GCR’s flagship copper-gold project containing a resource of 310,000 tonnes of copper and 890,000 ounces of gold within a constrained optimised open pit.
The 100%-owned Copper Hill project is well located near Molong in central New South Wales, 40 kilometres north of Newcrest Mining Limited’s Cadia operations and four hours’ drive from Sydney (Figure 1).
Copper Hill is the Company’s most advanced project being at the Pre-feasibility Study (PFS) stage.
It is typical porphyry copper-gold system containing several adjacent mineralized zones, most of which remain open at depth, and in some cases also along strike. Global resources of 87 million tonnes (Mt) at 0.32 percent (%) copper (Cu) and 0.27 grams per tonne (g/t) gold (Au) have been outlined by drilling to date with strong potential for further resource growth through exploration.
Importantly the Copper Hill and Buckleys Hill deposits contain higher grade resources totaling 28Mt at 0.56% Cu and 0.53 g/t Au concentrated in the upper portions of the mineralised system and open at depth. Consequently the bulk of this resource is potentially extractable by open pit mining. The project also enjoys excellent infrastructure and support from by the Molong community.
Prior to 2015 project activities focused on development of the global (0.3% Cu) resource. Given the relatively low grade of this resource and modest metal recoveries this led to considering relatively large throughput (5 – 10 Mt per year) operations. The results indicated that while the project was technically feasible it required additional resources and/or strong commodity prices to be financially robust.
During the first quarter of 2015 Golden Cross Resources undertook a Scoping Study on a 2 – 3 Mtpa operation extracting the higher grade, relatively shallow, portion of the deposit. This study sought to leverage off;
- Improved geological understanding of the deposit controls and internal geometry through detailed geological mapping, structural analysis and geo-metallurgical assessment work by 360 Geosciences and GCR staff.
- The higher grade resources commence at the top of the deposits and are most extensive in the upper portions of the resource.
- Recoveries of copper and gold for the higher grade resources are materially better than for the global resource – >85% for copper and >80% for gold compared with average recoveries of 75% for copper and 45% for gold in the global resource.
- More consistent and improved quality of concentrate from the higher grade mineralisation.
- Improved prices for equipment and services flowing from reduced project activity in the resources sector and the Australian economy overall.
2015 Scoping Study
The Scoping Study focused on the extraction of higher grade, better performing mineralization and treatment through a 2 – 3 Mtpa process plant utilizing the well proven floatation process to produce a copper-gold concentrate for sale. The study leveraged off previous work, in particular the Scoping Study completed by Calder Maloney in 2010, with emphasis on leveraging off recent work and the intrinsic characteristics of the higher grade ore as well as utilizing fit for purpose equipment and infrastructure and current contract and material supply costs.
The study involved a resource estimate based on the improved geological understanding, up-dated mining study and strategic production schedules, revised capital costs for 2 – 3 Mtpa process plant and associated infrastructure and up-dated operating costs using current rates for mining services and power.
Geology and Resources
The Copper Hill Project is located near the northern end of the Molong Rise (Figure 3) within the Lachlan Fold Belt and consists of Ordovician to early Silurian Molong Volcanics interpreted as an ancient island arc system that has been intruded by many small stock-like dioritic to dacitic bodies from Ordovician to Middle Devonian times (Chivas and Nutter 1975).
North-south and north-northwest trending structures bound the Molong Volcanic Rise, while northwest trending cross lineaments are interpreted as former transverse fault systems (the Lachlan Transverse Zone and the less understood Nyngan/Hunter Transverse Zone). The corridor formed by the Lachlan Transverse Zone encloses many significant copper-gold porphyry deposits and hence it is considered to be one of the controls for these deposits within the region.
Significant porphyry gold-copper mineralisation such as Cadia, Ridgeway, Cargo and Copper Hill, and intrusive-related skarn gold + copper mineralisation such as Browns Creek and Junction Reefs are hosted by the Molong Volcanic Belt. Numerous smaller workings, mineral occurrences and advanced exploration prospects demonstrate the widespread influence of mineralising processes along the Molong Volcanic Belt.
