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Published by marian.lee, 2015-11-25 21:19:17

gmj118-Jan-March15web

gmj118-Jan-March15web

January – March 2015 VOLUME 1. ISSUE 118
$11.95
Registered by Australia Post PP 643938/00057

2014 WINNERS

Miner of the Year: Explorer of the Year:
Northern Star Gold Road

Plus: Renaissance and Geopacific... Cambodian pioneers

ISSN 1324-4396
01

9 771324 439005
Registered by Australia Post PP 643938/0071. No pages or articles in this publication
may be reproduced in any form without the consent of the publisher. This includes
photographs either taken by Paydirt Media staff or provided by other parties



CONTENTS

12 31 36

5 NEWS 31 RENAISSANCE

“I saw the challenges but I also saw there were op- It might only be in its infancy as a mining jurisdiction
portunities.” New St Barbara Ltd chief executive Bob but Cambodia could soon become an exploration hot-
Vassie is excited by the prospect of taking on one of spot if Renaissance Minerals Ltd’s success – and influ-
Australian gold’s problem children. Mark Andrews ence – in the Asian nation continues. Rhys Dickinson
spoke to him about his plans for the company visited Renaissance’s Okvau project to get a first-hand
glimpse into what has investors intrigued

7 OPINION 36 GEOPACIFIC
Geopacific Resources Ltd’s Kou Sa project may be a
Gold Mining Journal’s Johannesburg correspondent few steps behind Okvau but according to managing
Brendan Ryan is confused. He can’t work out just what director Ron Heeks, it exhibits all the hallmarks of a
attracts Chinese investors to highly marginal South Af- low-tonnage, high-grade company-making asset. Now
rican gold mines in the middle of a bombed-out market he just needs to convince the market there’s much
more to the company’s Cambodian story
12 COVER
Gold Mining Journal’s annual survey of gold indus- 41 AUSTRALASIA
try insiders has seen Northern Star Resources Ltd In our round-up of Australia, South-East Asia and the
awarded the Miner of the Year gong and Gold Road Pacific, we visit Papua New Guinea, the Philippines,
Resources Ltd crowned Explorer of the Year. We New South Wales and the Pilbara region of Western
spoke to the chief executives of both companies about Australia
their year of achievement and take a look at some of
the other finalists for this year’s awards

COVER PHOTOGRAPH:

Northern Star managing director Bill Beament and Gold Road executive chairman Ian Murray. The two companies were voted the Miner and

Explorer of the Year for 2014

GOLD MINING JOURNAL (ISSN 1324-4396) Paydirt Media:
Published by Paydirt Media Pty Ltd. A.C.N. 063 985 133 Executive chairman: Bill Repard
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Editorial: Member of:
Editor: Dominic Piper
Deputy editor: Mark Andrews Registered by Australia Post PP 643938/0071. No pages or articles in this publication
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EDITORIAL

The enthusiasm has gone

out of the hunt

The dearth of worthy gold explorers for only to see them closed down, put on care-and-maintenance or, in the
Gold Mining Journal’s Explorer of the most disastrous cases, sold by administrators in an effort to stave off

Year award highlights the lack of discover- receivership.

ies made in the last decade. There is nothing wrong with going back into old mining camps, apply-

After a decade of unrivalled opportunity ing both innovative thinking and technology to test for extensions, ad-

and positive market sentiment for gold min- ditional ounces and new orebodies but too often in the last decade com-

ers and explorers we should be looking at panies have been satisfied by doing the bare minimum; adding 50,000oz

a long pipeline of new mines and develop- more here, using a $US1,600/oz gold price there and then tapping the

ments. However, due to a lack of foresight, market for the funds needed to restart operations.

ambition and bravery, we are sadly not. Surely, the industry and the companies themselves would have ben-

In that decade we saw numerous companies become min- efitted more from a considered approach, one which assuaged quick

ers but most have done so off the back of resurrected projects, not by start-ups based on marginal ounces in favour of applying innovative

making exploration breakthroughs. thinking and technology to exploration in the hope of making a long-

Now, the party is largely over. Commodity prices may return to higher lasting discovery?

levels but there is never likely to be the interest in resources equities to This is not to suggest explorers should spend all of their time building

match what happened between 2005 and 2011. multi-million ounces resources that will never be brought into produc-

The opportunity was wasted by everyone – from the majors who spent tion. This is the problem many of Australia’s West African explorers have

all their money overpaying for assets that they would eventually close, suffered.

write down or sell heavily discounted, to the juniors who spent too long It is very difficult to find an orebody, never mind develop it, build it and

trying to resuscitate projects which were abandoned in the 1980s, or in bring it into production but there has to be a balance between creat-
some cases, even earlier. ing shareholder value in the short
term and building the company’s
Bravery has gone out of the win- plans for the long term.
Gold Road Resources is one
Vast amounts of shareholderdow. I was recently in Adelaide for example. When the company
made its initial foray into the
the South Australian Exploration Yamarna belt in 2010, its focus
was the Central Bore prospect.
money and management andand Mining Conference. There,
The company took the
Geological Survey South Australia 200,000oz high-grade deposit
all the way to a feasibility study
employee efforts were exhaustedchief geologist Steve Hill discussed

“trying to get various operations upat length the research and devel-
opment being put into deep drilling and running, only to see them closed
technology by the Deep Explora- down, put on care-and-maintenance
tion Technology CRC in Adelaide.

This is exciting, innovative work or, in the most disastrous cases, in early 2013 which confirmed a
which could eventually (and it’s not sold by administrators in an effort to $20 million, 100,000 tpa opera-
stave off receivership.
very far away from reality) result in tion could produce 29,200 ozpa
lower cost drilling which, you would at cash costs of $330/oz.
hope, could lead to more discover-
However, such a project was

ies in new frontiers in Australia. never going to get investors too

The discussion made me think excited and Gold Road went back

about how little genuine technological innovation has been applied to to exploration. The management team, led by chairman Ian Murray and

gold exploration in Australia in the last decade. Apart from the applica- executive director Ziggy Lubieniecki, were convinced the Yamarna belt

tion of some advanced geophysics, the opposite is largely true. Instead still held something for the company.

of using these unprecedented times to push new boundaries while in- Two years on and the company is now sitting on a 3.8 moz gold re-

vestors are favourable to gold stocks, companies have chosen instead source at the Gruyere prospect and is preparing to release a scoping

to mine the share market, releasing any number of “director’s holes” study on a potential 5 mtpa operation in the March quarter.

instead of trying anything innovative. There are still questions as to whether the resource will hang together

And because of this attitude, what has the Australian gold sector but the company’s shares have been one of the best gold performers on

gained from this era of unprecedented opportunity? Not very much. the ASX this year. By sticking to its conviction and returning to explora-

The Tropicana discovery made by AngloGold Ashanti Ltd and Inde- tion, Gold Road has managed to build value in the toughest market im-

pendence Group Ltd stands out as an obvious candidate, particularly as aginable for gold juniors and bring returns to shareholders far in excess

it is now in robust production. of anything it could have by building a small operation.

There have also been others. Gold Mining Journal’s Explorer of the Gruyere may never become another Tropicana or Telfer but by being

Year, Gold Road Resources Ltd, has in its Gruyere project one of the brave in its exploration approach, Gold Road has given itself a chance

largest local discoveries of recent times. Regis Resources Ltd’s discov- that many of its contemporaries have passed up in favour of fleeting

ery of the Garden Well deposit also deserves mention but after that the share price appreciation.

list becomes relatively thin.

Even the exciting discoveries made by Australian juniors in West Afri-

ca have so far failed to come to fruition from a development perspective.

On the flip side, how many historical mines, closed in the 90s, 80s – or

in some cases the 70s, 60s and even earlier – have been brought back

into production only to fall over in a relatively short space of time?

Vast amounts of shareholder money and management and employee

efforts were exhausted trying to get various operations up and running, – Dominic Piper

Page 4 GOLD MINING JOURNAL January – March 2015

NEWS

Returning to sainthood

Bob Vassie stepped we’re expecting that to show
into the position of
St Barbara Ltd chief signs of levelling out and re-
executive with “eyes
wide open”. building. It is absolutely clear

“I saw the challenges but I also what we have got to do here.
saw there were opportunities. St
Barbara is quite a significant gold I have had a few years’ expe-
producer with a significant stock
of reserves and resources com- rience in reducing corporate
pared to its Australian peers and
companies of this size,” he told and exploration costs and I
Gold Mining Journal.
believe Simberi is absolutely
At the time of print, St Barbara
was trading at 9c/share, as the doable,” Vassie said.
burden of $360 million debt lin-
gered on top of underperforming Curtailing costs across
assets in the Solomon Islands
and Papua New Guinea. the board to reduce its debt

In FY2014, St Barbara report- is essential, however, Vassie
ed a $411 million write-down of
its Pacific assets (after tax) which promised St Barbara would
followed write-downs of $221
million in FY2013. not lose focus at its Leono-

However, the company has ra project where it has the
started to turn the corner, ac-
cording to Vassie. Gwalia and King of the Hills

Expectations are for 100,000 underground mines.
ozpa gold production rate to be
hit at Simberi towards the end Forecast production in
of FY2015, with total operating
costs of $1,200-1,300/oz guided. FY2015 at Gwalia is 180,000-

Delivering to guidance will see 200,000oz @ 7.9 g/t gold at
the $70 million loss incurred at
Simberi flipped and the operation total operating costs of $720-
become cash flow positive in the
June 2015 quarter. 750/oz, while King of the

“Currently a lot of time is being Hills is scheduled to produce
put into PNG at Simberi. A turna-
round is taking shape and there 60,000-70,000oz @ 4.1 g/t
are a lot of positive signs. We
are turning it around late in the gold at total operating cash
day. The company has left its run
a little late, particularly with our costs of $1,040-1,090/oz.
cash position, share price and all
those sorts of things but we need A two-week shutdown at
to back ourselves at a low ebb,”
Vassie said. Leonora during September

“We know a turnaround at impacted production for that
Simberi is absolutely doable but
we can’t afford it to be any later quarter but the company
[than now] or having any upsets
as we work towards turning it is confident of delivering
around.”
310,000-350,000oz gold from
Simberi, along with Gold
Ridge in the Solomon Islands, Leonora and Simberi.
were brought into St Barbara’s
portfolio through its combina- St Barbara has had its problems in the Pacific Islands, however it is “Our market cap is about
tion with Allied Gold Mining plc confident of positive cash flow from Simberi in 2015 $40 million, which is ridicu-
in 2012. lous for how much gold we

Like Simberi, Gold Ridge has has been stifled by a lack of gov- edge or destabilising the thing. produce,” Vassie said.
not been without its problems.
ernment attention at Gold Ridge Gold Ridge is absolutely getting “We have got $360 million
Most recently, the company
despite repeated efforts from St a fair bit of my time and it is cer- debt, so investors want to see

Barbara to curb a potential haz- tainly frustrating because we are us deliver on our promises like

ardous situation involving the not getting any attention from the catching up on production at Le-

tailings storage facility. Ministry of Environment. They onora. They want to see us get to

St Barbara reported the tail- are not attending meetings or re- 3.5 mtpa at Simberi and we are

ings facility will overflow unless turning calls.” due to bring the mill back online

pumping starts, however, the Operations remained sus- [mid-December] after the refur-

Government has failed to re- pended at Gold Ridge and St bishment so we’ll be able to start

spond to the company’s requests Barbara’s preference is to divest to demonstrate that.

for permission for a controlled the asset in FY2015, with nego- “Investors want to see costs

water release. tiations to potentially transfer it to come down and we have abso-

Torrential rain in April 2014 the Government. lutely done that, and they want

and consequent flooding in the A loss of about $40 million to see the upside, particularly

Solomon Islands interrupted op- was attributed to Gold Ridge in at Leonora. We have nine years

erations, forcing St Barbara to FY2014. in front of us at Leonora and

reduce the number of personnel It appears cutting Gold Ridge we want to extend some of the

on site. loose will be a relief for the com- oxide life at Simberi. All those

“The situation in the Solomon pany as it looks to rebuild its things are coming together and

Islands is taking more time but reputation. in the New Year we will be able

less money to [solve],” Vassie Slashing costs is an impera- to demonstrate some of them in

said. tive right now and St Barbara the quarterly report in January.”

“It is highly frustrating as it has started by taking the knife to – Mark Andrews
would be so easy and we’re so exploration (FY2015 $8 million

prepared and willing to fund an budget compared to $22 million)

appropriate solution. The con- and corporate costs ($20 million

sequences of topping of the dam down from $30 million).

can range from not much rain “Our cash balance had

water at the top going over the dropped time and time again but

January – March 2015 GOLD MINING JOURNAL Page 5

NEWS

Peru crackdown on illegal gold

leads to new smuggling routes

Acrackdown on Gold mined illegally in Peru is being smuggled through all sorts of terrain into Bolivia
illegal gold mining
in Peru has spawned Peruvian customs, however, The dealer, who declined to clared most clandestine mining
new smuggling routes registered gold exports totalling be named but met Reuters on in Madre de Dios snuffed out.
through its porous 290t. two separate occasions in cof- Shortly after, the retired general
border with Bolivia, fee shops, said the surest way was promoted to interior minister.
with some gangs A ministry source said the 112t to avoid losing a consignment
using human mules, difference – worth around $US3 to bandits stalking lawless bor- Still, he acknowledged the
armoured cars and billion, according to customs ex- derlands was to fly the gold into proliferation of smuggling gangs
light aircraft to evade port data – was mostly attributed Bolivia using light aircraft. based in Puno, another border
capture. to the gold extracted by wildcat region, saying large numbers of
miners and sold down a chain to Peruvian law prohibits the people crossed the frontier “like
The gold is ghosted across exporters. Government from shooting down ants”, each carrying small quanti-
jungles, rainforest and Lake Titi- small aircraft. ties of gold.
caca on the mountainous border, “We couldn’t allow this gi-
and is then sold to dealers who ant flow of illegal gold passing “Gold is heavy and can unbal- The influx of illegal Peruvian
process the precious metal for by right under our noses,” said ance the plane, so you can only gold swamps Bolivia’s local
export out of Bolivia’s capital La Romero. “But we have 1,000km really take up to 200kg at a time,” markets and depresses prices,
Paz, Peruvian officials say. of border with Bolivia, and every the dealer said. “But it’s a lot saf- head of Ferreco, a federation of
one of those kilometres is entire- er than by ground.” small-scale miners, Edmundo
Bolivia, a relatively small gold ly passable.” Polo,said.
producer which commissioned The gold smuggling is a re-
no new large mines in 2014, of- Asked if Peruvian gold is being versal of illegal flows before the “Our own gold buyers are buy-
ficially exported 24t of gold be- smuggled into Bolivia for export crackdown, when Bolivian ore ing gold from Peruvians,” Polo
tween January and August 2014, to the US, the US Department of was taken to Peru to avoid taxes, said. “It’s no secret.”
data from Bolivia’s statistics Homeland Security said Wash- Hector Cordova, a former Boliv-
agency shows. ington and Lima were discussing ian mining minister, said. Part of the surge in Bolivian
the sharing of trade data to inves- gold exports might be due to less
That is six times the amount of tigate asset laundering. Peru’s attempted clean-up is ore being smuggled out via Peru,
gold Bolivia’s miners produced its latest effort to control a gold as well as efforts to stop export-
in the first seven months of 2014 One gold dealer who smuggles rush in the Amazon jungle, where ers manipulating a customs
and more than three times the ore through Bolivia said miners in migrant workers, often from the loophole and disguising gold
total amount it exported in all of Peru’s Amazon region of Madre impoverished highlands, tear shipments as mining waste, said
2013, illustrating how Peruvian de Dios had been hit but output through river beds in search of Cordova.
gold is being diverted. from illegal mines across Peru gold nuggets.
has likely only slipped to 4-5 tpm “But too much gold is being
Nearly all of Bolivia’s exported from 8t before the crackdown. The Government has target- exported for that to explain the
gold was shipped to the United ed companies exporting mined entire difference,” he said. “It’s
States, government data shows. “We’ve taken gold by motor- ore, restricted fuel and mercury because of the measures Peru
cycle, by mule, by armoured car, used in illegal mining hot spots is taking.”
Peruvian President Ollanta and never the same way,” the and sent troops to blow up min-
Humala launched a clampdown Lima-based dealer said. Once ing equipment in unauthorised – Mitra Taj, Reuters
in 2013 to tackle a decade-long the gold crosses into Bolivia, it camps.
boom in wildcat gold mining that is dropped at safe houses before
has destroyed swathes of Peru’s being delivered to cash buyers. In June, Peru’s illegal min-
Amazon forest and laced its riv- ing czar, Daniel Urresti, de-
ers with mercury.

But the proliferation of smug-
glers’ routes into Bolivia shows
how difficult it is to eradicate il-
legal mining without better coor-
dination across frontiers.

“They move much faster than
we do,” Peruvian customs official
Gustavo Romero said. “We close
one door and they’ve already
opened another.”

Bolivian customs and mining
officials declined to comment.

Legal gold miners in Peru re-
ported 178t of gold for export
with the Mines Ministry in 2013.

Page 6 GOLD MINING JOURNAL January – March 2015

OPINION BRENDAN RYAN

South African junior gold

sector on red alert

Idon’t get it. Make old workings – something as Stonewall Resources.
that I still don’t get it.
What is it about highly experts had been warning Stonewall’s promoters
marginal South Afri-
can gold mines that about for more than a dec- declared that the com-
attracts Chinese in-
vestors, particularly at ade. pany would be producing
this bombed-out stage
of the gold market? Looking back, it’s as- 155,000 ozpa gold by the

It makes me wonder whether tounding how investors end of 2014.
basic research on the histories of
the companies that they are look- swallowed CRG’s story Stonewall made a loss
ing at buying is done? You don’t
have to hire expensive geological hook, line and sinker given of $US29.9 million in the
or mining consultants. An archive
search of South African media the amount of time it has year to end June 2013 but,
which cover mining closely such
as Miningmx or Business Day or taken a real gold mining despite this, a Chinese
Martin Creamer’s Mining Weekly
will provide the necessary over- company – Randgold Re- company called Shan-
view.
sources Ltd – to achieve dong Qixing Iron Tower of-
I have asked these questions
before. That was back in April the 1 moz production mark fered to buy Stonewall for
2011 when Hong Kong-listed
Wing Hing International agreed which it did this year af- $US141.5 million subject to
to pay R3.9 billion in shares for
Harmony Gold Mining Company ter starting up in the late “appropriate Chinese regu-
Ltd’s Evander 6 shaft and the
dormant Jeanette mine. 1990s. latory approvals”.

