Introduction

Two distinct types of copper mineralisation have been discovered within the Mt Gunson Project tenements:

  1. Sediment-hosted copper (plus cobalt and silver) mineralisation in the undeformed Proterozoic Cover Sequence rocks of the Stuart Shelf (Cover Sequence mineralisation)
  2. Olympic Dam-style, Iron Oxide Copper Gold (IOCG) mineralisation in the underlying metamorphosed rocks of the Gawler Craton (Basement mineralisation)

The Cover Sequence mineralisation is of immediate interest to Torrens because of the potential to generate a profitable business by mining two neighbouring copper-cobalt-silver sulphide deposits, MG14 and Windabout, both of which have published JORC-compliant Indicated Mineral Resources.

The copper-rich Cover Sequence sulphide mineralisation at Mt Gunson is quite different in physical style and genesis from the known Basement mineralisation, which exhibits many of the attributes of the giant Olympic Dam IOCG deposit, which is located 100km north of Mt Gunson.

The Mt Gunson Cover Sequence copper-cobalt-silver deposits occur as discrete, stratiform, tabular bodies in the relatively undeformed cover sequence rocks of the Stuart Shelf, while IOCG-style mineralisation occurs in the older, deformed and altered basement rocks, associated with large and intense iron-rich alteration zones emanating from Hiltaba Suite Granites and other highly deformed igneous rock of Early Proterozoic and Archaean age.

The known Cover Sequence mineral deposits, Windabout, MG14, Cattle Grid South and Emmie Bluff, are located within the historic Mt Gunson copper mining centre, about 135km north of Port Augusta in South Australia (Fig.1, 2 & 3). Mt Gunson is the third-largest copper-producing district in South Australia, with approximately 145,000 tonnes of copper produced to date.

These deposits have been extensively drilled and investigated by CSR, Stuart Metals NL and Gunson Resources Limited, now Strandline Resources (Gunson) since the 1970’s, with JORC-classified mineral resources published by Gunson. Conventional sulphide flotation mineral processing trials have been unable to demonstrate satisfactory recoveries of copper, cobalt and silver to support commercial mining.

The Cover Sequence deposits are dolomitic shale-hosted, or sandstone-hosted, disseminated copper-cobalt-silver sulphides formed by the hydrothermal replacement of diagenetic pyrite.
The main metallurgical obstacle to efficient conventional flotation recoveries is the very fine grain size of the metal-bearing sulphides, which results in poor flotation characteristics. The deposits are not amenable to sulphuric acid leaching of the mineralisation because of the high content of acid-consuming carbonate gangue.

Initial metallurgical testwork conducted by Torrens over 2014 and 2015 has shown that hydrometallurgical leaching of the mineralisation, in conjunction with sulphide flotation, can achieve about 90% recovery of copper and cobalt.

Torrens is planning a drilling program to obtain fresh metallurgical sample on which to conduct further metallurgical testwork, as part of the PFS. The PFS will also include a review of all relevant technical and commercial data, conceptual plant design, and costed engineering proposals. The PFS is projected to take about 1 year, and a positive outcome will lead to a full BFS, which is expected to be completed within two years. Based on these estimates, a Decision to Mine could be made in 2018.

Using the large exploration database accumulated over the last 40 years, Torrens also intends to re-invigorate the exploration effort for additional sediment-hosted copper-cobalt deposits in the Stuart Shelf.

Exploration on the Project tenements by BHP Billiton and Xstrata has previously identified IOCG-style alteration and mineralisation. Exploration for the deeper IOCG mineralisation will be pursued by joint venture with major mining companies.

Figure1 project locationFigure 1 - Project Location

 

Figure2 windabout locationFigure 2 - Location of Windabout and MG14 Mineral Deposits
Tenements held by unrelated third parties are bounded by solid brown line. The solid green shows the approximate areal extent of MG14 & Windabout deposits

 

Figure3 tenementsFigure 3 - Tenements and mineralisation
Overlain on tenements originally held by Gunson Resources Limited in 2000

Tenure

Table1

Table 1. Tenements

 

Location

The Mt Gunson Project is centred about 45km south of Woomera and 135 km north of Port Augusta in South Australia. It is approximately 5 hours by road from Adelaide, and 1½ hours from Port Augusta.

The Mt Gunson mining centre lies about 9 km off the sealed Stuart Highway and is accessed by established unsealed mining roads. There is also established access to electrical grid power and scheme water. The Adelaide to Perth/Darwin railway parallels the Stuart Highway.

