Question and Answers (Q & As)
Unity Mining operations in Bendigo
1. What is the status of Unity Mining operations in Bendigo?
Unity Mining Limited (Unity) produced gold from the Bendigo goldfields until early 2011 and held five licences (two exploration and three mining) in Bendigo and the immediate surrounding areas.
Operations ceased on the sites in 2011 except for the pumping of groundwater into the Woodvale evaporation ponds (by arrangement with the State Government).
2. Why did Unity Mining cease operations in 2011?
Unity Mining ceased operations in 2011 because it considered the ore reserves would not sustain an ongoing commercial operation.
3. Who is GBM Gold?
GBM Gold is a publicly listed company focussed on gold production in Central Victoria. It holds current exploration licences in that region.
4. What is GBM Gold acquiring?
GBM Gold announced on 17 September 2015 that it was acquiring (subject to approval by the Minister and shareholder and other regulatory approval) all five Unity licences and the equipment and infrastructure in place to operate the licensed sites.
5. Why is GBM Gold interested in the operations if Unity considered them uncommercial?
The GBM Gold CEO has publicly stated that:
"the Bendigo Gold Project is multi-dimensional in nature and provides the company with several low cost projects that will provide cash flow to fund exploration and potential development of Australia's second largest gold field".
The 'low cost' operations mainly involve:
- reprocessing mine waste (tailings) around the Bendigo area
- reprocessing existing sand dams (600,000 tonnes) at the Kangaroo Flat site
- selling the sand after reprocessing from the Kangaroo Flat site
- commencing exploration works within the licence areas purchased
GBM Gold may consider underground mining in future if exploration indicates it will be viable.
6. How is GBM Gold financing the purchase and operation?
GBM Gold has issued 20 million shares at 1cent/share to raise $2 million to fund the purchase. The company has stated to the ASX that it will pay Unity $1 million in cash for the assets.
Unity has agreed to provide GBM Gold with the entire bond funds ($5.948 million) upon transfer of the licences and GBM Gold will pay Unity the cost of the rehabilitation liability bond ($5.948 million) in three instalments over three years.
7. What is the economic benefit for Victoria?
The purchase of Bendigo assets is part of GBM Gold's strategy to expand its operations in Victoria. In the planning phase GBM has already employed five people – all Bendigo locals.
After the first year of operation, total employment is expected to be 15 people. These employees will include geologists, mining engineers, accounting and administration personnel and operational and maintenance staff.
8. Was the community aware that Unity was seeking a buyer for the mine?
Unity Mining has said publicly for some time that it was looking for someone to take over its operations in Bendigo. The potential sale of Unity's Bendigo assets has been discussed extensively at the company's Bendigo Environmental Review Committee.
9. Does the community have an opportunity to object to the transfer?
The Mineral Resources (Sustainable Development) Act 1990 does not provide for community input into the transfer process.
However, community members on Unity's Environmental Review Committee have provided extensive feedback to the Department of Economic Development, Jobs, Transport and Resources and to Earth Resources Regulation's personnel about their concerns.
10. Will a new work plan be required?
The approved work plan is transferred with the licence.
The approved Unity work plan does not include a number of activities GBM Gold has said it wishes to undertake (re-processing tailings etc). As such GBM, Gold will be required to submit a work plan variation before undertaking these activities.
11. What are the rehabilitation bonds in place and are they adequate?
The rehabilitation bonds for the three mining licence sites were independently reviewed in January 2016 and increased from $5,670,000 to $5,948,000 (an increase of $278,000).
12. What is the state of the current rehabilitation of Unity sites?
Since 2012, Unity has prepared and implemented closure plans for some infrastructure including ventilation shafts and other infrastructure associated with the now disused underground workings.
Earth Resources Regulation (ERR) will issue a notice requiring a closure plan for Woodvale Ponds (you can read more about these ponds below). This notice will be issued on GBM following completion of the licence transfer.
13. What is going to happen to the Woodvale Ponds?
The Woodvale Evaporation Ponds Complex (WEPC) is a series of ponds historically used to evaporate groundwater from Unity's underground operations. GBM Gold does not wish to use these ponds for evaporation in future.
GBM Gold has committed to rehabilitate ponds six and seven (the two largest ponds on the site), following soil and other testing. Earth Resources Regulation will require this rehabilitation to be undertaken as part of GBM's work and rehabilitation plan approvals. Former ponds four and five have already been rehabilitated.
GBM Gold considers community involvement in the rehabilitation process to be essential, and believes the end use of the site should be productive agricultural land.
GBM Gold proposes to only use 'clean' non-mine water on the Woodvale site in the future.
14. How would a transfer affect the groundwater management plan led by Department of Environment, Land, Water and Planning?
The groundwater in mine voids beneath Bendigo need to be considered in a holistic, integrated way as part of the long-term solution.
GBM Gold is willing to be part of the long-term solution for managing groundwater from mine voids beneath Bendigo.
The Victorian Government will work with the mining licensee in the development of a permanent solution to manage the groundwater in mine voids beneath Bendigo.
15. How is dust being managed at the closed mine sites?
Earth Resources Regulation (ERR) is continuing to monitor environmental compliance by Unity at the closed sites.
Dust concerns have been raised by nearby residents at the Woodvale and Kangaroo Flat sites. Following a dust incident in October 2014, where high winds led to offsite dust, ERR directed Unity by Notice to increase dust monitoring and better control dust by covering dust sources.
These Notices were complied with by the end of January 2016.
Ongoing concerns about levels of arsenic in the dust will be addressed by the dust monitoring program which includes testing for arsenic.