Porphyry related copper-gold mineralisation at Copper Hill occurs primarily within and associated with multiphase calc-alkaline tonalite porphyry intrusions over an area of 4 square kilometres, and extending into Fairbridge Volcanics wall rock.
Five mineralisation stages and one supergene stage have been identified in recent work based on inspection of oriented diamond drill core and surface mapping, linking specific mineral species occurrences and associated porphyry system vein sets to corresponding northwest, north-south and northeast structural trends (with reference to Copper Hill Local Grid – CHG). In general the copper and gold grades are determined by the abundance of chalcopyrite + bornite, that overprint and commonly lie within, earlier sheeted and stockwork quartz magnetite veining. The higher grade zones are generally associated with more intense veining (generally stockworks) and lower grade zones with less intense veining. The association between mineral species (in particular chalcopyrite + bornite), vein styles, sample copper and gold grades and prevailing local structural trends has been used in the current study as a basis to model mineralisation domains to constrain resource estimation.
The higher grade zones typically contain moderate to intense stockwork veining and occur in areas where concentrated northwest structures and veins intersect north-south structures and can be continuous over strike lengths of 500 metres (see Figure 5) and at least 200 metres down dip. The highest grade cores of these zones are interpreted to plunge steeply to the north parallel to the intersection of the dominant NW and N-S mineralised structures.
Drill intercepts cutting these “cores” can deliver high grade copper and gold results over broad intervals as shown by GCHD 470 which intersected 155 metres at an average grade of 0.93% Cu and 2.6 g/t Au including 60 metres at 1.83% Cu and 5.4 g/t Au (See Figure 4). Future drilling will target the extensions of these high grade zones, mainly down plunge.
Alteration and mineralisation at Copper Hill occurs over substantial spatial and temporal spans across the porphyry-epithermal continuum. Alteration style is directly linked to mineralisation/vein style.
The updated Copper Hill Scoping Study is based on the updated JORC 2012 compliant Resource Estimate released to ASX on 24 March 2015. This estimate builds on the improved geological understanding of the controls on the mineralisation overall and honours the structural controls and geology of higher grade mineralisation. The results are summarised below in Table 1.
The 28Mt higher grade resource highlighted in Table 1, and its Indicated and Inferred Mineral Resource components calculated using a 0.4% copper cutoff, is a primary input to the Scoping Study.
Auralia Mining Consulting Pty Ltd (Auralia) completed scoping level Mining Studies based on the 24 March 2015 up-dated resource model and revised mining inputs reflecting current market conditions. Yearly strategic schedules were generated for both 2Mtpa and 3Mtpa throughput options using updated pit optimisations and provided mine lives of 13 and 9 years for the 2Mtpa and 3Mtpa options respectively. Yearly grade profiles for copper and gold are shown in Figure 5.
Extended higher grade profiles for both copper and gold in the early years of operation show the benefit of the updated resource model and geological interpretations.
Significant mineralisation remains outside the Revenue 1 Factor pit shell defined for the Scoping Study as shown in Figure 4. This highlights the potential to increase the material within the pit shell as well as at depth. These areas will be targeted as a part of the PFS drilling.
To better represent performance of higher grade samples from Copper Hill, Golden Cross completed a review of historical metallurgical testwork results and established an updated scoping level grade/recovery relationship. This relationship honours metallurgical performance from higher grade Copper Hill samples tested in 2006 and references relevant results from other historical metallurgical testwork programs.
Figure 6 shows the yearly average copper and gold recoveries from the strategic schedules and based on applying the scoping level grade recovery relationship on a block basis as a part of the pit optimisation.
