Rediscover Victoria Updates 3D modelling and Victoria drilling AUGUST 2008 Clean Coal Victoria Victoria’s collaboration on clean coal Petroleum Projects Record prices fuel exploration Illuka Resources Ltd Second stage Murray Basin Lihir Gold Ltd $4M water treatment plant for Ballarat Resources Victoria Conference Bendigo Mining A new voice for resources in Victoria On track to resume mining 8 Page Feature

Victoria’s prospectivity shines at Resources VICTORIA’S EARTH RESOURCES JOURNAL DISCOVERY Victoria Conference FEATURE SECTION

Resources 09 Rex Minerals 11 Bendigo Minerals

Victoria Conference: 09 Jabiru Metals 12 Dart Mining NL

A three-day, 09 Beach Petroleum 12 Synergy Metals multi-commodity 10 Loy Yang Power 12 Bass Strait Oil Company conference featuring 10 Mineral Sands 13 Essential Petroleum Res. leading industry presenters. 10 Lakes Oil 13 Goldsearch 11 Iluka Resources 13 Morning Star NL

11 Hot Rocks CONTENTS

REGULARS ARTICLES

Minister’s Foreword Rediscover Victoria Updates Peter Batchelor, Minister for Latest on Victoria’s 3D modelling and drilling Energy and Resources PAGE 7 PAGE 2 p Cover: Southbank precinct, Melbourne Victoria Clean Coal Victoria Executive in Focus Victoria’s collaboration on clean coal Mark Nolan, Chairman, and carbon capture technologies Exxon Mobil Australia PAGE 16 For Discovery online visit: PAGE 3 www.dpi.vic.gov.au/minpet/discovery or to receive your free copy send your Petroleum Projects details to: News Updates Record prices fuel exploration Gordon Chakaodza Brief updates on the Victorian PAGE 22 Resources Development Officer mineral and petroleum sector Department of Primary Industries Phone: 03 9658 4401 PAGE 4 TO 6 Iluka Resources Ltd Email: [email protected] Second stage development on Murray Basin Tenement Updates PUBLISHING DETAILS PAGE 24 Discovery is published three times a year by the What’s happening with mineral applications and licences Victorian Government Department of Primary Lihir Gold Ltd Industries, Minerals and Petroleum Division, PAGE 32 Melbourne. August 2008. $4M water treatment plant for Ballarat ISSN Number 13282409 PAGE 25 For more information contact: Contacts The Department of Primary Industries Your guide to Minerals and Petroleum Level 16, 1 Spring Street, Melbourne 3000. contacts and resources sector websites Gold Undercover Update www.dpi.vic.gov.au PAGE 33 Unearthing Victoria’s gold future DISCLAIMER PAGE 26 This publication may be of assistance to you, but the State of Victoria and its officers do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication. This publication is copyright. No part may be reproduced by any process without the written permission of the Department of Primary Industries.

ACKNOWLEDGMENTS Minerals and Petroleum Division acknowledges contributions made by private enterprise. Acceptance of these contributors, however, does not endorse or imply endorsement by the Department of Primary Industries of any product or service offered by the contributors. Results now available. Download free reports from www.dpi.vic.gov.au/minpet/goldundercover • Gold endowment north Bendigo - 32 M oz yet to find • Victorian gold deposit styles • Exploration strategies for Victorian gold deposits • Primary lithogeochemical alteration study around Victorian gold deposits • 500 m station spaced gravity data north of Bendigo • Compilation of rock densities • Geochronology of gold deposits

For more information about the Gold Undercover Initiative contact: Kathy Hill Director, GeoScience Victoria Phone: 03 9658 4562 Email: [email protected] DISCOVERY JOURNAL AUGUST 2008 t The Honourable Peter Batchelor, Minister for Energy and Resources Minister’s Foreword

p Minister Peter Batchelor at the opening of the 3D visualisation room

There is no better time than now to be talking about A suite of new Victorian geological data is due for release at the Victoria’s earth resources with the inaugural Resources conference and an impressive list of speakers has been finalised. Victoria Conference being held this month from August The conference will include industry and government presentations, with the first two days having a strong commercial 25-27 and activity across a variety of sectors within our focus and the final day showcasing technical work and new data earth resources industry. by both industry and GeoScience Victoria Since the last edition of Discovery there has been significant New data on coal, carbon capture and storage modelling, gold new investment in the oil and gas sector, a commitment to and other base metals, will be released at the conference. establish Clean Coal Victoria and new copper and molybdenum The conference provides a great opportunity to not only highlight discoveries. some of the great work being done by industry, but also the work being undertaken by government. Turrum The biggest investment news in recent months has been 3D Visualisation ExxonMobil and BHP Billiton’s announcement in July they would In addition to the high grade data to be released at the commit $1.4 billion to the development of the Turrum Oil and Gas conference, GeoScience Victoria has been busy establishing the field in Bass Strait. new 3D visualisation room at their Melbourne office. The new development is offshore from Ninety Mile Beach in I recently opened the 3D room which is the first facility of its Gippsland and the development of the field is expected to kind in Australia to be made available by a State Government provide one trillion cubic feet of gas and 110 million barrels of geoscience organisation. liquids. The 3D room will be used to assist geological modelling work This development provides a massive boost to the oil and gas and will be open to industry to view during the Resources Victoria industry in Victoria and builds on Exxon Australia’s announcement Conference of a $1 billion commitment to develop the Kipper gas field, located close by, late last year. Clean Coal Victoria Work has also begun to establish Clean Coal Victoria. Copper and Molybdenum Discoveries $12.2 million was committed over four years in the May budget to Recent activity in the base metals sector is also promising with establish Clean Coal Victoria in the Latrobe Valley, in the heart of discoveries of high grade deposits of copper and molybdenum. Victoria’s coal industry. Dart Mining has discovered a high grade molybdenum anomaly We are currently in the process of appointing a director to head in north east Victoria, while Beaconsfield Mining has made a up this new organisation, which will develop long-term plans for copper discovery near the Grampians. extraction, development and rehabilitation of the State’s coal Pleasingly, Beaconsfield’s discovery in June is a result of resources. exploration drilling part funded (they received a grant of $80,000) This new organisation will also play an important role in liaising by the first round of grants from our Rediscover Victoria Strategic with the local community and industry to sustainably develop Drilling Initiative. Victoria’s vast brown coal resources. The grants aim to provide incentives to industry to carry I hope you enjoy this edition of Discovery and I look forward to out exploration activity and accelerate the chances of new talking with many of you at the Resources Victoria Conference discoveries. This is exactly what has occurred with Beaconsfield. later this month The second round of funding, worth up to $700,000, has just opened. Applications close for the current round of funding on September 12 and more information is available on the DPI website.

Resources Victoria Conference Peter Batchelor The mix of new investment and new discoveries in Victoria Minister for Energy and Resources provides the perfect lead-up to the inaugural Resources Victoria Conference from August 25-27.

02 Executive in Focus

MARK NOLAN, CHAIRMAN, EXXON MOBIL AUSTRALIA

The Bass Strait oil and gas fields are in Mr Nolan’s blood. As a boy growing up in Victoria during the 1960s it was impossible to ignore the euphoria in the state as discovery after discovery made the headlines and dominated the share market.

The Bass Strait has played host to some of the nation’s greatest oil and gas finds and almost half a century after the first discovery, the fields are pumping new wealth into Victoria. The first production platform was built by the Exxon Mobil, BHP Billiton joint venture in 1968. Exxon Mobil chairman Mark Nolan committed the company to spending more than one billion dollars building yet another offshore platform, just when the Bass Strait oil The Esso/BHP Bass Strait joint venture was in full-flight in the mid and gas fields were thought to be nearing their end. 1970s. It was Australia’s largest offshore oil and gas development The Bass Strait oil and gas fields are in Mr Nolan’s blood. As a and Mr Nolan found himself at the epicentre of all the activity. boy growing up in Victoria during the 1960s it was impossible to ‘‘We’d just put two platforms in the water and we were building ignore the euphoria in the state as discovery after discovery made West Kingfish, Cobia, Fortescue and Flounder, one after the other, the headlines and dominated the share market. as fast as we could, so it was a very, very exciting time,” Growing up in Ballarat, with its rich history of gold rushes in the Mr Nolan said. 1850s, Mr Nolan remembers the talk about the wealth these new Initially the Bass Strait partners used standard oil industry discoveries would deliver to the state. technology, building conventional, steel platforms built at the Barry’s In the 1960s Victoria was regarded with envy by other Australian Beach construction facility near Wilson’s Promontory and attached states. With its abundance of cheap coal for power generation, to the sea bed with massive piles. rich mineral history and the offshore petroleum bonanza, it seemed But newer technologies have now emerged. Mr Nolan played Victoria offered limitless opportunities for new wealth. a part in the installation of one of the world’s first sub-sea Mr Nolan never imagined he would one day find himself leading developments at Cobia, and the development of Blackback in the development of new oil and gas fields in Bass Strait. 1999, which was at the time Australia’s deepest ever offshore “Bass Strait has a long history and a bright future,” he told production project. Discovery. “We estimate there are more than 20 years of liquids The Blackback field sits in more than 400 metres of water, production and 30 plus years of gas still to be produced from and presented a major engineering challenge to the Bass Strait Gippsland. partners. “Improvements in technology, particularly related to seismic In recent years, Exxon Mobil has moved towards the use of processes and analysis, and drilling accuracy, are playing an concrete for its offshore platforms. Massive concrete platforms are integral part in extending the life of the Bass Strait fields.” cast in a single structure allowing the project to be completed close He said the fact that the company was peering deeper into the to shore before being towed to the required location. untested Basin demonstrated its confidence in the potential under “Concrete gravity (platforms) enabled us to build things on site, existing fields. even put the chairs and tables in the quarters and make the beds… Mr Nolan was born into a family of sheep farmers in 1954 and then tow the whole finished facility and just sink it into the sea floor,” grew up in rural Victoria in an era of good fortune for the farming Mr Nolan said. community. He completed his secondary education at Ballarat’s Now he has the chance to lead the development of yet another Saint Patrick’s College and went on to graduate from the University Bass Strait oil field. The Turrum field is being developed at a cost of of Melbourne in 1975 with a mechanical engineering degree. more than $1 billion to help maintain the supply of vital crude oil to St Patrick’s enjoyed a golden period in the 1970s, turning out a Victoria. stream of successful Victorian leaders that included former premier Mr Nolan maintains his fitness by riding his bike to work in Steve Bracks, one of Mr Nolan’s classmates. Melbourne from his East Hawthorn home – a gentle 12-kilometre All the excited talk of Australia’s new petroleum clearly had an round trip – a couple of times a week – but trains hard impact on Mr Nolan as he joined Esso Australia (an Exxon Mobil most weekends. subsidiary) in 1978, when the construction of offshore production Wearing corporate colours he has completed several marathons platforms in South Gippsland was at its peak. in the annual Around The Bay In A Day charity ride, a journey of That followed a couple of years exercising his new found more than 200 kilometres. Mr Nolan completed the ride with about engineering skills at a variety of mining camps around Australia. Mr 40 of his staff and said the gruelling event “generally takes around Nolan’s first job out of university was in the Melbourne design office nine hours to complete”. “It’s getting harder every year!” of mining giant CRA (now Rio Tinto) which sent him to work on the Mr Nolan said.

