exploration proposal in support of grant of …
TRANSCRIPT
~ POSGOLD", LIMITED ,...~,
66 Coonawarra Road, Winnellie, Northern Territory PO Box 38970, Winnellie, N.T. 0821
EXPLORATION PROPOSAL
IN SUPPORT OF GRANT OF
ACN 007511 006
Phone (089) 844 554 Fax (089) 844 565
EXPLORATION LICENCE APPLICATION 8953
("HIGHLAND ROCKS NORTH")
HIGHLAND ROCKS PROJECT
1 :250,000 SHEET
VOLUME 1 OF 1
Author: G.C. Edwards
Date: August 1995
Commodities: Gold
Authorised by:
Distribution: 0 Central Land Council (1)
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Minister for Aboriginal Affairs (1) III Office of the Minister for Mines and Energy (1) o PosGold, Darwin (1) o PosGold, Adelaide (1)
The contents of this report remain the property of PosGold Limited and may not be published in whole or in part nor used in a company prospectus without the written consent of the Company.
Report No. 19834
CONTENTS
LIST OF APPENDICES
LIST OF FIGURES
Page No
1. INTRODUCTION 1
2. THE COMPANY, POSGOLD LIMITED 1
2.1 CORPORA TE DEVELOPMENT 1 2.2 COMPANY PROFILE 2
3. TENURE 3
4. PERIODS OF ACTIVITY 3
5. PROPOSED AND POSSIBLE EXPLORATION TECHNIQUES 4
5.1 GEOCHEMICAL AND MINERALOGICAL SURVEYS 4 5.2 GEOPHYSICAL SURVEYS 4 5.3 DRILLING, TRENCHING AND PITTING 5 5.4 OTHER WORK 6
6. GEOLOGICAL POTENTIAL OF THE AREA 6
7. SOCIAL ISSUES 6
8. ENVIRONMENTAL IMPACT AND REHABILITATION 7
8.1 GENERAL 7 8.2 BASE CAMP 10 8.3 VEHICULAR ACCESS 10 8.4 MANPOWER 11 8.5 REQUIREMENTS FROM THE LAND 11 8.6 WASTE DISPOSAL AND CONTAINMENT 11
9. SACRED AND SIGNIFICANT SITES 12
10. TERM OF EXPLORATION PERIOD 12
11. POSSIBLE MINES AND DEVELOPMENT 12
12. ESTIMA TED COSTS OF EXPLORATION 13
13. PROPOSED EXPLORATION PAYMENTS 15
14. NAMES OF NEGOTIATORS 15
Appendix No
2
Figure 1
LIST OF APPENDICES
Title
Letter from Minister for Mines and Energy Consent to Negotiate
Location Plan ELA 8953 - Highland Rocks North
LIST OF FIGURES
PosGold Limited Corporate Structure
REPORT NO: TITLE:
AUTHOR: DATE:
19834 EXPLORATION PROPOSAL IN SUPPORT OF GRANT OF EXPLORATION LICENCE APPLICATION 8953 ("HIGHLAND ROCKS NORTH") G C EDWARDS AUGUST 1995
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_ ~Tennant Ck. lonaml I.
W .A. \ ELA 8953
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: N.T. LOCALITY MAP I ,---t- ---I 200Km
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1. INTRODUCTION
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On 14 October 1994, PosGold Limited applied to the Northern Territory Department of Mines and Energy for Exploration Licence Application 8953. The licence application covers a total of 155 graticular blocks.
The Minister for Mines and Energy, the Hon Mike Reed, consented to PosGold Limited to enter into negotiations with the Central Land Council for the granting of the licence on 16 May 1995 (Appendix 1).
This proposal is in support of the licence application as required under the Aboriginal Land Rights (Northern Territory) Act, 1976 and the Aboriginal Land Rights (Northern Territory) Amendment Act (No 3), 1987.
2. THE COMPANY, POSGOLD LIMITED
2.1 CORPORATE DEVELOPMENT
PosGold Limited has its corporate history in the long-standing Northern Territory mining company, Australian Development Limited (ADL). ADL was first listed on the Adelaide Stock Exchange in 1939 to develop and mine gold deposits at Tennant Creek. The mainstay of ADL to the mid 1980's was the Nobles Nob mine.
Poseidon Limited, also an Adelaide based company, maintained a corporate relationship with ADL and purchased a 10.6% interest in ADL in 1982. In 1984, Poseidon moved to control ADL, acquiring 57% of the company. Subsequently, in 1990, this interest was increased to 75% and the company's name was changed from Australian Development Limited to Poseidon Gold Limited.