The focus on higher grade material significantly improves expected recoveries for both copper and gold, compared with the flat recoveries of 75% for copper and 45% for gold used in previous optimisations. Continued improvement in metallurgical performance is expected in the PFS as testwork programs focus on higher grade material from early in the scheduled Mine Life.
Capital Cost Estimate
CPC Engineering produced an updated Capital Cost Estimate for a 2Mtpa Concentrator Process Plant at Copper Hill. The updated Process Plant estimate from CPC Engineering was combined with Non-Process Plant or “Other” Costs from a historical project estimate (2012), to produce the overall Capital Cost Estimate Shown in Table 2.
The 3Mtpa capital cost estimate was directly factored from the 2Mtpa by Golden Cross using standard estimating methodologies.
The updated Process Plant estimate from CPC Engineering provided an approximate 20% saving in mechanical equipment costs compared with the previous 2012 estimate for 2Mtpa Concentrator Plant options and highlights the market shift that has occurred since the previous project estimate for similar fit-for-purpose equipment.
Golden Cross believes there is further potential to reduce capital costs in the Non-Process Plant or “Other” project areas and these will be targeted during the PFS to further reduce the total project capital requirements for the project.
Operating Cost Estimate
The average life of mine Operating Costs are shown in Table 3. Mining Costs are on a contract basis and reflect current market conditions, based on recent cost estimates received by Auralia. Process Plant Operating Costs were updated by Golden Cross based on historical manning level and operating cost estimates and updated power costs. Treatment and refining costs were benchmarked against current industry costs and include concentrate transport costs.
Forward Plan and Budget
The Company has developed a nine month forward work plan for the completion of a Pre-Feasibility Study into a 2 to 3Mtpa Development at Copper Hill. Funding requirements for the PFS will include costs associated with targeted exploration and infill drilling at Copper Hill, metallurgical testwork and supporting engineering studies. The key elements of this plan are summarised in Table 4 below;
Golden Cross is investigating options for funding of the PFS with the aim of commencing this study, notably resource infill and extension drilling, as soon as possible.
The favourable geological setting of Copper Hill combined with the large size of the mineralised system have long been recognised by Golden Cross.
The Ordovician Macquarie Arc consists of several volcanic belts which host world-class porphyry copper-gold deposits currently being mined at Cadia (Newcrest), Northparkes (China Molybdenum) and Cowal (Barrack).
The Molong Volcanic Belt hosts significant porphyry gold-copper deposits at Cadia, Cadia East, Ridgeway (Newcrest), Cargo (GCR), Yeoval and Copper Hill (GCR), and skarn gold + copper deposits at Browns Creek and Junction Reefs, as shown in Figure 8.
Porphyry copper-gold deposits of the Copper Hill area occur within the corridor formed by the WNW trending Lachlan Transverse Zone. Accordingly, Golden Cross tenements within this strongly mineralised area are regarded as highly prospective for copper – gold.
The 2014-15 geological review of Copper Hill has added further to the potential of the Copper Hill mineralising system. Several areas have been identified with potential for resource expansion and discovery:
- Copper-gold mineralisation at Copper Hill as drilled to date consists of 310,000t of copper and 890,000oz. of gold hosted in a Crowded Tonalite Porphyry wall-rock. Two distinct styles of wall-rock mineralisation styles are recognised, associated with multiple intrusive phases at depth, a common characteristic of porphyry style systems.
- The earliest mineralised phase is related to sericite-pyrite-quartz “phyllic” alteration, and has distinctive distal (away from the source porphyry intrusive) chalcopyrite mineralisation with a molybdenum-rhenium-zinc association.
- The later stage overprinting mineralisation has distinctive and intense quartz (-magnetite) “potassic” alteration and sheeted veins, being a proximal association (ie close to the source porphyry intrusive) hosting chalcopyrite-bornite mineralisation with associated high gold.
- The porphyry intrusive responsible for the later stage high-grade “potassic” wall rock gold-copper mineralisation is interpreted to be younger and shallower and yet to be intersected in drill holes and provides discovery potential at depth below Copper Hill and Wattle Hill (the target being high grade “pipes” of the style being mined at Ridgeway and Northparkes).
