Zinc, Lead, Silver

AIMR 2013
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Zinc, Lead, Silver

Zinc (Zn) is the 23rd most abundant element in the Earth’s crust and the 4th most common metal in use after iron, aluminium and copper. The construction, transport and appliance manufacturing industries use large amounts of zinc, mainly as anti-corrosion coatings (galvanising) on sheet steel, steel beams, vehicle panels, chain-link fencing, guard rails and light posts. World-wide, galvanising accounted for 50% of the world’s total consumption of zinc (consumption data from www.ilzsg.org). The widespread use of zinc as a protective coating is mainly because of its resistance to weathering as a consequence of an electrochemical reaction known as galvanic action. Zinc is more reactive than iron or steel and consequently attracts almost all local oxidation. A protective surface layer of oxide and carbonate forms as the zinc corrodes. Zinc is used also in brass (17% of zinc consumption), other alloys (17%), with the balance in other uses such as pigments, salts, oxide additives to rubber and agricultural chemicals (16%). Zinc metal is produced in Australia at the Sun Metals Corporation Townsville refinery in Queensland (Qld) and at Nyrstar NV’s Hobart refinery in Tasmania (Tas).

The widespread occurrence of lead (Pb), its relatively simple extraction and a combination of desirable properties have made it useful to humans since at least 5000 BC. In deposits mined today, lead — mainly in the form of galena (PbS) — is usually associated with zinc, silver (Ag) and sometimes copper (Cu) and is extracted as a co-product of those metals. The largest use is in batteries for vehicles, which accounts for 80% of modern lead usage. The remaining 20% of applications include weights and ballast, underwater cable sheathing, solder, casting alloys, chemical compounds, including PVC plastics and pigments, ammunition, glassware and radiation protection. Uses for lead could increase in the future in large storage batteries used for load-levelling of electrical power and in electric vehicles. The growing popularity of electric bikes, particularly in China, has led to an increase in demand for lead to make batteries for e-bikes. More than half of the lead currently used is from recycling rather than from mining. Of the 10.62 million tonnes (Mt) produced in 2012, only 5.18 Mt was primary mine production (www.ilzsg.org). Lead recycling plants jointly owned by Nyrstar NV and the Sims Group are in Melbourne, Victoria (Vic) and in Sydney, New South Wales (NSW). Nyrstar NV’s Port Pirie smelter in South Australia (SA) is the world’s largest primary lead smelting facility and a leading global silver producer.

The relative scarcity, attractive appearance and malleability of silver make it suitable for use in jewellery, ornaments and household silverware. Its extensive use in coins throughout history has declined over the past 50 years. In Australia, the 1966 50 cent piece was the last coin in general use to contain silver (80% Ag, 20% Cu). Silver is mined and produced mainly as a co-product or by-product of lead, zinc, copper and, to a lesser extent, gold (Au). In 2012, the global supply totalled 32.6 kilotonnes (kt), of which 24.5 kt was mine production (75%) with the balance from scrap, de-hedging and government sales. Consumption was dominated by industrial applications (14.5 kt or 44%), followed by fabrication (10.1 kt or 31% — 5.8 kt for jewellery, 2.9 kt for coins and medals, and 1.4 kt for silverware), and photography (1.8 kt or 6%). The balance of consumption was dehedging of 1.3 kt (4%) and nett investment of 5 kt (15%). The use of silver in the photographic industry has declined steadily since the development of digital photography, dropping from 6.3 kt in 2002 to 1.8 kt in 2012 (source of supply and demand data: www.silverinstitute.org). Industrial uses of silver are varied and include electronics, such as batteries and solar panels, coatings for mirrors, catalysts, construction of high quality musical instruments, biocides in many different guises and many other applications. The use of silver as a biocide is growing and largely replacing the photographic industry as a major use. Silver can be used to prevent bacterial and fungal growth in plastic and textiles as well as an anti-bacterial agent in topical gels, the treatment of wounds and in water treatment.
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Resources

Australia’s total resources of zinc, lead and silver declined by around 5% in 2012. Total identified resources of zinc decreased to 92 Mt in 2012 from 97 Mt in 2011 while lead decreased by 3 Mt in 2012 to 58 Mt and silver decreased by 6 kt to 125 kt.

