Victorian Strategic Policy Near zero greenhouse emissions NOVEMBER 2007 Gold Undercover Update Unearthing Victoria’s future Executive in Focus Arthur Hood, Lihir Gold Limited Goldstar Resources Walhalla Project Tubal Cain success pmd*CRC New understanding of mineral systems VIMP Otway Gas Project Victorian Initiative for Minerals and Petroleum Woodside announces start of gas export 14 Page Feature VICTORIA’S EARTH RESOURCES JOURNAL DISCOVERY REGULARS

Minister’s Foreword News Updates Tenement Updates and

02 Peter Batchelor, Minister for 03 Zero Greenhouse Contacts Energy and Resources, introduces 04 GeoScience Victoria 36 What’s happening with mineral the special ‘VIMP’ edition of applications and licences 04 Victorian gas and oil sector Discovery Magazine. 05 Castlemaine Goldfields success 37 Your guide to Minerals and Petroleum contacts and Executive in Focus 05 Stawell wins rescue competition resources sector websites 09 Arthur Hood, Lihir Gold Limited 06 Mutiny project in track at Cassilis

06 Adelaide hot rock conference

CONTENTS

FEATURES ARTICLES

Gold Undercover Update Mineral systems in Victoria Unearth Victoria’s wealth: Cooperative research centre understanding PAGE 12 PAGE 07

VIMP Goldstar Resources Walhalla Project p Victoria’s striking visual identity to underpin its new promotional campaign VIMP data release showcases Eureka moment for Tubal Cain PAGE 08 the latest geoscience data For Discovery online visit: PAGE 14 Bemax NL www.dpi.vic.gov.au/minpet/discovery Bemax production record from Murray Basin or to receive your free copy send your New players boost Victoria’s Oil PAGE 10 details to: and Gas potential Gordon Chakaodza PAGE 15 Iluka’s Hamilton plant Resources Development Officer Ballarat project on track for Commissioning and ramp-up Department of Primary Industries commercial production PAGE 11 Phone: 03 9658 4401 PAGE 16 Email: [email protected] Seismic transect sheds light on central National Mine Safety Framework Monitoring trends and performance PUBLISHING DETAILS Victorian gold potential PAGE 34 Discovery is published three times a year PAGE 17 by the Victorian Government Department of Perseverance tops up cash to offset Primary Industries, Minerals and Petroleum Division, Melbourne, November 2007. gold shortfall PAGE 18 ISSN Number 13282409 Maldon reveals its golden secrets For more information contact: The Department of Primary Industries PAGE 20 Level 16, 1 Spring Street, Melbourne 3000. Gold Undercover and Rediscover www.dpi.vic.gov.au Victoria Initiatives DISCLAIMER PAGE 21 This publication may be of assistance to you, Undiscoverd Hydrocarbon in Victoria’s but the State of Victoria and its officers do not guarantee that the publication is without Otway Basin flaw of any kind or is wholly appropriate PAGE 22 for your particular purposes and therefore Victoria leads carbon capture and disclaims all liability for any error, loss or storage research other consequence which may arise from you PAGE 24 relying on any information in this publication. This publication is copyright. No part may be reproduced by any process without the Petroleum Update written permission of the Department of Current goings-on in the state’s oil Primary Industries. and gas industry ACKNOWLEDGMENTS PAGE 26 Minerals and Petroleum Division acknowledges contributions made by private Geothermal in Victoria Update enterprise. Acceptance of these contributors, The companies that secured the first round of however, does not endorse or imply exploration permits in Victoria endorsement by the Department of Primary PAGE 32 Industries of any product or service offered by the contributors. DEPARTMENT OF PRIMARY INDUSTRIES

Rediscover Victoria in3D A 3D geological model for the 21st Century v A sophisticated, fully attributed 1:250,000 scale 3D geological model v Links sedimentary basins and basement terranes v Allows better understanding and predictability of mineral, geothermal and hydrocarbon systems A one-day technical workshop will be held in Melbourne in late 2007 to develop the scope of the project and to encourage industry’s long-term involvement and participation. The Rediscover Victoria Initiative is the Victorian Government's new four-year $5 million project which includes a 3D geological model and a strategic drilling project for the minerals sector. For more information, or to express interest in attending the workshop, contact: Dr Tim Rawling, 3D Modelling Manager, GeoScience Victoria Phone: +61 3 9658 4584 Email: [email protected] Visit: www.dpi.vic.gov.au/minpet/rediscovervictoria DISCOVERY JOURNAL NOVEMBER 2007 t The Honourable Peter Batchelor, Minister for Energy and Resources Minister’s Foreword

p Minister Batchelor (second from right) along with senior executives from the Department of Primary Industries at the launch of the Issues papers, Stategic Policy for Near Zero Emissions from Latrobe Valley Brown Coal. Welcome to the November edition of Discovery. We also recognise that addressing this will require an investment Victoria’s resources industry is going from strength by the Victorian Government in a variety of policy measures and innovative technologies that aim to reduce or negate greenhouse to strength with the state currently benefiting from the gas emissions. highest level of mineral exploration investment in more than 25 years. To this end, the Brumby Government is committed to reducing greenhouse gas emissions by 60 per cent by 2050. The Brumby Government is proud to be a part of this growth through our on-going partnerships and support of industry, and Central to creating our clean energy future is the protection and our own innovations and technology development. enhancement of the energy industry in the Latrobe Valley, one of Australia’s most important energy regions and the cornerstone Victorian Initiatives for Minerals and Petroleum (VIMP) of the Victorian economy. 19th Data Release Recently, the government invited industry and the community to One of the most significant ways the Brumby Government works be involved in creating a strategic blueprint that could achieve with the private sector to grow the industry is the annual Victorian near zero net greenhouse gas emissions from the use of brown Initiative for Minerals and Petroleum (VIMP) data release event. coal from this region.

At this year’s event in July, I was pleased to join more than In part, these opportunities are based on the introduction of 200 industry representatives to see the Department of Primary carbon capture and storage (CCS) technologies which are one of Industries (DPI), researchers and industry showcase their high the range of options the government is considering in our efforts quality geoscience data that helps industry find Victoria’s best to tackle climate change. mineral and energy prospects. The Victorian Government believes there are many benefits Since 1994 more than $31.5 million has been invested into to this technology. growing the mineral and petroleum industries through this VIMP research. CCS will ensure brown coal remains the major source of energy in Victoria for many decades. It will protect Victoria’s affordable From the government’s point of view, our investment has paid electricity prices and will also provide opportunities for producing off. For every dollar we put into acquiring this data, research a range of value added products from brown coal. suggests we attract between $5 and $9 in additional exploration expenditure. The data has also been instrumental in the discovery Most importantly, this technology will help secure the long-term of several major prospects. Recent ABS data showed record viability and prosperity of the Latrobe Valley community and mineral exploration expenditure in Victoria reached an all time economy, and will benefit all of the state’s communities high of $82.5 million in 2006/7, the highest since records began and industries. in 1988. During 2008 I look forward to continuing to work with minerals This year, the VIMP event also outlined the innovative work that and petroleum industries to continue to grow the sector, the government, the research sector and industry are undertaking encourage exploration and investment and create new jobs in the areas of carbon capture and storage technology and across Victoria. renewable geothermal energy. I hope you enjoy the November edition of Discovery magazine. Near Zero Emissions Our featured Executive is Arthur Hood, CEO of Lihir Gold, a leading Asia-Pacific gold producer with operations at Ballarat. While there are many exciting opportunities ahead for the energy and petroleum sector, the Brumby Government recognises that for the on-going sustainability of all industries we need to acknowledge and address the issue of climate change.

Peter Batchelor 02 Minister for Energy and Resources of theissuespaper. Resources Peter Batcheloratthelaunch whole state,”saidMinisterforEnergyand the futureprosperityofregionand long-term role as a major power generator, will helpensuretheLatrobeValley’s harnessing oftherichresourcesinVictoria technologies toallowfortheresponsible “Theinnovationanddevelopmentof development oftheLatrobeValley. the government’scommitmenttofurther gas emissions.Itwillalsodemonstrate deliver deepcutstoVictoria’sgreenhouse long-term useofbrowncoalandwill will provideplanningclarityforthe Brown Coal.Thisoverarchingframework Zero EmissionsfromLatrobeValley a StrategicPolicy Framework forNear The VictorianGovernmentisdeveloping Latrobe Valley. coal toensurethelong-termfuturefor deliver nearzeroemissionsfrombrown there isaclearneedforstrategyto gasses. Inacarbonconstrainedfuture, coal thatcreatessignificantgreenhouse the inefficiencyofcombustionthiswet content, typically60-70percentwater. Itis Victorian browncoalhashighmoisture in competitiontoblackcoal. processing andexport-quality browncoal activated carbonproductions,minerals metallurgical reductantproducts, gas-to-liquids, agriculturalneeds, applications suchascoal-to-liquids, greater valuewithpotentialusesinother coal reservesmaybecomeofeven sources suchasoilandgas,Victoria’s for other, increasinglyscarceenergy the attentionofinvestors.Aspricesrise lignite acommercialpropositionattracting which makespowergenerationusing can beaslowafewdollarspertonne, The costofminingintheLatrobeValley stakeholders inAugust2007. from browncoalwasreleasedto framework fornearzeroemissions Government’s strategicpolicy An issuespaperontheVictorian Zero greenhouseemissionstoprotecttheenvironmentandjobs MINERALS ANDPETROLEUMNEWSUPDATES CO2CRC studies suchasthatconductedby has beentechnicallyexplored.Geological reduction ofcarbondioxideemissions asanoptionfor the The potentialforCCS and storage. facilitating thetransitiontocarboncapture best useofthecoalresource,andin expected toplayaroleinensuringthe by theprivatesector, thegovernmentis However, notwithstandinginvestment and storage. time, becombinedwithcarboncapture in Australiameansfuturecoalusewill, emissions andacarbontradingscheme The introductionofacaponcarbon climate change.” government isinvestigatingtotackle technologies, oneoftheoptions orgeosequestration storage (CCS) the introductionofcarboncaptureand “The proposedstrategywouldinvestigate permeability ofreservoirrocks. of majorcarbondioxidesourcesandthe around Australiabecauseoftheproximity storage costsincomparisontoothersites quality storageandthepotentialforlower carbon dioxidestorage.Itoffersbothhigh- Strait oilfields)appearswellsuitedfor Gippsland Basin(whichincludestheBass The geologicalsettingoftheoffshore nominated inVictoria. for geosequestration.Severalhavebeen the suitabilityofvarioussitesinAustralia p  The StrategicPolicy Framework willshape thewaycoalisusedinlong-term LatrobeValley 1 lastyearhaveinvestigated acceptable. dioxide storagearemanageableand to demonstratethattherisksforcarbon years. However, itwillstillbenecessary gas andcarbondioxideformillionsof have containedmaterialssuchasoil, to below. Thesestoragesitesor‘zones’ from appropriatelyassessedstoragesites Geologists considertheriskofleakage tonnes. storage capacitytobearoundsixbillion comprehensive studiescouldconfirm two billiontonnes.Italsoestimatesmore of existingstudies,tobeinexcess Basin’s storagepotential,onthebasis CO2CRC hasestimatedtheGippsland millions ofyears. have retainedfluidssuchaspetroleumfor to regional‘seals’–imperviousrocksthat offers ahighstoragesecurity, attributable reservoirs anddeepsalineaquifers, storage capacityindepletingoilandgas Furthermore, theregionhassignificant January 2007. Research CentreforGreenhouseGasTechnologies, S.Edwards, R.P. LongfordandB.Vakarelov, Cooperative inVictoria,CMGibson-Poole,Capture andStorage(CCS) 1. ReviewofGeologicalStorageOpportunitiesforCarbon Email: [email protected] Phone: 0396584172 Department ofPrimaryIndustries Energy andEarthResourcesPolicy Division Manager EnergyTechnology Dr HelenMurphy FOR MOREINFORMATION CONTACT: 03 NEWS UPDATES MINERALS AND PETROLEUM NEWS UPDATES

GeoScience Victoria leads worldwide innovation Victorian gas and oil sector the base for international jobs

Victoria will become the base for the international oil and gas industry with 100 new jobs to be created for petroleum sector specialists.

International oil and gas industry consulting firm Production Services Network (PSN) plans to boost Melbourne staff levels to support joint ventures of two major oil companies in Russia. PSN’s Melbourne office will supply engineering and design services to two new joint ventures headed by Shell and ExxonMobil on the Russian Pacific p Specialists from geological surveys of several different countries attended the workshops hosted by GSV ocean island of Sakhalin. Aberdeen- based PSN supplies skilled people to

NEWS UPDATES GeoScience Victoria (GSV) recently Intended uses for the exchange language design, construct and operate oil and gas hosted specialists from around the are for web portals publishing data for platforms, pipelines and terminals around world to develop the next high level customers, exchanging data between the world. computer language to enable easy organisations, and geoscience web Minister for Energy and Resources exchange of information between services. GeoSciML is based on a model Peter Batchelor said the announcement governments and industry. of geoscience concepts that include of the 100 new Melbourne-based jobs geological units, geological structures was testimony to the experience and From 10-20 September 2007, GSV (faults, folds, foliations etc), and earth professionalism of the Victorian gas and hosted a series of workshops to finalise materials (rocks, minerals, fossils etc), oil sector and the special skill sets needed GeoSciML, the geological data exchange as well as borehole, outcrop and sample to work in difficult areas like Bass Strait. standard. Twenty five specialists from information. the geological surveys of Canada, PSN is already operating in Victoria, USA, Arizona, France, Britain, Sweden, The member organisations will test the holding a contract to supply Esso Japan and Italy, as well as GSV, CSIRO capacity of the language to deliver the Australia with technical services for its and Geoscience Australia attended the following products and services from Gippsland and Longford operations. Previously known as KBR Halliburton, workshops. Over the eleven day meeting, multiple data sources: PSN also worked with Woodside the various task groups: • geological map symbolised on age Petroleum on its Otway gas project near Port Campbell. • finalised the geological data exchange or lithology, model design, • geological data based on a complex Mr Batchelor said Victoria’s petroleum • established a set of use cases that query, sector was in good shape with nearly will test the capacity to deliver • lithology based query using the web, A$2 billion in investment, geological data, • use GeoSciML data to populate 3D and 1700 construction jobs and 180 • identified the software architecture GIS applications, and permanent jobs created since 2000. requirements, and • establish registers of web services, Additional investment of A$2 billion • commenced specifying content of geological terms, symbology definitions by the end of the decade would secure controlled vocabularies to realize data and service profiles. gas supplies at competitive prices. interoperability. The results will be demonstrated at the FOR MORE INFORMATION CONTACT: Dave Irvine Geological surveys are experiencing an International Geological Congress to be Director ever increasing digital data deluge. The held in Oslo, Norway, during August 2008. Production Services Network Level 16, 15 William Street exploration industry is becoming more Melbourne VIC 3000 FOR MORE INFORMATION CONTACT: digitally sophisticated and is no longer Telephone: 03 9944 5500 Alan Willocks simply satisfied with images of data. Fax: 03 9944 5600 Manager, Geoscience Information There is a move towards digital data in GeoScience Victoria standardized formats that can be used Phone: 03 9658 4501 Email: [email protected] immediately in client applications. Website: www.dpi.vic.gov/minpet

04 MIneralS and PETROLEUM NEWS UPDATES

Victorian gas and oil sector Castlemaine Goldfields early success in a new Stawell wins mine the base for international jobs drilling program on the Chewton anticline rescue competition

The Stawell gold mine rescue team has defeated teams from nine other mines across the country to win the prestigious Victorian underground mine rescue competition, held in Bendigo in July.

Rescue theory and skills, first aid, breathing apparatus, firefighting, search and rescue and rope rescue were tested during eight mine rescue and emergency response exercises at the three-day event.

The dramatic rescue of two miners trapped in the Beaconsfield gold mine in Tasmania in 2006 brought the skills of p Chewton anticline intercepts mine rescue teams into the living rooms of families around the world.

