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By T. Baker

The Eloise Cu-Au deposit is 60 km SE of Cloncurry in NW Queensland and has a current indicated reserve of 3.2 Mt @ 5.8 per cent Cu, 1.5gA Au and I9g/t Ag. It is hosted by metasediments and metabasic rocks that underwent amphibolite facies metamorphism at 550-600¦C and less than 3.5 kb. Peak metamorphism coincided with the regional D2 event which produced an S2 foliation with north-south strike and variable sub-vertical to steep east or west dip. The deposit is associated with several major shear zones parallel to the S2 foliation. The lodes form part of a large alteration system that is localised by the retrograde shear zones. Homblende-biotite-quartz with minor sulphides occur early in the alteration paragenesis which is overprinted by chlorite-muscovite-pyrrhotite-chalcopyrite ¦calcite+¦nagnetite. The later assemblage replaces the earlier Fe-K alteration as well as Fe-rich metamorphic assemblages such as homblende, biotite and staurolite indicating a post peak metamorphism timing for ore formation. Although replacive textures are the most common, the alteration can display open space infill and brecciation as well as durchbewegung and mylonite textures indicating that mineralisation occurred during ongoing ductile deformation. All these features are crosscut by a later brittle phase of calcite-chlorite-quartz¦pyrite alteration.

Jan 1, 1994

By P W Haines

The McArthur, Balma (new name) and Habgood Groups are thick (up to 4.5 km) correlative sequences of shallow water evaporitic carbonates, mudstones and sandstones that are exposed largely within the Batten, and southern and northern Walker Fault Zones (Batten and Walker Troughs) of the McArthur Basin respectively. Recent re-mapping of the Walker Fault Zone has provided data for refined stratigraphic correlations between these groups. Two significant hiatuses are now recognised within the Balma Group (base of Vaughton Siltstone and base of Yarrawirrie Formation) and these may represent tectonically-generated sequence boundaries which may correlate with similar local hiatuses within the McArthur Group such as at the base of the Teena Dolomite and Lynott Formation respectively.

Jan 1, 1994

By Noller B. N, Mine F. J

Modem open cut and underground mining in the tropics inevitably expose partially weathered and unweathered rocks to oxygen and water, leading to weathering and the release of solutes and often acidity as well. Historical monitoring data can demonstrate these phenomena. Three case studies from open cut mines in the north of the Northern Territory illustrate the deterioration in quality of pond water receiving drainage from waste rock dumps. The potential for deterioration of water quality was not recognised in many mine Environmental Impact Statements prepared and accepted in the 1980s. The examples documented indicate the importance of adequately planning for this near inevitable process. Retrofitting a mine water management system to 'no' or minimal release can be very difficult and expensive, and may not be feasible, leading to downstream pollution. The characterisation of acid and solute production potential of ore and waste rock, and improved dumping strategies and water management are very important to minimise the environmental impact of mining in the tropics.

Jan 1, 1994

By AUIMM AUIMM

Continuous Improvement The Council of the AusIMM should expedite the introduction of a continuous professional education policy along the lines of that to be proposed to you by David Pollard today. The Education and Accreditation Committee must continually review the training needs of the next generations of mining industry professionals. It should continue to demand and encourage the creation of the schools for the training of such people. The AusIMM could even put greater onus upon university researchers to accredit university post graduate degrees.

Jan 1, 1994

By N Donnellan

The Palaeoproterozoic Warramunga Formation is notable as the host to the enigmatic, so-called 'Tennant Creek style' mineralisation. These polymetallic (but mainly Au-Cu-Bi) ore deposits typically have a close spatial association with massive ironstone bodies, and frequently also with banded ironstone, known locally as 'haematite shale'. The Warramunga Formation is a polydeformed, turbiditic succession. Partial, or complete Bouma sequences variously comprising lithic arenite, wacke, siltstone, and mudstone constitute a classic flysch sequence deposited as a proximal (sandstone lithofacies) to distal (siltstone lithofacies) fan association. The Warramunga Formation has a substantial component of volcanic detritus and has generally been attributed to an essentially contemporaneous volcanic provenance. However, lithostratigraphic revision (Donnellan, Hussey and Morrison, in press) apparently precludes outcropping volcanic rocks of the Tennant Creek Block, or indeed Inlier, as the source of detritus. Warramunga Formation geochemistry indicates rapid derivation from a fractionated, predominately felsic igneous source (Palaeoproterozoic upper crust) with a minimum of chemical weathering; together with an admixture of mafic material. Warramunga Formation geochemistry cannot, however, be reconciled with that of the Bemborough Formation, which is here taken to be representative of Flynn Subgroup felsic volcanic rocks. Similarly, the Warramunga Formation is geochemically distinct from Flynn Subgroup sedimentary rocks. Geochemistry of the banded ironstone is consistent with its interpretation as Dine-grained turbidites.