- Drilling on section 6150N below Buckley’s Hill confirms the presence of an early phase wall-rock porphyry style copper-gold mineralised system. A nearby drill hole (GCHR190) on section 5900N also intersected copper-gold mineralisation associated with porphyry style stockwork quartz-magnetite veins with chalcopyrite. Discovery potential for high-grade gold-copper porphyry mineralisation similar to that intersected in GCHD470, exists between 5900-6150N and extending south to below Copper Hill.
While Golden Cross is currently focused on the Copper Hill Scoping Study, it is intended to assess the best options to obtain vectors to target any future exploration activities and drilling. It should be emphasised this remains a conceptual target, supported by mineralisation trends recognised in international studies of porphyry copper deposits.
Beyond the Copper Hill resource several exploration targets remain to be tested. These include; to the south:-
- Wattle Hill: moderate to high grade mineralisation intersected in previous drilling remains open in several directions
- Hayshed-Vale Head: located in a corridor that follows the southeast extrapolation of the main Copper Hill trend as indicated by surface geochemistry. Several drilled locations have returned shallow intercepts, typically 30m long with 0.3%Cu or 0.3 g/t Au grades.
- Power: a distinct under-drilled IP chargeability anomaly, with some geochemical support, located on the eastern margins of the main Copper Hill IP chargeability high, a prospective location as evidenced in other parts of the system.
- Southern Areas: surface geochemistry associated with the Gamboola Prospect. Similar occurrences in close spatial association with the Reedy Creek Iimestone (skarns?) have been documented in adjoining licences (Rowena, Printhie Propsects), but most remain untested by drilling.
and to the north of Copper Hill:-
- Shades Road: moderately elevated surface copper geochemistry and low level intercepts in shallow drilling; possibly related to a deeper source beneath the andesitic cover rocks.
- Little Copper Hill: an outlier of elevated copper, zinc and lead geochemistry, probably related to the main intrusive system at depth, where it is in contact with limestone units
- Dash: outcropping ferruginous breccia with visible malachite associated with the margins of a limestone unit, which has elevated pathfinder geochemistry (silver, arsenic), extending over 3 kilometres of strike.
- Larras Lee: a discrete zone of surface geochemistry and IP response.
These targets will continue to be prioritised for evaluation and follow-up.
R & D Activities
GCR is committed to using the best available tools and technologies to extract value from it projects, especially those which are advanced sufficiently to be in the study phase. Copper Hill is in the PFS stage and is the focus for the Company’s R&D efforts.
Prior to 2014 GCR undertook a significant amount of metallurgical testwork to determine the metal recovery characteristics and develop a suitable flowsheet for the project. At that time the focus was on maximising copper and gold recoveries from the global (lower grade) resources and the results were quite variable with a range of metal recoveries and average figures around 75% for copper and 45% for gold. This compares with around 85% copper recoveries for similar deposits in the region.
The variability is believed to be due to the mineralogical variability within and between samples due to differing physical and chemical characteristics of the mineralisation throughout the deposit.
Accordingly during 2014/15 the Company undertook further drilling to enable additional work to be done to improve the understanding of the various mineralisation types and improve their differentiation so further metallurgical work could improve overall recoveries. This work included;
- Detailed geological logging with a focus on understanding and differentiation of mineralisation.
- Multi-element analyses (35 elements) on these drill samples and selected previous drilling within the Copper Hill resources to enable the definition of “geometallurgical” ore types based on physical and chemical characteristics.
- Measurement of physical properties (magnetic, density etc) of the mineralisation types to facilitate metallurgical testwork for pre-concentration steps.
- Plan the next phase of metallurgical testwork
This work is well advanced and the next stage of metallurgical testwork is planned for the second half of 2015.
Updated June 2015.