These assets had been CRG shares have limped Stonewall followed up
purchased from Harmony six
months previously by unlisted along since 2011 as man- with a loss of $US13 mil-
South African junior Taung Gold
for just R300 million and then agement eked out an ex- lion in FY2014. The 2014
flipped to Wing Hing. So far, very
little has been done about devel- istence mining bits and review of operations said
oping these projects.
pieces of ore where they several bulk trial mining ex-
The latest example is the in-
terest by two more Hong Kong could and they had made it ercises had been success-
companies in Central Rand Gold
(CRG) which is one of the biggest back to around 130c/share fully completed.
dogs ever to list on the JSE.
by the middle of this year. As for actual gold pro-
The company’s prospects
were hyped into the stratosphere On November 12, CRG duction, well, the 2014
when it listed on the JSE back in
2007 when management confi- jumped fivefold to around September quarter report
dently predicted that it would be
producing 1 mozpa within a mat- 650c/share after a Hong did not mention anything
ter of years from the extensive
former mine workings under- Kong company – the Hira stating that “the Shandong
neath Johannesburg.
Group – announced it transaction has continued
The stock hit R20/share in
2007 then collapsed to 4c by could pay $US150 million to be a key focus during the
October 2011 as the proposed
mining areas were hit by seri- in cash for the junior miner, quarter”.
ous underground flooding from
rising acid mine drainage in the subject to a positive out- But it seems Shandong –

come from a due diligence Chinese investors have shown a penchant for small not surprisingly – has got-

examination. South African gold mines, such as Stonewall’s ten cold feet. On November

CRG shares subse- assets in the Mpumalanga Province 21, Stonewall announced

quently eased and had that it “regrets to inform

pulled back to around 390c by a gold mine, there are far better shareholders that Shandong

the end of November when it was candidates out there. unexpectedly advised Stonewall

announced a second Chinese Another case in point is ASX- that it did not intend to complete

company – Beijing Angkong listed Stonewall Resources Ltd the purchase of Stonewall Min-

Investment, which is a wholly- which owns a number of gold ing.”

owned subsidiary of Phoenix mines and prospects around the Stonewall added: “[We are]

Tree Investment Group – had towns of Sabie and Pilgrim’s Rest well positioned to recommence

signed an MoU over possibly in South Africa’s Mpumalanga gold production and the board is

buying CRG for around $US148 Province. committed to running the com-

million. Want to know how to make a pany in its current form as an

Speculation early in December small fortune mining gold around attractive value proposition for

was that a third Chinese compa- Pilgrim’s Rest? It’s easy: start shareholders.”

ny was considering also making with a large one. The only comment I would like

a bid for CRG. So, they are lining Those prospects are the for- to make on that statement is to

up to buy a highly marginal gold mer Transvaal Gold Mining Es- repeat there are far more attrac-

operation which is still facing an tates (TGME) assets and nobody tive value propositions out there

uncertain future at a time when has made money out of them in for investors than either Stone-

the gold price is going nowhere. decades although a number of wall or CRG or Wing Hing/Taung

Clearly I am missing some- companies – most recently the International.

thing. former Simmer and Jack Mines Brendan Ryan is a freelance writ-

I know from the personal expe- (Simmers) – have lost plenty try- er, based in Johannesburg

rience of dealing with them that ing.

hard core gold bugs are funda- Simmers sold TGME in 2010

mentalists in their unshakeable to unlisted junior Stonewall Min-

optimistic outlook on the metal. ing for R25 million which then

But, if you have the cash to buy listed them on the ASX in 2012

January – March 2015 GOLD MINING JOURNAL Page 7

NEWS

Kingsgate still in enviable position

Kingsgate Consoli- @ 0.8 g/t gold.
dated Ltd endured “Chatree will continue churn-
a stressful 2014,
however the outlook ing out ounces as our cash cow
remains rosy, ac- and will still be there if gold
cording to non-exec- goes to some lower, horrendous
utive chairman Ross price,” Smyth-Kirk said.

Smyth-Kirk. Reserves and resources at
Chatree are 1.4 moz and 3.8 moz
The passing of long serving gold, respectively, and while the
company has exploration ambi-
chief executive Gavin Thomas in tions in Thailand its efforts have
been stymied by a system not ac-
June has been a great loss and customed to mining.

at the time of print the company Chatree will continue to be Kingsgate’s cash cow for a long time to come Smyth-Kirk said the company
had been limited to exploration
remained on the hunt for a suit- activities on its granted mining
lease, while it awaits approval
able replacement. ing at things, that doesn’t faze us, rising total unit cash costs of for exploration licences further
afield.
Former Newcrest Mining Ltd but we need them to be compat- production at Challenger –
“Thailand has been very good
EGM sustainability and external ible. $US1,310/oz from $US1,135/oz to us but it is a frustrating atmos-
phere to work in because they
affairs, Geoff Day, filled the po- “We are once bitten, twice shy FY2013 – in a lower gold price don’t have a mining culture,”
Smyth-Kirk said.
sition however it was for a short at the moment and we are going environment.
“There has been a freeze on
period only, with Tim Benfield relatively slowly but I don’t think it Expensive exploration pro- exploration and our actual ex-
ploration expenditure is consid-
currently acting chief executive. will be a long time before we find grammes targeting the bottom erably reduced until we have
exploration licences granted for
“With the experience we have someone,” he said. of the pit stopped when the gold drilling.”

been through in recent times our Despite Kingsgate shares trad- price slumped in 2013 and the The news is better from else-
where in South East Asia, with
mantra is to hasten slowly on it. ing at one of their lowest points in Challenger West orebody was Laos and Myanmar emerging as
areas of interest for Kingsgate.
There is a shortlist of people but many years – 72.5c/share at the brought into play, along with a
Smyth-Kirk said the company
we are not going to rush into ap- time of print – Smyth-Kirk said new mining contractor, Byrnecut. was looking forward to evaluat-
ing some prospects in Myan-
pointing someone,” Smyth-Kirk the company had a compelling Productivity and costs have mar in 2015, while drilling was
planned for the Sayabouly pro-
said. business case for any new pro- since improved and a hedging ject in Laos.

“In the last couple of months spective chief executive to step position has been established, “There is an interesting poly-
metallic prospect there but those
we have found out so much into. including 22,000oz gold forward kinds of things need a lot of work
and investigation. While we were
about how very, very loyal and “We are in a situation that a lot sold at $1,419/oz for delivery there we found some interesting
trench samples of gold nearby.
dedicated our people are. We of other companies would love to in the December half year. The We are about to put a few holes
into that in the next few months.
have a family-like atmosphere be in,” he said. changes have left Challenger in It is early days but very interest-
ing,” he said.
here and while some might not Record production of nearly a profitable position and Kings-
More pertinent to the com-
be absolute tops in their fields, 210,000oz gold was reported gate bullish on the mine’s short- pany’s immediate exploration
aspirations – particularly as its
they are certainly very loyal and in the 2014 financial year from term future. advanced Bowdens silver mine
in New South Wales appears
dedicated, which a company Chatree in Thailand (134,546oz However, should the gold price stalled – is its budding Nueva Es-
peranza project, 900km north of
needs. It is important that any- @ $US728/oz) and Challenger fall further – $US1,198/oz at the the Chilean capital of Santiago.

one coming in is compatible with in South Australia (74,9540z @ time of print – in the medium Described as a potential
“pearler” by the late Gavin Thom-
our people, rather than someone 4.78 g/t). term, Smyth-Kirk said the com- as, latest results confirm that
Kingsgate maybe onto a “ball-
coming in with a brush, clearing Kingsgate celebrated pouring pany would need to “take action”. tearer”, according to Smyth-Kirk.

people out and starting all over its 1 millionth ounce of gold from “Despite the fact that you have “Nueva Esperanza is emerg-
ing as the real star on the horizon
again. Challenger in November, some got a wide-ish tunnel to contend in Chile,” Smyth-Kirk said.

“We welcome, and are looking 12 years after first production in with and therefore a lot of waste;

for, new ideas and new ways of October 2002. if the grade keeps up it can be

doing things and new eyes look- The milestone comes amid profitable,” Smyth-Kirk said.

“People are sniffing

around Challenger and if

we can get a [good] deal

we will probably sell it.

Without a sale, it will prob-

ably be in production for

another 18 months de-

pendent on the gold price.”

Forecast produc-

tion from Challenger in

financial year 2015 is

65,000-75,000oz, while at

Chatree, where the outlook

is more certain, Kingsgate

expects to pour 130,000-

140,000oz gold from cur-

The right price could see Challenger in the hands of another owner rent operations of 6.2 mtpa

Page 8 GOLD MINING JOURNAL January – March 2015

“That could be anything and pany, with a programme to ground also indicated po-
we should know a lot more about the west of the Chimberos
it in the next few months. It is pit intersecting mineralisa- tential structures and sig-
pretty clear cut what the future of tion including: 15m @ 7.13
the company is.” g/t gold and 103 g/t silver natures likened to deep
from 150m, 20m @ 5.18 g/t
Key outcomes of a DFS gold and 84 g/t silver from intrusive bodies.
completed in March included: 118m, 37m @ 3.27 g/t gold
throughput of 3 mpta for average and 52 g/t silver from 180m, “We are clearly look-
production of 6.43 mozpa silver 22m @ 2.04 g/t gold and 23
and 17,500 ozpa gold over an ini- g/t silver and 13m @ 1.92 g/t ing at something quite big
tial mine life of six years. gold and 71 g/t silver.
and different there. We
Capital costs for a heap leach Furthermore, hole ECHR-
operation at Nueva Esperan- 25: 170m @ 4.2 g/t gold don’t exactly know what
za – which is comprised of the equivalent has been extend-
Arqueros, Teterita and Chim- ed from 232m to 430m. it is yet but the stuff com-
beros deposits – is estimated at
$US140 million (including $US10 “We put a diamond tail ing through is certainly
million contingency). down on that really good hit –
which is continuous through encouraging and our geo-
However, the existing envi- 170m of gold – which is rare
ronmental approvals granted in and fantastic. We have gone logical people are beside
2013 only covered the Arqueros down further and we are
deposit therefore an amended getting copper hits. We don’t themselves,” Smyth-Kirk
EIA has been submitted to in- have the results from that
clude open cut mining of Chim- but its chalcocite and chalcopy- said.
beros and Teterita, on-site power rite I think. It’s speculation at the
generation and additional waste moment but we’re on to some- “We are changing the
dumps. thing bigger – how much bigger I
don’t know,” Smyth-Kirk said. whole perspective [of the
There may be delays in receiv-
ing approvals, which were ex- At the time of print, 6,000m project]. We have done a
pected by the end of March but had been completed since late
are now more likely to be granted August, and such is the com- DFS on a heap leach but
in the June quarter. pany’s enthusiasm for Chile right
now it has extended the pro- clearly we have a lot more
In the meantime, drilling has
proved successful for the com- gold and we are now into

the copper so that may

change,” he said.

Nueva Esperanza is Kingsgate’s next big thing “We are working to-

wards getting a better han-

gramme by a further 10,000m. dle on the situation as it may be a

The additional drilling is de- lot bigger and further drilling will

signed to follow-up extensions allow us to determine that. We

within the Chimberos gold and will certainly know more about

silver mineralisation, while King- what we are looking at in the next

sgate will look to revisit holes few months.”

that finished at depth in minerali- – Mark Andrews
sation.

A recent ground magnet-

ics survey over the exploration

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January – March 2015 GOLD MINING JOURNAL Page 9

NEWS

Hedgers sit pretty

Gold hedgers were September quarter was Australian operations with average hedge prices over $1,500/oz
the winners in $1,385/oz, with the US
the September 2014 gold price trending down- Company Operation A$/oz Gold Price Achieved
wards against a more sta-

quarter, according to ble Australian gold price, Evolution Mining Ltd Edna May 1,554
Surbiton Associates which was helped by a Carosue Dam 1,533
lower Australian dollar ex- Saracen Minerals Holdings Ltd

Pty Ltd director San- change rate. Millennium Mining Ltd Nullagine 1,516
dra Close. Andy Well 1,508
Despite challenging
times in the gold sec- Doray Minerals Ltd

tor, Australian output re-

“Results this September quar- mained strong at 71t for the Sep- Ball mill issues at Gwalia im- at Mt Carlton, Queensland, to

ter clearly show the benefit of tember quarter. pacted St Barbara Ltd’s produc- 19,443oz gold equivalent.

hedging,” she said. Production was about tion with 14,000oz less gold Regis Resources Ltd also re-

“Several producers deliver- 20,000oz less than the June produced from the mine in the ported record quarterly produc-

ing some of their production into quarter but half a tonne higher September quarter. tion of 26,316oz from Rosemont

forward positions or using put than the corresponding period in Meanwhile, the transition to as recovery from flooding earlier

options achieved well over $100/ 2013. predominantly gold-rich ore in the year continues.

oz more than the average spot There was lower output from from silver ore saw Evolution AngloGold Ashanti Ltd also

price. Newmont Mining Corp’s Tanami Mining Ltd increase production benefitted from higher through-

“Used wisely, hedging mecha- operations in the Northern Terri- put at Sunrise Dam

nisms provide certainty and re- tory (down 23,000oz), while pro- in Western Australia,

duce risk. It strikes me as being duction at Jundee was also down with production in-

quite inconsistent for a company 19,700oz before the handover to creasing by 16,000oz

to insure its plant and equipment Northern Star Resources Ltd. gold.

and even its senior personnel but Nevertheless, the company “The gold sector is

not to insure the minimum price it is on track to deliver 1.57-1.67 maintaining produc-

receives for its product.” moz at all-in sustaining costs of tion but low gold ex-

The average gold price for the $US970-1,050/oz for the year. ploration expenditure

is still a real concern,”

Top producing Australian operations for the Close said. “However
September quarter 2014 with reduced share
prices and a short-

Operation Ounces Owner age of new capital,

Boddington 165,000 Newmont Mining Corp we are seeing some
rationalisation of ex-

Super Pit – JV 164,000 Newmont Mining Corp 50%, ploration tenements
Barrick Gold Corp 50% and projects among
the other juniors.

Telfer 134,771 Newcrest Mining Ltd Hopefully this will

Tropicana 119,593 AngloGold Ashanti 70%, provide some much
Independence Group 30% needed stimulation.”


St Ives 88,700 Gold Fields Ltd Dr Sandra Close

Surbiton Associates Pty Ltd “It is very hard to say what is be modest, as “you don’t want to on the State. Key outcomes in-
director Sandra Close has reasonable with a delicate bal- kill the goose”. cluded: WA’s gross state product
called for a fair outcome to pre- ance needing to be struck. Now would initially decline by $110
vail as the West Australian Gov- is probably not the time to be WA gold miners have cam- million and $240 million by 2016-
ernment decides the fate of gold whacking too much of a royalty paigned hard against the Gov- 17, a reduction of $100 million in
royalties in the State. increase on gold or any other ernment’s proposed royalty WA exports which would double
mineral at this time,” Close told hike, particularly through the in 2016-17, while regional com-
The State Government was Gold Mining Journal. Gold Royalty Response Group munities would be severely im-
expected to make a decision late (GRRG). pacted.
in 2014 on whether it would lift “It is not an easy one, however
the gold royalty in the State. I do know companies spend a Global blue chip and junior The GRRG says that increas-
great deal to explore, develop miners alike have joined forces ing gold royalties in WA could po-
A review of the mineral royalty and produce. Companies and and launched the “Heart of Gold” tentially put 25,000 jobs at risk.
system has been in progress for government need to discuss campaign to bring attention to
some time, with Government what is fair and reasonable for all the plight of mining companies
looking to peg back budget parties concerned.” and communities should a gold
deficits and it is working on the royalty increase be imposed.
theory of royalties reflecting 10% Close said royalties should be
of the commodity’s value in the paid and if there was to be any Deloitte Access Economics
ground. increase in the rate it should only completed a report on the impact
a royalty increase would have

Page 10 GOLD MINING JOURNAL January – March 2015

11 March 2015

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COVER

Northern Star and
Gold Road:

A fairytale year

Through the acquisition of Jundee, Northern Star has emerged as Australia’s second largest gold miner

After several close For Miner of the Year, North- In quick succession, Northern when most of the miners seem to
votes in recent ern Star, voters were undoubt- Star acquired the Plutonic, East have had a difficult year, as evi-
years, Gold Mining edly swayed by the company’s Kundana and Kanowna Belle op- denced by their share price un-
Journal’s annual Min- audacious move into the mid-tier erations from Barrick Gold Corp derperformance,” Gold Mining
er and Explorer of the gold space. and the Jundee mine from New- Journal columnist Keith Goode
Year awards for 2014 mont Mining Corp to catapult it- said. “The company stands out
were won emphati- From a single mine producer self to Australia’s second largest for what it has already achieved,
cally by Northern Star with a production profile of less gold miner with a production pro- the acquisitions it has made and
Resources Ltd and than 90,000 ozpa last year, the file of 600,000 ozpa. what it continues to achieve.
Gold Road Resources Bill Beament-led company trans- And, they pay dividends too.”
Ltd respectively. formed itself and the Australian The experts who voted on the
gold landscape with a series of awards agreed that the com- Papillon Resources Ltd man-
Depressed resource equity deals with North American ma- pany’s bravery should rightly be aging director Mark Connelly is
markets and a plummeting gold jors keen to divest their Austral- rewarded. no stranger to company-defining
price meant 2014 was one of the ian portfolios. M&A activity and he pointed to
toughest years in recent memory “Northern Star is a standout
for gold miners and explorers,
but the two winners were able to To cap a stellar 2014, Northern Star was also nominated for the Explorer of the Year award
defy sentiment.

Although Gold Mining Jour-
nal’s awards are not based
on share market performance
– Northern Star’s 72% gain
over the voting period and Gold
Road’s 144% increase over the
same period – highlight the win-
ners’ exceptional performance in
a sector where the S&P/ASX All
Ordinaries Gold Index managed
just a 10% return in the last year.

Page 12 GOLD MINING JOURNAL January – March 2015

Northern Star’s “good consolida- Gold Mining Journal’s Miner of the Year Northern Star Resources managing director Bill Beament and
tion of assets”. Explorer of the Year Gold Road Resources executive chairman Ian Murray

Doray Minerals Ltd is in the it has a low-cost operation which ket sentiment towards gold ex- belt,” Goode said. “The historic
middle of a slightly more mod- it is going to make a lot of money plorers to produce a project with comment used to be that the
est takeover of Mutiny Gold Ltd, out of and even the higher cost a 97mt @ 1.23 g/t for 3.8 moz Yamarna didn’t tie together, but
but managing director Allan Kelly New Zealand mines are lower gold resource at a discovery cost going back to basics and rebuild-
recognised the quality of the as- than their Australian counter- of just $2/oz. ing the geology back up over a
sets Northern Star had acquired. parts. And, it has a very good two-year period appears to have
hedge book for the New Zealand Perhaps most excitingly of all, led to Gold Road ‘cracking the
“Northern Star put together operations.” Gold Road has achieved all this code’.”
the deals of the year ... Kundana with a genuine greenfields dis-
and Jundee being the standout Other miners to attract the covery. NewGenGold conference or-
assets.” votes of experts included Doray ganiser Keith Yates saw Gold
for its low-cost production and When it first started unfurling Road as the winner “by a country
Another exploration company takeover offer for Mutiny, Anglo- impressive drilling results from mile” while Doray’s Kelly said it
executive said the company Gold Ashanti Ltd for the success- its Yamarna belt properties, was a “great technical success”
had undertaken an “impressive ful start of operations at Tropi- there were still plenty of doubters story.
amount of action in a short pe- cana and Evolution Mining Ltd who were sceptical the remote
riod of time” but warned that “the for continuing to hammer down project could hang together. Though first place went to an
challenge is how to sustain that costs despite having a mature Australian junior for its work in a
and it will be heavily dependent portfolio of mines. Three years on however and greenfields area, judges award-
on exploration success”. the quality of the Gruyere deposit ed second prize to a South Afri-
The Explorer of the Year simi- has many veteran gold explora- can major breathing new life into
While Northern Star was over- larly stood ahead of the pack. tion watchers hailing the compa- a mature asset.
whelming favoured in the voting, ny, including Keith Goode.
there were others who impressed After the recent domination of Gold Fields stunned many
Gold Mining Journal’s experts. West African stories, the 2014 “It has achieved its resource in Diggers & Dealers delegates in
award has a homespun feel to record time [just 10 months after August when it used its presen-
Second place was awarded to it, with Gold Road the runaway the discovery hole at Gruyere tation at the Kalgoorlie forum to
Gold Fields Ltd for its own inte- winner. was drilled] and is continuing to highlight its new 9.2mt @ 4.5 g/t
gration of recently acquired as- add resources and discoveries for 1.33 moz gold Invincible dis-
sets. The company has defied mar- along the Yamarna greenstone covery at St Ives in the WA East-
ern Goldfields.
The South African major Gold Road has confirmed WA’s Yarmarna greenstone belt
picked up the Yilgarn South op- as a gold-rich destination Kelly said the Invincible dis-
erations from Barrick in August covery – for which the discov-
2013, making Australia the larg- ery hole was only drilled in 2012
est regional contributor to the – proved “there is life in the old
group’s global portfolio. camp yet”.