Bougainville copper project, in Papua New Guinea. FOR MORE INFORMATION CONTACT: He later moved to Queensland’s Mary Kathleen uranium mine Rob Young and later Mt Tom Price in the Pilbara. Government Relations Advisor But two years in the bush was enough so to get back to ExxonMobil Australia Group civilisation he took a job with Esso in Sale. Phone: (03) 9270 3443 Email: [email protected]

03 MINERALS AND PETROLEUM NEWS UPDATES

Gas sale Maldon goldfield inches closer to new production from Bass Strait

ExxonMobil and BHP Billiton have signed a 10-year gas supply deal in which the producers will supply Origin Energy with up to 250 petajoules of gas from their Gippsland Basin joint venture. The contract is expected to start in late 2009, providing Origin with a smooth transition from its current Gascor contract. Origin Chief Operating Officer Karen Moses said the contract would contribute to meeting the company’s retail gas demand in south-eastern Australia. p Alliance foreman Les Cox and Avko operator Phil Reece underground at Union Hill “Together with our current equity gas reserves, the contract will help service Melbourne-based Alliance Resources, Alliance told the Australian Stock NEWS UPDATES customers across south-eastern Australia owner of the Maldon gold project in Exchange the discovery has the potential and potential new generation projects central Victoria 30 kilometres south- to provide easily accessible feed for such as Origin’s proposed Mortlake power west of Bendigo, has revealed strong Alliance’s Maldon treatment plant. station,” she said. new intersections at its Ladies Reef The company plans to follow up the find The company’s BassGas development prospect. with further in-fill drilling to calculate the contributes 20 petajoules of gas to the Alliance has discovered a new goal extent and geometry of the mineralisation company’s supply, while the Otway gas bearing lode in Ladies Reef, about 140 in Ladies Reef. project is expected to contribute an metres west of the company’s Union Hill Recent drilling on the Eaglehawk Reef additional 30 petajoules a year when decline at Maldon. seeking remnant gold mineralisation fully operational. The new discovery was drilled to the west between the Alliance ore shoot (past “The contract strengthens Origin’s of the decline about 580 metres south production 71,000 tonnes for 39,000 long-term gas position. We continue of the southern-most section drilled in ounces of gold) and the Union ore shoot to maintain a highly flexible gas supply Ladies Reef, and around 520 metres north (past production 50,680 tonnes for portfolio by developing our own equity gas of historical workings on Beehive Reef in 70,386 ounces of gold). Any remnant reserves and contracting from a range of Beehive Mine. mineralisation found in this area has potential to be easily accessed from the other gas suppliers,” Ms Moses said. The drill hole tested three targets: the Union Hill decline now being completed. Origin recently announced the acquisition southern extension of Ladies Reef, the of the Halladale and Black Watch northern extension of the Beehive Reef Significant advances have been made to exploration permit in the Otway Basin, and the Derby line of reef further west. lengthen the Union Hill decline, which had which may supplement its gas supplies. It revealed several intersected highly grown to 1.5 kilometres from the portal. Once complete, around 300 metres of ExxonMobil’s Gas Marketing Director mineralised lodes and highly mineralised strike driving on the Eaglehawk reef is James Hunsaker said the sale felsic dykes. planned to produce a bulk sample for announcement demonstrated the long- The mineralisation is in a structural processing through Alliance’s Maldon term competitiveness of the Gippsland position comparable to the historic treatment plant. gas business. ore shoots in the early Linscott’s and FOR MORE INFORMATION CONTACT: “With approximately seven trillion cubic Eaglehawk Reef mines. Steve Johnston feet of gas remaining, Gippsland gas is Chief Executive Officer well placed to meet the increasing energy Alliance Resources demands of south-eastern Australia,” Phone: (03) 9697 9090 Email: [email protected] he said. “The sale affirms the increasing demand for clean burning natural gas, which can produce up to 70 per cent fewer emissions than coal in power generation and use up to 80 per cent less water.”

FOR MORE INFORMATION CONTACT: Michelle Hindson Acting General Manager, Corporate Communications ExxonMobil Phone: (02) 8345 5217 Mob: 0414 207 049 04 MIneralS and PETROLEUM NEWS UPDATES

Ballarat jobs boost Reedy Creek produces the goods by Gekko Systems

p Premier John Brumby welcomes p First hole being drilled at Reedy Creek tenement decision by Gekko Systems

Victoria’s mineral processing hardware Gold explorer Beadell Resources has The company is planning a major NEWS UPDATES maker Gekko Systems plans to invest intersected high-grade gold grading drill program and will begin resource $5 million in a new Ballarat factory, 54.2 grams per tonne at the Apollo modelling of the mineralisation. This creating at least 105 new jobs in prospect within the Reedy Creek follows Beadell’s recent announcement of the region. project north of Melbourne. a new zone of dyke-hosted mineralisation Gekko Systems plans to expand and Perth-based Beadell produced best between Golden Dyke and Apollo. invest in the new manufacturing facility intercepts of 20 metres at 14.5 grams per The zone returned a composite result of and more than double its workforce over tonne of gold from 65 metres, including 20 metres at 14.5 grams per tonne the next three years. five metres at 54.2 grams per tonne from of gold from 65 metres, including five 70 metres, and six metres at 10.1 grams metres at 54.2 grams per tonne of gold The company is a success story for per tonne from 67 metres. from 70 metres. husband and wife team Sandy and Elizabeth Gray, who started the family The company said the intersections Beadell said the new mineralisation is business in their Avoca backyard 13 years confirmed a significant gold discovery. completely open down dip and to the ago, before moving to Ballarat in 1999. Gold mineralisation at Apollo has been north. Single metre split results from the identified over 200 metres of strike. hole, as well as further diamond drilling The company now exports about 85 per Beadell said it has several targets over results, are due shortly. cent of its products and services and has about 30 kilometres of under-explored sold more than 350 processing units in 33 FOR MORE INFORMATION CONTACT: strike, with the Apollo and Golden Dyke different countries in just over a decade. Peter Bowler prospects the first to be tackled. Managing Director Premier John Brumby said Gekko Beadell Resources Limited The company is planning further drilling to Systems machines are designed Phone: (08) 9429 0800 identify a maiden resource for the project. specifically to recover precious minerals The numbers from Apollo add to earlier like gold, silver, copper and diamonds drill results from the adjacent Golden Dyke using water gravity systems aimed at prospect, also part of the Reedy Creek minimising environmental hazards. project. “With assistance from the Victorian Beadell said the combined Apollo and government, this exciting new venture will Golden Dyke results highlighted the mean a new purpose-built manufacturing potential of the Reedy Creek project to facility in Ballarat and the expansion of develop into a new gold field with over 30 Gekko Systems’ workforce from 70 to 175 kilometres of strike potential unexplored. within three years,” he said. Gekko Systems specialises in the design, development and distribution of innovative mineral processing equipment and systems. While its headquarters is in Ballarat, the company has offices in Canada and South Africa. Gekko Systems plans to grow its workforce to 250 over the next five years.

FOR MORE INFORMATION CONTACT: Mick Alsop Gekko Systems Email: [email protected] 05 MINERALS AND PETROLEUM NEWS UPDATES

High base metal prices National Geochemical Survey of Australia could see Benambra fly

Jabiru Metals has received approval from the Victorian Department of Primary Industries (DPI) for diamond drilling to be completed at the Stockman project – formerly the Benambra project – in north-eastern Victoria. Jabiru’s drilling program, initially up to 8,000 metres of diamond drilling, started in May this year after a positive result from airborne electromagnetic surveys. An airborne electromagnetic (VTEM) was completed over the Stockman project by Geotech Airborne in the March quarter. Unlevelled data confirmed an expected EM response from the massive sulphide NEWS UPDATES deposits at Currawong and Wilga, both of which are about 90 metres vertically below p Figure 1: Victorian NGSA sample locations within coarse scale drainage catchments the surface. . The scale of the massive sulphide lenses GeoScience Victoria has completed a Geochemical results from the survey and associated alteration at Wilga and collection of 62 sediment samples from will provide valuable information on the Currawong suggests a large-scale selected floodplains around Victoria presence of minerals and consistent data hydrothermal system and the VTEM results (Figure 1) as part of a joint exercise on the concentrations of more than 62 are expected to permit more definitive drill with the National Geochemical Survey elements, including precious metals, such targeting for future drilling programs. of Australia (NGSA). as gold and silver. It will also improve the Scanning and cataloguing of historical The NGSA falls under the Australian existing knowledge of the concentrations hard-copy data for the project was Government’s Onshore Energy Security and distributions of energy-related completed in May, with validation of Initiative, which seeks to attract investment elements at a national scale. datasets likely to allow a JORC-compliant resource estimation to be completed. in onshore petroleum and geothermal or This project will enable GeoScience “hot rock” energy. The realisation there Victoria to provide a pre-competitive layer A program of diamond drilling aimed at was no complete geochemical coverage of geochemical data and information confirming geological, metallurgical and geotechnical interpretation of the Wilga and for Australia motivated the project. regarding the distribution of geochemical Currawong deposits has now begun with The survey uses an ultra-low sampling elements in the state. It is anticipated DPI approval of the Stockman Drilling density, with an average of one site per the project will influence exploration Work Plan. 5,500 square kilometres. This provides a for mineral deposits, the definition The initial program will include up to 8,000 cost-effective way to cover the large area of geothermal resources and the metres of drilling. The company said the of mainland Australia. interpretation and calibration of airborne principal aim of the drilling would be to radiometric survey data nationally. Results Sample sites are located on the confirm the previously identified zinc- are expected to be released by 2011. floodplains of major watercourses draining copper-lead-silver-gold mineralisation and 1999 JORC-compliant resources pre-defined catchments. Two samples FOR MORE INFORMATION by generating a 2004 JORC-compliant were collected from each location, the ON THE NATIONAL SURVEY GO TO: resource estimate for the massive first sample was taken from zero to 10 www.ga.gov.au/ngsa sulphide lenses. centimetres (just below the root zone, FOR MORE INFORMATION if present) and the second sample was Jabiru will use the diamond drill core ON VICTORIA’S SURVEY CONTACT: produced from the program to complement collected between 60 and 90 centimetres. Paul McDonald All Victorian samples have been sent to previous metallurgical and geotechnical Manager Resources studies, and will integrate this information Geoscience Australia for preparation GeoScience Victoria into the Stockman mine plan and and analysis. Phone: (03) 9658 4531 reserve calculations. Email: [email protected] Website: www.dpi.vic.gov.au/minpet/ FOR MORE INFORMATION CONTACT: goldundercover Gary Comb Managing Director Phone: (08) 9426 8300 Email: [email protected]

06 Rediscover Victoria Drilling is a $2.5 million State Government program focused on increasing exploration drilling and widening the range of commodities discovered in Victoria.

Round two of the initiative was released in July Rediscover and will provide up to $700,000 in funding. Victoria Updates Applications close September 12, 2008.

3D Victoria Modelling Rediscover Victoria Drilling

The 3D Victoria project, which aims to develop a fully The Rediscover Victoria Drilling initiative has produced attributed 3D model of the onshore and offshore geology immediate results, with Beaconsfield Gold discovering at 1:250,000 scale, has progressed in earnest in 2008. high-grade copper intersections in a drilling campaign on its Stavely prospect south of the Grampians. Assisted by an $80,000 grant under the initiative, Beaconsfield Gold defined several high-grade primary copper (predominantly chalcopyrite) intersections from its first diamond drill hole at the Thursday’s Gossan prospect within the Stavely project, about 110 kilometres west of Ballarat. These intersections, together with high-grade supergene copper (chalcocite) intersections generated by a previous explorer, show pmd*CRC Tasmanides 1:1 000 000 scale model of Victoria. the Thursday’s Gossan prospect has potential to host significant, high-grade copper mineralisation with associated Project highlights include: nickel, gold and silver values. • Completion of the 1:1,000,000 fault model of Victoria’s basement. Phase one of the initiative resulted in grants of more than This model was developed as part of GeoScience Victoria’s (GSV) $375,000 approved in February, with two of the six companies involvement in the pmd*CRC Tasmanides project and provides a completing their drilling in June. building block on which more detailed 3D Victoria modelling will Rediscover Victoria Drilling is a $2.5 million State Government be based. program focused on increasing exploration drilling and widening the range of commodities discovered in Victoria. • Construction by GSV’s Ben Williams, Phil Skladzien and Chris The grants are designed to encourage greenfields exploration Osborne of several serial cross sections based on field mapping and the application of new ideas relating to Victoria’s economic and geophysical interpretation and modelling for the Bendigo Zone. geology. These sections will form a constraint skeleton for future modelling Penshurst Resources was granted $97,500 for a drilling and be released in August 2008. program seeking nickel, copper and gold at a site near Hamilton, in Victoria’s south-west. • Progression of the Otway Basin modelling, with the Geoscience Three drill holes with a total length of 750 metres and a Australia regional offshore seismic dataset being built into an maximum depth of 270 metres were completed in April. integrated 3D project by local computer modelling consultants, Highlake Resources was granted $69,500 to drill for nickel 3D-Geo. near Stawell, north-west of Melbourne, while Dart Mining NL was given $59,194 to drill for gold and base metals near Corryong, the In addition to core project work, Minister for Energy and Resources, state’s north-east. North Ballarat received $40,000 to drill for gold Peter Batchelor’s launch of the 3D visualisation facility in May this near Invermay, north of Ballarat and Peter and John Forwood were year received positive media attention for the facility and the 3D granted $29,105 for a drilling program prospecting for gold and Victoria project. copper in a greenfields site near Ararat. The visualisation facility influenced the way we go about 3D Round two of the initiative was released in July and will provide modelling work, as we now have the ability to assess the quality of up to $700,000 in funding. Applications close September 12, 2008. our model products in 3D and to visualise subtle variations in the geometry of structures not visible with a traditional desktop computer. FOR MORE INFORMATION CONTACT: Somma Groat FOR MORE INFORMATION CONTACT: RVD Project Officer Tim Rawling GeoScience Victoria 3D Modelling Manager Phone: (03) 9658 4585 GeoScience Victoria Email: [email protected] Phone: (03) 9658 4584 Email: [email protected] 07 State’s prospectivity TO shine at Resources Victoria Conference 2008