Regular air services are available at Woomera, Olympic Dam and Port Augusta. There is a serviceable airstrip for light aviation at Mt Gunson.

History of Mining and Exploration

Copper mineralisation was discovered at Mt Gunson in 1873. A cluster of oxide copper deposits yielded approximately 1700t of copper from several small-scale mining efforts, up to 1943.

Interest in the Mt Gunson copper district greatly intensified with the discovery in 1975 of the Olympic Dam copper gold deposit, today one of the world’s largest producers of copper, uranium, gold and silver, and operated by BHP Billiton Limited. This discovery led to the delineation of the Olympic Dam Copper Province in which Mt Gunson is located.

Between 1974 and 1984, 127,000t of copper and 62t of silver was produced from 7.2Mt of ore mined in the Cattle Grid open pit, operated by subsidiaries of CSR Limited. The ore was processed on site by conventional sulphide flotation and the concentrates shipped to Sumitomo for smelting in Japan.

Systematic ‘step-out’ exploration drilling around the Cattle Grid pit by CSR discovered the MG14, Windabout and Cattle Grid South mineral deposits in the early 1970’s. Both MG14 and Windabout deposits share very similar geological characteristics, whereas Cattle Grid South is similar to the Cattle Grid deposit. All three deposits were subsequently ‘drilled out’ in various phases and subjected to metallurgical and mining studies.

Later oxide copper leaching operations by the Adelaide Chemical Company (ACC) and others, who continue to produce approximately 1 tonne of cement copper per day (from mining leases to which Torrens is not a party), has brought total production for the mineral field to an estimated 170,000t of copper and 65t silver. Cobalt was also reportedly produced as a by-product of smelting Cattle Grid sulphide concentrates by Sumitomo.

Stuart Metals NL, which floated as Cobalt Resources NL in 1993, acquired the exploration title when it was relinquished by ACC in 1994. Gunson Limited acquired the property from Stuart in 2000, pursuant to its IPO Prospectus dated 15 March 2000.

In accordance with its Prospectus, Gunson, in joint venture with BHP Billiton Limited, which invested $0.5M in Gunson’s IPO, initially focussed on exploration for Olympic Dam-type deposits, drilling several targets between 2001 and 2003 before BHP withdrew. Significant copper-gold mineralisation and associated alteration was intersected in basement rocks on the 10km-long Elaine target zone, which was defined by overlapping gravity and magnetic anomalies and interpreted structural trends.

The discovery of the Carrapateena Cu-Au-U deposit 20km to the east of Mt Gunson and announcements of increased resources at Olympic Dam refreshed investment interest in Mt Gunson during the period 2005 to 2007. Drilling at the Chianti Prospect by Gunson intersected 6m @ 1.4% Cu in basement rocks, which encouraged Noranda Pacific (a Falconbridge subsidiary, later controlled in turn by Xstrata and Glencore) to farm-in to the Project.

Drilling at Moseley Dam, located south-west of Mt Gunson, during 2004-2005, intersected sub-economic shale-hosted copper mineralisation. This drilling defined a target zone at around 60m depth, which is yet to be fully explored.

In 2007, Gunson initiated new feasibility studies of MG14 and Windabout, undertaking further drilling, metallurgical testing and mine planning. By 2010, a key issue that remained unresolved was that of achieving satisfactory copper recoveries and feasibility work was suspended.

Between 2007 and 2012, Noranda Pacific funded airborne and ground geophysical surveys and drilling at the Chianti, Emmie Bluff and Elaine Pinchout, without intersecting economic Olympic Dam-style mineralisation, however important zones of mineralisation and alteration remain to be fully tested.

In 2014, Torrens commenced earning an interest in the Windabout and MG14 deposits and Noranda Pacific withdrew from the Project. In March 2016 Torrens acquired rights to 100% of the Mt Gunson tenements.

Geological Setting

The Mt Gunson Cover Sequence copper deposits are hosted by flat-lying undeformed terrestrial sedimentary rocks of Late Proterozoic Age deposited on the Stuart Shelf. These platform sediments are referred to as the ‘Cover Sequence’ and overlie igneous and metamorphic rocks of the eastern margin of the Archaean Gawler Craton, which host the Basement mineralisation.