The company now operates Other exploration stories to at-
St Ives, Agnew-Lawler, Granny tract the attention of voters were
Smith and Darlot in WA and Miner of the Year Northern Star,
have contributed a combined 1 for its near-mine discoveries on
moz gold production since being its newly acquired assets, and
consolidated under Gold Fields’ Renaissance Minerals Ltd for its
ownership. quiet achievements in Cambodia

The company’s September (see page 31).
quarterly results highlighted the
success of the acquisition with a
10% increase in net earnings and
a 12% free cash margin.

Connelly said Gold Fields had
proven the sense in acquiring the
Yilgarn South assets.

“It is always hard to bed down
a corporate takeover and come
out the other side with a positive
outcome [but Gold Fields has],”
he said.

Other voters opted for Ocean-
aGold Corp Ltd, due largely to
the successful commissioning
of its Didipio mine in the Philip-
pines.

Year-to-date production from
Didipio – 270km north of Manila
– was over 71,000oz gold and
18,000t copper and the opera-
tion is on track to exceed 2014
full-year guidance and hit a
steady run rate of 3.5 mtpa.

Gold Mining Journal founder,
Ross Louthean, said Oceana-
Gold was in “a strong position”.

“That is particularly the case
looking ahead to the next few
years,” Louthean said. “In Didipio

January – March 2015 GOLD MINING JOURNAL Page 13

COVER

A star is born

Northern Star has been pleasantly surprised by the assets it has acquired from Newmont

Northern Star months, but there was still more didn’t surprise were our share- probably better than we thought,”
Resources Ltd’s to come in May with the com- holders because we had spent he said. “When you are doing the
last 18 months are pletion of a deal with Newmont three years developing and com- due diligence you don’t get to see
perhaps unparalleled Mining Corp for its 200,000 ozpa municating our strategy to them.” a lot about the operations out-
in the long and rich Jundee mine. side of the data room; in fact, you
history of the Austral- Having made a splash by re- probably only get six hours on
ian gold sector. Despite all the talk about defining the Australian gold land- site. So when we did take control
the need for a mid-tier miner to scape, Northern Star has spent we realised there was a lot more
When the company won the emerge in Australia, few in the the subsequent eight months upside than we assumed in the
2013 Gold Miner of the Year local gold scene expected it to finding just what it has in its port- due diligence.”
award, it did so as a single asset come about so quickly or spec- folio. Beament said even the
company, its high-grade Pauls- tacularly. Northern Star management team Among the pleasant surprises
ens mine in the Pilbara region itself had been surprised by the was the quality of the staff in
of Western Australia producing “It is fair to say we scared quality of the assets once it had place.
86,000oz at less than $1,000/oz the bejesus out of the market,” got inside operations.
all-in costs in FY2013. Northern Star managing direc- “The expertise of the work-
tor Bill Beament told Gold Min- “It has probably gone better force has been a big surprise,
However, the company which ing Journal. “But the people we than planned and the assets are they are exceptional.”
retains the award for 2014 has a
very different look to it thanks to Bill Beament
a remarkable series of audacious
acquisitions across the WA gold
scene.

In December, as its perfor-
mance at Paulsens was being re-
warded in Gold Mining Journal,
the company paid Barrick Gold
Corp $25 million to acquire the
major’s 100,000 ozpa Plutonic
mine in the Eastern Goldfields.

Two months later, the two
companies were again signing
transaction papers, this time over
Barrick’s 100%-owned Kanowna
Belle mine and its 51% share of
the East Kundana JV for a com-
bined $75 million.

Northern Star had increased
its production profile from sub-
100,000 ozpa to more than
500,000 ozpa in less than four

Page 14 GOLD MINING JOURNAL January – March 2015

Also a surprise is the level of nearly double our current mar- Northern Star has produced 382,000oz at all-in cash costs of
work which has gone into each of ket cap. Investors are the ones $1,043/oz in the last four quarters
the assets. With the North Ameri- we have to target now and you
can majors keen to exit Australia do that through your production covery at Kundana after return- now turned its attention from ac-
for a number of years, it had been results, increasing reserves and ing hits of 15m @ 6.2 g/t, 3.2m @ quisition to organic growth.
widely assumed that Jundee, resources and educating them 26.6 g/t, 3m @ 11.2 g/t and 2.3m
East Kundana, Kanowne Belle on your strategy. @ 7.9 g/t. The mineralisation is “As a managing director you
and Plutonic had been left to 200m from surface and adjacent must always keep an eye out for
wither on the vein. Beament said “We need to get up the curve to the dormant South/Centenary acquisition opportunities but we
this was far from the case. but that process can take 12-18 mine at Kundana. are pretty happy at this point,” he
months and there is pretty nega- said. “The bulk of our focus will
“There was exceptional work tive sentiment towards resources In December, the company be on demonstrating the strength
done by both Newmont and Bar- in the market which is currently followed up with results from of these orebodies. For every
rick. Even if they didn’t do a lot of an impediment to that process.” the White Feather prospect at year of mine life we add, that
drilling, they did a lot of high level Kanowna Belle which returned equates to 30c increase to our
work on the geology and plan- Exploration success would ap- intercepts of 1m @ 5,328 g/t, 1m share price.”
ning. You have PhD level work pear to hold as much potential @ 60.3 g/t,, 3m @ 8 g/t and 1m
on these orebodies and you only for boosting the share price as @ 11.6 g/t gold from below the Northern Star has surprised
see that once you get the keys.” production numbers in the cur- historical workings. many over the last 12 months, if it
rent market. can continue with the production
Beament said the first eight The increased budget is un- and exploration success at what
months had been spent impos- At Paulsens, Northern Star likely to be repeated in the 2016 some analysts considered tired
ing Northern Star’s own will on to built a reputation for exceptional financial year but Beament said assets, it will surprise many more
the mines, a process which had near-mine exploration which ex- the company remained commit- in the coming 12 months.
gone relatively smoothly accord- panded the 18-month mine life ted to around $30 million of an-
ing to the managing director. it inherited into a five year-plus nual exploration as the company – Dominic Piper
operation. With more than $80
“It has gone better than we million having been committed to
planned, mainly because we exploration of the newly acquired
spent a lot of time building the assets, Beament is confident
team before we made the acqui- of repeating that success else-
sitions and so we were well pre- where in the portfolio.
pared when we did take them on.
Since then, we have found a lot “We are really focusing on the
more positives than negatives.” geology now. These assets have
short mine lives so we need to
“The main focus has been on get up to speed on the geology
implementing the business mod- and we are starting to get a good
el and we did that quickly. We handle on that. We have demon-
had to down-scale the workforce strated our intent on the geology
which was difficult. It is never side by committing $50 million to
an easy process because you exploration which is the second
are trimming good people but it largest budget in Australia after
needed to be done. And, despite Newcrest [Mining Ltd].”
that, we haven’t missed a beat on
production.” Success has come rapidly
with a 68% increase in reserves
Across the last four quar- and resources at Jundee and
ters, Northern Star produced new discoveries at Kundana and
382,000oz at all-in cash costs of Kanowna Belle
$1,043/oz.
In November, the company an-
The stumbling gold price is nounced the new Millennium dis-
liable to cause the company
some heartburn however. While The team inherited by Northern Star has been as valuable as the assets it acquired in 2014
Jundee and East Kundana per-
formed exceptionally in the Sep-
tember quarter (55,654oz at all-
in costs of $962/oz and 24,286oz
at $548/oz respectively), the
company still has work to do at
Kanowna Belle (24,561oz at
$1,205/oz) and Plutonic (23,047/
oz at $1,482/oz).

In mid-December, Northern
Star shares were trading 72%
above the level prior to the Plu-
tonic acquisition but Beament
said producing strong results
would be the only way to con-
vince investors the company’s
decision to expand in a falling
gold price environment was an
astute one.

“The analysts that have been
to site are already big supporters
and have got some great valu-
ations out there; some of them

January – March 2015 GOLD MINING JOURNAL Page 15

COVER

Following the
Gold Road

Gold Road has more than 5,000sq km of ground in Western Australia’s Yamarna greenstone belt

With discover- months of exploration work, in- Gold Road, however, is buck- Wanderrie camp through aircore
ies and cash
eluding most junior cluding further detailed drilling of ing the trend with exploration drilling.
companies in recent
times, Gold Road Gruyere with potential expansion success, and has support to con- Follow-up aircore drilling has
Resources Ltd has
bucked the trend. of the deposit, chasing up other tinue unearthing gold projects. been planned, with RC drilling

The company surged ahead regional targets and following up Late last year the company to define gold targets potentially
with exploration in Western Aus-
tralia’s Yamarna greenstone belt on the regional anomalies that identified another half dozen happening in 2015.
in 2014 to become the standout
explorer on home soil; and it is we have identified.” new targets over a combined “There is a war chest in our
starting to receive worldwide
recognition. The cash will allow Gold Road 25km strike length in the Pacific bank account, so should we

Twelve months ago the com- to complete a scoping study Dunes-Corkwood/Sun River- make a discovery on one of these
pany barely had any institutional
investors onboard, now institu- conducted by GR new anomalies we can
tions make up more than a third
of the company’s register. Engineering (March drill it out to maiden re-

Interest, of course, has been quarter 2015), with source before we have
spurred on by Gold Road’s 97mt
@ 1.23 g/t for 3.8 moz Gruyere a PFS/DFS to follow. to go back to the mar-
maiden resource declared in
2014. However, what ket. It is a great position

Infill and extensional drilling shape the PFS/DFS to be in considering the
was to start at Gruyere in the De-
cember quarter. takes is dependent weak market. We have

“It has been a fantastic year on potential explo- good institutional sup-
for Gold Road, with 3.8 moz gold
discovered within 10 months of ration success, with port behind us now;
the initial discovery [drill] hole, at
less than $2/oz. It is a great dis- the likes of Toto 35% of the register is
covery, and the scale and size of
that deposit should lead us into (south of Gruyere, institutions, which has
production,” managing director
Ian Murray told Gold Mining where results from grown from close to
Journal.
a 8,600m RC pro- zero a year ago. What
“We raised $23 million in Oc-
tober, which with our cash in the gramme were pend- these guys like about
bank gave us $27 million. That
will get us through the next 12 ing at the time of the Gold Road story is

print) possibly enter- that it is in a Tier 1, low-

ing final study equa- risk country, where you

tions. have got a big-scale

It could be that exploration looking for

multiple deposits multi-million-ounce de-

are mined from a posits.

4-10 mtpa project at “Most foreign inves-

Gruyere, with con- tors perceive Austral-

struction potentially ians as explorers who

beginning in 2017. define small systems,

Development sce- develop them too

narios have not de- quickly and have short

tracted Gold Road mine lives. So when

from its exploration they hear what we are

ambitions, despite doing with the Gruyere-

some sentiment in type discovery, which

the market that pro- has a 10-year-plus de-

duction and cash posit, the gold funds

flow right now are A thorough review of old data and information led to an exten- really like that strategy,”

drivers for invest- sive targeting programme, in which Gold Road Murray said.

ment. defined 10 gold camps Gold Road has been

Page 16 GOLD MINING JOURNAL January – March 2015

work we are doing and ed at the South Yamarna 50:50

have an incredible amount JV with Sumitomo Metal Mining

of information now. I think Oceania in the October quarter,

in a very short time we will which was to be followed up.

make another discovery, Work will include geological

there is no doubt about it,” interpretation of the Minnie Hill

Lubieniecki said. South prospect to identify drill

The company wants to targets at the Breelya-Minnie Hill

have a pipeline of devel- camp; assessing data and plan-

opment projects behind ning aircore or RC drilling on any

Gruyere and had prepared identified anomalies at Riviera-

another busy exploration Smokebush camp; following up

period for the December aircore and RAB drilling with air-

quarter. core or RC drilling on identified

In addition to drilling anomalies at the Metropolitan-

at Gruyere and assess- Beefwood, with the same at the

ment of drill results from Pebble Beach-Quandong gold

Toto, Gold Road’s agenda camp.

includes: preparation of At the time of print, gold min-

heritage clearance for drill- eralisation was confirmed at

ing access at the South Riviera-Smokebush, with best

Dorothy Hills trend; set in- results including 9m @ 1.75 g/t

fill aircore drilling at Pacific gold from 56m and 12m @ 0.96

Gold Road managing director Ian Murray with retiring exploration Dunes-Corkwood camp; g/t from 28m.
manager Ziggy Lubieniecki and conducting a first pass The company’s share price
reconnaissance aircore
shot up 12% on the back of the

able to generate some hype While confident there was programme at Sun River-Wan- announcement to 23c/share.

around Gruyere, however the something big in the Yamarna derrie camp. – Mark Andrews
company’s story has been build- greenstone belt, pinpointing the Meanwhile, a 16,000m aircore

ing for some time. areas with the highest probability drilling programme was complet-

Like many companies to have of finding gold was the challenge

made bonanza discoveries in re- for Lubieniecki and his explora-

cent times – Sirius Resources NL tion team.

at Nova is one example – Gold Eighteen months of global

Road was almost penniless not targeting across Gold Road’s

long ago and was banking on 5,000sq km package in the

one programme to change its Yamarna belt resulted in 10 high-

fortunes. priority gold camps to test.

With less than $400,000 in “By nature I am overly optimis-

the bank, and the company whit- tic … but I was certain we would

tled down to just Murray and find something,” Lubieniecki

long-time and soon-to-be retired said.

executive director Ziggy Lubi- “But there were difficulties: we

eniecki, Gold Road managed to have an entire greenstone belt

top up its kitty and go for broke in with many opportunities but the

the unknown Yamarna Belt. problem was that with so many

“We had a hunch to drill some- tenements and most of them un-

thing called Central Bore, where der cover, where do you start?

we hit the high-grade system and When you have a large tenement

put the Yamarna Belt on the geo- package you can very quickly

logical map,” Murray said. waste your money on drilling the

The Geological Survey of wrong places.”

WA followed up on Gold Road’s The Attila Trend, west of Cen-

work and confirmed that the belt tral Bore, was known in the re-

was the same age and shared gion, however the potential near-

characteristics to the gold-rich by was not, because of a lack of

Kalgoorlie Belt. exploration.

“On the back of the Central While the Yamarna Belt shares

Bore discovery in 2009 we were similarities to Kalgoorlie, it will be

then on the global map. That al- a while yet before another Gold-

lowed us to raise money and do en Mile can be declared.

targeting in 2012, which led to Nevertheless, the big end of

the Gruyere discovery in 2014,” town has approached Gold Road

Murray said. to view its data, however with so

“Everything has flowed on much more to investigate along

from the work done previous. the 60km strike length of the

Ziggy started with the building Dorothy Hills trend, more will be

blocks seven years ago and kept determined before the company

adding to them, culminating in opens its doors.

a 3.8 moz discovery. Ziggy has “We like the rocks and think

been the lifeblood of the com- that we are getting closer. We While other juniors haven’t been able to keep rigs churning,

pany.” have learnt so much from all this Gold Road has forged ahead with great reward

January – March 2015 GOLD MINING JOURNAL Page 17

GOLD MINING JOURNAL AWARDS

Gold Fields
has success
with shovel
and drill

The Yilgarn South assets, the Darlot mine among them, have made a massive impact on Gold Fields’ Australian production profile in the last 12 months

The impact of the to the Johannesburg-based South African-based company Weston said the purchase also
newly acquired company’s performance in Aus- has grown into one of Australia’s fitted the company’s desire to
Yilgarn South assets tralia as the main driver of those largest gold producers. move away from being primarily
has already been felt achievements. South Africa-focused.
at Gold Fields Ltd, Gold Fields Australia vice
with the company “Our four mines in Australia president, Richard Weston, told “Gold Fields had stated that it
doubling net earnings contributed 269,000oz at all- Gold Mining Journal the ac- wanted to diversify its geograph-
for the September in costs of $US990/oz for the quisition offered both a “unique ic risk profile by focussing future
quarter. quarter,” Holland said in late No- opportunity” for the company to investments in OECD countries,”
vember. “That is 771,000oz at acquire three additional sources he said. “The Yilgarn South deal
The multi-national miner re- $US1,043/oz for the nine months of production, “including one of resulted in our production profile
ported net earnings of $US19 against guidance for the year of Western Australia’s premier gold in Australia increasing to around
million for the quarter, up $US10 975,000oz at $US1,130/oz.” mines, the Granny Smith mine”. 42% of total Group production,
million from the September 2013 compared with around 19% pre-
quarter. And, in his quarterly Australian operations now rep- As well as the 230,000 ozpa acquisition.”
presentation, Gold Fields chief resent 42% of Gold Fields’ global producing Granny Smith, the
executive Nick Holland pointed production portfolio. Until August $US270 million deal with Bar- Weston said the integration
2013, the company’s Austral- rick included the purchase of of the Yilgarn South assets had
ian concerns consisted of just the Lawlers mine. Lawlers is sits been well managed with the
two mines; St Ives and Agnew, adjacent to Gold Fields’ Agnew company’s Australian operations
but with the acquisition of Bar- mine, offering the company the already having produced 1 moz
rick Gold Corp’s Granny Smith, opportunity to realise shared in- gold since the deal was made.
Darlot and Lawlers mine, the frastructure savings.
“The acquisition has gone

Page 18 GOLD MINING JOURNAL January – March 2015

plant we provided much

needed and starved capital

to improve the recovery and

general reliability of the pro-

cess plant,” Weston said.

While an immediate

boost to production was

the most obvious reason

behind the Yilgarn South

acquisition, Holland has

regularly highlighted the ex-

ploration potential of WA as

a major reason for complet-

ing the deal.

“The key strategy is sig-

nificant investment in near-

mine exploration. We have

a $US55 million budget

aimed at improving re-

sources and reserves,” Hol- The recent Invincible discovery at St Ives proves there is still gold to be
found in mature Australian goldfields
land said.

