Richard Hillis, CEO &Christian Dupuis, Program 2 Leader

Hyatt Regency, Perth, 26 March 2012

DET CRC: An Update

World Copper Production

0

10

20

30

1900 1920 1940 1960 1980 2000 2020

Mine Production (Mt pa Cu metal)

Sources: US Geological Survey (1900-83), Brook Hunt (1984 onwards)

Forecast

2005

1981

2030

Average 3.4% pa growth rate 1900-81 Average 2.0% pa

1982-2005

Average 3.2% pa

1986-2030

Copper consumption over the last 25 years accounted for half of all copper metal ever mined in the world

World consumption over the next 25 years will exceed all of copper metal ever mined to date

Copper Reserves

Source: Rio Tinto, 2009

Copper ExplorationPrimary copper deposits >0.3Mt found in western world: 1950-2009

Deeper Targets

Source: Rio Tinto, 2009

Depth of cover for copper discoveries (>4 Mt Cu)

Date of Discovery

Depth to Top of D

eposit (m)

Australian mineral exploration expenditure rose 2.9% to $945M

in the Dec 2011 Q, but metres drilled fell 6.4% (ABS data)

Effect of Depth on Value

Modelling for a Voisey’s Bay style orebody in remote WA(30 Mt @ 2.5% Ni, 2.0% Cu; 20m thick, 60°dip)

Source: Hronsky, 2005

IRR

NPV

(m)

DET CRC Overview: Animation

What is the DET CRC?• backdrop of declining minerals inventory, declining

exploration success and deeper targets: need effective methods for exploring under cover

• not-for-profit company with independent, skills-based board and representative Science Steering Committee

• $AUS 119M over 2010-2018 ($28M cash from Australian Government $26M cash & $65M in-kind from participants)

• world’s best-supported independent minex research initiative

• combines miners, research providers and service companies (service companies have key role in commercialisation)

• technology not science: impacting exploration workflow• industry-driven: projects from AMIRA International’s

drilling technology roadmap• Participants: $AUS 450k pa (~32:1 leverage)• Affiliates: $AUS10k pa

• allocated ~30% of CRC’s resources to a portfolio of 12 three year projects late 2010 (scoped in CRC proposal)

• ongoing ~16 months• new Participant funding, currently allocating ~10% of CRC’s

resources to portfolio of two year Opportunity Fund projects early commercialisable outcomes gaps in our current portfolio hit Commonwealth milestones

• government and internal reviews early-mid 2013, third round resource allocation late 2013

OUR PLAN IS TO FIND GIANT NEW MINERAL DEPOSITS UNDER COVER

WE’RE NOT FINDING ENOUGH NEW MINERAL DEPOSITS

THE VISIONARY LEADERSHIP WORK IS DONE. HOW LONG WILL YOUR PART TAKE?

DET CRC Projects

~100 researchers in 8 different organisations

DET CRC HQ Embedded with Industry at Boart Longyear’s Adelaide Airport Facility

IP and Role of Service Providers

Mining Companies

Drilling Equipment Manufacturers/

Technology Service Providers

R&D Providers

Research & Technology Transfer

Drilling equipment manufacturers & service providers offer a natural

route to commercialisation

Mining companies and geological surveys are

the end users

IP Creation

DETCRC

IP Licencing

IP Utilization

3 pilot driller training programs: 24

unemployed trainees, 15 now in drilling

industry

Target of 40 PhD completions over 8

years: 21 PhD projects commenced

Education & Training

Research Project Areas

• Next Generation Drilling Technologies

• Fundamentals of Rock Fragmentation

• Drilling Optimisation

• National Drilling Testing & Training Facility

Drilling Technologies

Logging and Sensing

Deep Targeting

• In Front of Bit Sensors for Real-Time Drilling Optimisation

• Sensors for Rapid Down-Hole Rock Characterisation

• Integration of Geophysical & Petrophysical Data for Timely Mineral & Lithology Discrimination

• Joint Inversion of 3D Seismic and MT Data

• 3D Seismic for Hard Rock Environments

• Hypogene Alteration as a Vector for Drilling

• Defining and sampling deep cover

• SA case study integration

• are we always going to send core for assay?• are we always going to drill straight holes?• can we drill follow-up holes without de-mob?• can we increase effective radius of the borehole?