Jan 1, 1994

By Hein K. A A

The Mt Todd Gold Project is located 42 km northwest of the township of Katherine within the Northern Territory of Australia. It is situated in the southeastern portion of the Pine Creek Geosyncline. The Batman gold deposit, the largest of several deposits at Mt Todd, hosts an identified mineral resource of 92.9 million tonnes (Mt) grading 1.4 grams/tonne (g/t) as at 31 December 1993. Host rocks at Batman are assigned to the Early Proterozoic Burrell Creek Formation, comprising greywacke and siltstone interbedded with shale. Gold mineralisation is associated with a very broad zone of sheeted and stockwork quartz-sulphide veins that occupy a corridor of intense brittle fracture and faulting. A conceptual model of formation involves the dilation of joints and micro-faults within overlying sediments during sinistral movement along a basement shear zone. Synchronous granite intrusion generated convective circulation of crustal fluids through the sedimentary pile resulting in the formation of auriferous quartz veins within favourable structures. The Batman zone of mineralisation is not directly related to fold structures which typify several other major gold deposits within the Pine Creek Geosyncline.

Jan 1, 1994

By K A Plumb

New structural studies in the Walker Fault Zone of eastern Arnhem Land are integrated with basin-wide reconnaissance observations, made to refine models for the structural evolution of the McArthur Basin and provide new insights into the nature of metal logenetical ly important pre-inversion phases of the basin's evolution. At least five principal events may be identified during the Proterozoic: The Tawallah Group and equivalents were deposited throughout the McArthur Basin during an extensional event. Rifting of an incipient Batten Trough occurred at this time, in a terrain characterised by orthogonal, linked extensional faults. Uplift and erosion of the Tawallah Group accompanied continuing extension and was penecontemporaneous with continuing deposition of the overlying Parsons Range Group, within a precursor to the Walker Trough. Dt (of the Walker Fault Zone) relates to a new rifting event, penecontemporaneous with deposition of the McArthur Group and its equivalents in the Walker and Batten Troughs. This rifting accompanied dextral strike-slip faulting along northerly-trending bounding faults, as a result of northwesterly-directed oblique extension, leading to pull-apart basins. D2 inversion of the Batten and Walker Fault Zones pre-dates deposition of the Roper Group. In the proposed model WNW-ESE directed shortening (D2.), accompanied by folding and thrusting, and by local development of cleavage in the Walker Fault Zone, is seen to be followed by northerly-trending sinistral faulting (D2b), about a SE to ESE-directed compression. D3 is basin-wide and post-dates the Roper Group. It is characterised by conjugate faulting and folding about ENE to NE-directed compression. The latest Proterozoic event to be identified (D4) comprises widespread north-trending strike-slip dextral faulting of Roper Group, coupled with N-S directed thrusting across the Urapunga Fault Zone and Murphy Inlier This is accompanied by late dextral reactivation of NNW to NNE-trending faults in the Walker and Batten Fault Zones.

Jan 1, 1994

By Noller B. N, McGill R. A

The Alligator Rivers Region has been the scene of one of Australia's most intensive environmental monitoring efforts since the current generation of uranium mining was mooted in the 1970s. Prior to mining, the local environment and the nature of potential impacts were not well known. The initial monitoring programs therefore included large baseline characterisation and research components. After some 15 years, water, soil and sediment monitoring programs have been reduced to a fraction of their early size, as the mining and natural systems became better known and characterised, and the actual nature of the environmental impacts were established. Modem techniques allow much more rapid and thorough identification of chemical species and elements of concern, allowing much more focused monitoring programs to be designed. In the 1980s data collection was emphasised at the expense of interpretation, and monitoring programs were maintained at much higher levels than were in fact required. It is now clear that investigations are important and should be distinguished from monitoring programs, and that the timely interpretation of investigations and implementation of recommendations can greatly reduce the effort and expense that can be involved in a monitoring program. Monitoring programs based on a sound understanding of potential environmental impact may then be efficient and cost-effective, yet provide sufficient information to assess the environmental impact of mining, guide further environmental protection measures when problems are detected, and demonstrate compliance with regulatory requirements.

Jan 1, 1994

By Cocks T

The 15-year long debate between the industry, Government and Aboriginal people about the rights and wrongs of Land Rights, the right of Aboriginal people to control development on their land and the relationship between the parties, has been long and often bitter. It has so far been a war of words and often the truth has been the first casualty. This paper looks at the debate and presents the perspective of Aboriginal people, as well as looking at how the industry and Aboriginal people can work together for everyone's benefit. It addresses such matters as: ò why Aboriginal people believe they have the right to control development on their land; ò the perception that Aboriginal people are anti-development; ò the perception that Aboriginal land is 'locked-up'; and ò how companies can negotiate with Aboriginal people.

