Producing Mines

Beta Hunt Mine

The Beta Hunt Mine is a low-cost gold and nickel mine located in the prolific Kambalda mining district of Australia. RNC has as 100% interest in Salt Lake Mining Pty Ltd. (“SLM”), a private company whose main asset is a 100% interest in the Beta Hunt Mine.

Beta Hunt Mine Overview

The Beta Hunt Mine, located 600 km from Perth in Kambalda, Western Australia, is a deposit with the very rare feature of hosting both nickel and gold resources in adjacent discrete mineralized zones. The mining tenements on which the Beta Hunt Mine is located are held by Gold Fields Limited. SLM operates the Beta Hunt Mine by virtue of a sub-lease agreement with Gold Fields Limited.

Beta Hunt Mine (100% Basis) 2017 Production Guidance

Beta Hunt Mine

Units

2017 Guidance

Gold Production

000 ounces

37 - 42

Brief history

The Kambalda mining district in Western Australia is a long-established major mining centre with excellent existing infrastructure, a skilled local workforce, and nickel and gold processing mills nearby. Beta Hunt was originally a core WMC (Western Mining Co) asset discovered in 1966, producing 153,500 tonnes of nickel metal up to 1998. It was sold to Gold Fields Limited in 2001. In 2003, Reliance Mining acquired nickel rights for A$11.7M, developed an operation, and was acquired by Consolidated Minerals for A$76.5M in 2005. Consolidated Minerals placed the mine on care and maintenance at the end of 2008.

The Beta Hunt Mine was acquired by SLM in 2013 for A$10M after securing gold mining rights from Gold Fields Limited. The mine began producing nickel in 2014 and began gold production in November 2015. RNC expects to ramp up gold production to an annualized rate of approximately 60,000 ounces by the end of the first quarter of 2017.

Exploration Opportunities

The SLM land package includes significant exploration opportunities at Beta Hunt to add to the SLM resources alongside production.

Geology

The Beta Hunt mine is situated within the central portion of the Norseman-Wiluna greenstone belt in a sequence of mafic/ultramafic and felsic rocks on the southwest flank of the Kambalda Dome. Nickel mineralization is hosted mainly by talc-carbonate and serpentine altered ultramafic rocks and is typically pyrrhotite-pentlandite-pyrite+- chalcopyrite.  Gold mineralization occurs mainly in the Lunnon Basalt, which is the footwall to the nickel-bearing ultramafics, and is characterized by intense albite, carbonate and chlorite alteration, with a halo of biotite/pyrite alteration.

Mining

Beta Hunt is owner operated using conventional underground mining methods. 

Milling

All processing is conducted under tolling contracts with local processing plants.

Nickel mineralization is trucked 3km to the BHP Billiton Ltd. (BHPB) concentrator in Kambalda. Concentrate is treated at the BHPB Kalgoorlie smelter. Gold mineralization is trucked to the FMR Investments Pty Ltd mill for processing.

Table 1  Beta Hunt Nickel Mineral Resources as at 1st February 20161,2,3,5

Nickel

Classification

Inventory

(kt)

Grade

(Ni %)

Contained Metal

Nickel Tonnes (NiTs)

>=1% Ni

Measured

96

4.6

5,550

Indicated

283

4.0

13,620

Total

379

4.42

15,840

Inferred

216

3.4

7,400

 Table 2  Beta Hunt Gold Mineral Resources as at 1st February 20161,2,4,5,

 

Gold

Classification

Inventory

(kt)

Grade

(Au g/t)

Contained Metal

(Ounces)

>=1.8 g/t Au

Measured

0

0.0

0

Indicated

815

3.5

92,000

Total

815

3.5

92,000

Inferred

2,910

3.4

321,000

1.    Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.
2.    The Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is also no certainty that Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves once economic considerations are applied. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding 
3.    Nickel Mineral Resources are reported using a 1% Ni cut-off grade
4.    Gold Mineral Resources are reported using a 1.8 g/t Au cut-off grade
5.    Mineral Resources described here has been prepared by Elizabeth Haren, MAusIMM CPGeo, of Haren Consulting Pty Ltd. 

Financing and Royalties

Existing royalty obligations for SLM at Beta Hunt are (i) Consolidated Minerals, 3% (at a nickel price under A$17,500/t) or 5% (at a nickel price of A$17,500 or greater) until total royalty payments reach A$16 million; (ii) Western Australian state government, 2.5% in respect of gold and nickel; (iii) St Ives Gold Mining Company Pty Limited, 1% in respect of nickel and 6% in respect of gold; and (iv) Resource Income Fund LP, 0.5% in respect of nickel and 1.5% in respect of gold.

SLM has in place a US$16.5 million senior secured gold loan and US$6.5 million working capital facilities with Auramet International LLC (“Auramet”). The senior secured gold loan will be repaid by the delivery of 16,800 gold ounces over a thirty month period commencing on February 28, 2017 (560 ounces per month). The US$6.5 million in working capital facilities are comprised of a US$5.5 million in-process gold facility and a US$1.0 million in-process nickel facility. These facilities bear interest at a rate of LIBOR plus 4.5% per annum, and form part of agreements providing for the purchase by Auramet at market rates of all gold and nickel produced by the Beta Hunt mine during the term of the senior secured gold loan.

 

Download - Beta Hunt Mine - Preliminary Economic Assessment