One of the highest grade gold deposits in Australia’s recent gold producing history, the Tick Hill Gold Project near Mount Isa, Queensland is seen having significant potential to generate near-term cashflow.

Introduction

Diatreme Resources is progressing the project under a Joint Venture Agreement with Superior Resources Limited signed in 2015.

A scoping study conducted by an independent consultant in 2016 showed the potential of a standalone operation processing an identified tailings resource.

Additional metallurgical testwork is required to allow detailed design of a process flowsheet, determination of capital and operating costs, and the development of a financial model to further assess the project’s economic potential.

Overview

The Tick Hill Gold Project comprises three granted Mining Lease No’s 7094, 7096 and 7097 (totalling 390ha). The Tick Hill Gold Deposit was mined between 1991 and 1995 by Carpentaria Gold Pty Ltd (a subsidiary of MIM Holdings Limited) for the production of 513,333 ounces of gold from 705,000 tonnes of ore at a recovered grade of 22.6 g/t gold (source: MIM – Annual Reports). This makes it one of the highest-grade gold deposits in Australia’s recent gold producing history.

The transfer of the three ML’s to Diatreme Resources was confirmed by the Department in March 2015, triggering the commencement of the DRX Farm-In and Joint Venture Agreement with Superior Resources Limited (ASX:SPQ) over the Tick Hill Gold Project.

Under the Joint Venture Agreement, Superior Resources has the right to earn a 50% interest in the project by:

  • Completing $750,000 of exploration expenditure;
  • Making a payment to DRX of $100,000; and
  • Lodging 50% of the Queensland Government security bond on the tenements.

Exploration and assessment of the surface material within the leases (including alluvials, tailings and waste dumps) is to be conducted as a joint operation, with each party contributing 50% of the costs.

The Tick Hill Gold Mine operated from August 1991 through to March 1995, with commissioning of the site processing plant in December 1991.

The plant comprised crushing and milling circuits delivering a product with a p80 of 70μm to a CIL circuit. Tailings were discharged into a tailings dam comprising two paddocks of a “turkeys nest” construction in which a perimeter embankment with a clay core retains tailings. Wall heights range from 6m to 10.5m. Since decommissioning the surface has been capped and both the surface and batters seeded, with good vegetation cover now present.

The total reported production for the Tick Hill Gold Mine was 705,000t at 22.6 g/t Au for 15,900kg Au at 97% gold recovery. Some high grade open pit ore was mined and transported to the Carpentaria Gold operations at Ravenswood to provide early cash flow to the project, this has been estimated at 20,000t based on the reported 19,000oz produced at Ravenswood in the 1991/1992 financial year (with head grades for that year of 30.2 g/t Au). This suggests that approximately 685,000t of tailings remain on site, with an estimated grade of around 0.7 g/t Au.

Mineral Resource

In January 2016, Diatreme announced a maiden Mineral Resource estimate for tailings material located within the rehabilitated tailings dam at Tick Hill (refer ASX announcement 19 January 2016). The Indicated Resource is estimated at 630kt at 1.08 g/t Au (at 0.5 g/t Au cut-off) containing 680kg (22,000 troy ounces) of gold.

In March 2016, Diatreme announced that a scoping study completed by an independent external consultant (Metcor) had confirmed the viability of a standalone operation processing the identified tailings resource. Tick Hill has the potential for a 20-month operation processing the tailings via regrinding and a standard CIP/CIL circuit.

Metallurgical studies were undertaken to help determine the optimal grain size required to balance leach extraction rates with energy requirements for regrinding of the tailings. The cyanide leach testwork showed that gold extraction increases with increasingly finer grind size, but gold extraction of ~90% or higher can be achieved at grind sizes of around P80 35 μm and finer.

Ultra-fine grinding testwork utilising an IsamillTM was conducted to determine the likely energy requirements, with results reported slightly higher than parameters used in the Scoping Study, but further work is required to generate data suitable for use in feasibility studies.

Additional metallurgical testwork is required to allow detailed design of a process flowsheet, determination of capital and operating costs, and development of a financial model to further assess the economic potential for mining and processing of the tailings material.

Tick hill mineral diagram

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