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Copper Country - Mount Isa, Queensland

Australia is estimated to have about 13% of the world’s economic resources of copper, the second largest behind Chile.

Castillo Copper Ltd - Copper Country - Mount Isa, Queensland
Mount Oxide is one of the Mt Isa district’s significant copper deposits

The base metal region of Mt Isa and Cloncurry are synonymous with world-class copper and zinc deposits. My first memory of this region was working with drillers who had a base in the Gunpowder mine in the early 1990s.

As a fresh graduate working in the Northern Territory, I kept hearing this name. Over the years, I learnt that this region is famous for great copper, zinc, lead and silver mines and later learnt the term IOCG (Iron Oxide Copper Gold mineral systems).

The region was made famous in 1923 by the discovery of a world-class copper lead zinc and silver deposit by John Campbell Miles. In his journey, he saw some yellow-black rocks that reminded him of the ore found in the Broken Hill mine.

This sparked the creation of Mount Isa Mines Limited which was founded to develop the mine. Production started in 1931. The famous company MIM crafted their decades of existence from this discovery.

Mount Isa Mines, showing the acid plant stack (white, far left), copper smelter stack (red & white stripes, middle stack) and lead smelter stack (right). (Source: Geomartin – Own work, CC BY 3.0)

Like many of these ‘isolated’ deposits, rail was the key and after years of lobbying, the Queensland government-backed the rail to the coast and this helped the fruits of what opened up this region. Similarly, in the west, it was the same lobbying by Lang Hancock and associates to the WA government that created the fortunes of the iron ore industry in the Pilbara region.

History of the region

Interestingly, this whole region may have never been developed. There is a good description I found in Wikipedia describing the lean years between 1924 to 1945. At one stage, the debt owed by MIM to creditors was £2.88 million. This was equal to 15% of all income tax paid in Australia in 1932. The ore was lucrative but if not for the Second World War and the need for copper in the war effort, the region may never have been developed. This reinforces that the market forces are crucial in any commodity play.

My recent interest in this area was born out of my interest in copper projects. Those that have read my writings over time would attest to my liking for the copper story. I have touched on copper several times in the following articles:

Mining in Queensland is known for lead, zinc and bauxite. It is the second-largest copper producer in Australia (Queensland Department of Natural Resources and Mines). The Mt Isa and Cloncurry mineral field is heaven for base-metal style mineralisation or a more scientific nomenclature, the IOCG style of mineralisation.

Figure 1: Queensland’s significant mineral mines, advanced mineral projects and new intersections (July 2017). (source: www.dnrm.qld.gov.au)

Copper in Australia

According to the Australian Department of Industry, copper is one of Australia’s top 10 commodity exports, worth about AUD$6 billion a year. Australia is estimated to have about 13% of the world’s economic resources of copper, the second largest behind Chile. It is interesting to note that this is higher than the traditional copper countries such as Peru, Mexico, the USA, Indonesia and China. This is largely due to the giant Olympic Dam deposit as 75% of the country’s copper comes from that one mine.

Figure 2: Australia’s major copper deposits based on total Identified Resources. (source: Geoscience Australia)

The other main copper region in Australia is in the Lachlan Fold Belt in New South Wales and the Mt. Isa region in Queensland. Away from all the traditional copper regions and armed with the discovery of a potential mine making mineralisation in Victoria, Stavely Minerals Ltd (ASX:SVY) is showing the world that there are copper belts in Australia that are still undiscovered. As you can see in Figure 2, the region Stavely is working does not even come up on the map. The eastern coast of Queensland has had some discoveries but I would not call it a 'copper-belt'.

We don’t hear of too many copper discoveries because it is expensive and like nickel sulphides, it is not simple exploration. The team at SVY have worked hard and endured many years of exploration but it appears they have found their “grail”.  Granted that they may still be distant from confirming a mineable resource, but they are in a pretty good position.

Another interesting development is the Nebo-Babel deposit that Cassini Resources Ltd (ASX:CZI) is working on in the Musgrave. That is developing a decent story.  Nebo-Babel is a nickel-sulphide story with copper and their scoping study is showing positive economic viability for a large, low-cost mine. The study estimates an average annual production of 20-25Kt of nickel and 25-30Kt of copper in concentrate.

Figure 3: Queensland’s new resources and mineral intersections map Modified from www.dnrm.qld.gov.au.

Not to be outdone, the NSW deposits of Cadia, Northparkes and Cobar are world-class deposits in their own right. However, there is no doubt that the concentration of copper deposits is glaringly obvious in the Mt Isa region. Figure 3 shows this region with numerous well-endowed copper mines/deposits. I compare the regionalised concentration of copper deposits to places like the Kalgoorlie goldfields or the Kambalda nickel region, or the copper-belt of Zambia … etc. The Mt Isa region has a base-metal history.

One cannot talk copper in Australia without mentioning the giant of giants, Olympic Dam. I made a mistake when it talked to Simon Paull from Castillo Copper when I mentioned copper regions and missed out the Zambian Belt. So, I am making sure I don’t do the same mistake twice.