Weston said bringing all

operations back into cash In the meantime, Gold Fields about ounces to thinking about
has already started work on con- cash,” Holland said.
Australia now accounts for 42% positive territory had also verting Invincible and the FBH
of group production assisted the company’s ex- orebody at Agnew-Lawlers into In January 2013, Gold Fields
ploration push. producing mines. Capital devel- divested much of its high-cost
opment has begun at Invincible South African operations, choos-
extremely well. Gold Fields un- “We have also invested heav- with first production from the ing instead to focus on a more
open pit set to come in mid-2015. international portfolio and the
dertook a number of immediate ily in near-mine exploration company has been reaping the
“The grades at Invincible are benefits in recent quarters.
changes to operating systems, and this is allowing all mines to 3-4 g/t versus an average at St
Ives of 1.5-1.8 g/t in open pits so The one remaining South Af-
site organisation and operating plough back all or a significant it will have a big impact on opera- rican asset, South Deep, has
tions,” Holland said. continued to perform below ex-
culture while at the same time amount of their cash – this was pectations but according to Hol-
At Agnew-Lawlers, access de- land there had been “strong per-
providing capital to those opera- not the case previously,” Weston velopment has begun at the new formance from our international
underground FBH deposit. mines, all seven of which were
tions to ensure they were brought said. “For example, Darlot was cash generative”.
“FBH is adjacent to the Kim
up to Gold Fields standards, both losing money in the nine months lode which we have mined for “Gold Fields is now one of the
the last eight years. We are look- strongest free cash flow genera-
from a technical and a safety before the acquisition. While ing at double digit grades there tors in the gold sector,” he said.
which should allow us to con- “And that reflects our commit-
viewpoint.” Darlot has limited reserves we tinue to see good results out of ment to generate free cash flow
Agnew-Lawlers.” of 15% at a $US1,300/oz gold
Gold Fields’ initial focus has have expended around $8 million price. For the September quar-
Holland said exploration re- ter it was a 12% free cash flow
been on a cultural change, ac- on exploration in 2014 to extend sults from Granny Smith sup- margin at an average realised
ported the continuation of work price of $US1,255/oz. That com-
cording to Weston. mine life, and it now generates on the underground lodes. mitment ensures we have a soft
cushion down to a $US1,050/oz
“One immediate change was sufficient funds to self-fund its The move towards near-mine price.”
exploration is part of a wider
the colour of the PPE from the exploration programme and op- change in strategy at Gold Fields. – Dominic Piper

previous owner’s use of orange erational expenses.” “It is a move from thinking

to Gold Fields use of yellow.” The $55 million budget for

A technical review was also 2014 was likely to increase to

undertaken in conjunction with around $75 million in 2015, ac-

the existing Barrick personnel. cording to Weston.

“The technical reviews identi- “We remain optimistic and en-

fied those areas where changes couraged by the nature of Oro-

to operating practices should be genic orebodies found within WA

made, changes to organisational and can already highlight some

structures and staffing levels significant near-mine exploration

were required, and operating pa- successes at our mine. We are

rameters both underground and confident that other discoveries

in the process plants need to be will follow.”

adjusted. Among the biggest successes

“Often neglected in [consid- has been the Invincible discovery

ering the] acquisition, was the at St Ives. A 1.33 moz resource

skilled and highly trained work- has been defined at Invincible

force and professionals that just two years after the discovery

came with the purchase.” hole was drilled.

With the review largely com- Holland said the exploration

plete, Gold Fields is beginning to strategy in Australia could take

see the results from the changes some time to enact.

implemented. “It will take more than a year

“All of the mines are now gen- to achieve this [reserve and re-

erating cash which they hadn’t source growth] and we will spend

done at all or to the extent they a similar amount in 2015. It is

are doing now At Granny Smith early days but we are showing

we also changed the mining signs of success. We want to get

practices to reduce the amount ahead of simply replacing ounc-

of ore loss and dilution under- es but that will take a few years The combination of Agnew and Lawlers should deliver
savings to Gold Fields
ground, while in the process to achieve.”

January – March 2015 GOLD MINING JOURNAL Page 19

GOLD MINING JOURNAL AWARDS

Consistency reward for Evolution

Evolution Mining Klein put his company’s “We work each asset
Ltd has developed
a reputation as one success in 2014 down to hard because no single
of the most consist-
ent and reliable gold making “proactive” and gold mine is predictable,
producers on the ASX
over the last three “difficult” decisions in so in a portfolio you will
years – and it’s not
hard to see why. what was another tough have some which have

The Sydney-based miner has year for the gold industry. outperformed and some
met all aspects of guidance for
12 successive quarters since “The gold price started which have underper-
listing on the back of a merger of
assets in July 2011 and achieved showing signs of weak- formed and, overall,
record annual group production
of 427,703oz gold in FY2014. ness in April 2013 … and you’ve then got reduced

FY2015 is already off to a we’ve been making pretty volatility and improved
promising start with the company
producing 107,165oz gold at C1 significant changes to the predictability,” Klein said.
cash costs of $728/oz across its
five operating gold mines during business right through “I don’t think there is a
the September quarter.
that period and even be- near-term silver lining for
Evolution’s production and fi-
nancial numbers are impressive, fore,” Klein said. the gold price and one of
yet the company has never really
been considered a market dar- “At Evolution, we are the things which has al-
ling and is often overlooked by
investors and analysts in favour particularly proud at how lowed us to stay ahead
of fellow Australian gold produc-
ers Northern Star Resources Ltd we’ve responded to these of the game is to be real-
and Regis Resources Ltd.
challenges and we con- ists, not just in the busi-
But executive chairman Jake
Klein is not overly concerned, tinue to believe that the ness of hoping the gold
instead suggesting the lack of
market recognition and attention industry is going to be price is going to improve
could work out better for his com-
pany in the long run. healthier – and Evolution and save us at some

“We do seem to be a little off is certainly healthier – as point.”
the radar, but sometimes that’s a
good thing,” Klein said. a result of these chang- Operational success

“We’re just looking to demon- es.” has been at the forefront
strate over the long term that we
can deliver superior shareholder Klein highlighted the of Evolution’s three core
returns and while the last 12
months have been disappointing transition to owner-miner business pillars in recent
in that regard, we certainly have
strong belief in our capacity and operating status at the times, but the other two
our approach to be able to turn
that around.” Cracow and Mt Rawdon – exploration and M&A –

Heading a resources company mines in Queensland as are expected to have an
with a reputation for being con-
sistent and reliable, particularly one of the key business increased focus in 2015.
in the current market, is some-
thing that sits well with Klein, a improvement changes at Evolution has com-
former Macquarie banker and
the founding director of Sino Evolution over the past Evolution achieved record annual group mitted $20 million to ex-
Gold Mining Ltd. year, along with other production in FY2014 ploration this year and
adjustments to supply the company’s desire to
Those factors helped Evolu-
tion earn a third straight nomina- contracts and drill and blast prac- “We estimate that we have achieve success in that space
tion for Gold Mining Journal’s
Miner of the Year award and tices. probably improved the business was highlighted last June when

“As an example, at Mt Raw- from a cost base point of view by it signed a lucrative JV with Em-

don, our drill and blast cost has in excess of $50 million as a re- merson Resources Ltd over the

gone down but also the produc- sult of those changes and that’s Tennant Creek mineral field in

tivity improvements through a had a massive difference in what the Northern Territory.

different drill and blast pattern is often correctly described as “We certainly believe that as a

has improved fragmentation staying ahead of the choppy gold company, you need to dis-

and allowed more tonnes to go white water.” cover ounces as well,” Klein said.

through the mill,” Klein said, add- Mt Carlton – Queensland’s “You can’t just mine the ounc-

ing that all of his employees were first new gold mine in more than es you have because ultimately

encouraged to act like owners of a decade – ramped up smoothly you have got an asset which is

the company. in 2014 and exceeded the com- reducing in size each year. Dis-

pany’s expectations during that covery is an absolute core part

period, according to Klein. of our business and we see it as

Another mine in Evolution’s being a competitive advantage.

Queensland portfolio, Pajingo, “If Santa can deliver, we’d

saw gold production up 10% love some discovery success

in the September quarter and because that’s what the industry

is poised for a new lease of life is missing at the moment; some

after undergoing a series of op- real discovery sizzle to get inves-

erational changes to cope with a tors excited.”

lower gold price. Klein was hopeful his company

It is a similar story for Edna would also execute some “smart”

May in Western Australia after acquisitions in 2015, but said his

two years of underperforming team was yet to come across any

operations. new assets which were both eco-

The overall effect of these nomic and affordable.

changes has Klein and his team – Michael Washbourne
confident about the future of all

five mines despite a gloomy out-

Jake Klein look for the gold market.

Page 20 GOLD MINING JOURNAL January – March 2015

Saracen slashes cash costs

The days of high Saracen is targeting all-in sustaining cash costs of
cash costs at Sar- $1,150/oz from Carosue Dam in FY2015

acen Mineral Holdings have to bring those costs back. Saracen intends to Whirling Dervish is delivering higher
“The market has been worry- have the Thunderbox gold grades at lower strip ratios
Ltd appear over. feasibility study complet-
ing about our costs, but we’ve ed by the end of March. helping the company direct funds
And managing director Ra- built a very large stockpile be- Once back in operation, to other projects, including the
leigh Finlayson says patient and cause we’ve fully expensed all Thunderbox could dou- Karari underground develop-
astute shareholders can expect of our mining costs and what we ble the company’s group ment.
further reductions over the com- will actually end up with next year production portfolio to 300,000
ing year. – and this is where it gets better ozpa. “The one that gets mentioned
– is nominally 90,000oz sitting very rarely is Karari, but inter-
Saracen has been blighted by on the ROM pad and an all-in However, Finlayson was quick nally we’re probably as bullish
high cash costs since the start sustaining cash cost of around to deny such a scenario was the on that as the others,” Finlayson
of operations at Carosue Dam, $550/oz.” primary driver for his company. said.
north-east of Kalgoorlie in West-
ern Australia, but all that is set to The downturn in the gold “Our driver is not to deliver “The beauty about that is it sits
change with the company target- market over the past two years 300,000 ozpa and you’ll never completely under the shadow,
ing all-in sustaining cash costs of did Saracen’s strategy to model read anywhere about our de- figuratively but also literally, in
$1,150/oz for this financial year. cash costs on cash flows no fa- sire to meet any production the sense it’s adjacent to Whirl-
vours, but Finlayson said he and milestones as far as ounces go ing Dervish and as we roll into
The best performing ASX- his fellow board members never because we’re purely about add- the next financial year, it will be
listed gold producer in FY2014 is panicked. ing value to shareholders, either the one that will surprise the mar-
also tipping C1 cash costs to fall through a dividend or through ket in our view, not only with solid
to $875/oz in FY2015. “It penalised us last year and free capital gains,” Finlayson drill results, but also our ability to
the year before because we had said. turn those drill results into pro-
Saracen ticked the first box a number in excess of the gold duction very quickly.”
towards achieving that goal with price, but like any investment “We’re not going to do 300,000
all-in sustaining costs of $1,448/ you’re going to have a phase of ozpa and deliver no margin. If in Saracen has budgeted to
oz for the September quarter, negative cash flow before it spins 5-10 years’ time we’re delivering spend about $20 million explo-
down 16% from the previous out the other side,” Finlayson 80,000 ozpa and making more ration in FY2015 and at the time
three-month period. said. money doing that than 500,000 of print the company had three
ozpa, that’s what we’ll do.” rigs at Thunderbox, two at Red
The month of September also “We haven’t hidden that nega- October and one at Karari, with
saw a record 16,328oz of gold tive cash flow. We’ve said what it Finlayson remained hopeful another on the way.
produced from Carosue Dam at is and the benefit now is every- Thunderbox would become a
all-in sustaining cash costs of one looks at our stock at a time cornerstone asset for the com- “The mantra in these environ-
$1,147/oz. when we’re about to have a belt- pany and expected to see it op- ments is conserve cash and we
er of a run because our mining erating alongside Carosue Dam absolutely subscribe to that, but
Finlayson said cash costs costs come down, yet our ounc- rather than as a direct replace- we are also mindful that these
were expected to fall even fur- es grow substantially as the strip ment. drilling programmes are critical
ther over the coming quarters ratio goes down and the grade to our future,” Finlayson said.
as the Whirling Dervish open pit doubles.” A timeframe for the restart of
delivered higher gold grades at operations at Thunderbox is yet “What we’re looking for [in
lower strip ratios alongside the Saracen’s ability to bring down to be determined. 2015] is news flow very consist-
consistently strong returns from its cash costs in a tough market is ently from January all the way
the nearby Red October under- just one of the many milestones Solid production performance through to December, so not only
ground mine. the company has achieved over from Whirling Dervish and Red will we be generating very good
the past year. October in the last financial year cash, we’ll be having consistent
Saracen’s high cash costs helped Saracen record a net news flow as well.”
have attracted criticism from a The “opportunistic” acquisition profit after tax of $6 million and
number of factions, but Finlayson of the Thunderbox gold opera- sales revenue of $211.4 million, – Michael Washbourne
said canny investors have always tions from Norilsk Nickel Austral- with the latter underpinned by
understood the company’s strat- ia Pty Ltd last January kickstart- the company’s gold hedge book.
egy to provide bigger returns for ed what would be a whirlwind
shareholders over a longer pe- 12 months for the Perth-based Net cash flow from operations
riod. company. was $49.4 million and EBITDA
was $42.1 million for FY2014,
“We’ve been incurring these
arbitrarily higher cash costs sim-
ply because we haven’t been
putting tonnes into a bucket and
theoretically bringing those costs
back later on,” Finlayson told
Gold Mining Journal.

“Our strip ratio is now less than
the average at the start. If we
had been doing what every other
gold producer had been doing
our cash costs would have been
down to $1,050-1,100/oz, but the
benefit we’ve now got is we don’t

January – March 2015 GOLD MINING JOURNAL Page 21

GOLD MINING JOURNAL AWARDS

Metals X: bringing sexy back

Well respected as its footprint in the region.
an Australian tin
producer, Metals X In 2014, it acquired the
Ltd is fast emerging
as a standout gold Meekatharra gold project
producer.
from Reed Resources Ltd
The company took ownership
of the Higginsville and South for $7.7 million.
Kalgoorlie operations from Al-
acer Gold Corp in October 2013 In doing so the compa-
and at the time of print was on
the cusp of delivering an inau- ny bolstered its resources
gural dividend (0.6785c/share) to
shareholders. by 3.5 moz to CMGP’s 5

With its 50% owned and man- moz, while also adding
aged Renison tin mine in Tas-
mania bedded down, and the another 2-mtpa plant to
Rentails project awaiting final
go-ahead by partner Yunnan its portfolio.
Tin Group, Metals X has made
a seamless transition into gold “The world is awash
producer in the past 12 months.
with opportunity at the
Such has been the company’s
success in the gold game, it is moment for anyone with a
primed to bring a third mine into
production in 2015, executive di- strong balance sheet and
rector Warren Hallam told Gold
Mining Journal. good operating team,”

“Our gold business has had Cook said.
a good year. We’ve generated
good cash and about $100 mil- “We evaluate every-
lion EBITDA, and we are brin-
ing on the Central Murchison thing but buy little. The
gold project (CMGP) next year.
In two to three years we will be model is different to
a 400,000 ozpa gold producer,”
Hallam said. some other companies;

Metals X is targeting a plant we haven’t been to the
restart at CMGP in mid-2015 and
is confident of sustainable opera- Metals X has quickly turned Higginsville from cash burner into money-spinner market [to raise capital]
tions of 250,000 ozpa @ 4.2 g/t
gold. for nearly eight years. We

While Metals X looks to in- given that the Higginsville and tal costs with 180,361oz @ $999/ haven’t raised external funds or
crease its production profile in
the next few years – potentially South Kalgoorlie’s heydays ap- oz total costs of sales. taken on any debt, we have built
over 500,000 ozpa in the 2017/18
financial year with the addition of peared to be over. However Met- “It has been a really tough few everything internally. The model
Rover 1 in Tennant Creek, North-
ern Territory – managing director als X can now attest to having years for the gold miners who is very much not to take on a
Peter Cook said the company
was primarily focused on cash played the right card. have been swimming upstream large amount of capital risk. Ef-
generation for shareholders.
The company shelled out $44 from the torrent that’s running fectively, buy assets that are dis-
“We’re not interested in size.
We don’t want to be number one, million for the two operations, downstream, and when you are count to their replacement costs
two or three, we are just inter-
ested in making money for our which included two plants and buying assets that other people and try and manage them better.”
shareholders and managing the
risks we take for our sharehold- existing infrastructure. have owned and operated not so A healthy bank balance has
ers in making that money,” Cook
said. For the period ending Septem- well, there is always someone Metals X in a strong position to

Entering the gold sector in a ber 30, 2014, Metals X reported who doesn’t like them or thinks capitalise on assets currently
bearish market towards the end
of 2013 was brave, particularly cash and working capital of they are no good. stranded by companies strapped

$133.3 million, with its gold divi- “For us, the last 12 months for cash, Cook said.

sion outperforming guidance by have shown that’s not necessar- “It is getting a hell of a lot hard-

20.8%. ily the case, and you can make er to define good acquisitions in

Tonnes mined were 207,385t quite a bit of money out of these the gold space. There has been

@ 5.96 g/t, while 394,252t @ assets if you manage them, fo- a huge shortage in investment

3.46 g/t gold was processed for cus on them and give them some in exploration in both greenfields

42,293oz gold produced with love,” Cook said. and now brownfields exploration.

cash cost sales of $878/oz. Given the company’s nomina- “In recent years the juniors

The 2014 September quar- tion for Gold Mining Journal’s and emerging companies have

ter marked the company’s first Miner of the Year award, it can struggled so much with fund-

full year of production, a year in be concluded that it has thrived ing that a lot of their titles aren’t

which it exceeded guidance of under the pressure. in good standing or are under

150,000oz gold @ $1,000/oz to- Implementing different strate- stress in their own right.”

gies has been the key to suc- Chasing a bargain is an op-

cess, including restructuring the tion for Metals X, however, in the

NSR with Morgan Stanley from meantime, leveraging from its fa-

4% to 1% with the starting level cilities has the potential to be a

for price participation lifted from nice earner.

$600/oz to $1,340/oz. Metals X recently agreed to

Furthermore, shifts have been fund mining operations and man-

halved from four to two on a nine age all mining, haulage and ore

and five basis, with the plants treatment from Southern Gold

switched off during downtime, Ltd’s Cannon project, 30km from

while drilling has been cut to one Kalgoorlie.

shift per day. Metals X will provide a

With a grip on operations at $500,000 secured loan to kick-

Higginsville and South Kalgoor- start mining, with revenues from

lie, Metals X has placed an em- the project initially used to reim-

phasis on bringing the CMGP burse Metals X.

