently?

DL: Last year, we conducted some trial mining, which involved extending the ramp a short distance; lateral development underneath the base of two stoping areas (as well as a couple of raises into those areas); and rehabilitation of the historical Number 2 level back to the existing shaft to provide secondary egress to the mine. We also initiated dewatering last year and have brought the water level down; right now, we’re holding it constant at about 250 m below surface. We’ve also done a lot of surface work to clean up and prepare the site for future activities.

With the debt financing now complete and a decision to construct by the board, detailed engineering in advance of site development work will commence immediately. We expect surface works and underground development to commence in Q4 (December quarter) of 2019.

IM: Based on current progress, when do you expect to produce first gold at Madsen?

DL: With access to the capital provided by the recently announced financing, the construction of the Madsen Red Lake mine is now fully funded. Combined with the equity financing, this secured approximately C$90 million of immediate funding enabling us to initiate construction and put us on track for first gold pour by late 2020.

IM: What factors came into play when deciding on the use of battery-electric equipment at Madsen?

DL: The key drivers for us were operating costs, environmental benefits and improved working conditions.

The use of electric equipment underground really eliminates a large component of the operational greenhouse gases that would be emitted from the mining operation, but also key is the reduction in ventilation requirements: the use of an electric fleet is going to require about 50% less ventilation. When you look at the life of mine at Madsen – with the combination of power and propane that would be used – you’re looking at savings of around C$41 million by going down the electrification route.

The ventilation benefits really increase with depth as you continue to push the mine down. Electrification allows the mine to push ramps down more efficiently, while reducing operating costs at the same time.

From a social, community and regulatory perspective, the move to a more environmentally friendly operating environment is also being well received.

IM: How did the company balance the capex issues with the opex benefits when choosing battery-electric haulage equipment over conventional diesel?

DL: The capex is higher for electric fleets – these costs are reducing, and I would expect to see them to continue to reduce into the future as that technology advances. Saying that, the increases in capital over diesel equipment are more than covered by the operating cost improvements that come with the reduced ventilation and heating requirements.

In an earlier study we completed we had a more pronounced combination of diesel and electric equipment. One of the things that has allowed us to further electrify this operation is the use of the existing shaft on the property. With this existing shaft, we will be transitioning to an operation that hoists ore and waste up the shaft, which reduces the haulage distance for the electric equipment. From an operational standpoint, in terms of the battery capacity and the need to recharge/replace batteries, it really advances our potential use of electric equipment.

One of the limiting factors in ramp-supported operations is ventilation. As you go deeper and deeper in a mine, you need to drive more and more air down to these depths. Ultimately, you get to a point with deepening a mine where you just cannot push enough air to clean out the diesel from the operating environment. With an electrified fleet, you can have narrower openings and you can push those ramps much deeper as the ventilation requirements are reduced.

IM: Have any investors raised concerns about this planned mine electrification?

DL: While we haven’t received any specific concerns, we have been asked about the technology’s availability and reliability. We can now point to several operations in Canada that are transitioning to electrical equipment. Many of the major equipment suppliers are also transitioning and starting to provide electrified versions of existing diesel equipment. That technology has been rapidly advancing and will continue to do so.

For us, looking to go into operations in the near-term, initially starting with the diesel equipment and transitioning into the electrical equipment reduces any risk from an availability and operating perspective.

IM: Is the move to start with diesel and go into electric also predicated on the flexibility required during development/production?

DL: It’s a few things. Primarily, when you look at the early years of mining, we are mining much shallower and the ventilation requirements are that much lower, so you see limited operational cost benefits when using electric equipment. From a capital perspective, initiating operations with diesel equipment allows us to be capital efficient, as well as equipment availability being high.

As we continue to deepen the mine, we transition into electric technology and then see operational cost improvements. This strategy also allows the industry more time to advance the electric technology.

IM: What was the reason behind the plan to use a tethered 6 t LHD close to the loading station and 6 t diesel LHDs elsewhere?

DL: The use of tethered equipment is a function of how much this 6 t LHD has to travel in the mine plan. Its purpose is to transfer muck into the loading pocket shoot, so it has a limited travel path.