The Mt Gunson Project tenements are centred about 100km south of Olympic Dam within Olympic Copper-Gold Province, which is a 650 km long corridor along the eastern boundary of the craton and bounded to the east by the Torrens Hinge Zone, a major geological discontinuity.

The Cover Sequence in the Mt Gunson mineral district is up to about 1000m in depth. The main sedimentary units (oldest at the bottom) are:

Table2

Table 2. Cover Sequence Geology

Disconformities, during which there was long time period between deposition of the Pandurra Formation and the Tapley Hill Formation in which volcanic and glacial events occurred, are important horizons for mineralisation. These provided the trap sites for mineralisation from metal-bearing hydrothermal fluids which are thought to have migrated through deep-seated faults bringing metals leached from underlying rock formations, including the Gawler Craton and Pandurra Formation.

The Cattle Grid deposit (7.4Mt at 1.9%Cu) is hosted by sandstone breccia which follows the palaeotopography of the Pandurra Formation, covering an area of 1,400m by 600m and averaging 4.5m in thickness. Mineralisation consists of chalcopyrite rimmed by bornite then chalcocite. Minor sphalerite-galena-bismuth and carrollite (a cobalt–bearing mineral) are associated with the deposit.

The Windabout and MG14 deposits are hosted by black calcareous shales, with the main mineralised zones occurring as a well-defined zone at the top of the Tapley Hill formation. Less continuous and generally lower grade mineralised zones also occur near the base of the Tapley Hill Formation. The Tapley Hill Formation appears to have been deposited in shallow basin-like structures elongated along a north-west to south-east trend. Elevated base metal values (copper, lead and zinc) are present throughout the unit. Although cobalt and silver contents are low relative to that of copper, they are of economic significance.

The most common basement rock unit underlying the Cover Sequence rocks in the Project area appears to be the Gawler Range Volcanics, which have been dated elsewhere at between 1580 and 1600 million years ago. The sequence comprises basaltic to rhyolitic volcanic rocks which crop out to the west of the Mount Gunson property but within it are known only from deep drill holes. The sequence is considered to extend at least as far east as the Torrens Hinge Line, which marks the eastern edge of the Stuart Shelf.

Mt Gunson Sediment-hosted Cu-Co-Ag Deposits

Mineralogy and Deposit Morphology

The copper and cobalt mineralisation in MG14 and Windabout is distributed as fine-grained, discrete and intergrown sulphides. Copper occurs as complexly inter-grown chalcocite (Cu2S), bornite (Cu5FeS4) and chalcopyrite (CuFeS2,) and cobalt occurs as carrollite (Co, Ni)2CuS4, in a gangue of dolomite, sericite, quartz and siderite.

Based on the extensive drilling, the resources are similar in style, and comprise sub-horizontal flat sheets with little deformation or faulting evident. Neither deposit outcrop, with MG14 lying at 25m depth, dipping gradually to the north west, and Windabout between 50m to 80m below the surface. They vary in thickness, from 2 metres to 8 metres, averaging 2.5 metres. The lower mineralisation boundary at MG14 is gradational, making tonnage estimations sensitive to grade cut-off values, while both the upper and lower mineralisation boundaries at Windabout tend to be better defined by grade.

Deposit Type & Economic Importance

The dolomitic black shale-hosted MG14 and Windabout Cu-Co-Ag deposits belong to a large and diverse family of sediment-hosted copper deposits found world-wide, which are second only to porphyry copper deposits for copper production. Among the best-known examples are the mines of the Zambian Copper Belt which are, by far, the largest producers of copper in that class and also important producers of cobalt and silver.

While these deposits occur in a variety of sedimentary-host rocks, MG14 and Windabout are characterised by their occurrence in calcareous host rocks and the copper-cobalt-silver association. The neighbouring Cattle Grid deposit, which shares similar mineralogy, is hosted by brecciated sandstone, therefore supporting the concept that the Mt Gunson deposits are part of a continuum of ore body-styles within a variety of host rocks.

World-wide, this deposit type averages 22 million tonnes grading 2.2% copper and 23g/t silver, with variable cobalt content. Size, however, may extend to billions of tonnes. The implication of this observation is that the known Mt Gunson deposits are relatively small to average in size from a world-wide perspective, and it is possible that more, and possibly larger, deposits may be discovered in the region around Mt Gunson.

