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South Australian Minerals andEnergy Resources Overview
10th GMUSG / SACOME Annual ResourcesIndustry Conference & Trade Expo
Whyalla 3 September 2014
Dr Paul HeithersayDeputy Chief Executive
Resources and Energy
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South Australias Major Minesand Resource Projects
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South Australian Resources Industry Indicators
Petroleum ($531.3m) and Minerals ($116.3m)
$647.6 million EXPLORATION EXPENDITURE -2013/14
~$30 billion of potential capital for Minerals and Energyprojects in the Major Developments Directory RECORD HIGH
$1.8 billion new CAPITAL EXPENDITURE 12mth to June 2014
Minerals ($5.4 b) and Petroleum ($1.6 b) RECORD HIGH
$7.0 billion resources PRODUCTION - 2013
Minerals ($4.6 b) and Petroleum ($0.2 b) RECORD HIGH 39% of South Australias total exports ($12.4 b)
$4.8 billion EXPORTS 12mth to June 2014
Minerals ($157.4 m) and Petroleum ($133.9 m) RECORD HIGH
$291.3 million ROYALTIES 2013/14
more than double - 6,641 ten years ago RECORD HIGH
16,208 people EMPLOYED May 2014
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Exploration Expenditure
Minerals and Petroleum exploration expenditure 1998-99 to 2013-14
For 2013-14 was $647.6 million ($531.3m Petroleum and $116.3m Minerals)
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Source: ABS data cat. 8412.0 June 2014
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Onshore and Offshore Oil and Gas
ONSHORE COOPER EROMANGA BASINSThe Cooper-Eromanga basins represent a world class hydrocarbon province(Australias largest, most mature onshore basins for petroleum production) and hasbeen the centre of South Australia's exploration, development and productionactivities for 50+ years. Both the Western Flank oil play and several majorunconventional gas resource plays are, and will leverage on existing processing andtransport infrastructure connecting the basin nationally to major cities and LNG export
markets
ONSHORE OTWAY BASINOtway Basin contains both mature and immature conventional and unconventionaloil and gas plays, with high potential for further discoveries. The onshore area isregarded as the States second most prosperous petroleum basin
OFFSHORE BIGHT BASINThe Bight Basin is the largest, prospective but unexplored Cretaceous marine delta-play in the world. To date, most exploration drilling in the Bight Basin has focused onthe margins of the Ceduna and Duntroon Sub-basins. The BP Statoil Joint Venture isleading in exploration the offshore Bight Basin, with fast-followers Chevron, and theMurphy-Santos joint ventures
FRONTIER BASINSProspectivity is being explored in the Pedirka (including oil shows in the PoolowannaTrough), Officer and Arckaringa Basins
Emerging conventional and unconventional oil & gas boomSouth Australias history of oil and gas exploration extends back to 1866 with the first oil exploration in the Otway Basin. SouthAustralia has 14 petroleum basins (12 onshore, 1 offshore, 1 on-and-offshore), however currently only three are producingcommercial hydrocarbons
Source: Updated form of display from Invest in SA - Department of State Development
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Setting the Scene Oil and Gas
Parks with no petroleum exploration access
Officer Basin
Pedirka Basin
Cooper
Basin Arckaringa
Basin
Eromanga Basin
Arrowie
Basin
StansburyBasin
BightBasin
OtwayBasin
Petroleum exploration licence(Onshore: PEL Offshore EPP)Petroleum exploration licenceapplication (PELA)
Polda Basin
Moomba
Olympic
Dam Mine
SimpsonBasin
200 km
Gas pipelineGas and liquids pipelineOil pipeline
Acreage release blocks bids close 29 May 2014
Selected mine
Four Cooper CO2013 bid roundblocks offered versus aggregate $103million bids
Western Flank oil play in the Cooper-Eromanga continues with 50+ percentsuccess in finding average 2.5 millionbarrels of oil
Encourage results from Otway Basinexploration
Bight Basin attracting the majors
massive investment Frontier basins plays include:
Conventional oil and gasUnconventional regional plays
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Roadmap for Unconventional Gas
Designed to inform industry strategies,government policies, and regulations to facilitateunconventional gas projects in ways that SAcommunities welcome.
