Chinova’s Current Prospects
As of April 2021, Chinova had the resource authority holdings in the Cloncurry region of northwest Queensland comprising 32 granted Mining Leases (MLs) with an area of 109.8 km, held by its 100% owned subsidiaries Chinova Resources Cloncurry Mines Pty Ltd (24 MLs) and Chinova Resources Osborne Pty Ltd (8 MLs). Chinova’s exploration holdings comprised 26 granted Exploration Permits for Minerals (EPMs) including joint ventures for a total area of 2,865 km².
Chinova currently has no mining or processing activities and the Osborne and Merlin sites are in care and maintenance, however Chinova has an impressive project pipeline.
Apart from Osborne, the main deposits that make up the Chinova Cloncurry Project, Mount Dore, Starra Line, Merlin, Mt Elliott and SWAN are remote and require the development of key infrastructure e.g. sealed access road, grid electricity connection, water supply.
The CopperString project https://copperstring2.com.au proposes to provide an electricity connection for the Mount Dore / Starra / Merlin deposits to the QLD grid power from 2024. Chinova has a connection to a natural gas supply, via the Cannington spur which traverses the Osborne mine site and connects the Carpentaria Gas Pipeline to the Cannington Mine.
Opportunities exist to share infrastructure and develop synergies between these projects to minimise future capital expenditure and project operating costs.
Following the depletion of the Osborne mine and in a time of buoyant copper and gold prices, Chinova’s attention refocused on the brownfields Starra Line of mines, as a potential source of mill feed for the Osborne Processing Plant. Three areas along the Starra Line have been identified to provide ore for a project which is now known as the Osborne Extended Mine Life Project, or the EML Project. The mining areas with their current mine inventory reported above economic thresholds from mining feasibility studies are:-
- Starra 254 Open Pit = 2.34M tonnes @ 0.77%Cu, 1.28g/t Au.
- Starra 222 Open Pit (cutback) = 0.35M tonnes @ 0.68%Cu, 1.20g/t Au.
- Starra 222 Underground = 3.27M tonnes @ 0.79%Cu, 1.88g/t Au.
The EML Project is planning to mine approximately 6 million tonnes from these three mines that will extend the life of the Osborne site by several years. Ore will be hauled by road trains, approximately 50km from the Starra mines to Osborne Processing Plant, along a sealed haul road, privately owned and operated Chinova.
The three mines do not exhaust the potential along the Starra Line with the most recent mining prior to current operations occurring from 2013 to 2014 at Starra 276, where Chinova mined 0.85M tonnes @ 1.67% Cu, 0.93g/t Au from underground development. Several other areas along the Starra line are also identified as having exploration potential.
The EML Project may also be extended with mill feed from the Kulthor deposit, located adjacent to Osborne processing facility, should future exploration and mining feasibly studies at Kulthor, prove favourable.
The Mount Dore Heap Leach Project has previously been considered as Chinova’s next project. However, the relatively low copper grade, lack of gold credits in the primary ore body combined with relatively low copper prices throughout the 2010s caused a development hiatus for this project.
A number of mining feasibility and pit optimisations at Mt Dore indicate the potential for two adjacent pits with a relatively large mining inventory, with one study in 2014 by an external mining consultant, quoting shell 30 as having an inventory of 19Mt 0.9% Cu above a cut-off grade of 0.5% copper. In 2020, the opportunity to improve the cost structure of the project was achieved when Chinova signed a Connection and Access Term Sheet – Foundation Customer with the CopperString project. Further enhancements in engineering were underway in early 2020, with preliminary engagement of a design institute from China with experience in delivering copper heap leach projects. The arrival of COVID-19 brought stringent border restrictions on international travel, which has resulted in these works being suspended.
The Mount Dore Project will target copper oxide ore, which is not ideally suited to the Osborne Processing Plant. A heap leach operation, including a Solvent Extraction and Electrowinning (SXEW) plant will be constructed at Mount Dore. Mount Dore is within 5km of Starra, and alongside Merlin. All these projects will share infrastructure. As a result of the works being suspended, Chinova has decided to tie the commencement of the Mount Dore Project with the availability of cost-effective and reliable power offered by the CopperString Project which will connect the North-West Mineral Provence of Qld with the National Electricity Market.