Peter Cook on-stream while also expanding Surplus funds will be split

Page 22 GOLD MINING JOURNAL January – March 2015

equally between Metals X and time of print) – indicated some Warren Hallam green tape have really prevented
Southern Gold. traction for Metals X in the mar- this project from getting up in the
ket as it looks to enhance its and the people in charge of the last commodity cycle,” he said.
Mining is on track for quarter standing in the gold space. approvals is that projects of this
one 2015, with 20,000oz gold size get up in the commodity Cook said the Australian min-
slated for production in phase However it has not turned its price cycles. ing sector was overregulated
one, with cash flows to fund back on tin or its base metals and feared that the small mining
growth and phase two under- interest, particularly its Wingel- “Wingellina is a $2.5 billion industry – “the engine room for
ground development. lina nickel-cobalt-iron project in build, which is tiny compared to employment and a strong econ-
Western Australia, which is cur- some iron ore projects. Red and omy” – particularly in regional
Metals X has expanded quickly rently under public review. centres, was under increasing
into the gold sector, which, Cook pressure to run sustainable busi-
said, was what the company The $2.5 billion project is de- nesses due to stringent red and
needed to do to stay “relevant”. velopment ready after a DFS in- green tape being enforced by
dicated potential for a 40,000 tpa government.
“We were a special-purpose nickel and 3,000 tpa cobalt over
tin company, and one of the very a 40-year mine life. Cook used the proposed in-
few in the world. Effectively we crease to gold royalties in WA as
became irrelevant and we’ve “Our nickel asset – Wingellina an example and said if imposed
had to go back to our long past – is a really big project. The pro- would cost jobs and “obliterate
history of gold mining to create ject has the potential to generate regional centres”.
some relevance and some inter- a $1 billion of royalty income for
est,” Cook said. the state,” Cook said. – Mark Andrews

The company’s share price “At the moment, what is lost
mid-2014 – 28c/share (19c at the on the regulators of the industry

Resolute flexes Syama’s boundaries

Having become the first com- Resolute is looking at a $250/oz decrease in cash costs from the our production targets,” Sullivan
pany in the project’s 30-year introduction of an oxide circuit at its Syama mine in Mali said.
history to get it up and running
efficiently, Resolute Mining Ltd The 1 mtpa expansion is set to budget is going,” Sullivan said. Snowden completed an inde-
is ready to increase the perfor- deliver 70,000 ozpa over seven “We have already started look- pendent PFS on Syama’s under-
mance of its Syama gold mine years at cash costs of around ing at the oxide targets and we ground potential in March last
in Mali. $US700/oz, delivering a $250/oz are finding with the few holes year which suggested reserve
saving to all-in cash costs. we have drilled under 100m that grades beneath the open pit
Resolute’s Miner of the Year they are going into the fresh rock were underestimated when com-
nomination came on the back of Resolute chief executive Peter at depth.” pared to the typical gold profile in
its exceptional performance at Sullivan told Gold Mining Jour- the pit.
Syama, a mine which had previ- nal the start of oxide processing The company is also striving
ously proven challenging for both was an important step in achiev- to drive down cash costs in the The result was a 56% increase
BHP Ltd and Randgold Resourc- ing greater flexibility at Syama. main Syama orebody where all- in underground reserves to 1.1
es Ltd. in costs averaged $1,279/oz in moz gold and the company has
“It is one of the key points for the last year. since followed up with infill drill-
How to best treat the refrac- raising this money. It will add ing which has produced hits of
tory ore – near the border with 70,000 ozpa to Syama’s pro- In November, Resolute an- 88m @ 2.73 g/t gold and 47m @
Burkina Faso in south-east Mali duction and is a big thing for the nounced it was deferring the 3 g/t gold.
– has proven the biggest hurdle company,” he said. planned Stage 2 cutback of the
to success at Syama but Reso- main Syama open pit in favour The success of the PFS and
lute’s concentrate roasting flow The Syama project area is lit- of pursuing underground ambi- subsequent drilling has seen
sheet is now in its sixth year of tered with shallow oxide targets tions. Resolute bring forward the start
operation and the mine has con- and Sullivan said Resolute’s ex- of DFS work to the beginning of
sistently achieved in excess of ploration team would be looking “We have taken the prudent 2015.
100,000 ozpa production. to expand the current 337,000oz measure to defer Stage 2 of the
of oxide reserves and 288,000oz Syama sulphide pit as we look “Syama is a robust, long-life
The last 12 months saw the of oxide resources. at further optimising the open mine with operational flexibility
mine produce 179,000oz and pit and increasing our cash flow and we are keen to explore its
having solved consistency is- “We have 70km of shear struc- in the current lower gold price underground opportunities,” Sul-
sues at Syama, Resolute is now ture which is unexplored and that environment, while maintaining livan said.
turning its attention to an efficien- is where most of the exploration
cy drive in an effort to bring cash While Syama remains the
costs down. company’s flagship, Resolute is
also an Australian miner with its
A convertible bond issue oft-forgotten Ravenswood gold
raised $25 million in November mine in Queensland continuing to
as the company pushed to com- perform strongly with 124,471oz
plete commissioning of a new @ $1,267/oz produced across
oxide circuit at Syama, as well as the last four quarters.
launch an underground feasibil-
ity study into the main sulphide The operation’s Mt Wright
orebody. mine is set to close in the next
two years but Sullivan is hopeful
Commissioning of the 1 mtpa the 1.28 moz Bucks Reef West
oxide circuit was completed on deposit may be able to replace it.
budget and two months ahead of
schedule on November 25. – Dominic Piper

January – March 2015 GOLD MINING JOURNAL Page 23

GOLD MINING JOURNAL AWARDS

Perseus turning

productivity around

Perseus Mining Ltd In line with other miners in Ghana, Perseus has accepted a 25% reduction in power allocation
has bounced back
from some lean times because we were concerned cise at this time” on what impact the company is wary of.
and is returning to the what the future was looking like. the reduction in power at Edikan “Some governments get bet-
shape it was in some It wasn’t looking that great and would mean from a cost perspec-
three years ago. with falling gold prices we need- tive. ter and some get worse which
ed to move quickly and put our makes it challenging if you are
“The past 12 months has been house in order. We have done Measures are in place to offset focused in one country. That is
a challenging year for Perseus that and as a consequence our the availability of power, includ- the reason why our longer term
as we dealt with a shift in the production is steadily improving ing full-time usage of back-up strategy is to diversify as soon
gold price and the imperative to and all the efficiency measures generators on site. as we practically can without put-
reduce costs across the board. have certainly been improving,” ting undue stress on the balance
Despite the difficulties, we are in Quartermaine said. “We also have a range of other sheet. To ignore geopolitical
our best position since we start- initiatives which would mean the risk is not particularly sensible,”
ed production at our Edikan gold “I think there is no doubt that impact is negligible or it could be Quartermaine said.
mine, Ghana, in 2011,” Perseus people are coming to understand more profound,” Quartermaine
non-executive chairman Reg Gil- what we were proposing and said. Diversification through M&A is
lard said in his AGM address. that what we did made sense in not a priority and would only be
the circumstances. Our balance “I think the important point pursued if a standout deal pre-
In the 2014 financial year sheet is particularly strong rela- from our perspective is that sented favourably for sharehold-
changes were initiated to con- tive to a lot of other companies – we’ve had a very strong start to ers.
serve cash and increase ef- $90-odd million in working capi- the year and that puts us in pretty
ficiencies at Edikan and while tal and no debt – which gives us good shape to meet production Perseus shareholders can be
production – 6.7mt @ 1 g/t gold the ability to see things through guidance. We are pretty com- relatively pleased with how its
for 180, 519oz at an average as the [gold] environment contin- fortable with what we have to stock performed in 2014, with
of $US1,294/oz – was short of ues to weaken.” produce in December [half year members of its peer group on
guidance and up on 2013 mining 95,000-105,000oz gold] to meet the ASX – Orbis Gold Ltd (128%)
costs, Perseus is heading in the Amid a soft gold market, Per- guidance. and Saracen Mineral Holdings
right direction. seus will focus exploration on Ltd (22%) – the only companies
near-mine, high-grade targets “Having said that we thought experiencing greater share price
A decision to blend fresh ore while also managing its power it prudent to make people aware gains than Perseus (16%).
with lower grade mined and consumption, which is a primary that we do have an exercise un-
stockpiled ore meant the ore concern. der way and there could be impli- While the company is far from
grade processed was 26.8% cations if everything doesn’t go trading at the lofty heights of
lower, all-in costs 12.5% higher Perseus, along with five other according to plan.” 2011 when it reached $4/share,
and production 13.4% lower. miners in Ghana, is taking a 25% any uplift is welcomed during
reduction in power allocation With a strong focus on effi- these trying times.
While trying to implement its starting December 1, 2014. ciently producing as much gold
cash-conscious operating strat- as it can at the lowest possible The market acknowledgments
egy, having to deal with a fire in The load shedding exercise price at Edikan, a decision on its reflect the strides taken by Per-
the plant in April and unexpected is in place until the end of 2015 Sissingue project in Cote d’Ivoire seus (26c/share at the time of
increases in mining costs height- however Perseus’ production is expected in early 2015. print) in improving efficiencies
ened the company’s challenge. guidance remains unchanged. and reducing costs at Edikan at a
Sissingue provides Perseus time when uncertainty lingers in
Nevertheless, the measures Late last year Quartermaine the opportunity to not only diver- the gold sector.
taken during the year bode well said it was “impossible to be pre- sify technical and production risk
for when higher grade ore is but also geopolitical risk which – Mark Andrews
mined in the future, managing
director Jeff Quartermaine told
Gold Mining Journal.

The company is targeting
210,000-230,000oz gold at
$US1,100-1,200/oz from Edikan.

Results from the September
quarter – 51,529oz at $US959/
oz, a 28% cost reduction from
the previous quarter – indicates
Perseus is on track for a stellar
2015 financial year.

“Some people didn’t quite per-
haps understand what we were
doing when we started to imple-
ment it [cash conservation and
operating efficiency strategies]

Page 24 GOLD MINING JOURNAL January – March 2015

Doray’s entry into Aussie mid-tier

The equation was could smooth out production deposit, Judy, [58,000oz] in
simple for Doray
Minerals Ltd: make between two projects and the reserve category and we
a discovery or do a
deal. reduce the single mine risk,” have a third discovery [Suzie]

Current market conditions Kelly said. as well.”
dictate that companies should
produce gold and make money “Deflector is a manage- Doray plans to start under-
quickly, which meant penning an
agreement that would deliver it able size for us. It is the same ground access to the Judy
with a near-term producing asset
was a logical choice for Doray. style of mining as Andy Well: lode from the Wilber lode de-

With Andy Well – which in- high-grade, narrow vein, un- cline early in the 2016 finan-
cludes the Wilber lode that Doray
managing director Allan Kelly derground. The plant size cial year.
and Heath Hellewell gained rec-
ognition for with AMEC’s 2014 is of a similar scale and the In 2016, by which time the
Prospector Award – a six-year
proposition when production build size and capex [$67.6 merger with Mutiny would
started in 2013, Doray has been
focused on its long-term future in million] is similar to what we have well and truly settled,
the Murchison from the outset.
have just done, so we are not the company has set pro-
“Andy Well is never going to be
a big producer, so the most likely stretching ourselves too far.” duction guidance of 160,000
scenario was that we keep ex-
tending the mine life and produce Total group resources will ozpa, making it an important
at the same rate. We always had
in our mind that we wanted to be in excess of 1 moz @ 7.7 player in the Australian mid-
use that Andy Well cash flow as
a spring board to something else, g/t gold and 27,000t copper tier gold sector.
either exploration discov-
ery or getting hold of an- @ 0.9% when the merger is The company knows its
other project,’ Kelly said.
completed in early 2015. capabilities and further M&A
“We’d like to make an-
other discovery and bring Development work at De- activity is unlikely in the near
it on, but that would take
years and dollars and flector will also be under way Allan Kelly future, however, it has a pipe-
exploration risk. So we
thought in the current mar- this year with Doray forward- line of opportunities to pon-
ket that if we could find
something that had the ing $3 million to allow early in- from the Wilber lode at Andy der.
work done on it but was in
need of funding then that’s roads to be made at its new ac- Well (August 2013 to June 2014) Doray is close to finalising a
where we could create a
bit of value.” quisition. Doray treated 175,000t @ 10.7 deal for an 88% interest in the

The opportunity for Production from Deflector is g/t for 76,785oz gold. Gnaweeda JV in the northern
Doray – Gold Mining
Journal’s Explorer of the slated for early 2016 handing All-in sustaining costs were Murchison and get moving at drill
Year 2011 – was a merger
with fellow Murchison- Doray a second focus on top of $1,044/oz, with the company re- ready targets; St Annes at Turn-
focused entity Mutiny Gold
Ltd. maintaining its production per- ceiving an average gold price of berrry (3m @ 23.4 g/t gold) and

Mutiny’s Deflector pro- formance at Andy Well, a perfor- $1,506/oz. Bunarra (10m @ 18.5 g/t from
ject was the major attrac-
tion with its reserve base mance which attracted its Miner The margin delivered was 113m, including 4m @ 39.8 g/t).
of 322,000oz gold, 16,000t
copper and 360,000oz sil- of the Year nomination. $462/oz which generated cash Doray has budgeted $4 million
ver justifying an initial six-
year mine life. In its first year of production flow of $57.8 million and allowed for near-mine drilling activities

“It was always part of Doray to reduce its debt at Andy Well, while it will spend
the plan to try and get
hold of a second Andy from $55 million to $12 about $3.5 million on regional
Well, something where we
million. targets.

Kelly said the com- Meanwhile, after signing a

pany had encountered farm-in agreement with miner-

some troubles with dilu- als sands miner Iluka Resources

tion in the June quarter Ltd late last year over the latter’s

however that appears Central and Western Gawler

to be resolved now with Craton tenements, Doray is keen

consistent production in to start drilling there.

excess of 3,000oz per It can earn up to an 80% inter-

month flowing between est in any gold discovery made

July and November by spending $7 million within six

2014. years.

Forecast production “Iluka did 2,000 shallow drill

for financial year 2015 is holes over the project, down

77,000-85,000oz gold, through the sand dunes into the

with about 50% hedged basement but never assayed

at $1,533/oz. them. They have the samples

“We’ve had a pretty in chip trays so we are going to

good year and next year pick out some priority holes, as-

is looking like being on say them and see what we get

a similar trend, with the straight away, that could be a

second half of the year pretty exciting start to the pro-

better than the first. We ject,” Kelly said.

have the stage two open – Mark Andrews
pit which gives us a nice

little cash kick in the

second half of the year,”

Kelly said.

“We replaced reserves

Doray has reduced the debt on Andy Well from that we mined from

$55 million to $12 million Wilber with our second

January – March 2015 GOLD MINING JOURNAL Page 25

GOLD MINING JOURNAL AWARDS

Regis rebounds from flood drama

Regis Resources More than 4.7 million cubic metres of water flooded the Garden Well pit in early 2014
Ltd achieved
record gold produc- strophic event that we had to from the previous estimate in gold miner might look overseas
tion in the September work our way through ... and it 2013. for potential project opportuni-
quarter, but celebra- took us some time to get back on ties.
tions were tempered top of those challenges during Clark said there were still some
as the company con- the June and September quar- metallurgical recovery issues af- The Perth-based company will
tinued to pick up the ters.” fecting operations at Garden also hang on to the McPhillamys
pieces from a horror Well, but he was confident those gold project, about 35km west of
start to 2014. While the rare flooding event deleterious materials would be Bathurst in New South Wales,
was out of anyone’s control, mined out by early 2015. despite the 2.2 moz gold asset
The former Gold Mining Clark and the other members likely to stay on the backburner
Journal Miner of the Year pro- of the Regis board accepted “Whilst there’s clearly still chal- once again in 2015.
duced 88,818oz gold at a pre- responsibility for the underper- lenges left for us to overcome,
royalty cash cost of $745/oz from formance of the Garden Well particularly at Garden Well, I McPhillamys is in the same
its three Duketon operations in and Rosemont mines due to poor really feel comfortable we have gold district as Newcrest Mining
Western Australia during the grade reconciliations. the right people and the right Ltd’s Cadia-Ridgeway mine and
quarter. strategy in place to get us back Rio Tinto Ltd’s Northparkes oper-
“In hindsight, there’s no doubt to the operational excellence and ation, but it has remained largely
The record quarter came only we got those mod- predictability that this company untouched since Regis acquired
three months after the one-time els wrong and we has been known for,” Clark said. the project in November 2012.
Australian market darling report- paid a heavy price
ed production of just 270,759oz for that in terms of “Obviously we can’t make “At this stage the board doesn’t
gold for the 2014 financial year our gold produc- definitive promises on how we feel the return on investment is
– well short of the 318,000- tion and our cash think things are going to go, but sufficient to compensate us for
348,000oz guidance – in the flow and there’s certainly we now have very good the challenge of pushing ahead
wake of major flooding and grade simply no escap- confidence we will achieve good with that project, so we’re not
reconciliation issues at two of its ing that fact,” performance from those projects moving to feasibility study in the
mines. Clark said. based on those reserves.” near term,” Clark said.
“At Garden
Garden Well and Rosemont Well, we really Regis has forecast production “We will continue behind the
were severely impacted by a of 305,000-355,000oz at grades scenes completing cost-effective
one-in-150-year rainfall event in Mark Clark suffered from a of 1.1-1.23 g/t gold with 91-93% PFS work and we will continue
February when 165mm bucketed drill pattern that recoveries for pre-royalty cash negotiations to try to secure an
down on the Laverton-Leonora costs of $835-915/oz across its option over processed water,
district in the space of just 36 probably wasn’t dense enough Duketon operations in FY2015. such that we put ourselves in a
hours. in the less predictable part of position that, if and when the
the oxide orebody. We also had The ASX-listed producer ap- gold price permits, we can move
More than 4.7 issues in the fresh rock, but cer- pears to be in a healthy financial forward very quickly.”
million cubic me- tainly less pervasive than what position heading into the new
tres of water – the we saw in the oxides.” calendar year after reporting a Regis also rejected specula-
equivalent of 2,000 cash and gold bullion holding of tion it would reduce the size of
Olympic-sized swim- Regis went back to the drawing $26.2 million at the end of the company’s board in a bid to cut
ming pools – flooded board and tabled new reserves September quarter. costs as shareholders approved
the Garden Well pit, for Garden Well and Rosemont the re-election of non-executive
while another 0.6 cu- at a lower cut-off grade of 0.4 g/t. Regis has budgeted to spend directors Glyn Evans and Mike
bic metres washed The group reserve (75.4mt @ $5-10 million on exploration in Okeby at the 2014 AGM.
into the pit at Rose- 1.04 g/t gold for 2.53 moz) was FY2015 to add incremental ton-
mont North. also updated, but there was no nage and ounces to the compa- – Michael Washbourne
reduction in contained ounces ny’s existing resources and Clark
Remediation works even suggested the established
totalled just $5 mil-
lion, but Regis managing direc-
tor Mark Clark said the loss of
almost five months of operations
had come at a greater cost to his
company.

“It wasn’t a huge financial cost,
but it certainly set us back very
significantly in terms of cash flow
and production and left us with
very restrictive mining schedules
for reasonable periods,” Clark
told shareholders at the compa-
ny’s AGM on November 28.

“This was a genuinely cata-

Page 26 GOLD MINING JOURNAL January – March 2015

Tropicana boost for AngloGold

Afailed attempt to call presentation of the The company 84,000oz at total cash costs
split its assets, a of $US721/oz, compared with
fatality on one of its company’s September had to combat 93,000oz @ costs of $US498/oz
sites, an earthquake in the previous quarter.
which caused disrup- quarter results. inflation in 11
tions at its South Af- Lower production and higher
rican operations and “Our operations are countries in which costs in the quarter were due to
a plunging gold price lower mined and milled grades,
conspired against An- firing on all cylinders, it has opera- plus planned downtime for main-
gloGold Ashanti Ltd in tenance and repairs.
the latter part of 2014. delivering the seventh tions, with all-in
Tropicana and Sunrise Dam
However, the company sol- consecutive quarter of sustaining costs contributed 152,000oz gold to
diered on and was happy to the group’s global production
report another solid quarter of strong performances of $US1,036/oz of 1.128 moz, which comprised
production, AngloGold chief of 314,000oz from South Af-
executive Srinivasan Venkat- despite every bit of (10% lower than rica, 410,000oz from continen-
krishnan (Venkat) said. tal Africa and 251,000oz from
headwind coming at the correspond- the Americas in the September
“In the last seven quarters quarter.
we have proved every sceptic the sector.” ing quarter in
wrong in terms of performance,” With strong year-to-date pro-
Venkat said during a conference Venkat said the 2013), while to- duction across its suite of as-
sets, AngloGold has forecast
AngloGold ship was tal cash costs of full-year production guidance at
the higher end of its 4.2-4.5 moz
“steady as she goes” $US820/oz beat guidance at total cash costs of
$US775-810/oz.
and hoped the imple- the $US850-890/
mentation of self-help Srinivasan Venkatkrishnan oz guided.

measures would be The company

seen when it releases its full-year attributed its improved perfor-

2014 results in February. mance to having full quarter pro-

At the end of the September duction from Kibali (DRC) and

quarter, the company was track- Tropicana (JV with Independ-

ing ahead of production guid- ence Group NL in Western Aus-

ance on a year-on-year basis. tralia).