Working groups of the Roundtable:1. Training;
2. Supply hubs, roads, rail and airstrips for theCooper-Eromanga basins;
3. Water use in the Cooper-Eromanga basins;
4. SA-Qld wharf to well corridors for the Cooper-Eromanga basins;
5. Cost effective, trustworthy GHG detection; and
6. Suppliers forum to boost local content
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Now under the auspices of the Roundtable for Oil and Gas Projects
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0
1
2
3
4
5
6
7
8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ B
i l l i o n
Copper Hematite Magnetite Gold Uranium Coal
Other Metallics Industrial Construction Gemstones Caroline 1 CO2 (well) Condensate
Crude Oil Ethane LPG Natural Gas
Mineral and Petroleum Production
Record
Production
Production by commodity 2000 2013In 2013 was $7 billion ($5.4b Minerals and $1.6b Petroleum)
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South Australian Mining Industry Dimensions
Mineral Tenements - July 2014
Mining Leases (MLs) 866 Extractive MLs (EMLs) 655 Private Mines (PMs) 235 Operating Mines 450 Major Operating Mines ~20 Opal Mining Claims 391 Advanced Mineral Projects ~30 Former Mines 3500
Commodities mined copper, gold, coal, iron ore, zinc, lead, silver, uranium,
heavy mineral sands Industrial Minerals - salt, silica sand, gypsum Extractives, dimension stone, opal & other gemstones
Mining Methods : open cut, underground, in-situ recovery
Processing Methods : flotation, carbon in pulp, crushing andscreening, cyanide leaching, ion exchange, magneticseparation, salt harvesting, solvent extraction Middleback Ranges iron ore operations (courtesy Arrium Mining)
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Olympic Dam - long life
Olympic Dam massive 910 year resourcelife - longest life core asset of global miningmajor, BHP Billiton
Contained resource:78 Mt copper, 2.5 Mt uranium oxide,100 Moz gold & 307 Moz silver
worlds largest uranium deposit worlds 4th largest copper deposit ~65% of Australias copper resources
Premiers Award for Excellence in SocialInclusion 2014
Prisoner reintegration employmentopportunities program
Archeological program with Aboriginalcommunities
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Resource Life - BHP Billitons core assets
Minister Koutsantonis (right) presentingaward to Darryl Cuzzubbo (BHP Billiton)
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Olympic Dam way forward
2013-14 production
184 400t copper, 3988t uranium oxide,121 335 oz gold, 972 000 oz silver
Technology studies proceeding
Lab scale leach testing continues
BHPB now considering on-site HeapLeach Demonstration trial (smallscale)
Applications referred to State andFederal Governments
If approved, construction tocommence July 2015, operation tocommence Oct 2016 for 3 year trial
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GEO-MEMBRANE LINED COPPER HEAP LEACH IN ARIZONA, USA
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Carrapateena positive PFS
OZMinerals announcement - 18 AugustPre-Feasibility study confirms Carrapateena is a
technically and financially viable project
Capital cost $2.985 billion 12.4 Mtpa block caving via 2 x 500m lifts producing copper-gold concentrate 114,000 tpa copper and 117,000 ozpa gold
low operating costs and a 24 year mine life
potential to use Prominent Hill concentrator base case demonstrates ore exported via Port
Adelaide - closer ports to be investigated next stage feasibility study and development
of exploration decline
Ore reserve:270Mt at 0.9 %Cu, 0.4 g/t Au, 4.5 g/t Ag= 2.5Mt Copper, 3.5Moz Gold & 39Moz Silver
Government of South AustraliaPACE co-funded discovery in 2005
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Arrium Mining Iron Ore
South Australia - birthplace of Australias iron ore production and is countryssecond largest producer
Arrium leads South Australian production; stepping up production from 3mtpa a decade ago to 11.6 mtpa in 2013/14
Export capacity boosted with expanded port capacity at Whyalla complete
with rail-loops - delivered on time and on budget Expansion continues through Middleback Ranges - Government case managers
and regulators working closely in Iron Knob area
Source: Photographs by Sean Kelly, courtesy of Arrium Mining
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Central Eyre Iron Project (CEIP)
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Central Eyre Iron Project (CEIP)
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Nyrstar Port Pirie Smelter Transformation
Source: Courtesy of Nyrstar
Slag FumingPlant
Precious MetalsRefinery
Lead Refinery
Sinter Plant
Blast Furnace
New Acid Plant
Oxygen EnrichedBath Smelting
Furnace
Zinc Plant
Copper Plant
Closed end of July. Zincoxide transferred toHobart from August2014 onwards
Change due to Redevelopment process
Advanced metal recovery and refining facility3-D snapshot of Redevelopment on completion