Castlemaine Goldfields has had early NEWS UPDATES success in a new drilling program on The ability to operate in confined areas the Chewton anticline following a shift while concentrating on saving lives in exploration focus from regional makes mine rescue teams a highly valued drilling at Castlemaine North. p Diamond drilling at Chewton commodity within the mining industry. Minerals Council of Australia Assistant A five-hole drilling program along the Castlemaine Goldfields Limited holds Director for Safety and Health, Megan Chewton anticline, designed to test the significant exploration licences in Central Davison, said the competition provided strike potential of the earlier high-grade Victoria, including the Castlemaine practical training experience to members gold intersections on the anticline, goldfield. The Castlemaine goldfield is a of mining operations, encouraging them to has confirmed the presence of a multi-million ounce, under-explored and apply teamwork to build skills vital to any significant mineralised fault zone under-developed field. Unlike Bendigo emergency rescue squad. less than 250 metres east of the or Ballarat, the entire goldfield is still Wattle Gully mine. accessible. The Castlemaine community “This highly-regarded national event is designed to improve the safety and health Drilling provided more evidence that is located on the western side of the of all people involved in the mining industry Wattle Gully style mineralisation lies goldfield, with the small village of and provide realistic and practical training immediately east and south of the old Chewton at its centre. to the mine site rescue teams,” she said. Wattle Gully mine the last major gold The company holds licences that cover mine in the Castlemaine area. the complete Castlemaine goldfield and is “This competition also fostered strong team spirit, competitiveness and goodwill The five-hole drilling program was well positioned to evaluate the whole field, among the rescue teams, with 190 people completed during the June 2007 quarter. a situation that until now has not occurred attending the presentation.” It was designed to follow up on the on this under-explored, high potential, promising results obtained from hole field that has already produced 5.6 million ounces of gold. Ms Davison said the competition remained CHEW_0819. The fault zone, Cemetery an important part of the MCA’s health reef, is associated with considerable FOR MORE INFORMATION CONTACT: and safety strategy. “Our goal of zero quartz veining and wallrock alteration with Gary Scanlan fatalities and injuries remains the minerals the best new intersections seen in holes Managing Director and CEO industry’s top value and commitment,” she CGT_009 and CGT_011. Castlemaine Goldfields said. Teams in the Victorian underground Phone: 03 5472 3411 mine rescue competition included: Castlemaine Goldfields managing director Email: [email protected] Ballarat Goldfields, VIC; Lihir Ltd, VIC; Gary Scanlan said the drilling provided a Fosterville Gold Mine, Perseverance valuable insight into the structure of the Corporation Ltd, VIC; Stawell Gold Mine, Cemetery fault. The next phase of drilling Perseverance Corporation Ltd, VIC; Oscar would continue the rigorous exploration of 1, Country Fire Authority, VIC; Cadia Valley the overall field comprising both structural Operations, Newcrest Mining Ltd, NSW; and targeted drilling in both the northern Endeavour, CBH Resources Limited, NSW; and southern areas. Northparkes, Rio Tinto Ltd, NSW; Peak Goldmine, Peak Gold Ltd, NSW; Perilya Broken Hill, Perilya Ltd, NSW; and Golden Grove, Oxiana Ltd, WA.

FOR MORE INFORMATION CONTACT: Megan Davison Assistant Director for Safety and Health Minerals Council of Australia Phone: 03 9629 1851 Fax: 03 9629 8603 05 Website: www.minerals.org.au/victoria

MINERALS AND PETROLEUM NEWS UPDATES

Adelaide conference reveals Victoria has 12 geothermal exploration The first reef intersected in drilling was permits (totalling 73,396 square parallel to the Cassilis reef. This reef, 0.65 hot rock energy potential kilometres) which have been awarded to metres wide, was intersected in four holes five companies, representing 42 per cent producing assay values of up to 42g/t Au of all gazetted geothermal acreage over a width of 0.55 metres. The company in Australia. said the geological model was becoming increasingly robust for targeting gold FOR MORE INFORMATION CONTACT: mineralisation within the reef system Jim Driscoll at Cassilis. Geologist Geoscience Victoria The Snake reef was intersected in holes Phone: 03 9658 4535 MCU 003 and MCU 005. Intersections of Fax: 03 9658 4555 Email: [email protected] one metre produced an assay value of 9.76g/t Au in MCU 003, while 0.9 metre produced 22g/t Au in MCU 005. Mutiny project on “The extremely promising information p The presentation about Victoria’s geothermal track at Cassilis activities sparked several enquiries from delegates gained from this first round of drilling Exploration and development work to has resulted in the company planning Victoria’s geothermal energy potential resurrect mining at the Cassilis gold extensions to a number of holes at

NEWS UPDATES was showcased at the Hot Rock Energy mine project at the historic Swifts Creek the level of the Shamrock adit, both to conference in Adelaide in August in gold field has been boosted by the further delineate the Snake reef and a presentation on the ‘Geothermal continuity of gold mineralisation within provide additional strike length to this journey in Victoria: From legislation to the Cassilis system. vertically extensive gold reef,” Mutiny said. exploration’, by GeoScience Victoria “Further drilling will also aim to follow geologist Jim Driscoll. Exploration work in the June 2007 quarter up on the newly-identified high-grade involved a refurbishment of the historic reef intersected in close proximity to the The conference, regarded as Australia’s Shamrock adit and development of the Cassilis reef. premier annual geothermal gathering, Cassilis reef by 12 metres along strike heard presentations from all from the end of the historical workings. Mutiny’s focus is on the development of 27 geothermal companies exploring for its gold tenements to become a profitable, geothermal resources in Australia. More Mutiny Gold, which now controls the low-cost producer of gold. The company than 120 delegates participated, including Cassilis project near Swifts Creek in controls two gold fields in eastern Victoria representatives of state, territory and Victoria’s eastern highlands, extended that contain more than 70 old workings federal government agencies, geothermal the strike length of the Cassilis reef to and several significant old mines. and oil industry service providers, financial 90 metres at average grade of 11g/t Au representatives from a variety of banking at one-metre width. The new development FOR MORE INFORMATION CONTACT: and finance organisations, petroleum heading, which is one kilometre along John Greeve industry representatives and overseas the Shamrock adit from the portal and Managing Director Mutiny Gold Ltd geothermal experts. GeoScience Victoria’s 500 metres below surface, provided a Phone: 08 9368 2722 geothermal prospectivity report from 2006, favourable drilling platform to target the Email: [email protected] an updated temperature database and high-grade Snake, Blacksmith and Crisp depth to 150°C geothermal map, as well reef complex located in a hanging wall as copies of all presentations given at position to the north-east of the the July DPI geothermal workshop were Cassilis reef. distributed at the conference. A banner, explaining Victoria’s geothermal potential, Mutiny achieved early success by was displayed. intersecting four significant gold bearing quartz reefs from the company’s first The success of DPI’s sponsorship can be part of the Phase 1 drill program. This measured in part by the large number of drilling was at the Shamrock level, which inquiries and conversations initiated by at 500 metres below the surface makes the delegates who responded to Victoria’s it the deepest level of recorded gold promotional information. Feedback mineralisation at the Cassilis mine. suggested many Australian companies were interested in Victoria’s geothermal Five holes of the Shamrock drilling exploration scene and its energy market. program have been completed and A workshop organised by the Australian logged, and assay results have been Geothermal Energy Group was convened returned for four holes. The holes on August 3, with representatives from the were designed to test the depth and 48 members in attendance. The group has gain a better understanding of the a common interest in sharing information spatial relationship between the Snake, to commercialise Australia’s geothermal Blacksmith and Crisp reefs, the company resources at maximum pace and minimum said in its June quarter report. cost in Australia’s competitive energy markets.

06 2006–07 has been a pivotal year in preparing the pmd*CRC for transition from research within its portfolio to delivery in the context of exploration mineral systems. Much of the activity is structured around the ‘5 Questions’ approach that defines mineral systems.

The project has benefited from a project team predominantly drawn from sponsors, with their local knowledge proving to be a key to its success. “The 3D model is assured of ongoing development for research groups and industry since Dr Tim Rawling, who ran the Tasmanides T5 Project for the CRC, accepted the position of 3D modelling manager at Geoscience Victoria,” Dr Haydon said. Over the next four years Dr Rawling will build on the 3D model developed in the T5 project in Victoria. The project, which will run Minerals systems in conjunction with a targeted co-funded drilling program designed to increase the geological understanding and resource potential of in Victoria Victoria, will be funded by GSV. Other longstanding initiatives, which include two projects under the supervision of Professor Chris Wilson at University of Melbourne, Cooperative research have focused on the Victorian mining industry. One project is T6 at Stawell with sponsor Perseverance centre understanding Corporation, which has been integrating structural geology and

t Draft version of the T5 Victoria model viewed from the Southeast. The model contains surfaces representing all of the major faults, granites (red) and lithological surfaces on the mainland as well as the offshore basin basement and major stratigraphic surfaces. The colourmap in the offshore basins represent depth.

A new understanding of mineral systems in Victoria is close to geochemical alteration within well-constrained 3D and 4D frameworks being delivered by the cooperative research centre for predictive to help mineral targeting in the Stawell belt. Data from this project, mineral discoveries, the pmd*CRC, headquartered in Victoria at now in its final stages, has already been fed into the wider Victorian the School of Earth Sciences, University of Melbourne. 3D model. The fourth Victorian project, T7 is investigating targeting mineral The pmd*CRC is in its final year of a seven-year term and is deposits at Fosterville and is sponsored by Perseverance through finalising a broad range of projects, including four with sponsor the CRC. The research team, led by Chris Wilson and his students groups in Victoria. have integrated field, geochronological and geophysical data in a 2006–07 has been a pivotal year in preparing the pmd*CRC for collaborative effort, to develop 4-dimensional geological models of transition from research within its portfolio to delivery in the context of the crust at a range of scales, to predict the location and control of exploration mineral systems. Much of the activity is structured around mineral deposits at Fosterville. Data from this project will be integrated the ‘5 Questions’ approach that defines mineral systems. into the Tasmanides project at a later date. Leader of the pmd*CRC, Dr Bob Haydon, told Discovery: This collaboration among the CRC research groups and sponsors, “Excellent progress has been made in terms of providing answers including industry and government in Victoria, clearly demonstrates to these research questions and delivering preliminary outcomes the success the pmd*CRC has had in contributing to shifting through a range of seminars, workshops and industry meetings.” exploration thinking into a mineral systems framework. This is The four Victorian projects address key aspects of understanding expected to pay dividends for the industry in future. mineral systems in Victoria. The Tasmanides T5 project has been successful in constructing a 3D model of the geological and FOR MORE INFORMATION CONTACT: geophysical framework of the state. The results from Victorian Dr Bob Haydon seismic lines 1 and 2 under the T13 project have been incorporated Chief Executive Officer pmd*CRC into the Victorian 3D model with numerous fault and lithology surface Phone: 03 8344 8351 geometries recently included. Email: [email protected] 07

DISCOVERY JOURNAL NOVEMBER 2007

u Undergraoud drilling. Inset: Schematic of Eureka Bulk Sample August update

Goldstar Resources Walhalla Project Goldstar Resources NL has announced a 57 per Tubal Cain success gives cent increase in the modelled quartz reef/breccia Goldstar a Eureka moment tonnage at its Tubal Cain Project in Victoria to over 3.6 million tonnes, providing a strong basis to A potentially significant new Victorian gold mine is emerging in Victoria’s eastern ranges as Goldstar Resources continues advance it towards the next stage of evaluation. to produce strong exploration results from its Walhalla region project.

Goldstar Resources NL has announced a 57 per cent increase Andrew King said. in the modelled quartz reef/breccia tonnage at its Tubal Cain Project “Importantly, the hole in Victoria to over 3.6 million tonnes, providing a strong basis to has confirmed that the advance it towards the next stage of evaluation. The upgraded dyke bulge continues to geological model has confirmed Tubal Cain has the potential to a depth of at least 1,000 underpin a large-scale, long-life project for Goldstar, providing the metres and has highlighted next source of gold production after the Eureka Project. the repetition of the suite Recent drilling has significantly improved the confidence level in of high-grade quartz the top 600 metres of the deposit, resulting in over 2.3 million tonnes reef structures below the of quartz reef zone now being classified with a medium-to-high level previously confirmed level of geological confidence. of 600 metres. The geological model has also been extended down to “This has significantly 1,000 metres, resulting in the overall quartz reef zones estimated to upgraded the long-term contain between 3.6 million and 4.1 million tonnes. The dyke bulge production potential of the remains open at depth with drilling stopped at 1,000 metres only due Tubal Cain project and reinforced the importance to the limitations of the drill rig. Follow up drilling is being planned. of the dyke bulges to our growth and development strategy. Tubal Cain is substantially larger than the Eureka Project, located “We plan to accelerate the evaluation and development of other 5 kilometres to the south, where Goldstar recently estimated a revised significant deposits in the Walhalla field such as Tubal Cain to provide quartz reef tonnage of 720,000 tonnes to a depth of 550 metres. a pipeline of development and production opportunities that can As with the previous geological model, the new model for Tubal leverage off the infrastructure developed at the nearby Eureka project.” Cain incorporates conservative assumptions including a significant The recent Eureka bulk sample program (EBSP) was so adjustment for historically mined material. The latest drilling program successful, Goldstar has now started a full feasibility study into a also targeted a potential location for a Tubal Cain Bulk Sample mine, expected to be complete by early next year. Goldstar now says Program (TCBSP). Geological logging has confirmed the presence it has enough information to calculate an upgraded geological model, of five unmined reef zones in the target area below the known historic from which a fully diluted mining model has been established. workings. The geological model has been calculated to contain A near vertical diamond drill hole, GRT011 – the deepest drilled 720,000 tonnes of quartz reef material, a 67 per cent increase on the to date by Goldstar in the Walhalla field – was drilled in the central previous figure of 430,000 tonnes. The model has been extended portion of the Tubal Cain dyke bulge in the 2007 June quarter. from 300 to 550 metres, which is the current depth to which drilling Geological logging of the drill core has confirmed that the dyke has been completed. The underground drilling, to be completed by bulge and potentially mineralised zones extend to a depth of at October, is continuing to improve the grade prediction for the model, least 1,000 metres. This represents a significant expansion of the Mr King said. dyke bulge compared with the 2.3 million tonne, 600 metre-deep The latest drilling results have provided further confidence in the geological model for Tubal Cain announced in February this year. Eureka bulk sampling program and Eureka pre-feasibility study The latest drilling has also confirmed the presence of the previously estimations. Eureka is now estimated to contain between identified package of 27 quartz reef/breccia zones to a depth of 800,000 and 900,000 tonnes of ore to a depth of 550 metres, 600 metres and identified at least eight reef zones below this level. with an estimated grade range of 8-12g/t Au. “This significant deep diamond drill hole had provided the first FOR MORE INFORMATION CONTACT: definitive test of the depth potential of the dyke bulges within the Andrew King Walhalla field, reinforcing the evidence of historical production from Managing Director deposits such as Morning Star,” Goldstar’s Managing Director Goldstar Resources NL Phone: 08 9321 1577 Website: www.goldstarnl.com.au 08 EXECUTIVE IN FOCUS Arthur Hood, Lihir Gold Limited