Victoria’s reputation as a premier The state’s prospectivity for a The conference, with the state location for investment in mineral range of commodities including government as principal sponsor, gold, base metals, mineral is set to be the premier annual exploration and development sands, oil and gas, brown coal event for all mining, exploration and of mineral and energy projects and renewable energies will services companies with projects in will be showcased during the be on display and all the major Victoria, or those looking to invest in exploration and development the state. The conference will also inaugural Resources Victoria companies will present. be an invaluable forum for investors Conference at the Hilton on the scouting for information about Park hotel from August 25 to 27. The three-day, multi-commodity Victorian industry players. conference will feature leading industry presenters and exhibitors FOR MORE INFORMATION CONTACT: and provide a unique opportunity to Brooke Boardman Conference Manager browse a wide range of resources Paydirt Media investment opportunities in Victoria. Phone: (08) 9321 0355 Email: [email protected] On the final day, a free technical Gordon Chakaodza forum will give delegates access to Senior Resources Development Officer the Victorian Department of Primary Department of Primary Industries Industries’ latest pre-competitive Phone: (03) 9658 4401 Email: [email protected] geoscientific data, a fantastic tool to help companies reduce their FOR MORE INFORMATION VISIT: exploration risk. www.resourcesvictoriaconference.com

08 State’s prospectivity TO shine at Resources Victoria Conference 2008

Below we focus on a selection of presenters. Full list available on conference website www.resourcesvictoriaconference.com

Rex Minerals Jabiru Metals Beach Petroleum The strategy at Rex Minerals is to Jabiru Metals has just started producing Beach Petroleum is a long established acquire highly prospective projects with zinc and copper from the Jaguar project, oil and gas exploration and production the potential to host large resources in located 300 kilometres north of Kalgoorlie company based in Adelaide, but with commodities that are in high demand. in Western Australia. It is one of the first extensive operations and exploration Rex owns projects prospective for gold, new base metal mines to be developed in tenements in Victoria. silver, copper and iron in South Australia, WA’s north-eastern goldfields in several The company has oil and gas reserves of Victoria and New South Wales, which are decades. 90 million barrels of oil, equivalent annual oil within geological regions known for their The Jaguar deposit, which was discovered production in the 2006-07 fiscal year of 9.4 endowment in these commodities. in 2002, is four kilometres south of the historic million barrels and an active drilling program Rex applies its extensive technical Teutonic Bore base metals mine. It is a within a well balanced portfolio of tenements. experience and existing drilling capacity to volcanic massive sulphide style deposit with a The company’s oil and gas production progress its projects. The projects will lay grade which is in the top five per cent of these is derived from the Cooper/Eromanga the foundations for Rex’s long-term internal deposits worldwide. The total reserve was Basins (north-eastern South Australia and growth, as the company forges ahead to recently increased to 1.7 million tonnes at three south-western Queensland), the Surat Basin become a diversified exploration and mining per cent copper, 11.3 per cent zinc, 0.7 per (eastern Queensland) and the Gippsland company. cent lead and 115 grams per tonne of silver. Basin (offshore Victoria). The company’s principal projects are With an on-site concentrator, Jaguar will Production for the half-year totalled 4,583 Moonta South project, Wandearah project produce both a zinc and copper concentrate, barrels of oil equivalent, compared with 4,696 and Cowell joint venture project. The Moonta with annual metal production ranging from for the previous corresponding period. South project lies 60 kilometres north-west 25,000 – 37,000 tonnes of zinc metal, 6,000 Oil production was up by 46 per cent due of Adelaide on the east coast of the Yorke – 12,000 tonnes of copper metal, and 580,000 to increased production from the Cooper/ Peninsula centred on the town of Ardrossan. ounces to more than one million ounces of Eromanga Basins and the Basker Manta Copper mineralisation was discovered in silver over a five-year mine life. Approximately Gummy (BMG) project, offset by a 16 per the area as early as 1846, with numerous 55 per cent of revenue is expected to come cent drop in production of Cooper Basin gas, small copper mines active periodically over from zinc, 35 per cent from copper and 10 per resulting primarily from a shutdown of the the proceeding 100 years. Rex’s objective cent from silver. Moomba gas plant for 11 days in December at Moonta South is to identify economic Jabiru Metals plans to continue its for maintenance. quantities of iron-oxide hosted copper gold exploration efforts within the highly Production comprised approximately 27 mineralisation, commonly referred to as prospective belt surrounding the Jaguar per cent oil and 73 per cent gas/gas liquids. Iron Oxide Copper (Cu) Gold (Au) Deposits deposit to delineate additional reserves. The Cooper/Eromanga Basins made up 71 (IOCAD), similar to the Olympic Dam and per cent of Beach’s oil production, with the Prominent Hill deposits. remaining 29 per cent coming from the BMG project. Beach is also a major player in the emerging coal seam gas sector.

09 LTD MINERAL SANDS

Loy Yang Power Mineral Sands Lakes Oil NL Loy Yang Power owns and operates the Mineral Sands has established a portfolio With 2005 marking its 59th anniversary, 2,200 megawatt Loy Yang power station of 100 per cent Australian owned mineral Melbourne-based Lakes Oil NL is the and the adjacent Loy Yang coal mine. sand projects, covering about 23,000 oldest Australian oil and gas explorer The company supplies around one third square kilometres in zircon and rutile rich still operating in the country. of Victoria’s power requirements, or 10 provinces in Victoria, Western Australia, The company provides one of the few per cent of total generation for New South New South Wales and Queensland. remaining links between the struggles to find Wales, Queensland, South Australia and The company has acquired advanced and produce Australia’s first local oil reserves the Australian Capital Territory. project areas containing resources that exhibit during the early part of this century, and the The Loy Yang power station is the biggest potentially favourable mining and processing relative comfort of the nation’s near self- in Victoria and the open cut mine is the options, and good infrastructure. sufficiency in petroleum production during largest producing brown coal mine in the In Victoria, Mineral Sands has extensive the 1990s. southern hemisphere. leases in the Murray Basin area, where it Lakes Oil has kept the pioneering spirit Located in the heart of the Latrobe Valley, holds the advanced Wedderburn, Graybridge, alive of a once larger band of optimistic junior 165 kilometres east of Melbourne, Loy Yang Avonbank, Kalkee, and Magic projects; as explorers, by being willing to tackle programs Power is Victoria’s single largest energy well as exploration projects at Balmoral West, in which more cautious major companies producer and is a reliable and efficient energy Cannie West, Kings Tank, and Hay covering have declined to take part. source for consumers right across south- an aggregate area of 6,844 square kilometres. The company has drilled a large number eastern Australia. The Wedderburn, Graybridge, Avonbank/ of exploration wells in the Gippsland area Construction began at Loy Yang in 1977, Kalkee projects host large heavy mineral of Victoria and has discovered substantial with the first overburden (soil) removed deposits that have attractive grades, low gas resources contained within tight from the mine in 1982. The company’s four potential strip ratios, and high in-situ zircon reservoir sands. turbo-generators have a nameplate rating of contents. The Magic project contains inferred Its two main projects are the Trifon and 500 megawatts each and were brought into resources that have the potential to grow. Wombat gas discoveries. Both projects have service between 1984 and 1988. In addition, the Cannie West project includes the potential to produce commercial gas flows Recent major maintenance programs at mineralisation that has considerable potential if the right fracturing technique can be applied Loy Yang Power have delivered generation to be upgraded to resource status. to unlock the tight gas reservoir structures. enhancements, with the power station now The combined resources could sustain Lakes Oil has recently embarked on a capable of generating more than 2,200 mining operations for significant periods of program to expand its portfolio of petroleum megawatts. The open cut brown coal mine time providing the recovery and metallurgical interests interstate and overseas. It has also has an annual output of approximately 30 challenges can be resolved. Advances in been instrumental in helping to establish the million tonnes of brown coal. technology and increased commodity prices geothermal energy sector in Victoria. As Australia’s lowest cost producer of have resulted in improvements in product electrical energy, Loy Yang Power is well recoveries in the mineral sands industry placed to be the leader in the national since the 1980s, particularly for electricity market. fine-grained minerals.

10 Full list of presenters is available on conference website www.resourcesvictoriaconference.com

Iluka Resources Hot Rock Bendigo Mining Iluka produces about 37 per cent of the Hot Rock is a company seeking Bendigo is Australia’s second largest world’s zircon and is the second largest geothermal energy production answers goldfield having historically produced titanium dioxide minerals producer with to the growing global concern about 22 million ounces of gold, down to an a one fifth share of the global market. the environmental impacts of energy average depth of 750 metres. Its core business is the production and production using traditional fossil fuels The company is exploring the Garden processing of mineral sands (producing and nuclear energy. Gully and New Chum lines of reef as ilmenite, rutile, synthetic rutile and leucoxene) It is planning to be the first company to they accounted for 70 per cent of historic and zircon with its business based in Australia generate electricity from geothermal energy in production. and the United States. Victoria, using proven technology employed The better parts of each line are identified The main mineral sands products of rutile, by commercial projects world wide. using the volume and grade of gold produced synthetic rutile, ilmenite and zircon have Hot Rock is a specialist Australian energy from each historic area. This technique has a wide range of consumer, lifestyle and company, formed to appraise and develop identified multiple targets across the goldfield. industrial applications, such as the pigment in geothermal energy projects that can be Exploration drilling is conducted from paints, plastics and papers. developed for electricity generation within underground locations within the company’s The company employs approximately 1,600 eastern Australia, North America, Asia and modern mine, which has been developed people across its operations and development Europe. down to depths of 900 metres and over a projects, with its head office located in Perth. To meet the growing demand for green length of three kilometres. It is reducing its reliance on its Western power, the company aims to harness Assets such as a 600,000 t/y process Australian operations to larger, higher quality geothermal energy, which is a potential plant, mining equipment and various and longer life operations in Victoria, New source of clean, renewable and continuously infrastructure (ventilation, water treatment South Wales and South Australia. available power production. plant and pipelines) are in place to capitalise Iluka has committed to the second stage Geothermal energy is environmentally on exploration success. of development of its Murray Basin mineral clean, sustainable and is strongly supported Bendigo Mining plans to start producing sands operations in Victoria.The company by government. gold from the newly discovered Gill Reef. plans to spend at least $209 million to boost Commercially viable water temperatures of Located on the Garden Gully line, access annual average production to 330,000 tonnes more than 40 degrees have been recorded into the Gill Reef was completed on schedule of combined rutile and zircon between at depths of up to 3,500 metres in oil and during the March quarter, with production 2009-12.The development builds on the gas wells in the company’s Otway Basin expected to start in the September quarter. existing Murray Basin operations by accessing permits. Hot Rock is planning to develop The Gill Reef looks impressive and backed the first of Iluka’s heavy mineral resources in these hot, wet rock resources, which can be by assays from face sampling, Bendigo the northern part of the Murray Basin. developed at lower cost than the hot, dry rock, Mining is confident that this is a high grade as they contain reservoir water, are naturally continuous reef. permeable, and exploitable at shallower drilling depths.