On the other large LHDS, obviously we would use electric equipment should it be available at the time we need to procure it.

IM: Are you looking to use any other battery-powered or tethered equipment underground?

DL: We would look at electric equipment wherever it is practical and available. Currently utility vehicles such as man carriers, telehandlers, etc are available and will be utilised.

It will be something we consider at the time of the purchasing. We would look to use electric equipment as much as possible.

IM: Do you envisage other juniors going down a similar mine electrification route in the near-term?

DL: I believe so.

My perspective on this is that electrification of underground equipment is one of the great innovations in underground mining technology over the last decade. It has a very pronounced impact on operating costs, it obviously improves working conditions underground without the occurrence of diesel particulate matter and improves the ability to move your mine system deeper. It, importantly, also results in a real reduction in greenhouse gases, which reduces the environmental impact of underground mining.

Electrification is one of those rare cases where we see not only a strong operational reason for a move to that technology, but also a pronounced positive impact on the workforce and surrounding community.

Ivanhoe’s Kakula copper mine takes shape in the DRC

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Development is speeding up at Ivanhoe Mines’ majority-owned Kamoa-Kakula copper project in the Democratic Republic of Congo, with the first access drives approaching Kakula’s initial high-grade ore and earthworks for the surface processing plant having now commenced, the Toronto listed company says.

Mining OEMs will be getting excited too, with tenders for long-lead mining and processing equipment now issued and orders expected to be placed shortly, Ivanhoe said.

In February, Ivanhoe unveiled a prefeasibility study for a 6 Mt/y mine at Kakula, which envisaged an average annual production rate of 291,000 t of copper at a mine-site cash cost of $0.46/Ib ($1,014/t) of copper and total cash cost of $1.11/lb copper for the first 10 years of operations. Annual copper production would step up to 360,000 t by year four, the company said. This came with an initial capital cost of $1.1 billion and would result in an after-tax net present value (8% discount) of $5.4 billion factoring in an average copper price of $3.10/lb. In addition to this, the company unveiled an updated preliminary economic assessment combining both Kakula and Kamoa into an 18 Mt/y operation.

Shortly after this, various stakeholders advanced money for the project, getting Ivanhoe, as the operator, and Zijn Mining, as a partner, to the point where they were both able to fully fund their share of capital costs required to bring the mine into commercial production.

In the latest update on the project, Ivanhoe said “excellent progress” was being made on the construction of the 6 Mt/y Kakula copper mine. Initial copper concentrate production from the Kakula mine currently is scheduled for the September quarter of 2021, with the initial, five-year, detailed mine design now finalised and production scheduling in progress.

The full, detailed mine design will be included in the independent definitive feasibility study that is expected to be published early next year.

Approximately 2,500 employees and contractors now are working at the project as Ivanhoe advances construction of the project’s initial mine at the Kakula deposit.

A total of 647 m of underground development was completed last month, some 100 m more than achieved in April. Lower-grade development ore is being stockpiled on surface near the site of the concentrator plant, which will be used for plant commissioning.

“Mine access drives 1 and 2 (interconnected, parallel tunnels that will provide access to ore zones) are approximately 200 m from Kakula’s initial high-grade mining area, and these priority drives are expected to intersect the higher-grade ore in late July or early August this year,” Ivanhoe said.

The underground development work at Kakula is being performed by mining crews operating large-capacity, semi-autonomous mining equipment, such as jumbo drilling rigs and 50-t trucks (shown above).

The Kakula mine access is via twin declines on the northern side (which have been completed) and a single decline on the south side of the deposit (under development). One of the northern declines will be the mine’s primary access way, while the other will be for the ore conveyor haulage system. The southern ventilation decline will serve as a secondary access and will facilitate the acceleration of critical, early mine development.

From the bottom of the northern and southern declines, a pair of perimeter drifts will be driven to the east and west extremities of the deposit and will serve as the primary accesses to the production areas. These drifts also will be used as the primary intake and exhaust ventilation circuits and will connect with the intake and exhaust ventilation shafts. Underground access to the first raise bore ventilation shaft has been reached, Ivanhoe said. The pilot hole for the 177-m raise bore has been completed, and reaming of the 5.5-m diameter ventilation shaft is expected to be completed next month, according to the company.