Jan 1, 1994

Banks' focus in using cash flow methods can differ markedly from that of equity investors. This paper attempts to explain and describe bankers' approach by: ò outlining the fundamental difference between banks' and investors' risk / return profiles. ò describing lenders' consequent use of cash flow methods in mineral valuation. areas. explaining lenders' specific treatment of key risk Fundamental to understanding banks' appraisal of mineral projects is the appreciation that lenders have a basically different risk profile and outlook from those familiar to equity investors. Lenders do not normally participate in any project upside. The economics of lending dictate that banks can only accommodate a low probability of loan default and consequently banks' principal focus in mineral ""valuation"" is ensuring an acceptably comfortable probability of debt repayment. A simple conceptual explanation of lenders' risk / return position is outlined.

Jan 1, 1994

Kalgoorlie Consolidated Gold Mines Pty Ltd is currently developing the 'Super Pit' gold mine in the mining area known as the Golden Mile adjacent to the city of KalgoorlieBoulder, Western Australia. The presence of numerous abandoned mine workings and complex structural geology has required considerable geotechnical input into the determination of the optimum pit slope geometries for both interim and ultimate pit slopes. Slope design is based on detailed site investigation and stability analysis which is balanced with historical operational experience. This paper discusses the process of determining the optimum pit slope angles for each of the stages of the west wall of the 'Super Pit'. The risks associated with slope instability are discussed for each stage.

Jan 1, 1994

By Harper F

This paper outlines the authors' views of the methodologies which can be employed to value mineral properties at different stages of development for the purposes of project financing, mergers and public floats. This paper discusses the key issues in Discounted Cash Flow (DCF) analysis including the importance of data verification and the shortcomings in DCF analysis. Stockmarket valuation measures and valuation methodology for exploration and pre development projects are examined through examples and pitfalls are identified. The use of valuations in corporate transactions and their strategic value is also discussed.

Jan 1, 1994

By Dodd SF

Valuation of mining companies and their underlying assets prepared by brokers' analysts are, by necessity, approximations. The reliability of the valuations is entirely proportional to the quality of available data, the reliability of forecasts and the nature of underlying commodity price assumptions. The latter is perhaps the greatest single cause of gross variations in company and asset earnings estimates and- valuations. Assumptions are often necessary regarding commodity price achievement based on commodity hedge positions. Public disclosure from listed companies provides a sound base from which to project earnings, cashflows and balance sheets. The uncommon disclosure of projected production and cost schedules often reduces the reliability of future estimates. The application of reserve and resource estimates is contentious with practitioners applying differing weightings to importance of resources in estimating mine lives (and therefore cashflow streams). Valuation methods applied in equity markets usually focus on relative value and the identification of pricing anomalies. The commonest ""rules of thumb"" applied in the valuation of mining companies (and therefore their underlying assets) is with the use of year specific price/earnings (P/E) and price/cashflow (P/CF) ratios, with low multiples suggesting undervalued assets, high multiples overvalued situations (but these rules can often be clouded by market expectations of underlying commodity price movements). Another simply applied valuation tool is to examine the examine the value placed on reserves and resources by the market. Inexpensive gold in the ground (expressed as $ of market capitalisation per ounce of reserves or resources) might indicate a buying opportunity, but the market does discount the value of gold in the ground prior to mine development and where development risk is perceived.

Jan 1, 1994

DCF Valuations are very important to individuals and companies involved in the mining industry. Such valuations are critical to investment decisions in relation to new and existing projects. In particular they provide fundamental information to shareholders in the event of a capital raising or takeover and to financiers supporting mining companies and projects. Also, DCF Valuations are often used to support asset carrying values in the financial statements of mining companies. This paper presents a Chartered Accountant's (CA's) perspective on the main issues to be considered in preparing, analysing and relying upon DCF methods in mineral valuations and provides some practical examples relating to key issues. The paper makes the important point that DCF methods involve making assumptions about future events and circumstances that inherently contain uncertainty which results in a valuation prepared on a DCF basis providing a range of values that are not perfect or accurate. In order that DCF valuations provide meaningful information the underlying methodology used and assumptions made must be consistent, sound and well supported. Credibility of those involved in preparing mineral valuations is vital and this paper supports the adoption of sound practices by all concerned.