Olympic Dam has been a long interest of mine as it is one big deposit with multiple economic metals (Cu, Uranium, Gold and Silver). The deposit has a global resource of 10GT @ 0.78% Cu, 0.33 g/t Au, 1.0g/t Ag, 0.25 kg/tonne U3O8, (as published in 2017). These are all world-class numbers in terms of tonnes of contained metal. As an exploration geologist, I continue to wonder if there are similar systems out there that could surpass or be equivalent to Olympic Dam. It seems that when the mineralising system decided to operate, it just concentrated within one 'mine'. What is interesting is that when you look at its neighbours, admittedly, far neighbours, you see other similar IOCG world-class deposits such as:

  • Prominent Hill – 283.4 Mt at 0.89% Cu, 0.81 g/t Au, 2.48 g/t Ag
  • Cairn Hill – 11.4 Mt at 49.5% Fe, 0.4% Cu, 0.1g/t Au
  • Carrapateena – 203 Mt at 1.31% Cu, 0.56 g/t Au, 0.27 kg/t U3O8, 6 g/t Ag.

As one can see in Figure 3, it seems that the mineralisation source in The Mt. Isa region is more scattered. Hence the lack of the 'super mine' such as Olympic Dam.  However, this also means that there are more chances of finding similar ore bodies.

Mount Isa ore bodies

(source: Wikipedia)

Mount Isa contains two separate orebodies: a stratigraphically lower lead-zinc-silver ore horizon and an upper copper ore. Both are contained within the Lower Proterozoic Urquhart Shale. The Urquhart is 1,000 metres thick and is a grey dolomitic shale with tuffaceous horizons. Near the ore horizons, the shale is pyritic. The ore bodies are on one limb of a plunging anticline and are extensively faulted. Figure 4 shows how the ore body separates the Pb-Zn and Cu sections. It gives a good view of the extent of the mineralisation.

Figure 4: A typical east-west cross-section showing the Urquhart shale sequence juxtaposed against the older Eastern Creek Volcanics under the Paroo Fault. Note the discrete nature of the copper and lead-zinc ore. (source: Geomechanical Modelling of the Mount Isa Copper Deposit – Predicting Mineralisation – Scientific Figure on ResearchGate. Available from: https://www.researchgate.net/figure/A-typical-east-west-cross-section-showing-the-Urquhart-shale-sequence-juxtaposed-against_fig1_273062699 [accessed 10 Jan, 2020])

The ore occurs as en-echelon bodies parallel to the shale bedding. Ore bodies may extend more than 1-kilometre along strike and three-fourths of a kilometre down dip. Thickness may reach 50 metres. The ores are considered to be syn-genetic with the host shale and interbedded volcanic material. In Figure 5 below, one can see a more schematic representation of the ore body.

Figure 5: Schematic cross-section of the Mt Isa Mine showing the anomalous east-dipping to subhorizontal fault contact controlling mineralisation. From Heinrich and others (1995) (source: www.researchgate.net)

Lead-zinc silver ore

The primary ore consists of galena, iron-rich sphalerite and tetrahedrite as ore minerals along with common accessories pyrite, pyrrhotite, quartz, carbonates and graphite. Minor arsenopyrite, marcasite, chalcopyrite, valleriite, proustite, polybasite and argentite also occur. Original surface oxidised ore contained cerussite, anglesite and pyromorphite. Silver and zinc were removed from the surface oxidised zone and were deposited as supergene ore at a depth above the primary ore.

Copper ore

Copper occurs in brecciated 'silica-dolomite' rock. Primary minerals are chalcopyrite, pyrrhotite and arsenopyrite. Minor amounts of cobaltite, marcasite, valleriite, chalcostibite, galena and others are reported.

The Gunpowder deposits

There are too many deposits to described but recent news by Castillo Copper Ltd (ASX:CCZ) and the Owen Hagarty led Capricorn Copper has sparked my interest in this region, especially the old Gunpowder deposits. These deposits sit approximately 125 kilometres northwest of Mt Isa. This region has a rich history of copper mines going back to the late 1800s when mineralisation was first discovered.

The discovery of the Mammoth and Esperanza deposits is the foundation of the Gunpowder region with production being first recorded in 1927. A resurgence in the area occurred in the late 1960s with the discovery of chalcocite ore approximately 66 metres below the surface at an area named Mammoth Extended (AUSIMM 98 – The Mining Cycle). The old Mt Oxide mine which was eventually operated by Perilya added to the focus of production in more recent times till their closure. The treatment of copper ores was in full swing in the 1970s. However, mining and closure of operations continued to fluctuate until recent times.

Figure 6: Exploration Potential within the Known Ore Bodies for Capricorn Mine. (source Capricorn Copper)

Capricorn Copper's recent acquisition of the Mammoth and Esperanza deposits (Figure 6) which is now renamed Capricorn appears to be creating some interest in the area. If you believe that copper pricing will rise with time, then these deposits are going to become highly profitable. Remember that these mines were being mined at >10% in the old days and geologically, that is a very good sign. Modern technological advances and a better understanding of the mineralisation will enhance these old projects.

