The Gwalia mine is located three kilometres south of the town of Leonora, Western Australia. The operation continues the development of an ore body that has already produced four million ounces from open cut and underground operations. The mine was originally established in 1897 by Herbert Hoover, who later became the 31st President of the United States.
The Gwalia mine is the cornerstone of Leonora operations with 2.0 million ounces of gold in reserves at a grade of 8.9 grams per tonne. After two years of redevelopment, the first gold pour from the operations occurred in October 2008 and a year later, the first 100,000 ounce milestone was reached.
The main decline, called the Hoover Decline, has been extended to 1,360m below surface at June 2011 to allow production from a range of ore sources. In financial year 2012 production is almost solely from the higher grade South West Branch lode which contains 87% of the total reserve ounces. To date the geotechnical environment has been well within design parameters.
The processing plant is a conventional CIP circuit and has a nominal capacity of 1.2 million tonnes per year of hard rock and up to 1.8 million tonnes per year, when softer material is blended. Other surface infrastructure includes a gas-fired power station, a paste fill plant, and a refrigeration plant to cool the underground environment. Central to the mine ventilation system is a 5.5 metre ventilation shaft, which at 800 metres long is the largest raise bored shaft ever drilled in Australia. The accommodation village was significantly upgraded and expanded in 2008, incorporating a number of energy efficient and environmentally friendly initiatives. The Camp received a certificate of merit in the 2009 Golden Gecko Awards for environmental excellence.
Production at the operation is forecast to grow from 131,133 ounces in financial year 2011 to at least 175,000 ounces in financial year 2012. Gwalia has strong margins supported by good grades and a focus on costs and returns.
King of the Hills
In March 2010, approval was given for the development of the King of the Hills, which is 42 kilometres by road from Gwalia mill and production successfully commenced in June 2011. Gold production is planned at the rate of 55,000 to 60,000 ounces per annum over at least the next 4 years.
The King of the Hills margins, cash flows and investment have been protected by put and call options over the majority of current reserves in 2011.
Like Gwalia, the project has a long history dating back to 1897 when high-grade underground mining first commenced at this location. Between 1985 and 2004, previous operators focussed on extraction of high volume, low-grade mineralisation through open pit mining, taking total production to 1.6 million ounces.
Tower Hill, which is two kilometres from the Gwalia plant, has been identified as a potential underground opportunity with a reserve of 338,000 ounces, which includes several higher grade areas. Further work is being undertaken to better understand the geological controls over the high gold grade domains and the potential for extending the mineralisation at Tower Hill.