Gunson Resources secures mining approval for Coburn Minerals Sands
Gunson Resources (ASX: GUN)
has received the key approval covering the first 5 years of operation
at its Coburn Mineral Sands Project Mining Proposal from the Western
Australia Department of Mines and Petroleum.
This is a major
milestone as the company continues discussions with potential strategic
partners for the “construction ready” project.
Its application
covering environmental matters associated with the first 5 years of
mining is in the final stage of processing by the WA Department of
Environment Regulation.
This is the last approval required before mining operations can commence and a final decision is expected soon.
“We
are very pleased to have passed this major milestone in the Project
approval process, which commenced more than 10 years ago, and we look
forward to clearing the final milestone with the DER very soon,”
managing director Bill Bloking.
“Completing the approval process
will further de-risk the Project from the perspective of potential
strategic partners and will make Coburn one of a very small number of
mineral sands projects globally that are ready to proceed to
construction and mining operations once financing is secured.
“We
believe that this will be an important source of competitive advantage
as the market for mineral sands products – particularly zircon –
continues to improve.”
Coburn Mineral Sands Project
The rapid recovery in the zircon market in 2014 has brought the Coburn Heavy Mineral Sands project into focus.
Previous
work carried out by Gunson on the project, which has a Resource of 979
million tonnes and JORC Reserve of 308 million tonnes at a grade of 1.2%
heavy minerals, means the project is construction ready.
The
project area covers 1,200 square kilometres of fossil coastline, and is
located in an area that is well served by the North West Coastal Highway
45 kilometres to the east and the Dampier to Bunbury natural gas
pipeline 120 kilometres east
Geraldton is 300 kilometres south by
road along the North West Coastal Highway and is a major mineral sand
port, where Iluka Resources (ASX: ILU) ships its zircon and titanium
dioxide products to markets overseas
Coburn has a natural
competitive advantage by hosting much higher levels of zircon (greater
value) and a very low slime level of 2.7% compared with 12% at Iluka’s
project in the Eucla Basin.
Further value could come from the
farm-in with Terrace Mining to study the feasibility of producing
copper, silver, and cobalt metal from shallow deposits at Mount Gunson
in South Australia.
The deal with Terrace Mining will see Terrace
spend $2.5 million on a bankable feasibility study for mining of the
shallow open pittable MG14 and Windabout deposits excised from the joint
venture Gunson has with Noranda Pacific.
A proposed flow sheet
is currently being tested by Terrace that utilises cyanide to leach
copper and silver. Early tests show 90% copper recovery into solution.
Dissolution
of the copper and silver is the first step to produce saleable metal or
metal salts at the minesite. Indications are that this route will
significantly improve the value of the Mount Gunson Project.
MG14
and Windabout contain identified JORC resources of 209,680 tonnes of
copper with significant cobalt and silver credits. Conceptual potential
exists for a Life of Mine of up to 17 years that outputs 9,000t of
copper per year plus cobalt and silver credits.
Analysis
With
zircon – and other mineral sand – prices continuing to improve, the
approval by the Western Australia Department of Mines and Petroleum for
the first five years of mining at Gunson Resources’ Coburn Mineral Sands Project is a major step forward.
Together this is a major boost for
Gunson and effectively a competitive advantage as the market for mineral
sands products turns upward.
The company is now waiting for
environmental approval that would further de-risk the project for a
prospective strategic funding partner and allow mining operations to
commence.