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Zinc

Australia’s Economic Demonstrated Resources (EDR) of zinc decreased by 3 Mt to 64 Mt in 2012 and accounted for around 27% of world economic resources which represented the world’s largest holding. Queensland continued to hold the most resource with 35 Mt, or 54% of national EDR, predominantly at the George Fisher, Mount Isa, Dugald River and Century deposits. The Northern Territory (NT) had the second largest EDR with 19 Mt, or 30% of national EDR, almost all of which is at the McArthur River deposit. Following was NSW with 5 Mt EDR, mostly at the Broken Hill and Endeavor deposits, and Western Australia (WA) with 3 Mt, partly at the Golden Grove and Sulphur Springs deposits. Total inferred zinc resources decreased by 1 Mt to 26 Mt in 2012.

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Lead

Australia’s EDR of lead decreased by 2 Mt in 2012 to 34 Mt of contained lead and constituted 59% of Australia’s total identified lead resources (58 Mt). Australia also accounted for the largest share of world economic resources for lead with 40%. Queensland retained the top ranking with its EDR of 19 Mt in 2012, representing a 55% share of national EDR, which is mostly at the Mount Isa, George Fisher and Cannington deposits. The NT lead EDR ranks second with 8 Mt or 24% of the national total, almost all of which is at the McArthur River mine. Both NSW and WA have lead EDR of 3 Mt. Australia’s Paramarginal Demonstrated Resources of lead remained at 3 Mt, which is 6% of total Identified Resources. Total Inferred Resources of lead decreased 2 Mt in 2012 to 20 Mt.

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Silver

Australia's EDR for silver decreased by 3 kt in 2012 to 85 kt, which represents 16% of world economic resources. Queensland has 47 kt or 55% of Australian EDR, mainly in the Mount Isa, Cannington, George Fisher and Dugald River deposits. The other silver EDR occurs in SA (12 kt), NSW (11 kt), the NT (8 kt), WA (3 kt) and Tas (3 kt). In SA, most silver EDR is at Olympic Dam with some at Carrapateena and Prominent Hill, while in NSW it is mostly at Bowdens, Broken Hill and Endeavor. In the NT silver EDR is nearly all at McArthur River, while in Tas it is largely at Rosebery.

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Accessible EDR

All zinc, lead and silver EDR is accessible.

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JORC Reserves

Joint Ore Reserve Committee (JORC) Code ore reserves of zinc account for around 50% of Accessible Economic Deomonstrated Resources (AEDR). This rise to 50% from the 2011 proportion of 33% can be attributed to development of resources into reserves at two large deposits. These are the Mcarthur River mine, where an expansion is proposed, and Dugald River, where a new mine is under construction. The remaining AEDR is made up of those measured and indicated resources as reported by mining companies and which Geoscience Australia considers will be economic over the long term. The zinc resource life using national AEDR divided by annual production is 42 years, but using the ore reserve and dividing by annual production gives a resource life of 21 years.

Of Australia’s AEDR of lead, 45% occurs in the JORC Code ore reserves categories. For lead, the national AEDR/production ratio is 55 years, but if the ore reserve/production ratio is used it is 25 years. For silver, JORC Code reserves account for around 36% of AEDR and resource life is 49 years for AEDR or 17 years for JORC Code reserves.
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Exploration

In 2012, exploration spending on zinc, lead and silver was $83 million, the same as in 2011. The 2012 expenditure was 11% of the total base metal expenditure of $733 million, which is slightly lower than the $741 million of expenditure in 2011. Expenditure on exploration for the three commodities made up only 2.3% of total mineral exploration expenditure of $3.7 billion (excluding petroleum), which compared closely to the 2.3% of $3.6 billion in 2011. New South Wales accounted for 36% of the total 2012 zinc, lead and silver exploration expenditure, which largely focussed on the Cobar and Broken Hill regions. WA accounted for 19% of the exploration, which was spread across the State.

