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.
Rising copper and gold prices since mid-2019 focused Chinova’s attention on the brownfields Starra mines, as the likely successor to the depleted Osborne orebodies, to provide mill feed for the Osborne Processing Plant. Three Starra mines have been identified to provide ore for a project which is now known as the Osborne Extended Mine Life Project, or the EML Project. They are:-
- Starra 254 Open Pit = 2.34M tonnes @ 0.77%Cu, 1.28g/t Au.
- Starra 222 Open Pit = 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 6 million tonnes from three mines which will extend the Osborne site life by several years. Ore will be hauled by road trains, approximately 50km from the Starra mines to Osborne Processing Plant, along a haul road, privately owned and operated Chinova.
Starra 276 was previously mined by Selwyn Mines Limited SML about 20 years ago. Chinova also mined underground at 276 in 2013-2014 producing 0.85M tonnes @ 1.67%Cu, 0.93g/tAu. There is potential to include additional mill feed into the EML Project from Kulthor, Starra 276 or other previously mined Starra underground mines with improved metallurgical performance and improving metal prices, however that will be the subject of a future studies.
The Mount Dore Heap Leach Project has previously been considered as Chinova’s next project. However, the relatively low copper grade of the primary ore body combined with relatively low copper prices throughout the 2010s caused delays in the progress of this project through its feasibility study. The project comprises two open pits with a total ore reserve of 18.2M tonnes @ 0.74% Cu. In 2017, the copper grade of the project was improved with the acquisition of the adjacent Stuart mining lease. 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 has the high-grade molybdenum / rhenium (Mo/Re) Merlin Underground mine on care and maintenance. Merlin has an ore reserve of 5.2M tonnes @ 1.3% Mo, 22ppm Re, 0.24% Cu. The Merlin Feasibility Study was completed by Chinova in 2014 and the project was planned to commence, however when the Mo price collapsed shortly after project approval, the project was placed on care and maintenance.
Merlin has 3.5km of access decline already developed and is within 5km of Starra so these mines would share extensive infrastructure. The Merlin dewatering system is maintained to provide raw water to the EML Project.
Mount Elliott is approximately 20km north of Starra and has a large and potentially highly economic open pit with 19.6M tonnes @ 1.00%Cu, 0.53g/tAu. The EML Project was selected in front of Mount Elliott as the extensive old underground workings below the pit will require backfilling at a cost of $29M over 2 years. Extensive archaeological work is also required to document and preserve the historic smelter ruins on the site before mining can commence.
Construction of a new sulphide flotation processing plant is envisaged at Mount Elliott, rather than hauling ore over 70km back 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 is the most valuable deposit in the Chinova portfolio with an insitu resource of 570M tonnes @ 0.44%Cu, 0.26g/tAu. SWAN is located alongside Mount Elliott and less than 20km north of Mount Dore / Merlin.
A comprehensive scoping study was conducted in 2012 which demonstrated that although the SWAN deposit is low grade, that with bulk mining methods such as Block Cave and massive capital investment estimated of $1.4 to $1.6 Billion the project could be viable. This investment would involve construction of an 12M to 16 Million tonne per annum copper / gold flotation & gravity Processing Plant and all the associated regional infrastructure. Mining would be by Block Cave (BC) with a mine inventory of 134.6M tonnes and a mine life of 8 to 11 years after several years of development and construction.
The above-mentioned projects are the steppingstones 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.