Mineral Resources

MG14

The MG14 Cu-Co-Ag deposit, named in 1973 after the CSR discovery drillhole, lies about 1 km north of the abandoned Cattle Grid open pit mine. It is a totally concealed, flat lying body of disseminated copper sulphide mineralisation at about 25 metres depth. It is oriented east-west and is about 1,400 metres long by 400 metres wide, and from 3 to 8 metres thick.

A JORC -compliant resource was estimated by T. Callaghan in June 2013, with a Cut-off Grade of 0.5% Cu and an average SG of 2.5:

Table3Table 3. MG14 Mineral Resources

Callaghan’s resource estimate was based on 117 vertical drillholes, approximately half of which were diamond core holes, and the remainder reverse circulation (RC) holes. The main copper minerals in order of decreasing abundance are chalcocite, bornite, chalcopyrite and covellite. The only cobalt mineral described is carrollite.

Windabout

The Windabout Cu-Co-Ag deposit is situated approximately seven kilometres north-west of the Cattle Grid open pit. It is also totally concealed and of similar style to MG14, being a flat lying body of disseminated copper sulphide mineralisation dipping at about 5º to the north-west, and varying in depth from 55 to 80 metres. It is elongated east-west and is about 2,000 metres long by 1,000 metres wide, and from 3 to 8 metres thick.

The deposit has been tested by a total of 190 drillholes, consisting of 178 RC holes, and 12 NQ diamond holes. The latest resource assessment, published in Gunson’s annual reports, upgraded the Windabout resource to Indicated status, using an SG of 2.65, as follows:

Table4
Table 4. Windabout Mineral Resources

The main copper minerals in order of decreasing abundance are chalcopyrite, bornite, and chalcocite. Carrollite is the only cobalt-bearing mineral.

Cattle Grid South

The Cattle Grid South Cu-Co-Ag deposit is located approximately 350m south-west of the southern limit of the historical Cattle Grid open pit and is partially overlain by waste dumps. Average thickness of overburden cover is reported to be 64 metres.

The mineralisation at Cattle Grid South is reported to be an extension of the Cattle Grid sandstone-hosted mineralised horizon on the Whyalla Sandstone–Pandurra Formation contact. It is of similar average copper and silver grade to Cattlegrid; however cobalt grade is reported to be lower, generally less than 100ppm cobalt.

Cobalt Resources targeted the deposit in 1974, completing 14 holes for 1137 metres of reverse circulation drilling, on 100m by 100m centres. An indicative (non-JORC compliant) in-situ resource was estimated to be 700,000 tonnes averaging 1.7% Cu and 10g/t Ag, with an average thickness of 2.75m and extending over an area of 500m north-south and 250m east-west.

Emmie Bluff

Drilling at Emmie Bluff in 1984, near the northern limits of the Project area in EL5333 discovered important but sub-economic Olympic Dam-style mineralisation at depths below 750m. Follow up drilling over subsequent years expanded the target area. A flat-lying zone of shale-hosted copper-cobalt-silver mineralisation was also discovered at depths of around 400m. Collectively, these mineralised zones are known as “Emmie Bluff.”

A 1998 resource study by Gunson estimated the Inferred Resource for the Emmie Bluff shale-hosted deposit as 24Mt averaging 1.3% Cu, 600ppm Co and 10g/t Ag, with a minimum thickness of 2.5m. Internally, the deposit exhibits some distinctly higher grade zones.

The Emmie Bluff shale-hosted mineralisation is considered unlikely to be economic in its own right, due to its depth and thickness. With the proposed mining of the very much shallower Windabout and MG14 deposits and the potential for new discoveries of mill feed, however, this position may change.

Proposed Drilling

While there is little doubt as to the position, tonnage, grade and mineralogy of the MG14 and Windabout deposits, Torrens plans to undertake additional drilling to obtain additional samples for metallurgical studies, continued geotechnical evaluation and to address outstanding issues including ore density and quality assurance/quality control (QA/QC) that may be required for the purposes of calculating resources and reserves to contemporary JORC standards. This will be followed by recalculation by geostatistical methods to produce a Measured Resource for each deposit.

Proposed Mining Method

The proposed mining of both MG14 and Windabout has been the subject of various studies.

Mining of the Whyalla Sandstone overburden at MG14 will be achieved by conventional hydraulic excavator and truck.