11 Dart Mining NL Synergy Metals Bass Strait Oil Company Dart Mining was created to explore for Synergy is a Victorian-based company, Bass Strait Oil Company (BAS) is a and discover a gold resource of sufficient focused on development of the historic specialist oil explorer focused exclusively size for the company to become a Glen Wills goldfield in the alpine region in on south-east Australia. Over a ten producer and a resource base across the north-east of the state. year period, BAS has assembled a different goldfields. The main project site is located about 40 quality exploration portfolio across the The company is also seeking to find kilometres north of Omeo. Potential for gold Gippsland, Bass and Otway Basins. and develop large gold and base metals and other mineralisation exists along the five BAS recorded two new offshore seismic mineralised systems in porphyry, reduced kilometres of historic workings, which includes surveys in May and June 2008. Its strategic intrusive-related gold (RIRG) and gold-silver- the Glen Wills and the Sunnyside fields and focus is based on an anticipated resurgence base metals targets. Dart is exploring within within Synergy’s surrounding exploration of exploration interest in the productive three exploration licences, two of which are in areas. south-east Australia basins. The drivers for north-eastern Victoria and one is in south- Since announcing an initial gold resource this include access to prospects of material eastern New South Wales. at Glen Wills and Sunnyside in late 2005, scale in world-class basins, a database of Dart’s tenements are host to five separate the company has continued with drilling and modern 3D data defining new targets and goldfields, mined sporadically from the 1880s evaluation. This work has involved technical play types, regional infrastructure and market to the early 1900s. Since that time those studies and discussions with potential development, the benefits of Australia’s stable goldfields have not been explored using partners and investors. low-cost jurisdiction and the increasing value modern techniques. The Glen Wills project has been extensively of oil and gas resources. The company’s projects are located where explored and researched. The area has been Across its permit portfolio, BAS seeks the major east Australian Molong volcanic mined from the 1860s with historic workings to retain operatorship of its joint ventures arc converges with the back-arc sedimentary focusing on high grades. The Mount Wills (currently five of seven permits) and typically basin of the Lachlan fold belt. project has potential for large tonnage, holds large permit interests. This can optimise The volcanic arc hosts disseminated gold- moderate grade mineralisation within the the control of exploration direction. copper porphyry deposits in New South Wales Mt Wills granite and adjacent schistose BAS has also continually invested in seismic and the Benambra copper zinc deposits sediments at its contact. data and modern exploration technologies, south of the Dart tenement in Victoria. Due Synergy has a mining lease over the main allowing it to assemble an extensive database, to the convergence of the metallogenic historical workings and also has surrounding including over 7,000 square kilometres of 3D belts, the tenements may simultaneously exploration areas. The main area of interest seismic in the offshore Gippsland Basin. All of host structurally controlled high grade is several kilometres from the border of the this 3D data has been acquired since 2001, and disseminated lode gold deposits, Alpine National Park. Mining started in this adding significant value to the company’s disseminated porphyry gold-copper and RIRG district in the 1860s but only became larger in acreage position. precious-base metals systems that include the 1880s. bismuth, tin, copper-lead-zinc mineralisation.

12 Full list of presenters is available on conference website www.resourcesvictoriaconference.com

Essential Petroleum Goldsearch Morning Star Gold NL Resources Goldsearch is a publicly listed Australian Morning Star Gold NL is a publicly Essential Petroleum Resources is a public company listed aims to: listed gold explorer and mine developer, publicly listed, Victorian-based petroleum • Undertake grass-roots exploration in focused solely on historically known exploration company exploring the Otway Australia with the aim of discovering high-grade gold production targets in Basin, and holds large interests in four commercial deposits of minerals and the rich eastern Victorian goldfields at onshore and two offshore tenements precious metals. Woods Point. within the Basin. • Establish working relationships with The Woods Point gold project is located 120 Essential Petroleum has established a indigenous Australians for exploration kilometres north-east of Melbourne, adjacent permit portfolio with a unique exposure to the and mining on native title lands. to the historic gold town of Woods Point. Discovery Bay High. • Attract joint venture partners able to The Woods Point goldfield and nearby The Discovery Bay High play fairway has contribute experience and skills and Walhalla are two of the most significant mining the potential to be the next major hydrocarbon share exploration costs to maximise fields in Australian history. Historical gold province in Australia’s southern margins. value for shareholders. production was about 155 tonnes or more Essential Petroleum’s objectives are to: • Adopt best practices in environmental and than five million ounces of gold over a century • Deliver high returns to shareholders by community responsibilities, as well as in of mining, with an average production grade applying disciplined technical and financial exploration methods. exceeding 27 grams per tonne. management to a sound and focused • Identify and develop mineral assets and Morning Star Gold has refurbished and approach to oil and gas exploration that mining operations at an advanced stage of dewatered the famous Morning Star mine to leads to the commercial development project development that provide rewards create access for a substantial underground of reserves. commensurate with the high risks inherent diamond drilling program, targeting areas • Explore based on rigorous analysis of in exploration and mining activities. of the mine which were largely unexplored and undeveloped by the last operators of the interests in prospective basins, which are Goldsearch is exploring for high-grade gold, mine, the Western Mining Corporation. acquired at minimum cost, with potential base metals and uranium deposits in eastern This primary exploration area, containing access to energy infrastructure and markets Australia and for nickel in central Australia an estimated 60 million tonnes of host rocks, with growth opportunities. through joint ventures at its Musgrave project. exists between levels 7–15 of the existing mine • Drive commercial developments of Goldsearch-managed projects are currently and is called the Gap Zone. successful exploration activities, based on focusing on under-explored portions of well Morning Star Gold now holds the largest solid economic and market factors. endowed mineral belts in Queensland ever aggregation of exploration licences and and Victoria. Essential Petroleum has interests in four mining licences in the Woods Point Dyke The company is constantly reviewing the permits onshore and two permits offshore in Swarm with over 220 square kilometres investment of its exploration expenditure as the Otway Basin, in south-eastern Australia. of tenements. Analysis of these areas has identified several new geological information is accumulated at significant prospects and leads that have a its projects. New opportunities are constantly combined estimated resource potential of being reviewed with a view to both the more than five trillion cubic feet of gas and generation of new projects and increasing potentially more than two billion barrels of oil. Goldsearch’s position around existing priority projects.

13 ,

The Resources Victoria Conference will showcase the State’s strength as a premier location for investment in commodities such as gold, mineral sands, oil and gas, brown coal and renewable energies.

Held 25-27 August at the Hilton on the Park – Melbourne, this multi-commodity event will The conference will benefit mining executives, financiers/bankers/brokers/analysts, feature leading industry presenters and exhibitors, and provide the opportunity to explore investors, media, government representatives, mining services industries, suppliers and a range of resources opportunities in Victoria. consultants. A free technical day will be held on 27 August, offering delegates the opportunity to access Resources Victoria, with the support of the Victorian Government, will become the the Department of Primary Industries’ latest world-class, pre-competitive geoscientific premiere annual event on the resources calendar for all mining, exploration and services information to help companies reduce their exploration risk. companies with existing projects in Victoria, or those looking to invest in the state.

A selection of the presenters include:

Hon Peter Batchelor, Gary Comb, Peter Cook, Nicholas Garling, Minister for Energy and Resources, Managing Director, Chief Executive, Managing Director, Government of Victoria Jabiru Metals Ltd CO2CRC Morning Star Gold NL

Richard Aldous, Executive Director, Peter Beilby, Rod Hanson, Peter Barnett, Minerals and Petroleum Division, General Manager Murray Basin, Managing Director, Executive Technical Director, Department of Primary Industries Iluka Resources Ltd Bendigo Mining Ltd Hot Rock Ltd

Kathy Hill, Director, Ian Nethercote, John Quayle Michael Sadler GeoScience Victoria, Chief Executive, Chief Operating Officer, Chairman, Department of Primary Industries Loy Yang Power Dart Mining Ltd Synergy Metals Ltd

Steve Olsen, Patrick McManus, Andrew Adams Peter MacPhail, Managing Director, Managing Director, Managing Director, Managing Director, Northgate Australian Rex Minerals Ltd Mineral Sands Ltd Bass Strait Oil Company Ltd Ventures Corp Pty Ltd

Stephen de Belle Rob Annells, John Remfry, Heath Hellewell (pictured), Managing Director Chairman, Managing Director, Exploration Manager, and Granite Power Ltd Lakes Oil NL Essential Petroleum Resources Ltd John Percival, Director of Operations Goldsearch Ltd

For all presenter, exhibitor and sponsorship enquiries, call conference manager resourcesvictoriaconference.com Brooke Boardman on (08) 9321 0355 or email [email protected]

14 ,

The Resources Victoria Conference will showcase the State’s strength as a premier location for investment in commodities such as gold, mineral sands, oil and gas, brown coal and renewable energies.

Held 25-27 August at the Hilton on the Park – Melbourne, this multi-commodity event will The conference will benefit mining executives, financiers/bankers/brokers/analysts, feature leading industry presenters and exhibitors, and provide the opportunity to explore investors, media, government representatives, mining services industries, suppliers and a range of resources opportunities in Victoria. consultants. A free technical day will be held on 27 August, offering delegates the opportunity to access Resources Victoria, with the support of the Victorian Government, will become the the Department of Primary Industries’ latest world-class, pre-competitive geoscientific premiere annual event on the resources calendar for all mining, exploration and services information to help companies reduce their exploration risk. companies with existing projects in Victoria, or those looking to invest in the state.

A selection of the presenters include:

Hon Peter Batchelor, Gary Comb, Peter Cook, Nicholas Garling, Minister for Energy and Resources, Managing Director, Chief Executive, Managing Director, Government of Victoria Jabiru Metals Ltd CO2CRC Morning Star Gold NL

Richard Aldous, Executive Director, Peter Beilby, Rod Hanson, Peter Barnett, Minerals and Petroleum Division, General Manager Murray Basin, Managing Director, Executive Technical Director, Department of Primary Industries Iluka Resources Ltd Bendigo Mining Ltd Hot Rock Ltd

Kathy Hill, Director, Ian Nethercote, John Quayle Michael Sadler GeoScience Victoria, Chief Executive, Chief Operating Officer, Chairman, Department of Primary Industries Loy Yang Power Dart Mining Ltd Synergy Metals Ltd

Steve Olsen, Patrick McManus, Andrew Adams Peter MacPhail, Managing Director, Managing Director, Managing Director, Managing Director, Northgate Australian Rex Minerals Ltd Mineral Sands Ltd Bass Strait Oil Company Ltd Ventures Corp Pty Ltd

Stephen de Belle Rob Annells, John Remfry, Heath Hellewell (pictured), Managing Director Chairman, Managing Director, Exploration Manager, and Granite Power Ltd Lakes Oil NL Essential Petroleum Resources Ltd John Percival, Director of Operations Goldsearch Ltd

For all presenter, exhibitor and sponsorship enquiries, call conference manager resourcesvictoriaconference.com Brooke Boardman on (08) 9321 0355 or email [email protected]

15 DISCOVERY JOURNAL AUGUST 2008 Clean Coal Victoria (CCV), a new organisation created by the Victorian Government, is dedicated to maximising the value of Victoria’s coal resources.

Clean coal collaboration Government calls for collaboration on clean coal technologies