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Production

According to the Bureau of Resources and Energy Economics (BREE), 2012 Australian mine production of zinc, lead and silver was 1.54 Mt, 0.62 Mt and 1.73 kt, respectively. Compared to 2011, production in 2012 increased by 2% for zinc, but remained at the same levels for lead and silver. The majority of production was from Qld, which contributed 1007 kt, or 65% to national zinc production during 2012 along with 440 kt, or 71% of lead and 1.39 kt, or 81% of silver, all very similar amounts to 2011. Elsewhere, NSW produced 142 kt of zinc and 90 kt of lead while the NT produced 199 kt of zinc and 42 kt of lead and Tas produced 88 kt of zinc and 30 kt of lead. In NSW and the NT, production of zinc and lead increased from the levels in 2011. Western Australia produced 77 kt of zinc and 8 kt of lead with lead production remaining low in WA because of continued suspension of operations at the Magellan lead mine.

The Century zinc mine, which is located close to the Gulf of Carpentaria about 250 kilometres north of Mount Isa in northwest Qld, ranks in the top few globally in zinc production. Century produced 515 kt of zinc and 21 kt of lead as metal in concentrate in 2012. The Cannington mine, also located in northwest Qld, is the world’s largest and lowest cost single mine producer of both silver and lead as well as a significant producer of zinc. Cannington produced 215 kt of lead, 1.00 kt of silver and 50 kt of zinc in 2012. Also in Qld are Xstrata’s Mount Isa operations which in 2012 produced 390 kt of zinc, 300 kt of lead and 214 tonnes of silver, including 31 tonnes in silver from purchased concentrate.

The value of Australia’s exports of zinc concentrates and refined zinc in 2012 totalled $2178 million, 10% less than the $2414 million in 2011 and 1% of the value of total merchandise exports. The amount of zinc exports increased by 1% to 1.56 Mt in 2012. The average price for zinc in 2012 was $1970 a tonne, 16% lower than the average of $2350 a tonne in 2011. The 2012 December quarter average price was 7% lower than for the December quarter in 2011.

Exports of lead totalled 688 kt in 2012, only slightly lower than in 2011. The value of the 2012 exports was 5% lower at $2080 million compared to $2181 million in 2011. The average price for lead was $2108 a tonne in 2012, down 19% on 2011. However, lead prices were only 3% lower when comparing December quarters. For silver, the average price was 8% lower at $975 a kilogram (kg) compared to the average of $1061/kg in 2011, with a 5% December on December increase. The value of Australia’s mine production of silver was $1678 million in 2012, down 9% on 2011.
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World Ranking

Based on United States Geological Survey (USGS) data for other countries, Australia has the world’s largest economic resources of zinc (27%) and lead (40%) and ranks second for silver with 16% after Peru (22%). In terms of production, Australia ranks second for zinc and lead after China and fourth for silver after Mexico, China and Peru.

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Industry Developments

Mount Isa (Qld): Mount Isa zinc-lead operations commenced production in 1931 and were acquired by Xstrata Plc in 2003. Operations currently comprise the George Fisher underground mine, the open cut mines of Black Star and Handlebar Hill, an eight million tonnes per annum (Mtpa) capacity zinc-lead concentrator, a lead smelter and a zinc filter plant. Following a major restructuring in 2009, there have been major increases in production in the Mount Isa operations, which continued into 2012. Mined volumes increased by 4% to 9.45 Mt, and ore treated increased by 1.5%, to 9.38 Mt in 2012. Higher head grades along with the increase in ore treated resulted in increases in production of zinc-in-concentrate to 390 kt from 357 kt in 2011 and lead with combined in-concentrate and bullion up to 300 kt from 269 kt in 2011. The production of silver in crude lead increased by 5% to 214 tonnes (including 31 tonnes from purchased concentrates) from 204 tonnes (including 32 tonnes in purchased concentrates) in 2011.