A total of 1.128 moz gold had Tropicana came on stream in

been produced, better than the September 2013, and the third

1.06-1.09 moz guided. quarter of 2014 production was

OceanaGold flexes its muscles in Australasia

OceanaGold Corp consolidat- OceanaGold was on track to exceed group production guidance for 2014. Didipio when first ore comes on-stream
ed its position as one of the has performed well for the company since commercial production started in 2013 in late 2017, two years earlier
premier gold producers in Aus- than planned.
tralasia with another solid year. Macraes) and the Philippines at Didipio which confirmed ear-
lier access to high-grade under- Meanwhile, over the next two
Replicating its 2013 success (Didipio) totalled 214,751oz gold ground ore was possible upon years $40 million will be spent
– 325,732oz gold at all-in sus- completion of open pit mining in on the development of an explo-
taining costs of $US868/oz, net and 18,263t copper. 2017. ration decline and drilling at the
of by-product credits – is within Blackwater project in New Zea-
reach for OceanaGold. Year-to-date production Underground operations will land to determine the viability of
start one year ahead of schedule bringing the mine back into pro-
Full year production guidance from its newest mine – Didipio, with OceanaGold starting con- duction.
for 2014 was 275,000-305,000oz struction, funded from cash flow,
at all-in sustaining costs of 270km north of Manila – was in quarter one 2015. A PEA indicated base case
$US750-850/oz net of copper potential for 58,000 ozpa gold
by-product credits. over 71,000oz gold and 18,000t Improved production and cash production over 10 years from
flow over the life of mine are ex- Blackwater in the Reefton Gold-
“The company is well on track copper and on track to exceed pected from the underground fields, South Island.
to achieve its full year production
and cost guidance. We expect a 2014 full year guidance and hit a Blackwater will add to Ocean-
strong finish to the year where aGold’s New Zealand portfolio
we further strengthen the bal- steady run rate of 3.5 mtpa. which includes the Reefton and
ance sheet with increased cash Macraes mines.
and repayment of an additional Further good news for the
$30 million in debt. We will con- New Zealand production re-
tinue to maximise value from our corded to the September quarter
existing operations and we will was 143,278oz, with the com-
identify and evaluate new value pany expecting production from
and add opportunities for our Reefton to return to normal in the
shareholders and other stake- last quarter of 2014.
holders,” OceanaGold chief ex-
ecutive Mick Wilkes said when A minor pit wall failure impact-
addressing the company’s Sep- ed production from Reefton in
tember quarter 2014 results. the third quarter which Oceana-
Gold covered with increased out-
At that point in time production put from Didipio.
from New Zealand (Reefton and
company was the positive out-

come from optimisation studies

January – March 2015 GOLD MINING JOURNAL Page 27

GOLD MINING JOURNAL AWARDS

Upstanding Orbis head and
shoulders above

Orbis’ recently launched drilling programme will see it venturing out from the main Natougou deposit for the first time in two years

As other West Afri- on October 13. The Orbis board ing value enhancing alternatives aging director Peter Spiers told
can gold explorers unanimously rejected the offer to Semafo’s offer”. Gold Mining Journal.
struggle to win atten- as inadequate, recommending
tion, Orbis Gold Ltd shareholders “take no action” in While Orbis can do little but Since the updated scoping
finds itself fighting off relation to the bid. mount a strong defence against study was released in October,
an unwanted suitor. the Semafo bid, it is still in control the company has returned to
Orbis countered Semafo’s bid of its own destiny when it comes the drill rig with a 15,000m drill-
The market has been particu- by proposing a $20 million rights to development of its suite of gold ing programme planned to pro-
larly brutal on the West African issue. In his address to the com- assets in Burkina Faso. vide enough infill drilling to build
junior gold sector in the last 12 pany’s AGM in November, Orbis a maiden reserve as part of the
months with gold’s prolonged chairman John Bovard said the The company won the 2013 DFS.
downturn being joined by fears company would not allow the Gold Mining Journal Explorer
over Ebola’s spread and the po- Semafo offer to compromise the of the Year award for the rapid The recently launched drilling
litical turmoil in Burkina Faso in company’s progress. growth in resources it managed programme will also revisit re-
offering investors plenty of rea- at its Natougou project in Burki- gional targets around Natougou
sons to depart the one-time gold “While the board does not na Faso’s south-east. Twelve where Orbis’ exploration team
hotspot. consider it appropriate to delib- months on, Orbis stands on the has been largely focused on Na-
erately frustrate the offer, in the verge of a development decision tougou for the last three years.
ASX-listed junior Orbis, how- absence of Semafo materially at Natougou.
ever, has remained largely shel- revising its offer the board does “Our exploration team has
tered from the market hostil- not consider it appropriate to ma- The project’s resource base done very little work on the re-
ity, reaching a three-year high of terially slow down management’s was updated to 18mt @ 3.4 g/t gional targets across the broader
70c/share in October. The rise existing work programme and in for 2 moz gold in August, a num- project area. Now that a large
was fuelled by the company’s this regard its priority will soon ber which was plugged into an proportion of the infill drilling has
exploration success in Burkina turn to securing the funding the updated scoping study which been completed we can move
Faso and the unveiling of a hos- company needs to deliver the delivered increases to IRR (from back into exploration mode,” Spi-
tile takeover offer from Semafo next chapter of growth,” Bovard 60% to 100%), NPV (up $US87 ers said.
Inc in October. said. million to $US533 million) and a
relatively unchanged capex (up “We have a 50sq km soil
Canadian miner Semafo – Orbis announced prior to its $US1 million to $US234 million). anomaly and there is plenty of
which already operates the AGM that it had begun debt fi- evidence – from artisanal work-
Mana gold mine in Burkina Faso nancing discussions over fund- “From the outset we viewed ings as well as rock chip sam-
– launched its 65c/share offer ing for its flagship Natougou Natougou as a world-class pro- pling – that gold mineralisation is
project and Bovard said the com- ject which deserved to be moved widespread in the area.”
pany was also “in active discus- forward rapidly. The DFS should
sions with other partners regard- be completed by mid-2015 with a – Dominic Piper
decision-to-mine to follow,” man-

Page 28 GOLD MINING JOURNAL January – March 2015

The Gold Mining Journal Miner and Explorer of 2011
the Year awards is a popular feature of this mag-
azine. Each year analysts, investors, media and Miner of the Year operations at Randalls where it
industry figures give their views on which compa- Integra Mining Ltd hit 90,000oz gold.
nies have outstripped sector expectations.
Chris Cairns re-emerged in Explorer of the Year
Here we take a look at Gold Mining Journal’s 2014 with the $6 million Stavely Doray Minerals Ltd
winners from the past five years. Minerals Ltd float focused on (ASX:DRM)
copper in Victoria. Of course,
2013 Cairns was at the helm Doray Minerals
of Integra Mining be- rejuvenated the oft-
Miner of the Year gold – and the discovery of Mil- fore Silver Lake Re- forgotten gold bear-
Northern Star Resources Ltd lenium at Kundana, which made sources Ltd acquired ing Murchison region
(ASX:NST) the company a worthy nominee the company in 2012. of Western Australia
for Explorer of the Year. When the deal was an- with its Andy Well
From ASX-tiddler to billion dol- nounced at Diggers & discovery. A maiden
lar company, North- The question is: can Dealers 2012, Integra resource of 311,000t
ern Star Resources Northern Star claim had been in commer- @ 17.5 g/t gold for
Ltd’s rise in the gold both Gold Mining cial production at Ran- 174,000oz was an-
space has been both Journal’s Miner and dalls for less than 18 nounced early in
impressive and quick. Explorer of the Year months. More remark- 2011 and the com-
awards in 2015? able was that Integra pany has not looked
Gold Mining Jour- scooped the Miner of the Year back since taking Andy Well into
nal and sister publi- Explorer of the Year gong in 2011 after one year of production in 2013.
cation Paydirt have Orbis Gold Ltd
provided extensive (ASX:OBS) 2010
coverage of the com-
pany’s successes Not every explorer in Miner of the Year Explorer of the Year
since it acquired the the West African gold Silver Lake Resources Ltd Ampella Mining Ltd
Paulsens gold mine sector is in the dol- (ASX:SLR)
in Western Australia’s Pilbara re- drums, and Orbis Gold is proof of At the height of the West Afri-
gion from Intrepid Mines Ltd for that. The company figured promi- There wasn’t much separating can exploration boom, Ampella
$40 million in 2010. nently in 2014 voting for Explorer Silver Lake and Medusa Min- stood tallest in 2010 with pun-
of the Year for continued success ing Ltd in 2010,
While Northern Star has been in Burkina Faso and is staving off however, the dits giving the company
recognised for its production a takeover attempt from SEMA- WA-based miner deserved recognition for
feats, it has not shied away from FO Inc, which suggests its story pulled through building a resource of
exploration with the fruits starting is only just starting. for a second con- 18.5mt @ 2 g/t gold for
to be seen at Jundee – resources secutive year. 1.194 moz at the Batie
increased by 68% to 900,000oz West project, Burkina
Mt Monger, Faso. Konkera was the
2012 near Kalgoor- standout deposit boast-
lie, tipped the ing a 1.2 moz resource.
Miner of the Year second-largest solely Australian- ledger in Silver Like many of its Australian
Regis Resources Ltd listed gold producer behind New- Lake’s favour peers in the West African
(ASX:RRL) crest [Mining Ltd],” NewGenGold with production gold space, Ampella at-
organiser Keith Yates said at the for FY2010 of tracted attention and was
Flooding and pit wall issues time. 66,700oz at cash taken over by UK-based
may have cast unwanted atten- costs of about $650/oz. Centamin plc in 2014.
tion on Regis’ Duketon opera- Explorer of the Year
tions in WA’s Laverton region, Papillon Resources Ltd 2009
however, it was not long ago the
company was the darling of Aus- In 2012 Mali-focused Papillon Miner of the Year Explorer of the Year
tralia’s gold sector. Resources created a buzz in the Silver Lake Resources Ltd Gryphon Minerals Ltd
market with a maiden resource of (ASX:SLR) (ASX:GRY)
With over 100,000oz at oper-
ating costs of $512/ 3 moz at its Fekola pro- Silver Lake was quick to de- Releasing a maiden resource
oz in FY2012 from ject. Led by experienced liver on its $30 of 410,000oz gold at its Ban-
Moolart Well and its West African wheeler- million IPO in fora project, Burkina Faso,
second mine, Gar- and-dealer Mark Con- 2007, with its in 2007, Gryphon continued
den Well, heading nelly, Papillon went onto first Miner of its exploration success and
towards full produc- complete a DFS – 5.15 the Year award increased the resource to
tion in 2013, Regis’ moz @ 2.35 g/t gold for in 2009. With a 1.1 moz in 2009. Gryphon
share price rock- 300,000 ozpa at cash suite of projects emerged as the trendset-
eted by over 60% costs under $US800/oz. and the 300,000 ter in Burkina Faso and
from $3.30 to more Such compelling num- tpa Lakewood saw its share price shoot
than $5.50/share in bers prompted Cana- processing facil- through the $2 mark during
2012. dian big boys B2 Gold to ity, near Daisy 2011 and parts of 2012. The
approach, and ultimate- Milano, the com- market has since turned its
“Over the past ly, takeover Papillon in 2014. pany started back on the West African
year this company has posi- spinning some real cash in 2009.
tioned itself to soon become the In FY2008/09, 160,103t were gold space, however, Gryphon
milled for 50,067oz gold @ 9.7 (4.5c/share at the time of print)
g/t from Daisy Milano and the remains in the hunt to bring a
Christmas Flats open pit. 70,000 ozpa heap leach project
at Banfora into production.

January – March 2015 GOLD MINING JOURNAL Page 29

Case histories of discovery

The world’s pre-eminent
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Didipio (Philippines) OceanaGold Corp Galat Sufar South (Sudan) Orca Gold Inc.
Salares Norte (Chile) Gold Fields Ltd
Invincible (Australia) Gold Fields Ltd Aurora (Guyana) Guyana Goldfields Inc.
Natougou (Burkina Faso) Orbis Gold Ltd Cukaru Peki (Bosnia) Reservoir Minerals Inc./
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Kiaka (Burkina Faso) B2Gold Corp
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Pan Pacific Perth
November 17-18

Jointly organised by:

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For all enquiries about exhibiting or attending please contact Tammy Caldwell on (+61) 8 9321 0355
or email [email protected]

CAMBODIAN SITE VISIT

Renaissance paves a
yellow brick road

Okvau is located in Cambodia’s Mondul Kiri province

If Renaissance Miner- It was somewhat unsurprising But instead of a few families, tems and got quite excited. It took
als Ltd was trying to to learn the project that could put chief exploration geologist Stuart him six months to convince Oxi-
keep Cambodia’s gold Cambodia on the mining map Smith and company found more ana there was real potential here.
prospectivity under was first discovered by local ar- than 1,500 people digging the They weren’t interested in any-
wraps, the junior tisanal miners long before the ground – unbeknownst to the title thing that would be less than 1
explorer well and truly western world had any idea of its owner. moz. They got some guys in from
foiled its plan with the existence. Alaska with expertise in intrusive
release of its Okvau “Stuart Smith … took 15-odd gold systems and they confirmed
scoping study last Tremain said Oxiana Ltd – samples from the local workings that potential. Oxiana came in
quarter. which earned first-mover advan- and they averaged about 20 g/t here and got the ground in 2007
tage when it entered Cambodia gold,” Tremain said. … and they drilled the first four
The study lifted the veil on the in the mid-2000s – stumbled holes, which were ripping holes.”
potential of a burgeoning pros- across Okvau after hearing whis- “He had worked with some
pect, which managing director pers of a small artisanal commu- intrusive-related gold systems Oxiana continued to drill
Justin Tremain hopes is merely nity mining the site. himself and saw the similarities Okvau but fell over in 2008,
the beginning of big things for the with intrusive-related gold sys-
company in the budding mining
jurisdiction. Artisanal miners originally found Okvau Justin Tremain

Highlights of the study includ-
ed an in-pit mineral resource of
11mt @ 2.3 g/t for 794,000oz
gold which will support a 93,000
ozpa production target over an
initial eight-year mine life.

The project is set to cost just
$133 million in start-up capital
and could generate operating
cash flow of up to $345 million
with a diminutive C1 cash cost of
$US625/oz and all-in sustaining
cost average of $US663/oz.

January – March 2015 GOLD MINING JOURNAL Page 31

CAMBODIAN SITE VISIT

“There was discussion within Oz At last count, at least 70 artisanal miners were still working on site
Minerals at the time of spinning
it out into another subsidiary, which only to return to Cambodia in ning it out into another subsidiary,
was very much pushed by their head 2009 as Oz Minerals Ltd [follow- which was very much pushed
of exploration and technical guys who ing the merger of Oxiana and by their head of exploration and
Zinifex Ltd]. technical guys who saw a lot of
saw a lot of potential here. potential here,” Tremain said.
“They came back and did a
Tremain outlines the Renaissance strategy on a recent site visit drill out in 2009 to get a maiden “But the board wasn’t inter-
resource, which was 600,000oz,” ested and wanted cash. And
Tremain said. when we came to the party we
offered them a blend of cash and
“Then they gave the guys one some shares. We paid $7 million
more season to prove there could up front [and] gave them a 20%
be potentially more than a couple shareholding, which was really
million ounces. They drilled a few the key to securing the acquisi-
isolated holes on IP targets … tion.”
and that’s when we came in and
picked it up.” Renaissance’s gamble on
Okvau was rewarded in the com-
The managing director told pany’s first drilling campaign in
Gold Mining Journal Renais- June 2012, with three diamond
sance had to fight off a long list of holes intersecting 16m @ 3.7 g/t
companies to acquire the Cam- gold from 13m, 1m @ 15.7 g/t
bodian gold project in February from 6m and 11m @ 1.2 g/t from
2012. surface respectively.

Oz Minerals had spent more A subsequent diamond hole
than $40 million on the Okvau testing an up-dip extension of
and was looking to recoup the the veins included in Oz Miner-
majority of its investment and als’ former resource included a
with the gold market in much bet- broad intersection of 112m @ 2
ter shape than it is today, Renais- g/t gold, spurring a $10 million
sance was competing against a capital raising in October 2012 to
host of cashed-up companies accelerate exploration at Okvau.
offering $30 million-plus for the
ground – forcing it to get crafty to That investment led to the an-
seal the deal. nouncement of Okvau’s first in-
dependent resource of 16.6mt @
“There was discussion within 2.4 g/t gold for 1.2 moz in March
Oz Minerals at the time of spin-

Page 32 GOLD MINING JOURNAL January – March 2015

RENAISSANCE

2013, which at the time of print Drilling at the Samnang prospect has netted intercepts of 9m @ 6.6 g/t from surface
was still Renaissance’s most up An aerial shot of the Okvau exploration camp
to date figure for the deposit.

At that point Renaissance ne-
gotiated a binding agreement
with Oz Minerals to defer a pay-
ment of $10 million required upon
establishment of a 1.25 moz re-
source at Okvau until it lodged a
formal decision to mine with the
Cambodian Government.

“That would have put a hand-
brake on the project because the
market had taken a dive in that
12-month period,” Tremain said.

“Oz Minerals came to the party
and were very commercial about
it and they agreed to push that
back to … a decision to mine.
The payment will not be made
until we have a feasibility study
completed, funding in place and
finance as part of our construc-
tion.”

The payment deferral, in part,
helped Renaissance to move on
a regional RC drilling campaign
aimed at identifying new, near-
deposit targets, which is still in
progress.

Further mapping and surface
sampling helped identify the
company’s first near-mine target,
Rhyolite Ridge, in September
2013.

Located within the broader
10sq km Area 6 regolith anomaly
and just 12km from Okvau, Rhy-
olite Ridge returned high-grade
rock chips of 10.7 g/t gold, 9.2 g/t
and 7.3 g/t.

Renaissance exploration man-
ager Craig Barker said the com-
pany was likely to target Rhyolite
Ridge with a drilling campaign in
February.

Additional reconnaissance
work also led to the discovery of
the company’s Area 1 prospect –
just 3km north of Okvau.

Barker described the target as
“a massive soil anomaly sitting
over diorite” which had returned
1 g/t surface samples.

“We went in with drilling at
the beginning of this year with
one line through the highest soil
anomaly but we didn’t hit any-
thing,” he said.

