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Mutooroo Copper-Cobalt Project

Summary

Mutooroo is a lode-style massive sulphide deposit located in South Australia about 60 km west of Broken Hill that contains economic grades of copper and cobalt. Metallurgical studies indicate that roasting of the sulphide ore followed by leaching of the calcine is the best means of extracting the copper and cobalt. An efficient roasting plant would be capable of producing products worth more than US $400 / tonne of processed ore, that include sulphuric acid, copper, cobalt, iron ore and electricity.

History

The Mutooroo copper mine was worked in the period between 1887-1914, with reported production of some 6,000 tonnes of mostly hand-picked oxidised material, including 2,557 tonnes of 6.58% copper and a parcel of 218 tonnes of 19.3% copper.

More than 30 diamond drillholes were completed by Broken Hill South in the 1970s into the deeper sulphide bearing portion of the lode zone resulting in a sulphide copper resource estimate of 8.7 million tonnes of 1.9% copper. This historic resource figure may not comply with current JORC reporting standards, but is considered to be reliable in light of the number of diamond drillholes that it is based on.

Since that time the prospect had lain largely dormant until Havilah commenced exploration in 2005. Havilah’s initial objective was to drill the largely untested top 200 metres of the lode system for an open pit deposit.

Geology

The copper mineralisation is hosted by a major, roughly north-northeast trending shear zone that can be traced on the surface for over 2 kilometres.

The target lode dips roughly 45-50 degrees west and is predominantly composed of coarse-grained pyrrhotite, pyrite (containing cobalt), chalcopyrite (containing copper) and quartz. In detail, the sulphide lode system is complex, consisting of a main lode and various footwall and hanging-wall lodes, that in aggregate may vary from a few metres to over thirty metres thick.

The top 20-30 metres of the sulphide lodes are oxidised, and consist of gossanous material with secondary copper and cobalt minerals, including abundant malachite, that attracted the attention of the early miners.

Feasibility Study

Havilah’s drilling has targeted the largely undrilled top 200 metres of the lode zone in the search for an open pit copper resource. Surprisingly good copper and cobalt grades were intersected at comparatively shallow depths in the sulphide lodes as follows:

• 13 metres of 2.2% Cu and 0.29% Co from 36-49 m in drillhole MTRC01
• 31 metres of 1.71% Cu and 0.18% Co from 78-109 m in drillhole MTRC044
• 26 metres of 1.55% Cu and 0.18% Co from 101-127 m in drillhole MTRC045
  

Subsequent diamond drilling has confirmed the earlier percussion drilling results as follows:

• 13.3 metres of 2.58% Cu and 0.26% Co from 42.2-55.5 m in drillhole MTDD112
• 27 metres of 2.26% Cu and 0.25% Co from 84.5-111.5 m in drillhole MTDD113

Havilah is now well advanced on a feasibility study for the Mutooroo deposit, which has involved :

• Completion of more than 230 percussion and diamond drillholes with the objective of outlining an open pittable resource of 10 million tonnes of sulphide ore. Approximately one third of the strike length has been drilled down to around 200m depth.
• Completion of detailed metallurgical studies, which has demonstrated the amenability of the sulphide ore to roasting and then leaching to extract the copper (95% recovery) and cobalt (90% recovery).
• Geotechnical studies required for open pit design (steep highwall is feasible).
• Hydrology study.
• Baseline fauna and flora studies.
• Contracting an experienced consultant to complete a process design and engineering cost study for a roasting plant (in progress.)
• Investigating markets for the sulphuric acid (in progress).

Important conclusions thusfar are:

• Resource delineation drilling is supportive of the geological model, and significant widths of new footwall lode mineralisation have been intersected in many drillholes, which will add appreciably to the mineral resource.
• The sulphide ore material has a high net value if all of the valuable components can be extracted as shown in the following table

Value of ore (all figures in USD, based on metal prices current at 1 October 2009):

This means that a 500,000 tpa operation (mining about 110,000 m3 of ore at an SG of 4.5) can potentially yield an annual revenue of more than US$200 million.

• The processing route is relatively straight forward and involves construction of a roasting plant in order to extract all of the valuable components, as summarised in the following diagram.

Construction of the roasting plant is expected to exceed US$100m. Havilah is presently seeking a partner willing to assist with completion of the feasibility study and financing of the project development in exchange for an equity interest in the project or an offtake agreement.