In 1995, Poseidon Gold Limited changed the company name to PosGold Limited to reflect the acceptance of the name within the investment community and the mining industry.
In May 1991, Normandy Poseidon Limited was formed as a single resource finance group through the merger of Normandy Resources Limited and Poseidon Limited. This company is now called Normandy Mining Limited.
The Group has grown rapidly in recent years through a combination of merger, acquisition and exploration success. PosGold acquired controlling interests in Mt Leyshon Gold Mines Limited and Gold Mines of Kalgoorlie Limited in 1989. In 1991, PosGold purchased North Broken Hill Peko Ltd's gold/copper operations and tenement holdings in the Tennant Creek area.
A successful takeover of Australian Consolidated Minerals Ltd (ACM) in the same year resulted in the acquisition of a 49.8% holding in North Flinders Mines Ltd (NFM). The acquisition of interests in the Bounty and Boddington Mines in 1993-94 established PosGold as a gold producer of international significance (Figure 1).
The Group has now developed major Australian mining group and industrial minerals.
a passive investment company into a interests in gold, base metals, diamonds
Normandy Mining limited i
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The Group has over 50 operations throughout Australia, New Zealand, Turkey, Vietnam, Lao PDR and Indonesia. In 1995, PosGold acquired a 38% interest in Compagnie Miniere International Or SA, which in turn has interests in three operating 90ld mines in Peru, Sudan and Ivory Coast and advanced exploration projects in Mali, Zaire and Guinea. The Group maintains extensive exploration tenements to support these operations.
During the year ended 30 June 1995, PosGold companies produced a total of 1.438 million ounces of gold with PosGold's equity share being 956,800 ounces. 1994/95 diamond production from the Bow River mine near Kununurra, Western Australia was approximately one million carats.
PosGold also has a significant interest in base metals production, managing the Scud dies zinc-copper-Iead-silver-gold deposit east of Geraldton in Western Australia.
The Normandy Mining Group is the largest commerciallindustrial minerals group in Australia through its wholly owned subsidiary, Commercial Minerals Limited.
During 1993/94, the Company's operations generated a net cash flow of $254 million and refunded total dividends to its predominantly Australian shareholders of $54.9m. These figures are detailed in the Company's 1994 Annual Report which has been previously sent to the Central Land Council (CLC). Additional copies can be provided on request.
The Group employs approximately 4,900 people in its operations mostly in Australia. PosGold has two bases in the Northern Territory: Darwin and Tennant Creek and employs 17 full-time geoscientists with an exploration budget for 1995/96 within the Northern Territory of approximately $7 million.
2.2 COMPANY PROFILE
PosGold Limited is established as an internationally recognised gold producer with efficient, low-cost, long life mining operations.
PosGold is committed to growth through exploration success and strategic acquisition. It is also committed to a policy of financial integrity, seeking to maximise the Quality and efficiency of its operations through the highest standards of performance and accountability. The company has a stated
to conduct all mining and exploration activities in an environmentally responsible manner with the aim, through self-regulation, to work in advance of government standards.
PosGold continues to develop a long term relationship of trust and co-operation with the Aboriginal communities of Australia in order to pursue exploration and mining opportunities of mutual benefit. Although exploration and mining negotiations with the Aboriginal owners proceed on a commercial basis, the Company is always responsive to the cultural wishes of the Aboriginal communities.
The following are examples of some of the developments and Aboriginal communities.
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PosGold
III The Normandy Mining Group has developed a Policy and Philosophy to Aboriginal and Torres Strait Islander Issues. This policy document, firmly supported by the Board, was developed by an Aboriginal person in consultation with Aboriginal groups and communities. In addition to joint ventures between PosGold and Yuendumu Mining Company NL, Yuendumu personnel are contracted on exploration projects outside the joint venture areas. PosGold - Tennant Creek, has recently trained 12 Aboriginal people from the local Warramunga community in all aspects of mining, milling, environmental rehabilitation and exploration, and all trainees have been given permanent positions in the various operating departments. Kalgoorlie Consolidated Gold Mines Pty Ltd has implemented a strategy to improve its relations with the local Aboriginal communities. A number of workshops attended by the community representatives have provided a forum to express concerns and improve communication. Poseidon Bow River has instituted a 13 week pre-employment course for local Aboriginal people at its diamond mine near Kununurra, Western Australia. Graduates are employed in a range of positions. The acquisition of North Broken Hill Peko's Tennant Creek assets also included Phillip Creek Station. PosGold has moved to develop a pastoral school for Aboriginal people and a scoping study is in progress.