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Government Initiatives
Creation of new Department of State Development
Premiers Economic Priority 1 Unlocking the full potential of South Australias resources, energy andrenewable assets
The Regional Mining and Infrastructure Plan &
Resources Infrastructure Taskforce (RIT) within theOlympic Dam Taskforce
Nyrstar Pt Pirie Smelter Transformation Govt.guarantee to underpin the $514 million investment
PACE 2020 further $4 m to launch PACE Frontiers
New Core Library underway at Tonsley
Mining and Petroleum Services Centre ofExcellence ...
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Resources Infrastructure Taskforce (RIT)
The Regional Mining and Infrastructure Planlaunched by the Minister for Transport andInfrastructure 12 June 2014
Resources Infrastructure Taskforce (RIT) within theOlympic Dam Taskforce, jointly chaired by senior stafffrom the Department of State Development and DPTI
The RIT will guide development of rail, road, port,water and electricity infrastructure supportingexpansion of States resources and energy sectors
In 12 months development of a business case for a 1 st port solution supporting increased export of iron orefrom prospective mines in SA
Work closely with key private sector stakeholders
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Eyre Peninsula Land UseSupport Program (EPLUS)
The objectives of the program include:
Shared commitment to multiple land use
Build capacity of Eyre Peninsulacommunities, farming businesses andlocal industries
Provide tools and support to fullyunderstand and realise the opportunitiesfor agribusiness by workingcollaboratively with the explorers andmine developers
Knowledge and understanding forlandowners to effectively participate inthe land access negotiation process
http://www.pir.sa.gov.au/eplus
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Land Access CommunityEngagement Program
Resources & Energy GroupStakeholder EngagementFramework
Community LandholderWorkshops
Field Days
Premiers Community ExcellenceAwards in Mining and Energy
Local Government workshops
Booklets Understanding MineralExploration & UnderstandingDryland Farming
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Future Farm Landscape Workshops
Targetedworkshops to assistpotentiallyimpactedlandholders to
assess the overallimpact ofexploration andmining on theirsustainability andidentify theopportunities fortheir farmingbusiness
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Aboriginal Economic Participation
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Working to identify all known Aboriginal Businesses in SA
Developed a Business list of 66 Businesses so far, available on request
Building a business network and proposing they link through ICN
Agency Aboriginal EconomicParticipation Strategy
Encouraging Industry leaders tosupport Aboriginal EconomicParticipation through:
Supporting Small BusinessDirect Employment; and
Training and Development viaSkills for All
Further information contact JasonDowns at [email protected] or 0428 830 473
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WPA 166 ELs & 9 PELs
The Federal Parliament passed the
Defence Legislation Amendment(Woomera Prohibited Area) Bill 2014 on16 July 2014
Formally establishing an innovativecoexistence framework
Providing clarity and certainty in accessing
this world-class resources province
The WPA boundary will exclude the landknown as Section 400, placing its full careand control back to the Maralinga peoplewho are freehold landowners
Details of the permit system in the WPARules now available on the FederalRegister presentation forum inAdelaide planned
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Sample
Measure
Interp
Target
Drill
Greenfields Exploration Drilling
Current Practice Continual cycle over
many months
Delayed decisionmaking
Multiple drillingcampaigns
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Deep Exploration: Prospecting Drilling
Build out from initial targets using 5-10
km coiled tubing drilling array andresampling prior holes for consistentgeochemical data
Downhole & Lab-at-Rig tools definepetrophysics and geochemical halos real-
time Anomalies re-modelled and followed up
during same campaign
Targets based on broad bandwidth of
geophysical and geochemical datareduces false +ves and allowsrecognition of new deposit types
Start to map entire mineralising systemwith regional scale vector potential
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SA Mineral Systems Drilling Program
Funding ~$2M (PACE Frontiers)
Collaborative project involving DETCRC
Q1/Q2 2015 calendar year
Trial a new style of industrycollaboration
Aim Test geological questions in an
economic context
Test DET CRC technology in thefield
Test mineral systems mappingconcept
Test prospectivity indices
DET CRC / Boart Longyear diamond rig
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Cairn Hill
Jacinth-Ambrosia
Wilcherry Hill
Where to Drill ?
