Bass Metals Ltd.: Positive Gold Processing Scoping Study Outcomes

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Bass Metals Ltd.: Positive Gold Processing Scoping Study Outcomes

•3 gold recovery process routes identified as potentially viable for the Hellyer Tailings which contain 0.8Moz gold and 32Moz silver.
•The 3 Options comprise; Direct Cyanidation, Albion Process and Pressure Oxidation.
•Conceptual annualised gold recovery of 21 to 72koz and silver recovery of 1.3 to 2.7Moz postulated across the 3 process options.
•Conceptual total site operating cost estimates range from A$743 to $877 per ounce gold(Eq (gold & silver only)).
•Results highlight potential for significant gold production base to be developed by Bass subject to completion of a positive feasibility study.

Introduction

Bass Metals Ltd (ASX:BSM) commissioned metallurgical consultancy, BatteryLimits Pty Ltd and Como Engineers Pty Ltd to undertake a scoping study on the processing options for the economic recovery of gold, silver and possibly base metals from the Hellyer Tails resource. The resource contains 0.8 million ounces of gold and 32 million ounces of silver, but with the gold being highly refractory associated with sulphide mineralsand hence specialised recovery processes are required

BatteryLimits has provided a metallurgical review, process descriptions, process schematics, and process design criteria for each of the three short-listed process routes. Como Engineers has estimated capital and operating costs for each option.

Gold Processing Scoping Study Findings

The process routes identified following an assessment of the historical testwork and feasibility studies were:

1. Direct Cyanide Leach with Cyanide Recycling – Option 1.

This involves attritioning, followed by cyanidation in a high cyanide environment with cyanide recovery (SART) and recycling before a gold and silver recovery phase to a dorè.

2. Fine Grinding with Oxidation (Albion Process) and Cyanide Leach – Option 2.

This involves flotation recovery to a bulk sulphide concentrate which would be fed to an IsaMill and subjected to fine grinding before being leached at atmospheric pressure and 90-100oC, using Xstrata’s Albion Process. The oxidised residue would be then fed to standard cyanidation circuit with gold and silver recovery to dore. The Albion Process is marketed globally by Core Resources and has been previously tested using Hellyer tailings (Xstrata, 1999).

3. Partial Pressure Oxidative Leach – Option 3

A bulk flotation concentrate is finely ground and fed into an autoclave for oxidation. Testwork indicates that optimum recoveries are achieved at partial oxidation of the sulphides reducing the autoclave residence time and hence the capital costs. Base metals will dissolve and report to the autoclave leach solution where zinc and copper could be recovered as a saleable intermediate product. The gold and silver remain in the partially oxidised residue and are recovered by standard cyanidation and elution techniques as in Option 2 above.

A summary of the key outcomes for each processing concept described above is presented in Tables 1 to 4 below. These scoping study level outcomes are based on the grades contained in the Hellyer Tails Mineral Resource as presented in Table 5 and described in Table 6 (also refer ASX Report 23 June 2009). It is important to note that Bass does have other gold bearing resources which may also be amenable to this style of gold silver (+base metals) recovery. The production estimates presented in Table 1 assume a feed-rate of 1mtpa, as that is the notional excess plant capacity after processing of Hellyer Mine Project (HMP) ore.

Table 1: Production Estimate Summary-assuming 1mtpa processed: http://www.irw-press.com/dokumente/BAS_Tables_280710.pdf

The capital cost estimates in Table 2 are based on current engineering costs within a range of plus or minus 35% with a 30% contingency added and assuming new plant and equipment. These costs apply only to the processing facility.

Table 2: Process Capital Cost Estimates for each Option: http://www.irw-press.com/dokumente/BAS_Tables_280710.pdf

The processing operating cost estimates in Table 3 are based on a stand-alone operation with no credit for potential synergies resulting from the current processing plans at Hellyer in relation to the HMP which is currently under development. Other operating costs such as mining, or tailings reclamation, general administration or environmental management are not included.