The Normandy Mining Group is proud of the relationship which it is building with Aboriginal Australia. It is intended to strengthen this association by establishing training programmes and additional real employment opportunities within the Group for Aboriginal people.
3. TENURE
Exploration Licence Application (ELA8953) was applied for on 14 October 1994. A plan of the ELA area is attached as Appendix 2 and 3. It covers 1 55 graticular blocks and is located approximately 500km NW of Alice Springs. The application is within Lake Mackay Aboriginal Land Trust (NT Por 1642).
The applicants received consent to negotiated from the Minister for Mines and Energy on 16 May 1995. A copy of the letters of consent from the Minister for Mines and Energy is attached as Appendix 1 .
The proposal by PosGold to the Central Land Council as representatives of the Traditional Owners of the relevant areas is covered by the following sections.
4. PERIODS OF ACTIVITY
The Minister has advised that should agreement be reached within the Central Land Council. the licence would be granted for six years. Periods and levels of activity will depend on climatic conditions and under normal circumstances most activity will be concentrated during the dry season winter months (April to November). Limited activities might be possible during the summer season (December to March) depending on weather conditions. Exploration will be intermittent throughout the life of the tenement, with periods of 2-3 months of activity on limited portions of the tenement.
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Reconnaissance exploration, including orientation studies, remote geophysical techniques (both ground magnetics and gravity) and bedrock geochemical methods to target diamond drillholes will be concentrated during the first two years of operations. The extent and nature of further work commitments will be dependent upon the success of the initial programme. Should the first pass exploration programme prove negative, the licence will be relinquished.
5. PROPOSED AND POSSIBLE EXPLORATION TECHNIQUES
Exploration will incorporate a multi-disciplinary approach combining geological, geochemical and geophysical exploration methods.
5.1 GEOCHEMICAL AND MINERALOGICAL SURVEYS
Small gravel, sand and soil samples will be collected from dry creek beds and/or selected land areas by field crews comprising a geologist and one to three field assistants.
Each sample location would be recorded with plastic flagging tape and a small aluminium tag or plastic pin-marker showing the sample number.
Geological mapping of rock outcrops will be undertaken in selected areas to prove upon the existing maps and to aid understanding of the rock
formations. The geologists may sample rock outcrop by chipping up to 2kg of rock.
Some samples may be taken for diamond evaluation and these will be approximately 20kg in weight, screened on site and taken at a sample density of approximately one per 7 to 12km2
• This larger sample size is normal for diamond exploration to enable testing for indicator minerals such as chromite, ilmenite and garnet.
Samples taken for base metals and precious metals will most likely comprise a 5kg sand/soil sample for testing for precious metals (gold, silver, platinum and palladium) and a 2kg finer fraction (BOU) for testing for a variety of base metal and pathfinder elements.
Virtually no permanent land or vegetation disturbance will result from these programmes. All work will be undertaken and supervised by trained, experienced and responsible employees or agents of the company.
5.2 GEOPHYSICAL SURVEYS
The area may be flown with aeromagnetic and radiometric survey equipment to record and map variations in the earth's natural magnetic field and natural radiometric response.
The surveys are designed to identify prospective rock units and geological structures that are prospective for concentrations of economic mineralisation.
More detailed investigations over prospective areas may include gravity, electromagnetics (EM) and spectral scanning.
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m Some areas may require more detailed ground geophysical surveys which will require gridding and the measurement of the earth's electrical conductivity, magnetic field and/or gravity field. None of this work is environmentally destructive and will be closely supervised by trained operators.
5.3 DRILLING, TRENCHING AND PITTING
Drilling is required to test rock types in certain areas. There are several drilling techniques commonly used by the exploration industry. These include vacuum, rotary air blast, open hole percussion, reverse circulation percussion and diamond drilling. On completion, all holes will be capped and/or backfilled.
Vacuum Drilling Much of the area has poor rock exposure due to transported sand and soil cover. In these areas, geochemical response is generally very poor. To assist with identification of sub-surface rock types for mapping purposes and geochemistry, small diameter drilling is used to drill through the transported cover. This drilling technique produces holes of approximately 2" in diameter and utilises a small rig mounted on a small truck or tractor. Being of a more regional nature, this style of drilling does not require drill sites to be prepared.