Program 1: Drilling

Program Leader: Gary Cavanough (CSIRO)

Objective: Reduce the cost and environmental impact, and increase the safety, of drilling exploration holes by delivering incremental and transformational changes in drilling technology facilitated by a unique drilling research and training facility

1.1 Next Generation Drilling Technologies(Gary Cavanough, CSIRO)

1.2 Fundamentals of Rock Fragmentation(Luiz Franca, CSIRO)

1.3 Drilling Optimisation (Andrew Olsson, CSIRO)

1.4 Drilling Research and Training Facility(Peter Kanck , Boart Longyear)

• ~1,000m Alberta gas wells with 4.5” casing• 1000s of such wells drilled annually by CT• soft, predictable sedimentary rocks• 2-3 hours move in and rig up time (minimal

surface preparation/disruption)• fast penetration rates: up to100m/hr• 2 wells/day achieved• $US 8,000 per well for drilling

• improved cost, safety, environmental impact and hole stability in minex

• key challenges for minex include: coil durability, low WOB/high RPM drilling, downhole impact tool and CT coring tool

• target: $50/m

Project 1.1: Coiled Tubing Drilling for MinEx

Initial One-Year Scoping Project Conceptual design with review and calculations of CT rig for hard rock drilling.

1.1.1 CT Rig Components Develop, design and build CT drilling infrastructure at Brukunga (i.e. reel, injector and control systems)

1.1.2 CT Coil Tube Develop the coil tube for hard rock drilling

1.1.3 CT Motors & Cuttings Transport Develop downhole motors and cutting transport methods for hard rock drilling

Project 1.1: Coiled Tubing Drilling for MinEx

Project 1.1: Percussion Drilling Test Facility (CSIRO, QCAT Facility, Queensland)

Percussive Drilling Research Platform at CSIRO, QCAT (Brisbane)• perform percussive drilling studies under lab conditions• sound attenuating test chamber• full PC control and instrumentation• 40 kW hydraulic motor and high pressure hydraulic pump• simulate range of industry problems, fatigue testing and bit design• in situ testing of 10 tonne hard rock specimens

Project 1.1: Percussion Drilling Test Facility (CSIRO, QCAT Facility, Queensland)

Project 1.1: Percussion Drilling Test Facility (CSIRO, QCAT Facility, Queensland)Percussive Drilling Research Platform at CSIRO, QCAT (Brisbane)• investigating drill rod coupling losses using strain gauge techniques• investigating rock-bit interface and drill bit wear rates• investigating optimum configurations for maximum ROP and bit life• comparing actual to model-based predictions of complex drilling systems

Project 1.2: Fundamentals of Rock Fragmentation

Lab Testing Equipment• Thor: segments/block testing• Echidna: bit testing (<30 mm) Cutting/Drilling tests• experiments with different segments• experiments with different bits (matrix hardness)Model• rock interface laws for stationary response (given

state of wear)• non-stationary response : first evidence that

operating parameters (WOB, ROP) can affect wear rate of segment/bit.

Collaboration• acoustic monitoring & FE modelling of diamond

failure (Adelaide)• bilinear oscillator of drill bits (Curtin)

Con

tact

dom

inat

ed

Mor

e co

ntac

t (c

lean

ing)

Cut

ting

dom

inat

ed

Project 1.2: Fundamentals of Rock Fragmentation

Project 1.3 Drilling Optimisation

Carbon Fibre Drill Rod

Carbon Fibre Rod Manufacture from 2:15

Project 1.3: Carbon Fibre Rod with Embedded Sensor

Project 1.3: Housing for Rod Positioning Vision System

Project 1.3: Rod Positioning Vision System

Laser rod stacker sensor

Project 1.3: Rod Stacker Sensor

Project 1.4: Brukunga Drilling Research and Training Facility

Project 1.4: Brukunga Core

0

100

200

300

400

500

600

700

0 20 40 60 80 100 120 140 160

Mag Sus (SI * 10^-5)

SG (g/cm3 * 100)

Metres down hole

Sulphide zonesmagnetic & dense

Dominantly pyrite, chalco-, pyrrho- & arseno-

Alteration zone around mineralisation

DETCRCDDH-1

Project 1.4: Brukunga Gravity Survey

Program 2: Logging & Sensing

Program Leader: Christian Dupuis (Curtin University)

Objective: Increase the value of holes drilled by real-time down-hole or top-of-hole evaluation of intersected mineralization, detect near-misses and enable immediate follow-up drilling by real-time refinement of exploration and life-of-mine models.

