Merlin Project — 2011 Prefeasibility Study

The prefeasibility study outlines a processing route for the Merlin molybdenum-copper-rhenium deposit based on a combination of bench-scale testwork, vendor data, and independent consultant experience.

Report context

The Merlin Project 2011 Prefeasibility Study was documented in a NI 43-101 technical report dated October 2011 (AMC 111041) prepared for Ivanhoe Australia Limited. The process plant design criteria are primarily a compilation of data from bench test work programs, vendor and independent consultants, and information supplied by IVA. Jacobs E & C Australia Pty Ltd (Jacobs) provided additional engineering design criteria from their past experience on similar applications. Where test work results were unavailable, assumed data was used. The majority of the concentrate treatment area design criteria were sourced from the experience of independent consultants as only limited test work had been completed.

Processing route

General

Annual ore throughput of 500,000 t/a was agreed with IVA and shows best practice for each operating area. The annual ore throughput is limited by the mining rate. Operating schedules and plant availabilities were agreed with IVA. The processing plants are supported by utility and ancillary facilities including water treatment, compressed air, reagent mixing and dosing systems. Power will be provided from the Osborne power station. Site ancillaries include an administration building, maintenance workshops, a canteen and change house, laboratory, store, and domestic waste treatment facilities.

Ore Blending

Head grades of the ore show the expected average ore grade. As the mine plan evolves and variability is better understood, the design ore grade and its implications on the plant design should be reviewed. Ore mineralogy was extrapolated, using the most recent head grades, from the mineralogical assessment of the four major lithologies (AMMTEC, 2009). The run-of-mine ore physical properties were based on similar ore types.

Crushing

Metallurgical design parameters for the crushing properties of the ore were taken from the crushing test work report (AMMTEC, 2009). Samples of each of the four major lithologies were subjected to a series of tests to determine the unconfined compression strength and Bond abrasion index, along with the Bond rod and ball mill work indices. The crushing parameters are a summary of a Bruno crushing model prepared by Metso (2009). The crushing facilities located at the Merlin mine site consist of a ROM ore pad, three stages of crushing, and a fine ore stockpile.

Grinding

As with crushing, the grinding metallurgical parameters were taken from the 2009 AMMTEC crushing report. A conservative Bond ball mill index was used for the design of the mill to ensure this area does not become a process bottleneck.

Flotation

The flotation design criteria are the culmination of flotation test work findings from the 2010 laboratory program undertaken at Metcon (2011, 3 reports). A scale up factor of 2 between the laboratory and plant residence times was used for the study, however this will be reviewed in the next phase to ensure sufficient residence time is available to achieve the desired metal recoveries. A conservative concentrate grade of 30% molybdenum was used for the design to ensure sufficient capacity in the flotation cells and maximum volume of concentrate to be roasted.

The concentrate production facilities are located at Osborne and consist of a fine ore stockpile, ball mill, rougher, scavenger and cleaner flotation to produce a bulk sulphide concentrate. This is followed by concentrate regrind and copper depression flotation stages to produce both molybdenum and copper concentrates. The molybdenum concentrate is thickened, filtered and dried. The copper concentrate produced will be directed to the existing copper concentrate thickener, which has adequate capacity to handle the additional small volume of material.

Services and Tailings

Thickening test work had not been undertaken at the time of writing the Metcon (2011) reports. Similar settling characteristics to the existing Osborne material were assumed, giving an underflow density of 70% as advised by Metago Environmental Engineers, who are designing the tailings storage facility. Subsequent to the Metcon report, tailings settling testwork has been undertaken which indicates that the PFS assumptions are valid and will not require a material change to the design.

Concentrate Handling

The settling and filtration characteristics of the molybdenum concentrate were based on testing by Pocock Industrial. Drying properties of the molybdenum concentrate were assumed based on the experience of EHP Consulting Inc. These assumptions will be reviewed as further test data becomes available.

