Lorena Mine Project. Preliminary Mine Plan - Water Supply

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1 Lorena Mine Project Preliminary Mine Plan - Water Supply Prepared for: Prepared by: September 2013

2 i TABLE OF CONTENTS Table of Contents... i 1 INTRODUCTION WATER DEMANDS WATER SOURCES Potable and Bulk Water Supply Surface Water Supply Groundwater Water Supply CONCLUSIONS RECOMMENDATIONS REFERENCES... 8 APPENDIX A: Groundwater Bore Locations LIST OF TABLES Table 2.1 Registered Groundwater Bores near Lorena... 5 LIST OF FIGURES Figure 1: General location of the LGP... 1 Figure 2: Flinders Catchment Basin... 3 Figure 3: Regional Groundwater Bore Locations... 5

3 BCD Resources NL Lorena Gold Mine 1 1 INTRODUCTION Lorena Gold Project (LGP) is within mining leases ML7147, ML90192, ML90193, ML90196, ML90195 and ML ML7147 was mined by prospectors consisting of a small open pit and toll treatment of the ore. LGP is located in northwest Queensland, approximately 15km east of Cloncurry and some 2km from the Flinders Motorway, near its junction with the Landsborough Highway, as can be seen in Figure 1 below. Contained in the leases are a gold deposit that comprises a resource of 203,200 tonnes at 8.7 g/t Au, for 56,700 ozs of gold at 2g/t cut-off. Further exploration is planned with the aim of identifying resources at depth towards a later underground mining operation. The mining project is relatively small and requires water supply and management infrastructure to suite, with a zero discharge philosophy. This report provides details on the conceptual mine plan water supply, which is based on obtaining make-up water from groundwater sources at a rate determined by a water balance. The water balance has modelled the surface and groundwater supply considerations in order to obtain estimated infrastructure requirements and related water management approaches. Additional details on the water balance model could be obtained from the Water Management report dated September Figure 1: General location of the LGP

4 BCD Resources NL Lorena Gold Mine 2 2 WATER DEMANDS Water demands for LGP processing is estimated to be 7 L/s or 220 ML/a for a 150,000 tpa flotation process, from where the concentrate will be transported to Tasmania to produce gold doré. Water demands for processing and other site activities were estimated to be as follows: Process water 600 m 3 /day or 25 m 3 /hr (including plant dust suppression) Potable maximum of 8.75 m 3 /day or 0.4 m 3 /hr Firewater 600 m 3 or 6 m 3 /hr for 5 hr (minimum 33.3 l/s) General Site Dust suppression 6.4 m 3 /day (not required on rainy days more than 5mm) Process water demand is based on metallurgical requirements provided by BCD, which was indicated to be in the order of 25 m 3 /hour or 600 m 3 /day and the water balance results that estimated an average of 176 m 3 /day additional make-up water to be sourced. The make-up water included the requirements for processing/milling, potable, fire water and dust suppression.

5 BCD Resources NL Lorena Gold Mine 3 3 WATER SOURCES The project site is located in the surface water management area of the Gulf Catchment and the Flinders basin as can be seen in Figure 2. Furthermore, the LGP lease is located in the Mount Isa groundwater management unit near the border of the Great Artesian Basin groundwater management unit. Lorena Mine Figure 2: Flinders Catchment Basin

6 BCD Resources NL Lorena Gold Mine Potable and Bulk Water Supply No potable or bulk water supply sources are available at the lease. No other sources could be identified, other than at Cloncurry 14km to the west of LGP. It has also been established that no potable or bulk water source are available at the Yuribi Rail Loading facility to the south or is planned for the new Multi User Rail Loading facility 7 km to the east of Cloncurry. Water supply from Cloncurry were not investigated as it is not a practical solution for a 2 year mining project. 3.2 Surface Water Supply An alternative to potable or bulk water supply, is to capture sufficient surface water runoff from the project area as a supplement water supply. Surface water runoff from a clean catchment, prior to placement of mine waste or undertaking other mining activities with the potential to contaminate the surface water, could be collected in a storm water dam and discharged over a spillway as clean water. However, it is not a reliable option as the project could be commissioned during a dry period and the current climatic conditions are some of the driest in history for regional Queensland. 3.3 Groundwater Water Supply An investigation into groundwater resources in the area was undertaken by Environmental Hydrologist Associates (2009) (EHA) to determine background groundwater resources and conditions as well as potential for groundwater supply for mining use. Further work was done by Environmental Earth Sciences in June 2013 (EES). During these investigations, 3 bores were identified having electrical conductivity data, as follows: Bore number 2737 interpreted to tap the Staveley Formation / Marimo Slate with an electrical conductivity of 1,050 µs/cm in April 1967; Bore number interpreted to tap the Corella Beds with an electrical conductivity of 334 µs/cm in July 2004; and Bore number interpreted to tap the Corella Beds with an electrical conductivity of 167 µs/cm in July EHA also conducted a field visit of eight bores and one exploration bore located in the vicinity of the LGP, as can be seen in Figure 3. Inspection on the various bores found that most of the bores have a pump installed, although only one pumping rate of 2.1 L/s could be obtained. The EHA study also referenced a limited hydraulic testing program undertaken for the former Department of Main Roads (DMR), which indicated a preliminary pumping rate in the order of 3.1 L/s. EHA calculated from this pumping rate a general (albeit limited) impression of yields from local aquifers. EES identified the same bores as EHA which are provided in the Table 2.1 below:

