REVEALED: The turbulent, troubled history of Goondicum Mine
ON MONDAY it was announced that Goondicum ilmenite mine, around 30km east of Monto, had appointed administrators.
Administrator Bryan Hughes of Pitcher Partners confirmed, as of Tuesday, 38 workers had been made redundant, as the mine scaled back to "care and maintenance" while a technical review of the operation was under way.
The Times takes a look at the troubled history of Goondicum mine, which has changed hands three times since its commissioning in 2007 and left a raft of sacked workers and unsecured creditors in its wake.
2007: Monto Minerals Ltd
Goondicum mine initially commenced operation in October 2007, with an expected life of around 25 years. However, by March 2008, it was clear the mine had fallen well short of its production targets.
The company raised $5 million in June 2008 to enable it to undertake a review of the mine's feasibility.
According to a Preliminary Economic Assessment prepared for Melior Resources in 2016, the "key issues" identified by the review were a "grossly under designed feed preparation plant, lack of process control and monitoring, general undercapitalisation and poor engineering design".
It was estimated an investment of $30 million was required to rectify the issues.
The company placed itself into voluntary administration in August and ceased production in September, having produced 14,042t of ilmenite and 5269t of apatite, the mine's secondary mineral.
40 workers were made redundant, with a skeleton staff of seven retained.
The Times reported on September 11 that one local contractor was owed more than $280,000, and there were 676 unsecured creditors.
2012-13: Belridge Enterprises
Belridge Enterprises Pty Ltd came into existence on May 1, 2009, having acquired the shares in Monto Resources Pty Ltd. Production restarted in September 2012 and ceased in June 2013, having produced 47,425tn of ilmenite and 2769tn of apatite.
"Operations ceased largely due to the operation becoming uneconomic at that production rate," the 2016 PEA said.
Ilmenite prices had fallen from USD $280 per tonne to USD $165.
Managing director Mark McCauley, who would become the CEO of Melior Resources' Australian subsidiary when Belridge Enterprises was acquired by them, told the Times on June 20 that the mine only had around one month of full production.
"We couldn't continue at such low prices and keep paying the bills," he said.
"No doubt this is a big blow to the Monto community and we would like to think they don't totally give up."
He said Belridge Enterprises "anticipate(d)" no one would be out of pocket.
35 workers lost their jobs and the mine returned to care and maintenance.
2014-15: Melior Resources
Canadian company Melior Resources Inc acquired Belridge Enterprises on March 31, 2014.
In December 2014, Melior was accused by Monto graziers Rob and Nadia Campbell of "illegal clearing" of bushland to create an access road.
The former Department of Mines and Natural Resources referred Melior to the Crime and Corruption Commission.
However, Mr McCauley went hat in hand to LNP premier Campbell Newman seeking retrospective approval.
This was granted by the former Department of State Development.
Mr McCauley's father Ian, who was married to former State Member for Callide Di McCauley, was the biggest individual donor to the LNP, giving more than $250,000 since 2009.
The CCC suggested the retrospective approval could amount to "maladministration" and the case was referred to the Queensland Ombudsman.
However, the matter "appear(ed) to have gone no further", according to a 2017 report by Graham Young, executive director of the Australian Institute for Progress.
The Times does not suggest any wrongdoing by Mark, Ian or Di McCauley.
The mine reopened in April 2015 after the insufficient feed preparation plant, which dogged previous iterations of the mine, was upgraded, "significantly lowering the forecast cost structure", according to the 2016 PEA.
However, by early July, falling ilmenite prices had again forced the mine to drastically scale back operations, slashing 18 jobs to run at 50 per cent capacity.
By August, workers were again being laid off, with 30 of 36 remaining staff receiving their marching orders, the remaining six being kept on for care and maintenance duties.
"We tried to work at 50 per cent, but the ilmenite market is just not good enough and it is not working for us," he said.
"Production will hopefully continue in the future."
Miner Terry Allwood, who had previously worked at Goondicum under Belridge Enterprises, lost his job for a second time.
"It's harder to take in as I've got four kids and a house mortgage to pay," Mr Allwood told the Times.
"The biggest hit is all the local shops. I can find another job but it's hard for little local shops to find more customers."
2018-19: Melior Resources
In September 2018, Melior Resources announced a merger with ASX listed Metallica Minerals Limited, which had no active projects but a "pipeline of longer term development and exploration assets" in Queensland, including in bauxite, silica sands and graphite.
Mr McCauley told the Toronto Stock Exchange (TSX) the merger was "an attractive and low risk proposition providing a stronger platform for growth via an enhanced pipeline of development assets, a strengthened balance sheet and an ASX listing."
However, Melior terminated the merger in late December after Metallica's "failure to perform certain covenants and obligations... by the completion deadline of December 31, 2018," according to a notice published to the TSX.
Goondicum mine reopened in November 2018 with a scheduled nine-year mine life and budgeted production of 160 kilotonnes per annum of ilmenite and 38 kilotonnes per annum of apatite.
Mr McCauley told the Times that Chinese buyers "are very excited about receiving our product early in the new year".
January 2019 ilmenite production exceeded Melior's monthly forecasts, although apatite production lagged behind.
However, by March, ilmenite production was more than 3000t behind monthly forecasts and apatite more than 2000t behind.
In July, ilmenite production still lagged by around 3000t behind monthly forecasts, while apatite production had fallen off a cliff face.
"Although the ilmenite product quality is good, the project is yet to consistently produce the targeted top quality Goondicum AA specification ilmenite," a TSX notice said.
"Production is being impacted by the failure of the processing plant to reach the 375tph (tonnes per hour) design throughput; the average throughput rate over the past three months was around 270tph or 72 per cent of design."
On August 5, Mr McCauley resigned as CEO.
Melior chairman Martyn Buttenshaw was appointed interim CEO.
On Sunday, Melior appointed Pitcher Partners as administrators and 38 mine workers had lost their jobs by Tuesday and the mine again went into care and maintenance while a technical review is under way.
Pitcher Partners chairman Bryan Hughes told the Times he anticipated the review would take around six months.
A creditors meeting will be held at Monto Shire Hall on Tuesday, September 17 at 10.30am.