Re-Invigorating Unloved Projects

Mining at the Tuckabianna Mining Centre in the Murchison district of Western Australia ceased in 1997, after the production of 550 000 ounces of gold at an average grade of 2.5 g/t from 22 separate open pits (Tectonic Resources, 2006). Like many historic mining camps in WA, Tuckabianna was considered exhausted of gold, such that an economic project could not be sustained on the existing resources. Since 1997, three separate companies have owned the Tuckabianna leases. Each of these companies completed minor exploration and some form of mining study to determine if mining could be sustained. All three companies concluded that the remaining resources were insufficient to support an economic project. Silver Lake Resources acquired the adjacent Tuckabianna, Comet and Moyagee projects in 2007 with a combined resource base of 693 000 ounces of gold in 11 separate deposits. In September 2009, Silver Lake commenced exploration in the Murchison targeting extensions to the main resources at the three project centres and completing targeted regional exploration across the lease holding. At the same time, a detailed evaluation of all historic drill data was completed and all resources re-estimated. This has culminated in the resource base increasing to 1.5 million ounces of gold in 20 separate deposits, with two new discoveries being made. In August 2010, a mining feasibility study was commissioned. Preliminary results from the study indicate that an economic stand alone project can be sustained for a minimum of five years. The ability to bring the remaining resource from a once unloved project into production is due to a number of factors: historically high gold price, combining adjacent projects into a single operation, evaluation of all resources regardless of size and grade, and well funded exploration directed to both resource extensions and new discoveries. Using the Tuckabianna Project as an example, this paper attempts to outline the strategy Silver Lake used to define the resources to justify the capital expenditure required for production, and give a summary of some of the successes and failures made as the projects progress towards mining. Examples of where being too rigid and over exuberant have resulted in less than optimal use of expenditure are used to high-light the difficulties in exploring in mature terrains. Evaluation of the success of a company’s exploration strategy at all scales from project acquisition to target selection is critical to the success of future project development. This paper has been part of that process for Silver Lake with some interesting discussions and insights being made. It is hoped that some of the points discussed can be applied to other projects to help achieve the best outcome from the assets available to a company.