Benefits of brownfield
With the many advantages of a brownfield operation – infrastructure, information and positive community relationships – not to mention a 10.1 million tonne resource – TriAusMin’s Woodlawn project is falling into place.
The pre-existing mine on the site was shut down relatively recently (1998), despite having resources still on the books, due to a combination of low commodity prices and internal company factors, rather than any real flaw with either the site or the deposit. “That’s where the walk-up opportunity presents itself for us, the fact that it wasn’t fully exploited in terms of what they had fully defined,” says managing director and chief executive officer Wayne Taylor.
It’s not just the riches left beneath the ground that stand to benefit the Sydney-based company. Crucial to TriAusMin’s plan is the presence of tailings left over from the historical setup, remnants that, by their very nature, are assets to the new operation. With the benefit of technology that was not commonplace during the life of the earlier mine, TriAusMin has plans to extract zinc, lead, copper, silver and gold into three separate concentrates from the leftover tailings: a process it is calling the Woodlawn Retreatment Project.
The JORC-compliant figures for the project are certainly impressive, with reserves of 250,000 tonnes of zinc; 147,000 tonnes of lead; 55,000 tonnes of copper; 101,000oz of gold; and 11.2Moz of silver.
Scheduling the tailings retreatment as the first part of the Woodlawn plan is pivotal to TriAusMin’s strategy.
With a relatively modest capital requirement needed to get up and running and the already-extracted ore so easily accessible, liberating minerals from the tailings “puts us into a cash flow position quite quickly, and that allows us to build off that presence and the next piece to add to it is the underground,” says Taylor.
Going underground is the eventual plan, once a little reconnaissance has been carried out.
While the site has a 10.1 million tonne JORC-compliant resource, comprised of Measured, Indicated and Inferred , Taylor says that TriAusMin “would like to see underground” before developing a mine plan that encompasses the rest of the site, an initiative to be known as the Woodlawn Underground Mining Project.
Recent drilling has shown some encouraging results with a substantial downdip extension from the previous operation discernible: a clear indication that the site’s last owners “hadn’t taken everything,” says Taylor.
“There are extensions to the mineralisation.”
A drilling program designed to shed some further light on this is planned for the new year.
The potential for a significant high-value new mine is high, says Taylor; with the high grade of material putting the in-situ dollar value of the site in the top quartile of similar sites from around the world.
The Woodlawn project reaps all the potential benefits of a brownfield site, chief among them the fact that TriAusMin has been able to take advantage of the pre-existing infrastructure, all of which is “in place and readily useable,” says Taylor. The site has power, access to water and associated infrastructure and a bituminized road to within a few hundred metres of the site.
Perhaps even more important than those hard items of infrastructure is that, unlike a more historical brownfield site, at Woodlawn TriAusMin has access to operating records taken with relatively recent technology and, to ex-employees of the previous operation, factors that Taylor emphasises are likely to de-risk the project even further by cutting down on unknowns.
“It’s a significant step in de-risking a project if you can walk into these things having a better understanding of the operating conditions,” says Taylor. “I know that if you go into a greenfield site, invariably you are surprised because something wasn’t as you thought it was going be, and in this particular case we can cover off a lot of those risks based on historical operating knowledge.
“The geology’s been drilled out and interpreted; it’s been mined before so we know the kind of issues we’ll face in mining it; it’s been processed before. Someone’s been there and done it before so it takes away a lot of that potential for surprise.”
A benefit of this specific brownfield site relates to the proximity of the town, which, until 1998, serviced the pre-existing mine. Having spent a lot of time working in some fairly remote Australian locations, Taylor is keenly aware of the benefits of the project’s location.
“We don’t have to build large transmission lines or power plants; we don’t have to build camps, we don’t have to build airstrips. We’ll be taking people from the local community and the local community is very supportive – they want to see this start up again.”
This reaction from the local community stands in contrast to other, neighboring projects, which have encountered resistance to their plans to encroach on agricultural land, an eventuality that Taylor allows can be “emotive”.
“This is an already disturbed site so we’re not going through that pain of a greenfield site. The process is less painful for us because of community support and acceptance of the fact that the site is already disturbed. [Commencing work on a greenfield site] can certainly chew up a lot of time and result in quite a delay.”
In addition, the company is finding the regulatory approval process smooth – an additional benefit of a disturbed site. “We are very close to having the approvals for both the tailings and the underground projects and there have been no significant unforeseen issues raised during the process,” says Taylor.
Turning to the future, Taylor sees a clear-cut series of steps for TriAusMin to follow.
The intention is to get the tailings operation up and running first – a project that calls for an 18-month construction lead time. “That start is predicated on the project getting financing of the build cost of AU$93 million,” says Taylor. “Once we’re in production we have cash flow, and that allows us to reinvest into the business.”
The planned development of the underground project is likely to happen in roughly the third year of production, “contingent on development costs.”
Going this route also gives TriAusMin the benefit of the fact that the plant built for the tailings operation will also be utilised as a component of the larger and more expensive underground operation.
“So it’s a ‘one plus one equals three’ approach,” says Taylor, “and I guess we have some flexibility as to when we bring the underground mine project in and, given the high grade, we want to bring that in as soon as we can.”