Rotary Air Blast (RAB) Drilling RAB drilling, either by blade or hammer as the drilling conditions dictate, is used for some areas underlain by coarse cobble layers, hard calcrete or silcrete which the vacuum drill cannot penetrate. RAB drilling is also employed where a deeper hole is required. A RAB drill rig is generally mounted on a medium sized truck and produces holes of 5%" diameter.
Percussion Drilling This generally involves either open hole percussion (generally used for pre-collars for diamond drill holes) or reverse circulation percussion. The technique. is used when a larger and/or uncontaminated sample is required, or the depth of testing is outside the limits of aRAB This involves drilling a hole with a 6%" diameter. The depth of drilling may be up to 300 metres. The drill rig is generally a truck mounted multipurpose drill which can collect diamond core and percussion rock fragments. It normally requires a support truck and level drill pads may need to be bulldozed and access tracks prepared.
Diamond Drilling This technique is used when a detailed and uncontaminated record of the rock type is required, where groundwater pressures are too great for percussion drilling to continue or where the unit to be sampled is deep. Diamond drilling is also used to obtain samples for metallurgical testing, geotechnical parameters or where drilling conditions do not permit percussion drilling techniques. As with percussion drilling, it generally requires a support truck and water truck. Level drill pads may need to be bulldozed and access tracks prepared.
In all cases where prepared drill sites and/or access tracks are required, these will be rehabilitated upon completion of the drilling project. Selection of drill sites will be undertaken after consultation with the traditional land owners and occupiers.
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I. Trenching and Pitting In some areas, trenches to approximately 3m depth will be needed to expose, map and sample bedrock. These would be cut only after consultation with the relevant Aboriginal Owners. On completion, trenches will be back-filled and restored in accordance with industry accepted environmental practice.
Should a positive sample result be obtained for diamond exploration (either as indicator minerals or diamonds themselves) these will be followed up to determine their source. Typical evaluation will require geophysical testing, drilling and/or trenching and pitting. On completion of the evaluation, any pits and trenches will be back-filled and restored in accordance with accepted environmental practice.
5.4 OTHER WORK
Non-field related activities will involve laboratory assaying, computer data processing, geotechnical office work and administration. These activities will be carried out in Darwin and Adelaide depending on the resources required.
6. GEOLOGICAL POTENTIAL OF THE AREA
The greatest geological potential of the area is for gold and copper mineralisation in a setting similar to the Granites-Tanami Goldfield.
There may also be regional potential for other commodities such as base metals, diamonds and industrial minerals.
The application area is covered by extensive aoelian sand with Lower Proterozoic gneiss and schists of the Arunta Complex outcropping to the south. AGSO have correlated the outcropping units with the Mt Charles Beds which host all known gold mineralisation in the Granites-Tanami Inlier. Analysis of regional aeromagnetic data (AGSO) also indicates lithological continuity between the two sequences. Granites plutons associated with Mt Charles equivalent schists in the tenement complete the similarity to the Granites-Tanami Inlier.
In addition major structures highlighted on the aeromagnetics increase the prospectivity of the tenement.
7. SOCIAL ISSUES
The Company and its personnel will respect the wishes of all Aboriginal communities. The Normandy Mining Group is committed to developing a long term relationship with Aboriginal people and communities. This can only be achieved through maintaining a sensitive and co-operative approach. The Group has instituted many initiatives relating to employment and training which have been endorsed by the Company's Board. Indeed, the Executive Chairman of the Normandy Mining Group, Mr Robert de Crespigny, is a representative on the Council for Aboriginal Reconciliation and chairs the mining sub-committee. Specific issues relating to the proposed field activities are as follows:
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A field base camp, when established, would be located and structured so as to minimise the impact of the presence of exploration personnel and only after consultation with the Traditional Owners. Given the extent of the licence areas, the base camp would be transient and sited to optimise local field programmes ..
No firearms or intoxicating drugs will be permitted in the field areas or at the base camp. If agreed to be the Traditional Owners, alcohol consumption, in limited quantities, will only be permitted to company personnel or contractors at the base camp and consumed in a restricted area. No alcohol will be sold.
We are aware that some communIties have problems with petrol sniffing. Wherever possible, diesel engines will be used on site and where petrol is required, it will be securely stored so as to prevent unauthorised access.
While efforts will be made to minimise the social impact of the exploration programme on local communities, there are some aspects of social interaction which are unavoidable and may be considered by the local residents and Traditional Owners as being desirable. There may also be services or equipment for hire and/or a community store which the Company could use and thereby supplement local income.