Latrobe Valley Resources Future Initiative: Driving new coal investment

An initiative to support and encourage but Victoria’s brown coal could become a issues also need to be addressed and will new brown-coal-based investments in substitute for increasingly expensive oil, gas strongly rely on better coordination and the Latrobe Valley has been developed to and black coal. strategic planning of the coal resource. ensure Victoria remains at the forefront New technologies applied to Victoria’s The initiative of Australia’s manufacturing and brown coal could enable the state to grab a The Developing the Latrobe Valley energy industries. share of the global energy market from brown Resources Future initiative builds on the coal exports. Victoria’s low-cost, brown-coal- recommendations and work already based electricity industry has been a major completed under the LV2100 Coal Resources factor in it becoming Australia’s leading project. Several key achievements under the manufacturing state. initiative are contributing to the Government’s New opportunities are emerging for Victoria vision for the development of coal resources: to produce diesel, petrochemicals, fertilisers and hydrogen from its abundant brown- • Exploration expenditure activities related coal resources. to new brown coal projects has boomed Brown coal can continue to remain the from virtually zero in 2000 to more than $100 million in 2008. Growth in coal p David Crawford (TRUEnergy) and DPI staff at main driver of Victoria’s future economic Yallourn brown coal mine in the Latrobe Valley. growth, particularly when combined with the exploration expenditure highlights industry’s underground storage opportunities in the confidence that new uses of technology The Developing the Latrobe Valley offshore Gippsland Basin, which can be used can be economically applied to clean and Resources Future initiative is a $1.5 million to store carbon dioxide. sustainable brown coal developments. program designed to accelerate and support • Expenditure on exploration-related activities new clean coal technologies and industries Technology: the key to the future for emerging industries like coal bed creating new products derived from Victoria’s Coal gasification and liquefaction are two methane has jumped from virtually nothing vast brown coal resources. processes now attracting serious attention in 2000 to more than $20 million today. The initiative developed out of the Victorian in the Latrobe Valley and while neither Government’s Provincial Statement Moving technology is new, changing economics now • Victoria has attracted potential multi-billion Forward and is a plan of action to attract new make the large-scale application of these dollar investments in non-power-related people, ideas, investment and businesses processes more commercially viable. Drying developments for coal resources including to provincial Victoria. One of the key aims brown coal can also offer the possibility of the Monash Energy (coal to liquids project) is driving growth and competitiveness in direct brown coal exports. and the Australian Energy Company’s urea Victoria’s primary industries. With these new opportunities comes production plant. Coal is abundant, affordable and reliable a range of new challenges for Victoria’s and will remain vital to the world’s energy coal-based industry, now and into the • The initiative has demonstrated needs for many years. future. The most obvious is the need to opportunities for new industries that can World coal trade is primarily in black coal, reduce greenhouse gas emissions. Future flow from technologies for non-power coal developments will rely on world-leading uses or sustainable business clusters. innovative, clean coal technologies and These clusters will use the principles of efficient and sustainable use of coal. sustainability, industrial symbiosis and However, other environmental and social industrial ecology. 16 Clean Coal Victoria A new organisation dedicated to maximising the value (such as the need for urban expansion), by clearly of Victoria’s coal resources has been created by the identifying significant coal resources that require Victorian Government. planning protection for future generations. Clean Coal Victoria (CCV) will fill the gaps in coal New coal data will also be used to assess the resource management created after the privatisation potential of deeper coal seams in the Latrobe Valley of the State Electricity Commission of Victoria. that may need to be accessed in the future, with the next generation of mines. This data may also assist The government has dedicated $12.2 million over four authorities to better understand coal quality issues for a years to establish CCV to help create new jobs in the variety of different uses for coal. Latrobe Valley and position Victoria’s coal industry as one of the cleanest in the world. The body will provide the Minister for Resources with advice for coal development in the Latrobe Valley and CCV will boost Victoria’s ability to strategically plan for across Victoria. future coal developments and the Latrobe Valley region. It will also be a point of stakeholder liaison and It will develop integrated, comprehensive, long-term community engagement on the planning and plans for the sustainable development of Victoria’s development of coal resources. coal resources and provide input into associated infrastructure. Long-term regional environmental CCV will be established within the Department of solutions for coal mining will also be developed to help Primary Industries and will have a major presence avoid excessive waste and sterilisation of significant in the Latrobe Valley. It is expected the body will coal resources through short-term planning decisions. require appropriate expertise in coal geology, mining engineering, environmental management and statutory Current knowledge on coal, although comprehensive, planning. is limited to past requirements for electricity production.

Drilling programs to acquire new data and new coal FOR MORE INFORMATION CONTACT: resource information will help optimise extraction of Sean Rooney viable coal and promote significant new non-power Development Manager, Coal uses of coal. It will also help reduce tension between Department of Primary Industries Phone: (03) 9658 4639 coal development and other incompatible land uses Email: [email protected]

Taking Stock of Victoria’s Coal

• Leading on from work undertaken An inventory report on Victoria’s vast coal GeoVic site to develop appropriate exploration on regional coal mining issues such resources, particularly in the Latrobe Valley, models. as rehabilitation and groundwater which will allow easy access to important Victorian Energy and Resources Minister, management, Government has increased data by exploration and development Peter Batchelor, said understanding the limit its strategic capacity to plan coal companies, has been released by the and extent of coal resources in Victoria is development and has funded Clean Victorian government. critical to managing this natural asset. Coal Victoria with $12.2 million over the Excluding existing mines, there are up to “This report will be a key tool in attracting next 4 years. 33 billion tonnes of potentially economic new investment in Victoria’s coal, to build brown coal resources in the Latrobe Valley, on existing and planned operations such • Following a regional assessment of enough to maintain the state’s electricity as Monash Energy’s coal to liquids project. Victoria’s potential to store carbon dioxide generation sector for centuries. Explorers and the public will be able to access geologically underground, the initiative has The report was prepared as part of the a visual representation of the coal deposits supported the development of legislation for $1.5 million “Developing the Latrobe Valley located throughout the state,” he said. carbon capture and storage. This will also Resources Future Initiative” and provides The future use of Victoria’s coal will require support the future policy framework towards an important update on coal resources in new technologies and new investment to meet enabling near zero emissions from brown the Latrobe Valley, where the majority of the the government’s commitment of reducing coal activities. State’s coal is located. Victoria’s greenhouse gas emissions by • A comprehensive coal resources inventory The report summarises Victoria’s coal 60 per cent by the year 2050. report has been conducted with a assets, identifies the location and size of “Victoria’s coal resource will require new supporting public mapping (GIS) system. coal deposits and identifies potential sites clean technologies and new investment to This identifies where coal resources occur for future exploration – particularly in South meet our future needs, and fundamental to and hence allows them to be protected Gippsland and the Murray basin. that future is a clear understanding of the for future generations and energy security. The data collected is incorporated quantity and quality of Victoria’s coal,” Understanding the limit and extent of coal into existing databases, to provide a Mr Batchelor said. resources in Victoria is critical to managing comprehensive record of Victoria’s brown For further information on the “Developing the this natural asset. coal resources which can be easily accessed. Latrobe Valley Resources Future Initiative” visit It can be accessed via a new web- based www.dpi.vic.gov.au FOR MORE INFORMATION CONTACT: system, making the information easily FOR MORE INFORMATION CONTACT: Sean Rooney available to local and international investors. Development Manager, Coal The tool will be particularly useful for Sean Rooney Development Manager, Coal Department of Primary Industries companies interested in obtaining a Victorian Phone: (03) 9658 4639 Department of Primary Industries Email: [email protected] exploration licence over available ground. Phone: (03) 9658 4639 Companies now have the ability to use the Email: [email protected] 17 Post-combustion capture is one of the most promising CO2 capture options for existing brown coal power stations, and one of the key capture technologies being considered for existing and future power stations.

The five-day meeting of APP partnership taskforces on cleaner fossil energy and power generation and transmission was attended Loy Yang Power by delegates from the United States, Japan, China, India, the Republic of Korea and Canada, as well as Australia. Loy Yang Power’s post-combustion ”We want to see acceleration in the development and deployment of new and carbon capture pilot plant moves emerging energy technologies that will deliver advanced coal and gas electricity generation, into the operational phase. with the potential to significantly reduce greenhouse gas emission levels, airborne pollutants and other environmental impacts,” Mr Batchelor said. He said accelerating efforts in collaborative research and providing an ongoing Loy Yang Power’s post-combustion carbon Post-combustion capture is one of the most demonstration of what was achievable with capture pilot plant has been moved into the promising CO2 capture options for existing new and emerging technologies, would operational phase. brown coal power stations, and one of the be “essential in reducing cost barriers The innovative plant is designed to capture key capture technologies being considered and bringing about affordable carbon dioxide rich flue gas from the power for existing and future power stations. The low-emission technologies. station with the aim of storing the CO2 deep research is being undertaken at Loy Yang “Victoria has set a long-term target for underground. Power and International Power Hazelwood by reducing carbon emissions by 60 per cent The plant is based on a solvent absorption the CO2 Cooperative Research Centre compared to 2000 levels. Victoria is also technology that absorbs the CO2 in the flue and CSIRO. working with all states and territories through gas. The mixture is fed into a distillation Loy Yang Power Chief Executive Officer, the National Emissions Trading Taskforce for column that operates at 120 degree Celsius, Ian Nethercote said the company had the implementation of a national emissions and pure carbon dioxide is evaporated. an abundant brown coal resource on its trading scheme by the end of 2010. The carbon dioxide is then returned to doorstep. Mr Batchelor said coal, oil and gas the flue gas duct. Other gases are also “Research and development will continue remained important fuels for all members of “scrubbed” at an early part of the process and to be at the forefront of Loy Yang Power the APP, and that increasing energy demands returned to the flue gas duct. activities. The prospects are bright for two trial in the Asia-Pacific region meant there was CSIRO and Loy Yang Power engineers plants – a coal drying pilot plant and the post an urgent need to improve the efficiency and are studying the behaviour of the solvent’s carbon combustion capture plant,” environmental performance of fossil fuel use. reaction to brown coal ash and other flue gas Mr Nethercote said. “We know that the availability of electricity constituents including SOx and NOx. CSIRO Victoria is leading Australia in the to large numbers of people in developing is assisting with a similar plant in China and in development of technologies and strategies countries will have a major impact on reducing early May a delegation of Chinese engineers for reducing greenhouse gas emissions and poverty,” he said. visited Loy Yang to study the plant before for carbon capture and storage options. The Mr Batchelor said the APP taskforces had commencing work on their plant. Victorian Government has indicated greater highlighted potential areas for co-operation Last year, the Victorian government granted international collaboration between states in the power sector, including efficiency and $2.5 million to Loy Yang Power for a $5.6 and the Federal Government could hasten environmental performance improvements million project, to research technology options the development of energy technologies and at existing power plants of all types, in the post-combustion capture of carbon policies that will combat climate change and loss reduction in electricity transmission dioxide from both Loy Yang A and Hazelwood reduce poverty. and distribution, improved demand side power stations. At the seven-nation Asia Pacific Partnership management and electricity market reform. (APP) on Clean Development and Climate “We look forward to working closely with in Melbourne, Minister for Energy and our international partners on these and other Resources, Peter Batchelor said attention initiatives in the energy sector in the coming had to be given to developing joint activities years,” he said. and projects to reduce the impact of greenhouse gas emissions from coal-powered FOR MORE INFORMATION CONTACT: electricity generators. Ian Nethercote Chief Executive Officer Loy Yang Power Phone: (03) 5173 2917

18 The innovative plant is designed to capture carbon dioxide rich flue gas from the power station with the aim of storing the CO2 deep underground.

p The post-combustion carbon capture plant.

19 “There is a need for many more projects of this type and at a larger scale. The launch of the project is a very important step in demonstrating the technical and environmental feasibility of carbon storage in Australia and the world in preparing the way for its widespread application,” Dr Cook said.