During 2012, Xstrata continued to expand its Mount Isa operations. The Black Star Deeps and Handlebar Hill expansions were completed in October and December 2011 respectively and expansion of the George Fisher underground mine was begun. First production from this expansion was delivered during 2012. A decision was made in May 2011 to accelerate development of the Lady Loretta deposit northwest of Mount Isa. First ore production at Lady Loretta was achieved in September 2012, with ore trucked 140 kilometres to the Mount Isa milling operations. Commercial-scale mining began in mid-2013, with production expected to ramp up to 1.6 Mtpa in 2016.

McArthur River (NT): Underground mining at McArthur River began in 1995, with open cut mining beginning in 2009. Xstrata Plc acquired the McArthur River operations in 2003. The conversion to open cut mining, combined with a concentrator expansion, increased production capacity to 2.5 Mtpa in 2009. Ore treated in 2012 was identical to 2011 at 2.34 Mt. Production of metals all increased. Because of higher head grades, zinc-in-concentrate production increased by 4% to 202 kt, production of lead-in-concentrate increased by 5% to 40.4 kt, and silver-in-concentrate production increased by 14% to 56.6 tonnes. In June 2013, the Northern Territory Government approved plans for the phase 3 expansion of the McArthur River mine. The expansion will extend mine life to 2036 and increase production from 2.5 Mtpa to 5.5 Mtpa from 2014, with concurrent increases in zinc and lead production. In May 2013, Glencore International Plc and Xstrata Plc merged to form Glencore Xstrata Plc.

Century (Qld): The Century Mine is one of the world’s three largest zinc mines, producing 4% of global production. Minerals and Metals Group (MMG), a Chinese-owned corporation, acquired the Century, Rosebery and Golden Grove mines, among others, in early 2009. Zinc production at Century Mine in 2012 was similar to that in 2011, although lead and silver production was significantly lower. During 2012, production of zinc-in-concentrate increased slightly by 4% to 515 kt, while lead-in-concentrate decreased by 19% relative to 2011 to 21.4 kt. Total payable silver production was 1.5 tonnes, a reduction of 61% relative to 2011 resulting from a decrease in grade. Mine life is expected to extend to 2016. The company is assessing possibilities to use existing mine infrastructure for phosphate production. The decrease in production associated with the anticipated closure of the Century Mine in 2016 will be replaced by development of the Dugald River deposit 220 kilometres southeast of Century.

Cannington (Qld): The Cannington deposit in northwest Qld was discovered in 1990 by BHP-Billiton, with mining operations commencing in 1997. Mine production in 2012 increased marginally by 1% to 3.17 Mt on that achieved during 2011, while mill throughput was unchanged at 3.19 Mt. Silver production was virtually unchanged at 1.00 tonne, but lead-in-concentrate decreased by 8% to 215 kt, and zinc-in-concentrate decreased by 15% to 50.4 tonnes.

Rosebery (Tas): In 2012, metals-in-concentrate produced at the Rosebery operations of MMG were 70.4 kt Zn, 20.1 kt Pb, and 1.59 kt Cu. In addition, payable silver and gold production were 73.3 tonnes and 968 kg, respectively. Although total mine production was 10% higher than that achieved in 2011, lower grades resulted in, production decreases of 13% for zinc-in-concentrate, 21% for lead-in-concentrate and 13% for copper-in-concentrate. However, payable silver and gold production increased by 37% and 25%, respectively. Rosebery currently has a mine life beyond 2020.

Golden Grove (WA): MMG Limited's Golden Grove operation consists of the Scuddles and Gossan Hill underground mines and the Scuddles processing plant. In 2012, a greater emphasis was placed on copper production, with an increase in copper-in-concentrate of 31% to 28.4 kt. Zinc-in-concentrate and lead-in-concentrate production decreased significantly by 47% and 29% to 37.4 kt and 5.3 kt, respectively. Payable silver and gold increased by 80% to 56.26 tonnes (from 31.29 tonnes in 2011) and 78% to 965 kg (from 542 kg), respectively. In the first half of 2011, approval was granted for development of a copper oxide open pit at Gossan Hill. Development of this resource commenced in 2012, with first shipment of copper concentrate in 2013. Mining of this open cut resource will reduce the need for ore from underground operations.

