Persistence pays off as mining's big cheese unveiled
Neil WatkinsonKalgoorlie Miner
Sun, 8 December 2019 8:40AM
Camera IconGruyere's processing plant. Credit: Neil Watkinson
Those involved in creating the $621 million Gruyere gold mine are holding up the development as a shining example of not only what is possible in remote WA in terms of discovering and generating new wealth, but also in sharing the benefits with the local Aboriginal community.
The mine, which sits in a landscape of tree-dotted sand dunes about 200km east of Laverton in the Great Victoria Desert, was officially opened on Tuesday by the two companies which operate it as a joint venture: Perth junior explorer-turned-mid-tier producer Gold Road Resources, and South African multinational Gold Fields.
It is the one of the largest gold mines built in the world during the past decade, and the biggest operation to open in WA since AngloGold Ashanti and Independence Group's Tropicana joint venture 330km north-east of Kalgoorlie-Boulder in 2013.
The ceremony took place in the capacious dining room at the mine's accommodation village, which sits a few kilometres from the mine itself and next to the airport-grade runway which can accommodate commercial passenger jets.
The three key speakers who outlined the vision of Gruyere were Gold Road chairman Tim Netscher, Gold Fields chairwoman Cheryl Carolus, and Yilka Talintji Aboriginal Corporation chairman Harvey Murray, also known as "HM".
The mine sits on the land of the Yilka native title group, centred on the community of Cosmo Newbery, about 70km to the west.
Mr Netscher said the mine had a "special relationship" with the Yilka people "of which I am personally very proud". He said soon after the Gruyere discovery was made, he remembered HM and Gold Road managing director Ian Murray tramping the vast land, "building trust and respect and allowing us to learn about all the things that are important to the Yilka people".
"A major personal priority for me is to have all those Yilka people who want to work here employed here, and I believe that we are very close to achieving this goal," he said.
Ms Carolus outlined what this meant in concrete terms.
"To date, four key contracts have been awarded to indigenous enterprises, focused on major plant, minor plant, labour hire and cleaning services," she said.
"Gruyere is the first operating mine on Yilka country, so this will, I am sure, create a positive stepping stone for future ventures to come."
Mr Netscher described how the huge project started.
"If one casts one's mind back just a few years, this was just a dusty, semi-desert landscape being explored by our geologists," he said.
"They had been systematically exploring here for around 10 years, discovering the much smaller high-grade Central Bore deposit before the discovery of the world-class Gruyere deposit in 2013 and the declaration of a maiden resource of 3.84 million ounces of gold in 2014, which then led to the development which you see around you."
Mr Netscher paid tribute to the two "geological leaders" who were at the opening ceremony: Russell Davis and Ziggy Lubieniecki.
"It is thanks to you and your team's foresight and hard work that this remote, dusty landscape has been transformed into what we see here today," he said.
Harvey Murray recounted his own story of Mr Davis and Mr Lubieniecki.
He said Mr Davis would turn up in Cosmo Newbery "about once a year with a football and a basketball".
"This would go on for years ... I started to doubt them," he said.
But he said the pair had faith, and found something significant.
"I thank you for your persistence," he said. Speaking about the relationship which had been built between the Yilka and the gold-mining companies, Mr Murray said: "We give to you, you give to us.
"This is how Aboriginal culture works ... We share with you our land and culture, and you must share your profits, employment and training."
Ms Carolus, who grew up in apartheid-era South Africa and was involved in the political struggle against the institutional system of racial segregation before rising in the ranks of the Nelson Mandela-led African National Congress in the post-apartheid era, said the company was not a short-term player in WA's mining scene.
She said Gold Fields had invested $80 million in its near-mine exploration program during the past five years, which had made the company one of the top mining investors in the State.
Ms Carolus said this program meant mines such as Gruyere and St Ives near Kambalda would be around for years to come.
"When we acquired our St Ives mine in 2001, for example, it had a life of mine of around three years," she said.
"Almost 20 years later it still has a three-year life or so and is going strong — thanks largely to our continued investment in near-mine exploration."
Mr Netscher noted the joint venture with Gold Fields was the key to properly funding the development and construction of the mine.
Gold Fields paid $350 million in 2016 for its 50 per cent stake, and Mr Netscher said the joint venture allowed Gold Road, then a junior mining company, to have the funds to do all the work needed to deliver a large-scale project, such as proper project design and construction, all associated grade control drilling, and metallurgical test work "without the need to undertake dilutionary capital raisings".
"In this modern world, for a company like Gold Road, it is simply not possible to build a project of this scale by going it alone," he said.
The official opening also involved a tour of the mine, comprising an open pit and the associated processing plant. The digging of the open pit began in November last year, and will be made progressively bigger and deeper as the mining operation goes on.
The mine is powered by a 45MW gas-fired power station, with the gas coming from a new 198km spur off the Eastern Goldfields Pipeline.
The workforce is more than 250-strong, with 700 workers needed during the construction phase.
The operation, which is remote from the Goldfields' main towns, is fly-in, fly-out, with workers brought in from Perth, landing at the runway next to the 648-room accommodation village.
The runway is no ramshackle remote bush affair, but good enough for commercial jets to take-off and land, just as they do at Kalgoorlie-Boulder, Perth and any other modern airport.
The first bullion — 1139oz worth $2.2 million — was poured at the end of June, and Gruyere is expected to produce between 75,000oz and 100,000oz in the 2019 calendar year, and then 300,000oz annually for a minimum of 12 years at an average all-in sustaining cost of $1025/oz.