Standout legacies of a giant pyrite deposit that yielded 8.4 million ounces of gold, 1.2Moz of silver, and 400,000t of copper over a century of mining up to 1980 were a mountain of ‘waste’ pyrite and an enduring acid mine drainage problem.

Mount Morgan is another site feted in industry circles for its geological significance and mineral-wealth endowment that is simultaneously held up by industry opponents as a symbol of what happens when operating licences are handed out with no social mandates.

James is one of the highly experienced Australian gold sector leaders who’ve run the proverbial ruler over a slew of projects in recent times.

Underground, openpit; high and low grade; by-product credits, or none. The Mount Morgan copper-gold tailings project is based on about 8Mt of tailings in four main dumps. It therefore presented some striking differences to most other projects, but one critical similarity.

“At the current gold price it works,” James told Mining Journal. “It ticks all the boxes.”

Carbine (ASX: CRB) acquired Mount Morgan from Norton Goldfields, a company that believed in the Queensland gold project but got completely preoccupied with the Paddington and surrounding gold assets in Western Australia before it became part of China’s Zijin Mining Group. 

Central to reviving Mount Morgan is a process flowsheet conceived under Carbine’s previous management that has copper and then pyrite separated out from the ore before it goes into a conventional gold leaching and elution circuit to enable much higher gold recoveries than previously envisaged. The process has been shown to be technically sound after multiple phases of testwork.

Carbine’s prefeasibility study pointed to a profitable, low-cost operation, costing about A$60 million (US$45 million), and producing 46,500oz gold-equivalent for eight years at forecast all-in sustaining costs of only US$234/oz (using a gold price of US$1,175/oz; copper at $5,100/t; pyrite at $60/t; and a 0.75 AUD/USD exchange rate). The importance of returns on high-grade pyrite sales (211,000tpa) and copper sulphate output is underlined by the PFS numbers that have pyrite worth about 70,000oz and copper sulphate some 30,000oz of gold of the 330,000oz resource base.

Carbine is currently waiting for final assays from extensive drilling to upgrade the resource as part of a definitive feasibility study due for completion this quarter. It hopes to be in production next year.

The company has a three-year offtake arrangement – in the form of an MoU – with Mauritius-based commodity trader Talana for Mount Morgan pyrite, and frequently cites First Quantum Minerals and its sales of sought-after pyrite from the Pyhäsalmi mine in Finland, mainly into China, for sulphuric acid production. China is a major market for the product and Pyhäsalmi, a substantial supplier, may only have 3-4 years of life in it.

Mount Morgan pyrite has the same high sulphur and iron content as Pyhäsalmi material, with low contaminants such as arsenic, antimony and mercury.

Retreating old mine tailings at Queensland’s “largest abandoned mine site” for fairly modest annual gold and copper production is not as sexy as building a substantial new underground mine in Western Australia, as James did at Higginsville with Avoca Resources, or starting up a major new openpit operation in Turkey, where he spent 18 months with Alacer Gold. Not for investors, nor seemingly for experienced mining and exploration executives looking for a new corporate launch pad.

James looked at the Carbine numbers a few times. He eventually came on board in April this year with Graham Brock, a veteran metallurgist, and exploration manager Chris Newman, a geologist who, like Brock, has had extensive previous working experience with James, a mining engineer who has managed and conducted due diligence on a number of high-profile mines in Australia and elsewhere.

Northern Star Resources director and experienced mining finance man John Fitzgerald also joined the Carbine board as non-executive chairman.

James says he kept going back to the prefeasibility numbers Carbine had prepared, and in particular the low production costs that have been whittled back further over the past 12 months.

“None of this is high-tech,” he said. “Everything in the flowsheet is off the shelf.

“GR Engineering [which did the process testwork and PFS] has built 4-5 plants for me in the past.

“It’s a simple, low-cost material handling operation with [smaller scale] trucks and shovels.”

Carbine this week upgraded the indicated resource at one of the four tailings dumps.

“The DFS at the moment is mainly waiting for the [other] resource upgrades, and that underpins the resource value in the ground. So we’re just waiting on assays from the drilling that’s been done to rebuild those models.

“We’re not expecting any surprises from that because it was essentially infill drilling.

“And there was some additional metallurgical testwork to be done [on drill samples] to make sure we got the spacing covered and the sample density correct. We’re effectively going through and crossing the ‘Ts’ and dotting the ‘Is’ with that sort of stuff.”

Carbine has been at pains to point out the Queensland Government “owns” the mine environmental legacy at Mount Morgan. It has no exposure to past problems.

But James said the company would continue to work very closely with the relevant authorities as it effectively reopened the Mount Morgan environment case file by restarting the operation. The chance to help address the acid mine drainage problems and reconnect mining and the local community – including the 3000-strong population at the historic adjacent town site in central Queensland – were other key milestones in James’ view of the future.

“When we pull this off, this is right up there [for me career-highlight-wise] because I think it’s a good story – from a community and also a mining industry point of view,” he said.

“Once we get this up and going it does two things. It helps fix the environmental legacy, and it also brings a new project into that region. What we can do by taking pyrite out of that environment is reduce the ongoing exposure that the mine has. Anything that we do helps from the base case where it is right now. Managing the water is obviously very important. Managing the pyrite there is very important.

“In my mind it’s just something that should happen. You work through all the issues and you get it going; work out what needs to be done and you make it happen.

“So this ticks a lot of boxes. It is a good social story too, and I think that’s very important.”