LGL is well positioned for rapid growth

Lihir Gold Limited (LGL), one of the largest A$1.2 billion in new gold producers in the Asia-Pacific region, equity through an produced 651,000 ounces of gold in 2006 entitlements offer and and is on track to produce more than institutional placement. 800,000 ounces this year. The funds were predominantly used to FOR MORE Under the leadership of Managing Director INFORMATION CONTACT: close out the company’s and Chief Executive Officer, Arthur Hood, LGL Joe Dowling hedge book, repay its General Manager has grown from its earlier single-mine status Corporate Affairs gold loan facility and and become a major regional gold player in Lihir Gold Ltd retire outstanding debt. Phone: 07 3318 3308 its own right. With its well established flagship “The restructure Email: [email protected] gold operation in Papua New Guinea and the means we are now fully promising central Victorian Ballarat Goldfields leveraged to the gold project in its portfolio, LGL is well positioned price, which is very attractive to global investors. for future growth. Mr Hood said from the outset his management We also have the financial flexibility to fund team’s core focus was on increasing gold output LGL, which has a combined workforce of growth initiatives on Lihir Island and to advance and reducing expenses, which in 2006 – his first more than 3,000 employees and business the development of our Ballarat project,” full year in the top job – saw LGL deliver record partners and more than 30,000 shareholders, Mr Hood said. gold production and higher profitability in a is best known for its world-class gold mine on LGL moved from being a single-mine business challenging cost environment. Lihir Island in Papua New Guinea’s New Ireland to a diversified gold company when it completed While the Lihir Island operation powered province. The Lihir Island gold deposit boasts a merger with Ballarat Goldfields NL in March ahead under Hood’s revitalized strategy, he also 40 million ounces of gold in resource and 2007. Ballarat Goldfields holds the mining directed the company to a momentous step 23.6 million ounces in reserves, ranking it among licences for most of the historic Ballarat gold forward in its corporate evolution with the first the largest individual international gold mines. region in Victoria, which has produced about expansion in its history beyond the Papua New Despite the potential of the Lihir Island mine, 12 million ounces of gold over the past 150 Guinea mine. until recent years the commercial performance years. Ballarat Goldfields is now developing a “Bringing Ballarat on board has been a very of LGL had failed to live up to expectations. mine to extract the significant gold deposits that exciting development for us and shows we have That is, until Arthur Hood assumed the reins remain beneath the old mine workings. reached a new level of maturity as a company. of the company in October 2005 as LGL’s first “With the successful completion of the Ballarat Ballarat will be a very valuable and productive independently appointed chief executive officer, merger and the capital raising, we’ve already asset in our portfolio. “It’s a long-life operation following a decade-long management agreement got some runs on the board. There is no doubt, which will start adding to our production from with major shareholder Rio Tinto Ltd. however, that the best is yet to come from LGL,” next year, initially at the rate of about Mr Hood, who has had a 30-year career in the Mr Hood said. 100,000 ounces per annum, before climbing mining industry, said there had been a genuine Mr Hood entered the gold mining industry in to 200,000 ounces in 2009. It will be the long step-change in LGL’s operational performance 1989 when he joined Placer Pacific, a subsidiary awaited renaissance in the Victorian gold mining and corporate maturity over the past 22 months of large Canadian gold miner Placer Dome industry.” According to Mr Hood, the outlook of independent management. The company (acquired by Barrick Gold Corporation in 2006). for LGL over the coming years is very strong. has been on a sharp growth trajectory since his He remained with Placer Dome for more than The company has plans to expand processing appointment, most apparent by a surge in the 18 years, holding a number of senior roles capacity on Lihir Island to more than one million company’s market capitalisation from including managing director of Placer Dome ounces per annum by 2010. A$1.9 billion when Mr Hood joined to its current Niugini, general manager of Misima Mines Ltd “We are in the latter stages of an A$7.5 million level of A$5.5 billion. This makes LGL one of in Papua New Guinea and managing director of feasibility study investigating the expansion, Australia’s largest publicly listed gold miners and Placer Dome Tanzania Ltd. with the results due in early 2008. Expanding positions it comfortably within the S&P/ASX 100. “Placer Dome was the perfect training ground production on Lihir is a logical move for us. It “Operationally, we are performing better than for the unique challenges I face every day as the means we will bring forward revenues, achieve ever. We have extracted efficiencies across the CEO of LGL,” Mr Hood said. “I was fortunate economies of scale, reduce unit costs and boost business and made tangible improvements to enough to spend around 12 years operating in shareholder returns. It will take us a lot closer the mining and processing functions on Lihir PNG on the Porgera and Misima gold operations, towards realising the full potential of the Lihir Island,” Mr Hood, 54, told Discovery. which gave me an invaluable insight into the Island asset.” “We recently commissioned a flotation circuit country’s operating environment.” Combined with the anticipated Ballarat gold in the plant, which puts us on track to deliver a With his strong leadership skills, broad output, LGL is set to double its production base 20 per cent increase in gold production this year mining experience and detailed understanding from 2006 levels to about 1.25 million ounces per to between 800,000 and 830,000 ounces. of Papua New Guinea, Mr Hood became the annum within four years. “We are also keeping a lid on costs by prime candidate for the role of CEO of LGL. “As an unhedged, debt-free producer with a harnessing geothermal steam reserves on the His mandate from the board was to grow growing production profile we are primed to reap island to generate electricity, which reduces our the company by pursuing value-generating the benefits of a buoyant gold price. I am very reliance on expensive heavy fuel oil power.” opportunities both on and off the island. His first optimistic about what the future holds for LGL,” In May this year Mr Hood led the company port of call was to substantially strengthen the Mr Hood said. through a major financial overhaul, raising company’s management, and he assembled a team of highly-experienced mining executives based on Lihir Island and in the newly-established corporate office in Brisbane. 09 DISCOVERY JOURNAL NOVEMBER 2007

u Ouyen district tenements

Bemax NL’s Murray Basin operations Bemax production record from Murray Basin

Production of heavy mineral concentrate from Bemax NL’s Murray Basin operations in New South Wales has continued to run at record levels, with new exploration continuing to expand the company’s position in Victoria.

Bemax reported in its June quarter report that exploration drilling in northern Victoria near Ouyen had identified a significant high grade deposit, now known as Kulwin North. That discovery is likely to add to Bemax’s position as the world’s fourth largest producer of heavy minerals and consolidate the future of the Murray Basin as a mineral sands province of world significance. Bemax has 67.5 million tonnes of heavy mineral resources over an area of 7,000 square kilometres in the Murray Basin – resources expected to sustain commercial mining for up to Bemax has 67.5 million tonnes of heavy mineral 60 years. The company’s major Murray Basin production stems resources over an area of 7,000 square kilometres from the Pooncarie area in NSW mines, principally the Gingko in the Murray Basin – resources expected to mine (which became the first commercial mining operation in the area in 2005) and the Snapper mine. sustain commercial mining for up to 60 years. The Ginkgo mine contains 5.8 million tonnes of heavy mineral, with an excellent suite of products including zircon. Production at the Ginkgo mine started in December 2005. New production is expected to start at the nearby Snapper mine, just north of Bemax’s latest drilling on three new lines extended the Mildura, in the next few months. Metallurgical test work on the resource a further three kilometres to the north within the Ouyen Snapper ore continued during the June quarter with the ore licence. Similar grades, widths and thicknesses to those defined characterisation test work completed in preparation for the bulk in the southern part of the deposit were encountered on each sample pilot scale test work program to begin. This testing is of the lines. A new licence application (ELA 5031) was also required to confirm the process design for the Snapper Mine submitted for an area in southern Victoria adjacent to the Nathan Wet Concentrator and additional mineral processing circuits at and McKenzie deposits and Bemax has been awarded priority the Broken Hill mineral separation plant, the company told the for the area. Bemax continues to aggressively explore its Murray Australian Stock Exchange. Basin tenements in NSW and northern Victoria, which covers an During the June quarter, 14,866 metres of exploration and area greater than 7,000 square kilometres. development drilling were completed, concentrating on the FOR MORE INFORMATION CONTACT: Carstairs and Neckaboo licences in NSW and the Ouyen licence Tony Shirfan in Victoria. The Kulwin north deposit was discovered near Ouyen Managing Director during the quarter. The southern portion of the Kulwin deposit was Bemax Ltd previously drilled out on a 200-metre grid pattern. This defined a Phone: 07 3210 7900 Fax: 07 3210 7999 resource, based on a three per cent heavy mineral cut-off, which Email: [email protected] was two kilometres in length, 86 metres wide, three metres thick Website: www.bemax.com.au and averaging 21 per cent heavy mineral.

10 u Douglas mining unit

Iluka starts production from Hamilton plant

to 96,000 tonnes and synthetic rutile production up 13.2 per cent Commissioning and ramp-up to 261,000 tonnes. Iluka reported that the Murray Basin provided of the Iluka projects its initial production and revenue contribution as the mineral separation plant at Hamilton was commissioned. However, the company reported that delays in a number of Victoria’s long awaited bonanza from the heavy mineral planned shipments from Western Australia and Murray Basin – sands deposits of the Murray Basin has started to emerge, due to the tight shipping market and port congestion at Geraldton, with the successful commissioning and ramp-up of the Iluka WA – meant that total sales volumes increased only marginally, Resources Ltd projects in the state’s west. Iluka has booked up 0.4 per cent, compared with the previous corresponding half. the first earnings contribution from the project producing The company said the deferred sales volumes were expected 48,000 tonnes of zircon and 22,000 tonnes of rutile in the to be made up in the second half of the year. “The Murray basin financial year ended June 30. In the current financial year operation made its first contribution to revenues and earnings Iluka is aiming to produce 110,000 tonnes of zircon and before interest and tax production,” it said. “The Murray Basin 70,000 tonnes of rutile. operations are performing to expectations and are expected to contribute approximately 110,000 tonnes of zircon and 70,000 The three-stage project is now producing at capacity with the tonnes of rutile production in 2007.” Hamilton mineral separation plant completed and commissioned On the exploration front, Iluka reported that in the west Balranald earlier this year. The Hamilton plant will be the base of operations area it had tested up to 20 magnetic anomalies, with the discovery for the existing mine and mobile wet concentration plant, which will of anomalous zones coinciding with heavy mineral strands. initially extract a concentrate, for processing at Hamilton. Iluka has Current exploration is designed to delineate the new resources now embarked on a full feasibility study for its stage two Murray with recent exploration success expected to increase JORC Basin development, which is expected to be completed by the compliant resources in the area. end of 2007. The recently announced Minsk Prospect north of Swan Hill also Stage two will exploit the deposits of the northern Murray Basin shows great promise, with a high grade (greater than 10 per cent which constitute about two-thirds of the company’s known Murray HM) core over 120 metres wide and 2 to 5 metres thick. In the Basin resources base. This project will allow the mineral separation first half of the year Iluka also conducted a major internal review plant at Hamilton to be “fully loaded” with feed from the Douglas of its business strategy. This started after the appointment of area and northern deposits. Mining at Douglas is expected to David Robb as managing director, with the principal objective of continue until at least 2012, although Iluka’s known resources improving Iluka’s underlying business performance. Mr Robb said elsewhere in the Murray Basin suggest mining will continue until at the detailed review of Iluka’s business had covered three main least 2020. areas. “A detailed bottom-up five-year regional business planning The stage two development will involve estimated capital exercise, an integrated business planning overlay to prioritise spending of about $180 million. The project involves building a capital development and asset deployment decisions and work on mobile wet concentrator plant and overburden stripping, mining a range of specific work streams, including the reconfiguration of and infrastructure for the first deposits at Kulwin, 30 kms from the South West (WA) business,” he said. Ouyen. The first production is expected in early 2009 and will lift Mr Robb said modelling of the company’s future showed a Iluka’s Murray Basin zircon production to between 120,000 and strong reliance on the growing Murray Basin operations for future 130,000 tonnes and rutile production to between 180,000 and earnings growth. “The measures being pursued to enhance the 200,000 tonnes a year. financial performance of the company are multi-faceted and For the longer term the major component of Iluka’s brownfield include: the reconfiguration of the south-west business; the exploration strategy is focused on the west Balranald region of development of Murray Basin stage two and the Jacinth-Ambrosia the Murray Basin. Recent drilling has focused on this area and zircon deposits (in South Australia) in a capital-efficient manner.” has so far yielded the largest part of Iluka’s Murray Basin resource inventory (44 million tonnes of heavy mineral) within an overall FOR MORE INFORMATION CONTACT: 12,000 sq kms tenement holding. David Robb Managing Director, The West Balranald area discoveries are categorised by ILuka Resources Ltd large, high grade (greater than 10%) deposits although these Phone: 08 9360 4713 are typically deeper than the existing operations at Douglas or and Kulwin. Overburden depths of up to 70 metres are being Dr Robert Porter experienced at the Balranald prospects, according to Iluka. General Manager, Investor Relations and Corporate Affairs ILuka Resources Ltd In its mid-2007 financial report, Iluka reported increased Phone: 08 9360 4751 production across all of its products, with zircon production Mobile: 0407 391 829 increasing 17.0 per cent to 257,000 tonnes, rutile up 15 per cent Email: [email protected] 11 Gold UndercoverUnearth Victoria’s wealth

The ‘Developing Gold Undercover’ initiative has been framed to unlock the secrets of Victoria’s vast gold potential. Its aims are to deliver the geoscience data and techniques that give the best chance of exploration success in covered areas.

Revealing the ground beneath our feet

etailed gravity and modern being built as part of a Cooperative Research Victoria (GSV) has undertaken world- D magnetotelluric (MT) data has Centre for Predictive Mineral Discovery class 2D surface geological mapping been collected along the route of the (pmd*CRC) project, due for completion in throughout Victoria. The state also has been central Victorian seismic transect, which early 2008. In turn, this model will feed into a comprehensively covered by regional scale was completed in June 2006 as part of more comprehensive 3D geological model airborne magnetic and radiometric surveys, Victoria’s Gold Undercover initiative. of Victoria being constructed within the DPI and ground gravity surveys. These surveys, Rediscover Victoria initiative, running over four together with the new data, will better Together, the package of seismic, MT years from July 2007 to June 2011. determine the geometries and nature of key and gravity data will significantly update the In the last two decades, GeoScience bounding faults and internal structures within regional-scale 3D geological model of Victoria the Stawell, Bendigo and Melbourne zones and the relationship of gold and other mineral deposits to regional structure in the Gold Undercover project area. The MT data, collected along the central part of the seismic transect, is being processed at the Korea Institute of Geosciences and Mineral Resources under a joint venture agreement with GSV and Monash University. The brightly-coloured preliminary pseudosections show data to about 20 to 25 kilometres deep, and give an indication of sub-surface structure based on lateral and vertical variations in electrical resistivity. Gravity data were collected at 200-metre station intervals along the seismic transect. Variations in the measured values are associated with variations in rock density and hence rock type. To aid the interpretation of gravity data within the project area, about 800 density measurements have been collated and 460 new determinations made from more than 50 separate rock types. A Gold Undercover report detailing the density measurement results is available on the DPI 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]

p Location map of central Victorian seismic transect showing gravity and MT coverage, together with pseudosections of gravity and MT data 12 A three year, $9 million initiative Gold UndercoverUnearth Victoria’s wealth Hylogging project

pectral data from near-infrared to of HyLoggerTM and HyChipsTM spectral GeoScience Victoria conducted a The ‘Developing Gold Undercover’ initiative has been framed to unlock the secrets S short-wave infrared electromagnetic analysers. HyLoggingTM trial in August using a of Victoria’s vast gold potential. Its aims are to deliver the geoscience data and radiation (NIR-SWIR) can be used to Diamond drill core samples collected as HyChipsTM device (Figure 3). This trial techniques that give the best chance of exploration success in covered areas. quickly identify hydrous minerals in the part of the Gold Undercover lithogeochemistry involved the scanning of diamond drill core field and in the laboratory. program have been analysed using the from seven central Victorian gold deposits HyChipsTM analyser at the CSIRO North in order to confirm the preliminary spectral Certain minerals absorb short wave infrared Ryde facility. The results support previous results and, more importantly, to determine radiation at characteristic wavelengths that studies using portable field instruments (e.g. the lateral extent of alteration that can be allow these minerals to be rapidly identified PIMA) that indicated a shift in white mica detected using infrared spectral analysis. Revealing the ground beneath our feet and, in some instances, for information on their composition associated with sericite alteration HyLoggingTM, if successful, raises the composition or crystallinity to be obtained. around central Victorian gold deposits possibility of automated logging of exploration Examples of alteration minerals for which the (Figure 1). This change in composition is drill core and chips to define hydrothermal technique is ideally suited include white micas revealed by shifts in the wavelength position alteration associated with gold mineralisation. and chlorite, and a variety of clay minerals. of the main absorption peak at about The technique can also be used for a wide The HyLoggingTM systems group at 2,200 nm that can be correlated with the variety of other deposit types, such as volcanic- CSIRO’s Division of Mining and Exploration arsenic content of the samples (Figure 2), hosted massive sulphide deposits, epithermal has developed a number of automated which is a reliable indicator of proximity to gold deposits and porphyry copper systems. infrared spectral devices for the continuous a mineralised structure. The shift in peak scanning of diamond drill core (HyLoggerTM) FOR MORE INFORMATION CONTACT: wavelength is interpreted to reflect a change and chip samples from exploration drill holes in mica composition from phengitic to more Paul McDonald (HyChipsTM). The group has developed an Manager, Resources muscovitic, and may correlate with an inferred infrared scanner to operate in the thermal GeoScience Victoria increase in potassium of the rocks hosting Phone: 03 9658 4531 infrared range (TIR-Logger) and is in the central Victorian gold deposits. Email: [email protected] process of developing a new generation Website: www.dpi.vic.gov.au/minpet/goldundercover

pFigure 1 Representative SWIR spectra pFigure 2 Plot of white mica composition, as indicated by the wavelength of pFigure 3 Hylogging trial at DPI’s from the Fosterville deposit the main AlOH absorption peak, versus the arsenic content of the samples Core Library Hydrogeochemistry project

eoScience Victoria has developed and will add considerable value to the existing following diamond drilling at gold prospects G a project to test the application of borehole and groundwater databases. and from existing groundwater bores that hydrogeochemistry as an exploration tool An initial hydrogeochemistry pilot project have penetrated the basement. This will for gold in Victoria. in the Lockington area has illustrated the allow direct sampling of groundwaters that difficulty of sampling bedrock aquifers through have interacted with basement sulphide Previous work in Victoria has shown overlying tertiary aquifers. Ten groundwater mineralisation where the overlying aquifers groundwater is useful as a geochemical bores (both public and private) were sampled have been cased off. The results of the new exploration sample medium in areas where and analysed for gold, arsenic and antimony. project will be released as a Gold Undercover deep weathering profiles or significant Gold analyses were carried out at Actlabs report in mid-2009. They will provide a new thicknesses of transported regolith obscure in Canada using high-resolution inductively perspective and an additional tool for mineral potential gold and base metal deposits coupled plasma mass spectroscopy, with a explorers when targeting gold and other (Giblin, A. 2001). detection limit of 0.1 ng/L (ppt). Although gold commodities. The Gold Undercover Hydrogeochemistry levels were very low (0.2 to 1 ng/L), 1 ng/L project will involve the analysis of existing FOR MORE INFORMATION CONTACT: appears to be locally anomalous for gold in CSIRO hydrogeochemical data (about 1,000 the Lockington context. Paul McDonald samples) from Victoria, as well as additional Manager, Resources The pilot study concluded that, to be data to be collected from groundwater and GeoScience Victoria useful, it was necessary to sample basement Phone: 03 9658 4531 exploration bores in the Gold Undercover aquifers. The hydrogeochemistry project will Email: [email protected] project area. Much of the interpretation will trial specific sampling of bedrock aquifers Website: www.dpi.vic.gov.au/minpet/goldundercover be in collaboration with DPI hydrogeologists 13 Giblin, A. 2001. Groundwaters; Geochemical Pathfinders to Concealed Ore Deposits (Handbook). CSIRO Exploration and Mining. VIMP Victorian Initiative for Minerals and Petroleum Victoria’s mineral and petroleum exploration boom has received another major boost with the release of the latest geoscience data collated by the Minerals and Petroleum division of DPI. The VIMP section provides an overview of company presentations from the minerals, petroleum and energy industries as well as a summary of new opportunities in Victoria.