Emphasis is in the Olympic Cu-AuProvince and including the WPAbut other areas will beconsidered
GSSA Key areas of interest Coober Pedy Ridge Mt Woods Olympic Dam Region Southern margin Gawler Range
Volcanics Eastern Eyre Peninsula Yorke Peninsula
All proposed locationswill be considered
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Drilling Specifications
Regional drilling 5-10 km spacing Holes will be cored from surface
where practical
Diameter of drillholes will be largeenough to fit DET CRC probes
Preference for areas less than 500metres of cover (Max depth of1,200 m)
Areas with more than 1,000 m ofcover will be excluded
Minimum of 50 m of basementcore to be recovered
DET CRC drilling site at Brukunga
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Coiled Tubing Drill Rig
New coil tube rigdelivered to the DET CRCfor further in late 2013
Lab-at-RigTM Prototypedeployed during the Victorian regional drillingprogram in mid-2014
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Only 5 day period to apply
Follows the one monthmoratorium/publication period
Pre-defined assessment criteria are outlinedin Minerals Regulatory Guidelines MG17
Online application via SARIG is available
If multiple applications are received, validapplications will be assessed by an
assessment panel
Mineral Exploration Release Areas (ERAs)
New ground release process inSouth Australia
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Exploration opportunity
East Gairdner relinquished tenements area
Area of ~ 9000 km 2 subdivided into 10 separateExploration Release Areas (ERAs)
Mineral prospectivity: copper, gold, silver &
uranium Mineral potential:
IOCG style mineralisationEpithermal, porphyry and skarn style Ag, Au,Pb, Zn, Cu, Sn and uranium
Stratabound base and precious metalsUnconformity uraniumUnconformity related Cu, Ag, Co, Pb and Mnmineralisation
Applications open 6-10 October 2014
For further details visitwww.minerals.statedevelopment.sa.gov.au/east_gairdner_ERAs
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State-of-the-art training hub
The state-of-the-art TAFE SA traininghub at Regency Park was opened on28 August 2014
The $38.3 million Mining, Engineeringand Transport (MET) Centre will help
deliver training for the 25,000 newworkers projected required by mining,transport, defence, engineering andallied industries over the next fiveyears
The MET Centre consolidatesprograms delivered across severalcampuses in one centralised traininghub
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State Drill Core Library - Tonsley
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Free App for South Australia Mining Investors
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Disclaimer
The information contained in this presentation has been compiled by theDepartment of State Development and originates from a variety of sources.Although all reasonable care has been taken in the preparation and compilationof the information, it has been provided in good faith for general informationonly and does not purport to be a professional advice. No warranty, express orimplied, is given as to the completeness, correctness, accuracy, reliability or
currency of the materials.
The Department of State Development and the Crown in the right of the Stateof South Australia does not accept responsibility for and will not be held liableto any recipient of the information for any loss or damage however caused
(including negligence) which may be directly or indirectly suffered as aconsequence of use of these materials. The Department of State Developmentreserves the right to update, amend or supplement the information from timeto time at its discretion.
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