The Stage I development of Kanmantoo underground copper mine in South Australia will involve targeting the deposits beneath the open pits at the site.
Hillgrove Resources, the owner of the project, took the Final Investment Decision (FID) to proceed with the development in June 2023.
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With all infrastructure already in place, the Stage I of the underground operation is slated to achieve first copper concentrate production in early 2024.
Over a period of four years, Kanmantoo Stage I is expected to produce 43.5 kilo tonnes (kt) of copper concentrate and 11.5k ounces of gold.
Location details
The Kanmantoo mine is located in Adelaide Hills region in South Australia on Mining Lease ML6345. The location is around 55km from the city of Adelaide, and 3km from the main dual carriageway that leads to Port Adelaide 70km away.
The mine is fully permitted with all necessary infrastructure in place including an operational 3.6Mtpa processing plant, a tailings storage facility and ancillary infrastructure such as access to portal, power, water, and ventilation.
Kanmantoo Project Background
The original Kanmantoo Copper Mine open pit operated from 1970 until 1976. Around 4.1Mt at 0.9% Cu was mined during this period before operations were closed due to low copper prices.
Although Kanmantoo Mines drilled and developed an underground operation in 1976, the reduced copper prices prevented the project to move forward.
Hillgrove Resources began exploration work at the location in 2004 and identified additional mineral resources across the property. The company started open pit mining on several lodes and began processing ore on the site from 2011.
In March 2020, the processing of stockpiled ore was concluded. In this period, the project produced 137k tonnes of copper and 56k ounces of gold from multiple open pits.
In December 2021, Hillgrove released the Kanmantoo Underground Stage 1 Project Economic Assessment (EA 2021).
Subsequently, an updated mine plan and project financial model were completed based on additional geological data and detailed mine engineering. This formed the basis for Kanmantoo Underground Stage 1 Updated Economic Assessment 2023 (UEA 2023).
The UEA 2023 assessed mining from the known resources of Kavanagh and Nugent, which would form the Kanmantoo Underground Stage 1 Project.
The economic assessment also demonstrated strong free cash flow potential of A$205m from a mine life of 45 months through underground operations.
The necessary approvals for Kanmantoo underground operation have already been secured.
The Program for Environment Protection and Rehabilitation (PEPR) for the Kanmantoo project was approved by the Department of Energy and Mining (DEM) in October 2020.
Underground development works at Kanmantoo commenced in May 2023.
The project is fully funded through a A$38m Placement and Share Purchase Plan, sufficient to achieve sustainable copper production in the Stage I underground, and continue additional exploration.
Geology and Mineralisation
Several copper, gold, lead, zinc, silver, pyrite deposits are found in pelitic meta-sedimentary rocks of the Cambrian Kanmantoo Group in the Adelaide Geosyncline over a 300km N-S strike length area.
Kanmantoo is one of the largest of these deposits. It hosts copper-gold deposits within iron-rich meta-pelites which are regionally thermally altered to andalusite- sillimanite grade schists.
The mineral resources are hosted by two mineral systems- called Kavanagh and Nugent.
Multiple Kavanagh Cu-Au mineralised zones are situated within Biotite Chlorite Garnet Schist (BCGS) and/or Garnet Andalusite Biotite Schist (GABS), while exploration drilling at Nugent showed that mineralisation is open at depth and along strike.
Kanmantoo Mineral Resource Estimate
The drilling campaigns at the project have increased the mineral resource estimate by more than 600% at Kanmantoo since 2019.
The UEA 2023 is based on Mineral Resource Estimate of 6.4Mt at 1.09% Cu, 0.12g/t Au. Additional drilling activity at Nugent has further increased the estimate by an additional 6 kilo tonnes of contained copper, which is not added in the economic assessment.
Mining and Ore Processing
The Stage 1 development of the Kanmantoo underground copper mine will focus on two of the nine known mineral lodes on the mining lease which were drilled or mined during open pit operations.
The plan aims to mine the Kavanagh zones to the 650mRL and the Nugent zone to the 900mRL.
Hillgrove will use open stoping mining method for the life of mine, with some adjustments based on geometry and sequencing. Particularly, the project will use bench stoping where stopes are extracted over a single level to a strike length of up to 80m.
Horseshoe production drill rigs will be used for mining, while a fleet of 45 to 60 tonne articulated dump trucks (ADT) will be deployed for haulage.
The existing 3.6Mtpa processing plant at the Kanmantoo site will be used to process ore from the underground operation. The process plant consists of crushing, grinding, flotation, and dewatering processes.
The final product will have a grade of approximately 24% copper along with gold and silver credits. The concentrate will be transported by container trucks to Port Adelaide for bulk shipping.
Key Mining Infrastructure
Initially, the project is receiving power supply from a 900kVa generator located on the 900mRL bench.
Grid power with 10MW 132-11kV switch yard is available on site. An overhead power line will be installed to procure power in a long run.
Water will be sourced from the raw water pipeline to the site. The existing 90mm polyethylene line from the top of the Giant open pit, down the haul road to the 900mRL portal. The pipeline will be extended into the decline and subsequent development.
All critical spare components to minimise operational downtime are stored at the site. In addition, the project will use the existing approved tailings facility, which can store an additional 7Mt of tailings.
Contracts and Agreements
The drilling activity at Kanmantoo was carried out by DRC Drilling.
Underground mining contractor PYBAR was engaged to extend the exploration decline and establish underground drilling platforms using traditional drill and blast practices.
Hillgrove entered into a royalty agreement with Freepoint Metals & Concentrate in August 2022 regarding Kanmantoo project. Under the agreement, Hillgrove will receive a cash payment of $6m for delivering 2.5% of net smelter returns for the first 85,000 tonnes of payable copper to Freepoint.
