Bendigo Buys Henty Mine from Barrick

Bendigo Mining announced on July 10, 2009, that it had acquired the Henty gold mine in western Tasmania from Barrick Gold for A$8 million plus potential royalties of up to $22 million from future production arising from exploration discoveries. The non-royalty consideration includes A$5 million in cash and A$3 million in Bendigo ordinary shares, giving Barrick an approximate 2.2% interest in Bendigo. The acquisition includes the operating underground Henty mine, a 300,000-mt/y process plant, infrastructure, 29 square miles of mineral tenements, and 92 skilled employees.

Barrick had scheduled Henty for closure at year-end 2009, due to depletion of reserves. However, Bendigo reports that Barrick had identified 22 exploration targets on the property, most of which remain untested. One example is Henty North, where an 800-m-long coincident geochemical and geophysical anomaly 3 km north of the mine remains untested. Near-mine targets also exist, especially up and down dip from the main mineralized trend.

Bendigo plans to invest significantly in exploration and development at Henty and to keep the mine in production, including production of 20,000 to 25,000 oz of gold over the remainder of 2009. Production in 2010 will depend on conversion of near-mine resources to reserves.

Henty will be Bendigo’s second producing mine, joining its Kangaroo Flat mine in Bendigo, Victoria, Australia. The Henty mine is located 10 km south of Rosebery, Tasmania and is of comparable scale and nature to Kangaroo Flat. Both mines are underground operations with similar depths, throughput rates, employee numbers, and mining methods.

The Henty mine has been in production for 13 years, having commenced operations in 1996, and has produced more than of 1 million oz of gold. Production has averaged around 85,000 oz gold a year, peaking at 143,000 oz of gold in 2004. Barrick Gold acquired the Henty mine in 2006 when it acquired Placer Dome.

As featured in Womp 2009 Vol 06 -