There are also potential employment and training programmes which could develop as a result of the Company's exploration activities. The Normandy Mining Group has a corporate policy to develop Aboriginal employment skills and enterprise development. This could result in a welcome source of support labour for the Company and additional income to the community.
All of these things, whilst certainly creating social impact, open up exciting possibilities for future co-operation between the Aboriginal communities and the Company. However, at all times, it will be for the local people to decide on the level of impact with which they are comfortable.
Company Exploration personnel have been involved in a Cross-Cultural Workshop to improve their understanding of Aboriginal culture, traditions and etiquette. Only employees that have undergone indoctrination by the Company on safety and Aboriginal issues, including their conduct while on Aboriginal land, will be allowed on the tenement.
8. ENVIRONMENTAL IMPACT AND REHABILITATION
8.1 GENERAL
As access to the Exploration Licences can be gained by a combination of existing roads and tracks, it is unlikely that there will be any substantial effect on land outside the licence areas. Where airborne surveys or photography are carried out, the aeroplane turn-around may be made over land outside the licence areas.
The physical impact of the proposed exploration programme is not great but covers a wide area. The Company will ensure that the project is conducted so as to:
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restrict access to essential personnel using established roads and tracks; conserve and protect the environment to the extent reasonably practicable; disturb the least amount of soil and vegetation possible and prevent erosion; minimise pollution; rehabilitate drill sites and temporary tracks at the end of the programme.
The types of impact expected and proposed rehabilitation measures are:
(a) The establishment of a base camp and fuel dump to service personnel and vehicular and air traffic (if required). The base camp normally will consist of several caravans (kitchen, office, ablution) and tents for personnel. During the early phase of exploration, the base camp, is temporary and demobilised at the completion of each field programme. The base camp would be transient and sited to optimise local field programmes.
(b) Airborne surveys such as magnetics and photography will require placement of survey beacons or markers. Normally these are required on hills to improve their effectiveness in returning signals to the aircraft.
The beacons and markers are temporary, cause no impact to the environment and will be removed at the completion of the survey.
(c) Where gridding is required, metal or wooden pegs of approximately 1 metre in length with plastic flagging attached, are driven into the ground at intervals ranging from 10 metres to 500 metres, depending upon the detail of the survey required. Lines of the pegs would be established at various intervals (usually 50 to 200 metres) over specific target areas defined by airborne or ground surveys. Lines of sight along grid lines will be required. This would entail cutting branches from shrubs or trees, but wherever possible, no mature trees would be destroyed.
Accurate survey stations may be established to provide survey control the areas to be gridded and these may require one or two star
pickets to be cemented into the ground for future reference in the event that grid lines are destroyed by fire or termites.
(e) At each grid station established, geophysical readings would be taken, most of which would be done on foot but some vehicular traffic may be required to carry heavy or cumbersome equipment.
(f) Where there is no outcrop, shallow holes may be drilled to bedrock to assist with geological mapping and for geochemical assessment. The method of drilling may be vacuum, rotary air blast (RAB) or air core. Drilling of this nature is normally carried out with a machine mounted on the back of a tractor or light truck. All holes will be back-filled and capped.
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m Drill assessment of this nature generally requires little or no site preparation with the rig being able to manoeuvre around trees, etc.
(g) Where geological, geochemical or geophysical targets have been located, a truck mounted rig would drill holes of 4" to 6" diameter, retrieving the samples as rockchips and dust, or core where the drill converts its operation to diamond drilling. Rockchip samples would be collected in biodegradable plastic bags which break down in sunlight. Where percussion drilling is carried out, dust suppressors would be fitted to the drill rig to minimise dust disbursement. Where diamond drilling is carried out, shallow sumps would be dug to retain drilling water. Sumps would be back-filled when they are no longer required. Depending upon the rock formation being drilled, a water tanker may be required to supply water to the drill rig.
Water would be obtained from water bores drilled at locations previously agreed with the Traditional Owners. In some areas, it may be necessary to drill special water borets for the drilling programme. In such cases, the location of borets would be agreed and the suitability of any water advised to the Traditional Owners.
Where possible, access tracks would be made by driving the vehicle along the proposed route. It may be necessary however, particularly in rough terrain or where a heavy vehicle such as a drill rig requires access, to use a grader or bulldozer to prepare a simple track, but at the same time keeping ground disturbance to a minimum.
