MiningInvestment Profile

Gascoyne

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Supporting documents and resourcesStrike Energy – Undeveloped Oil and Gas www.strikeenergy.com.au

Prospect Magazine – On the Horizon, December 2009 – February 2010

Department of Mines and Petroleum Statistics Digest www.dmp.wa.gov.au

Apache www.apachecorp.com

Gunson Resources Ltd www.gunson.com.au

Rio Tinto – Dampier Salt www.dampiersalt.com.au

Mitsui & Co Ltd. www.mitsui.co.jp

Gascoyne Development Commission Offices

Carnarvon

PO Box 78115 Stuart StreetCarnarvon WA 6701Phone: (08) 9941 7000Fax: (08) 9941 2576Freecall: 1800 061 173Email: info@gdc.wa.gov.au

Visit our website www.gdc.wa.gov.au

Exmouth

PO Box 26621 Maidstone CrescentExmouth WA 6707Phone: (08) 9949 2090Fax: (08) 9949 1618

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Mining Investment OpportunitiesWestern Australia continues to lead the way as Australia’s premier resource investment destination. There is currently more than $100 billion worth of projects either committed or considered for the past and next few years. This creates opportunities for second and third tier businesses to capitalise on the major contracts locally and for the adjacent Pilbara and Mid-West regions. Capturing supply chain benefits from major mining and energy resource projects represents a major long-term opportunity for the Gascoyne economy.

Opportunities for investment linked to the mining industry include:

• Further exploration for petroleum, oil and gas on and off-shore

• Bejaling Deepwater Port development

• Exmouth Deepwater Wharf

• Business development to support and facilitate the growth of major offshore oil and gas deposits

• Development of mineral sand mining in the region

• Heavy machinery leasing

• Residential accommodation development

• Short stay hotel/motel accommodation development

• Second and third tier construction businesses e.g. steel/cement fabrication, earth moving equipment and operation

• Support services for mine sites e.g. catering, cleaning services

• Energy production

• Limestone production; and

• Gemstone production.

Mining Industry by 2035The aspirational vision for the Gascoyne mining industry by 2035 is to increase the value of annual salt mining production from $100 million to $233 million. It is also envisioned to commence mineral sand production and annually produce an additional $23.4 million in value.

Capital expenditure in the Western Australian resources sector continues to be strong, having stabilised at near record levels. This reflects the continued growth and investment in the oil and gas sector, offsetting declines in iron ore and coal nationally, given a combination of the large project size and value and strong growth in energy exploration, particularly in Western Australia.

The strategic location of the Gascoyne between two major mining regions and adjacent the Carnarvon oil and gas basin presents considerable opportunities for the towns of the region to act as logistics and supply chain hubs to this critical Western Australian industry. Exmouth currently plays a supporting role for the oil and gas sector, providing accommodation and services for residential and fly-in fly-out workers as well as limited supply chain inputs to major projects. Expanding these supply chain opportunities into the mining sector and capturing a greater share of capital, operational and maintenance expenditure in the local economy will underpin economic growth in the region.

Salt The climatic conditions in the Gascoyne favour salt (Sodium Chloride) and gypsum production, either from seawater or naturally occurring brines in salt lakes. The Region has significant salt mining operations, hosting two separately owned solar salt mines.

The Mitsui salt field in Shark Bay spans 7,000 hectares with a harvesting process that is natural and environmentally friendly, using only the wind and the heat of the sun. This coupled with pristine seawater from which the salt is derived, produces a high quality product. Shark Bay salt is sold for food use in Taiwan, Indonesia and the Philippines and to soy sauce manufacturers in Japan.

Salt has been mined by Rio Tinto Dampier Salt at Lake MacLeod for over 45 years. The operating area of Lake MacLeod is 764 hectares with future plans to expand operations to 1000 hectares on a lease of 220,000 hectares. Saturated brine contained in Lake MacLeod is approximately 10 times saltier than normal seawater, eliminating the need for a series of concentration ponds normally required to evaporate water to reach “salting” point. Rio Tinto privately owns a deep-water port with berthing and ship loading facilities at Cape Cuvier and charters vessels that can deliver salt to all customers in a variety of shipment sizes.

UraniumThere are currently a number of exploration companies proving up potential uranium deposits in the inland Gascoyne.

Overview

The Gascoyne region is located in the North West of Western Australia and is rich in resource and investment potential. The Gascoyne extends along 600km of the Indian Ocean coastline and around 500km inland, for a total area of approximately 138,000 km2. It comprises the Shires of Carnarvon, Exmouth, Shark Bay and Upper Gascoyne.

The main commodity mined in the Gascoyne is salt, bound for the chemical industries in Asia. Department of Mines and Petroleum statistics show that the value of mineral production in the Gascoyne was $113 million for 2012/13, and has risen to $132.6 million in 2014/15.

The Gascoyne’s location; adjacent to major mineral and energy regions, with associated investment pipelines, represents a comparative advantage of the region that is currently being realised. The role of Exmouth as a hub for offshore oil and gas production in the Carnarvon Basin has driven migration-based population growth and rising incomes in recent years, at a faster rate than the rest of the region. This illustrates the potential scale of opportunity long-term development of mineral and energy resources in regional WA presents to the Gascoyne. Opportunities from resource investment can be varied and range from physical engineering and construction materials to knowledge intensive branding, marketing and technical support.

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Oil and Gas Current fields under production off the North West Cape include:• Enfield – Woodside – Oil from this project is

produced through five subsea wells connected to the Floating Production Storage and Offloading Nganhurra facility, with a maximum design production rate of about 100,000 barrels per day and a storage capacity of about 900,000 barrels of oil.

• Stybarrow – Woodside (50%) & BHP Billiton Petroleum Australia (operator – 50%) – Project involves a subsea development and a Floating Production Storage and Offloading facility, which has a design production capacity of 80,000 barrels of oil a day and storage capacity of 900,000 barrels.

• Vincent – Woodside 60% (Operator) & Mitsui E & P Australia Pty Ltd 40% – Oil is produced through eight (four dual lateral) wells connected to the Floating Production Storage and Offloading Maersk Ngujima-Yin facility.

• Van Gogh Oil Field – BHP Billiton Petroleum Australia & Quadrant Energy – Production utilizes a Floating Production Storage and Offloading linked to two subsea drill centres with 10 production wells. Additional exploration drilling has been underway north of the field.

• Pyrenees – BHP Billiton Petroleum Australia – Full project involves 13 subsea wells, an extensive subsea gathering system and a Floating Production Storage and Offloading facility, with production capacity of approximately 96,000 barrels of oil and gas reinjection capacity of 60 million cubic feet of gas per day. The project has an estimated production life of approximately 25 years.

• Macedon Gas Field – BHP Billiton Petroleum Australia – proposes to develop the Macedon gas field to produce domestic gas for use by Western Australian consumers. Project includes an 81km subsea pipeline from the Macedon field to shore. The Onshore facilities include a gas processing plant located near Onslow.

Geothermal EnergyThe Gascoyne Artesian Basin has been identified as a potential source of geothermal energy. Exploration of this resource is currently being undertaken.

Semi Precious StonesSemi precious stones such as tourmaline, amethyst and variscite are mined in modest quantities in the Upper Gascoyne region. There is also evidence of gold and diamonds in the region. Other activities such as limestone, rock, gravel and shell mining augment the region’s mining industry. Opportunities exist for further exploration and development with these resources.