http://www.braidwoodtimes.com.au/story/2706975/opposition-mounts-to-cyanide-use-at-dargues

Andrew McIllwain, Managing Director and CEO of Unity Mining Limited, stood confidently behind the decisions of Peter van der Borgh (Cortona Resources) in front of a packed community hall in Majors Creek on February 10, 2013.

In this meeting he reinforced the Land and Environment Court decisions, the “Limits on Approval” and indeed the concerns of the local community in countless community discussions from as early as 2008, that there would be no on site processing facility using cyanide or mercury at the Dargues Gold Mine project.

http://www.canberratimes.com.au/act-news/cyanide-processing-near-braidwood-terrifying-for-local-shires-20141114-11mwqv.html

The meeting on February 10, 2013 marked the start of construction at the Dargues Gold Mine site the following morning. The Braidwood Times published a story about this meeting on February 13, 2013 and quoted Mr van der Borgh in the article as saying, “Cortona would particularly like to thank the community for their patience and support throughout the extensive approvals process. None of the commitments made will change with this new relationship and, as shown by Unity in previous projects, their commitment to environmental sustainability is as strong as Cortona’s.”

http://www.braidwoodtimes.com.au/story/1298357/construction-starts-on-dargues-gold-mine/

To back track a minute, the Land and Environment Court of NSW issued an order on February 7, 2012 and approved the proposed mine development subject to a series of conditions. Many of these conditions were standard conditions concerning building works, hours of operation etc. However, the Court imposed some “Limits on Approval” that addressed the potential impacts and loss of amenity upon the communities surrounding the site, those downriver of the development, and the local environment.

The "Limits on Approval” are:

5. The Proponent may carry out mining operations on the site until 31 August 2018….

6. The Proponent shall not:

process more than 355,000 tonnes of ore at the site in a calendar year;

b) process more than 1.2 million tonnes of ore at the site over the life of the project;

c) use tailings to backfill completed stopes within the mine;

d) use any cyanide or mercury on site to process or extract gold from the project; or

e) process or smelt any ore other than that extracted from the site.

It had taken Cortona Resources (Big Island Mining Pty Ltd) almost five years of community consultation and research to achieve the final approval through the Land and Environment Court. This decision no doubt paved the way for a successful merger with Unity Mining less than a year later.

On the April 12, 2013, Mr van der Borgh resigned as executive director of the company and commenting on the change in an ASX release, Non-Executive Chairman Clive Jones said: “Peter has been the key figure and driving force in Cortona Resources

since its inception and successfully led the programs that outlined the Dargues Reef project. Peter has also seen the project through the successful approvals phase which led to a mining lease being issued for the project in 2012."

In the first six months of operation, Unity Mining had five environmental breeches, three of which resulted in them being prosecuted and fined. Big Island Mining Pty Ltd was convicted after pleading guilty to three water pollution offences which occurred at the Dargues Gold Mine near Majors Creek in February and March 2013, and was fined almost $200,000.

The Land and Environment Court found that while the environmental harm caused by the incidents was low, practical measures were available to minimise that harm and there appeared to have been a substantial failure to implement these measures. The Court found that the harm was foreseeable and the mine shared culpability with the specialist contractor for the pollution.

An approval was granted to modify the Land and Environment Court's Limits on Approval to remove condition 6c, and as such Unity was then allowed to use tailings to backfill completed stopes within the mine. Of course, at this stage it was not proposed that these tailings would include any traces of cyanide.

On April 15, 2013 gold posted its biggest one-day percentage drop in 30 years. It was a significant market red flag as gold prices steadily dropped over the next year and a half with only momentary recoveries. Throughout 2013 the declining price of gold and other contributing factors forced Unity to progressively slow down its operation at Dargues Gold Mine before work came to a standstill in November 2013. A Braidwood Times article on December 3, 2013, "Mining Halt at Dargues Gold Mine", said:

“Unity Mining Limited announced a temporary halt to development of its Dargues gold project at Majors Creek pending completion of technical optimisation studies and funding discussions. The company had intended to process the gold at a Parkes processing plant, however after an objection, the Development has not been determined and the matter is due in court in March 2014. The company now has plans to reuse a reopened Bendigo processing plant, although there are some objections locally”.

Reading the writing on the wall at this point, it seemed Cortona Resources and the newly merged Unity Mining Limited had not thoroughly conducted investigations as to where they would eventually process ore extracted from the site at Majors Creek; in other words, they had not completed their due diligence.

http://www.braidwoodtimes.com.au/story/1947501/mining-halt-at-dargues-gold-mine/

Four weeks ago on November 11, 2014, at the same community hall in Majors Creek where the directors of Unity Mining stood not even two years previously, the community gathered again at the request of Unity Mining to discuss the company's proposed change of direction. Unity’s Chief Operating Officer Tony Davis addressed the gathering and outlined the proposed changes.

These proposed modifications will be made in an application to the Department of Planning early in the New Year, with some suggesting this gives Unity an unfair advantage by holding the advertising and submission period during the Christmas holiday period when most families are away and most companies that could prepare expert reports and community responses, are closed.