(i) With drill sites where the ground is relatively level, drilling could commence with very little preparation. On uneven terrain, drill pads would be prepared by using a grader or bulldozer to push the ground level. When the drill hole is finished and no follow-up drilling is required, the drill pad would be rehabilitated and the topsoil placed back on top. No mature trees would be destroyed.
A helicopter pad may be established near the base camp. The disturbance to the terrain caused by this would depend upon the location of the pad and base camp, however the pad would be chosen where minimal or no preparation is required.
(k) Land disturbances will be re-shaped to a natural landform if required and, if needed, re-seeded with local species of native plants.
(I) Wastes will be disposed of in a safe manner as permitted or removed from the district.
(m) If required, a bond will be lodged with the Department of Mines and Energy to ensure compliance rehabilitation.
Territory required
The Central Land Council and Traditional Owners will be advised of all work proposals' prior to their commencement. The Company would only undertake exploration activities within the licence area as have been included in a work programme submitted to and cleared by the Land Council. The work programme would include details of the exploration activity proposed to be undertaken.
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m In order to maintain good communication between the Company, the Land Council and the Traditional Owners, it is proposed that a liaison committee be formed to review and monitor the project. The composition of the liaison committee would be representatives of the Land Council, Traditional Owners and Poseidon.
All field personnel would be made fully aware of the need to consult before any land disturbance occurs. The company will require guidelines on how this consultation is best carried out.
8.2 BASE CAMP
In the initial phase of exploration, the proposed base camp would comprise several caravans or tents for housing personnel, a basic field office and a kitchen. An ablution block may be necessary and if so, will be erected using either chemical or septic systems.
The location of the base camp will be determined in consultation with the Traditional Owners. Given the extent of the licence areas, the base camp would be transient and sited to optimise local field programmes.
8.3 VEHICULAR ACCESS
Access to the project areas would, where possible, be by established roads and/or tracks. Up to six 4-wheel drive field vehicles (eg Toyota Landcruisers) and up to three trucks (water truck, drilling rig) could be in the area from time to time. These vehicles will belong to PosGold and its bona fide consultants and contractors. If work programmes indicate the need to significantly increase the number of vehicles required, this would be after consultation with the Traditional Owners.
Track construction comprises the single greatest impact on land during the exploration phase. Wherever possible, existing tracks would be used rather than constructing new roads. If new track construction is required, the Company will attempt to avoid grading of the natural surface. Where grading is required, humps and drainage channels will be utilised to prevent soil loss by diverting water flow from the track surface.
The Traditional Owners may request that tracks constructed for exploration be left for their use. This can be arranged through mutual discussions. new tracks, not required by the Traditional Owners, will be rehabilitated in accordance with industry accepted practices.
Multiple drillholes angled from one drill pad will be used wherever technically feasible. This will decrease the necessity for additional access and disturbance.
Helicopter transport to outlying and difficult areas will reduce the land disturbance caused by vehicular access. Temporary fuel dumps may be required to reduce refuelling distances. The location of these dumps would be approved by the Aboriginal Owners and all drums would be removed when the dumps are no longer required.
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III Fuel, water and provisions would be generally supplied by road but infrequent light aircraft trips may be required.
8.4 MANPOWER
Initially as many as ten persons may be intermittently working in the area. Depending on the success of exploration, additional people such as drilling contractors, geophysical crews and other consultants may temporarily increase the number of personnel. It is hoped that some of the residents of the local area could be employed on this project to reduce the numbers of outside people and to establish additional skills within communities.
A list of persons working Council.
8.5 REQUIREMENTS FROM THE LAND
the area be available to the Central Land
Water for the base camp and field workers would be required. This would be initially trucked in to the camp but water bores will be considered if permitted.
No demand for timber (apart from firewood requirements) is envisaged.
Road-making may not be required, but if necessary, borrow pits for road construction and maintenance could be necessary rather than carting such material from outside the project area.
In general, these issues will require open dialogue between the Traditional Owners, their representatives and the Company because the Traditional Owners' local knowledge will guide the Company to the best way of achieving an acceptable exploration programme.
8.6 WASTE DISPOSAL AND CONTAINMENT
Environmentally safe disposal of camp rubbish, waste water and sewerage will be carried out at the base camp as approved.
On drilling sites, the drilling contract will stipulate that no rubbish, oils or additives of any kind are to be left behind on any site. A representative of the company will be used to check all drill sites on completion of drilling.
Only the most professionally competent of drilling contractors will be employed on the project. Reports of previous drilling within the region indicate that drilling conditions are quite satisfactory so that no environmentally hazardous drilling additives should be needed.
