Phillips River

Phillips River's flagship project, Phillips River, is located 20 kilometres south east of Ravensthorpe in southern Western Australia. The Company has a strong track record as a producer in the region, having successfully mined in excess of 16,000 tonnes of nickel metal from its RAV 8 mine until the reserve was exhausted.

Phillips River

Located on the south coast of Western Australia, the Phillips River Project (PRP) is between Hopetoun and Ravensthorpe, 180km’s due west of the sea port of Esperance. PRP includes two areas of mineralisation, the polymetallic Trilogy deposit and the gold / copper deposits of Kundip comprising Flag, Kaolin and Harbour view.

On February 11, 2011 the Company announced the completion of the DFS for the PRP.  The headline numbers for the DFS are

• $1Billion in revenue over 10 years through the sale of gold, copper concentrates and lead/zinc concentrates
• NPV of $72M , pre-tax IRR 26%, payback year 5
• 80% of revenue from copper and gold production

The project commences with the mining of the polymetallic Trilogy ore via open pit then transitioning to underground for the last year of Trilogy production. Subsequently, mining commences at the gold /copper Kundip deposits in the later half of the project. Kundip is located ~11km north of Trilogy.

Mining Schedule

The life of the project is expected to extend beyond the current Reserve of 10 years. The leases held by the Company have demonstrated to be highly prospective and strategic exploration programs proposed over the life of the project are expected to yield significant additions to the current Reserve.

Both the Trilogy and Kundip open pits and Trilogy underground will be mined under conventional contract arrangement with experienced Australian contractors. The underground mines at Kundip will be managed and operated by the Company. No major earthmoving plant will need to be purchased for the initial stages of the project.  The ore at Trilogy is close to surface. As such, no significant pre-strip will be required to enable the project to move into production. A pre-production phase will however be required for the earthworks to construct various installations such as the integrated waste landform and the water storage facility.

The mineralisation at both Trilogy and Kundip displays oxide, transitional and sulphide components, each requiring a similar process route but with slight modifications to optimise recovery. The level of base metal endowment in each category determines whether treatment is by flotation and leaching or leaching only.

The Trilogy process plant will use gravity, floatation and leach processes to create a variety of saleable products. Gold/silver Dore generated from the gravity and leach processes will be sold on the domestic market whereas, the concentrates produced by floatation will be containerised and transported by road to the Esperance port where they will be shipped to Asia markets.

The estimated Capital required is AUD$145M with a large portion directed to establish the Trilogy based processing facility.  Trilogy plant design is the corner stone of the Company’s regional strategy and has a capacity of between 800ktp and 1.1mtpa depending on ore type.  The plant is capable of accepting gold ores, copper ores and polymetallic copper/gold/silver/lead/zinc ores. The flexibility of the plant means that it is highly likely that any ore discovered in other areas of the Company’s substantial and prospective portfolio of tenements will be compatible feed for the Trilogy plant.