Broken Hill (NSW): In 2012, Perilya Limited slightly decreased ore production from its Southern Operations at Broken Hill, producing a total of 1.69 Mt, compared with 1.74 Mt in 2011. The decrease in ore production was offset by an increase in grade, resulting in increased production of produced metals. Relative to 2011, zinc-in-concentrate production increased by almost 10% to 76.9 kt and lead-in-concentrate production increased by 5% to 54.1 kt while contained silver production was 49.0 tonnes, up by 7% from 44.8 tonnes in 2011. Current reserves and resources provide for at least 10 years of production at the Southern Operations. The Potosi-Silver Peaks operation is in development, although slowed, and the historic Broken Hill North Mine is the subject of a development study.

In 2010, CBH Resources Limited continued to push towards production at its Rasp Mine development, which had been placed on care and maintenance in June 2008. Approval from the New South Wales Department of Planning and Infrastructure for development was gained in January 2011 and development was approved by the Toho Board in February. Underground development began in April 2012 and the mine was opened in July 2012, with full scale production achieved at the time of writing. On 1 July 2009, the mineral resource was 16.5Mt at 6.6% Zn, 5.1% Pb and 89 grams per tonne (g/t) Ag. Annual production is planned to be 34 kt Zn, 28 kt Pb and 34 tonnes Ag for a minimum mine life of 15 years. In September 2010, CBH Resources was taken over by Toho Zinc Company Limited of Japan.

Endeavor (NSW): In 2012, the Endeavor mine near Cobar in NSW and owned by CBH Resources, a wholly owned subsidiary of Toho Zinc Co Ltd, produced 42.9 kt zinc-in-concentrate, 20.9 kt lead-in concentrate, and 20.5 tonnes of silver1. Given these production rates, mine life is expected to be six years.

Angas (SA): Operations began at Terramin Australia Ltd’s underground Angas Mine in July 2008. The mine reached nameplate production capacity of 0.4 Mtpa in the second half of 2009. In 2012, the mine produced 0.434 Mt of ore, 5% more than 2011, and the mill processed 0.441 Mt, 10% more than 2011. A total of 62 kt of zinc concentrate and 25 kt of lead concentrate was produced, which represented an increase of 41% over 2011 for each concentrate. The total amount of payable metal produced was 25.9 kt Zn, 12.6 kt Pb, 145 tonnes Cu, 11.6 tonnes Ag and 167 kg Au. In July 2013, Terramin announced that the Angas mine was to be closed on 30 September 2013.

Mount Garnet-Challagoe-Balcooma-Thalanga (Qld): On 30 April, 2012, Kagara Ltd went into voluntary administration. At that time, Kagara Limited’s north Qld zinc interests were centred on the Mount Garnet-Chillagoe region of north Qld and included mines at Mungana, Mount Garnet and Balcooma and ore processing facilities at Mount Garnet (separate facilities for copper and polymetalic ores) and Thalanga. Limited mining and milling operations continued into the December quarter of 2012, with all operations on care and maintainance subsequently. Mill production during the March and June quarters in 2012 for all Kagara north Qld operations totalled 3.32 kt Cu and 12.27 kt Zn. Mill production in the September and December quarters totalled 1.82 kt copper concentrate, 5.06 kt zinc concentrate and 0.604 kt lead concentrate. Metal production was not reported for either of these two quarters.

Jaguar – Bentley (WA): The Jaguar project consists of three high grade deposits, Jaguar, Teutonic Bore, and Bentley, located approximately 300 kilometres north of Kalgoorlie. Perth-based Jabiru Metals Limited began operations at Jaguar in 2007 while production began at the Bentley deposit in June 2011 after it was discovered in 2008. Jabiru Metals Ltd was taken over by Independence Group in February 2011. Production in 2012 was 25.35 kt of zinc-in-concentrate, 6.19 kt of copper-in-concentrate and 26.1 tonnes of silver-in-concentrate (in the copper concentrate) from 0.380 Mt of ore milled. As the tonnage milled and zinc grade were both higher in 2012 relative to 2011, zinc-in-concentrate production increased by 104%, although copper-in-concentrate decreased by 12% because of lower grades.

