Dugald River Mine, Queensland

The Dugald River zinc-lead-silver mine is located in Northern Queensland, Australia. Image courtesy of MMG Limited.

The mine has reserves of approximately 39.6Mt graded at 11.9% zinc. Image courtesy of MMG Limited.

Mining at Dugald River is planned to be done using long-hole open stoping method. Image courtesy of MMG Limited.

First production from the Dugald River mine is expected in mid-2018. Image courtesy of MMG Limited.

The Dugald River zinc-lead-silver mine is situated 65km north-west of Cloncurry in Northern Queensland, Australia, and owned by MMG. It is one of the world’s biggest zinc-lead-silver deposits and comprises of high-grade minerals.

MMG commenced production from the Dugald River in November 2017. The first shipment of approximately 10,500 wet metric tonnes of zinc concentrate was delivered in December 2017.

The expected mine life of the property is 25 years. During the initial period, the project is estimated to process an average 1.7Mtpa of ore to produce 170,000t of zinc concentrate along with by-products.

Finance of the Dugald River zinc-lead-silver mine

China Development Bank and Bank of China agreed to provide 13-year debt facility of up to $1bn for the Dugald River mine development in June 2013.

In June 2016, MMG entered an amended facility agreement for up to $550m to fund the development and construction of the Dugald River mine.

Dugald River mine geology and mineralisation

The Dugald River mine lies within a tabular lode representing the sediments of Corella Formation. The tabular lode at the area has a strike length of approximately 2,200m and is extended to a minimum depth of 1,000m.

The mineralisation is mostly confined to the main lode and includes sphalerite, galena, pyrrhotite and pyrite.

Dugald River mine reserves

As of 30 June 2017, the Dugald River mine is estimated to contain 32.8 million tonnes (Mt) of mineral reserves graded at 11.9% zinc, 2.2% lead, and 44g/t of silver. The measured, indicated, and inferred resources are estimated at 64.8Mt with average zinc grade of 12%.

Dugald River mine development details

The original development plan for Dugald River is an underground operation to be accessed through two declines developed north and south.

MMG also plans to incorporate the operations and maintenance of the Dugald River mine and the Century mine under a single Queensland operations structure, which will help in simultaneously managing the development activities and human resources at both mines.

Mining and processing at Dugald River

Diamond drilling at the Dugald River mine reached beyond depths of 20,000m by the end of June 2013. Conventional mobile equipment, along with the long-hole open stoping method of mining, is applied at the project while the ore is hauled to the surface and treated by an on-site concentrator.

The produced concentrate is trucked and transported to the storage shed and rail load-out facility at Cloncurry. It is then transported by rail to the Townsville Port for export.

The ore is processed through crushing, fine grinding and flotation at the 1.7Mtpa processing plant. It is expected to annually produce 170,000t of zinc, and by-products.

Infrastructure facilities and construction of Dugald River mine

The development and construction of the Dugald River underground mine was approved in 2012.

The major construction activities undertaken were the main site access road, an accommodation village, and other infrastructure facilities. Workers are accommodated at the permanent 500-member accommodation camp.

The mining fleet consists of one Tamrock Jumbo, one Caterpillar 2900 Bogger and Caterpillar AD55 trucks. Power supply for the mine is being provided by Mica Creek Power Station through a 62km transmission line.

Contractors involved with the Dugald River mine development

Barminco was awarded the underground development contract for the Dugald River mine. It developed two exploration declines for accessing and developing the orebody under the $100m contract.

Origin Energy was awarded a contract for supplying gas to the Dugald River and the Century mines for producing power.

The contract for designing and engineering the crushing and screening plant was awarded to Allmine Group.

Forge Group Minerals and Resources was awarded the engineering, procurement and construction contract for the processing plant, but the same was cancelled in September 2013 following the decision to defer the mining method.

RCR Tomlinson was awarded a $73m contract to construct the processing plant at the Dugald River project in May 2016.

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