VIMP launches wealth of new information

The 19th Victorian Initiative for Minerals Presentations also included carbon and Petroleum (VIMP) event attracted capture and storage technology and a crowd of more than 200 explorers, renewable geothermal energy exploration. investors, scientists and government Geothermal exploration has become a employees to hear a selection of topic of major new interest in Victoria with pThe 19th VIMP event attracted record presentations by and for the five separate companies recently awarded numbers of delegates resources industry. exploration permits to seek new sources of geothermal energy. The annual event provided Several of those companies are now an opportunity for DPI to planning public share floats to raise capital showcase Victoria’s potential necessary for comprehensive exploration programs. for discovery of a variety The gold and minerals industry in of minerals, petroleum and Victoria is also undergoing a significant energy resources including boom period with record expenditure on gold, oil, gas and geothermal exploration, reaching an all-time high of pThe poster presentations were well received ‘hot spots’. $82.5 million in 2006–07. by Victorian and interstate visitors The VIMP program has played a major Throughout the recent resources sector Minister for Energy and Resources, Peter role in promoting the prospectivity of renaissance the VIMP program has Batchelor, explained new ways the Victorian Victoria in recent years helping lift the received national accolades for its work in Government supports exploration through state’s profile from a relative mining developing relevant, new, pre-competitive the Rediscover Victoria initiative, which and energy backwater to a position of geoscience data for the industry to use as includes funding for drilling and the creation prominence in the Australian resources a base for significant new company based of a new 3D geological model of Victoria. industry. exploration programs. GeoScience Victoria displayed posters Offshore oil and gas projects worth FOR MORE INFORMATION CONTACT: about the newest geological findings. around $5 billion have been or are still Paul McDonald The day included a mix of presentations under construction in Victorian waters while millions more is being spent developing Manager, Resources by DPI executives and geoscientists, as GeoScience Victoria well as Victorian exploration and mining Victoria’s mineral sands, gold and base Phone: 03 9658 4531 companies. metals industries. Email: [email protected] Website: www.dpi.vic.gov.au/minpet/vimp-release

14 “The improved quality of seismic data, new ideas from new exploration companies New players boost and rising oil prices Victoria’s oil and gas potential improving project economics were all major factors in the rising exploration and A major influx of new oil and gas gas. Between 2001 and 2007, another 27 explorers into Victoria has dramatically offshore wells were drilled, Mr Edwards subsequent success rates improved the chances for the discovery said, with up to 16 fields likely to be in offshore Victoria” of new petroleum reserves around the declared commercially viable for state’s turbulent southern coastline. development. The figure represented a success rate of close to 60 per cent, Nexus Energy, one of the new breed and was a reflection of the influx of new of explorers and petroleum developers companies prepared to execute new which have moved into the state in recent and innovative exploration strategies years, believes the excitement of offshore and theories to find commercially viable exploration in Victoria could soon be hydrocarbon reserves. translated into a string of new discoveries. Mr Edwards conceded that some of the Speaking at the recent launch of the fields likely to be declared commercial latest Victorian Initiative for Minerals and were discovered in earlier times by the Petroleum (VIMP) data package, Nexus Bass Strait pioneers, but in some cases pDerek on the Ocean Patriot drilling rig taken Energy’s Engineering and Business new development ideas had allowed the during the drilling of Longtom-3 Development Manager, Keith Edwards said projects to be taken forward. He also exploration success rates in Victoria had illustrated the rising interest in exploration risen quickly in recent years as new players in Victoria’s southern waters. The area emerged on the oil and gas scene. held under exploration lease had been Mr Edwards said between 1965 and 2000 quadrupled in Victoria as the state was a total of 178 oil and gas exploration wells ‘invaded’ by a host of new explorers. were drilled in offshore Victorian waters for That was also reflected by the volume of the discovery of just 19 fields – a success 3D seismic data which had been acquired rate of just 10.6 per cent. That period in recent years, which had also quadrupled was dominated by the presence of Esso the amount of seismic data available in and BHP, which collectively controlled the 1994. The improved quality of seismic data, majority of Victoria’s offshore exploration new ideas from new exploration companies pOcean Patriot during the drilling of Longtom-3 acreage and resulted in the discovery of and rising oil prices improving project several billion barrels of oil and about economics were all major factors in the 15 trillion cubic feet of gas. rising exploration and subsequent success Mr Edwards said the Esso/BHP rates in offshore Victoria, Mr Edwards told successes were vital for the early Discovery. development of the Bass Strait fields, where FOR MORE INFORMATION CONTACT: big companies were essential to manage the high cost of the fledgling offshore oil Keith Edwards Engineering and Business Development Manager and gas exploration industry and to develop Nexus Energy Ltd the vital offshore and associated onshore Phone: 03 9660 2351 infrastructure, to produce the oil and Fax: 03 9654 9303

15 Lihir Gold Limited’s (LGL) Ballarat gold project is on track to begin commercial gold production during the second half of 2008. The company reported solid development Ballarat project on track progress in the first half of 2007 at its Ballarat East mine for commercial production site, about 100 kilometres west of Melbourne.

Progress on the underground mine in Significant assay results received during the quarter include the following: the June quarter was a record 1,064 Hole From To Length (m) Grade (g/t) Intersection metres, including a record month of 402 metres. The development rates BEU159 267 276 9 6.8 Thresher (Scandinavian) reflect continued refinement of BEU162B 254 264 10 8.9 Mako (First Chance) work practices, some better ground conditions and greater flexibility as BEU162C 187 188 1 144.4 Tiger (First Chance) more work faces become available, BEU162D 197 198 1 27.4 Gummy (First Chance) the company reported to the Australian BEU161 394 395 1 24.9 Thresher (First Chance) Stock Exchange. BEU168 374 375 1 26.8 White Pointer (First Chance)

General Manager of the Ballarat operation, BEU168A 373 382 7.9 9.5 Whale Shark (First Chance) Wojciech Ozga, said a seamless transition BEU182 272 284 8.9 5 Mako (Scandinavian) for the project followed the merger BEU169A 268 270 2 9.8 Whale Shark (First Chance) between LGL and Ballarat Goldfields NL *All intersections adjusted to true width in March 2007. “Our key focus has been on underground development and resource This material is being stockpiled on-site definition drilling. The development plan before completing the leach circuit. Site we announced in September 2006 is preparations have begun, with civil works progressing as planned under the under way. LGL umbrella,” he said. Resource definition drilling, with diamond While development at Ballarat East is drill rigs in the Sulieman and Woah Hawp focused on the main access headings declines, continues to intersect mineralised – the Woah Hawp and Prince declines structures with numerous occurrences of – underground development resources visible gold. are being used to access nearby identified Lengthy assay turnaround time mineralised structures and ore resources pProgress on the Ballarat underground mine has presented a challenge for the to prepare them for mining. Material taken is speedily moving ahead project, with a major backlog of from a mineralised structure, intersected subject to pre-commissioning. Preliminary work at laboratories delaying the in the Prince decline, has been mined as works are under way on a major ventilation processing of drillhole samples. ore as part of trial mining. Further definition intake shaft at Golden Point, following final LGL is now considering building an drilling was completed on the Woah Hawp government approval in July. The company assay laboratory on-site to address 218 ore block to refine the geological has ordered long lead items and the off-site the problem. interpretation prior to stope design and fabrication of the head frame is more than Overall, good progress continues to mining. From these structures 2,032 tonnes 70 per cent complete. be made at Ballarat East and the project have been mined and placed on the ROM Site civil works have begun, with remains on target to begin commercial pad ready for processing. Access into a contractors mobilised on site. The shaft rates of production in the second half further mineralised structure, First Chance effectively provides the “lungs” of the mine of 2008. 176 level ore resource, began in June, and represents an important milestone in with trial mining scheduled to begin in the the underground development progress. September quarter. In the process plant, construction of the Major work on key infrastructure projects stage two leaching circuit is advancing, with is continuing, including ventilation raises, off-site fabrication of the ancillary equipment power upgrades, dewatering, office and close to completion. Stage two involves change-house facilities and planning for an introducing a small ball mill and an InLine on-site assay laboratory. Construction of a leach reactor to extract fine grained gold fibrecrete batch plant was completed and is associated with the sulphide concentrate.

16 VIMP

Seismic transect sheds light on central Victorian gold potential q Captions to come

The last of a series of data interpretation workshops for the 2006 central Victorian seismic transect was held in September 2007.

Interpretation of the seismic data in conjunction with other geoscience datasets has enabled geologists from the partner organisations to predict the position of rock types deep in the earth’s crust which may have been pJumbo operator preparing rock bolt the source of the gold now found in the central Victorian goldfields of the Bendigo and Stawell region.

In addition the data has enabled the geologists to trace the position of fault lines that acted as pathways for fluids to carry the gold and deposit it, between 440 and 380 million years ago, in what would eventually become the goldfields we see today. A better understanding of the distribution of gold source rocks and fluid pathways provided by the seismic data will allow geologists and explorers to better pinpoint the location of potential new gold resources in the region. The seismic data, collected during May and June 2006, was funded by the Commonwealth and State Governments with industry partners. Results from the seismic data interpretation workshops will be included in the 3D geological model being constructed by pPlant Operator checking crushed ore GeoScience Victoria. It is planned to release final data The company also hosted an Open Day interpretations at a public workshop in early in May, with approximately 200 people 2008. The new data should help increase visiting the site. Visitors were offered investment in exploration for minerals and walking and coach tours of the surface petroleum in country Victoria. facilities and had the opportunity to view FOR MORE INFORMATION CONTACT: displays and demonstrations of mobile mining equipment. Six prize winners took a Peter O’Shea Manager, Minerals Geoscience trip down the mine as part of the activities. GeoScience Victoria Ballarat Goldfields also decided to use Phone: 03 9658 4525 its Open Day as a fundraiser for the KIDS Email: Peter.O’[email protected] Foundation. pLoading Toro 40t truck underground FOR MORE INFORMATION CONTACT: Joe Dowling General Manager Corporate Affairs Lihir Gold Ltd Phone: 07 3318-3308 Email: [email protected]

17 At Fosterville, gold production for the June quarter Perseverance tops up cash was 16,248 ounces at a cash cost of $620 per ounce, contributing to a 2006–07 full-year production of 76,706 to offset gold shortfall ounces at a cash cost of $530 per ounce.

Victoria’s biggest gold miner, Perseverance Corporation, has raised $A26.5 million through a placement of shares to institutional and sophisticated investors after revealing that gold production from the Fosterville and Stawell gold mines had fallen below expectations in the 2006–07 financial year.

Together, the Fosterville and Stawell mines produced 189,192 ounces at a cash cost of $497 per ounce for the year ending June 2007. At Fosterville, gold production for the June quarter was 16,248 ounces at a cash cost of $620 per ounce, contributing to a 2006–07 full-year production of 76,706 ounces at a cash cost of $530 per ounce. The Stawell mine performed far better, producing 25,570 ounces at a cash cost of $574 per ounce in the June quarter and 112,486 ounces at a cash cost of $474 per ounce for the year. But on July 2 this year, Perseverance revealed production for the June quarter would be below expectations and its financial position had been adversely impacted by the shortfall and other factors. On July 12, Perseverance announced it had completed a placement of securities to long-term major shareholders of the company to raise $26.5 million to stabilise the group. A total of 177 million fully paid ordinary shares at five per share, with one attaching option per share, were issued in the placement. Cash from the capital raising will be applied across the company, with operations receiving $9 million. Another $10 million will be applied as working capital while an accelerated drilling program costing $3 million will be funded from the raising, with the remaining $4.5 million kept as a contingency fund.

18 p2007 June quarter tenement plan VIMP

and positive development results from Fosterville’s Phoenix orebody. Follow-up drilling of Stawell’s GG6 zone has returned further high grade results including 24.7 m at 7.1g/t Au, 11.3 m at 13.1g/t Au and 8.2 m at 8.0g/t Au. Drilling has indicated Golden Gift-6 mineralisation along approximately 150 metres of strike and over 100 metres vertically. The mineralisation remains open up dip to the south, down dip to the north and below the current drilling. Resource definition drilling in Fosterville’s Phoenix orebody has intersected a pFosterville gold mine plant at night previously unrecognised mineralised position, called the Shamrock, which is After the completion of the capital- Development of the Phoenix and Falcon associated with the Fosterville fault and raising, Perseverance managing director underground operations at Fosterville offset from the Phoenix orebody by up to Graeme Sloan resigned from the board. resulted in 1,634 metres of advance for 30 metres. Perseverance chairman John Quinn paid the quarter. Performance was affected late Significant intercepts are 12.4 m at tribute to Mr Sloan’s “tireless efforts” over in the quarter by low manning levels and 23.2g/t Au, 11.7 m at 18.9g/t Au and 12.3 his five stints at the company, which was some ground rehabilitation work in areas m at 10.4g/t Au. It has been confirmed now seeking a replacement. adjacent to the Falcon pit floor. Staff levels along a strike of 150 metres, over a height Perseverance also revealed it was returned to normal by the end of the quarter. of 30-50 metres and with widths up to 10 proposing a study to validate the current Underground ore production totalled metres. The mineralisation remains open Fosterville mine plan for the near term 106,003 tonnes @ 3.51g/t Au, substantially along strike and can be easily and quickly and determine such changes as may be below the grade of underground ore mined accessed from existing and planned beneficial to the life of mine plan. in the previous quarter which averaged Phoenix development. In its June quarter report, Perseverance 5.4g/t. Most of the production was sourced Ore development has now commenced outlined a hectic schedule of mine around the margins of the Phoenix ore body in a more typical part of the Phoenix development and exploration drilling at whilst the main declines were advanced orebody. A 70-metre section on the 4,980 both Stawell and Fosterville. At Stawell, towards the top of the main wider high- level of the Phoenix orebody has returned drilling of the underground target Golden grade ore zones. Stoping in the Falcon full-face grades up to 37.1g/t Au, with Gift-6 intersected significant mineralisation and Phoenix ore bodies has reached about average full-face grades of 18.0g/t Au. including 5.1 m @ 35.0 g/t Au and 2.7 m @ 150 metres below the surface (the 5,020 This face grade is well in excess of reserve 8.0 g/t Au each from a different hole level). Work is under way to determine the indications for this section of the Phoenix 100 metres apart. This has given the practicality of accessing the wider, higher- orebody and supports the company’s company confidence that substantial new grade areas of the Phoenix ore body earlier conviction that the Phoenix orebody will be ore resources at the mine could than previously planned. robust once operations are established in be unveiled. At Stawell, underground mining was the core of the orebody. At Fosterville, Perseverance said lower affected by equipment maintenance Of the recent work at Stawell and than expected gold production was caused difficulties late in the quarter and lower than Fosterville, Executive General Manager by delays in accessing the higher grade expected grades from development and Mark Mitchell said: “our management Phoenix ore blocks, lower underground one of the main stoping areas. However, the and people are pleased with the work that grades associated with ore production from mine still managed to generate production has put the operations on a more secure areas around the ore-body margins and of 162,725 tonnes @ 4.8g/t Au and ore footing. The recent resource definition and the treatment of stockpiled lower-grade, grades are expected to improve in line development results give added confidence transitional material. with target grades in the current quarter. in the recently completed mine plan.” Sulphide ore production from Ellesmere Development into the GG3 and Lower GG5 north pit at Fosterville was completed to ore bodies progressed as planned with the FOR MORE INFORMATION CONTACT: below design depth early in the June 2007 aim of establishing the first GG3 stope early Mark Mitchell quarter. Mining of the Harrier open pit in the September quarter. Development of Executive General Manager progressed with production now into fresh the GG5 area is expected to be completed Perseverance Corporation sulphide ore. in the December quarter. Phone: 03 5442 77551 Wet weather late in the quarter restricted At the year’s end, Perseverance held Email: [email protected] access to the higher grade sulphide ore cash and gold on hand worth $14.8 million. and exacerbated geotechnical conditions A total of 45,294 ounces of gold were sold in some sections of the pit wall, requiring for the quarter, at an average price of A$731 minor cut-backs to maintain wall stability, per ounce. the company reported. Mining of the Harrier In September, Perseverance announced pit, subject to weather and pit stability further high grade drill intercepts that extend issues, is expected to be completed in the in-mine Golden Gift-6 zone at Stawell, the September quarter. Total ore mined high grade drill intercepts that identify a new from open pits for the quarter was 183,256 mineralised position adjacent to existing tonnes at an average grade of 2.39 g/t Au. and planned development at Fosterville 19 Gold exploration at Maldon, in central Victoria, is revealing new, Maldon reveals potentially rich lodes that could form the basis of a significant its golden secrets new mine operating in one of the state’s biggest goldfields.

