PLANS to develop the old Conrad Silver Project, 18 Kilometres west of Tingha, were given a boost last week when mine owners Malachite Resources Limited entered into an agreement with Mancala Resources Pty Ltd.
Conrad has an estimated 10 million ounces of silver (together with substantial deposits of tin, copper, lead and zinc), it is open at depth and an attractive project for development.
However, a study by Australian Mine Design and Development late last year indicated the project was sensitive to mining dilution (the amount of waste mined with the ore) because it is a narrow vein deposit. The report assumed a minimum mining width of 1.2 metres, but a large proportion of the vein is only 0.6 to 0.8 metres wide.
Malachite commenced discussions with Mancala because of their experience mining narrow vein deposits.
Mancala considered their proprietary underground vertical miner technology could reduce the amount of dilution to enable a greater value-per-tonne to be mined and processed. Add that to reduced underground costs and it is an attractive proposition.
Malachite Chief Executive, Geoff Hiller, said Mancala is the right group to partner the Conrad Silver Project.
“Not only do they provide mining experience and an innovative approach to the underground mining of Conrad, but also they are prepared to advance the Project to development at their own cost,” Mr Hillier said.
“The vertical miner has the potential to unlock value by allowing economic mining of the high grade vein mineralisation that constitutes the majority of the resource at Conrad.
“The application of a new mining technique that could enable modern mining to replicate the production parameters of the past is the key to giving this historic mine a whole new life and to giving Malachite a secure, long-term basis on which to grow as a mining company.”
Key terms of the agreement are that Mancala has an exclusive six-month option to carry out a pre-feasibility study of Conrad at their own cost, they then have the right to do a full feasibility study to get the project ready for financing, which is expected to cost them about $5 million over two years,
Mancala will earn 50 per cent of the project and have the right to earn an additional 10 per cent by arranging the financing.
From 1891 to 1912 the old Conrad mine was a major source of silver and also produced lead, zinc, copper and tin. A Broken Hill company mined for lead there from 1955 to 1957 before a collapse in lead prices forced its closure.