CCS Otway Launch Victorian carbon storage project a first in southern hemisphere

p Seismic monitoring of the Otway Project is An underground carbon storage project Overseen by the Cooperative Research used to detect subtle changes associated with the presence of the injected CO2 and map the in Victoria’s south-west has commenced Centre for Greenhouse Gas Technologies migration pathways. ©CO2CRC operations, with around 100,000 tonnes of (CO2CRC), the Otway Project has won a compressed carbon dioxide (CO2) to be national award for excellence in innovation insatiable thirst for energy, coal and fossil fuels injected into a depleted natural gas field and gained international recognition through will continue to provide a significant proportion two kilometres below the surface. the Carbon Sequestration Leadership Forum. of the world’s energy for the foreseeable The Otway Project, 30 kilometres east of CO2CRC Chief Executive Officer, future,” he said. Warrnambool, will inject primarily CO2 into the Dr Peter Cook said the project was one of Mr Ferguson said Australia’s coal resources Waarre C Formation in the Otway Basin. The few underway around the world to safely alone were so large that they could be world-class project includes a comprehensive and securely store CO2, the most abundant significant in the global energy mix for several monitoring and verification program and aims greenhouse gas after water vapour. hundred years, assuming the advent of to demonstrate the possibility of safely and “There is a need for many more projects successful clean coal technologies. permanently storing CO2 in the Australian of this type and at a larger scale. The “That is why carbon storage projects such geological context. launch of the project is a very important as the Otway Project could play a major role step in demonstrating the technical and in reducing the atmospheric emissions of environmental feasibility of carbon storage in greenhouse gases,” he said. Australia and the world in preparing the way “I hope this project will encourage for its widespread application,” Dr Cook said. community acceptance of CCS and its “The project involves compressing and potential role in reducing greenhouse gas transporting 100,000 tonnes of CO2 and emissions. While the Otway Project will then sequestering it in a depleted natural gas demonstrate the carbon storage aspect reservoir two kilometres below the earth’s of CCS, the Australian Government is also surface. supporting projects to demonstrate post- “A key feature of the project is its world- combustion capture at coal-fired power class monitoring program, which is designed, stations.” developed and implemented by researchers These projects form part of the National from Australia, New Zealand, the United Clean Coal Initiative that is underpinned by a The project uses monitoring and verification States and Canada.” $500 million Clean Coal Fund. technology, regulatory frameworks and Commonwealth Minister for Resources and Mr Batchelor said the CO2CRC had more community consultation to demonstrate Energy, Martin Ferguson and Victorian Minister than 50 researchers, post-doctoral fellows and carbon capture and storage (CCS), which for Energy and Resources, Peter Batchelor doctoral students working at six universities is expected to form a significant part of the launched the project in April. around the country on a range of cost- solution to addressing climate change. Mr Ferguson said the International Energy effective CO2 separation techniques. Agency considers CCS the second most Victoria is playing a pivotal role in p Installing the CO2 flux station, an integral part viable option to reduce CO2 emissions in the development of cutting-edge CCS of the atmospheric monitoring program, at the Otway Project. Geosequestration experts from the the short to medium term behind improving technologies. These include a trial by HRL International Energy Agency’s Greenhouse Gas energy efficiency. Developments at Mulgrave in suburban Research and Development Programme reviewed “There is no single solution to reducing Melbourne of a patented CO2 capture the Otway monitoring program in November, 2006, and found it was one of the most comprehensive in our carbon footprint. With historic global technology, using a unique gasifier along with the world. ©CO2CRC economic growth accompanied by an solvent-based membrane and absorption capture techniques. 20 The demonstration plant is expected to p Schematic representation of the be in operation in 2009–10. If successful, CO2CRC Otway Project.©CO2CRC the technology has the potential to be used at similar plants around the world, helping Council of Australia’s Chief Executive Officer, achieve significant reductions in greenhouse Mitch Hooke. gas emissions. Mr Hooke said the CO2CRC Otway Project The $4.11 million pre-combustion carbon was a key strategic initiative in the global capture project has received $2.06 million challenge of addressing climate change. from the Victorian Government’s Energy “This project is a globally significant step Technology Innovation Strategy (ETIS) grants in developing a clean coal strategy that is program. The remainder of the funding will be environmentally effective, economically efficient provided in equal parts from CO2CRC and socially acceptable,” Mr Hooke said. and HRL. “Economic and energy security concerns Researchers from Melbourne and Monash Another significant demonstration project is mean that coal will remain an indispensable universities and HRL will evaluate the capture the Latrobe Valley Carbon Capture Research contributor to energy generation in the years technologies to identify the most cost Hub, Australia’s first research hub to fast- ahead. This reflects the fact that coal is effective for application to HRL’s Integrated track the maturity of technologies capturing plentiful in the economies that will dominate Drying Gasification Combined Cycle power greenhouse emissions from coal-fired power the global economic scene in the period to generation technology. stations. 2050, such as China, USA and India.” Cost-effective capture technologies could In the Latrobe Valley, CO2CRC, Loy Yang reduce CO2 emissions from a power plant Power, International Power and CSIRO are FOR MORE INFORMATION VISIT: by up to 90 per cent. The successful capture working on a $5.6 million project that focuses http://www.co2crc.com.au technology could then be trialled at a larger on the reduction of emissions from brown FOR MORE INFORMATION CONTACT: scale at HRL’s 400 megawatt demonstration coal power stations. The Latrobe Valley Post- Dr Peter Cook plant in the Latrobe Valley. Combustion Capture Project is one of the few Chief Executive Officer projects to combine all of the CO2 capture p CO2CRC researchers Trent Harkin (left) and CO2CRC Abdul Qader work on plans for the trial of new separation techniques in the one location. Phone: (02) 6120 1600 pre-combustion CO2 capture technologies. Victoria’s campaign to reduce greenhouse Email: [email protected] ©CO2CRC gas emissions was also praised by Minerals 21 20"OD 55km existing DISCOVERY JOURNAL AUGUST 2008 The Turrum field has significant development Snapper 30"OD 55km cost benefits from its reservoirs sitting directly Crude Plant existing 20"OD 52km beneath the big Marlin gas field, one of the existing biggest three gas producers in the Bass Strait. Gas Plant 1 24"OD 37km Gas Plant 2 existing

Gas Plant 3 Longford 18"OD 18km Petroleum projects experience boost Marlin Record prices are fuelling exploration

that could lead to new developments, New CO2 particularly in the Bass Strait. Removal plant

WeWesttT Tuna

Victoria’s oil and gas industry continues to boom with new Gas sales are projects being developed, exploration drilling increasing forecast to start in 18"OD 16km steadily and the value of locally produced energy rocketing 2015 after a new gas in line with world trends. conditioning unit is built at the gas processing The state’s large scale Bass Strait petroleum projects plant at Longford. Kipper have also experienced a boost as the Esso and BHP The go-ahead for the project would follow Billiton Joint Venture works toward the $1 billion Turrum on from the December Phase 2 Oil and Gas Development Project. 2007 decision to develop the $1.4 billion While Esso and BHP Billiton pursue the project at the Kipper Gas Project in Gippsland Basin, Nexus Energy is pressing ahead with its $195 the Bass Strait, a JV Dual 14"OD 18km million development of the Longtom gas field. between Esso (32.5% & Umbilical In Bass Strait, the Anzon Australia operated Basker-Manta and operator), BHP p West Tuna platform, Bass Strait oil fields development is continuing to operate while the joint (32.5%) and Santos u Schematic: The Kipper field will be venture partners, including Beach Petroleum, Itochu and Sojitz, developed by the installation of a number (35%). of subsea wells with production piped consider a substantial upgrade to the project to produce more ExxonMobil has onshore to the existing infrastructure at oil and ultimately, a substantial associated gas resource. To the awarded the key Longford. west, in the Otway Basin, the $275 million Henry Gas Project engineering contracts has well advanced and will be tying into the Casino Gas Project, for the construction minimising the project’s environmental footprint. and development of the Kipper Gas Project in the Bass Strait. Meanwhile, the Turrum Phase 2 Project, about 40 kilometres ExxonMobil Australia Chairman, Mark Nolan said with the offshore from the Ninety Mile Beach on the Gippsland coast, will award of key contracts for the Kipper Gas project, ExxonMobil tap one trillion cubic feet gas needed to offset the depletion of expected construction could start from the second half of 2008 gas reserves from existing fields. and deliver first gas to south-east Australia in 2011. It has the added sweetener of coming up with a 40 million “The Kipper Gas Project will not only help underpin the jobs barrel oil reserve, which has grown rapidly in value with the boom of the 1,000 people currently employed through the ExxonMobil in oil prices. First oil from the Esso-operated development is Group of Companies in Victoria, but deliver significant flow-on expected in 2011. benefits throughout the local economy, including the creation of In the initial phase, gas will be re-injected into the subsurface up to 200 further jobs during the construction phase,” he said. reservoir for storage and to assist with oil recovery before being The Kipper field holds approximately 620 billion cubic feet produced at a later stage. p Interpretation of Line 4 ofof the recoverable central Victorian gas andseismic 30 transectmillion barrels of condensate and (Violet Town to Cobram).LPG, This andline shows is located seismically in 100 quiet metres of water, approximately 45 sedimentary rocks of the Tabberabbera and Melbourne zones (purples) overlying strongkilometres seismic reflectors, from Ninety cut byMile several Beach. faults, interpreted to representThe igneousTurrum andfield metamorphic has significant rocks development cost benefits from in an older substrate (green,its reservoirs blue and yellowsitting units) directly . beneath the big Marlin gas field, one of the biggest three gas producers in the Bass Strait.

22 20"OD 55km existing

Snapper 30"OD 55km existing 20"OD 52km Crude Plant existing

Gas Plant 1 24"OD 37km Gas Plant 2 existing

Gas Plant 3

Longford 18"OD 18km The Kipper field holds approximately 620 billion cubic feet of Marlin recoverable gas and 30 million barrels of condensate and LPG, and is located in 100 metres of water, New CO2 approximately 45 Removal plant kilometres from Ninety Mile Beach. WeWesttT Tuna

18"OD 16km

Kipper

Dual 14"OD 18km & Umbilical

The Esso and BHP partnership plans to build a Marlin B three separate oil accumulations with the uppermost zone, platform that would be linked by a bridge to the existing Marlin A flowing 1800 barrels of oil per day (bopd). platform for the full range of support services. ExxonMobil and BHP’s neighbouring Seahorse Field has The reservoirs would be tapped by drilling two oil wells and four produced oil since 1990–01 through a subsea completion gas wells. The operator is currently seeking regulatory approvals connected to the Barracouta platform. while front-end engineering and design work is completed. A recent work-over of the Seahorse-1 well (2005) resulted in These developments follow the development of the $250 the well’s return to production at 4,000 bopd following a period of million Minerva (BHP/2005), $200 million Casino (Santos/2006), declining oil production. $750 million BassGas (Origin/2006) and the $1.1 billion Otway VIC/P57 is flanked to the south by several oil and gas fields, (Woodside/2007) gas fields. including the giant Barracouta and Snapper gas fields as well as Record prices are also fuelling oil exploration by a host of new the smaller Golden Beach, Mulloway/Whiptail, Seahorse, Wirrah, operators that could lead to new developments, particularly in the Whiting, Emperor and Sweetlips fields. Bass Strait. FOR MORE INFORMATION CONTACT: Recently, 3D Oil confirmed the earlier discovery of oil in the West Seahorse field in Bass Strait. 3D Oil is now investigating its Rebecca Arnold Noel Newell Public Affairs Advisor Managing Director options for the development and production of the oil in the West ExxonMobil Australia 3D Oil Limited Seahorse field, a field which contains at least 10 million barrels. Phone: (03) 9270 3478 Phone: (03) 9650 9866 The West Seahorse-1 discovery well was drilled in 1981, by Email: [email protected] Hudbay Oil Australia Limited. It followed the discovery of oil in the neighbouring Seahorse field by Esso in 1978. The well intersected

23 DISCOVERY JOURNAL AUGUST 2008

Iluka Resources Ltd

Second stage development on Murray Basin

Mineral sands miner Iluka has committed to the second stage of development of its Murray Basin mineral sands operations. The company plans to spend at least $209 million to boost annual average production to 330,000 tonnes of combined rutile and zircon between 2009–12. The development builds on the existing Murray Basin operations by accessing the first of Iluka’s heavy mineral resources in the northern part of the Murray Basin.

Iluka’s heavy mineral resource base in the region contains an estimated 32.1 million tonnes of the Basin’s total 48.1 million tonnes of resources.

Stage two includes the development of the Kulwin deposit, before progressing to Woornack, Rownack and Pirro group deposits. The development of the deposits will start with Kulwin early next year, and is due to wrap-up by 2014. Earlier this year, Iluka awarded Clough Projects the contract and placed orders for long lead items in the first $6 million spent on the project. In the Murray Basin operations earlier this year, Iluka produced slightly less zircon and rutile than expected due to an expected decline in ore grade. Total zircon and rutile production for the March quarter was 56,561 tonnes while 53,600 tonnes of heavy mineral concentrate was produced at Douglas. About 48,000 tonnes of heavy mineral concentrate was stockpiled in March, ready for use at the Hamilton mineral separation plant. Several planned zircon shipments for the March quarter were delayed due to problems with customers securing vessels. A total of 1,955 tonnes of tin pre- concentrate was shipped from the Port of Portland during the quarter, and further shipments have been confirmed for the remainder of this year. Mining operations continue at Bondi Main South and Bondi West.

FOR MORE INFORMATION CONTACT: David Robb p Images from top: Heavy mineral concentrate being delivered to the Hamilton mineral separation plant for further processing; Hamilton mineral separation plant; Scrapers Managing Director removing overburden to expose ore body at Douglas mine site; View from top of wet Iluka Resources Ltd concentrator plant at Douglas mine site. Phone: (08) 9360 4700

24 t Environment Officer Kurtis Noyce monitoring water clarity at the discharge point to the Yarrowee River.

Lihir Gold Ltd to build new water treatment plant $4 million water treatment plant in Ballarat

Lihir Gold Ltd will build a $4 million water treatment plant at the Ballarat gold project, providing significant water-saving benefits for the gold operation and surrounding community. The company’s Environment and Community Manager, Laura Conroy said the plant – scheduled for completion in early 2009 – would enable surplus groundwater extracted from deep within the mine to be treated and used by the community.