Hellyer – Fossey (Tas): Following cessation of Bass Metals Limited’s mining activities at its Que River Mine in September 2010, the company concentrated on developing and mining the Fossey and Fossey East deposits, which were discovered adjacent to the historical Hellyer Mine in 2007 and 2010 respectively. Work to develop a decline to access the Fossey deposit and refurbish the Hellyer mill began in January 2011. First ore production from Fossey was achieved in March 2012. Production at Fossey for 2012 was 0.188 Mt of ore for 15.04 kt of zinc-in-concentrate, 6.61 kt of lead-in-concentrate, 0.339 kt of copper-in-concentrate, 15.29 tonnes of silver-in-concentrate, and 88.4 kg of gold-in-concentrate. Mining ceased at Fossey in May 2012.

Magellan (WA): Toronto-listed Ivernia Inc, totally owns the Paroo Station project, 30 kilometres west of Wiluna in WA. Three deposits are known in this project, Magellan, Cano and Pinzon. Lead production at the Magellan deposit, which is the largest known carbonate lead deposit in the world, began in October 2005, with concentrates sold overseas and shipped initially from the Port of Esperance. However, because of lead contamination at the port, shipping was suspended and the mine was placed on care and maintenance in April 2007. Mine production re-commenced in February 2010 following revision of concentrate transport procedures and the concentrate being shipped through the Port of Freemantle. However, production ceased again in early January 2011 following a stop order on the transportation of lead carbonate and the mine was placed on care and maintenance again. On 27 March 2013, the Western Australian Office of the Environmental Protection Authority provided final sign-off on pre-conditions and management plans to allow transport of concentrate to resume. Operations are ramping up, with nameplate production anticipated at the end of 2013.

Other zinc-lead-silver developments: There are several zinc-lead-silver prospects at various stages of development which could come on line in the next decade. The most significant of the zinc-lead projects is the MMG owned Dugald River deposit in Qld. This deposit, the first zinc deposit discovered in the Mount Isa region, was the subject of a feasibility study in 2008, which was updated in 2010. The feasibility study indicated a mine life of 23 years based on a resource of 53 Mt grading 12.5% Zn, 1.9% Pb and 36 g/t Ag. Development approval was granted in December 2011 to bring the project to full environment approval, which was achieved in August 2012. The approval for construction was given in December 2012, with binding banking agreements signed in June 2013, and an engineering, procurement and construction contract let in May. However, in September 2013, this contract was terminated because geotechnical studies identifed complexities in the orebody, which resulted in some surface construction being suspended.

After Dugald River, the most advanced project is YTC Resources’ Hera-Nymagee Project near Cobar in NSW. The Hera deposit has a global resource of 2.444 Mt grading 3.8% Zn, 2.8% Pb, 0.2% Cu, 16.7 g/t Ag and 4.1 g/t Au, and the nearby Nymagee prospect has a global resource of 8.096 Mt grading 1.2% Cu, 0.7% Zn, 0.3% Pb and 9 g/t Ag. A definitive feasibility study, completed in September 2011, indicated a financially and technically robust project with a minimum 7.3 year mine life. Financing facilities were agreed with Glencore International AG in November 2012, with surface construction and Hera decline development commenced in December. Full-scale ore production is anticipated in the September 2014 quarter, with full-scale mill production anticipated in the December 2014 quarter.

Another advanced project is the Independence Group's Stockman Project in Vic, which includes the Wilga and Currawong volcanic-hosted massive deposits with a combined (updated June 2012) resource of 13.986 Mt grading 4.3% Zn, 0.7% Pb, 2.1% Cu, 38 g/t Ag and 1.0 g/t Au. On 5 July 2013, Independence Group announced that exploration activities on the project had ceased and that the enhanced feasibility study had been curtailed. However, work is continuing on an environmental effects statement which is expected in December 2013.

