Millennium Minerals
Millennium Minerals chief executive Peter Cash speaks with The Australian Mining Review about reaching its 100,000 ounce per annum run rate and what else lies on the horizon.
MILLENNIUM Minerals’ flagship Nullagine gold project in the heart of the Pilbara comprises six mining centres along a 40km corridor.
Hosting a total resource base of 1.1 million ounces of gold in the underexplored Mosquito Creek Belt, the project has produced 400,000oz since operations commenced in 2012.
Gold production has averaged at between 75,000 and 80,000 ounces per year within the 264km mining tenements.
During the September quarter the company reached its 100,000ozpa run-rate target at Nullagine three months ahead of schedule.
Millennium Minerals chief executive Peter Cash said while the company felt enormous pressure to demonstrate its growth initiatives would deliver in the long run, reaching this goal was a massive milestone for the company.
“It has been a key element of our growth strategy for the past 12 months,” Mr Cash said.
“Putting all the necessary foundations in place to achieve this goal – the exploration programs, the capital development initiatives, and the sulphide expansion study– meant that we had to navigate some pretty tough periods where our gold production was relatively low and our operating costs were high.
“We remained really focussed – we were confident that once we had the right foundations in place we would be much better positioned to deliver stronger, more reliable and lower cost gold production.
“And that work really paid off – our growth initiatives combined to deliver improved head grade, stronger mining rates and significantly increased mill throughput during the September quarter.
“There was an enormous sense of excitement and relief amongst the team when we clicked over the 100,000ozpa run rate, and the excitement continued to build as we became more and more certain that we were operating at a sustainable level and we could maintain 100,000ozpa well into the future.”
Exploration & Growth
The company’s exploration strategy has remained focussed on multiple deposits at Nullagine, including the Golden Gate and Five Mile mining centres to progress the project’s mine life.
Mr Cash said its recent discovery at Golden Eagle South was an exciting development that could be a “genuine game-changer” for the company.
“It was the result of a major new review we’ve commenced into all the historical exploration datasets that we’ve collected at Nullagine – including spectral, magnetic, surface geochemistry and radiometric survey data – and specifically looking for areas where two or more datasets converge to show potential anomalism,” he said.
“When we commenced this review, Golden Eagle South West was one of the first such areas we identified – with 3D magnetic inversion, structural analysis and soil geochemistry data all indicating compelling exploration potential.
“It was a greenfields target with no previous exploration conducted so it represented our first real test to see whether our new exploration targeting program had merit.”
Mr Cash said while the first drill hole returned a low grade of 12m at 0.87 grams per tonne (g/t) gold, there was proof gold mineralisation was in the area.
“We then drilled a second hole 80m to the north-east that intersected two significant zones of high-grade gold mineralisation, the first returning 1m at 34.00g/t gold and the second returning 5m at 17.86g/t gold, including 2m at 42.35g/t gold,” he said.
Once Millennium confirmed the presence of high-grade gold within the region, Mr Cash said the company prioritised the region for further follow up work starting with gravity surveys.
“Now that we also have confirmation that our data review can successfully deliver new exploration targets, we’re actively interrogating this data for additional opportunities,” he said.
The company’s extensive exploration program also targeted the potential for new discoveries at depth given the limited drilling below the shallow deposits, including Bartons, Hope Town, All Nations, Junction, Little Wonder, Central and Round Hill.
Bartons has paved the way for the first underground mine at Nullagine with first ore expected to be delivered to the processing plant in December.
The company has now replicated the same process at Bartons to Shearers and Golden Gate with the potential of future underground mining.
Room For Potential
Within the far north-eastern corner of the miners landholding at Nullagine was Millennium’s Golden Gate mining centre, which was being assessed as its second potential underground development after Bartons.
Mr Cash said it contained three separate gold deposits – ABC Reef, D Reef, and Harrier.
“To complete this assessment we’re currently undertaking mining studies and calculating a maiden ore reserve to determine the economic and technical merits of the proposed mine development,” he said.
“We expect these assessments will be completed towards the end of 2018, which will enable us to make a decision on whether to proceed with the mine development in early 2019.”
To date, the company has conducted deep drilling below four of Nullagine’s 30 known gold deposits with positive results.
“We believe there is really strong potential for deeper gold mineralisation to be discovered at Nullagine, we just need to get the drilling done,” he said.
“Obviously it’s hard to tell exactly where the ‘next big thing’ will be found, but deep drilling is certainly a core component of our exploration strategy going forward and we believe it will be an important source of new discoveries in the region.”
Sulphide Resources Expansion Plan
In April, the company announced its plan to expand the Nullagine gold project to process the sulphide mineral resource at a cost of $15 million.
Previously, the company had never had the ability to extract gold from the ore through its existing carbon-in-Leach processing plant.
“As part of our efforts to increase our production profile and extend the mine life at Nullagine, we commenced studies on how we could capitalise on this large sulphide mineral resource inventory,” Mr Cash said.
“Our initial studies were based on a plant configuration comprising an integrated carbon-in-leach and flotation circuit.
“However in February this year we delivered a major breakthrough, with studies indicating we could deliver a much more cost-effective solution by simply adding a small modular concentrating circuit to the tail-end of the existing CIL plant.”
He said preliminary financial estimates indicated the new processing option had the potential to substantially reduce the $40-$46 million projected capital cost of the original flotation circuit pathway to now be in the order of $15 million.
“We’ve now commenced ordering key items to complete the processing plant upgrade with the planned commencement of construction in December 2018 and commissioning targeted to commence late Q1 2019.
“The ability to process sulphide ore also opens up new exploration opportunities for Millennium, with a number of very compelling historical sulphide intercepts never previously followed-up due to the lack of a processing option.”
Moving Forward
Now that Millennium has achieved its 100,000ozpa run rate, Mr Cash said the next component of its growth strategy was aimed at expanding its mine life to more than five years.
“Based on our existing ore reserves we have a current mine life of around three years, so over the coming 12 months we will be focussed on completing the sulphide plant expansion and continuing our exploration program to deliver new discoveries,” he said.
“I am very hopeful that by the end of next year we will be well on the way to achieving our five year mine life.”