Tellus Holdings Ltd (Tellus) plans to develop the Chandler Salt Mine Project (the project) on pastoral leases about 120 kilometres (km) south of Alice Springs and about 15 km by road to the Titjikala community in the Northern Territory.
The project exploration phase has been fast-tracked by using the results from previous oil and gas exploration programs to identify the resource. The oil and gas industry exploration program looked for salt beds and domes as the salt often acts as a trap for hydrocarbons. Historic exploration in the project area includes 145 km of seismic survey (comprising 15 lines), 6,600 metres of core drilling (two wells) and about $A6.5 million of historic exploration expenditure. Based on this exploration, new core sample analysis and a detailed prefeasibility study it was concluded that the project is technically and commercially viable. Tellus has now progressed to the definitive feasibility study stage, lodged its Notice of Intent in November 2012 and has received its Draft EIS Guidelines in August 2013.
The Chandler deposit is potentially Australia's largest underground multi-mineral rock salt deposit and is a world-class asset. With an expected initial mine life of 25 years, the resource could possibly support Australia's longest life mine as evidenced in Europe where salt mines with similar resources have been mined for hundreds of years.
There is growing demand in Asia for industrial and edible salt and associated minerals (e.g. potash and magnesium rich fertilisers) providing a potentially ongoing market viability. The voids left from mining 700m below ground in a 200m thick salt bed will be used for a complementary storage business. Namely the storage of equipment and archives and the backfill/disposal of mainly mining and oil and gas sector wastes. This hybrid salt mine/storage business is a safe and tried and tested business model. Around the world there are over 150 projects in thick underground salt beds with close to 500 salt caverns/ mines. North America has over 400 salt caverns/ mines selling mostly industrial salts and the voids left from mining used mostly by the oil and gas industry. In Europe, countries like Germany have 30 salt/fertilizer mines that have been used for backfill. This has resulted in improving the viability of the salt mines, increases investment, jobs and environmental outcomes.
Tellus environmental studies and feasibility studies are in progress. The company is identifying potential parties to assist in the development of the mine and supply chain build and operation.SHOW LESS