BeMaX Resources is fast approaching a final development decision on its Pooncarie mineral sands project following completion of several key milestones during the quarter ended December 31.
Project go-ahead is now subject only to the completion of acceptable project financing arrangements.
BeMaX achieved 100% ownership of the Pooncarie project after acquiring the remaining 25% BIP Joint Venture party, Probo Mining, from Sons of Gwalia in December for a total consideration of $14m in cash and shares.
The Pooncarie project comprises the Ginkgo and Snapper deposits, located 200km south of Broken Hill and 40km west of Pooncarie, containing two of the largest coarse-grained mineral sands deposits currently delineated in the rapidly emerging Murray Basin mineral sands province. A combined project based on these deposits would produce the high value mineral zircon in additional to the titaniferous products rutile, ilmenite and leucoxene.
The Ginkgo mine and the associated Broken Hill mineral separation plant are the first and the only fully permitted mineral sands project in the NSW region of the Murray Basin. The Snapper deposit is subject to pre-feasibility evaluation to confirm the economic value it would add to the project.
Following the consolidation of project ownership, the financial advisers to the project, ABN AMRO Australia, commenced the project financing process by releasing an information memorandum to potential debt financiers. Project finance is the final stage prior to ultimate project commitment.
BeMaX has wholly owned and joint venture interests in strategically situated tenements covering over 9500km2 and containing a global resource of over 42Mt of Heavy Mineral (HM) within the NSW area of the Murray Basin. This resource represents a significant portion of the total announced resources of 110mt of HM in the Murray Basin, and continues to increase as BeMaX further explores and defines new deposits.
Ginkgo, located 200km south of Broken Hill and 120km north of Mildura, has a proved and probable reserve of 184Mt averaging 3.1% HM and containing 5.7Mt HM. A $6m Ginkgo mineral sands project bankable feasibility study (BFS) has confirmed the project's economic viability.
The Snapper deposit, situated 10km to the south-east of Ginkgo, contains a similar HM quantity to that of Ginkgo. The inclusion of Snapper in the Ginkgo development is expected to extend the project life and add significant economic benefits. Pre-feasibility studies continued during the December quarter to upgrade Snapper’s status and prepare for full-scale feasibility work.
The Ginkgo BFS, completed in February 2002, had been prepared to the level of +/- 10% accuracy required to determine its bankability to potential financiers. Following completion of the BFS in February and prior to the release of the IM in December, BeMaX completed further capitalisation and value engineering studies for the purposes of enhancing the project status and identifying risk mitigation opportunities ahead of project commitment.
The metallurgical and engineering requirements for all products and equipment have been verified to a high level of confidence by laboratory and high capacity pilot plant testwork which is supportable by performance guarantees.
Significant improvements have also been achieved in saleable product recoveries, capital construction costs reductions through alternative flowsheet design and selection of plant, giving forecast operating costs savings for the MSP.
During the December quarter the results of the value engineering were incorporated in the definitive engineering and design phase (DEDP) conducted by Roche Mining. The engineering designs produced as a result of the DEDP process formed the basis for the tendering packages prepared and released by BeMaX in December 2002 to potential contractors.
The mining operations plan (MOP), submitted to the NSW Department of Mineral Resources (DMR) during the September quarter, has now been reviewed and accepted by the DMR.
Environmental management plans (EMPs) continued to be developed during the December quarter to meet the requirements of, and ensure compliance with, the conditions of the development consents and legislation relevant to mineral sands operations in NSW. All EMPs relating to the Ginkgo mine site development approval were submitted to the various statutory bodies and Planning NSW with the MOP in the September quarter. These were reviewed during the December quarter, and changes agreed prior to their lodgement early in 2003.
EMPs, which relate to the MSP and other aspects of the project, were also prepared during the December quarter for submission in early 2003 to Planning NSW.
A statement of environmental effects will be submitted in early 2003, accompanied by supplementary studies carried out in areas that would be affected by the modifications. It is expected that the modifications will be approved on schedule and in time for financial close in March.
During the December quarter, BeMaX and the NSW Roads and Traffic Authority continued to negotiate the final terms of the deed of agreement that will formalise the approval already agreed with the RTA for the use of an AB Triple roadtrain configuration.
During the December quarter invitations were extended to potential contractors for the transport and logistics package. Early indications are that this tender process will result in further reductions in transport costs.