Auctus ready to roll with $100m Chillagoe project
Posted May 19, 2016
Auctus Minerals plans to start mining in late 2016 as it kicks off a $100 million project near Chillagoe, North Queensland.
The private company holds a raft of former Kagara-owned assets in the area as a result of its $65 million takeover of Atherton Resources in late 2015.
Managing director Steve Murdoch (pictured below) has promised a local focus as Auctus lets out the 40-plus contracts required to bring the Mungana polymetallic mine back online and optimise the site’s unfinished concentrator.
This would be followed by the development of a new mine at the nearby King Vol zinc deposit, Mr Murdoch said.
“We intend in the first instance to restart the Mungana underground mine, which has been on care and maintenance since January 2012, and finish the construction of the concentrator,” he said.
The contract for completion of the processing plant, including circuit modifications to extract more value from the Mungana feedstock, is expected to be awarded in June.
“Within the next month we will issue requests for proposals for the underground mining contract,” he said.
Dewatering and rehabilitation work will be carried out in the meantime, and a tender has gone out for the re-establishment of the 240-room worker’s village at Chillagoe.
Mr Murdoch said the operation’s workforce would be a combination of Chillagoe residential and DIDO (drive in-drive out) from the Atherton Tableland-Cairns district.
“Our management team – it’s mandatory for them to be residential in Chillagoe and we already have our senior executive team living there with their families,” he said.
“Direct employees will have option to be residential or DIDO from the hinterland and contractors will be domiciled in our village at Chillagoe.
“It will have a massive impact on the regional economy.”
Mr Murdoch said also Auctus Minerals would promote and assist local supply opportunities.
“We have already sourced our personal protective equipment from a local supplier and the pumping solution that we have put in place for Mungana underground (dewatering) – our biggest purchase so far – is being provided by a local supplier,” he said.
The company plans to begin development of the King Vol project in 2017 and bring it into production in 2018 as Mungana operations begin to tail off.
The combined capital expense across the operations to start up is expected to be about $100 million.
Mr Murdoch said the Chillagoe tenement package included a 10-year mineable inventory, with a further 10 years’ worth of resources already established.
“Over time we will increase the confidence around that and maybe expand it a bit, but the focus now is not really on resource development and expansion – it’s about getting operations under way,” he said.
The concentrator will be set up to process 500,000 tonnes of ore annually.
Backed by private equity firm Denham Capital, Auctus Minerals had enough funding to develop more projects and was actively looking to buy additional mineral assets, Mr Murdoch said.
But he ruled out further projects in Queensland.
“The Queensland Government have made it very undesirable to go again in Queensland with the ‘Chain of Responsibility’ legislation targeting Clive Palmer and the raft of companies involved in Queensland Nickel,” he said.
“They’ve tried to have a sniper shot at Clive but they’ve actually introduced a weapon of mass destruction across the Queensland mining industry.
“Unfortunately from a risk point of view and particularly sovereign risk, while we’ll follow through at Mungana this jurisdiction is not as favourable as it once was.”
People wishing to express interest in work on Auctus Minerals’ Chillagoe project should contact email@example.com
More at http://www.auctusminerals.com.au/