Alliance Resources Ltd has reported the discovery of at least two new gold- bearing reefs that could accelerate plans for an early return to commercial gold production. Drilling into the Ladies reef intercepted 2.75 metres at 22.1 grams of gold per tonne (g/tAu).

The results came from a hole drilled west from the Union Hill exploration decline, targeting the Ladies and Day Dawn reefs. A follow-up diamond drilling program to define the extent of the mineralisation at Ladies reef – which could have the potential to supply early mill feed to Alliance’s

pAlliance Board & Management: (L to R) Ian Pamensky (Finance Manager), Tony Lethlean (director), Steve Johnston (CEO), John Dunlop (Chairman), Ian Gandel (director)

gold processing plant at the Maldon gold project – has been built into the company’s exploration program. The newly-discovered mineralisation was similar to historical offshoots from Linscott and Eaglehawk reefs at the Maldon project. Alliance also reported high-grade drill results from the Eaglehawk reef, with the best results “The Union Hill decline is crucial to our pLadies Reef intercept Jul 2007 including 0.65 metres at 63.7g/tAu, plans for near-term production and Ladies 2 metres at 12.89 g/tAu and 5.25 metres reef, which can be accessed from this of 28 g/t. Alliance’s tenements cover the at 4.13g/tAu. decline, represents an additional potential majority of the gold field and Alliance “This new and outstanding find at Ladies source of high-grade feed for our wholly- owns a fully permitted and operational reef demonstrates the significant potential owned facility.” CIP gold treatment plant at Maldon. In its for new production from Maldon,” Alliance’s Alliance is deepening the decline to June quarter 2007 report to the Australian managing director Steve Johnston said. provide access for underground exploration Stock Exchange, Alliance reported that “Coming so soon after the high-grade ahead of a return to commercial production. the Union Hill decline had advanced 750 Eaglehawk results, it both highlights the The Maldon goldfield is one of Victoria’s metres from commencement. The decline importance of our progress with the Union most productive reef goldfields behind is designed to parallel the Eaglehawk reef, Hill decline and justifies our persistence. Bendigo, Stawell and Ballarat, with the main producing reef at Maldon, in order 1.75 million ounces of recorded primary to access the Alliance South mineralisation production at an average recovered grade for trial processing through the company’s 20 VIMP

gold treatment plant. The decline is also being used as a platform for underground Gold Undercover and drilling of the Day Dawn target to the west Rediscover Victoria Initiatives as well as drilling for possible remnant mineralisation within the Eaglehawk reef to the east. Several major initiatives are underway The recent drilling program confirmed in Victoria to help explorers locate that a significant mineralised zone had been new, commercially attractive mineral discovered at the Ladies reef, associated deposits of gold, base metals and with its east-bounding (“wall”) fault. The industrial minerals, as well as oil, gas company said that drill intersection lengths, and coal deposits. were likely to be close to true width, as Significant geoscience initiatives underway in Victoria include the three-year, $9 million Gold Undercover initiative, which started in July 2006, and the four-year, $5 million pDPI’s Chief Scientists Sir Gustav Nossal AC CBE Rediscover Victoria initiative, which kicked and Dr. Graham Mitchell AO have their eyes on off in July this year. the gold bars Gold Undercover is designed to deliver universities and industry and will incorporate the new geoscience data and techniques all available open file 3D datasets, provide required to discover Victoria’s potentially a scientifically robust 3D representation of large, undiscovered gold resources, the state’s geology for visualisation and presently concealed under cover. analysis, and enable explorers to carry out pDevelopment at Maldon At the 19th Victorian Initiative for and refine their own predictive modelling to Minerals and Petroleum (VIMP) event better target prospective areas. DDH 136 was drilled at a high angle to in July, geoscientists working on Gold The applications of such a model in the interpreted reef dip. The high-grade Undercover projects presented results of the exploration for undiscovered precious intercepts in the Ladies reef were in an area the programs’ first in the form of technical and base metal systems or oil and gas well away from known historical workings, presentations or poster displays on 3D accumulations are clear. However, the as the system was mined mainly to shallow geological model management, MT survey integrated nature of the model will also depths 250 metres northwest of the drill data, detailed gravity data from the Bendigo provide a rare opportunity to analyse section. The newly identified mineralisation Zone, resource assessment from the complex resource system interactions is about 30 metres lower than the decline at Bendigo Zone north, classification of gold such as the potential exchanges between that point, approximately 140 metres to the deposits, exploration models, and primary geosequestration and oil and gas extraction west and 100 metres below surface. lithogeochemical alteration haloes. activities within a basin as well as the This lode is a new discovery in Ladies The Rediscover Victoria Strategic Drilling effects on the groundwater system, salinity reef. It has the potential to be readily project is designed to stimulate drill testing and subsidence. developed from the existing decline and, of geologic targets. It aims to stimulate A one-day technical workshop is to if proved, to provide early mill feed for new drilling programs in greenfield areas be held in Melbourne in November 2007 Alliance’s fully permitted Maldon treatment and areas previously seen as too risky or to develop the scope of the 3D Victoria plant. Alliance plans follow-up drilling of having limited prospectivity. The Victorian project and encourage industry’s long-term Ladies reef from the decline, to enable the Government will reimburse exploration involvement and participation. extent and geometry of the mineralisation to companies a capped amount of their direct be assessed. drilling costs incurred on exploration drill FOR MORE INFORMATION VISIT: During the quarter, diamond drilling also holes that meet a strict set of criteria. The www.dpi.vic.gov.au/minpet/rediscovervictoria tested the Eaglehawk reef near historical application process and selection criteria www.dpi.vic.gov.au/minpet/goldundercover stopes in the Alliance ore shoot where past are currently being developed and calls KEY CONTACTS: production produced 39,000 ounces from for drilling proposals are expected in the Larry Stewart 71,000 tonnes of ore. December quarter 2007. Manager While the primary purpose of the drilling A second project under the initiative, Strategic Geoscience was to find the original stopes for a the 3D Victoria project, aims to accelerate Phone: 03 9658 4536 proposed dewatering bore, the drilling also Email: [email protected] the development of an integrated 3D or tested for remnant gold mineralisation. “Two geological map or model of onshore and Peter O’Shea holes and two wedges were drilled and all offshore Victoria at 1:250000 scale. The Manager confirmed the structural model of Eaglehawk model will include all major lithostratigraphic Minerals Geoscience reef in this area,” the company said. boundaries and faults for all of the Phone: 03 9658 4525 Email: Peter.O’[email protected] onshore and offshore post-Permian basins FOR MORE INFORMATION CONTACT: (Gippsland, Otway and Murray), Palaeozoic Steve Johnston basins and basement and regolith (where Chief Executive Officer Alliance Resources Limited appropriate). It will build on existing Phone: 03 9697 9090 work carried out by the GSV, pmd*CRC, Fax: 03 9697 9091 Email: [email protected]

21 The geochemical compositions of the discovered hydrocarbons in the Shipwreck Trough in the eastern offshore Otway Basin vary systematically Undiscovered with both proximity to large displacement fault systems and with the thermal Hydrocarbon in maturity of the underlying source systems. Victoria’s Otway Basin

Work by GeoScience Victoria has shown the most important critical success factors in the Otway Basin (Figure 1) are fault seal integrity and the hydrocarbon generation-migration history.

Interplays between these two factors determine, at a first-order, where commercial and non-commercial hydrocarbon accumulations occur. Many trap-bounding faults in the Otway Basin leak, especially where these faults are sub-parallel to the principal horizontal stress – Sh’max’ (oriented along approximately 130˚) and have dips which exceed 50-55˚. Consequently, numerous residual gas fields or dry structures in the basin have been drilled. Examination of regional 1, 2- and 3D hydrocarbon generation processes for the hydrocarbon source rocks belonging to the Austral 1 (Late Jurassic to earliest Cretaceous fluvio-lacustrine shales of the pFigure 1: Tectonic elements of the eastern Otway Basin (modified from O’Brian et al., 2006) Casterton Formation and Crayfish Subgroup), Austral 2 (Early Cretaceous fluvial and coaly facies of the Eumeralla Formation) and Austral 3 (Late Cretaceous to earliest Paleocene fluvio-deltaic sedimentary facies) petroleum systems have revealed that more than 99 per cent of the commercial hydrocarbons and strong shows that occur in Victoria belong to the Austral 2 petroleum system (Figure 2). Moreover, commercial accumulations occur exclusively where the top of the Austral 2 (Eumeralla Formation) source system is experiencing peak hydrocarbon generation, and importantly has reached peak maturity in the Late Tertiary, and sub-crops the Late Cretaceous Waarre C reservoir sands (Figure 3). Migration distances typically appear very short and are probably mostly vertical: up critically stressed fault segments which extend through the generating source interval (Figure 4). Lateral migration distances are very restricted, usually less than 500 metres and up to pFigure 2: Wells drilled in the Otway Basin which intersected strong gas and/or oil shows or commercial a maximum of 3,000 metres. The limited quantities of hydrocarbons. Colour scheme for wells relates to whether the hydrocarbons were sourced 22 from the Austral 1 (dark blue), Austral 2 (red) or mixed Austral 1-2 (light blue) petroleum system. VIMP

(at P10). Overall, the Victorian Otway Basin’s undiscovered resource potential would appear to lie between 1.849 and 3.696 TCF. The geochemical compositions of the discovered hydrocarbons in the Shipwreck Trough in the eastern offshore Otway Basin vary systematically with both proximity to large displacement fault systems and with the thermal maturity of the underlying source systems. Significantly increased hydrocarbon wetnesses are observed along the Mussel-Tartwaup Fault Zone (in the La Bella, Geographe, Thylacine gas fields) and may relate to the contribution of a minor, more liquids-prone Turonian (Waarre-Flaxman Austral 3) source system to the dominant Austral 2 hydrocarbon inventory (Figure 4). These fields also have moderate but not high (8-12 per cent) CO2 contents; the CO2 has probably migrated from deep magmatic pFigure 3: Seismic line extending across the Port Cambell Embayment and Shipwreck Trough. The location of sources up the large displacement faults the peak generation window (depth window between 2,500-3,500m) is shown, as are the observed relative system to the reservoir level. In contrast, the variations in wet gas composition and CO2 content. Simple migration pathways for Austral 2 and 3 gas and fields located inboard from the major Turonian CO2 are indicated. faults, on the Mussel Platform “proper”, such as Minerva, Pecten and Casino, are significantly drier geochemically and have been sourced solely from the Austral 2 Eumeralla Formation source rock system. These fields also contain essentially no CO2, probably in part because of the absence of suitable vertical conduits from the magmatic sources. Traps within the Otway Basin spatially associated with large displacement Turonian faults have both significant CO2 contents and more importantly, large trapped volumes of CO2. A similar relationship also exists in the Gippsland Basin (along the Rosedale Fault) and as far west as the Duntroon Sub-basin (at Greenly-1). In the Victorian Otway Basin, traps which have very high CO2 contents, such as Boggy Creek, are invariably small – and often contain less than 10-15 billion cubic feet of gas – perhaps indicating that the gas compositions of small structures are the most easily affected by CO2 migrating up the pFigure 4: Peak maturity (2,500-3,500m subsurface) for the Austral 2 petroleum system in the Victorian part fault systems. of the Otway Basin. Locations of wells that have intersected significant quantities of Austral 2 sourced hydrocarbons are indicated in red; interpreted mixed (Austral 1 and 2) sourced hydrocarbons are shown The Thylacine gas field provides some in light blue. Surface shown is derived from seismic data and shows the maturity of an Austral 2 Eumeralla insights into the relationships between trap Formation source system located at the top of the Otway Group. size, gas composition and the total volume of CO2 in the trap. Thylacine is a large trap lateral migration is probably the result of discovered in the Shipwreck Trough to the (greater than 500 billion cubic feet) but has the complex and tortuous nature of the total area of the mature Austral 2 source CO2 contents between only 8-12%. Even so, migration pathways within the highly fault- system, an estimate of the “efficiency of the Thylacine accumulation contains more controlled Waarre C reservoir sands. accumulation” (in billions of cubic feet of than 40 times as much CO2 as does the CO2 Commercial accumulations within the gas per square kilometre of mature source accumulation at Boggy Creek. The large Otway Basin are thus restricted to areas system) has been calculated and applied volumes of CO2 which have entered Thylacine where the hydrocarbon charge rates exceed to the wider basin. This deterministic have only affected the total gas composition the rate of hydrocarbon loss through petroleum systems approach yielded a minimally because of the large trap volume. fault-related leakage. This observation has maximum undiscovered gas potential for allowed the potentially prospective areas the Austral 2 system in the Victorian Otway FOR MORE INFORMATION CONTACT: of the Otway Basin – that is areas where Basin and adjacent Tasmanian sector of Dr Geoffrey W. O’Brien the Austral 2 system is currently at peak 3.696 TCF. This compares to the USGS’s Manager Energy Geoscience hydrocarbon generation – to be accurately probabilistic Seventh Approximation GeoScience Victoria Level 9, 55 Collins Street determined and mapped out. methodology, which, when applied by Melbourne, Victoria 3000 Using the deterministic relationship GeoScience Victoria, yielded estimates of Phone: 03 9658 4537 between the volume of hydrocarbons 2.224 (at P50), 2.731 (at P90) and 1.849 Email: Geoff.O’[email protected] 23 “Greenhouse concerns will require a portfolio of responses Victoria leads ... CCS, nuclear, energy efficiency and renewables are all part of the mix,” Prof Kaldi said. “For as long as we use carbon capture fossil fuels for base-load power, CCS is the only technology and storage research that can make deep cuts in emissions.”