Venturex Resources Ltd has consolidated many of the zinc-lead resources in the Pilbara region (WA) into its Pilbara VMS Copper-Zinc Project. The project includes the Whim Creek, Mons Cupri, Salt Creek, Evelyn, Kangaroo Caves and Sulphur Springs deposits. Current resources for the consolidated project total 26.37 Mt grading 3.4% Zn, 0.3% Pb, 1.2% Cu, 18.9 g/t Ag and 0.1 g/t Au. A bankable feasibility study was released in December 2012 which covered the development of the Sulphur Springs, Whim Creek and Mons Cupri deposits, but not other deposits in the project (Salt Creek, Evelyn and Kangaroo Caves). No plans for further development of the project have been announced.

The Myrtle deposit (NT) is located about 20 kilometres south of the McArthur River deposit in the same host succession. This deposit and the Teena deposit, 10 kilometres to the west of McArthur River, are the most significant prospects in the Reward project. The project, a joint venture between Rox Resources and Teck Australia, is still at the exploration stage, but a total resource of 43.6 Mt grading 4.09% Zn and 0.95% Pb, with a higher-grade resource of 15.3 Mt grading 5.45% Zn and 1.40% Pb, has been identified at Myrtle. Recent results at Teena, including 26.4 metres grading 13.3% Zn+Pb, have encouraged Teck Australia to exercise its right to earn additional equity in the project.

At Kagara's Admiral Bay deposit in the Canning Basin (WA), a pre-feasibility study identified mineral resources of 72 Mt grading 3.1% Zn, 2.9% Pb, 18 g/t Ag and 20% barite. However, this deposit is located more than a kilometre below the surface and requires a large financial investment to bring the project to bankable feasibility status. At the time of writing, this asset was to be retained by Kagara Ltd, which currently is in volutary administration.

In July 2013, TriAusMin Ltd received final approval from the NSW government to proceed with development of the Woodlawn Project. The Woodlawn mine, northeast of Canberra, produced 13.4 Mt of high grade zinc-lead-copper ore between 1978 and 1998. The approval was for the re-treatment of tailings from the previous mining campaign, and redevelopment of underground operations. Global resources for the tailings re-treatment project total 11.65 Mt grading 2.29% Zn, 1.35% Pb, 0.50% Cu, 32 g/t Ag and 0.29 g/t Au, while the underground global resources total 10.10 Mt grading 10.15% Zn, 4.03% Pb, 1.78% Cu, 84 g/t Ag amd 0.53 g/t Au. Subject to financing, TriAusMin plans to bring the Woodlawn project into production during the 2015-16 financial year.

Kidman Resources Ltd reported a number of significant intersections at its Home of Bullion project, 25 kilometres east of Barrow Creek in the NT. Historically, the Home of Bullion mine produced 8 kt of copper from the 1930s to the 1970s. Although dominantly a copper prospect, Home of Bullion also contains significant zinc, lead, silver and gold credits. For example, in October 2013, Kidman Resources reported a 9.7 metre intersection grading 3.4% Cu, 2.0% Zn, 0.83% Pb, 40.7 g/t Ag and 0.47 g/t Au. At the time of writing Kidman Resources is continuing with deep drilling at the project.

KBL Mining Pty Ltd has defined a JORC Code compliant resource of 16.7 Mt grading 4.5% Pb and 52 g/t Ag at the Sorby Hills project 50 kilometres northeast of Kununurra in WA. The company completed a pre-feasibility study on stage 1 development, which was granted approval by the Western Australian Environmental Protection Authority in October 2013, a ruling that has since been appealed. Construction of the project is planned for mid-2014, with operations 12 months later.

Silver: The interest in deposits in which silver is the main, or only commodity has continued, with mining and processing commencing at Alcyone Resources' Twin Hills (Qld) mine in July 2011 and at Cobar Consolidated Resources' Wonawinta (NSW) mine in May 2012. A number of other projects are at various stages in the production pipeline, mostly in NSW and QLD, but also in SA and WA.

At Alcyone Resources Texas Project, the Twin Hills mine was re-commissioned in February 2011 with production in 2012 totalling 24.5 tonnes. The company also announced a resource for the Mount Gunyan deposit four kilometres east of Twin Hills of 3.9 Mt grading 55 g/t Ag. The combined Twin Hills-Mount Gunyan resource has the potential for a 6 to 8 year mine life.