“Then we did some north-south
trenching over the top of existing
trenching to get a better idea of
what was in the ground. It was to
confirm that we had a north-west
orientation of quartz veining and
mineralisation. In that trenching
we got 2m @ 4.7 g/t gold and 5m
@ 1.95 g/t. Down to the south we
did a 300m trench and we came
across 17m @ 2.9 g/t. That will
be our target for future drilling.
Our first hole will go into that and

January – March 2015 GOLD MINING JOURNAL Page 33

CAMBODIAN SITE VISIT

“The pit as it stands would be Okvau’s core shed
designed in three stages. The
first two stages give us about 60-70% Gold Mining Journal’s site visit. While finding another high-
of the ounces, so that’s basically the
The Samnang prospect is grade asset was at the forefront
first five or six years of mill feed.
characterised by highly anoma- of Tremain’s mind, he took time

lous surface geochemistry, com- to reiterate the importance of

plex geology and significant ar- Okvau and its scoping study,

tisanal workings along the Prek which was essentially the foun-

Te fault. dation for the company’s future

Rock chip and trenching sam- in Cambodia.

ples previously returned high- “We think what we’ve got here

hopefully prove up the additional er 15,000m drilling programme grade assays of 14.9 g/t gold, in Okvau is a good base,” he
200,000oz that we need.” aimed at discovering another
large deposit. 10.9 g/t and 6.8 g/t and previous said.
At the time of print, Renais-
sance was about to embark on Renaissance was also target- drill results included 9m @ 6.6 g/t “It’s a single pit and that’s the
a six-week drilling campaign at ing its Samnang prospect, 500m
Area 1, which was part of a larg- north-west of Okvau, during gold from surface, 20m @ 2.05 beauty of this deposit. The pit as

g/t from 38m and 3m @ 3.97 g/t it stands would be designed in

from 21m. three stages. The first two stag-

es give us about 60-70% of the

ounces, so that’s basically the

first five or six years of mill feed.

They are very robust ounces and

have a low strip ratio of 3.5:1.

“Stage three is chasing deep-

er ounces, so there will be a

high strip ratio and therefore

higher cost. But you don’t start

stage three in the current design

schedule until year five. So the

opportunity is to defer that stage

by finding resources elsewhere,

which is what we are focused on

now.”

Tremain was also quick to re-

mind Gold Mining Journal the
Okvau scoping study was based

on an almost two-year old indi-

cated resource, which he expect-

Four expat geologists and about 40 Cambodian Renaissance Minerals Ltd senior ed to be updated by March.
staff work on the ground at Okvau
geologist Craig Barker Strong metallurgical results in

Page 34 GOLD MINING JOURNAL January – March 2015

RENAISSANCE

Oxiana found more than 1,500 artisanal miners on site when it first went to investigate Okvau

the scoping study also reinforced “Now it’s about optimising our and we target to have A core sample from a 23m @ 15.29 g/t
the company’s confidence in the cyanide consumption and grind that done in 12 months intersect at Okvau
project. sizes. That’s a big part of the and then permitting
budget for the next phase of fea- would come into play,” Cambodia, which is a committee
Total gold extraction of 85- sibility work.” Tremain said. comprising the 16 senior minis-
95% was achieved by coarse ters and the Prime Minister and
grinding and flotation, fine grind- Renaissance hopes to release “At the moment we they give final approval to pro-
ing of low-mass concentrate and a PFS on Okvau by Q3 this year have an exploration jects like this.”
conventional cyanide leaching of but Tremain said some geotech- licence but we’ll need to con-
concentrate and flotation tails. nical, hydrological and environ- vert it to an industrial produc- – Rhys Dickinson
mental work needed finishing tion licence. We will also need
“The phases we have done to before that was achievable. approval from the Minister for
date are really about getting the Environment and then there’s a
gold out and seeing what recov- “We expect to have a pretty third approval required from the
eries we could achieve,” Tremain good PFS completed mid-2015 Council for the Development of
said. and then we will go into a DFS

Cambodia mining coming of age

It might only be in its infancy as Government’s Ministry of Indus- is 20% but for mining it will be project.
a mining jurisdiction but Cam- try, Mining and Energy (MIME) 30%,” he said. Renaissance was in rarefied
bodia could soon become an ex- had called on Australia – and Re-
ploration hot spot if Renaissance naissance – to help set up a new “There are a lot of compa- air having secured a special
Minerals Ltd’s success – and industry code to take Cambodia nies lobbying to reduce that but agreement with the Cambodian
influence – in the Asian nation from a mining minnow to a world- the reality is 30% … is pretty Government affording it an eight-
continues. class jurisdiction. competitive. And the royalty is year exploration licence and
2.5% as a gross, or 3% NSR four-year feasibility licence.
Justin Tremain told Gold Min- ”We brought down three up to the miner. Also, there is
ing Journal the Cambodian [MIME officials] to Perth and or- no Government participation in Typically, a company would
Government believed establish- ganised meetings with the De- projects. We have 100% owner- be issued a six-year exploration
ing a modern mining industry partment of Mines and Petroleum ship of Okvau and O’Chuung and licence [to be renewed every two
was a path to prosperity for the and lawyers in Perth and we’re there’s no requirement for us to years] at which point it would be
nation. now acting as a go-between for bring in a local partner. We are expected to seek a production
lawyers in WA – Hunt and Hum- quite comfortable not having a licence.
The Cambodian People’s phrey, who basically drafted the local partner. We’ve had discus-
Party (CPP) received all the WA Mining Act – and MIME to sions with the MIME and they are “Our relationship with the
motivation it needed to broaden provide feedback on how they not looking for participation at all. Government is second to none,”
the country’s economy last year draft their mining code,” he said. They are very keen to see this Tremain said.
when, for the first time it was mine developed.”
legitimately challenged in the “They have accepted basically “We had the Minister for Mines
National Assembly general elec- every recommendation we’ve Tremain also said the current come to Okvau in March this year
tions. made. They’re not putting any mining code included a mineral with an entourage of 40 people.
roadblocks in place.” revision investment in which He took two or three days out of
The CPP, which romped to vic- they could negotiate tax incen- his schedule to visit an explora-
tory in the 2008 elections, nar- Tremain said once enacted, tives outside of legislation and a tion camp. You wouldn’t see it
rowly defeated the Cambodia Cambodia’s new mining code number of stabilisation clauses, anywhere else. They’re right be-
National Rescue Party, which would only improve what was which helped to alleviate inves- hind the project.”
garnered almost 45% of the peo- already a favourable jurisdiction tors’ concerns about the possi-
ple’s vote. for junior exploration companies. bility of future tax imposts on the – Rhys Dickinson

As a result, Tremain said the “In Cambodia the tax rate

January – March 2015 GOLD MINING JOURNAL Page 35

CAMBODIAN SITE VISIT

Geopacific considers

Cambodian first

Drilling targeting copper at the 150 prospect

Ron Heeks has no Geopacific’s Cambodian quest (GRD), a South Korean-con- nal although hardly systematic,
doubt Geopacific began in January 2013 when it trolled Cambodian company, GRD’s work did spark Geopa-
Resources Ltd’s Kou executed an off-market takeover which focused primarily on lo- cific’s interest in Kou Sa.
of unlisted public explorer World- calised stream sediment and soil
“GRD literally walked up to

Sa project exhibits wide Mining Projects Ltd to ac- sampling, surface trenching and where you could see outcropping
all the hallmarks of quire a 85% interest in Kou Sa, rock chip sampling programmes mineralisation and drilled under it
in the country’s Phreah Vihear culminating in a 40-hole drilling and sometimes straight on top of
a low-tonnage, high-
province. programme chasing visible, out- it,” he said.

The project was previously cropping mineralisation in 2010- “All their stuff did for us – the
“grade company mak-
owned and explored by Golden 11. 4,000m of core and 2,000 sam-
ing asset.
Resources Development Ltd Heeks told Gold Mining Jour- ples – was giving us an indica-
Now the managing di-
rector just needs to con- tion of the system.
vince the market there’s
much more to the compa- GRD literally walked up to where you could It was like a grass-
ny’s Cambodian story. see outcropping mineralisation and drilled roots programme
under it and sometimes straight on top of it. with really good
geochemistry. We
had a good idea

Page 36 GOLD MINING JOURNAL January – March 2015

GEOPACIFIC

Investors and analysts inspecting core at Geopacific’s exploration camp in
Cambodia’s Chep District of the Phreah Vihear province

of the rocks and the alterations found to the west of its 100 pros- Geopacific managing director Ron Heeks
and liked what we saw and knew pect.
there was mineralisation in the Page 37
system.” The company first rolled drill
rigs out at Kou Sa on January 4
Geopacific first got its hands last year and had immediate suc-
dirty at Kou Sa in April 2013, cess, intersecting 3.9m @ 16.47
completing a re-sampling pro- g/t gold from its first diamond
gramme on some of GRD’s old hole at its 150 prospect and 3.9m
drill holes, which eventually led @ 3.13% copper from 33.4m at
to a soil geochemistry survey the same target.
identifying a contiguous 18km-
long zone of copper anomalism. Follow-up drilling at 150 net-
ted intersects of 32m @ 25.04 g/t
That same programme also gold and 1.31% copper from 16m
gave Geopacific hope that its and 33m @ 5.02 g/t gold and
ground contained a suite of el- 0.95% copper from surface.
ements, with significant gold-
copper-molybdenum anomalism Geopacific landed its second
significant copper discovery in

January – March 2015 GOLD MINING JOURNAL

CAMBODIAN SITE VISIT

Drillers’ quarters on site at the 150 prospect

May while RC drilling its 117 June chasing a 2km anomaly Further work at 150 confirmed news for the junior, assaying 3m
prospect, returning a best result netted a standout intersect of the presence of at least two sepa- @ 15.94 g/t gold for 9.83% cop-
of 12m @ 2.34% copper. The 10m @ 2.75% copper. rate zones of mineralisation, with per equivalent.
prospect is located 7km east of hole KDH015 assaying 9.65m @
150 and forms parts of a near Geopacific recently discov- 4.33 g/t gold and 4.32% copper The latest programme at the
continuous copper anomaly ered native copper at 117 and from 43.85m, including 5.65m @ 150 prospect [drilled in Novem-
spanning roughly 8km. was in the midst of a trenching 7.22 g/t gold and 6.43% copper. ber] included hits of 4.5m @
campaign targeting an outcrop- 12.9% copper equivalent from
Subsequent drilling at 117 in ping gossan at the time of print. KDH011 brought more good 76.6m and 22m @ 4.15% copper
equivalent from surface.
Heeks on-site with exploration manager Prayogo Hargyono and chairman Milan Jerkovic
“There’s also very high silver
credits in 150 which can’t be dis-
counted,” Heeks said.

“We get up to 400 g/t silver
and we had one intersect that
was 1,150 g/t silver recently.”

Heeks said Geopacific’s im-
mediate goal was to develop a
resource for the 150 prospect.

He said given the information
the company had to date, a good
result would be a 100,000t-plus
resource with a 5-7% copper
equivalent grading.

“We’re hoping to get the first
resource out at the end of Feb-
ruary, which will be limited to the
150 area,” he said.

“The problem with these re-
sources is that they can’t be
done in-house, they have to be
done independently. We haven’t
engaged anyone yet but there’s
a list of companies lining up to do
that.”

Page 38 GOLD MINING JOURNAL January – March 2015

GEOPACIFIC

“Wouebt’reaetlhitmhoepitieendngdttoootfghFeeet1bt5hr0ueaafrirryes,atw.rheiscohuwrciellNative copper from the 117 targetHeeks addresses questions from brokers and analysts during the site visit

strong gold anomalies of the country and whether they
but there’s no copper operate efficiently.”
at 170.”
Jerkovic said while the com-
He also aired some pany was focused on completing
concerns about Ge- its cultural due diligence and en-
opacific becoming vironmental surveys at present,

Cambodia’s first miner. completing a PFS for Kou Sa by

Geopacific chairman Milan copper skarn down there. It’s lo- “My preference is really not to September was within the realms

Jerkovic said work programmes gistically our most difficult area to be the first,” he said. of possibility.

in 2015 would be largely dictated get to and as of last week we still “If you’re third or fourth the “We have good logistics and a

by the 150 prospect’s resource. couldn’t get down the road and others have put the procedures fantastic area that just keeps on

“We’re going to do some sort get in there because of the wet in place. That’s a big issue. We’d giving but we have a long way to

of preliminary resource and a season. 170 is also quite fasci- prefer a lower spend for a higher go,” Heeks said.

statement of what we think the nating as it’s a gold-only target. IRR which funds the big picture – Rhys Dickinson
progressive schedule will be The 150 and 180 areas have while testing all of the systems

here to foreshadow the bigger

picture,” he said.

“Once we’ve got to that point

… we will release a statement

about where we intend to go

next.”

Heeks said while he was con-

fident 150 could support a low-

tonnage, high-grade mine by

2016, Geopacific had to make

sure the market was aware of

Kou Sa’s exploration upside.

“We certainly see this area as

having a lot more to give; wheth-

er that’s larger tonnage and low-

er grade deposit or a larger ton-

nage and higher grade scenario,”

he said.

“With the drilling we’ve got

under way at the moment, both

of those scenarios are on the

cards. A massive copper anom-

aly is sitting in the middle of the

150, 117 and 100 zones, which is

just in an open field and we have

geophysics in there just now try-

ing to narrow it down. And the

180 area, which is a fascinating

area, we’ve got a mineralised Bayon temple at Angkor Thom in Siem Reap

January – March 2015 GOLD MINING JOURNAL Page 39

AMERICALATINSAVE THE DATE

20-21 May 2015, Sydney

www.latinamericadownunder.com

To present, exhibit or attend as a delegate please contact
Lauren Carey on (+61) 8 9321 0355 or email [email protected]

AUSTRALASIA FOCUS

Kula waits for next wave

Having nailed down Upward movement in the gold price will boost the prospect of ready stage and we may spend
a mining lease Kula Gold’s Woodlark Island project being built $3-4 million in RC and diamond
and confirmed gov- drilling and get that into an in-
ernment participation were able to convert the debt into trenching and revision of high ferred resource,” Pether said.
in the Woodlark Island equity and also bring new equity quality magnetics data.
project in Papua New into the business of $3.56 million, “The work we are doing there
Guinea, Kula Gold Ltd which is a fantastic position for Pether said the company was is to get that ready to be a re-
rounded out 2014 by the company now,” Pether said. re-ranking potential drill targets, source definition target. Right
relieving itself of debt. with limited RC/diamond drilling now it is about demonstrating
The provision of debt allowed planned at the top prospects in where the resource growth is
RMB Australia Holdings Ltd Kula to complete the work re- 2015. and where we can bring a direct
and Pacific Road Resources quired to secure a mining lease improvement in the DFS.”
Fund agreed to convert the $3 in July, making Woodlark Island Trenching at the Watou pros-
million working capital facility the first gold project to be ap- pect is currently exciting the A 2012 DFS was based on 11mt
loaned to Kula in 2013 into eq- proved in PNG in eight years. company. @ 2.2 g/t gold for 766,000oz at a
uity. gold price of $US1,200/oz.
Additionally, the company “We are interested to see
The agreement followed the has managed to demonstrate what comes from the next lot of An improvement in gold price
$3.56 million equity placement some of the near-surface, high- trenching [results] from Watou. is necessary for Woodlark Island
to sophisticated and institutional grade resource potential through Depending on those results, to proceed and Kula has ap-
investors in October. Watou may advance to the drill pointed debt advisors to help it
prepare for an upswing in prices
With money for junior gold which will trigger project go-
companies hard to come by, ahead.
Kula’s ability to extract vital fund-
ing in 2014 further endorsed the “The sun will come out from
potential at Woodlark Island, ac- behind the clouds eventually and
cording to chief executive Stuart when it does you want to have
Pether. your surfboard ready and waxed
to catch the wave,” Pether said.
“Our major shareholders un-
derstand what we are doing and “We are very much working
are supportive of what we are do- towards being prepared for this
ing and provided us that debt. We and have engaged debt advisors
to help us understand what our
debt options are. If the gold price
does take a big run we are in a
position to capture it.”

– Mark Andrews

Production forecast lifts Medusa’s spirit

It might have had a tumultuous sioning of Co-O’s new mill. well, with improvements being
start to the year but Medusa The company discovered progressively undertaken,” Teo
Mining Ltd looks to be tracking the vibrator feeder to the said.
towards a profitable FY2015 at primary crusher was unsuit-
its Philippines Co-O gold mine. able, forcing all feed to the As a result, the company’s
mill to be loaded through preliminary production forecast
The ASX-listed junior was an emergency feed station, for the full year to June 30, 2015
faced with adversity right from resulting in uncrushed run- was 95,000-100,000oz gold with
the get-go in 2014 when a large of-mine size rock to be fed a head grade average of 5 g/t
weather event causing slippages into the SAG mill. gold and a mill recovery rate of
and landslides forced staff off the greater than 92%.
job for a week last January. The vibratory feeder was
replaced with a purpose- Medusa also predicted its cash
Just over a fortnight after work built apron feeder on July 9, costs to range between $US400-
resumed on site, the company allowing the primary crush- $US450/oz and all-in sustaining
reported an underground fatality er to operate to design. costs of $US900-$US1,000/oz.
in which a contract miner’s assis-
tant was killed by a rock fall. Medusa chairman An- Enhancements were also
drew Teo said the company planned for the mine itself, with
Unfortunately it was not the was just now finding its feet the upgrade of Co-O’s L8 shaft
only fatal underground incident after a troublesome year. scheduled to take place at the
at Co-O – a second worker died time of print.
after breaching standard safety “I think everyone is
regulations on June 25 and a Medusa had a shaky start to 2014, experienc- aware of the trials and Concurrently, the on-site de-
third employee was killed on Oc- sign requirements for the E15
tober 17, prompting a review of ing problems with its new SAG mill tribulations associated with shaft were completed and it was
the mine’s stope management the commissioning of the anticipated its upgrade would
protocols. take between 27-30 months at a
Medusa also experienced new mill … and I am pleased to cost of about $12 million.
problems following the commis- report it has been performing

January – March 2015 GOLD MINING JOURNAL Page 41

AUSTRALASIA FOCUS

Alkane excels in tough market

Alkane Resources Nick Earner said since the
Ltd managing
director Ian Chalmers DZP’s EIS submission to
appeared peeved at
the company’s AGM the Department of Planning
in November; not be-
cause he didn’t have and Environment and sub-
great news to share
but rather because sequent forwarding to the
he felt the company’s
good work in 2014 Planning Assessment Com-
had been overshad-
owed by a low share mission for review or deter-
price it had no control
over. mination, Alkane had been

Given some of the company’s focused on optimising the
milestone s in New South Wales
this year – bringing its Tomingley DZP’s flow sheet and layout
gold mine online and completing
an EIS for its potentially lucrative of the proposed processing
Dubbo zirconia project (DZP) –
Chalmers cut the figure of a frus- plant.
trated man at the convention.
The company was also in
“If you look at Alkane today
and the cash flow we’re generat- the early stages of sourcing
ing out a Tomingley, if this was
a normal market, and a normal equipment for the plant.
gold market, that would probably
value Alkane at over $250 million “We are getting aggres-
and our share price would be 40-
50c,” Chalmers said. sive interest from equipment

The managing director also manufacturers and we are
lamented the market’s contempt
for Alkane’s ambition in Dubbo, expecting those costs com-
telling investors he felt the com-
pany was being punished for pur- ing down at quite aggressive
suing the zirconia project.
prices,” he said.
“I feel we’re actually getting
negative value for Dubbo,” Chal- Chalmers said work was
mers said.
continuing at Alkane’s ANT-
“The market is saying, ‘Alkane
has to go and raise $1 billion for SO-run demonstration pilot
this project – that’s an enormous
negative, so we’ll put that enor- plant, which sought to de-
mous negative on top of a small
positive coming out of Toming- risk the project.
ley’ and you end up with a share
price of 22c and a market cap of He reassured investors
less than $100 million.”
Alkane was not done with
Though the company’s share
price baffled him, Chalmers said its exploration programme,
the strides Alkane took in 2014
could not be understated. revealing the company

He said bringing Tomingley had plans for a drilling pro-
into production on budget and on
time was the without doubt com- gramme at its Bodgangora
pany’s number one achievement.
copper-gold prospect, spe-
Alkane backed up its commis-
sioning of the mine with standout cifically the new Kaiser tar-

get.