pOtways CCS pilot project concept Victoria is leading the way in research Other projects include the post-combustion coal was abundant in most user countries into greenhouse gas abatement carbon capture R&D project by International and likely to remain as the fuel of choice technologies, with a range of projects Power at the Hazelwood power station, (or necessity) in developing countries, underway to reduce the state’s the pre-combustion capture R&D project especially China and India, with or without emissions. operated by HRL at Loy Yang power station CCS. But public perception and ensuing and the carbon capture, coal to liquids laws in OECD countries meant CCS was Professor John Kaldi, Chief Scientist at and carbon storage project proposed by likely to underpin coal’s future. the Cooperative Research Centre for Monash Energy. “Greenhouse concerns will require a Greenhouse Gas Technologies (CO2CRC) In addition, a basin-scale storage portfolio of responses ... CCS, nuclear, at the University of Adelaide’s Australian screening study has been completed, energy efficiency and renewables are all School of Petroleum, believes Victoria is confirming that Victorian geology has part of the mix,” Prof Kaldi said. “For as the place to be for Carbon Capture and significant potential for CCS, although long as we use fossil fuels for base-load Storage (CCS) research and development, further research is required to firm up site power, CCS is the only technology that can with a string of projects being developed selections. make deep cuts in emissions.” under the Energy Technology Innovation Professor Kaldi told delegates at the He added that the Intergovernmental Strategy (ETIS). These include the world’s recent launch of new data from the highly Panel on Climate Change had concluded first carbon storage research demonstration successful Victorian Initiative for Minerals CCS could significantly decrease the overall project, the Otway Basin carbon dioxide and Petroleum (VIMP) program that energy cost of mitigation and that global storage underground storage project, where gas security would take precedence over capacity was likely to be sufficient for needs injection is due to start late this year. greenhouse concerns in the future. He for this century. But he conceded CCS had said unlike most other energy resources, to be economically viable as a mitigation 24 VIMP

pCO2 geological storage options option compared to other technologies. transport CO2 from a CO2 well to a nearby The Monash Energy commercial project Costs, though, were coming down. depleted gas field. The gas will be injected, will cost far more, at an estimated range of “While there is more work to be done, stored at a 2-kilometre depth and monitored A$6 to $7 billion in its final form. The project CCS is feasible in many of the areas where extensively. Stage two involves the injection, is a brown coal to hydrocarbon liquids it is required and associated business storage and monitoring of CO2 into a saline project with associated carbon capture and opportunities will be plentiful,” aquifer. storage facilities. It is proposed to store the Prof Kaldi said. Also under ETIS, two major large scale captured CO2 in gippsland basin sediments The professor said the public perception precommercial demonstration projects have in Bass Strait. was that climate change and global also been announced in Victoria. One, by FOR MORE INFORMATION CONTACT: warming was real, happening now and International Power at the Hazelwood power Prof John Kaldi caused by greenhouse gas emissions station, involves a brown-coal-drying and Chief Scientist Cooperative Research Centre for Greenhouse Gas Technologies from burning fossil fuels. Already, industry subsequent CO2 capture project. (CO2CRC) was positioning for a carbon-constrained The A$369 million project involves Australian School of Petroleum world, and carbon capture and storage was retrofitting a 200-megawatt boiler at University of Adelaide the most likely technology to mitigate the Hazelwood to install the brown coal drying Phone: 08 8303 4291 Email: [email protected] problem. technology as well as the CO2 capture The CO2CRC Otway project is a and diversion into a carbonation plant. carbon storage demonstration project The carbonation plant is due to be installed seeking to prove the efficacy of taking in 2008 while the coal-drying phase will high concentrations of carbon dioxide and be completed by the end of 2009 and if storing it deep underground in geologically successful ready for potential retrofit to the secure structures. The project has a budget existing power stations and new plant. of $30 million, with $17 million contributed HRL will build an integrated drying by governments, $6.5 million by industry gasification combined cycle (IDGCC) and $6.5 million from the CO2CRC. The plant ($750m). The objective is to reduce objective is to demonstrate the geological CO2 emissions by 40 per cent from the storage, monitoring and verification of CO2 brown coal-fired power plant. Construction under Australian conditions. Stage one will will begin this year and is expected to be completed in 2009. 25 DISCOVERY JOURNAL NOVEMBER 2007

Otway Gas Project

In September 2007, Woodside announced the discoveries came as Victoria was being the start of gas export from the Otway gas connected to three states by pipeline networks, project. Commencement of production from creating a much more secure gas supply for the Woodside-led Otway gas project has all involved. petroleumfurther enhanced the status of Victoria’s The commissioning process at the Otway Otway Basin as a major new gas hub project began in July 2007, with the gas servicing growing south-east Australian supplied from TRUenergy’s neighbouring Iona energy markets. gas plant. Much care was taken during the The A$1.1 billion development follows the commissioning process given it involved the earlier Otway Basin gas field developments in introduction of hydrocarbons and the sequential waters offshore from Port Campbell in western start-up of production systems. Victoria – Minerva (BHP Billiton-2005) and Woodside said that, at all times, testing and Casino (Santos-2006). Those developments assurance checks were undertaken before and completion of the Otway project – along moving to the next phase of commissioning. with planning for the development of the Henry Temporary offices used during the construction gas field (Santos) – have improved the security phase of the gas plant have been removed of the gas supply and competitiveness for or relocated. In keeping with best operating energy users. practice, there are no offices or accommodation The Otway project involved the development within the immediate vicinity of the operating of the Geographe (expected to come on line plant. All operations, including the running of by the end of the decade) and Thylacine the offshore platform, are conducted from a gas fields, 55 and 70 kilometres offshore control room in an administration centre in respectively, from Port Campbell. Construction Waarre Road, about 200 metres from the plant. and development work involved a remotely- Meanwhile, at the offshore platform, operated platform, offshore and onshore Thylacine gas was introduced to provide fuel for pipelines and a gas processing plant built six the platform’s generators ahead of production kilometres north of Port Campbell. The fields starting. A remotely operated vehicle had are forecast to supply 885 petajoules of sales already been dispatched along the offshore gas, 12.2 million barrels of condensate (light oil) pipeline work to ensure its integrity ahead of and 1.7 million tonnes of liquid petroleum gas gas being sent to shore. (LPG). In practical terms, that means the gas The Otway project produces three products: fields are capable of supplying more than sales gas, LPG and condensate. Gas produced

10 per cent of south-east Australia’s current is being distributed to the Victorian transmission p The unmanned wellhead production platform annual demand for more than 10 years. system via the South West Pipeline to at the Thylacine field Initially, raw gas from Thylacine, which sits in Melbourne, as well as to Adelaide via the South waters administered by Tasmanian authorities, East Australian (SEA) Gas Pipeline. Condensate process. The joint partners have also supported is being processed at the onshore gas plant, is to be transported by truck from the Otway community events during the construction with the smaller Geographe to be tapped later gas plant to Shell’s oil refinery at Geelong by phase and plan to continue to do so during the in the life of the project. By August 2007, the the logistics company Toll. A dedicated route operational phase. In 2007, the joint venture has onshore gas plant had taken commissioning has been agreed with the relevant shires and sponsored the Brophy Youth Enterprise project, gas ahead of receiving the first gas from the government agencies. About five to eight the Timboon Railway Music Festival and the offshore Thylacine wellhead platform. Final dedicated truck movements are expected on a Port Campbell Swim Series. regulatory approvals are in place and first gas daily basis for the condensate deliveries which, Elsewhere in the offshore Otway Basin, sales followed in September 2007. in a small way at least, will reduce Australia’s the Santos-led Casino gas joint venture has Like most resource projects, the Otway growing dependency on imports. LPG reported strong production of 43 petajoules project has felt cost pressures and delays. But processing will start once gas and condensate of gas in the year to June 2007. That was Woodside has forecast the final cost to be less production levels are stabilised. The LPG will be 23 per cent more than original contracted than 20 per cent over budget. Partners in the trucked to local markets in Victoria, with about volumes for the project. The adjacent Henry project are Australia’s biggest pure oil and gas 8-13 dedicated truck movements expected gas discovery has also been declared group Woodside (51.55 per cent and operator), each day. commercially viable. Front end engineering and Origin Energy Resources (30.75 per cent), Consultation with the community and other design work has started, with a development Benaris International Pty Ltd (12.7 per cent) and stakeholders has been a priority in the Otway decision expected before the end of December. CalEnergy Gas (Australia) Ltd (5 per cent). gas project’s development. The offshore gas First production is forecast for the first quarter Thylacine and Geographe were discovered production industry is relatively new in an area of 2009, adding new capacity and flexibility in 2001. An exploration well on Thylacine found known internationally for its stunning scenery. to the existing Casino production system. a 281 metre thick gas column. That discovery Woodside has run a consultation program FOR MORE INFORMATION CONTACT: was followed by the Thylacine-2 appraisal with various stakeholders since the project Tony Johnson well, which found a 230 metre gas column. was first conceived. Regular updates to the Woodside media contact The Geographe-1 exploration well discovered Community Reference Group, a construction Phone: 08 9348 5034 gas in a 240 metre gross column. Significantly, progress newsletter and advertising in the local Mobile: 0417 916 638 Email: [email protected] 26 media have all been part of the consultation A high level of activity in exploration and development of petroleum in Victoria is highlighted by nearly $A3 billion in investment, 1,700 construction jobs and 180 ongoing jobs since 2000.

BassGas project provides Victoria with gas security

Victoria’s newest major gas project, BassGas, is making a big impact on the security of the state’s natural gas supplies, and helping meet recent unprecedented petroleumlocal demand. Victorians switched on their gas heaters in record numbers this past winter, one of the coldest in recent memory. But thanks to projects like BassGas the gas flowed seamlessly to provide unprecedented security of supply for the state. The BassGas project involves the development of petroleum resources in the Bass Basin, including the Yolla and White Ibis fields and several exploration targets. After a troubled beginning, the project is now operating at its design capacity of 60 terajoules a day (TJ/d). The project collaborators, led by Origin Energy and AWE Ltd, are looking beyond the original offshore gas reserves

contained in the Yolla gas field in the hope p BassGas plant, Lang Lang Victoria of developing new fields utilising the existing offshore infrastructure. to exploration permits close to the offshore The BassGas project consists mainly Interpretation of the Shearwater 3D seismic production permit. Additional work is also being of two gas production wells Yolla-3 and survey – acquired over the nearby Trefoil undertaken on the nearby White Ibis gas field Yolla-4, and an offshore, unmanned wellhead discovery and adjacent exploration leads in and the Gentoo/Rockhopper complex. AWE platform connected by a gas pipeline to the offshore permit T/18P – is almost complete. reported initial 2P resource estimates for the gas processing facility at Lang Lang. The Well locations for a potential drilling program Trefoil and Gentoo/Rockhopper features, which offshore facilities were designed to incorporate are now being considered, and planning is are located in T/18P, of 420 petajoules of gross additional production wells from the Yolla fields in progress to acquire a substantial seismic recoverable gas volumes with associated and also to tie-in other gas discoveries in the program in the newly-awarded permit T/44P. liquids totaling 27 million barrels. These region. Gas and gas liquids are produced from The T/RL1 Retention Lease around the Yolla estimates are based on the existing wells in the the offshore wells, and water is removed prior gas field production licence was renewed area and interpretation of the high quality 3D to their injection into the offshore pipeline and during the June quarter. seismic data, acquired during 2006. The joint transportation to Lang Lang. In its quarterly report to the Australian venture has its focus on gas commercialisation, The pipeline is a 14-inch steel line buried in Stock Exchange, AWE Ltd reported gas including the potential for the acceleration of the onshore section between Lang Lang and output from the BassGas project reached the next phase of drilling in the Bass Basin, Kilcunda, while the offshore pipeline sits on the stabilised rates above contract levels during the because of these encouraging volumes of sea bed. The shore crossing at Kilcunda was quarter. Increased liquid recoveries were also recoverable gas. drilled beneath the pristine beach to ensure associated with the higher gas rates. Gross gas The Bass Basin, geologically similar to the protection of the sensitive coastline. Gas production from the BassGas project during neighbouring prolific Gippsland Basin, contains and gas liquids are separated into their sales the June quarter averaged 55 TJ/d, the rate significant discoveries of gas and condensate components at the Lang Lang gas facility. required to meet gas sales agreements. and is under-explored, even by Australian The BassGas project is expected to generate AWE reported recent gas production had standards. The original Yolla gas discovery was gross revenues in excess of A$1.5 billion over stabilised at rates of 15 to 20 per cent above made in 1985 when Yolla-1 encountered gas the estimated 15-year life of the project. The this level, and noted that the recovery of stackingin five onshoreseparate pipeline reservoir prior tointervals. laying The Yolla-1 project’s revenues are largely underpinned by condensate and LPG from the Lang Lang well was production-tested at rates of up to 15 contracted gas sales to Origin Energy, LPG gas plant has also improved, with recovery million cubic feet of gas per day and the Yolla-2 sales to Elgas Limited and condensate sales rates now at design levels. AWE’s share of appraisal well was drilled in 1998 to test the to Shell Australia. Project partners now include production for the quarter was 1,501 TJ of gas, lateral and vertical extent of the gas pools. The Origin Energy Australia (operator) (42.5 per 68,592 barrels of condensate and 4,468 tonnes initial appraisal well provided sufficient evidence cent), AWE Ltd (30 per cent), CalEnergy of LPG. that a commercial field was present. (15 per cent) and Wandoo Petroleum During the quarter, the BassGas joint venture Following AWE’s acquisition of Premier Oil’s (12.5 per cent) advised that the first stage of an arbitration Australian assets, a development concept was FOR MORE INFORMATION CONTACT: process related to delays in completing the reviewed and accepted by the joint venture, and in 2001 and 2002 gas sales contracts Tony Wood project had been determined in favour of the External Affairs Manager BassGas joint venture partners. The second were executed to allow the BassGas project to Origin Energy Ltd stage of the hearing is unlikely to be held until proceed. Proved and probable gas reserves for Phone: 03 9652 5506 April 2008. the Yolla field were estimated at 333 Petajoules, Email: [email protected] Scoping studies on the Trefoil gas and with approximately 28 million barrels of gas condensate field were the main activities related liquids, in the form of condensate and LPG. 27 DISCOVERY JOURNAL NOVEMBER 2007 ExxonMobil revealed in August it had added more than 300 Bass Strait: billion cubic feet of gas to the known Bass Strait reserves through a combination of seismic surveys, drilling and other Victoria’s evaluation programs. petroleum hub

Natural gas supplies to Victoria and other Australian east coast markets have been strengthened by significant new additions to reserves in the Bass Strait fields, operated petroleumby ExxonMobil. ExxonMobil revealed in August it had added more than 300 billion cubic feet of gas to the known Bass Strait reserves through a combination of seismic surveys, drilling and other evaluation programs. The addition came on top of the 700 billion cubic feet added to reserves in 2005, ExxonMobil Australia’s Chairman, Mr Mark Nolan said. But the company is not stopping there. It has already embarked on a program to test much deeper structures beneath the currently- producing fields, seeking even greater gas reserve increases. “We have added approximately one trillion cubic feet of gas to existing resources in Gippsland since 2004 – enough gas to power a city of a million people for 20 years,” Mr Nolan said. While these additions to gas resources will help meet growing energy demand in eastern Australia, they are also important from an p Kingfish Platform Structure environmental perspective.” Mr Nolan said natural gas could produce up Mr Nolan said the drilling program had required in this instance,” Victorian Minister for to 70 percent less greenhouse gas emissions significantly extended the life of the Bass Strait Planning Justin Madden said. than coal in power generation and also uses fields, which previously were entering a sharp “The proposed site for the proposed plant up to 80 percent less water. Additions to the production decline as they aged. consists of cleared agricultural land with no ExxonMobil resource base had strengthened “The results so far give us confidence that landscape, biodiversity, cultural heritage an already-extensive foundation, underpinning there is today more than 20 years left of oil or water body features of established the long-term competitiveness of the production in Bass Strait,” Mr Nolan said. “For environmental significance. I am satisfied Gippsland gas business in supplying gas to example, the Kingfish field – Australia’s largest- greenhouse gas emissions will be readily south-eastern Australia. ever oil field, from which over one billion barrels assessed once the proposed plant design is “As an indication of our confidence in the of crude has been produced – continues to finalised and that the Environmental Protection substantial gas resource remaining in the basin, be one of our most important oil producers 40 Authority approval process will be satisfactory we are planning to begin a comprehensive years after its discovery.” in assessing suitable means to reduce these formation evaluation study to look into the He said improvements in technology, emissions.” untested deeper basin gas potential under our particularly related to seismic processing and “In the longer-term, there may be an existing fields,” Mr Nolan said. analysis and drilling accuracy, were integral to opportunity to implement technologies to Esso Australia Resources Pty Ltd operates the success of the oil production enhancement capture and store carbon dioxide emissions the Gippsland Basin fields on behalf of a 50-50 program. “As a result, we have been able to from facilities such as the proposed Esso joint venture with BHP Billiton. While ExxonMobil more precisely firm up targets, and also go plant. However, full commercialisation of looks for new gas resources in Bass Strait, back over older areas to identify and extract this technology is not complete and hence it also has been drilling around the margins more oil.” they don’t warrant in-depth assessment in of existing oil fields in a bid to extend known To help ExxonMobil maintain its place as this case.” resources. The program has been a huge Victoria’s largest natural gas supplier, the The proposed plant will be built on flat land success, with ExxonMobil Australia adding company is planning to extend the Longford currently used for grazing, to the immediate about 30,000 barrels a day to liquids production gas plant near Sale in Gippsland. The Victorian east of the existing Longford gas plant. It will since 2005. Liquids production from the Government recently found no additional involve construction of a gas processing plant, Gippsland operations averaged 127,000 barrels Environment Effects Statement (EES) were as well as connections to the existing offshore a day in 2006. needed to assess the effects of the proposed pipelines and connections to the existing plant. To date, the drilling program has involved an gas conditioning plant at Longford. FOR MORE INFORMATION CONTACT: investment of about $300 million to drill wells “After careful consideration and advice at the Kingfish, Bream, Halibut and Fortescue from the Minister for Environment and Climate Rob Young External Affairs Manager fields. This follows an earlier investment of Change, and the Minister for Energy and ExxonMobil about $100 million in seismic recording and Resources, I am satisfied that an EES is not Phone: 03 9270 3443 reprocessing. Fax: 03 9270 3494 Email: [email protected]