At the Wonawinta deposit, in the Cobar mineral field, Cobar Consolidated Resources Ltd treated the first batch of ore in May 2012, with pouring of the first silver in July and first shipment in August. The Wonawinta deposit produced 11.0 tonnes of silver in dore in 2012.

Other silver projects in early stages of development in eastern Australia include Argent Minerals’ Kempfield project and Kingsgate Consolidated Bowdens Project, both of which are in NSW and are the subject of feasibility studies. At Kempfield, updated resources released in April 2012 total 21.8 Mt grading 47 g/t Ag and 0.12 g/t Au with lead and zinc credits in primary ore. At Bowdens, an updated total resource of 88 Mt grading 47.4 g/t Ag, 0.39% Zn and 0.29% Pb was announced in December 2012. Other less advanced silver project include Silver Mines Ltd's Webbs Project in NSW and White Rock Minerals' Mount Carrington Project in Qld. The Webbs Project currently has a total resource of 1.49 Mt grading 245 g/t Ag, 0.27% Cu, 0.71% Pb and 1.56% Zn. In July 2012, a scoping study on the Mount Carrington project using JORC Code compliant mineral resource data released in February 2012 indicated robust viability. This mineral resource was updated in July 2013 and stands at 12.21 Mt grading 58 g/t Ag and 0.2 g/t Au (silver-dominant) and 6.64 Mt grading 3.0 g/t Ag and 1.3 g/t Au.

Although silver exploration and development is occurring mostly in NSW and QLD, particularly in the New England and Lachlan Orogens, silver exploration continues at MacPhersons Rewards Nimbus Project in WA and at Investigator Resources Paris prospect in the Peterlumbo silver field in SA. At Nimbus, which produced 112 tonne of silver between 2003 and 2007, MacPhersons Reward has upgraded its total resource inventory to 4.876 Mt grading 79.3 g/t Ag, 0.29 g/t Au, 1.83% Zn, and 88 part per million mercury. In addition, the company has identified several massive sulfide zones that are not considered in the resource.

The Paris prospect in the southern Gawler Province continues to be advanced. This prospect, which was discovered in January 2011, consists of mainly sheet-like zones and sub-vertical veins in dolomite just below the unconformity with Gawler Range volcanics. The silver is interpreted to be epithermal in origin and has some similarities to manto-type deposits. A global resource comprising 5.9 Mt grading 110 g/t Ag and 0.6% Pb was announced in mid-October 2013.

Rocky roads: Financial difficulties for small to mid-tier producers continued from 2012 into 2013. Kagara Limited went into voluntary administration on 30 April 2012 after suspending all operations in north Qld earlier in the month. At the time of writing, the assets of Kagara, had been partially sold. Kagara's former Central Operations, which included the Surveyor and Mount Garnet operations, were sold to Snow Peak Mining Pty Ltd. Consolidated Tin Pty Ltd, which manages and operates these assets, announced in October 2013 that mining had re-commenced. Kagara's administrator, FTI Consulting (Australia) Pty Ltd, terminated an agreement for the sale of Kagara's Southern (Thalanga and Liontown/Waterloo) and Northern (Chillagoe) operations because of non-payment of deposits. These properties will be re-tendered. Although initially up for tender, the Admiral Bay assets in WA are being retained by Kagara.

Bass Metals ceased mining of the Fossey deposit in May 2012, with milling at the Hellyer mill finishing in June. The Hellyer mill operation was sold at the end of January 2013, providing funding for Bass Metals to clear debts and re-launch exploration.

TopNotes

  1. Cited production is from Earnest, D.F., 2013. Endeavor mine, Cobar, New South Wales, Australia, technical report. Unpublished report, Couer d'Alene, 95 p. (available at http://au.intierra.com/Reports/2013/Apr/02/CB537888.PDF#Page=1). The silver production is 10% lower than production data provided in the 2012 Couer d'Alene annual report (659,204oz vs 734,008oz).
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