HERA PROJECT Implementing a Feasibility

Transcription

1 HERA PROJECT Implementing a Feasibility December 2014 By: J D Moore GOLD LEAD ZINC SILVER COPPER 1

2 Content History of Hera Project Hera s feasibility Implementing a Feasibility Hera s Implementation Next steps Questions GOLD LEAD ZINC SILVER COPPER 2

3 HERA PRJECT- LOCATION 3

4 PROJECT TIMELINE 2001 Discovery of Hera deposit by Pasminco 2003 Triako purchase Hera from Pasminco's Receivers Drilling campaign delineates top of New Cobar style system 2005 Positive Pre Feasibility Study completed on Hera deposit 2006 CBH take over the Triako in scrip $70million scrip bid Hera was Triako's primary asset at the time of takeover CBH significantly increased the size of the Hera resource Decline permitted 2009 YTC acquires Hera from CBH for $11m cash + royalty YTC acquires 80% interest in Nymagee JV for $1m cash 4

5 PROJECT TIMELINE 2010 YTC undertakes additional drilling to increase resource base at Hera Develops metallurgical flow sheet to maximise gold production 2011 Positive Feasibility Study completed on the Hera Deposit 2012 Work commences on Boxcut and clearing of site appoved under REF. Project approval received from the Department of Planning and Infrastructure. Funding secured through Glencore for development of the Hera Project and Nymagee Mine 2013 Underground mine portal established and Surface Decline commenced Surface Fan installed and site offices established Mine accomodation village completed 2014 Tailings dam constructed Processing Plant construction completed YTC Resources changes name to Aurelia Metals 5

6 Feasibilities Feasibility: Is an analysis of a proposed venture, it determines the cost, risk and potential value the venture can add. The Hera Definitive Feasibility Study (DFS) based on the Resource included an explicit mine and construction design, schedule and cost frame work. cost are around $8 Million $13 Million 6

7 HERA Resource KEY METRICS STAGE 1 HERA DEVELOPMENT Resources Reserves Initial Mine Life Estimate Project Revenue (Stage 1 Only) Estimated Average Annual Production* 4.1g/t Au, 2.8% Pb, 3.8% Zn and 16.7g/t Ag 3.6g/t Au, 2.5% Pb, 3.5% Zn and 15g/t Ag 7.3 years >$500 million Gold: 39,000oz Lead: 7,800t Zinc: 10,800t Silver: 154,800oz Recoveries (average over initial LOM) Gold: 94% Lead: 91% Zinc: 90% 7

8 Hera Resource SCHEMATIC A u s t r a l i a NSW 8

9 HERA MINE - DEVELOPMENT Total Development of 12.5km, 50/50 split between Cap and OP Development to be Completed by March 2017 Long ore body (up to 800m strike) Ground conditions generally good Decline development and capital to be shotcreted while Operating to bolted and meshed Development dimensions typically 5mx5.5m for Decline and 5mx5m for level development Cablebolts used for intersection support Hera Underground development 9

10 HERA MINE - MINING METHODS Combination of bottom up and top down open stoping mining methods Series of regional pillars developed for stability in top down mining areas (every 100m vertical) High grade zone 100% recovery using CRF Stopes opened using LHR Production rate of 350Kt per annum. (<30Kt per month) 10

11 HERA MINE - MINING METHODS High grade stopes extracted via retreat method to allow mining along strike without leaving pillars Typical widths range from 5-12m and strike lengths of 25-30m CRF will be placed in by loader Stopes will require extensive cablebolting of hangingwalls for stability Production drilling using 76mm blast holes combined with raisebored slots Bulk explosive ANFO 11

12 HERA DEVELOPMENT PROCESS FACILITY CONCENTRATE LEACH TANKS 34% GOLD RECOVERY (TOTAL 94%) 47% SILVER RECOVERY GRINDING AND GRAVITY MODULE 60% GRAVITY GOLD RECOVERY TERTIARY CRUSHING FLOTATION CIRCUIT 56% LEAD + ZINC BULK CONCENTRATE 91% LEAD RECOVERY 90% ZINC RECOVERY PRIMARY AND SECONDARY CRUSHING TPH 12

