Hellyer Tailings Project Go-ahead
The Age
Friday September 24, 1999
The cash-rich but project-hungry Dominion Mining is to pick up the running on a possible $90 million project based on the retreatment of tailings at the Western Metals' near-exhausted Hellyer polymetallic mine, 50 kilometres south of Burnie in Tasmania.
Contained metal in the tailings is estimated at one million ounces of gold, 30 million ounces of silver and 300,000 tonnes of zinc for a total value of more than $1 billion. But the recovery of the metals remains dependent on the development of an economic processing route.
Under the deal announced yesterday, Dominion will earn a 50 per cent interest in the tailings project by spending $5 million and managing a bankable feasibility study over the next 15 months. It would then have the right to move full ownership of the project by paying 50 per cent of the study's estimate of net present value to Western Metals.
Alternatively, Western Metals has the right to sell its 50 per cent stake to Dominion for $5 million.
Reserves at the metallurgical complex Hellyer mine are due to be exhausted next year, making its continued operation dependent on regional exploration success or the tailings retreatment project.
The managing director of Dominion, Mr Peter Alexander, said that the tailings project was a ``quality opportunity with the potential to produce strong cashflows and deliver an excellent rate of return over a 10-year period".
``The key to the project is to apply a processing route which maximises the recovery of gold and silver, as well as recovering the base metals as a concentrate or metal," he said.
The group that discovered and developed Hellyer, Aberfoyle, was taken over by Western Metals last year. In its defence documents Aberfoyle highlighted the potential for a low-cost regrind and flotation treatment process for the tailings. That would leave the gold sitting in the tailings dam but represents what Mr Alexander described as a ``fall-back case" for the partners.
© 1999 The Age