No damage to groundwater or aquifers is likely. Should good quality groundwater be discovered during drilling, holes will be left open and reported to the traditional Owners and their representatives. Analysis of water quality for possible use by any outstations will be undertaken at the Company's expense.
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9. SACRED AND SIGNIFICANT SITES
No exploration will be carried out in "No Go" areas having special cultural significance for the Traditional Owners.
With regard to site clearances, there are several approaches which can be considered. At this stage, the Company's preference would be to undertake progressive regional clearances. Being a regional reconnaissance exploration programme, detailed clearances within the tenements would be both time consuming and not cost effective with the first one to two field seasons devoted to clearances rather than the assessment of the area's exploration potential.
The preferred course of action would be to maintain a close liaison with the Land Council and Traditional Owners nominating a person or persons responsible for regional clearances within a sub-region. The nominated person(s) would provide reconnaissance clearances prior to the sampling team moving into the field. This will avoid areas of significance. If required during site clearances, a representative of the Central Land Council would accompany the team. Some areas may require a detailed anthropological survey. If so, these will be undertaken by an anthropologist accredited with the Central Land Council.
It is important that common sense prevails and that a continuing dialogue can be encouraged between the Land Council, Project Management and Traditional Owners and their representatives so that no confusion develops on this issue.
Restricted areas must be well understood and respected by field crews.
However, as stated previously, successful exploration depends upon gammg access to as much area as possible to enable geological trends to be identified -the vast majority of locations sampled will not require any further work apart from the first sample.
Normal personal contact and the understanding which arises from this will help to prevent conflict. The exploration staff will be disciplined and responsible people.
10. TERM OF EXPLORATION PERIOD
The term of each Exploration Licence will be six (6) years with a minimum of three years exploration being anticipated. The amount of work being carried out and the time taken will depend to a large extent on the results obtained.
11. POSSIBLE MINES AND DEVELOPMENT
If a deposit is discovered, an evaluation phase will occur whereby the deposit will be intensively drilled to delineate it for grade, tonnage, metallurgical and geotechnical characteristics for project feasibility studies. This would require an upgrade of camp facilities to something of a more permanent nature and an increase in the number of people on the project.
Most discoveries prove unviable for development.
Should an economic deposit be discovered, the terms of agreement to bring it into production would be progressively negotiated. The form and direction of the negotiation process should be agreed and defined in the formal Exploration Agreement.
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Normal mine development for gold or base metal deposit involves either an open pit, decline tunnel, shaft or a combination of the three. Gold mines currently operating in the region are a combination of open pit and decline tunnel.
Most diamond deposits are initially mined by open pit methods.
Normally, a mill to concentrate the ore must be sited near the mine. In the case of a gold deposit, ore is produced and sent directly to the refinery.
For diamonds, recovery is through heavy media separation followed by x-ray sorting and finally hand sorting. The raw stones are then sold to the international market through reputable European agents.
The heavy media separation process utilises biologically inactive ferrosilicon powder which is recovered for re-use.
In the case of a base metal deposit (or a copper-gold deposit)' mineral concentrates are produced (normally by froth flotation techniques) which are then shipped away from the mine area for sale or further treatment (eg smelting and refining). However, if an exceptional discovery is made, further processing on site may be economic.
A mine camp or township could eventuate, depending on the deposit, the Government's requirements and especially the requirements of the Traditional Owners and their representatives.
A preferable alternative is to operate the mine on a fly-in/fly-out basis to restrict the number of people on-site thus reducing social impact and maintaining control by the local community.
