Navigator Resources has resumed mining from the Central Pit at its Bronzewing gold project, after a pit wall failure last week.
Navigator Resources has resumed mining from the Central Pit at its Bronzewing gold project, after a pit wall failure last week.
The company said clean-up costs associated with the collapse would be $750,000-1,000,000.
Processing continues in excess of the budgeted two million tonnes per annum and while September quarter production will drop by 10%, Navigator said it would alter its mine plan to stay on target for 101,000 ounces of gold in 2010-11.
The company said: "It was apparent during post blast inspections that there was no risk to employees or equipment and open pit mining subsequently resumed in the northern and eastern parts of Central Pit on Friday, 24 September 2010."
"Central Pit is currently providing the base load of ore supply to the mill and is scheduled to remain so for the coming six to eight months."
See company statement below:
Navigator Resources Ltd (ASX Code: NAV) requested a halt in the trading of its securities on Thursday, 23 September 2010 following a partial wall failure in the Central Pit at its Bronzewing Gold Project (BGP) whilst the Company undertook an assessment of the implications upon short term ore supply.
The Company has progressed its analysis and now provides the following update.
Key Points
- Wall failure stabilises and mining recommences in Central Pit on 24 September 2010
- Processing continues in excess of budgeted 2.0Mtpa throughput
- Cleanup cost estimated at $0.75-$1.0 million
- September 2010 quarter gold production estimated to be 10% less than forecast
- Mine plan to be modified to maintain 101,000oz annual production target
BACKGROUND
The west wall of Central Pit is in close proximity to a significant geological structure, the Bapinmarra Fault. Surface cracking along this structure occurred a number of years ago when the BGP was being operated by previous owners. In resuming mining at Central Pit in March 2010, NAV implemented a pit wall monitoring regime, especially of the west wall. Regular inspections and monitoring by the Company's site based staff indicated a number of weeks ago that some movement was occurring in the area of the previous surface cracking.
NAV subsequently installed a comprehensive system of movement monitoring devices and recorded trends in surface displacement as part of its geotechnical management plan. The Company also implemented a series of mining controls for the pit floor, which included an exclusion zone along the base of the wall and appropriate access restrictions.
The failure occurred over a period of up to an hour at approximately 2.00am on Wednesday, 22 September 2010. The only item of mining equipment in the area, an unmanned RC grade control drill rig, was parked in excess of 50 metres beyond the exclusion zone.
It is clear that the base of the failure was controlled by the Bapinmarra Fault and that insitu material adjacent to the fault was not competent. This combination of factors resulted in the failed material flowing across the pit floor to a greater degree than expected, partially engulfing the grade control drill rig.
Central Pit with wall failure visible in the south west corner The failed material stabilised during the 12-24 hours following the event. In consultation with Department of Mines and Petroleum officials, mining activities resumed with the firing of a previously loaded blast pattern on Thursday, 23 September 2010.
The Company's robust safety and geotechnical procedures ensured that there were no employees in the vicinity at the time of the failure and that there was no injury risk to personnel.
MINING RESUMES AT CENTRAL PIT
It was apparent during post blast inspections that there was no risk to employees or equipment and open pit mining subsequently resumed in the northern and eastern parts of Central Pit on Friday, 24 September 2010. Central Pit is currently providing the base load of ore supply to the mill and is scheduled to remain so for the coming six to eight months.
The Company's geotechnical consultant is scheduled to meet with mine management on Monday, 27 September 2010 to finalise the extent of the slip cleanup to be undertaken and associated procedures. It is expected that slip cleanup activities will commence within the coming week.
POTENTIAL IMPACTS ON PRODUCTION
The Company has potentially three slip cleanup options, these being:
- Do nothing and write off the "sterilised" tonnes of ore;
- Conduct a partial slip cleanup, the full extent of which is yet to be determined; or
- Conduct a complete slip cleanup from surface to the pit floor.
NAV has made an assessment of the ore tonnes and grade within the pit design which is beneath the slip material. It is estimated that approximately 420,000 tonnes of ore is currently "sterilised", which contains an estimated 19,800oz of recovered gold. The waste:ore strip ratio for the above ore tonnes is 4.2:1.0, excluding slip cleanup material, so these are high cashflow margin ounces. The "do nothing" case is therefore dismissed.
Full slip cleanup will involve cutting back the failed material from the surface to avoid the risk of dislodged material near surface from rolling down slope unimpeded to the pit floor working areas. There are obvious safety and potentially cost prohibitive barriers to this approach, as well as a significantly greater cleanup timeframe and more problematic impact upon ore supply continuity.
It is clear from this analysis that a significant slip cleanup effort is economically warranted. The likely outcome is therefore a partial, but reasonably complete, slip material cleanup which manages the safety considerations and ore supply to the mill, but minimises the economic losses. This approach would involve leaving some failed rill material at the base of the slope to arrest any future dislodged material and protect personnel working in the pit floor.
The Company's objective is to make the area safe as soon as possible, minimise ore losses and complete the cleanup in a manner which has minimal impact upon ore supply continuity. A reasonable expectation is controlling ore losses to less than 5,000oz of gold.
REMEDIAL STEPS & COST
Company staff have estimated that the total volume of failed material is approximately 300,000 LCM (loose cubic metres).
In consideration of safety during the cleanup process as well as to maintaining ore supply to the mill, the Company anticipates that the cleanup work will take place during day shift operation only whilst ore mining will continue on night shift. On this basis, it is estimated that the cleanup can be completed within a month of commencement, that is, by no later than the end of October 2010.
Allowing for various contingency factors, it is estimated that the cleanup cost will be in the range of $0.75-$1.0 million.
MILLING & SHORT TERM ORE SUPPLY
During the past days, the Company's management team has reviewed its options with regard to maintaining ore supply to the mill from its supplementary open pits at Success and Challenger South, whilst remedial steps are taken to overcome the temporary reduction in ore supply from Central Pit.
Further to previous market advice which described the site clearing, grade control and drilling and blasting initiatives to establish Challenger South Pit, the Company advises that these activities have been advanced with the objective of it being a backup ore supply to the higher grade Success Pit.
Prior to the slip, forecast ex-pit ore production in October would have resulted in the significant accumulation of stockpiled ROM ore. This build up in ROM stockpiles will now be delayed until later in the year.
There has been no interruption to milling and the processing plant continues to run in excess of the budgeted rate of 2.0Mtpa. It is the Company's objective to continue full throughput by utilising all available ore sources.
The Company advises that gold production for the September 2010 quarter is expected to be approximately 10% below forecast.
NAV is cognisant of its previously disclosed annual gold production forecast of 101,000oz. Management takes its production forecasts in this regard seriously and will take steps aimed at recovering from the temporary setback and meeting its overall targets.
CONCLUSIONS
In summary, NAV has experienced a temporary production setback due to the partial failure of the Central Pit west wall. Key points of note are as follows:
- The Company's procedures ensured that no personnel were at risk of injury;
- A cleanup operation (estimated at $0.75-$1.0 million) is financially warranted in order to minimise the impact of ore losses beneath the failure zone and this activity is expected to commence within the week;
- Mining recommenced from Central Pit within two days of the wall failure and Challenger South Pit is being fast-tracked to assist in meeting the required ore supply;
- Processing continues at full throughput in excess of the budgeted 2.0Mtpa;
- NAV has sought to minimise the short term impact to ore supply, which will be most critical during the coming month, however ROM ore stockpiles are forecast to increase significantly in subsequent months; and
- Despite the temporary setback, the Company will nevertheless do its utmost to recover and meet its previously advised annual production forecast.