Jan 1, 1994

By Grano S. R, Ralston J

It is the perennial problem most metallurgists face when examining data collected from laboratory float tests and plant surveys - there are more numbers than we know what to do with! The objective of this paper is to analyse and interpret a set

Jan 1, 1994

By Mizuta T, Sakurai M

The Pine Creek Inlier produced 12 440 kg of gold in the period from the first gold discovery in the 1860s to the early-1900s. During the 1930s renewed large-scale prospecting took place and gave a foothold for today's gold mining operations. The rise of the gold price and improved mining methods in the 1970s and 1980s made possible low cost, bulk low grade mining operations. Various gold deposits including vein, network and stratiform types occur in the Pine Creek Inlier (Nicholson and Eupene, 1990). The Tom's Gully deposit is located 100 km south-east of Darwin in the Northern Territory. It is hosted in the early Proterozoic Wildman Siltstone and lies north-east of 1800 my old Mt Bundey Pluton (Figure 1). Around the Mt Bundey Pluton, there are several prospective base and precious metal deposits such as Quest 29. The Tom's Gully gold deposit was discovered in 1986 and yielded a total of 3070 kg of gold from ore averaging 9.35 g/t gold between 1987 and 1990 when the mining operation was terminated.

Jan 1, 1994

By G Neely

COPING WITH COMPLEXITY In every industry, and mining is no exception, plant and processes increase in complexity over time and managers and operators need correspondingly more knowledge. The mine manager has to delegate details to operators, engineers, metallurgists, accountants, safety specialists, personnel officers and the rest. Is it reasonable then, to expect the Mines Inspector to be competent to judge the conduct of all these operations against the criterion of the regulations? Obviously not, but what are the alternatives? One is a superficial inspection where the inspector goes on a hazard hunt for broken steps and missing handrails. Another is one in which an army of specialist inspectors marches on a mine, sometimes outnumbering the staff. Each is competent to assess some part of the operation and if he or she can find an opposite number among the mine staff, they can discuss details. But what good does it achieve? The system acts to remedy present defects and to make recommendations which, if only they were followed, would prevent the same things happening again. Given that this process has been going on since the first Factory Act of about 1840, how is it that there are any more defects left to put right? The answer of course is that defects keep appearing, and new defects arise as fast as the old ones are found and corrected. Further progress can only be made by preventing defects at their source.

Jan 1, 1994

Getting it right is a very profitable outcome. Shareholders would ideally like to see their directors get it right all the time on the major economic decisions. But it is very difficult for mining directors to get it right all the time in such an uncertain environment. Primary decision-makers of companies with significant stakes in the mining industry should get it right much more frequently. The legal measures of evidence (beyond reasonable doubt and on the balance of probabilities) can be used to determine whether grade estimates (a key revenue variable) are realistic. The application of this approach can be far reaching. More frequently correct decision-making would result in more effective allocation of limited resources (capital and labour). In turn, this would result in higher financial returns and a more extensive mining industry.

Jan 1, 1994

Valuers of mineral properties should be aware that accountants are a major user of their opinions of value. Reliance by accountants can range from obtaining comfort that book values in balance sheets are not overstated to establishing values by which to assess the fairness of a takeover offer. Accountants using mineral property valuations clearly can't be expected to have the same level of expertise as the valuer and ""second guess"" the valuation. But they do have an obligation, under the ASC guidelines and their own professional standards, to'check the logic and reasonableness of the valuation before being able to rely on it. This means reviewing the valuation report for general sensibility, discussing the methodologies and assumptions with the valuer and being satisfied as to his competence and independence. This paper outlines how accountants use mineral property valuations, the level of scrutiny applied to such valuations and the problems commonly encountered in practice by accountants seeking to rely on them. The paper also explains how values of-mineral properties are established in company balance sheets and why these often differ, quite validly, from fair market values.

Jan 1, 1994

A broker relies heavily on mineral valuations and independent experts' reports to provide the fundamental information, both technical and commercial, which provides the basis of estimating the sharemarket value of securities and underlying assets. It is important to appreciate the significant variance that can occur between the market value and other types of valuation at a particular point in time. In general, most experts' reports and valuations seek to provide estimates of technical/fundamental or ""fair"" value which correspond to the Corporations Law and accounting standards requirements. They do not usually attempt to estimate (stock) market values and it is usually and quite correctly the broker's task to estimate market values on the basis of a technical appraisal and consideration of all other commercial, market and financial influences. Therefore ideally, an independent experts' report or information memorandum will include material relating to commercial and management aspects of a company as well as detailed technical reviews and fundamental valuations. Wherever sensible cash flow projections can be made, cash flow-derived valuations, usually based on discounted cash flow (DCF) calculations, remain the preferred valuation methodology. Brokers in general would not argue with this preference. However, there is a paucity of examples of valuations where alternative methods are applied as a check on the reasonableness of a DCF-based estimate.

Jan 1, 1994