Adelaide-based resource company Thor Mining have lodged a notice with the Northern Territory Government to commence gold mining operations at Spring Hill mine northwest of Pine Creek.
Thor Mining said it plans to extract near-surface gold from Spring Hill in a short-term mining operation estimated to yield between 40,000 and 45,000 ounces of gold over a 2-3 year period.
Thor hopes to start mining within 12 months, subject to regulatory approvals.
Thor executive chairman, Mick Billing, said the project would be non capital and non infrastructure intensive as ore would be processed at Toronto-listed Crocodile Gold Corporation’s existing Union Reefs gold mill 20 kms to the southeast.
Estimated mine capital costs would be around $5 million with an estimated 900,000 tonnes of near-surface ore available.
“We have been looking for some time at the viability of an accelerated development path at Spring Hill to recommence mining from this mine – last worked in the 1930s,” Billing said.
“Our studies identified an opportunity to potentially expedite early environmental and regulatory approval to mine by constraining the initial mine plan to extract only near surface oxide ore at a cut-off grade of 0.8 grams per tonne gold and to treat it off site,” he said.
“It is an opportunity to achieve an attractive early return from a very modest investment in Spring Hill, with plenty of scope to exploit this resource when Spring Hill’s deeper transition and primary ore are subject to future economic studies and permitting approval applications.
“In the interim, we have lodged a Notice of Intent with the NT’s Department of Mines and Energy to extract the near surface oxide portion of the broader and deeper Spring Hill gold resource.”
Billing told Australian Mining that the project would need around 30 staff once it was up and running.
Despite the gold price downturn in recent months which has seen job cuts and projects being scaled back, Billing said the operation was a perfect fit for Thor.
“The economics of the project still stack up,” he said.
Billing said the mining approach meant the environmental approvals process may be reduced if waste material mined along with the ore was stored in existing nearby waste dumps at Spring Hill and which did not contain primary and potentially acid forming material.
“In terms of approvals, our anticipation is that a proposed mining operation which does not require a processing plant with associated chemical storage and usage, has no requirement for a tailings storage facility and which is not expected to generate acidic liquor from waste dumps, will face comparatively fewer environmental hurdles,” Billing said.
“All we need is a waste dump, some minor pads for storage of ore, the establishment of a one km road from the pit to existing tracks and the upgrading of about 3.5 km of those tracks to the point where they meet existing public roads.”
Thor and co-venturer in Spring Hill, Western Desert Resources, signed a Memorandum of Understanding with Crocodile in April for the toll treatment of Spring Hill’s gold at Union Reefs.