The upside of this area and in many others we have covered is that mineralisation events are never local in nature. It is very rare to have one 'mine' isolated within the emplacement of the deposit.

Mount Oxide

Mount Oxide was discovered by Ernest Henry in 1882. Owing to the remote location, little production took place until the 1920s.

The main mining periods were 1927 to 1943 and 1955 to 1960, when the higher grade ore was worked by underground methods with access via an adit; and 1967 to 1971, when the lower-grade envelope and remnants of high-grade ore were bulk mined in an open-cut.

Underground mining produced 79,000 tonnes of ore (15.9% Cu) for a yield of 12,500 tonnes of copper, and some 355,000 tonnes of ore averaging 2.5% Cu were treated at the Gunpowder concentration plant in 1970–71. Leaching and precipitation operations from 1962 to 1965 and 1978 to 1982 periods yielded an additional 1,369 tonnes of copper.

Between the two world wars, a townsite existed on the site named Waggabundi (after the Waggabonga Aboriginal tribe). The abandoned townsite is about 1-kilometre south of the existing open pit.

Mount Oxide Mine is now classed as an abandoned mine site as there is no current mining lease or environmental authority in place.

Perilya website (www.perilya.com.au)

An 80% increase (announced on February 28, 2008) in the Mount Oxide mineral resource estimate to 203,000 tonnes of contained copper, together with the majority Indicated status of the resource, strengthens the project’s potential for development in the current strong copper market.

Mount Oxide has considerable potential as a low-cost near-term development project. Mount Oxide is  in a proven mineralised system in the highly prospective Mount Isa region and is part of Perilya’s 720-square-kilometre tenement holding in this area. It is close to existing infrastructure.

Within the project area, Mount Oxide mine produced 51,000 tonnes of secondary copper ore at a grade of 21% copper from an underground mining operation to a depth of 90 meters below the surface, prior to 1958. Between 1968 and 1971, an unknown quantity of ore was also extracted from an open pit at the mine.

The potential of the deposit was proven by previous shallow open cut mining and the resource is open at depth. Mount Oxide is 125 kilometres from an under-utilised processing facility and close to a major mining service town.

Perilya Limited’s latest increase in the mineral resource estimate for the Mount Oxide Copper and Cobalt Project in the Mt Isa region in Queensland is 17.9 million tonnes at an average grade of 1.3% copper for 224,000 tonnes of contained copper to only 450 metres vertical depth. This represents a 10% increase in contained copper compared to the previous mineral resource announced on February 19, 2008.

My thoughts

Looking for deposits is largely dependent on the approach and the skills of the management team. The reason for writing this article is to highlight the prospectivity of the myriad of regions that have been untested. Unlike the Kalgoorlie goldfields, the likelihood of finding an economic supergene gold deposit is pretty low as most of that would have been taken out in the 1980s. However, the likelihood of discovering a multi ounce gold deposit is still alive and well.

What is required is a good exploration team or capital acquisition team with steel balls for nerves and a good bank balance. Hence I have included the photo below which I took in July 2018 when I attended a Business Festival in Liverpool, UK. These guys were pitching their technology story and had this slide up. I think this quote from George Bernard Shaw depicts exactly what is required to discover mineral deposits.

What I am trying to highlight is that at a place like the Gunpowder region, where Castillo Copper is seeking exploration discoveries and Capricorn Copper is mining copper, is still highly viable for success. Look at the old copper mines, such as Mt Oxide, Mammoth and Esperenza. While doing research on this article, I read so much about the geology of the region dating back 100 years and also some current thoughts. The conclusion is that where you find mineralisation is where you find the deposit. It is that simple.

Some of the old reports mentioned that these mines were shipping out ores that were had greater than 10% copper grades. Now a simple thought would be that if the mine was generating that kind of grade, what else is still around in-ground.

One report (Blanchard, R, Significance of the Iron Oxide outcrop at Mount Oxide, Queensland, No 114, 1939) dating back to 1939 reported ores of up to 40% copper ore being shipped from Mt Oxide in 1912. Apparently, to the end of 1916, no ore less than 40% copper had been shipped. Apparently up to 1939, it was described that “ore as low as” 15.99% copper had been shipped and not made money.

The report went on to describe that hematite-specularite mass at Mount Oxide is not uncommon among well-known copper districts in Arizona, New Mexico and Nevada. Their presence can be regarded as short-range guides to ore because copper ore bodies commonly are associated with them and, if present, usually touche their peripheries at dome point. Whether this is still the case or not, the point is that this is a very well-endowed region and any historical information will go a long way to establishing new discoveries.

Disclosure:

I am a shareholder of Castillo Copper Ltd (ASX:CCZ). I have also previously done work for the company.

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Full interview: Castillo Copper historic data reveals up to 28.4% copper at...

Castillo Copper Ltd (ASX:CCZ) managing director Simon Paull updates Proactive on historic data that reveals up to 28.4% copper thus enhancing the exploration upside of the Mt Oxide pillar in the Mt Isa copper-belt of Queensland. The data from the Big One deposit will result in this area being...

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