Mining could be set to return to Bendigo with the resumption of activities at the Kangaroo Flat mine appearing imminent.
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The Bendigo Advertiser understands the state government is poised to make a decision on the transfer of mining and exploration licences from Unity Mining to GBM Gold.
GBM chief executive officer John Harrison said the Bendigo-based company was ready to start mining as soon as approval was granted.
Mr Harrison said GBM would be looking to hire operators over coming months as the company – which currently employs seven people – expanded to meet production.
But he was keen to keep expectations under check after the spectacular collapse of the Unity mine, which was mothballed in 2011, six years and more than $350 million after it was opened with expectations of producing 600,000 ounces of gold per annum.
In 2010 it produced less than 37,000 ounces.
Last September GBM purchased the gold plant, equipment and facilities, including tenements, buildings and freehold land for $100,000.
“I wouldn’t expect we’ll be going underground before 2020,” Mr Harrison said.
Instead, GBM will retrieve gold from piles of crushed ore on the site – and is hoping to do the same on tailing dumps around the city. It will begin with 425,000 tonnes of sand on the site, which it believes contain 7000oz of gold.
“We are starting small and building up – and one of the first things we have to do is build up trust with the community,” Mr Harrison said.
The finely crushed ore is contained in two, eight-metre deep “sands dams” which cover seven hectares at the Kangaroo Flat mine.
“Unity’s operation was focused on the easily-captured gold,” Mr Harrison said. “They got about 90 per cent of the gold from the crushed ore.”
The rest, which wasn’t captured, was dumped along with the crushed ore into the sand piles. Mr Harrison said improved technology and practices had made obtaining that gold viable.
“We see it as a two year job,” he said.
Mr Harrison said the process amounted to “an environmental clean-up,” with the sand being sold on to make concrete.
The CEO said GBM expected to hire another eight people this year as operations ramped up, to be steadily increased over time.
The next phase of growth would see the company move onto tailing heaps around the city. This would require further approvals, which Mr Harrison expected could take up to 12 months.
Mr Harrison said that process would clear land for the city’s growth, citing the example of the Ashleigh Street Hockey Complex, which was built on reclaimed land.
Once underway, he said that second phase could continue for five years.
Profits from the early projects would be reinvested toward expanding the company to its ultimate goal – resumption of underground mining.
But in order to do that, GBM would first have to remove water which has risen through the mine since Unity switched off its groundwater pumps in early 2012.
Prior to that, the groundwater – laced with hydrogen sulphide, arsenic, dissolved salts and other metals – was pumped into evaporation ponds at Woodvale.
The state government is currently seeking approval for construction of a $1.3 million brine lagoon as a temporary fix to the problem of groundwater rising through the network of abandoned and disused mines beneath the city.
The Kangaroo Flat mine spans 18-kilometres under ground, going to a depth of about one-kilometre.
The site’s caretaker, Peter Panozzo, worked for Unity while the mine was operational and will join GBM once it begins mining. He said the mine stretched below city landmarks like St John of God Hospital, the police station and the Quarry Hill golf course on its way to Eaglehawk.
“A lot of people didn’t realise that mining was happening right underneath… until you drove them in a Land Cruiser through a tunnel for 11km and parked it just below their office,” he said.
