Castlemaine Goldfields is a gold explorer and producer with five significant tenements in Australia’s historic central Victoria gold belt, collectively covering over 350 square kilometres. Underground mining and ore processing was restarted at the Ballarat tenement in 2011 and is currently producing approximately of 46,000 ounces of gold per annum.
Castlemaine was acquired by LionGold in August 2012 following a successful takeover offer, which attracted more than 90% acceptances. Castlemaine was subsequently removed from the official list of the ASX in September 2012, and the acquisition of the balance of Castlemaine shares was concluded in December. Castlemaine owns 100% of three of its five tenements outright and has a farm-in agreement with Navarre Minerals for the northerly Raydarra and Sebastian tenements.
The Company’s assets are within proximity of the established regional gold mining centre of Bendigo, an area which has produced over 1.4 million ounces of gold at a grade exceeding 9 grams per tonne from the 1850s. The active Ballarat mine is located some 115 kilometres northwest of Melbourne. Facilities include a fully commissioned 600,000 tonne per annum mill, gravity and leach circuits, an assay lab and a stores warehouse. High standards of environmental practice include rehabilitation and land management activities, a fire reduction programme and an active working relationship with Parks Victoria.
Underground mining and ore processing at Ballarat was restarted in 2011, and the first gold pour under a new management team was achieved in September that same year. Production was ramped up in 2012, and by June, the underground development was sufficiently advanced to include a number of working areas, progressively trending north.
In FY2016, operational achievements included approximately 3.5 kilometres of underground development, 60.1 kilometres of diamond drilling and the mining of 250,610 tonnes of ore at 6.1 grams of gold per tonne. Major projects comprised the commissioning of the flotation circuit as part of the processing circuit and commencing works to extend the capacity of the mine’s tailings storage facility.
The successful mining at the Ballarat tenement has led to the development of a broader regional exploration programme, devised with the intention of generating a pipeline of projects that could eventually provide ore feed to the Ballarat gold processing plant. Related activities in the past financial year have included interpretation and modelling of the mineralisation identified in the previous year at the Tarnagulla tenement, and planning for exploration works at Berringa, Ballarat West and Ballarat South.
Castlemaine bought 100% of Ballarat from Lihir Gold plus supporting infrastructure in 2010 for A$4.5m cash, compared with Lihir’s total investment of A$350m for the mine (inclusive of plant) plus A$400m on development and administrative facilities. Lihir had purchased the mine in 2007 believing that over 200,000 ounces pa of gold would be produced once mining commenced. The nuggety nature of the ore body was not well-understood at the time. On realising that the production potential was notably smaller, the Ballarat Mine was put on the market in 2009. A 2.5% royalty is still paid to Newcrest, the owner of Lihir.
Castlemaine tenements lie within the “Golden Triangle” of the Central Victorian Goldfields, one of the world’s major gold provinces. These maintain a degree of common geology and mineralisation features typical of Paleozoic ‘Slate Belt’ gold styles. The deposits occur in monotonous turbidite Ordovician slate and greywacke sedimentary rock sequences which are regionally folded to typically upright, sub-horizontal Chevron folds with gentle fold plunges both north and south. As folding occurred and the sequence was ‘locked up’, laminated quartz veins developed on bedding planes and strike parallel west dipping thrust faults developed of moderate to steep dip.
Gold mineralisation occurs as free gold grains (generally 70-90% of gold in a deposit) within fine quartz veins which are located along or adjacent to the major thrust faults. Deposits are strongly structurally controlled with the eastern fold limbs or anticline axial portions of the folds containing the majority of gold produced to-date. A strong characteristic of the Victorian Slate Belt mineralisation is the very high nugget effect caused by coarse gold distributed in the veins, often at a scale which is unpredictable to modern drilling and mining, but often high-grade. Veins can occur as tension arrays with very short continuity and in the same deposit as ‘fault-reef’ quartz or anticline ‘saddle’ reefs with a range of strike continuities up to about 600 metres length each. Some frequency of fault reefs or saddle gold lodes can be found to depth in many fields although not always with reliable frequency.
In compliance with section 26 of the Minerals Resources and Sustainable Development Act (Victoria), Castlemaine has issued its Sustainability Report for the period 1 July 2015 to 30 June 2016.
The Ballarat Goldfield is Victoria’s second largest based on historical production and represents Castlemaine’s cornerstone asset. The tenement contains two parallel gold lines of reef, divided by major late cross faults into four northern compartments – Golden Point, Llanberris, Britannia and Victoria. These northern compartments have historically provided large, geologically continuous stopes with high gold grades. They also contain significantly less geotechnical risk with a lower density of cross faulting. Drill intercepts have produced high-grade results, including 29.1 metres at 31.2 grams per tonne, which complement existing results as high as 3.0m at 1400 grams per tonne.
Castlemaine is Victoria’s third largest goldfield. More than 5.6 million ounces of gold has been produced, most of which was won from alluvial mining and 1.1 million ounces from hard rock mining. Some 415,000 ounces of the total was produced from the Wattle Gully underground mine at a headgrade of approximately 12 grams per tonne gold. The Chewton Deposit was subsequently discovered along about 700 metres of west strike. This ore body offers production potential outside the Ballarat tenement, with metallurgical characteristics suitable to processing at the plant. Other mineralised deposits within Castlemaine include Bicentennial, Cappers and Quartz Hill.
The Berringa Goldfield is Victoria’s ninth largest hard rock field with over 960,000 ounces of gold produced at average grade of 8.3 grams per tonne. The goldfield is located only 25 kilometres from Castlemaine’s Ballarat mill, and the mineralisation geometries are relatively simple. Mining last occurred at Berringa in the 1950s, and underground exploration in the 1970s and 1980s resulted in limited mine development or production.
The Tarnagulla field is one of Castlemaine Goldfields’ high potential regional projects and is conveniently situated about 80 kilometres from Ballarat. The mines on the goldfield have previously produced at least 700,000 ounces of gold and are home to the prolific Poverty Reef. Within this reef the Bonanza and Nick o’ Time shoots produced impressive mining results of 360,000 ounces at 92 grams per tonne and 53,000 ounces at 29 grams per tonne respectively. 130 years after Bonanza was mined, the discovery of Nick o’ Time in 1994 proved that other high-grade shoots still exist in the Tarnagulla field and relatively close to surface.
The Sebastian/Raydarra Project lies within the Bendigo structural corridor and includes the Frederick the Great and Bruhns fault systems which are mineralised at Sebastian, the former being sole focus of 1880′s miners who produced 186,000 ounces of gold. Assessment of the area using soil geochemistry, aircore, reverse circulation and diamond drilling identified the potential for large-scale gold resources. The Victorian Government geologists have estimated that between 15 million ounces and over 70 million ounces of gold remain to be discovered under the Tertiary cover sediments north of the Bendigo goldfield. Results at the Tandarra and Four Eagles projects on adjacent licences show this potential to be well founded.
Since 2005 diamond drilling program has been used to define targets at the Bruhns Fault and associated quartz vein reefs which were deeper than the historical mine workings on the overlying Frederick the Great fault. The Bruhns structure consists of large quartz veins ranging from 0.5 to 1.5 metres thickness and adjacent spur veins of silicified sandstone and shale.
In November 2011 a heads of agreement was established with gold explorer Navarre Minerals Ltd (ASX: NML) enabling Navarre to earn 75% of all Sebastian and Raydarra licences.