Micon is Independent Engineer on behalf of the senior lenders to the Hemerdon tungsten project, led by ING Bank, and conducts regular site visits to monitor construction and development. The Hemerdon project is located in Devon in southwest England, approximately seven miles northeast of Plymouth. The rural site is served by extensive infrastructure and Imerys Minerals extracts china clay from an operation approximately three kilometres to the north.
The deposit is hosted within the Hemerdon Granite that forms a cupola southwest of the Dartmoor Granite. Tungsten-tin mineralization results from greisenization and tourmalinization of the granite by high temperature magmatic fluids and is contained in a stockwork bearing wolframite and cassiterite with minor sulphides. The stockwork has a strike length of at least 600 metres trending north-northeast to south-southwest and persists to 400 metres below surface. There are three main vein sets with widths varying from 0.5 centimetres to 20 centimetres, with an average of approximately 1.5 centimetres. Greisen borders are often 5-10 times the width of the quartz vein. At surface, the granite is intensely kaolinized but becomes increasingly competent with depth and there is a distinction between Soft Granite and Hard Granite ore.
The deposit was discovered in 1867 and was mined for short periods during the First and Second World Wars. In 1976, the property was acquired by Hemerdon Mining and Smelting Limited which brought in AMAX Inc. as a joint venture partner. AMAX performed extensive work and completed a feasibility study in 1982. Planning permission was received 1986 but the project did not proceed due to low tungsten prices. Wolf Minerals Ltd., an Australian company, acquired the project in December, 2007 and issued a definitive feasibility study in May, 2011.
The lease, signed on 10 February, 2014 with the landowners, is valid for 40 years and Devon County Council grants Planning Permission as the Mineral Planning Authority. The 1986 planning permission granted to AMAX remains valid, although some of the changed design elements, including the plant layout, reduction kiln and surface water ponds required new planning permission. Various additional environmental permits were required and the Mine Waste Facility Environmental Permit was received in December, 2013.
AMAX conducted over 25,400 metres of diamond core, reverse circulation and air-flush percussion drilling between 1976 and 1981, and Wolf conducted additional drilling in 2008. The company reports granite domain measured and indicated resources of 58.63 million tonnes at 0.17% WO3 and 0.02% Sn with proven and probable reserves of 26.7 million tonnes at 0.148% WO3 and 0.028% Sn, using a cut-off grade of 0.05% W or 0.063% WO3. Conversion of resources to reserves is likely to extend the mine life.
A 3 million tonne per year operation is planned for a 10-year mine life with six months of pre-production, with an open pit and conventional drill, blast, load and haul mining. The soft kaolinized upper layer will require only limited blasting.
CA Blackwell was appointed as the mining contractor in March, 2013. Phase 1 work includes start-up operations, stripping, road construction and the starter dam and Phase 2 the on-going mine production, using a fleet of excavators, dump trucks and haul trucks. A standard drill and blast scheme on 5-metre benches will be utilized.
Wolf conducted a program for the 2011 definitive feasibility study to validate, confirm and complete the original AMAX testwork. The processing plant is designed for 500 tonnes per hour and includes two-stage crushing, scrubbing, sizing and tertiary crushing. Coarse material passes to a two-stage dense media separation circuit and fine material, after desliming, passes to conventional spirals and tables circuits. Combined gravity concentrates are reground, then processed via flotation, roasting, and low and high intensity magnetic separation to produce separate tin and tungsten concentrates. The flotation stage removes arsenic as sulphides and roasting converts hematite to magnetite for subsequent removal by magnetic separation. The final high intensity magnetic separation stage separates the magnetic wolframite from non-magnetic cassiterite. Off-take contracts have been agreed for both concentrates.
Tailings and waste produced includes mine waste, process plant tailings slurry and dense media separation coarse sands, all of which are stored in a single dedicated mine waste facility.
Infrastructure requirements include water supply and run-off control, power supply, the mine access road and various site buildings. GRES was selected for the EPC contract for the process plant and infrastructure (valued at £75 million) and site works commenced in February, 2014. First production is planned for the third quarter of 2015.
As designed by GRES, 26.7 million tonnes of ore will be processed over 10 years (2015 — 2024) at the annual rate of 3 million tonnes for a wolframite recovery of approximately 66%. Annual metal production will be approximately 3,450 tonnes WO3 equivalent and 460 tonnes of tin in the two concentrates. The life of mine C1 cash cost is approximately US$109 per metric tonne unit (10 kilograms of a 65% WO3 concentrate). The price for 65% WO3 concentrate is tracked by the price for APT (ammonium paratungstate) and is forecast to increase and achieve US$550 per metric tonne unit from 2019 onwards.
The total project cost is approximately £175 million including around £132 million in initial capital costs. A US$75 million bridging facility was secured to finance the early stages of development and was repaid with the proceeds from a £99.2 million placement. The senior debt facility is for £75 million. A project rehabilitation bond was agreed with the Hemerdon Mine Association and Devon County Council and, in addition, a separate bond (or financial provision) was provided for the mine