The proposed modifications are:

1) change Condition 5 to extend the life of the mine to 2022;

2) change Condition 6b and increase the total amount of ore extracted from the site to 1.6 million tonnes from 1.2 million tonnes;

3) change or remove Condition 6c to allow the construction of a processing plant (smelter) on site that will use as its principle method of operation cyanide leaching;

4) changing the location (within the site) of the surface waste rock emplacement;

5) construct a more direct access road to the Tailings Storage Facility and the relocated surface waste rock emplacement area.

At the November 11 meeting, Tony Davis was asked by the community the reasons for the proposed changes. His response was economic viability. In other words, profit margins for Unity Mining. He said if an approval was not granted for these changes and the proposed on-site processing plant (smelter) using cyanide leaching, the development would not proceed.

            This seems contrary to what Andrew McIlwain said in an interview with the ABC on November 14 this year when he said that if their "amendment submission is not successful then the company already has the approval to commence operations based on processing off site”. So which explanation should the community believe?

While we are talking profit and loss, one of the most worrying issues surfaces when reading the Independent Auditors report on Unity Mining's 2013-14 financial statement in their Annual Report.

"Without modifying our opinion, we draw attention to Note 3(v) in the financial report, which indicates that Unity Mining Limited incurred a net loss of $52,097,000 during the year ended 30 June 2014 and incurred a gross loss of $7,354,000. These conditions, along with other matters as set forth in Note 3(v), indicate the existence of a material uncertainty that may cast significant doubt about the Company’s and Consolidated Entity’s ability to continue as a going concern and therefore, the Company and Consolidated Entity may be unable to realise their assets and discharge their liabilities in the normal course of business.”

This issue is even more alarming when considering Unity's impact on the city of Bendigo in Victoria. A recent article in The Bendigo Advertiser said nearly 300 people had signed a petition demanding urgent rehabilitation works at mining sites across Bendigo. The petition called on Unity Mining to produce plans for rehabilitation works at its Eaglehawk, New Moon, Woodvale and Kangaroo Flat mines. While Unity Mining has adopted what is known as a “care and maintenance” program for these sites, it questions the length of time reasonably allowable for remediation works to be completed.

            An independent report produced by a local resident and used in the Victorian Civil and Administrative Tribunal (VCAT) suggests that:

1. The facility is a frequent source of aggravation in the community with complaints of dust and odour. Dust pollution discharged from pond 7 is about 0.1% Arsenic. (Reference - Unity Quarterly Monitoring Report and Bendigo Advertiser.)

2. An attempt to rehabilitate ponds 4 and 5 has failed, due to storm water scouring of the clay capping over the buried toxic salts and the difficulty in establishing vegetation in a saline environment with limited soil.

3. There is a lack of a suitable rehabilitation plan which will enable the return of the property to the original land use as required by the work plan. i.e. farming.

4. Unity has frequently denied the presence of, or risk from, heavy metal accumulation, and this has bred public apprehension and distrust of the company.

More than two years after the cessation of mining, Woodvale Ponds does not have a closure plan and there has been no rehabilitation. More than 50,000 tonnes of salt and 40 tonnes of Arsenic have been imported to the site but a chemical/water balance stocktake can only account for about two-thirds of the Arsenic quantified. Pond 6 has an associated toxic groundwater plume which extends within 200m of the local waterway, Myers Creek, and their future interaction is unknown. Three members of the Environment Review Committee have examined the company’s bond spreadsheet and consider the Bond as lodged is underestimated in the order of $12-15 million.

In the ABC news article “Mining on the Nose at Bendigo in Central Goldfields” on the August 23, 2013, Woodvale resident Gary Davis said the ponds are about 1800 metres long and nearly 800 metres wide.

"We estimate that there's approximately 40 to 50 tonnes of raw arsenic here that's been pumped over the years, and possibly up to 50,000 tonnes of dissolved salts, so it's actually a toxic environment," he said. Mr Davis says they were promised years ago the ponds would be closed. "Mining has stopped, there is a mining licence on this facility and once mining has stopped that mining licence ceases to exist and therefore the facility should cease to exist," he said.

"That was the commitment at the beginning of mining and that's the expectation of the community."

Back to Majors Creek. Since the start of the community consultation process way back in 2008, one of the biggest enticements from Cortona and now Unity has been the promise of wealth that will be generated for the local communities through job creation and the associated benefit to local businesses. However, a detailed assessment of the existing economic activity and assets in the Araluen Valley has not been completed. Is it not crucial to weigh up the associated economic risks involved with the proposed modifications to the existing approval, against the status quo? The Araluen Valley has niche market stone fruit orchards, located directly downstream of the mine within 8km of the mine's proposed tailings dam. These orchards, along with cattle production, are the backbone of the rural enterprises along the river. Throughout the valley, full-time and seasonal workers are directly employed with indirect flow-on effects throughout the valley and the Braidwood area in the supply of rural equipment and services. Additionally, the valley supports a sustainable “experiential” style tourist industry with easy access to Monga and Deua national parks, State Forests and the Araluen Creek and Deua River. Currently, this productive valley and the Deua waterway generate significant income and support an increasing level of employment, which no doubt will be put at risk if the proposed modifications are approved. The orchards, farming, market gardens, tourism, books and workshops would require a significant level of compensation if the mine activity resulted in pollution or reduced water availability.