13 Implementing feasibilities Majority of new projects run over budget and over time Average capital over run for projects since 1965 is 20 60% (mining, energy and construction USA) Mining is one of the worst culprits Resource Capital Funds' Jasper Bertisen said the "vast majority" of mining projects have been coming in "way over budget" for the past couple of decades. As a result, RCF now automatically factors in an average cost overrun of 25% when it considers the cost of mining projects. 13

14 Implementing feasibilities 14

15 Implementing feasibilities In a study of mining projects (by Christopher Hubrich at CIM MES 2014) found that the most common reasons for overrun where Poor Project / planning quality (quality feasibility) Economic environment Bearish markets Different executive sponsorship, design and build team. 15

16 Hera Implementation Hera Implementation Phase up until Nov 2014 (21 months from start) Cost overrun = Actual CAPEX / Planned CAPEX Pure CAPEX we are 1% under budget and on time 2% overrun (feasibility included some OPEX) 16

17 Hera Implementation TSF 5% Process plant construction 29% camp 2% mining 51% surface work / infrastructure 10% water management 3% Horizontal development Underestimation of costs Contract management Box hole / portal Ground Support Unanticipated site conditions Contract management Establishing a team Material Movement Planning quality Off set by savings in infrastructure and vertical development Good Tendering Practice Planning Combining Projects 17

18 Hera Implementation Senior executive oversight Championed by Sean and Dean Design team = build team Maintained same consultants Same management Did not change Scope of the DFS Well Defined targets / Hurdles First production November 2014 Constant monitoring against DFS Escalation plans Stop / Review Re asses Plan Determine additional recourses to achieve plan Change Management process Additional DD for extended Resource Over achievement on development allowed us to continue with one Jumbo instead of the planned 2. Changes to the standard ground support helped bring costs under control 18

19 Hera Implementation Underestimated ground support requirements for initial box cut and first 500m of Decline Stoped and reviewed Monitoring against Plan regularly People to do it Mining Eng. started November Metres/ $ per metre Ground Shotcrete support and Mesh installed Total vs. Cost Budget By Month this excludes stope Cable bolts Actual metres Actual $/m Budget m Total actual/m Total budget /m Budget $/m Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 19

20 Hera Implementation Building a team Despite cool economy, finding and retaining the right people was struggle Delay in staffing contributed to overrun Contract Management Robust contracts Well defined targets and hurdles Setting up of processes Culture up front Establishing and documenting the procedures before they are needed Establishing meeting regimes Scheduling discipline Templates Choosing an appropriate software to support future operations 20

21 HERA DEVELOPMENT - UNDERGROUND AHEAD OF SCHEDULE 6,000 Monthly Metres Cumulative 5,000 4,000 Metres Cum 3,000 2,000 1, Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Budget Cum 2,319 2,546 2,772 2,998 3,223 3,612 4,011 4,284 4, ,106 Actual Cum 2,368 2,653 2,847 3,132 3,453 3,781 4,059 4,411 4, ,542 21

22 HERA DEVELOPMENT FINALISING MILL COMMISSIONING Hera Mill July

23 HERA DEVELOPMENT FIRST GOLD POUR 12 TH SEPTEMBER 23

24 HERA DEVELOPMENT Sold first concentrate on schedule 24

25 GROWTH Aurelia Metals Limited ASX:AMI 2 Corporation Place ORANGE NSW 2800 T: E: office@aureliametals.com BUILDING A MID-TIER MINING COMPANY 25

26 References MISAC meeting presentation on Hera Project by Sean Pearce The Definitive feasibility study Of Hera Mine September 2011 Why building a mine on budget is Rare by Chris Haubrich, October 2014 (CIM MES Toronto) Bullock mining financeinvestment old?oid=140690&sn=detail, viewed 9 December 2014 Correcting the course of capital projects plan ahead to avoid time and cost overruns down the road by PWC, October 2013 Odysseus Pre feasibility Report, Xstrata nickel, 2012 Golders Consultancies, Jo Graf Geotechnical engineer. Hera Village 26

27 Questions? 27