“The Ballarat gold project has been extracting groundwater from the historic mine workings for the past 14 years. We are very pleased this new water treatment plant will help ease Ballarat’s water crisis,” she said. Lihir Gold Ltd is working closely with the Currently, Lihir Gold Ltd treats some of the water extracted City of Ballarat, Central Highlands Water from the mine and recycles it during the mining process. Surplus groundwater is treated and discharged into the Yarrowee River, and the Committee for Ballarat to deliver the where it helps maintain the river’s health. It is also used for groundwater to the community, Ms Conroy said. agricultural purposes downstream. Over the next few years, the volume of groundwater to be pumped out of the mine will grow as the mine development expands. The new water treatment plant will be used to remove The City of Ballarat is reviewing the cost of piping infrastructure, salt from the water, enabling the surplus supply to be redirected feasibility and the ecological implications for the delivery of for other use within the Ballarat township. groundwater from the Ballarat gold project to Lake Wendouree. Lihir Gold Ltd is working closely with the City of Ballarat, Central A recent ecological study of the Yarrowee River identified the Highlands Water and the Committee for Ballarat to deliver the mine’s groundwater contribution improves the river’s health. groundwater to the community, Ms Conroy said. “Regardless of the re-use options identified, Ballarat Goldfields “The cost of piping and pumping infrastructure to transport the will continue to allocate a proportion of groundwater to water is the most limiting factor in determining the best beneficial environmental flow in the Yarrowee River,” Ms Conroy said. use. We are aiming to identify an end-user that requires water to the quality that we can provide, and one located close to FOR MORE INFORMATION CONTACT: the mine.” Josie Brophy Communications Officer Lihir Services Australia Phone: (07) 3318 3317 Mob: 0448 177 502

25 Department of Primary Industries Gold Undercover unearthing Victoria’s gold future

The Victorian Government is now halfway through the roll-out of its Gold Undercover Initiative, which is delivering new geoscience data and techniques to help explorers access gold under cover, and there are some exciting developments to report. Read on to find out more.

New dates from Drill hole and geochemistry projects central Victorian he GeoScience Victoria (GSV) It is predicted that these recognised gold gold deposits T borehole and geochemistry deposits extend under a cover of younger databases are being improved in line Cainozoic sedimentary material. Interpretation with international standards, with a new conducted on quality-assured drill hole data ew 40Ar/39Ar dates from central geochemistry database expected to come will help identify new gold targets. Victorian gold deposits are the N online in 2009. There are more than two million assay subject of a Gold Undercover interim The databases can be used for a variety of results from 455,249 core, sediment and soil report to be released shortly. applications, including mineral and petroleum samples. Analysis of these data has identified The report is one of the outcomes of a exploration. The collection of historical areas of under-explored prospective terrain as collaborative project between GeoScience and contemporary data and information is well as many geochemical anomalies Victoria and the University of Melbourne’s useful for day-to-day operations, particularly not adequately explained or worthy Earth Sciences department, to record the resource planning and identification. of re-examination. timing and ore fluid geochemistry of major The databases have evolved over time, Quality assessment began in June 2008 central Victorian gold-bearing systems. leading to information gaps and inaccuracies, on selected drill holes, and is running in Mica separates for 40Ar/39Ar dating, and are not in a readily available format. This conjunction with a process to improve the collected from Bendigo, Fosterville, improvement project aims to revolutionise quality assurance system on the database. Lockington, Leven Star and Woods Point, systems and conduct a thorough quality Round one testing and evaluation of the new will be discussed in relation to existing assurance review on selected data. The data geochemistry database is complete. geochronology data from central Victorian will be cleaned, transformed, aggregated and These products will be used by industry gold deposits. integrated to deliver a unified, reliable product and help GSV in the generation of Gold Together with the acquisition of new noble that drives improved analysis and review. Undercover 3D maps. gas and halogen fluid inclusion geochemical The GSV borehole database includes data from these and other deposits, the FOR MORE INFORMATION CONTACT: more than 160,000 records from holes drilled project aims to better determine the timing of for gold statewide. A total of 11,231 of these Paul McDonald gold mineralisation and constrain the origin of Manager Resources holes are located within the Gold Undercover gold-bearing fluids. These data are critical for GeoScience Victoria area and the majority have been drilled within developing predictive models and exploration Phone: (03) 9658 4531 known gold mineralisation provinces. Email: [email protected] protocols for evaluating new deposits. Website: www.dpi.vic.gov.au/minpet/goldundercover

FOR MORE INFORMATION CONTACT: Peter O’Shea Manager, Minerals Geoscience GeoScience Victoria Phone: (03) 9658 4525 Email: Peter.O’[email protected]

26 A three year, $9 million initiative Gold Undercover unearthing Victoria’s gold future

Gravity survey data available

ata from GeoScience Victoria’s 2006 D gravity survey is now available and a new interpretation of the mapped area is being incorporated into the existing geophysical interpretation of the Bendigo 1:250 000 map sheet. In Figure 1, many of the gravity variations highlighted in the new data are attributed to variations in the depth of Permian and Cainozoic cover. The gravity highs around the subcircular gravity lows are attributed to hornfels rims standing higher around granite bodies. A similar pattern is seen in outcrop areas in western Victoria. Palaeo-topographic highs also are places of interest to drill, since they may reflect areas of mass silicification associated with significant gold-bearing systems, while in these areas, the drilling costs to basement are also likely to be lower. The new data show the previously mapped major faults, like the Avoca, Whitelaw and Mt William faults, but have also highlighted other significant faults not previously seen. This is important, since the gold deposits of central and western Victoria typically lie a few kilometres west of major faults. Bendigo lies west of the Whitelaw Fault and it may be no coincidence that the new p Figure 1. HSI coloured image of terrain-corrected Bouguer gravity data, with a first vertical derivative of the Tandarra gold discovery by Perseverance data as the intensity layer. The Victorian border is in blue and the area of new data outlined in pink. Major Corporation (now acquired by Northgate faults (in white) are named, but other faults are also evident in the image. T and L mark recent discoveries of Minerals Corporation) also lies on a distinct covered mineralisation at Tandarra by Perseverance (now Northgate) and Lockington by Goldfields, while B is at Bendigo and F is at Fosterville. gravity high, just west of the Whitelaw Fault. Mineralisation was intersected just 20 metres below the surface. these have a strong linear character, they may FOR MORE INFORMATION CONTACT: Similarly, Goldfields Australasia’s also be associated with significant faults. Peter O’Shea Lockington discovery and the Fosterville Finally, the new survey may have side- Manager, Minerals Geoscience GeoScience Victoria deposit lie just west of the same fault system. benefits for significant water users in the Phone: (03) 9658 4525 The depths to the basement at Lockington region. Some of the linear to meandering Email: Peter.O’[email protected] ranged from 40 meters to 110 metres. topographic lows seem to reflect palaeo-water Significantly, other fault-related, palaeo- courses. They do not reflect current water topographic highs are also obvious, notably courses and so may provide other drilling between Lockington and Tandarra and as targets for those seeking bore water.

27 Gold Undercover Unearthing Victoria’s Gold

Results consistent with seismic interpretation Seismic survey reveals answers

he 400-kilometre Victorian T seismic reflection survey is set to answer questions that have fascinated generations of geologists: what does the crust look like and how did it control the deposition of gold? The survey has revealed several major faults that provided the pathways for gold-bearing fluids 400 million years ago. The faults climb from nearly 40 kilometres depth to the surface and provide crucial evidence for the long-held suspicion that gold and faults go together. From as early as the 1870s Victorian geologists, based on systematic mapping of underground mine workings, realised that to find gold they needed to find faults. But these scientific pioneers could only imagine what lay beyond the deepest shafts. In tracing faults to the deep crust, the seismic survey shows that the source of gold was probably in the mid to lower crust (from 15 – 40 kilometres deep). After completing detailed analysis of the Victorian seismic reflection survey, geoscientists suggest the results are so important that several papers will be submitted to Australian and international scientific journals. p Figure 1. MT survey lines and inversion images superimposed on geology. Yellow ellipses with solid lines One of the most profound insights comes represent major faults. Dotted lines represent inferred faults. White ellipses with dotted lines represent inferred from integrating recent government and resistive bodies. academic mapping with the results of the 2006 seismic survey. The evidence suggests nterpretation of GeoScience Victoria’s There is a less–than-one-kilometre thick that gold-quartz deposition was not just a I 2007 magnetotelluric survey correlates conductive top layer, which overlies a very fortuitous event imposed on Victoria, but was strongly with data from the 2006 central resistive layer, extending down to a depth of an inevitable consequence of the way the Victorian seismic transect – information about 10 kilometres. crust was deformed and metamorphosed 440 which will help the interpretation of a new At greater depth, a highly conductive layer million years ago. survey line between Kerang and north of can be found at both edges of the survey line, The new insights are the outcomes of Warracknabeal in August. with a relatively resistive body in the central collaboration between Geoscience Australia, A new Gold Undercover report discusses section. The resistive body may be caused by GeoScience Victoria, the Predictive Mineral the 2007 survey results, a joint project a different rock type or structure in this area. Discovery CRC and industry. The survey was between GeoScience Victoria, Monash Further analysis of the data will be funded by the Commonwealth and Victorian University and the Korea Institute of conducted in light of the recently completed governments and industry partners. Geoscience and Mineral Resources. airborne EM survey, completed along the The seismic data will provide important The survey along part of the 2006 central route of the seismic transect. A combination information for the Victorian 3D geological Victorian seismic transect augments the of seismic, gravity, magnetic, magnetotelluric model and will enable explorers to conduct seismic interpretation. Outputs include images and EM data will provide powerful data to predictive modelling. of inversion modelled data (see Figure 1) that interpret the deep crust through the goldfields can be correlated with mapped structures in of central Victoria. FOR MORE INFORMATION CONTACT: the surface geology. Peter O’Shea FOR MORE INFORMATION CONTACT: Manager, Minerals Geoscience From the inversion models, the crust can Peter O’Shea GeoScience Victoria generally be divided into three layers beneath Manager, Minerals Geoscience Phone: (03) 9658 4525 the survey region. GeoScience Victoria Email: Peter.O’[email protected] Phone: (03) 9658 4525 Email: Peter.O’[email protected] 28 Results consistent with A long line of results seismic interpretation our helicopter-borne, versatile, time- F domain electromagnetics (VTEM) traverses were flown in April this year in west and central Victoria (Figure 1) to map resistive and conductive geology in 2008. The data, collected along 381 line kilometres, were acquired coincident to a deep seismic reflection profile in June 2006 to define the geometry of major faults and provide a crustal scale context for mineralisation.

p Figure 1: Location of VTEM traverses

The data characterises the ground conductivity and resistivity along the southern margins of the Murray Darling Basin. Areas of shallow basement should be indicated by relatively high resistivities, where basement conductors may be detectable, while areas of deep cover are expected to be more conductive. In these areas the EM data will be mainly influenced by groundwater conductivity, possibly reflecting salinity. Other datasets that already exist along this profile include geology, seismic reflection, ground gravity, detailed airborne magnetics, detailed airborne radiometrics and magneto tellurics. The survey was conducted by GeoTech Airborne and supervised by Greenfields Geophysics. The final data and report will be released at GeoScience Victoria’s technical forum at the Resources Victoria Conference in August. To add value to the dataset, RMIT University trialled prototype E field and B field sensors in association with the survey. This data was

collected on the ground during an overflight p Figure 2: VTEM with its towed 26 m loop flies down (Figure 2 and 3) and will later be combined with Sweeney’s Lane at the Eastern end of Line 1 with the VTEM data to check the calibration of the the RMIT monitoring station set up under the tree. VTEM system, thereby increasing confidence t Figure 3: Magnetic field measured in the RMIT in the final results; provide quantitative ground B field sensor as the VTEM system approaches. The slow decay seen in the transmitter measurements of how distant and deep the off-times indicates the presence of very conductive VTEM field can be detected; and contribute to sediments at this location. research.

