When Independence Gold NL floated in January 2002, it had a simple objective: to find or acquire a metals mine within two years and to make money.
In the event, it has achieved that already, and more. In fact, its purchase of the Long/Victor nickel mine complex near Kambalda from WMC Resources produced a positive cash flow of $2m within a year and, according to managing director Chris Bonwick, has the capability to produce an after tax cash flow of $60m over the next five years.
The venerable Long/Victor nickel mine complex was first discovered in 1971 and has produced 5.43Mt of ore at a grade of 3.7% nickel.
The Long mine is serviced by a 970m deep shaft, while Victor is accessed by a decline that also connects to Long.
Over the years the complex has always been affected by seismicity and when WMC decided to quit its Kambalda nickel mining operations, the mine was put on care and maintenance.
However, during this period, WMC is estimated to have spent some $3m on shotcreting, shaft work and getting the mine fit to re-open.
But instead, the company sold the mine to Independence Gold in September last year and by late October the first ore was being produced by Independence Gold subsidiary, Lightning Nickel.
The nickel ore occurs in what are effectively two lava channels running over a dome. When acquired from WMC, Long/Victor had an effective diluted mining inventory of 746,345t at 3.6% nickel for 25,791t of contained metal, or the equivalent of a five year mine life.
Lightning Nickel has upgraded the equipment fleet it acquired from WMC, and has moved to owner operation, with all miners being salaried employees except for the airleg miners. The mines had been contractor mined by Eltin from 1996-1999.
The number of employees is now expected to rise from 65 to 77 by 2003-4.
The present fleet comprises two Caterpillar Elphinstone 1300 LHDs, two Elphinstone 1700 LHDs, a Toro loader, a 669C Elphinstone ejector truck and three Atlas Copco drill rigs (one twin boom and two single boom). Only the truck and the development jumbo were acquired from WMC, the balance is new.
One of the 1700 LHDs is used in the Long mine to tram ore to the shaft. All the LHDs can be operated as ride-on units, by remote line of sight or teleremote.
New on site is a Normet charge-up machine, as well as a new shotcreting machine based on a converted jumbo. Lightning Nickel also has its own shotcrete agitation truck.
Ore is being produced at 150,000tpa with two 10.5-hour shifts a day.
Mining methods vary, and include jumbo flat backing, longhole stoping, airleg mining in the upper parts of the mine and jumbo underhand stoping is planned.
This last method, if the current R&D project is successful, is expected to have a major impact on mine productivity, as it will allow two 8m pillars to be mined between levels that WMC could not do safely because of seismicity issues and that they subsequently filled with tailings.
The tailings have been consolidated and the intention is to use known tunnelling techniques to excavate the tailings in 6m slices under a roof of tunnel-style rods. These are pushed ahead into the tailings and after the tailings removal are grouted and shotcreted.
When the top of the ore block is reached, a 0.5-1m thick concrete floor or beam will be laid over the ore, using civil engineering principles.
The ore will then be mined using the flat back technique in two 4m flitches over a 200-250m length.
Once the ore is extracted, another concrete floor is laid and the process is repeated for the second pillar.
Lightning Nickel is investing $1.4m in R&D in this technique to make sure it gets it right, and is in discussion with tunnelling company Baulderstone Hornibrook about the concept.
Bonwick says if the project is successful it will allow the company to access a large number of other remnant pillars scattered around the mines.
The present figure of 113,346t of contained nickel in mine metal inventory comprises reserve and resource categories and also contains 44,359t Ni in pillars at the Long mine alone.
Seismicity
Lightning Nickel is well aware of the problems of mine-induced seismicity.
Although seismic activity is lower than in WMC’s day, because of reduced extraction rates, it has carried out geotechnical studies and developed a seismic monitoring and ground support regime to ensure predictive and safe mining.
For example, it is re-entering the old 15/2 stope left by WMC since 1993. Rehabilitation of the stope has involved a combination of shotcreting, bolts, mesh, cone bolts and cable bolts.
Underground mining manager Gavin McLeay says the mine is moving towards increased shotcreting to speed up the drilling cycle and with the high cost of shotcreting by contractors has moved towards doing its own work.
Another change has been to reduce underground shots from four a day to two a day.
Budgeted production this year is 150,000t at a grade of 3.3g/t and will include 5000t at 3.3g/t from the Gibb South deposit that lies over the Long orebody near the decline.
A spectacular face was on show during Australian Mining’s visit.
Some 2000t a month are being produced by the five airleg miners employed, currently working on the 11 level.
To date, 20% of ore has been mined outside reserves and ore contained in pillars is not counted towards these figures.
Development has also started of the Victor South orebody lying down dip from Victor. This has 155,000t of ore at 4.1% nickel and drilling revealed a high grade hit of 32.7m at 7.3% nickel (not true width).
Further ahead, Lightning Nickel believes the two lava channels containing the nickel continue down dip into adjacent ground held by Gold Fields, and has negotiated a royalty agreement covering any future mining.