12. ESTIMATED COST OF EXPLORATION
It is estimated that exploration activities will be carried out in at least three stages over the term of the licence. Work programmes and budgets have been detailed for years one to three of licence areas as follows:
YEAR 1
Work Programme
processing & re-evaluation of AGSO aeromagnetic and radiometric data structural mapping and interpretation regional gravity survey (1,250 stations) geomorphological mapping and evaluation reconnaissance rockchip/residual laterite sampling (100 samples) reconnaissance vacuum/RAB drilling (> 1,500m)
13
Proposed Exploration Budget
Budget Item
Employee Costs
Drilling Costs
Analytical Costs
Specialist Services
Geophysics
Operating Costs
Office Costs
TOTALS:
YEAR 2
Work Programme
ELA 8953
$6,000.00
$11,000.00
$4,500.00
$2,000.00
$10,000.00
$4,500.00
$2,000.00
$40,000.00
m
evaluation of geochemical data from Year 1 sampling and drilling re-evaluation of geomorphology and paleotopographic reconstruction consideration for infill aeromagnetic and radiometric survey (800 line kms) geological and structural mapping geochronological dating RAB drilling of selected area (> 1,500m) RC/diamond drilling of at least two areas (> 500m)
Budget Item ELA 8953
Employee Costs $10,500.00
Drilling Costs $28,000.00
Analytical Costs $10,000.00
Specialist Services $3,500.00
Geophysics $7,500.00
Operating Costs $6,500.00
Office Costs $4,000.00
TOTALS: $70,000.00
YEAR 3
Work Programme
Prospect scale gravity, IP and EM surveys where appropriate infill RAB and vacuum drilling (> 1 ,500m) RC drilling of at least two areas (> 600m) diamond drilling of at least one resource target (200m)
14
Proposed Exploration Budget
Budget Item
Employee Costs
Drilling Costs
Analytical Costs
Specialist Services
Geophysics
Operating Costs
Office Costs
TOTALS:
ELA 8953
$15,000.00
$50,000.00
$12,500.00
$1,000.00
$6,500.00
$9,000.00
$6,000.00
$100,000.00
13. PROPOSED EXPLORATION PAYMENTS
EI
Payments would be made to the Traditional Owners as compensation for social and physical disturbances caused by the exploration programme. The amount would include a guaranteed minimum annual payment to accommodate unforeseen factors such as shortened field seasons, etc. Agreed payments would be made to the Traditional Owners as direct cash compensation or as direct assistance with the supply of goods and services or the provision of labour and/or materials.
The basis for direct cash payments would be negotiated with the Land Council as agents for the Traditional Owners and could take one of several forms:
i) a percentage of in-ground exploration expenditure; ii) a set, negotiated amount; iii) a payment for actual, physical disturbance (eg. an amount per sample
taken or hole drilled, an amount per line kilometre of gridding, etc.)
14. NAMES OF NEGOTIATORS
The following personnel are nominated as representatives:
1 Nick Green
2 Noel Bridge
3 Greg Edwards
Regional Exploration Manager Normandy Mining Group, Adelaide
Corporate and Exploration Consultant Normandy Mining Group, Adelaide
Principal Geologist Normandy Mining Group, Darwin
15
Alternate negotiators:
1 For Nick Green
Bruce Kay
2 For Noel Bridge
Rohan Worland
3 For Greg Edwards
Michael Busbridge
Group General Manager - Exploration Normandy Mining Group, Adelaide
Project Geologist Normandy Mining Group, Darwin
Senior Geologist Normandy Mining Group, Darwin
16
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• MINISTER FOR MINES AND ENERGY
ASSISTANT TREASURER
PARUAMENT HOUSE
DARWIN, N.T. 0800
Mr Greg Edwards Principal Geologist, NT Poseidon Gold Limited PO Box 38970 WINNELLIE NT 0821
Dear Mr Edwards
G.P.O. BOX 3146, DARWIN,N.T. 0801
TELEPHONE: (089) 89 6155 FACSIMILE: (089) 89 6155
I am pleased to advise that, pursuant to section 137(1)(b} of the Mining Act, I hereby give my consent for Poseidon Gold Limited to enter into negotiations with the Central Land Council in respect of your Company's application for Exploration Licence 8953.
Under the provisions of the Aboriginal Land Rights (Northern Territory) Act, the Company has three months from the date hereof in which to submit a written application to the Land Council for its consent to the grant of the licence.
If these proposals are not submitted within the three-month period. my consent will be deemed to be withdrawn, but you may, before the expiration of that period, seek an extenSion of time from the Minister for Aboriginal and Torres Strait Islander Affairs, as provided by section 41 (4) of the Aboriginal Land Fights (Nort...lJ.ern ,Territory) Act. Should you neither lodge your proposals nor seek an extension within that time, your application is refused.
Should you be able to negotiate an agreement with the Land Council, a copy of that agreement \Vi11 be required to be lodged with me before I v"ill conSider the grant of the licence. which grant will be for six (6) years.
2. 3 MAY ms
00 NQ,thern Territmy Government
In the event that the licence is granted, it will be subject to a minimum expenditure covenant of $50 000 during the first twelve months of its term, and to the terms and conditions specified in the Mining Act.
YourSSin~;e~ly~ ____ ~ __
MIKE REED Ib/rJ,C
129°21'
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NT POR. 1642
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A.C.N. ()()7 511 006
MAP REFERENCE :- I: 250,000 Series
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