Tag Archives: Red Mountain

BHP to sell stakes in Poitrel and South Walker Creek met coal mines to Stanmore

BHP has signed a Share Sale and Purchase Agreement to divest its 80% interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, Australia, to Stanmore SMC Holdings Pty Ltd.

Stanmore SMC, a wholly owned subsidiary of Stanmore Resources Limited, has agreed to acquire 100% of the shares in Dampier Coal (Queensland) Pty Ltd from BHP Minerals Pty Ltd, the subsidiary which holds BHP’s interest in BMC, for cash consideration of up to $1.35 billion. The purchase price comprises $1.1 billion cash on completion, $100 million in cash six months after completion and the potential for up to $150 million in a price-linked earnout payable in the 2024 calendar year.

The sale is subject to the satisfaction of certain conditions, including customary competition and regulatory approvals. This includes approval from the Foreign Investment Review Board. Completion is expected to occur in the middle of the 2022 calendar year.

The BMC portfolio includes significant infrastructure including an 8.4 Mt/y coal handling and processing plant (CHPP) at South Walker Creek (pictured), the 9 Mt/y Red Mountain CHPP (fully owned by BMC) in close proximity to the Poitrel operations, two rail loops and train loading facilities, two Marion 8050 draglines, and a fleet of excavators, dozers and haul trucks, Stanmore said.

BHP Group Limited operates BMC as part of an 80:20 joint venture with Mitsui.

BHP intends to continue operating BMC until completion and work closely with Stanmore Resources to ensure a successful transition of ownership. It will provide certain transitional services to Stanmore Resources for a short period of time after completion.

BHP’s President Minerals Australia, Edgar Basto, said: “This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community. As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions.

“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years and we are grateful for their contribution to BHP.

“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities. Stanmore Resources share our focus on safety performance and culture and support Australia’s commitments under the Paris Agreement.”

Stanmore Resources’ existing assets in Queensland’s Bowen Basin include the Isaac Plains Mine and processing facilities, the adjoining Isaac Plains East and Isaac Downs mining areas and the Isaac Plains Underground Project.

BHP, meanwhile, said the review process for its New South Wales Energy Coal is progressing, in line with the two-year timeframe announced in August 2020.

Ascot Resources considers SAMS mining method after releasing positive feasibility study

The feasibility study on Ascot Resources Ltd’s Premier and Red Mountain gold projects in the Golden Triangle of British Columbia, Canada, has shown off some compelling economics, as well as indicate potential future upside using an emerging mining method called the shallow angle mining system (SAMS).

SAMS, similar to Alimak mining, according to Ascot, is a new technology system focused on the mechanisation of ore extraction developed by Quebec-based Minrail. The system cropped up in the “value enhancement opportunities” section of Ascot’s study.

Ahead of that, the study, led by Sacre-Davey Engineering Inc, showed off some encouraging results.

Using a base case of $1,400/oz gold, $17/oz silver and a C$ to US$ exchange rate of 0.76, Premier and Red Mountain could provide a post-tax net present value (5% discount) of C$341 million ($242 million) based on initial capital expenditure of C$147 million. Life of mine (eight years) payable production came out as 1.1 Moz of gold and 3 Moz of silver with peak annual production of 180,000 oz of gold-equivalent.

The study’s mine plan generally used a combination of three mining methods: longhole (64%), inclined undercut longhole (14%) and room & pillar (12%). Minor amounts of cut and fill (2%) and development ore (8%) were also included to extract the mineral reserves of 6.2 Mt at 5.9 g/t Au and 19.7 g/t Ag.

The company assumed a “lease to own cost” for the mobile mining equipment, which primarily consisted of two scissor lifts, three jumbo drills, five haul trucks, five LHDs, 15 ventilation fans, and several other smaller supporting pieces of equipment.

Benefitting from an existing processing facility at the Premier gold project, the study envisaged using a SAG and ball milling flowsheet followed by the refurbished carbon-in-leach circuit. Over the mine life, the plant will operate 365 d/y to produce gold doré with an overall plant availability of 92% and an average throughput of 2,500 t/d, according to Ascot. In the latter part of year three, ore from the Red Mountain project will be introduced to the existing mill facility, it said.

While the economics and technical elements of the feasibility study stacked up, the company also laid out some potential “value enhancement opportunities” beyond the scope of the study.

This is where SAMS and Minrail came in.

Ascot said there was potential for reducing mining dilution and development by undertaking further studies and testing of SAMS.

“SAMS is similar to Alimak mining but at a low angle, with a central drive and long holes drilling laterally, offering the potential to significantly reduce dilution, operating costs and mine capital development costs,” Ascot said.

According to the company, the method is currently being tested by Minrail at Eldorado Gold’s Lamaque mine in Val D’or, Quebec.

A press release from Minrail posted around a year ago said Lamaque had ordered a “group of mining equipment” to undertake underground test work using SAMS at the operation.

“After an extensive review of all currently available underground mining methods and available technologies that are suited to narrow, shallow dipping deposits, Eldorado has perceived the great potential of Minrail’s technology to complement its mine development plans using SAMS, which incorporates critical mining innovations focused on safety, productivity and flexibility,” Minrail said in the statement.

The resource model at Lamaque encompasses several shallow dipping lenses that are believed to be amenable to using SAMS, Minrail added.

This test work was due to take place last year, according to the release.

Yet, in January, the Quebec government announced it would provide a C$150,000 grant to Minrail to complete a prototype SAMS system that would be installed at Lamaque.