The primary ore handling system will include perimeter conveyor drifts and load-out points along the north side of the deposit. The perimeter conveyor drifts will terminate at the main conveyor decline. Connection drifts between the north and south perimeter drifts will provide access and ventilation to the planned mining areas.

Around 99% of the deposit will be mined using the drift-and-fill method, which was chosen to maximise the overall extraction of Kakula ore, Ivanhoe said.

The tailings will flow through a series of cyclones at the backfill plant, and approximately 55% of the tailings will be sent back underground into the mined-out workings as paste backfill. The remaining 45% of the tailings will be pumped to a small tailings storage facility that is being designed by a team of international engineers to meet global best practices for safety, Ivanhoe said.

“The detailed design for the truck-tipping area, where underground ore will feed onto the conveyor system for transportation to surface, and the conveyor system for the main declines, has been completed and component manufacture is underway,” the company added.

Three underground mining crews are working at Kakula. Once Ventilation Shaft 1 is completed and fans have been installed, an additional three crews will be mobilised to accelerate mine development, which is scheduled for October 2019.

Development of an additional access and ventilation decline on the southern side of the Kakula orebody is progressing well and has advanced more than 200 m, Ivanhoe noted. A surface piling rig machine has been mobilised to prepare for the raise bore civil construction for Ventilation Shaft 2.

The DRA Global detailed engineering work on the project includes the engineering and design associated with all underground mining infrastructure, the concentrator plant and all supporting surface infrastructure. This engineering work is running in parallel with an independent definitive feasibility study that is expected to be completed early next year.

“An agreed, detailed budget, and construction and implementation plan is being finalised with Ivanhoe’s joint-venture partner Zijin Mining,” Ivanhoe said. “The project also will be further optimised and adjusted based on the development progress of the project and on the results of the definitive feasibility study.”

On May 22, the project’s construction team commenced breaking ground for the surface processing plant, marking the start of the concentrator construction. The Kakula concentrator will be constructed in a phased approach with two 3 Mt/y modules, as the mining operations ramp up to a full ore-throughput rate of 6 Mt/y. Kakula is expected to produce a very-high-grade copper concentrate in excess of 55% copper, with extremely low arsenic levels, according to Ivanhoe.

The processing plant flow diagrams, process control descriptions, and processing equipment lists have been completed and piping and instrumentation diagrams are being finalised, the company noted. “Tenders for long-lead items such as cone crushers, ball mills, thickeners, high-pressure grinding rolls, flotation cells, regrind mills, concentrate filter and low entrainment flotation cells, have been issued to the market and bids have been received. The Kamoa-Kakula project team in conjunction with DRA is in the process of adjudicating the tenders. Orders are expected to be placed shortly.”

In addition, the tender for the plant civil works has been issued. All bids have been received and are under adjudication. Tenders for smaller equipment for the processing plant such as agitators and samplers have been issued to the market.

Earlier this month, the Kamoa-Kakula project achieved a total of more than 14.5 million work hours free of lost-time injuries – it has been approximately seven years since the last lost-time injury occurred at the project. “This outstanding achievement reflects the dedication to a safety-focused culture of the entire Kamoa-Kakula exploration and development teams,” Ivanhoe said.

Ivanhoe also provided an update on the upgrading work at the Mwadingusha hydropower plant, which it said was progressing well. This project is important to the Kamoa-Kakula project as it is providing clean hydro-electricity to the site from the national grid.

“Construction activities at the Mwadingusha hydropower station are progressing well and Ivanhoe expects that the full upgrading and modernisation of the hydropower plant and its six generators to be completed in late 2020,” Ivanhoe said. “This upgrading work is pursuant to an agreement with the DRC’s state-owned power company, La Société Nationale d’Electricité (SNEL), and is in exchange for a guaranteed 100 MW of electricity – more than enough power for the Kakula mine. The Kamoa-Kakula project has been receiving hydroelectric-generated power from the national grid since late 2016.”

“This installation of modern power generating equipment at Mwadingusha is an important step in helping to secure long-term, sustainable and clean electricity for the Congolese people and for the development of the Kakula mine.”