At a vertical depth varying between 55m and 85m, the flat-lying Windabout mineralisation is significantly deeper than MG14, with high waste to ore strip ratios. An independent study into the mining of the Windabout overburden commissioned by Torrens in 2015 showed that bulk mining methods adapted from open cast coal mining may be economically applied. The bulk mining equipment will be electrically-powered, with grid-power available through the State grid.

At both MG14 and Windabout, Torrens plans to mine the flat-lying shaly ore horizons with a diesel-powered Continuous Miner. The Continuous Miner employs a rotating drum with hardened teeth to cut a horizontal layer up to 30cm thick and delivers the broken material to a windrow behind the machine or to a conveyor-loader directly into a haul truck for delivery to the mineral processing plant. Grade control sampling may be conducted on the broken ore stream.

Geotechnical drilling at MG14 and Windabout shows that the majority of the overburden (waste) can be classified as ‘free dig,’ with some possible ripping needed in the harder sandstones. However, mining at both MG14 and Windabout is expected to include little or no drill-and-blast requirement.

Torrens intends to produce updated mine designs and mining schedules, operating costs and process recovery figures as part of the PFS-BFS program.

Metallurgical Testwork & Process Design

The processing of the Gunson copper-cobalt-silver sulphide deposits has been investigated extensively over a period of over 40 years, with singular lack of success.

It is believed that the extremely fine grain size of the metal-bearing sulphide and gangue minerals in MG14 and Windabout is the main reason for the relatively low copper recoveries when attempting to produce a commercially acceptable sulphide concentrate using a conventional sulphide flotation process. The inability to economically separate saleable cobalt and silver from float concentrate was also considered an important commercial drawback. As a result, it has not previously been possible to demonstrate that the deposits can be mined and processed economically.

Initial metallurgical test work conducted by Torrens during 2014 on crushed ore samples showed between 75% and 90% of the contained copper is soluble in sodium cyanide solution. These samples were composited from several diamond drill holes from each of the MG14 and Windabout deposits.

Further testwork showed that the recovery of the cyanide from the leach process was significantly less than was hoped for, and the resultant process economics were not satisfactory. These results were reported internally in an Advanced Scoping Study in June 2015.

In late 2015 further leach test work was undertaken on composited flotation tailings from Windabout. Following on from previous research by Curtin University, these tests demonstrated that copper not recovered in a flotation process could be efficiently extracted from the float tailings using glycine and a substantially reduced amount of sodium cyanide. (Glycine is a simple amino acid, and is produced in large amounts worldwide. It is used in agriculture as an additive to animal feeds, in cosmetics and pharmacy, and as an additive in food supplements and protein drinks).

Results from the later testwork indicated that a process of conventional sulphide flotation followed by a glycine/cyanide leach would be capable of producing overall recoveries of about 90%.

The extension of this test work to whole of ore and flotation concentrates was prevented due to a shortage of fresh samples but, based on the substantial amount of work previously carried out by Curtin University, it is expected that this cyanide-catalysed glycine leaching approach will prove effective across the range of copper and cobalt minerals that have been identified in the Gunson ores.

These results were reported in the Enhanced Scoping Study in March 2016.

Based on the metallurgical test work described above, the process design study has concentrated on a flow sheet comprising flotation followed by separate glycine leach of the float concentrate and the float tailings. The leachates will be subjected to solvent extraction and electrowinning (SX/EW) for copper production and the recovered glycine stream from SX/EW will yield dissolved cobalt through ion exchange. The EW slime (tailings) will be sold to a smelter to recover contained silver. The final products from the operation will be EW copper metal and cobalt carbonate powder (95% pure).

Exploration Potential for Additional Sediment-hosted Copper

Torrens’s first mission is to bring the known MG14 and Windabout deposits to production, if found economically feasible to do so. However, Torrens believes there is considerable scope for increasing the tonnage of sediment-hosted copper mineralisation available for processing within the Project tenements, by re-evaluation of available exploration and mining data and additional drilling.

Figure4 prospect locationsFigure 4. Prospect Locations

Olympic Dam-Style Exploration Targets

Exploration over the past 40 years for Olympic Dam-style IOCG mineralisation in the Basement rocks has proven that potential for discovery of a major mineralised system remains at Mt Gunson.

Targets at Emmie Bluff and along the 30km north-east striking Cattle Grid Fault zone, including the Elaine and Chianti, offer some potential early drilling targets.

Torrens proposes to re-evaluate the Basement mineralisation potential with a view to attracting farmin interest from major companies interested in exploring in the Olympic Dam Copper Province.