BHP Flags Major Copper Find Near Olympic Dam

By Glenn Dyer | More Articles by Glenn Dyer

An announcement from BHP has confirmed that very quietly the next resources boom is taking shape, mostly in the states of WA and South Australia.

This time it’s not coal or iron ore – the old mainstays – but lithium, gas, copper, gold, silver, lead, and zinc.

BHP’s announcement on Tuesday was quite short but it confirmed that a potentially massive medium to low-grade copper deposit had been found, with low grades of gold.sliver and uranium – similar in fact to the profile at Olympic Dam.

The Olympic Dam mine works an extremely large iron oxide copper-gold deposit with estimated reserves of 2.95 billion tonnes of ore grading 1.2% copper; 0.04% uranium, 0.5 g/t of gold and 6 g/t of silver.

BHP has said in the past that Olympic Dam has 500 years of reserves, especially copper. The new area could add centuries to that. This new fund and its similarities to Olympic Dam tells us there could be other huge deposits hiding hundreds of meters underground in South Australia and other states.

Early indications that the new areas could be a smaller, richer deposit than Olympic Dam, especially so far as copper, gold, and silver are concerned. There is one hole where copper grades of 6.07% have been achieved, with high silver readings as well and some gold and uranium.

Like Olympic Dam it is underground, so the cost of a new mine could be large. Olympic Dam is already Australia’s biggest underground mine, it is the 4th largest copper deposit in the world and the largest deposit of uranium. Now it could have a rich but smaller deposit nearby.

BHP is towards the end of an $A1.1 billion spending program upgrading Olympic Dam.BHP was talking about a $US2.1 billion expansion of Olympic Dam a year ago (That’s after it abandoned a far more expensive open cut idea in 2012 as too costly). Now it might have to change tack and look at starting work at the new deposit.

BHP said it had “confirmed identification of a potential new iron oxide, copper, gold (IOCG) mineralised system, located 65 kilometers to the southeast of BHP’s operations at Olympic Dam in South Australia.”

(That BHP felt it necessary to make a statement containing so much detail about just four drill holes, tells us how important the company’s management and the board see this discovery).

“As part of BHP’s ongoing copper exploration program, four diamond drill holes, totaling 5346 meters, intersected copper, gold, uranium and silver mineralisation of IOCG style on BHP’s exploration licence 5941.”

The company said lab testing had revealed copper values ranging from half a per cent to 6% “with associated gold, uranium and silver metals.”

“This exploration project is at an early stage and there is currently insufficient geological information to assess the size, quality, and continuity of the mineralised intersections. BHP is evaluating and interpreting the results reported and planning a further drilling program, to commence in early 2019,” BHP said.

The key intersection, 180 metres – from 1,070 metres to 1,250 metres – contained 6.07% copper, 0.92 grams of gold per tonne, 12.77 grams of silver to the tonne and a high uranium grade of 401 parts per million. That is part of a drill hole with an intersection of 425 metres with a grade of 3.04% copper, just over 6 grams of silver to the tonne and 334 parts per million of uranium.

Another showed 77 metres with a grade of 2.11% copper and 2.94 grams of silver per tonne. That alone would be enough to wet the interest of any miner. But 425 metres (containing a 180 metre ’sweet spot of copper, silver, gold and uranium) of mineralisation is much more interesting.

OZ Minerals is another miner in South Australia expanding its copper operations. It has all but finished the expansion of its Prominent Hill mine to an underground operation and is spending just over $1 billion on a new mine called Carrapateena, to the north of Prominent Hill.

It also has discovered extensions or new separate indicators of what could be other deposits in the area of both mines.

The lithium boom has been well sketched out with upwards of $6 billion invested or committed in at least seven new projects – including the $1 billion plus expansion of the Greenbushes mining operation in southern WA and the $A1.6 billion investment in a 50% stake in Mineral resources Wodgina lithium mine.

Last week we revealed that a major single hole strike had been made in the Patterson region of the Eastern Pilbara, near the existing mines at Telfer and Niftys.

Small UK-based explorer, Greatland Gold revealed the strike near Newcrest’s existing Telfer gold mine.

Greatland said a 275-metre intersection in the hole had assayed at 4.77 grams per tonne (g/t) gold and 0.61% copper at its Havieron exploration licence.

The news adds to the company’s reports in May of interesting gold-copper mineralisation in the area. In its announcement, Greatland noted peak gold grades of 211.3g/t and a peak copper grade of 8.45% in the recent drill intersection.

The intersection is deep – below 459 metres but the hole does indicate the prospectivity of the area where known economic gold-copper resources are at the Telfer operation of Newcrest (about 40 kilometres from the Greatland strike) and Metal X’s Nifty mine.

But the news adds to the rumours of a big find by Rio Tinto this year in the same area. That much-rumoured discovery is 150 kilometres north-north-west of Telfer. According to reports in the West Australian newspaper Rio has set up a 50-person worker camp in the remote location and is said to have applied to build an airstrip to support its exploration efforts.

Earlier this year major lead deposit called Abra was confirmed by Galena Mining in the Gascoyne region of WA. It is one of the largest recent discoveries of lead globally.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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