With AurionGold intersecting further strong grades at depth at its flagship Kanowna Belle mine, located 18km north-east of Kalgoorlie, the company is deciding whether to sink an expensive shaft to extract the precious ore or to continue relying on truck haulage operations that have proved to be extremely cost-efficient to date.
AurionGold has long known that, beyond the 1km mark down, a 5-10mt resource will need to be defined to make it cost effective to consider a shaft development. At the same time, the company may have to increase its cut-off grade for underground production from 3g/t to 4g/t as depth increases below 1000m– fairly low compared to other mines in WA, which operate on 5g/t. Nonetheless, the company believes that, with a recent $3.6m upgrading to its haulage fleet and the development of a “whole of business” approach to mining, a profit margin still exists at the lower portions of the resource.
Kanowna Belle’s defined ore body (production plus reserves) of 4.1m oz currently extends to some 1200m below the surface. Deeper drilling has intersected significant mineralisation to a depth of 1300m.
One of Australia’s premier gold mines, Kanowna Belle has consistently shown reserve potential at depth. With mine development to 1020m in place, AurionGold believes that deep reserves can be cost effectively delineated. In June this year, reserves were increased by 540,000oz to 14mt at 4.7g/t gold for 2.14m oz – including the first delineated reserve in Block E (1010-1310m) as well as extensions to reserves in Block C (500-740m) and Block D. Recent drilling through the Block E reserve showed intercepts suggesting another resource of around 500,000oz.
This program of exploration drilling to the east of the Kanowna Belle ore body has included the development of two drill drives to provide underground drill access to the target zones.
The results show a significant body of favourable data to the east of blocks C and D, indicating both the potential for a new mineralised zone and the possibility of a high grade depth extension to the east of Block E. Further drilling is scheduled. Also, an extension of the drill drive from Block C is planned to explore the potential new mineralised zone.
Some of the better intersections in Block E include 27m at 4.8g/t gold at a depth of 1140m, 23m at 12.6g/t gold at 1095m, and 8m at 16.1g/t gold at 1095m. Better intersections in Block C include 5m at 79g/t gold at 670m, and 11m at 6.1g/t at 570m.
AurionGold expects the reserves in Block E to increase as a result of the additional information from exploration at depth. Most importantly, the potential new mineralised zone to the east of Blocks C and D would be easily accessible from established mine development.
These results leave the company with the need to define reserves before it can complete future mine planning and haulage decisions.
Primary access underground is via a decline. Production (in total around 1m oz) from underground is based on longhole open stoping.
Although most deep mines in WA use shafts to transport ore to the surface, AurionGold maintains truck haulage operations at Kanowna Belle. Through careful management, the company has devised a 14km underground truck haulage loop that, it says, creates greater cost benefits to a depth of around 1000m than the added expense of developing a shaft.
The circuit takes around 65 minutes to complete, using a fleet of three high performance trucks – which AurionGold recently spent $3.6m upgrading to include three owner-operated Caterpillar 775E haulers. This particular model was chosen after the company also tested owner-operated Elphinstone AD 55 trucks. During the comparative trials, used to gauge tonnes hauled versus kilometres per hour, the 775E trucks carried around 100t km/engine hour more than other combinations over the round trip. Each 775E moves 11 loads every 12 hours, loading from an automatic station 750m below the surface.
The full cost benefits from the new trucking system are anticipated to be realised in the second half of this year.
Should a shaft be necessary, it would most probably be external to the current workings, to allow continued truck haulage from the still-to-be-defined shallower resources.
Mining at a depth of 1km brings with it the additional problems of increasing rock stress. Here, blasting may initiate small seismic events, registering about 1 on the Richter scale, occasionally resulting in damage to ground reinforcement.
Kanowna Belle uses the system of pyramid mining, spreading stress points across a broad base and reducing pressure on workings. The mine’s seismic hazard plan includes reducing the ore drive size to 4.8m x 4.8m, carrying out in-cycle shotcrete covered by mesh and split sets in high risk areas, reviewing stope sizes (especially for tertiary stopes), auditing and upgrading tertiary stope pillar supports, and locating drill drives and access ways as far into footwalls as practically possible.
In the broader management sense, AurionGold teamed up with GRD Minproc Advisory to develop a systematic “whole-of-business” approach to the critical issue of risk by incorporating operational, safety and environmental processes. This major development flows on from the success of a pilot program trialled by Delta Gold in 2001, prior to the company’s merger with Goldfields Ltd earlier this year. As a result, AurionGold identified gaps in risk identification systems and established procedures to deal with them.
For example, with regard to the haulage fleet, a computerised risk reporting system was set up and training programs introduced for personnel.
Also, a plant was built at a cost of $12m to convert mines tailings into a sandstone-like paste, which is then used to fill underground voids and old tunnels. The paste, which is environmentally sound, improves stope stability and performance.
According to GRD Minproc Advisory director Phil Hearse, the integrated program sets a new standard. “Every organisation has some kind of risk process in place,” Hearse says. “Most have a range of ad hoc systems, however, it is very rare to find an operation that has one totally integrated response. More importantly, risk management is also about identifying opportunities that can have a direct and significant impact on the bottom line,” he says.