28 Apache set to join Bass Strait drilling rush

A new Bass Strait drilling rush could unlock substantial new oil and gas reserves in areas that have been producing for several decades and in virgin locations with potential petroleumfor a whole new style of fields. Apache Corporation, an international oil and gas production and exploration company based in the United States, is set to begin a major new drilling campaign after acquiring interests in five exploration permits in Bass Strait. Apache, founded in 1954 and today ranked among the world’s top independent oil and gas companies, has been operating in Western Australia for more than 14 years. Apache is a significant producer of oil and gas in WA, operating numerous conventional offshore platforms, monopods and gas plants. Its most intensive production area is based on Varanus Island, off the WA coast, where it has a significant oil and gas processing and shipping facility. Apache has extensive knowledge of the requirements of offshore drilling in Australia, having drilled more than 100 wells using five different drilling rigs in Australian state and Commonwealth waters in the past five years. Now it is bringing that expertise and knowledge to the hunt for new oil and gas reserves in p Apache exploration permits in Gippsland Basin Victorian waters. Apache is now one of the largest acreage But Apache will also probe the deeper, less holders in the Gippsland Basin, having recently commonly-explored sections such as the acquired interests in five permits: VIC/P42, Golden Beach and Volador formations. The VIC/P45, VIC/P54, VIC/P58 and VIC/P59. Gippsland Basin also presents a variety of Gippsland now forms an integral part of potential hydrocarbon trap styles and offers the Apache’s exploration strategy. possibility of stacked plays. Apache wants to drill up to 10 wells in the Apache believes its primary exploration Gippsland Basin during 2008, using both jack- challenge in the Gippsland Basin is depth up and semi-submersible drilling rigs (in shallow conversion. The company’s approach is to use p Western Trident and deep waters, respectively), as part of its a variety of geophysical methods to address exploration drilling programme. But Apache is the critical risks it sees in accurately finding its In addition to the 3D seismic data, Apache not just focusing on the more traditional-style oil planned exploration wells. In modern oil and acquired a scanning 3D controlled source and gas fields in its drilling program. gas exploration, seismic surveys are used to electro-magnetic survey. This survey covers The company is using its well known unlock the secrets of the earth’s layers to pick 928 square kilometres and is the first expertise in extracting new reserves from the right locations to drill. But in the Gippsland application of this technology in Australia. established fields to push the boundaries of Basin the nature of the subterranean geology The Gippsland Basin has become a strategic traditional exploration in the Gippsland Basin stackingcan often onshore distort pipeline the dataprior toproduced laying from core area for Apache. It believes the area can area. Apache believes a number of different seismic surveys, requiring highly complex provide the company with a slate of excellent play types are present at several different analysis to produce an accurate picture of the opportunities, leading to future reserves and stratigraphic levels, over which it has already earth before drilling proceeds. production growth. conducted regional and prospect/lead specific With offshore wells costing many millions FOR MORE INFORMATION CONTACT: mapping and geological studies. The primary of dollars, detailed preparation is required to Shelley Burnaby target is the Top Latrobe section – the structure minimise the risk of failures. In 2007 Apache Joint Venture Coordinator which, to date, has yielded the biggest oil and acquired more than 1,140 square kilometres Apache Energy Limited gas-producing fields in Bass Strait. of new 3D marine streamer seismic data in Phone: 08 9422 7401 the Gippsland Basin and will process the data Email: [email protected] through pre-stack depth migration. Apache plans to merge these new data with older 3D seismic data sets to develop a more accurate earth model.

29 DISCOVERY JOURNAL NOVEMBER 2007 New exploration and a better understanding of geology are helping to further unlock the hydrocarbon Recognising potential of Victoria’s offshore Otway Basin. the potential of petroleumDiscovery Bay High

p Figure 1: Essential Petroleum Resources Limited has significant interests in acreage over the eastern Morum Sub-basin, including the Discovery Bay High, central Otway Basin.

Heightened activity follows recent The potential to realise further significant The Discovery Bay High, discoveries of offshore natural gas fields offshore hydrocarbon discoveries is being Otway Basin, Victoria brought into production. While commercial planned by Essential Petroleum Resources Ltd Essential Petroleum is testing new models for oil discoveries have so far eluded explorers, (“Essential Petroleum”), a junior oil and gas oil and gas accumulations that include small to significant gas discoveries will help to meet exploration company listed on the ASX medium-sized onshore oil and gas prospects the rising demand for energy on Australia’s (Code: EPR). The company is focused and potentially very large offshore oil and gas east coast. exclusively on opportunities in the Otway plays on the continental margin. The company’s Exploration in the Otway Basin has shown Basin and has one of the largest portfolios of analysis of the Discovery Bay High recognises larger hydrocarbon accumulations are more prospective Otway Basin acreage with interests the potential for a new hydrocarbon province likely to be discovered offshore than onshore. in four onshore tenements and two offshore to the west of the Pecten High in the offshore This has been demonstrated by the recent tenements. Otway Basin. discovery of the Casino, Henry, Martha and Essential Petroleum holds interests in the Essential Petroleum has identified the Halladale gas fields off the south-west Victorian offshore permits VIC/P46 (25 per cent) and Discovery Bay High as a feature with major coast, adjacent to Port Campbell. Offshore VIC/P50 (100 per cent), as shown in Figure 1 influence on the size of potential hydrocarbon the Shipwreck Trough and Pecten High in above Onshore, the company has acquired an traps and sediment distribution in the offshore, the eastern part of the basin have reported interest in the Killanoola oil discovery in PRL 13 central part of the Otway Basin. Following combined gas reserves of more than 1.6 trillion (20 per cent) in the Penola Trough hydrocarbon an earlier period of extension that formed cubic feet (TCF). Onshore, the Port Campbell province, and more recently has been awarded the Penola Trough, a major offset in the Late Embayment in the eastern part of the Basin an interest in a new exploration permit, PEP 168 Cretaceous extension occurred between the and the Penola Trough in the north-west have (50 per cent), in the Port Campbell embayment Tartwaup Fault and the Mussel Fault in the produced about 0.2 TCF of gas. gas province. The company also has interests central Otway Basin, giving rise to the Discovery in western Victoria in PEP 151 (75 per cent) and Bay High. in PEP 150 (20 per cent) which contains the Lindon oil discovery.

30 The offset divides the Late Cretaceous section of the Otway Basin into the Morum Sub-Basin to the west and the Nelson Sub-Basin to the east, as illustrated in Figure 2. petroleumThe depositional histories of the two sub-basins are significantly different in the Late Cretaceous section as evidenced by the sandier Morum Sub-Basin relative to the Nelson Sub-Basin during that period. The large structural closures and the expected presence of reservoir quality sands and sealing shale sequences make the Discovery Bay High at the eastern end of the Morum Sub-Basin an ideal geological setting for hydrocarbon entrapment. p Figure 2: Late Cretaceous extension is transferred from the Tartwaup Fault to the Mussel Fault separating the Essential Petroleum is in the fortunate Morum Sub-basin in the west, from the Nelson sub-basin in the east (adapted from Figure C28 “Sherbrook Group position of having exposure to the entire isochron” in Woollands and Wong, 2001). onshore and offshore influence of the Discovery Bay High, particularly through its interests in the cretaceous marine source rock is present resource of approximately 750 MMBbls at Curie offshore permits, VIC/P46 and VIC/P50. offshore in the Morum Sub-Basin, then there and 800 MMBbls at Descartes (200 MMBbls in is great upside potential for oil. Fermat and VIC/P50). VIC/P46, Bernoulli are ideally located to trap oil migrating More recently, two strong leads have been Offshore Otway Basin, Victoria out of the Morum Sub-Basin. identified. Oliphant and Euclid are exciting In the offshore Victorian part of the Morum Prospect selection for drill testing will depend additions to Essential Petroleum’s Discovery Sub-Basin, Essential Petroleum holds a 25 on the results of the Bernoulli seismic survey. Bay High prospects and leads inventory. Both per cent interest in the VIC/P46 permit. Beach A drilling rig has been contracted to drill either prospects have the potential to host large Petroleum Limited is the operator, holding a 50 Fermat or Bernoulli. Subject to regulatory and volumes of oil. per cent interest in the permit, and Mitsui E&P joint venture approval, one or other of these The Oliphant structure is a four-way dip Australia Pty Ltd holds a 25 per cent interest. exciting prospects will be drilled in the second closure of Waarre C sands sealed by a thick The Fermat and Bernoulli prospects are the half of 2008. marine shale. The prospect is at the southern focus of the company’s exploration in VIC/P46. extent of existing seismic and requires A recently acquired 3D seismic survey over VIC/P50, additional seismic acquisition to mature to Bernoulli was designed to resolve the structural Offshore Otway Basin, Victoria prospect status. complexities associated with the horst hosting The VIC/P50 permit, in which Essential Euclid is a large low-stand fan within the the Bernoulli, Kepler and Joule prospects. The Petroleum has 100 per cent interest, provides Belfast Formation. The prospect is sealed Fermat and Bernoulli prospects target the Late exciting high-risk and high-reward deep-water by thick marine shales and the reservoir is Cretaceous Waarre and Flaxman formation exploration opportunities in the Otway Basin. juxtaposed against the source rocks of the reservoirs that host the Shipwreck Trough, Exploration in water depths of greater than Eumeralla Formation. Additional seismic Pecten High and Port Campbell Embayment 500 metres is an emerging frontier with many surveys are required to examine the internal gas fields. The prospects are on the western large discoveries in excess of 500 MMBOE properties of the fan before this most promising side of the Discovery Bay High, where upper stands for in recent years. Advances in drilling lead can be matured to prospect status. The Waarre and Flaxman sands are expected to be technology have enabled exploration to move prospective recoverable resource in these two deposited. out to the continental shelf margin where leads is estimated to be 200 MMBbls of oil at The Fermat prospect arises from the pinchout potentially prolific turbidite fan complexes are Oliphant and 750 MMBbls at Euclid. of Waarre C and Flaxman C sands into the deposited. Essential Petroleum is well positioned in the Otway Basin, with quality exploration acreage footwall of the Normanby half-graben. The stackingA number onshore of pipeline promising prior to deep laying water shelf Bernoulli prospect is a large but structurally margin opportunities have been identified in and an exciting prospect inventory, to potentially complex prospect. Although the closure VIC/P50 from seismic acquired by Essential play an important role in the growing Australian is robust at the Waarre reservoir level, the Petroleum. Two of these – the Curie prospect energy market. The company has identified extensive 3D seismic survey will allow the and the Descartes prospect – have been significant offshore prospects associated with prospectivity of Bernoulli to be compared more matured to prospect status through the the Discovery Bay High and is working towards completely with that of the structurally simpler acquisition of over 1,000 kilometres of modern unlocking this hydrocarbon potential.

Fermat prospect. The 3D seismic survey was 2D seismic data. Curie is a large faulted rollover FOR MORE INFORMATION CONTACT: completed in June 2007 and will be processed in the upper late cretaceous section, while the John Remfry and interpreted by the first quarter of 2008. Descartes prospect is an interpreted Oligocene Chief Executive Officer Fermat and Bernoulli have a combined turbidite fan complex. Essential Petroleum estimated P50 recoverable resource potential The two prospects are potentially very large, Phone: 03 9699 3009 of greater than 2 TCF gas. However, if an early with a current estimated P50 recoverable oil Fax: 03 9699 3009 Email: [email protected]

31 DISCOVERY JOURNAL NOVEMBER 2007 Geothermal Exploration Update Following a public tender process, 5 companies have accepted offers of permits for geothermal energy exploration in Victoria. The exploration permits cover an area of 74,000 km2 with over $64 million in expenditure committed over five years.

Hot Rock Ltd Torrens Energy Ltd Greenearth Energy Ltd

Hot Rock Ltd is aiming to identify, appraise Torrens Energy Ltd has a portfolio of 16 Greenearth Energy Limited was awarded and develop low-emission, commercially geothermal exploration licences (GELs) GEP10, 12 and 13, covering 19,000 square sustainable geothermal energy projects in in South Australia and the recently kilometres in May 2007. The permits cover Australia and internationally. granted GEP5 permit in Victoria, located the Latrobe Valley, the area to the east of in the geological region known as the Lorne as far as Melbourne and to the north Hot Rock was granted four geothermal exploration Melbourne Zone. covering the region around Daylesford. permits [GEPs] in the Otway Basin in south-west Victoria, covering 18,294 square kilometres, as The Melbourne Zone is a structural area that Greenearth Energy has committed to spending part of the Victorian Government’s competitive contains heat producing basement (the Selwyn a minimum of $8.5 million over five years as part tender which closed in October 2006. The Block), granite intrusions, possible high heat flow of its winning tender for the Victorian permits, company is also evaluating several projects in related to recent volcanics and a thick cover of but is planning to carry out a significantly more Europe, Asia and the USA. insulating sediments. The area begins within the aggressive work program that is likely to see the Hot Rock Ltd selected the Otway Basin because city limits of Melbourne and lies in the heart of company spend more. The program could include previous drilling had shown that anomalous infrastructure and markets. drilling one or more deep wells to a depth of 3-5 km as part of its regional exploration program temperatures existed and may be suitable for For an area to be prospective for commercial Greenearth was founded in 2006 with support binary plant electricity generation. Managing geothermal energy resources three key factors from backers including Lakes Oil and Victoria Director Mark Elliott said the company would are needed: Petroleum. The company has exclusive access focus its exploration and appraisal of geothermal a) An active heat source (high heat flow), to an extensive existing database of information resources within areas of high geothermal b) insulating sedimentary cover over the heat gained from Lakes Oil’s exploration and drilling gradients adjacent to existing energy delivery source, and, activities over the last 25 years. The original idea infrastructure, power transmission lines and c) proximity to infrastructure and market (the for Greenearth Energy came from Lakes Oil’s 2004 significant industry. The projects would focus national power grid). drilling of the Trifon-2 oil exploration well, which on both Hot Wet Rock and Hot Dry Rock targets. The presence of the Selwyn Block is a real encountered hot, saline water at about 2,000 m The first priority was to target hydrothermal positive for geothermal potential in the Melbourne that flowed to the surface at about 90°C. water at temperatures greater than 150°C at Zone. Elsewhere the occurrence of Proterozoic Since being awarded its permits, Greenearth depths of less than 4,000 metres. Oil well and Basement has given rise to zones of high heat flow Energy has participated in the drilling of the Boola waterbore data from sandstone units in the Otway due to the presence of radiogenic elements in the Boola-2 well (GEP12) in joint venture with Lakes Group sediments encouragingly showed relatively crust such as uranium, thorium and potassium. Oil. Greenearth Energy agreed to pay to extend high water temperatures, Mr Elliott said. Victoria is also dotted with granitic rocks of Lakes Oil’s planned drilling operations from Hot Rock Ltd directors believe the Otway Basin younger age, which have the potential to generate 1,500-2,200 m. Technical problems forced the potentially contains sufficient geothermal energy to high heat flow. The ‘newer volcanics’ event spans abandonment of the well at a depth of generate electricity. Mr Elliott confirmed Hot Rock the time from the Pliocene (about five million years 1,850 m, but Greenearth Energy was able to gain Ltd’s geothermal exploration permits – GEP6, 7, ago) to Recent (in the past 10,000 years), and vital temperature and coring data to a depth of 8 and 9 – were selected on the basis of specific contains about 400 volcanic centres. The presence 1,700 m. This enabled the company to assess geological technical characteristics, which meet of residual anomalous heat flow associated with temperature gradients and thermal conductivity the company’s focus on areas with relatively high these centres is currently unclear. In addition to for a portion of the total costs. geothermal gradient for existing wells, (i.e. greater a heat source, an adequate insulating blanket Greenearth Energy’s ultimate goal is to reach than 1,000-metre depth and fitting commercial of sedimentary rocks is required to create high commercialisation and to develop geothermal considerations such as proximity to transmission temperatures at depths of 3-5 km. Some rocks power. Initially the company will target the lines, infrastructure and industry). make better thermal blankets than others, such as shallower ‘wet’ conventional geothermal systems. At this early stage, the directors of Hot Rock mudstones, siltstones, shales and limestone. The But the company is excited at the prospect of Ltd will focus on identifying geothermal energy Melbourne Zone contains thick accumulations of having Hot Dry Rock potential within its permits. resources capable of producing geothermal Silurian to Devonian sediments. Torrens Energy An independent geological assessment, energy suitable for electricity generation, however will begin to explore by mapping key target areas commissioned by the company, suggested that direct use of hot water for industry will be also for the existence of thick insulating sediments, temperatures in the Latrobe Valley may reach considered. Data from water and gas wells followed by an assessment of the heat flow in as high as 225°C at 5 km depth. But this theory indicate temperatures of about 150°C exist at the Melbourne Zone. Torrens Energy will then drill remains untested because there have been no depths of 3,000 metres, which may equate to shallow heat flow exploration holes in key locations deep wells drilled to Basement in the Latrobe Valley. In the meantime, Greenearth Energy is commercial geothermal energy resources. The to enable modelling of the temperatures at depths designing a comprehensive geophysical and targeted areas are regarded by Hot Rock Ltd of between 3-5 km below the surface. Should initial geothermal modelling program using the results as prospective for predominantly Hot Dry Rock data collection prove favourable, Torrens Energy of its planned 3D magnetotelluric, seismic and resources, but the company is also looking for will begin development assessment processes receiver function pilot programs in the Latrobe shallower hot aquifers for Hot Wet Rocks. with the aim of producing large scale, emissions Valley. This will assist the company to consolidate free, baseload power for Melbourne and the FOR MORE INFORMATION CONTACT: its planned deep well drilling program. national electricity market. Mark Elliott FOR MORE INFORMATION CONTACT: Managing Director FOR MORE INFORMATION CONTACT: Hot Rock Ltd Rob King Chris Matthews Phone: 07 3857 7552 Director Chief Executive Officer Email [email protected] Greenearth Energy Torrens Energy Ltd Phone: 03 9620 7299 Phone: 08 8373 1822 Email: [email protected] 32 Email: [email protected] Geothermal Exploration Update