Chinova also operates the high-grade molybdenum-rhenium (Mo-Re) Merlin Underground mine, currently on care and maintenance.
Merlin is well drilled and has a Mineral Resource, of 6.7Mt at 1.4% Mo and 32ppm Re, classified as Indicated and 0.2Mt at 0.8%Mo and 13ppm Re, classified as Inferred, both reported above a cut-off grade 0.5% Mo.
The Merlin Feasibility Study was completed by Chinova in 2014 and the project was planned to commence, however large fall in the volatile Mo price, shortly after project approval, necessitated the decision to place the mine of care and maintenance.
Merlin has 3.5km of underground decline access decline developed and maintained and is within 5km of Starra, so these mines share extensive surface infrastructure. A side benefit of the Merlin underground is that the mine dewatering system provides high quality raw water to the EML Project.
Mount Elliott is approximately 20km north of Starra and has a large and potentially highly economic open pit (optimised by AMC consultants in 2012) with a mining inventory of 7.8M tonnes at 1.51% copper and 0.75g/t Au reported above economic thresholds from the mining feasibility study. Chinova’s EML Project at Starra, has been selected for delivery in front of Mount Elliott as the extensive old underground workings below the pit will require backfilling prior to commencement of open pit mining. Extensive archaeological work on European heritage is also required to document and preserve the historic smelter ruins on the site before mining can commence. These preparatory works are expected to take approximately 2 years to complete and require a budget of approximately $30m.
Construction of a new sulphide flotation processing plant is envisaged at Mount Elliott, as a way of establishing regional processing capacity in the area. Alternatively, sealing the remaining haul road to connect Mount Elliott to Starra would provide the opportunity for the ore to be transported to Osborne for treatment. Establishment of regional road, power, water, and communications infrastructure for the EML Project and Mount Dore will help lower the capital cost for Mount Elliott.
SWAN-Mt Elliott is the largest mineral deposit in the Chinova portfolio with an insitu Mineral Resource of 354M tonnes @ 0.6% copper, 0.35g/t gold reported above a cut-off of 0.5% copper equivalent (‘eCu’), (eCu=Cu% + 0.8*Au g/t). The Mineral Resource is well-drilled with approximately half of the tonnes classified as Indicated according to the following breakdown:
Indicated 174M tonnes at 0.65% Cu and 0.39g/t Au
Inferred 180m tonnes at 0.55% Cu and 0.32g/t Au
SWAN is located adjacent to the historical Mount Elliott mine, about 20km north of Mount Dore/Merlin and the above quoted Mineral Resource includes remnant resources at Mt Elliott.
A comprehensive scoping study, conducted in 2012, demonstrated that although the SWAN deposit is low-grade, with bulk mining methods such as Block Cave and significant capital investment estimated at $1.4 to $1.6 Billion, the project could be viable. Should this investment proceed, it would involve the construction of a 12 Million to 16 Million tonne per annum copper-gold flotation & gravity processing facility and associated mining and accommodation infrastructure. The scoping study estimated a mine life of 8 to 11 years after development and construction.
The above-mentioned projects are the stepping-stones to enable Chinova to establish cash reserves and regional infrastructure to eventually allow Chinova to develop SWAN.
Chinova's tenement package covers highly prospective geology of the Eastern Succession of the Mount Isa Inlier and includes a number of regionally significant deposits and mineralisation styles. Mineralisation includes the Mount Elliott-SWAN iron-oxide copper-gold (IOCG) system, Osborne IOCG deposit, Starra (gold dominate) IOCG orebodies, the Kulthor carbonate vein hosted copper-gold deposit, Mount Dore copper-oxide deposit, the Merlin molybdenum-rhenium deposit and a number of other mined and unmined mineral systems.
Exploration is active in both the near mine environment and regionally in support of the current development projects and continues to deliver a strong portfolio of targets. Prospective metals including copper, gold, molybdenum, rhenium, lead, zinc, silver, cobalt and new economy metals.
The current declared metal inventory and exploration prospects demonstrate the broad nature of the geological systems and the exploration potential.