Look at it in these terms. One breach of the tailings dam will close the mine indefinitely and will close every business down the length of the waterway below. Who will be accountable for revenue losses if this occurred?

From October to April, the Deua catchment provides about 60 per cent of drinking water to a standing population of 40,000 and a combined resident/holiday maker population of about 120,000. For the remainder of the year - again, to a mix of residents and holiday makers - it provides 100 per cent of the drinking water. The Tuross River is the other major source of water for the shire. The proposed cyanide plant and smelter is at the headwaters of the South Coast's water system which is upstream from two Conservation Reserves, home to more than 20 endangered, vulnerable or critically endangered species, is a vital migratory corridor and the only safe permanent water for countless local species.

The residents of Majors Creek, Jembaicumbene, Araluen, Braidwood and Moruya who oppose these proposed changes suggest Unity Mining is prepared to compromise the welfare of these local communities and environment for the sake of profit. All this is brought about by lower international gold prices. Is this fair and just? No it isn’t. The proposed modifications to the development threaten far more local jobs and income than Unity claims it will provide.

The concept "mean time to first failure" is often used to evaluate the capability of a project. The Dargues project operated for less than a fortnight before its first failure.

Any accident with cyanide is of major environmental and community concern. According to the company's own reports, the ore at Dargues contains 1.8 per cent lead as well as other heavy metals. The tailings dam, built on steep land, was meant to contain inert materials, mostly silica, however the lead and other heavy metals either need to be processed and removed on site or will be held above a vital waterway, all for short-term profit. Local environment groups and the Eurobodalla Shire Council won vital conditions and Limits on Approval with the initial development process. With modification after modification, the Department of Planning has allowed these to be ignored. The last modification even allows the company to only "generally" follow the conditions of approval.

In October 2013 The Department of Planning found that an application to modify consent for the Dargues gold mine in Majors Creek - 10_0054 - was consistent with the grounds of approval for a transitional Part 3A project modification under Schedule 6A of the Environmental Planning and Assessment Act 1979. Part 3A of the Act is now repealed, but transitional arrangements remain, in order to continue to evaluate and/or modify projects that were approved while this part of the Act was in place.

The Department of Planning found that a modification of the consent was able to be considered, as the proposed modification would not change the "essential function of the mine for which approval was originally granted" (NSW Planning & Infrastructure, 2013 p.2):

• it would not change the mining, processing and transport methods, operating hours, or life of the approved mine;

• no additional employees [we]re required;

• it d[id] not change the approved maximum rates of ore extraction;

• it involve[d] relatively minor changes to the approved surface infrastructure; and

• the impacts would generally be similar to the approved project.

While the grounds for modification under the now-repealed Section 75W of the Act are unfortunately vague, it can be seen from the above assessment of modification for the original development that any change to the function, the surface infrastructure or the potential impacts of the mine has the potential to be contrary to grounds for any proposal to modify the original development consent. Should the case proposed to the community by Unity Mining be realised, it is highly likely that the mining, processing transportation methods, operating hours and life of the proposed mine are all in question.

Should Unity Mining propose to amend conditions that could potentially allow for the use of cyanide and mercury in the onsite processing of ore, the impacts considered under the original proposal would most certainly not be similar to those originally negotiated for the operation of th0e mine in such a sensitive location. The use of cyanide for onsite processing of ore would almost certainly require substantial changes to above-ground surface infrastructure, and there would remain the potential for ores extracted offsite to be processed at Dargues, beyond that which is currently approved. Any proposed changes to maximum rates of ore extraction should also be carefully considered when determining whether to allow for changes to be made under the process of ‘Modification’ under (the former) Section 75W of the Act.

In an opinion piece published in The Braidwood Times and Canberra Times in December 2014, titled “As Good As Gold”, Andrew McIlwain, said “Local gold will bring prosperity to your local community. What I ask is that you consider the modification that Unity is proposing with the same rigour that you apply to other decisions that you make for the benefit of your family and the community in which you live”. Mr McIlwain should sleep well knowing that we will do just that. As I write this, a community-run Get Up Campaign addressed to NSW Planning Minister Pru Goward is about to register 1000 signatures of people opposed to on-site processing and a facility using cyanide in Majors Creek. The proposed modifications, by the Department of Plannings' own previous admission, should require a new application and Unity Mining should do just that, submit an entirely new development application and environmental assessment.

In closing, the name Araluen means "water lily" or "place of the water lilies" in the local aboriginal dialect. At the time of European settlement Araluen was described as a broad alluvial valley with many natural billabongs covered with water lilies. Unfortunately, no such billabongs exist in the Araluen Valley today because as with most river and creek valleys in south-eastern Australia, the natural landscape of Araluen Creek and its valley were completely destroyed by rampant and extremely destructive gold mining in the latter half of the 19th century. One must ask, what legacy will this local community and mining company leave for our children and future generations?

Mat L. Darwon

Majors Creek