Granite Power Ltd Geogen Pty Ltd

Victorian geothermal energy hopeful, When it comes to geothermal exploration, “If it’s successful, then the world’s cleanest and Granite Power Ltd, is hoping new Queensland-based geothermal exploration most cost effective form of renewable energy will technology will provide the solution to the company Geogen Pty Ltd plans to take a become available to all Australians for thousands economically-viable conversion of natural different approach to many other companies. of years.” heat in the earth’s crust into sustainable, Another major difference between Geogen and While all other geothermal companies in Australia renewable and emission free electricity. other geothermal exploration companies is the are targeting geothermal hydrothermal or Hot manner in which it intends to develop and fund its The company, in conjunction with the University Dry Rocks – radioactive granites underlying discoveries. Mr Carroll said Geogen was a private of Newcastle, has just patented a novel heat sedimentary basins at depths of a few kilometres explorer and intended to stay that way for the exchanger applicable for geothermal power – Geogen is pinpointing very shallow, high-grade time being. generation. The federal government is contributing geothermal heat, specifically for base-load power “The real value in Geogen is the unique $1.2 million to develop the concept, which aims generation. geothermal model, the proximity to major markets to utilise lower temperature source rocks than Geogen was formed in 2005 by experienced throughout Australia and overseas and our more conventional geothermal systems. The heat consulting geologist Bob Kitch and former decision not to ask Australian taxpayers and mum- exchanger applies a regenerator technology Beyond 2000 science and technology television and-dad investors to fund the early exploration which operates in a ‘supercritical state’ to presenter Andrew Carroll to develop geothermal work,” Mr Carroll said. “Geogen is all about finding generate power. exploration opportunities throughout Australia near-infinite sources of high-grade geothermal “Access to this technology means that we and internationally. Geogen managing director heat for the cheapest and most sustainable clean can make lower temperature rocks economic,” and principal geologist Bob Kitch is Bendigo born and renewable generation of base-load power.” Granite Power managing director Stephen de Belle and a highly-regarded economic geologist with “Victoria has all the ingredients to make that told Discovery. “It’s partly for this reason that we more than 37 years experience in the Australian happen quickly.” selected our areas in Victoria.” and south-west Pacific exploration and mining Granite Power sees potential for the technology industries, including BHP Minerals and Gold FOR MORE INFORMATION CONTACT: in a host of geothermal applications and has Mines, Utah Development Company, Newmont Bob Kitch secured exploration tenements in Victoria, New Australia and Uranerz Australia. Managing Director and Principal Geologist South Wales, South Australia, Queensland and The pair’s wholly-owned company Geogen Geogen Pty Ltd Phone: 07 3378 3745 Western Australia. The company also plans Victoria now holds the largest contiguous Email: [email protected] a radically different approach to testing the commercial viability of its technology. It aims to build a mobile, 5 MW (megawatt) power station which will operate directly from the exploration area. If rocks of sufficient temperature Victoria: are located near a market, Granite Power plans Geothermal to demonstrate its technology by operating the Exploration Permits power plant to generate electricity direct into the local grid. Hot Rock Ltd “When we do our testing we will be able to generate electricity and sell it so the reservoir Torrens Energy Ltd assessment process will be a part of the Greenearth Energy Ltd exploration process,” Mr de Belle said. The demonstration plant is expected to cost Granite Power Ltd approximately $20 million, but in normal operating Geogen Pty Ltd conditions a plant of about 120 MW is expected to

be constructed consisting of three 40 MW units. The company’s heat exchanger technology can operate at temperatures of about 150°C, geothermal exploration acreage package in much lower than some other geothermal power Australia – 18,350 square kilometres. projects currently under consideration. To finance The company’s permit areas – GEP1, 2 and 3 – the project and the exploration Granite Power are located in Victoria’s central highlands, with one is currently preparing a prospectus to allow the serious target just 60 kilometres from Melbourne company to raise cash and list on the Australian and directly under the national power grid. Stock Exchange. “Geogen has a 200/2000 geological model for the Victorian exploration areas. That means we FOR MORE INFORMATION CONTACT: expect to find more than 200°C of heat at less than Stephen de Belle 2,000 m of depth,” Mr Kitch told Discovery. “That Managing Director is very shallow compared with other geothermal Granite Power models and is more than enough to run very Phone: 02 8252 6100 Email: [email protected] significant base load geothermal power stations. “Equally significant is our proximity to the second largest energy market in Australia.” 33 DISCOVERY JOURNAL NOVEMBER 2007

Regulations Update Data collection and analysis to monitor trends and performance

p Chief Inspector and Director of Mines Tailings Storage Facilities on an underground inspection Audits 2007 – the results are in

An audit of 38 separate mine and quarry Overall, the physical inspection revealed MPR plans to progressively address the Tailings Storage Facilities (TSF) across TSFs were in good condition across the issues identified during the audit through Victoria in the second quarter has found state. But the audit found that none of the work plan variations, and replacing work that, overall, such facilities are operating existing sites had undertaken complete plans that are obsolete or have been in good condition. However, two aspects voluntary compliance with the guidelines’ lost. Results of the audits have been requiring attention were found in and recommendations. Therefore, a majority communicated to operators so that around TSFs – environmental monitoring of sites do not have the critical control attainment programs can be negotiated. and stormwater management. A lack of documentation for TSF management. MPR inspectors are available to advise record keeping for operator inspections MPR will now undertake a campaign to operators on voluntary conformance with and maintenance was also identified as an assist operators to develop and implement the guidelines. area requiring greater diligence and these critical control documentation to match FOR MORE INFORMATION CONTACT: issues have now been highlighted for the the scale and complexity of the TSF and necessary improvements. the site, over time. This documentation Cynthia Crowe Principal Petroleum and Since the November 2004 release of the includes: Geothermal Environment Adviser Management of Tailings Storage Facilities • inspection and maintenance Department of Primary Industries Victoria Guidelines, adoption of the recommended record keeping Phone: 03 9658 4419 documentation for contemporary • risk assessment completed Fax: 03 9658 4499 Email:[email protected] management of TSF had been voluntary for TSF (including cyanide issues) on existing sites, and only mandatory for • emergency response plan for new proposals. The Minerals and Petroleum TSF (including cyanide issues) Regulation Branch (MPR) frequently • operations manual for TSF undertakes targeted audits to support (including cyanide issues) its regulatory activities and to provide • environmental monitoring extension and education opportunities (including cyanide issues) for industry. • TSF monitoring for key elements (including cyanide issues) The audit assessed 138 elements for • closure plan (including cyanide issues) conformance with the guidelines, divided • annual reporting up to date and into three components: schedule 15 transfer reports for mines • physical inspection of the tailings/ up to date slimes storage facility • annual audits required and completed • review of TSF management documentation, and • specific management practices related to cyanide use, applicable to only a p Embankment failure of a water dam small subset of mines.

34 The National Mine Safety Framework, designed to create a consistent legislative and regulatory approach to the industry across all states and territories, has been launched across the nation.

p All work plans must now include plans for engaging the community Engaging communities as key stakeholders. The Minerals and National Mine Safety and stakeholders in mining Petroleum Division of the Department of Primary Industries (DPI) has embraced Framework Launched Earlier this year the Victorian Community Engagement as one of its Government, through amendments to priority focus areas and believes that Made up of seven strategies focusing on key areas in all jurisdictions, the framework the Mineral Resources (Sustainable investing in community engagement includes more consistent data collection initiatives for Victoria’s earth resource sector Development) Act 1990, legislated that and analysis to monitor trends and will encourage effective communication mining companies must formally engage performance and better target accident local communities about proposed between mining companies and local prevention strategies. The initiative also mining projects as well as during all communities. develops the skills and competency stages of operations. Mine operators Victorian Energy and Resources Minister of safety and health management in submitting new mining work plans and Peter Batchelor said the government was the industry. variations to existing work plans from in a unique position to encourage dialogue Victoria’s Minister for Energy and Resources 1 October will be required to submit between communities and industry, and Peter Batchelor launched the public community engagement plans for increase community confidence that consultation process in Melbourne with environment and social priorities can approval as part of their work plan. Federal Industry, Tourism and Resources coexist with mining industries. “The process Minister Ian MacFarlane in June. The Mining companies that engage and for mining companies to document and Ministerial Council on Mineral and Petroleum contribute to social wellbeing generally consider their community engagement Resources, established a steering group receive better financial return in the longer approach is a positive step in sustainable with representatives from the workforce, term and may experience other benefits development in Victoria,” Mr Batchelor said. industry and governments to guide the including: building and maintaining To assist industry to meet the new development and implementation of the community support for projects, more legislative requirement, DPI has created a framework. readily gain project approval and approved draft guideline for community engagement To contribute to the steering group visit land access as well as the opportunity to plans which outline key areas specified in www.industry.gov.au/minesafety. enlist local knowledge which can enhance the legislation and align with best practices project outcomes. standards in Australia and internationally. FOR MORE INFORMATION CONTACT: While it is recognised that mining is a valuable part of the Victorian economy, local FOR MORE INFORMATION CONTACT: John Mitas community concerns are also important. If Bonnie Baird Manager, Minerals and Extractive Operations Community Engagement Program Manager Department of Primary Industries local concerns are not addressed, they can Department of Primary Industries Phone: 03 9658 4422 cause serious disruptions to operations. Phone: 03 9658 4408 Email: [email protected] Through this legislative amendment, the Email: [email protected] government is optimistic that the mining industry will recognise the community

35 Mineral Exploration Tenements

New applications and grants during June – September 2007

N Applications Granted Current

0 50 100 Kilometers

Exploration Licence Applications Exploration Licence Applications TENEMENT UPDATE TENEMENT Tenement Primary Owner Application Date Tenement Primary Owner Application Date EL5062 Mutiny Gold Ltd 6/6/07 EL5098 Brady, John M 4/9/07 EL5063 Iluka Resources Ltd 7/6/07 EL5102 World Minerals Pty Ltd 18/9/07 EL5064 Highlake Resources Pty Ltd 8/6/07 EL5103 World Minerals Pty Ltd 18/9/07 EL5065 Highlake Resources Pty Ltd 8/6/07 EL5104 World Minerals Pty Ltd 18/9/07 EL5066 Highlake Resources Pty Ltd 8/6/07 EL5105 Rex Minerals (Victoria) Ltd 19/9/07 EL5067 Highlake Resources Pty Ltd 8/6/07 EL5106 St Barbara Ltd 19/9/07 EL5068 Highlake Resources Pty Ltd 8/6/07 EL5107 Gold Fields Australasia Pty Ltd 19/9/07 EL5069 Swancove Enterprises Pty Ltd 13/6/07 EL5108 Providence Gold & Minerals Pty Ltd 19/9/07 EL5070 St Barbara Ltd 14/6/07 EL5109 Blue Gum International Pty Ltd 25/9/07 EL5071 Pacific Resources Mining Corporation P/L 18/6/07 EL5110 Swancove Enterprises Pty Ltd 25/9/07 EL5072 Beadell Resources Ltd 18/6/07 EL5111 Uranium Oil & Gas Ltd 25/9/07 EL5074 BTB Mining Pty Ltd 22/6/07 EL5112 Uranium Oil & Gas Ltd 25/9/07 EL5075 BTB Mining Pty Ltd 22/6/07 EL5076 Newcrest Operations Ltd 27/6/07 EL5077 Goldstar Resources NL 2/7/07 EL5078 Goldstar Resources NL 2/7/07 EL5079 Morning Star Gold NL 2/7/07 Exploration Licences Granted EL5080 Sierra Minerals Ltd 24/7/07 EL5081 Leichhardt Resources Pty Ltd 10/8/07 Tenement Primary Owner Application Date Grant Date EL5082 Leichhardt Resources Pty Ltd 10/8/07 EL4572 Perseverance Exploration Pty Ltd 18/4/01 20/6/07 EL5083 Mineral Sands Ltd 13/8/07 EL4998 Swancove Enterprises Pty Ltd 26/9/06 13/9/07 EL5084 Mineral Sands Ltd 13/8/07 EL5001 Swancove Enterprises Pty Ltd 5/10/06 13/9/07 EL5085 Marathon Resources Ltd 20/8/07 EL5007 St Barbara Ltd 6/11/06 1/8/07 EL5086 Marathon Resources Ltd 20/8/07 EL5012 St Barbara Ltd 6/11/06 1/8/07 EL5087 Blue Gum International Pty Ltd 29/8/07 EL5014 St Barbara Ltd 6/11/06 1/8/07 EL5088 St Barbara Ltd 30/8/07 EL5015 St Barbara Ltd 6/11/06 1/8/07 EL5089 Mineral Sands Ltd 31/8/07 EL5017 Uranium Oil & Gas Ltd 30/11/06 29/8/07 EL5090 Gold Fields Australasia Pty Ltd 4/9/07 EL5033 Syndicated Resources Exploration Pty 15/2/07 6/6/07 EL5091 Gold Fields Australasia Pty Ltd 4/9/07 EL5035 Bendigo Mining Ltd 13/3/07 6/6/07 EL5092 Gold Fields Australasia Pty Ltd 4/9/07 EL5045 Jabiru Metals Ltd 27/3/07 20/6/07 EL5093 Gold Fields Australasia Pty Ltd 4/9/07 EL5046 Marlow, Alan Gerald 27/3/07 29/8/07 EL5094 Gold Fields Australasia Pty Ltd 4/9/07 EL5052 Perseverance Mining Pty Ltd 20/4/07 18/7/07 EL5095 Gold Fields Australasia Pty Ltd 4/9/07 EL5055 Kimba Resources Pty Ltd 27/4/07 13/9/07 EL5096 Gold Fields Australasia Pty Ltd 4/9/07 EL5056 Kimba Resources Pty Ltd 27/4/07 13/9/07 EL5097 Gold Fields Australasia Pty Ltd 4/9/07 EL5060 Navarre Discovery No 1 Pty Ltd 21/5/07 18/7/07 EL5071 Pacific Resources Mining Corporation P/L 18/6/07 26/9/07 Complete mineral, petroleum and extractive tenement details EL5076 Newcrest Operations Ltd 27/6/07 29/8/07 are available from www.dpi.vic.gov.au/minpet/geovic 36 [email protected] T: (613)9658 4414 Manager, Petroleum OperationsSafety and Environment [email protected] T: (613)96584433 Manager, SustainableDevelopment [email protected] T: (613)96584422 Manager, MineralsandExtractiveOperations [email protected] T: (613)96379734 Acting Manager, MineralsandPetroleum Tenements [email protected] T: (613)96584457 Director, MineralsandPetroleum Regulation Minerals andPetroleum Regulation [email protected] T: (613)96584536 Manager, StrategicGeoscience geoff.o’[email protected] T: (613)96584538 Manager, EnergyResourcesGeoscience [email protected] T: (613)96584531 Manager, Resources peter.o’[email protected] T: (613)96584525 Manager, MineralsGeoscience [email protected] T: (613)96584501 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.

David Boothroyd Phil Roberts Larry Stewart Paul McDonald Peter O’Shea Alan Willocks Kathy Hill Dr. RichardAldous Kim Ricketts Department ofPrimaryIndustries Terry McKinley Doug Sceney John Mitas Geoff O’Brien [email protected] T: (613)96584405 Director, BusinessDevelopmentandTechnology and Technology Business Development [email protected] T: (613)96584081 Communications Adviser Corporate Communications [email protected] T: (613)96584855 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)96584402 Minerals DevelopmentManager

Damia Ettakadoumi Jonathan Darby Manny Hemman Sean Rooney Kathy Friday Geoff Collins Roger Buckley Cliff Kavonic and ExplorationAssociation Australian Petroleum Production Peak Bodies and Resources Department ofIndustry, Tourism Geoscience Portal Australian Governments Government Monash EarthSciences Academic Resources SectorWebsites of Victoria Prospectors andMinersAssociation 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

37 CONTACTS