Havilah Resources NL (ASX:HAV) Quarterly Activities Report For The Period Ending April 2010
Perth, May 31, 2010 AEST (ABN Newswire) - During the quarter Havilah Resources NL (
ASX:HAV) finalised the Kalkaroo feasibility study funded by Glencore International (Glencore) for a high tonnage throughput open pit operation. This is based on a previously published resource block model containing an in situ resource inventory of 62.5 Mt @ 0.52 % Cu and 0.48 g/t Au (ASX release 7 May 2009). The feasibility study involved a rigorous study of all aspects of the Kalkaroo deposit including geological resource estimation, metallurgical recovery and processing flow sheet design, open pit mine design, capital and operating cost estimation and financial analysis. Numerous related aspects such as environmental, open pit dewatering, site works and access road upgrade were also examined, to produce a comprehensive study of the economic viability of the deposit (ASX release 8 April 2010).
Key conclusions of the feasibility study are as follows :
- Kalkaroo is a medium size copper-gold deposit containing over 320,000 tonnes of copper and almost 1 million ounces of gold, with excellent exploration upside.
- In gross shape the Kalkaroo orebody forms an arcuate, north- dipping sheet, which is disrupted by extensive faulting at its western end. The ore is sandwiched between well defined footwall and hangingwall rocks, and has preferentially replaced a favourable reactive horizon.
- The orebody shows typical supergene enrichment features in its upper part, caused by oxidation of the primary sulphides in the weathering zone. This is manifest in a stratification of the ore minerals from top to bottom, forming four main ore types dominated by - free gold, native copper, chalcocite and chalcopyrite.
- The processing plant is of conventional design, utilizing single stage gyratory crushing, single stage SAG mill grinding and flotation for a total estimated capital cost of approximately A$210 million for a 4.5 mtpa ore throughput.
- At a projected long term copper price of US$6,600 /t and gold price of US$1,000 / oz, the project produces a cash surplus of A$605 million (note that these figures are based on the taxation regime applying before commencement of the "super tax". Financial models are presently being run to determine what effect the "super tax" has on the cash surplus generated over the life of the project. A definitive answer is unlikely until the Commonwealth Government clarifies the many outstanding details of the "super tax")
- No major technical obstacles to development of the Kalkaroo orebody were identified.
Under the terms of the feasibility funding agreement, following consideration of the feasibility study report, and the results of a peer review audit, Glencore may elect to arrange project development funding in exchange for a 14% project interest and a metals off-take agreement. The project will repay project funding from profits without recourse to Havilah Resources Mutooroo Project Havilah staff and consultants continued working on a detailed resource and financial model for Mutooroo and compiling necessary information in support of a mining lease application.
Negotiations with potential funding partners for development of the project are presently clouded by the uncertainty surrounding the Commomwealth Government's proposed "super tax" on mining profits.
Benagerie Project
Late in the quarter access for heavy equipment was finally possible after the heavy rains and flooding from earlier in the year, receded. The Company once again continued with its experimental downhole mining method, which involves air-lifting of slurried silts that host the base of Tertiary gold mineralisation. If proven successful, this mining method will involve a much reduced capital outlay and therefore less risk to the Company, which is especially important given present uncertainties in the taxation of mining profits.
Thusfar the downhole extraction of the gold bearing silts is encouraging and several modifications have progressively improved recoveries of the material. The current terms of the Mining Lease only allow Havilah to proceed with an open pit method of mining, thus Havilah will seek PIRSA's approval to amend the Mining Lease terms to cover a downhole mining operation. Initially, this will involve preparation of new documentation and a re-evaluation of the environmental impacts. Havilah will endeavour to urgently progress this paperwork, so that it can taken advantage of the currently high gold prices.
Lilydale Iron Ore Project
A shallow reconnaissance RC percussion drilling program commenced in late February, targeting the area of highest combined gravity and magnetic response along a poorly exposed portion of the Braemar Iron Formation, where it was interpreted that the concentration of iron would be highest.
Five drillholes were completed before heavy rains in the district prematurely halted the drilling program.
Three separate areas were drilled. At each location, well developed magnetite-rich ironstone was intersected.
The wide spacing of the drillholes indicates considerable tonnage potential.
Representative composite drill chip samples from the RC percussion drillholes were submitted for Davis Tube testwork at ALS Chemex laboratory in Perth. The Davis Tube analysis is designed to determine the % recovery of the magnetic minerals (in this case magnetite - Fe3O4) from the bulk sample. Chemical analysis of the resultant magnetic fraction gives the Fe content of the concentrate as well as the levels of impurity elements.
The results tabulated below show that for the three grind sizes chosen (ie 38, 75 and 106 microns), average concentrate recoveries range from 25 - 35% by weight, with 68 -70% Fe in the concentrate.
It is notable that the coarsest grind size (106 microns) results in only a minor reduction in the Fe concentrate grade from 70% to 68% Fe, but a significant increase in the amount of Fe recovered from the sample, from 25 to 35%. The favourable recoveries for the coarser grind size means that significantly less energy would be required for grinding in order to achieve satisfactory Fe recoveries.
The levels of impurity elements such as silica, alumina, phosporous and titanium in all cases are low, indicating that a high purity, high value magnetite concentrate can be produced.
Again, as in the case of Mutooroo, negotiations with potential funding partners for development of the project are presently clouded by the uncertainty surrounding the Commomwealth Government's proposed "super tax" on mining profits.
Regional Exploration
Havilah has received drilling approvals for several regional prospects, which it plans to test during the next quarter.
Curnamona Energy Limited (ASX:CUY) (Havilah 45.4% ownership)
Construction and wet testing of the well house unit to facilitate field recovery trials at the Oban uranium deposit is complete. It is expected to commission the well house on site during the next quarter, subject to timely receipt of outstanding approvals.
Geothermal Resources Limited (ASX:GHT) (Havilah 58% ownership)
Detailed interpretation of extensive seismic data for the Penola-Robe project continued in order to identify zones of higher porosity within the target Pretty Hill Formation. Panax Geothermal's success with its Salamander 1 proof of concept well has provided positive confirmation of the prospectivity of the Penola-Robe project.
Finance
As at 30 April 2010 the Company had available funds of approximately A$6.8 million. Expenditure during the quarter was spread over a number of projects, with the major expenditure being drilling at Lilydale and Kalkaroo south dome, and experimental work at Portia.
Background
Havilah Resources NL aims to become a significant producer of copper, gold, cobalt and molybdenum from its 100% owned Kalkaroo, Mutooroo and Benagerie projects, which are at advanced feasibility stage. It holds more than 6,500 km2 of surrounding tenements in the highly mineralized Curnamona Province of South Australia, where it maintains an active drilling program. Deposits of iron ore, tin and hard rock uranium have been drilled, with good exploration upside. Havilah owns strategic interests in uranium explorer, Curnamona Energy (45.4%) and hot rock geothermal explorer, Geothermal Resources (58%.)
For the complete Havilah Resources Quarterly Activities Report including maps and tables, please view the following link:
http://www.abnnewswire.net/media/en/docs/62989-ASX-HAV-178355.pdf
About Havilah Resources Ltd
Havilah Resources Ltd (ASX:HAV) is a debt free South Australian gold producer having recently financed and developed its first gold mine at Portia in north-eastern South Australia. It plans to follow on with three copper-gold-cobalt mining developments at North Portia, Kalkaroo and Mutooroo, which are underpinned by a JORC resources mineral inventory of over 1.4 million tonnes of copper, 3.6 million ounces of gold, and 18,000 tonnes of cobalt.
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