Table 3: Direct Process Operating Cost Estimates for each Option: http://www.irw-press.com/dokumente/BAS_Tables_280710.pdf

This initial scoping study level assessment is based on the Hellyer tailings resource for input grades and metallurgical recoveries from historic testwork results. Historic costs for mining i.e. reclamation of the tailings by a dredge and a general administration cost have also been incorporated as detailed below in Table 4 and footnotes to generate conceptual site operating costs per ounce of recovered gold (equivalent). The gold equivalence is based only on gold and silver recovered and the prices listed below. Note in the case of option 3, no revenue from possible zinc or copper recovery has been included.

Table 4: Financial Outcome Estimates for each Option: http://www.irw-press.com/dokumente/BAS_Tables_280710.pdf

Table 5: Hellyer Tails Mineral Resource Estimate: http://www.irw-press.com/dokumente/BAS_Tables_280710.pdf

Discussion

Bass Metals has a 100% interest in 0.8 million ounces of gold, 32 million ounces of silver, which together comprise a gold equivalent resource of 1.3 million ounces, all within the Hellyer tails resource. The gold is highly refractory but these scoping study level results are regarded by Bass as highly encouraging that an economic gold recovery circuit could be added at Hellyer. The study findings are largely based on detailed assessments of a vast repository of applicable historical testwork and feasibility studies on the Hellyer tailings originating mainly from the 1980’s and 90’s; not on hypothetical data. As an example, a sample of Hellyer tailings was tested for amenability to the Albion process in 1999 by MIM recording encouraging results of 93% gold and 88% silver recoveries at 46% sulphide oxidation.

The major changes to contribute to the current positive assessment compared to when the viability of recovering gold from the tailings was last assessed in detail (late 1990’s), include:
•
A 3 times uplift in the gold price to approximately US$1,100 - $1,200 per ounce, compared to the sub US$400/oz prices prevalent through the previous decade.
•Improvements in technology such as recent advances in cyanide recycling (Option 1), and engineering and operation of autoclaves (Option 3). Option 2, the Albion Process was experimental in the ‘90’s but is now being installed commercially into several operations around the world.
•The potential resource base available to utilise the technology now includes more than just the Hellyer tailings, given the resource increments Bass has achieved over the past 5 years.

The highly refractory nature of the gold and fine grained texture of the associated sulphides means that the tailings currently represent the “metallurgically” most challenging” feedstock to any of the 3 process routes examined in detail, compared to Bass Metals’ other resources such as Que River, Fossey and Mt Charter, which are metallurgically regarded as more benign. However, the tailings are also the largest currently known and most easily accessibly feedstock on which to base an initial gold production strategy. Hence this early focus on the Hellyer Tails.

On the basis of these positive results Bass intends to undertake a staged feasibility study process as a high priority. The first stage will focus on final process route selection followed by a series of detailed testwork programmes, process route design and cost estimates. The focus will be the Hellyer Tailings, but as the testwork programme develops amenability testing of other potential feed stocks will also be included.

In conclusion, Bass is highly encouraged by the outcomes of the scoping study recently completed by Como Engineers and BatteryLimits. Whilst still at a very early phase the study indicates the potential of utilising proven technologies to recover appreciable quantities of gold and silver and possibly also certain base metals which could significantly enhance the production and revenue profile of its business in Tasmania. The Company has to complete further large scale sampling and testwork programmes before committing to a definitive feasibility study to determine if such an operation could be viable and how it might be implemented. Setting the staged gold recovery study objectives and budgets is now a priority and I look forward to providing further updates on this in the near future.

Table 6: Checklist of Assessment and Reporting Criteria. Hellyer Tails Mineral Resource Estimate- 23rd June 2009: http://www.irw-press.com/dokumente/BSM_Tabelle6_290710.pdf

Yours Sincerely

Mike Rosenstreich
Managing Director

Competent Persons Statement:

The information in this report that relates to the Hellyer Tails Mineral Resources is based on information compiled by John Tyrrell who is a full-time employee of AMC Consultants Pty Limited and a Member of the Australasian Institute of Mining and Metallurgy. John Tyrrell has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code)". John Tyrrell consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.

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Datum: 28.07.2010 - 11:54 Uhr
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