2.1 In Front of Bit Imaging (Binzhong Zhou, CSIRO)

2.2 Sensors for Rapid Down-Hole Rock Characterisation (Stephen Fraser, CSIRO)

2.3 Integration of Geophysical and Petrophysical Data (Richard Chopping, GA)

2.4 Joint Inversion of 3D Seismic and MT Data (Graham Heinson, University of Adelaide)

Project 2.1 In Front of Bit Imaging

Project 2.1: Seismic While Drilling at Brukunga –

Location of Geophones

Project 2.1: Seismic While Drilling

Power spectra comparison on drilling (red) and no drilling (black)

Project 2.1: Seismic While Drilling

Filtered Correlation ResultVelocity estimation

Project 2.1: Seismic While Drilling

Project 2.2 Sensors for Rapid Down-Hole Rock Characterisation

Project 2.2: Geochemical Logging Tool

Project 2.2: Autonomous Shuttle Geophysical Probe

Project 2.3 Integration of Geophysical and Petrophysical Data

Program 3: Targetting

Program Leader: David Giles (University of Adelaide)

Objective: Ensure that drill holes are placed to maximise their success and the knowledge they produce by developing new seismic and geochemical methods for exploration and integrating such into new exploration workflows in drilling, logging and sensing.

3.1 3D Seismic Exploration for Hard Rock Environments (Milovan Urosevic Curtin University)

3.2 Hypogene Alteration (James Cleverley, CSIRO)

3.3 Geochemical Sampling of Deep Cover (Steven Hill, University of Adelaide)

3.4 South Australian Data Integration (Martin Fairclough, PIRSA)

Project 3.1 3D Seismic Exploration for Hard Rock Environments

Low cost Hillside seismic survey.Can steeply dipping ores shoots be seen?

Project 3.1 3D Seismic Exploration for Hard Rock Environments

Projects 3.2 & 3.3 Hypogene Alteration& Geochemical Sampling of Deep

Projects 3.2 & 3.3 Hypogene Alteration& Geochemical Sampling of Deep

Best practise workflows for pXRF

Exciting calcrete sampling results

Geochemical anomalies discovered in cover flanking Hillside copper-gold discovery: base of cover is gold-rich and palaeo-redox interfaces are copper-, uranium- and REE-rich.

Projects 3.2 & 3.3 Hypogene Alteration& Geochemical Sampling of Deep

Characterising background and anomalous geochemistry in cover and basement

Will sample 100-150 drill holes in the central Yorke Peninsula

Samples will cover • 1 m at base cover• 1m at top basement• 1m 10m into basement

Analysed for whole rock geochemistry

Project 3.4 South Australian Data Integration

Project 3.4 South Australian Data Integration

Base of cover and basement geochemical and hyloggersampling centred on the Emmie Bluff Prospect.

Demonstrates combination of bulk geochemistry and hylogger mineralogy in recognition of alteration halos on simple discrimination diagrams .

EmmieBluff

Project 3.4 South Australian Data Integration

Sericite, coloured by white mica wavelength from HyLoggerAssays from sampling top basement every 10m

Blue = short wavelength(muscovite, acidic, PROXIMAL)

Red = long wavelength(phengite, neutral, DISTAL)

CT Rig drilling at $50/m sampling cover and basement

Lab-on-rig detects

geochemical vectors within

3.5 km of mineralised

system

Technology Push(R&D Providers)

Market Pull(Government &

Mining Companies)

Commercialisation(Suppliers)

A New Exploration Model?

Government co-sponsored

regional 5km x 5km grid drilling program

A New Exploration

Model?

Existing drilling is largely chasing geophysical and/or geochemical anomalies, is

subject to many ‘false positive anomalies’, and

does not inform about true background and anomalous geochemical, mineralogical or petrophysical signals of

mineralised systems.

PACE-type contract to drill 730,000m on 5km x 5km grid

for cover and basement sample at $50/m: $36.5M

Combined with 5km x 5km vectoring (lab-on-the-rig)

technologies, every IOCG-type mineralized system in

the province would be discovered

A New Exploration

Model?

PACE-type contract to drill 131,000m on 10km x 10km grid for cover and basement

sample at $50/m: $6.6M

A New Exploration

Model?

Research highlights

Top 10 Research Outcomes1. Boart Longyear’s SC9 drill rig and research equipment commissioned

and drilling at Brukunga Drilling Research and Training Facility.2. World’s first successful minex drilling with a carbon fibre rod. Core

orientation electronics embedded in CF rod and lab tested. 3. Prototype vision system for automated rod alignment bench tested

and being fitted to Brukunga rig for field trials.4. Real-time, remote rig monitoring system developed at Brukunga being

installed on a rig for Newcrest.5. SWD tests confirmed that detectable signals from a percussion bit and

seismometers set up for testing signal from diamond bit at Brukunga.6. World’s first logging-while-drilling system for minex comprising a

natural gamma sensor that will be sent downhole on a shuttle and retrieved with the drill rods ready for field testing.

7. Geochemical neutron logging tool ready for field testing.8. Workflow for cloud-based geophysical modelling developed.9. Seismic survey at Rex Minerals’ Hillside copper-gold discovery: sub-

vertical bodies known from drilling imaged.10. Confidential calcrete sampling results.