“We found some very

good copper-gold minerali-

sation at our Kaiser project

this year and we will continue

to explore those plays and

try to slowly raise them to a

point where they become our

next development projects

for Alkane,” Chalmers said.

“[Kaiser is] a Cadia-Ridge-

way style porphyry copper-

gold system. These are fan-

tastic deposits and if you can

find one they are incredibly

valuable.”

Recent drill intercepts from

Kaiser have included 41m @

1.15 g/t gold and 1.24% cop-

Ian Chalmers per and 8m @ 0.34 g/t gold
and 1.06% copper.

results in the September quarter, Tomingley in the future. Chalmers also said Alkane
producing 22,363oz gold for a
profit of $14 million. “Initially production was an- had plans to drill the Elsienora

Chalmers said Alkane’s for- ticipated at 400,000oz over our target at its McPhillamys JV
ward thinking and risk mitigation
strategy – specifically maintain- base life of 7.5 years but we be- and the Galwadgere prospect, a
ing a $1,439/oz hedge position –
played a part in its bumper Sep- lieve with the discovery and ulti- small VMS copper-gold deposit
tember quarter.
mate development of the Calmoa near Bodgangora.
And if Chalmers has his way,
Q3 will hardly be an outlier for 2 deposit we will extend that,” he – Rhys Dickinson
said.

“Longer term going under Cal-

oma is certainly possible too.”

Alkane chief operating officer

Page 42 GOLD MINING JOURNAL January – March 2015

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AUSTRALASIA FOCUS

Nicolsons in sight for
Pacific Niugini

High-grade drilling results – such as 3.4m @ 13.21 g/t including 0.36m @ 121 g/t gold – have excited Pacific Niugini at Nicolsons

Production is in The permitting is well advanced, in Halls Creek any longer. thermal target – is subject to a
sight for Pacific Ni- the mining proposal was submit- Such terms are enticing for farm out and JV agreement with
ugini Ltd at the Nicol- ted in August and we think that MGL Resources Ltd.
sons gold project, we are very close to having that Pacific Niugini, as not only does
Halls Creek, Western granted,” Cmrlec said. the Halls Creek package include MGL is required to spend $6
Australia, in 2015. a high-grade resource/reserve million for a 50.1% interest in the
“The financing is moving along across Nicolsons, Wagtail/Wag- project by April 2015, and with
At the time of print the com- well and hopefully we will be able tail North and Rowdies (1.1mt @ about half already committed,
pany was close to finalising a to announce that we have got 6 g/t for 209,130oz gold) but also Crmlec said it was probable ad-
financing solution to bring the that funding in the not-too-distant a 120,000 tpa CIP processing ditional drilling would be under-
mine back to life. future. We have the key person- plant. taken in the near future.
nel in place to manage the pro-
Pre-production capital costs ject and we are hoping to get the “We looked at a lot of projects Pacific Niugini manages the
of $10.7 million were estimated refurbishment, plant and mine inside and outside of Australia, project while MGL provides the
to re-start Nicolsons, which pro- development commencing in but the standout was the quan- funding.
duced 23,000oz gold in 1996 be- the first quarter of next year. By tity and quality of the plant that
fore being placed on care-and- mid-year or shortly thereafter we was already in place and we “We did a huge amount of
maintenance the following year. hope to be in production.” didn’t need the big upfront capi- surface trenching, soil sampling
tal spend that a lot of juniors are and geophysical works. We did
Pacific Niugini is The company proposed to struggling with at the moment. some initial drilling as well to un-
aiming to hit a produc- acquire the project early in 2014 Certainly there are a lot of other derstand where we were geologi-
tion rate of 130,000 similar quality resources in WA cally. We realised fairly quickly
tpm for 30,000 ozpa and by October had that we will be interested in going that we had a potential porphyry
gold over an initial fulfilled its obligations forward once we have bedded and epithermal discovery which
4.5-year mine life for 65% ownership of down Nicolsons,” Crmlec said. we think has a lot of analogues to
from Nicolsons, where the project by spend- Wafi-Golpu, so we went out look-
current underground ing $1.2 million in Crmlec said there was explo- ing for partners to spend some
probable reserves are first 12 months after ration upside as minimal drilling serious money in terms of drilling
435,455t @ 6.17 g/t for initially paying Bulletin has been conducted outside of the deposit out,” Crmlec said.
86,362oz. Resources Ltd $1.5 the existing resources.
million cash and $1.3 Drilling carried out in 2014 re-
Pacific Niugini man- million worth of fully Expanding the resources and turned results of 20m @ 2.89 g/t
aging director Paul paid ordinary shares. reserves are exercises the com- gold from 107m, including 11m @
Cmrlec said the com- pany intends to carry out once 4.72 g/t from 114m and 35m @
pany hoped to be in production Bulletin retains a consistent cash flow is estab- 3.04 g/t from 136m, including 4m
mid-year. Paul Crmlec 35% interest in the lished. @ 18.75 g/t from 160m and 11m
@ 8.24 g/t from 160m.
“We are going hard to pull eve- project however Pacif- In the meantime the company
rything together and to be able ic Niugini is close to spending the is considering a name change to Also in PNG, the company has
to start the project in the first additional $1.2 million required to better reflect its renewed focus approvals in place for mining at
quarter of next year. We have take its stake to 80%. on Halls Creek. Widobush ML457, where third-
done the feasibility study and party partnerships are possibili-
the re-start estimate as required. The remaining 20% can be The company has tried its luck ties.
purchased by Pacific Niugini for in Mexico and is still linked to its
$2 million (cash or shares) or a 2011 virgin discovery in Papua – Mark Andrews
1% royalty valued at $4 million if New Guinea; Garaina.
Bulletin decides not to participate
Garaina – a porphyry and epi-

Page 44 GOLD MINING JOURNAL January – March 2015

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AUSTRALASIA FOCUS

Acacia enters West Africa

Sarama Resources “There is nothing
Ltd has secured
vital funding for its worse than doing an
South Houndé pro-
ject in Burkina Faso expensive feasibility
by welcoming Acacia
Mining plc as a JV study only to find out
partner.
you need more ounc-
The deal is of the kind any jun-
ior would be happy to sign in the es,” he said. “We have
present market. Acacia (formerly
African Barrick Gold plc) will done the pre-scoping
make an initial $US1 million pay-
ment and can then earn an initial study work and know
50% interest by spending $US7
million on exploration at South we need around 3 moz
Houndé within the next two
years. Its holding will increase gold and that’s where
to 70% following a further $US7
million of exploration expenditure all the work will be di-
in the following two years and
can reach 75% once a reserve of rected towards.
1.6 moz gold has been achieved.
“I think Acacia in
TSX-listed Sarama has en-
joyed much success at South particular will be quite
Houndé – 260km west of Ouaga-
dougou – since it began explora- happy to do a lot of
tion there in early 2012. In Sep-
tember 2013 a maiden inferred exploration first and
resource of 29.13mt @ 1.6 g/t for
1.5 moz gold was defined for the get a good feel for the
project but with the market los-
ing its enthusiasm for resource endowment and oper-
stocks – and West African gold
plays in particular – Sarama ating environment in
struggled to find the funding
needed to advance the project. Burkina Faso before

Sarama’s vice president committing to feasibil-
corporate development Paul
Schmiede said the agreement ity studies.”
with Acacia represented the best
way forward for Sarama and Away from South
South Houndé.
Houndé, Sarama will
“This deal has the classic driv-
ers,” Schmiede told Gold Min- A deal with TSX-listed junior Sarama Resources has given continue to focus on
ing Journal. “Sarama has the Acacia Mining its first entry point into West Africa Burkina Faso follow-
project but needed money; Aca- ing its decision to call
cia had the money but needed a
footprint in West Africa.” that can then be demonstrated to starting resource and minerali- force majeure on its Liberian

Schmiede said while Sarama the market,” he said. sation remains open in all direc- assets in the wake of the Ebola
would have preferred to retain
100% ownership of the project Although some funding is tions.” outbreak.
for now, the current market envi-
ronment meant the company had available for companies close to Sarama will retain manage- The company is already in JV
to find other ways of keeping mo-
mentum up. project development, Schmiede ment of the project for the initial with Savary Gold Corp over the

“In this market you do what you believes South Houndé is still two years, a decision Schmiede adjoining Houndé South project
have to do. The choice is to either
dilute at the equity level or at the some way off that position. sees as being a tick of approval and Schmiede said attention
project level. This deal allows us
to avoid dilution at an equity level “We are probably at 50% of for its efforts to date. would also be paid to the Ban-
and hopefully it will create value
what we would need to get a “It is a big endorsement of fora belt.

starting resource and it will take our exploration team and the “Burkina Faso is the focus

close to that full $US14 million to way they work,” he said. “It also for us. It is still one of the better

get the other 50%,” he said. “But, means Acacia can use our base, countries to work in. It has good

if Acacia does elect to go to the knowledge and people and terrain and supplies are relatively

75% mark it leaves Sarama with spread its own resources across easy to access,” he said.

25% of an Acacia-sized mine. its exploration portfolio.” New opportunities are also

That is a situation we would very A technical committee will be arising as TSX and ASX-listed

happily be in.” formed shortly and a works pro- juniors struggle to stay afloat.

The deal represents Acacia’s gramme will be designed in com- “There is not a lot of explora-

first entry into West Africa. The ing months to allow exploration to tion going on outside of the core

company has been a producer start during the current season. projects and we are seeing dis-

for more than a decade in Tan- Schmiede said the first year’s tressed ASX and TSX juniors

zania but as chief executive Brad programme would involve drill- looking to divest their projects.

Gordon told Gold Mining Jour- ing, geochemical surveys and Juniors that don’t have resources
nal’s sister publication Paydirt geophysical work. on projects have trouble securing
in December, it has been weigh- funding and there may be some
“It is really a three-pronged

ing up how to gain a foothold in approach; follow up on the ex- ground moved on.”

West Africa for some time. tensions to the existing resourc- Sarama shares jumped 70%

“We are looking for quality ex- es; test some of the soil targets on news of the Acacia JV and

ploration ground in West Africa with aircore drilling and continue Schmiede said shareholders had

and we are pretty close to put- with the project-scale target gen- supported the move.

ting our foot on something there,” eration work by flying geophysics “The reaction has been gener-

Gordon said. over the area.” ally positive and the large share-

Schmiede said South Houndé Back-of-an-envelope workings holders such as Sun Valley Gold

offered Acacia the perfect entry have suggested that 3 moz gold [Inc] and Kinross [Gold Inc] have

point into West Africa. would be needed to justify devel- been very supportive.”

“It is a large [1,000sq km] opment and Schmiede does not – Dominic Piper
contiguous position in a proven expect either JV partner to push

mineral field; we have had early ahead with formal studies before

exploration success; produced a that figure is reached.

Page 46 GOLD MINING JOURNAL January – March 2015

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AFRICA

Golden Rim glows

amid uncertainty

Golden Rim Re- Golden Rim was unaffected by the recent political unrest in Burkina Faso define a maiden resource at the
sources Ltd project before the end of the cal-
managing director Drilling earlier this year out- $2.63 million via a finder’s agree- endar year.
Craig Mackay said his lined a gold anomaly at the Ban- ment with an affiliate of Sprott.
company did not lose ouassi prospect under laterite That means a BFS for the
a single hour’s work in and soil cover over an area of Aurora (15.9%) and Sprott Balogo project, also in Burkina
Burkina Faso during 1.2km by 0.2km, with peak sam- (13.7%) are now Golden Rim’s Faso, will remain on hold until
the recent political ples of 2,017 ppb gold, 1,622 ppb two largest shareholders and enough funds can be raised so
unrest in the West gold, 1,616 ppb gold and 1,593 Mackay hinted his company the company can work concur-
African country. ppb gold. might look to its new corner- rently on both gold assets.
stones for further funding in
Longstanding President Blaise One of the holes drilled during 2015. Golden Rim intercepted some
Compaore resigned on October that programme intersected 10m of Burkina Faso’s highest-known
31 following 48 hours of mass @ 8.4 g/t gold from 34m, includ- “Probably towards the end of gold grades at Balogo, including
street demonstrations against ing 2m @ 37 g/t gold, 10m be- first quarter we’ll need to look at 57m @ 40.6 g/t gold (including
the 63-year-old’s attempts to neath a previous discovery hole [raising capital] again, but at this 8m @ 245 g/t gold) and 31m @
change the constitution to extend of 14m @ 18.8 g/t gold, including stage we’re quite well funded to 65 g/t gold (including 6m @ 308
his 27-year term in office. 4m @ 63.8 g/t gold. get through the work we’ve got g/t), during previous field sea-
planned and see what results sons.
Former foreign minister Michel A rock chip sample of 818 g/t come back,” Mackay said.
Kafando was appointed transi- gold from the south-east of the Balogo has an inferred re-
tional president on November 18 Banouassi prospect was also “We’ve got some good cor- source of 850,000t @ 6.8 g/t
and will lead an interim govern- recorded during the last field nerstones at the moment, so gold for 185,000oz and remains
ment ahead of the next election season. certainly we would look at that open at a depth below 200m.
to be held later this year. option first [for further raisings]
“There’s certainly some good but as a board we haven’t really “I’d like to be drilling there
The mass protests put the grade there that needs a lot more talked about that yet.” again and seeing if we can in-
immediate future of many re- drilling and that’s happening right crease the high-grade resource
sources projects in Burkina Faso now,” Mackay said. Korongou will again be the fo- base we’ve got down there now
under a cloud, including Golden cus for Golden Rim in 2015 and and taking that forward to a de-
Rim’s Korongou gold project “We expect in the near future Mackay said he would be disap- velopment decision,” Mackay
where the ASX-listed explorer we’ll start to release the first pointed if his company failed to said.
had just started an extensive results from that programme.
drilling programme We’ve got samples at the assay Golden Rim is following up on promising “It’s the sort of resource that,
lab now and if we get a batch gold anomalies at Korongou because of the grade, you can
But Mackay was happy to re- back that look pretty good we’ll make considerable money, but
port his company was not im- put that out to the market.” we just need a bit more of our
pacted in any way by the brief own to make that happen.”
military coup. Golden Rim is able to carry out
this extensive drilling programme Despite ongoing exploration
“Our office [in Ouagadougou] on the back of funding arrange- success in Burkina Faso, Golden
has remained open and we’ve ments with investment firm Rim has not been rewarded by
got quite a crew out at Korongou Sprott Inc and ASX-listed Aurora the market and the company’s
doing work at the moment so it Minerals Ltd in the second half of stocks were trading below 1c/
hasn’t affected what we’re do- last year. share at the time of print.
ing,” Mackay told Gold Mining
Journal. Shareholders approved the However, Mackay said the re-
conversion of $1.65 million of the sults were a reminder to others
“There’s always been a bit of $3 million loan facility from Au- there was still plenty of gold to be
uncertainty as to what was go- rora before successfully raising found in West Africa despite the
ing to happen with the previous lack of sentiment towards explo-
president trying to get another ration in the region.
term, but I think now that instabil-
ity is out of the way and the mes- “West Africa has been on the
sage we’re getting from our guys nose, but it’s immensely pro-
in country is they think things will spective and we all know the
move forward quite quickly.” industry is cyclical, so it will turn
eventually,” Mackay said.
Korongou is currently sub-
ject to a major geophysical pro- “I’ve been in this game for
gramme and 20,000m auger about 28 years and I haven’t
drilling campaign to build on the seen it as bad as it is now. It’s
encouraging results reported a bit hard to tell [where the gold
during the last field season. market is headed] but I do get
the feeling it has bottomed and
there seems to be a little bit more
interest now than there was say,
six months ago. It’s still anyone’s
guess as to where it’s heading
though.”

– Michael Washbourne

Page 48 GOLD MINING JOURNAL January – March 2015

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GRAPEVINE

Politicians back gold group

The Gold Royalties GRRG spokesperson Les Davis and Gold Road Resources executive chairman Ian Murray
Response Group throw their support behind the gold hard hats campaign
(GRRG) stormed
the stairs of Western to the limit,” Davis said. ford to pay more in royalties. Our royalty levied on gold.
Australia’s Parliament “The State Government is members are concerned any Earlier this year Liberal party
House on November increase in the royalty on gold
27, delivering person- currently considering increasing will mean further mine closures members voted at their State
alised gold hard hats the royalties applied to various and job losses. Many operators conference to oppose any
to Members of Parlia- commodities. The 2014-15 State will not survive a royalty rate in- change in royalties on gold. Now
ment in an effort to Budget foreshadowed an in- crease.” all eyes are on what the WA Cab-
highlight the industry’s crease in revenue from royalties inet will do.
royalties plight. and we are waiting anxiously to The leaders of the WA Nation-
hear how the Government plans als and the ALP, along with two “WA needs all MPs to step up
Thirteen Members of Parlia- to raise that money. Greens MLCs, have committed and protect the jobs and com-
ment – including opposition lead- to opposing any changes to the munities that depend on the gold
er Mark McGowan of the ALP – “The gold industry cannot af- industry,” Davis said.
donned the hard hats in support
of the group, which is hoping to
convince the WA Government
to leave the gold royalty rate at
2.5%.

Silver Lake Resources Ltd
non-executive director and
GRRG spokesperson Les Da-
vis said the hats were just like
the ones protecting more than
20,000 West Australians who
work in the State’s gold sector.

“The gold sector is struggling.
More than 4,000 workers in the
industry lost their jobs last year
and low prices and high produc-
tion costs are pushing operators

INDEX

Acacia 46 Geopacific 36-39 Millennium 10 Regis 4, 10, 20, 26, 29
Alacer 22 Mutiny 13, 25
Alkane 42 Golden Rim 48 Renaissance 13, 31-35
AngloGold 4, 10, 13, 27
Aurora 48 Gold Fields 10, 13, 18-19 Resolute 23

Gold Road 4, 12-13, 16-17 Newcrest 8, 10, 15, 26, 29 Rio Tinto 26

Gryphon 29 Newmont 10, 12, 14-15

Norilsk 21 Saracen 10, 21, 24
Sarama 46
B2 Gold 29 Harmony 7 Northern Star 10, 12-13, Savary 46
Semafo
Barrick 10, 12-13, 14-15, 14-15, 20, 29 Silver Lake 28, 29
Sirius 29
18-19 Iluka 25 Southern Gold 17
Independence 4, 10, 27 Stavely
BHP Billiton 23 Intrepid OceanaGold 13, 27 St Barbara 22-23
29 Orbis 24, 28, 29 Stonewall 29
Bulletin 44 Oz
32 5, 10
7
CRG 7 Kingsgate 8-9 Pacific Niugini 44
Centamin 29 Kinross 46 Papillon 12, 29
Kula 41 Perseus
46
Doray 10, 13, 25, 29

Medusa 29, 41 Yunnan 22
Metals X 22-23
Evolution 10, 13, 20 MGL Randgold 7, 23
Emmerson 20 44 Reed 22

Page 50 GOLD MINING JOURNAL January – March 2015


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