The upgrading work at Mwadingusha is being conducted by engineering firm Stucky of Lausanne, Switzerland, under the direction of Ivanhoe and Zijin Mining, in conjunction with SNEL.

Work is underway on a 220-kV electrical substation at the Kakula mine that will allow the mine and processing plant to be fully powered from the national power grid. Two new Sumec generators also have been installed at Kakula to provide power to the mine in the event of any power interruptions in the national grid.

Herrenknecht brings boxhole backreaming to shaft sinking market

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Herrenknecht expects to install one of its new boxhole backreaming machines in a mine in Asia later this year, one of the company’s Mining Project Managers, Alexander Frey, told attendees at an SME technical presentation, in Denver, Colorado, last week.

Looking to produce a system able to develop ore passes with simultaneous drilling and lining, the company has adapted boxhole boring machines it has been working on for the past nine years – which use an adapted form of the pipe jacking method – and come up with the boxhole backreaming machine.

This new machine can stabilise the shaft with thrust pipes and a steel liner, which avoids collapses of the shaft or a rework, while reducing the amount of activities in the upper level during mine development.

Herrenknecht has already built one machine and tested it at a mine in the Black Forest of Germany, Frey said. This testing saw the company sink an ore pass with a 2.8 m diameter and 22 m length at an angle of 19°. During this test work in 150 MPa Gneiss rock, Herrenknecht achieved reaming rates of up to 1.3 m/h, Frey said. According to Frey, the machine, which is equipped with a cutterhead like those employed on raiseborers, can cut really hard rock.

He added that the machines would likely be used for safely and efficiently sinking ore passes with a maximum 70 m shaft length and 3 m diameter, but it could also find other industry applications.

Master Drilling edges closer to launch of MTB and BSB technologies

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The worldwide launch of Master Drilling’s Mobile Tunnel Borer (MTB) machine (pictured) is moving closer, with unveiling and commissioning set to take place next month, the company said in its latest financial results.

On top of this, the company’s Blind Shaft Boring (BSB) technology is expected to be launched in the March quarter of 2019.

This news comes amid a “satisfactory” set of financial results for the company in the six months to the end of June, where revenue increased 11.3% year-on-year to $67.4 million, operating profit rose 6% to $12.9 million and headline earnings per share decreased 10.6% to $0.059.

“The macroeconomic environment remained challenging across a number of markets during the first half of the year but our ability to report stable profitability amid tough conditions suggests that Master Drilling’s strategy does not only position the business for future growth but also supports the business throughout the economic cycle,” Danie Pretorius, CEO of Master Drilling, said.

Master Drilling said the addition of a new machine and the acquisition of the remaining shareholding in Sweden-based Bergteamet Raiseboring Europe AB drove the increase in revenue, but the strength in emerging market currencies proved challenging, with the South Africa rand accounting for a large portion of the company’s costs.

The company, however, thinks the latter will be short lived.

“Given the recent weakening of emerging market currencies, we anticipate that the adverse effect of the stronger South African rand on our business in H1 2018 will reverse in H2 2018 which, given the strength of the pipeline and new enquiries, should bode well for Master Drilling,” Master Drilling said.

Master Drilling also has some interesting technology launches on the horizon, which could provide further sales opportunities.

In February, Master Drilling announced the launch of the MTB machine for continuous mining without blasting.

The MTB can bore out an excavation of 4.5 m and/or 5.5 m in diameter at a rate that far exceeds conventional tunnel construction methods, delivering various infrastructure solutions such as for declines, ramps, haulages and contact tunnels in hard rock with compressive strengths in excess of 300 MPa (more information can be found in IM‘s May issue).

Its modular construction makes it also possible to retrofit to existing operations and major mining companies have expressed interest in deploying Master Drilling’s first MTB once commissioned.

In addition to this, the company said progress continued on the BSB technology, with a launch date of the March quarter planned.

The BSB is a mechanised system for boring a vertical shaft to a depth of 2,000 m with finished diameters ranging from 10 m to 13 m. No underground access is required for the BSB to start boring operations as a shaft sinking method.