EPA approves $70m Kununurra mine

The Environmental Protection Authority has recommended the approval of a silver-lead-zinc mine and processing facility near Kununurra involving China's largest lead producer.

The EPA said that it had given the Sorby Hills project the green light after subjecting it to the highest level of environmental scrutiny through a public environmental review.

The Sorby Hills project is a joint venture between Sydney-based KBL Mining and Yuguang (Australia), a wholly owned subsidiary of China's largest lead producer, Henan Yuguang Lead & Gold Co.

KBL, formerly known as Kimberley Metals, holds a 75 per cent stake in the project with Yuguang holding the remaining 25 per cent stake.

The Sorby Hills project will initially consist of three open cut pits and a sulphide flotation concentrator operation, with the concentrate to be exported via road train transport through established port facilities at Wyndham.

The proposal will also include the discharge of waste to a tailings storage facility and the construction of infrastructure including an access road.

A pre-feasibility study for stage 1 of the project has indicated a start-up capital cost of $70 million, with an average production rate of 400,000 tonnes of ore per annum, 20,000 tpa of lead and 800,000 ounces per annum of silver.

EPA chairman Paul Vogel said the Sorby Hills project partners had reduced the proposal's footprint from 767 hectares to 573 hectares during the assessment process and had replaced an initially proposed artificial wetland with the preferable option of an evaporation basin.

The proposal will now go to the Minister for Environment for final approval.

KBL will then complete a feasibility study and look to secure mining permits and operational licenses.

KBL hopes to see construction begin on the project by mid-2014 if approvals are granted with operations commencing approximately 12 months later but says it is still working through the process of securing project financing. 

KBL chairman Jim Wall said in the company's annual report this week that the company would consider selling up to a 50 per cent interest in its Mineral Hill mine in New South Wales to facilitate funding the Sorby Hills project.

Other options, including reducing its  75 per cent stake in the Sorby Hills project, are also believed to be up for consideration.

Shares in KBL were 4.8 per cent higher at 43 cents at the close of trade.