7 BCD Resources NL Lorena Gold Mine 5 Table 2.1 Registered Groundwater Bores near Lorena Bore number Date drilled Easting/Northing (Z54) Aquifer depth (mbgl) Aquifer lithology SWL (mbgl) Yield (L/s) Salinity (µs/cm) / /04/ / Naraku Granite Potable /01/ / /06/ / , Toole Creek /06/ / Volcanics (fractured , /06/ / rhyolite/ diorite) 9 3 1,560 Discussions with BHP Billiton indicated that the Yuribi Rail Loading facility water supply does not rely on groundwater from the area due to being unreliable. Adequate make-up water supply is expected to be obtained from a network of bores drilled into the Corella Beds. Figure 3: Regional Groundwater Bore Locations

8 BCD Resources NL Lorena Gold Mine 6 EES made the following recommendations for undertaking a groundwater prospecting drilling program. Drilling and subsequent bore screening should ideally be undertaken across the entire thickness of the aquifer to maximise water production in the fractured rock units, or at discrete intervals as determined by air-lift yield testing. Geological formations to be targeted are likely to be the Corella Beds (brecciated calcareous metasediments) and the Toole Creek Volcanics (metamorphosed sediments). Given the likely yields of 2-3 L/s and potentially up to 6 L/s, 4-6 production bores are likely to be necessary to achieve a sustainable pumping rate required of 7 L/s with a good degree of security. It is recommended that sites be targeted as close as possible to the site infrastructure, but individual bores be separated within the mining leases to account for potential low storage capacity of the aquifers being targeted (say 500m apart, if possible). Sites close to significant local streams (i.e. Fisher Creek and Pumpkin Gully) should be preferred to enhance the potential recharge from the streams during the wet season. Lorena mine site has been using a bore on-site at a pumping rate of 2 l/s, which has water at a depth of 20m. Location for existing and proposed groundwater supply bore can be found in Appendix A. It is envisaged that this groundwater bore will be used during the LGP and supplemented with additional new bores 500m away. Potentially this bore could also be used to harvest water ahead of the project, which could be stored in some of the existing site dams or new tanks if the integrity of the dams are not adequate. Bore locations and access routes in Appendix A, were included in the cultural heritage survey conducted by Aboriginal Cultural Heritage Assessment, Archaeo Cultural heritage Services (Jul 2013). The routes and pads were marked out during the survey and the installation of the bores should be done before the markings are lost.

9 BCD Resources NL Lorena Gold Mine 7 4 CONCLUSIONS It has been concluded that the groundwater supply option will be the most practicable and will be supplemented by surface water runoff captured in the water management dams. During the water supply investigation it has been established that no domestic or bulk water supply source are available in the LGP area. The existing groundwater bore, could be used ahead of the project to harvest a water supply and stored in one of the existing site dams. The groundwater supply option will therefore be required to supply full plant water demand of 25 m 3 /hour and based on the water balance model an average of 176 m 3 /day. 5 RECOMMENDATIONS New groundwater bores are to be installed by a licensed groundwater bore driller before the route and pad markings are lost. It is recommended that a pumping test is conducted on the existing site bores to obtain more reliable pumping rate data. The integrity of the existing dams are to be investigated as a potential to store harvested water. Other groundwater supply bore locations are to be selected and a drilling programme undertaken. Pumping tests are also to be undertaken at the same time to ensure that an adequate groundwater supply will be establishes.

10 BCD Resources NL Lorena Gold Mine 8 6 REFERENCES Groundwater resources study, Environmental Hydrologist Associates (2009) BHP Cannington, Environment Manager Southern Gulf Catchments, Website Environmental Earth Sciences, Desktop assessment including Bore field and Production Bore design for the Lorena Gold Project, Cloncurry, Queensland (June 2013)

11 APPENDIX A Groundwater Bore Location

12 TMRC004 LEGEND SURFACE WATER LOCATION GROUNDWATER BORE LOCATIONS REFERENCE SAMPLING LOCATIONS LMDD93 LMRC83 CATEGORY B ENVIRONMENTALLY SENSITIVE AREA NOTE: GW - DENOTES GROUNDWATER SW - DENOTES SURFACE WATER FIGURE 20 - WATER SAMPLING AND GROUNDWATER SUPPLY LOCATION PLAN SCALE 1: m 1:10,000 Integrated Geotechnical Engineering Services Specialists in Unsaturated Zone Hydrology and Mine Closure