Roaster and Off Gas Handling

The roaster design criteria were provided by EHP Consulting Inc based on their operating experience. Only limited roasting test work has been undertaken on small samples. The design allows for a much higher temperature in the lower hearths of the roaster to promote maximum rhenium volatilisation and recovery to the off gas. The off gas handling system has been designed with the aim of maximising rhenium recovery. Wet scrubbing of the off-gas directly from the roaster was selected to minimise the recirculation and potential rhenium losses expected from a dry dust collection system. The solids collected in the wet scrubbing system are likely to be fine and hard to settle, hence a conservative approach has been taken to thickener design. A wet sulphuric acid production plant has been selected for the duty of SO₂ removal prior to release of gas to the atmosphere.

Rhenium Recovery

The rhenium recovery design criteria, including solvent extraction, ion exchange, rhenium evaporation and crystallisation, product drying and packaging, were generated by EHP Consulting Inc based on their operating experience. No test work has been completed in this area. The ion exchange design criteria may be considered conservative as the new generation resins which are much more selective against molybdenum were not selected, opting instead for a resin with more history on loading capacity in production facilities.

Calcine Leach and Molybdenum Recovery

The calcine leach and molybdenum recovery design criteria were provided by EHP Consulting Inc based on operating experience. Only limited leach test work has been undertaken on small calcined samples to confirm complete molybdenum dissolution can be achieved. The final molybdenum trioxide product will be packed in 1 tonne bags for sale.

Process Plant Configuration

A number of option studies were undertaken, all based on modifying the existing Osborne plant to produce molybdenum concentrate and allowing for spare capacity to treat copper/gold ore which may be mined. IVA directed that a new and separate molybdenum concentrate circuit was to be constructed at Osborne, so as not to impact on the capacity of the existing copper/gold circuit. The configuration involves crushing facilities at the Merlin mine site (ROM pad, three stages of crushing, ore handling facilities), with crushed ore transported to Osborne. At Osborne, the facilities include crushed ore delivery and stockpiling on existing ROM pad, ore reclaim and conveying to new ball mill, new flotation, concentrate filtering, storage and load-out, tailings dewatering, and a concentrate treatment facility.

The process plant is not innovative and there are several examples of similar plants in commercial operation. The ore preparation circuit is designed to treat 500,000 t/a dry ore with no design margin applied to the mill design capacity. ROM ore is transported 50 km by truck to the concentrate production plant.

Approximately 18,000 dt/a of molybdenum concentrate is produced, containing 30% molybdenum. The concentrate treatment facility includes roasting of the sulphide concentrate to produce a molybdenum calcine. The roaster is designed to treat a total of 18,000 dt/a in a single roaster. The downstream calcine leach is designed to treat 15,000 dt/a.

The average power load for the crusher at the Merlin mine site is 600 kW, for the Osborne concentrator (including the ball mill) 2,500 kW, and for the roaster plant 1,500 kW. The process plant water requirement is 72 m³/h. The annual requirement for process plant materials is approximately 7,000 t.

Key reported parameters

Technical qualifications

The process design criteria are primarily a compilation of data from bench test work programs, vendor and independent consultants, and information supplied by IVA. Where test work results were unavailable, assumed data was used. The Jacobs database was referenced where no other data were available.

The majority of the concentrate treatment area design criteria were sourced from the experience of independent consultants as only limited test work has been completed to date. Given that insufficient concentrate sample was available to undertake extensive roasting test work within the project schedule, the process design criteria for each of the concentrate treatment areas relies on the experience of those who have operated these processes.

Flotation design used a scale up factor of 2 between laboratory and plant residence times, which will be reviewed in the next phase. Thickening test work had not been undertaken at the time of writing Metcon (2011) reports. No test work has been completed in the rhenium recovery area. Only limited leach test work has been undertaken on small calcined samples for the calcine leach and molybdenum recovery area. The overall molybdenum and rhenium recovery estimates will be refined in further studies based on further mine schedule information and variability testing.

Source: NI 43-101 Technical Report Merlin Project Prefeasibility Study, Ivanhoe Australia Limited, October 2011 (AMC 111041), Sections 17.1 and 17.2.