BHP and Esso miss out on bonanza

Press, 10 November 1983, Page 23

BHP and Esso miss out on bonanza

NZPA Perth A gold deposit abandoned by two of Australia’s resource giants has proved a bonanza for two junior exploration companies in Western Australia. The Nevoria deposit, south of Southern Cross and 10 kilometres east of Marvel Loch, was sold by BHP and Esso to the Perth-based explorer, Southern Goldfields, Ltd, earlier this year for sAustl.2 million. BHP and Esso had spent more than SSM since 1977 to delineate preliminary reserves of just over one million tonnes of ore grading about 6.0 grams of gold a tonne. However, extensive drilling by the project manager, Southern Goldfields, and Jingellic Minerals NL,

which is earning a 60 per cent interest in the venture, has found new accessible ore which has substantially extended the reserves.

The partners plan to bring the alluvial ores into production early next year and to begin open-cut mining on the promising Nevo--ria East pit during 1984. The company has announced that it expects to earn profits of $17.5 million from mining Nevoria in the next three years. Southern Goldfields bases its profit estimates on a gold price of $440 an ounce for the next three years and total mining and processing costs of $10.90 an ounce for the alluvials and $35.75 an ounce for the oxide ores.

The partners hope to mine the entire alluvial reserves of 267,000 tonnes, grading an average of 2.2 grams of gold a

tonne during the first 12 months. They can be mined easily by scrapers or shovels as the ore ranges from the surface to a depth of only two metres and the gold recovery rate is estimated at 94 per cent.

The company said there were no metallurgical problems with the ores and it expects production of just over 79,000 ounces of gold in the next three years. The recent drilling proved' reserves of oxide ore from the three main bodies to be 400,000 tonnes averaging 5.3 grams of gold a tonne. The partners will resume drilling this month and hope to prove up an additional 200,000 tonnes of oxide ore and 120,000 tonnes of sulphide ore which will be amenable to open-cut mining. The best drill-hole in the recent drilling programme assayed 12.7 grams of gold a tonne at a depth of 40 metres.