FOR MORE INFORMATION CONTACT: Paul McDonald Manager Resources GeoScience Victoria Phone: (03) 9658 4531 Email: [email protected] Website: www.dpi.vic.gov.au/minpet/goldundercover 29 DISCOVERY JOURNAL AUGUST 2008

u Victorian National Geochemical Survey of Australia sample locations within coarse scale drainage catchments

Castlemaine Goldfields A step closer to production

A return to commercial gold production at Castlemaine is a step closer after a highly successful drilling campaign allowed the company to declare an initial inferred resource of more than 650,000 ounces at its Chewton deposit. Castlemaine Goldfields declared inferred resources of 2.1 million tonnes at a grade of 8.3 grams per tonne of gold AU, amounting to 574,000 ounces at the Chewton deposit with another 112,000 ounces of gold identified in remnant areas of the adjacent Wattle Gully gold mine. After a two-year drilling program, Castlemaine Goldfields and Snowden Mining Industry Consultants declared a JORC Code compliant gold resource of 686,000 ounces at Chewton and Wattle Gully. The Chewton project area remains open to the north and south. For several years Castlemaine Goldfields has operated in the Castlemaine area, home of the now defunct Wattle Gully mine. It has developed a geological model to predict undiscovered large- scale gold deposits. The company is drilling along the central corridor to find the fastest route to cash-flow. These targets will include the ‘Pine Plantation’ area where the Cappers Project has produced large shallow high-grade gold intersections together with high grade “It is noteworthy the mineralisation is open to both the north intersections on the Shicer fault. In addition, the North Quartz Hill and the south. The last hole drilled on the Chewton deposit and Merthyrn gold prospects north of Wattle Gully are also primary returned very positive gold results with a 12.7-metre down-hole targets. intersection of the footwall fault lode, which suggests strong Castlemaine Goldfields Managing Director and Chief Executive potential for extended mineralisation to the north. Officer, Gary Scanlan said the release of the Chewton deposit “Similarly to the south, holes CGT_017 and CGT_019 have resource estimate places the company on track to meet its intersected two faults which are developing shallower, stronger primary goal of discovering at least two million ounces of resource reef and spur quartz veins towards the south.” within the Castlemaine goldfield. The company said the recognition of the Chewton deposit as “Drilling on the Chewton deposit and at other prospects along the structural twin to the Wattle Gully mineralisation also offered the central corridor clearly demonstrates that our geological considerable potential for increased resources between the two modelling has brought a new understanding to this under-explored major controlling faults, and a continuum of gold bearing faults and under-developed, yet historically prolific goldfield,” he said. between the two systems. This understanding of the geology “Our main objective now is to drill other prospects to determine beneath Wattle Gully indicated the lower faults beneath the the quickest route to an initial cash flow. Particular focus with bottom of the mine have been under-explored. be on the northern part of the goldfield where gold has been Mr Scanlan said it was clear the Chewton deposit had a gold discovered within 14 metres from surface in the Pine Plantation. inventory of similar character to Wattle Gully, with the potential “The announcement of this initial resource, combined with the for greater resource dimensions, and contained gold that has a highly promising drilling results released to the market on April reasonable expectation to be mined. 22 on other prospects along the central corridor, provides clear He said knowledge of the grade distribution, high-grade gold evidence to support the strongly-held conviction that Castlemaine proxies and structure at Wattle Gully had provided the basis for will again be a multi-million ounce goldfield.” resource estimation of the Chewton deposit. But importantly he Castlemaine Goldfields said there was potential to include noted substantial potential exists to expand the resource. extensive spur vein and spur stockwork lodes in the gold resource inventory at Wattle Gully with additional exploration, bulk sampling FOR MORE INFORMATION CONTACT: and further drilling. Gary Scanlan “These areas have been broadly quantified during the resource Managing Director and Chief Executive Officer estimation process, but cannot be included in the current resource Castlemaine Goldfields Limited Phone: (03) 5472 3411 due to uncertainty in geological continuity,” the company said in a Email: [email protected] statement to the Australian Stock Exchange.

30 u Jumbo drill operator working at the face of Gill reef

Bendigo Mining “Trial mining will commence following completion of additional Bendigo gold project infill drilling along the length of on track to resume mining the reef. The focus is quality, not quantity, but having said that, The Bendigo gold project is set to resume mining we will remain commercially after a year of reworking its exploration model to confirm pragmatic,” he said. the company was ready to restart full-scale gold mining. Bendigo Mining Managing Director and Chief Executive Officer, Rod Hanson, said trial mining of Gill Reef was set to start in June, with trial processing of ore to kick-off in the second half of the year. “Trial mining will commence following completion of additional infill drilling along the length of the reef. The focus is quality, not quantity, but having said that, we will remain commercially pragmatic,” he said. “The trial program is an important step in confirming our ability to reliably estimate reef tonnages and grade from drilling. Considering the issues we experienced in 2006, a period of trial production is a prudent course of action. We have to approach this conservatively and ensure we collect and interpret data accurately.” Mr Hanson said the company had much more information about the reefs now than before the previous mining campaign. “The drill spacing is closer, the drill hole orientation is better and the geology is being carefully recorded and faithfully interpreted,” he said. “I am very satisfied that we have done everything possible to mitigate risk.” Mr Hanson noted despite the issues involved in the previous campaign, the company delivered an average ore grade of 5.4 grams per tonne of gold. “So considering the high grade nature of Gill Reef, the quality of the work completed to date and the fact that we will use narrow vein mining equipment to improve mining selectivity, I am very confident we can achieve a grade range of 8–12 grams per tonne of gold,” he said. “With trial mining delivering the expected outcome, we will have proven our ability to predict gold grade from drilling and this should provide a real boost to our exploration effort across the Bendigo Goldfield.”

FOR MORE INFORMATION CONTACT: Rod Hanson Managing Director & CEO Bendigo Mining Limited Phone: (03) 5447 1834 Email: [email protected]

31 Mineral Exploration Tenements

New applications and grants during March 2008 – June 2008

N Applications Granted Current Mi ldura 0 50 100 Kilometres

EL4294

Swan Hill EL5118

EL5075 EL5154

EL5107 EL5108 Echuca EL5155 EL5135 Shepparton Wa ngaratta EL5144 EL5105 EL5136 EL5161 EL5139 Nagambie Bendigo EL5150 Horsham EL5149 EL5147 EL4747 EL5064 EL5065 EL5159 Benambra EL5146 MaryborougEhL5165 EL5152 EL5160 EL5156 EL5151 Ararat EL5158 EL5157 EL5069 EL5164 EL5153 Jamieson EL5143 EL4842 EL4943 EL4746 EL5044 Ballarat EL4637 EL5145 EL4995 EL4397 Hami lton Melbourne EL5142 EL5162 Bairnsdale EL5163 Wa lhalla Geelong Moe Traralgon Portland Colac Wa rrnambool TENEMENT UPDATE TENEMENT

Exploration Licences Granted Exploration Licence Applications

Tenement Primary Owner Application Date Grant Date Tenement Primary Owner Application Date EL4294 Iluka Midwest Ltd 11/3/98 4/6/08 EL5156 Swancove Enterprises Pty Ltd 23/5/08 EL4397 Minico Pty Ltd 18/2/99 21/5/08 EL5158 Swancove Enterprises Pty Ltd 23/5/08 EL4637 Blackwood Gold Mines Pty Ltd 21/1/02 10/4/08 EL5157 Swancove Enterprises Pty Ltd 23/5/08 EL4746 Gold Search International Pty Ltd 21/5/03 4/6/08 EL5153 St Barbara Ltd 22/5/08 EL4747 Gold Search International Pty Ltd 21/5/03 4/6/08 EL5159 Swancove Enterprises Pty Ltd 23/5/08 EL4842 Gold Search International Pty Ltd 7/9/04 4/6/08 EL5160 Swancove Enterprises Pty Ltd 23/5/08 EL4943 Oroya Mining Ltd 10/2/06 13/3/08 EL5154 St Barbara Ltd 22/5/08 EL4995 Ballarat South Gold Ltd 24/8/06 4/6/08 EL5155 St Barbara Ltd 22/5/08 EL5044 Goldstar Resources NL 27/3/07 23/4/08 EL5147 Fiddlers Creek Gold Mining Co Pty Ltd 10/4/08 EL5064 Highlake Resources Pty Ltd 8/6/07 10/4/08 EL5146 Fiddlers Creek Gold Mining Co Pty Ltd 10/4/08 EL5065 Highlake Resources Pty Ltd 8/6/07 10/4/08 EL5164 Navarre Discovery No 1 Pty Ltd 27/6/08 EL5069 Swancove Enterprises Pty Ltd 13/6/07 26/3/08 EL5161 Beaconsfield Gold Mines Pty Ltd 11/6/08 EL5075 BTB Mining Pty Ltd 22/6/07 4/6/08 EL5150 Panaegis Gold Mines Ltd 23/4/08 EL5105 Rex Minerals (Victoria) Ltd 19/9/07 19/6/08 EL5149 Panaegis Gold Mines Ltd 23/4/08 EL5107 Gold Fields Australasia Pty Ltd 19/9/07 19/6/08 EL5151 Panaegis Gold Mines Ltd 23/4/08 EL5108 Providence Gold & Minerals Pty Ltd 19/9/07 19/6/08 EL5162 Swancove Enterprises Pty Ltd 13/6/08 EL5118 Iluka Resources Ltd 17/10/07 4/6/08 EL5163 Swancove Enterprises Pty Ltd 13/6/08 EL5135 Providence Gold & Minerals Pty Ltd 4/1/08 26/3/08 EL5165 Coomooroo Exploration Co Pty Ltd 30/6/08 EL5136 Uranium Oil & Gas Ltd 9/1/08 26/3/08 EL5142 Blakeman, Martin 5/3/08 EL5139 Oscar Mining Pty Ltd 21/1/08 26/3/08 EL5145 South East Gippsland Resources NL 9/4/08 EL5143 Accord Mining Pty Ltd 20/3/08 19/6/08 EL5152 Liontown Resources Ltd 16/5/08 EL5144 Oscar Mining Pty Ltd 28/3/08 4/6/08

Complete mineral, petroleum and extractive tenement details are available from www.dpi.vic.gov.au/minpet/geovic

32 [email protected] T: (613)96584414 Manager, Petroleum OperationsSafety and Environment [email protected] T: (613)96584433 Manager, SustainableDevelopment [email protected] T: (613)96584422 Acting Manager, MineralsandExtractiveOperations [email protected] T: (613)96379734 Manager, MineralsandPetroleum Tenements [email protected] T: (613)96584457 Acting Director, MineralsandPetroleum Regulation Minerals andPetroleum Regulation geoff.o’[email protected] T: (613)96584538 Manager, EnergyGeoscience [email protected] T: (613)96584531 Manager, Resources peter.o’[email protected] T: (613)96584525 Manager, MineralsGeoscience [email protected] T: (613)96584511 Acting Manager, GeoscienceInformation [email protected] T: (613)96584562 Director, GeoScienceVictoria GeoScience Victoria [email protected] T: (613)96584411 Executive Director, MineralsandPetroleum Executive [email protected] T: (613)96584454 Tenements RegistrationOfficer Business Centre Minerals &Petroleum Information atDPI Minerals andPetroleum Division [email protected] F: (613)96584760 T: (613)96584440 Melbourne VictoriaAustralia3001 16th Floor, 1SpringStreet(GPO Box 4440) Dr.

Michael Matthews David Boothroyd John Mitas Paul McDonald Peter O’Shea Linda Bibby Kathy Hill Dr. RichardAldous Kim Ricketts Department ofPrimaryIndustries Terry McKinley Doug Sceney Geoff O’Brien [email protected] T: (613)96584405 Director, BusinessDevelopmentandTechnology and Technology Business Development [email protected] T: (613)96584088 Communications Manager Corporate Communications [email protected] T: (613)96584804 Manager, EarthResourcesPolicy Policy Development [email protected] T: (613)96584571 Manager, InformationDevelopment Information Development [email protected] T: (613)96584739 Manager, CoalDevelopment [email protected] T: (613)96584407 Minerals DevelopmentManager [email protected] T: (613)96584406 Petroleum DevelopmentManager [email protected] T: (613)96584401 Senior ResourcesDevelopmentOfficer

Kate Tunney Kristy Henry Boris Rudoy Sean Rooney Kathy Friday Geoff Collins Gordon Chakaodza Cliff Kavonic and ExplorationAssociation Australian Petroleum Production Peak Bodies and Resources Department ofIndustry, Tourism Geoscience Portal Australian Governments Government Monash EarthSciences Academic Resources SectorWebsites Association ofVictoria Prospectors andMiners Minerals CouncilofAustralia(Vic) Processors Association Construction Material Aggregrates Australia Cement Concreteand South Australia Primary IndustriesandResources, Mineral ResourcesTasmania Geoscience Australia Environment Australia Department of Primary Industries, Victoria New SouthWales Department ofPrimaryIndustries, and Mines,Queensland Department ofNaturalResources and Resources,Western Australia Department ofIndustry Northern Territory and ResourceDevelopment, Department ofBusiness,Industry of EarthSciences University ofMelbourneSchool University of Ballarat Geology Department Seismology ResearchCentre and ChemicalEngineering RMIT DepartmentofCivil                     www.doir.wa.gov.au www.pmav.asn.au www.minerals.org.au/victoria www.cmpavic.asn.au www.concrete.net.au www.appea.com.au www.pir.sa.gov.au www.mrt.tas.gov.au www.ga.gov.au www.environment.gov.au www.dpi.vic.gov.au www.minerals.nsw.gov.au www.nrm.qld.gov.au/mines www.industry.gov.au www.minerals.nt.gov.au www.geoscience.gov.au www.earthsci.unimelb.edu.au www.ballarat.edu.au/ard/sci-eng/geology www.seis.com.au www.rmit.edu.au/eng/civil-chem www.earth.monash.edu.au

33 CONTACTS 2859_DPI_Drilling_Ad_FA.indd 1 16/7/08 2:05:49 PM