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Tall order: Tall order:
Bellevue measures upBellevue measures up
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CONTENTS
PAYDIRT (ISSN 1445-3436)
Published by
Paydirt Media Pty Ltd. NEWS
A.C.N. 063 985 133 5
Azure Minerals’ recent run of lithium exploration
Head Office: success has continued, attracting the battery
Suite 9, 1297 Hay St, West Perth metals’ majors in the process. Last month, as
Western Australia 6005 Azure shares hit an intra-day high of $2.96,
P.O. Box 1589, West Perth Chilean giant SQM made a $2.31/share offer
Western Australia 6872 for the company. Yvette Ogilvie has been
Phone: (+61 8) 9321 0355 following the emergence of Azure’s Andover
Facsimile: (+61 8) 9321 0426 project as a genuine world-class opportunity
[email protected]
www.paydirt.com.au
18 COVER 5
It’s not easy being an Australian gold developer
Editorial: with several high-profile failures in the last 10
Editor: Dominic Piper years. However, Bellevue Gold is seemingly
Journalists: Michael Washbourne, defying the trend, pouring first gold last month
Yvette Ogilvie, Michael Cameron and closing in on completion of construction
Art director: Nick Brown at its namesake mine. Michael Washbourne
Advertising: visited the project with managing director
Advertising manager: Richa Fuller Darren Stralow to find out what makes Bellevue
Subscriptions: Grace Tan a standout
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426 24 DIGGERS REVIEW
Pre-press and printing: We provide our usual comprehensive appraisal
Vanguard Press, 26 John St, of this year’s Diggers & Dealers Mining Forum
Northbridge WA 6003 across 26 pages, including all the highlights, and
Member of: some of the lowlights, from the annual three-day
meet and greet in Kalgoorlie
50 NEW SOUTH WALES 24
Australia’s most populous state has a
Paydirt Media complicated relationship with mining but given
Executive chairman: Bill Repard the recent granting of two new mining licences
Finance manager: Giovanny Jefferson and a reinvigorated investment strategy
Accounts/administration: driven by critical minerals, a new era could be
Anjali Mediratta dawning. We look at the emerging stories in
the NSW metals sector and speak exclusively
Conferences: Angelique Julien, to Minister for Natural Resources Courtney
Paula Fujita
Houssos about her Government’s plans for the
industry
September 2023 VOLUME 1. ISSUE 319 $11.95
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trusted and independent insight. Capacity
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Flame Atomic Absorption (AA) & MP-AES South Africa where West Wits Mining appears
Fusion ICP-OES & Fusion ICP-MS
Bellevue managing director
T Tall order: all order: finally on the verge of starting development of
Bellevue measures upllevue measures up Darren Stralow underground
Be
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Thoughts from Diggers
fter every major conference, those who weren’t there ask – “What nity along the way.
Awas the mood?” We were far from the only
It is always difficult to answer and after Diggers & Dealers, it was ones to be pulled along. Salt
even harder because of the stratified nature of the Australian resourc- Lake Potash (SO4) was
es sector in 2023. backed into production by
At one end were the critical minerals companies, led by the lithium Taurus Funds Management
miners, who were in buoyant mood despite the recent price correction and the Federal Govern-
in the battery mineral market. ment-funded Clean Energy
At the other were the gold companies. Some of the established gold Finance Corporation, who
miners offered a compelling investment case, others admitted to their provided $203 million in
continued battle to maintain margin, but it was the junior developers debt between them, while
and explorers who were in a parlous state. a further $98.5 million was
Few previous cycles have delivered conditions as tough and pro- brought in via supportive
longed for an individual market segment as the prevailing conditions equity markets.
for the junior gold sector. SO4 managing director
Being an executive in one of these companies must feel like being Tony Swiericzuk had en-
trapped by a boa constrictor; as you wriggle to free one limb, another amoured investors with talk of WA’s ability to pull off big projects, the
body part is squeezed still tighter. simplicity of the sulphate-of-potash process and the potential size of
Just a few years ago, a 1 moz reserve and 100,000 ozpa produc- the end market.
tion profile was enough to attract debt and equity finance. Today, after The other potash executives fell in line and with the demand side
numerous failures, investors have no interest in backing such ven- of the sector blossoming, it appeared not even COVID would stop the
tures and want nothing to do with such companies. birth of yet another new arm to WA’s diverse minerals industry.
I have rarely talked to so many junior company executives who On reflection, however, late 2020 was the high point for the sector.
were so despondent about their immediate futures. Even if you are In reality, it was never going to be so easy to launch a new industry,
on to a big discovery or have enough ounces to warrant a feasibility using relatively new techniques and with little direct experience and
study, investors are sitting on the sidelines waiting for you to ask for from the remotest parts of the State.
more money. SO4 got both its financial and engineering sums wrong and suf-
It is an almost impossible position to be in and given Diggers & fered, followed by Kalium Lakes Ltd. Both struggled to get the compli-
Dealers at heart remains a gold conference, it had an overall effect cated processing – which involves evaporation and therefore relies on
on “the mood”. the right climactic conditions – to perform, and both fell into receiver-
The exception to the rule is De Grey Mining Ltd. Its Hemi discovery ship.
is a generational asset that has already taken the company to plus- So, is this the end for the WA potash sector? Definitely for now,
$1 billion valuations. Managing director Glenn Jardine’s presentation the reputational damage is so severe that Australian Potash Ltd an-
should have provided succour to every explorer managing director out nounced it would be handing its mining leases back to the mines
there; there are still world-class orebodies out there to be discovered. department, having failed to find funders, either debt or equity. The
Outside of the corporate atmosphere, and talking culturally, there company laid the blame squarely on the negativity surrounding both
is little doubt the mood at Diggers & Dealers is more inclusive than SO4 and Kalium.
ever before. However, a glance through the WA mining history books suggests
We covered this subject extensively in our July issue preview to the that these potash projects may see their day eventually. Today’s in-
conference, but Diggers and other forums are a reflection of the wider dustry is littered with successful operations which were initially seen
industry and the increased diversity was clearly on display this year. as little more than follies.
While male, pale and stale (speaking as somebody in that category) is Nickel laterite mines such as Murrin Murrin and Ravensthorpe
still in the majority, gender, cultural and ethnic diversity is undoubtedly appeared unrealistic for much of the 1990s and 2000s while Green-
in the ascendency. bushes, Mt Cattlin and Wodgina lithium projects were viewed more
The best evidence I can provide is anecdotal. When I walked as niche, geological oddities than world-class sources of the world’s
through one of Kalgoorlie’s most iconic nightspots at 6.30pm on Day most in-demand metal when they were first discovered and built.
1 of Diggers & Dealers, all eyes were turned not to the bar staff, but to Mistakes were made, the science and engineering wasn’t exact
the Matildas vs Denmark match on the big screens. and the markets may not have been ready, but the efforts of those
That may seem churlish or insignificant, but I don’t think it is, if you’d frontiersmen (and women) laid the groundwork for the highly success-
told me five or even 10 years ago that Diggers & Dealers delegates ful operations we see today.
would be in the pub cheering on Ausrtralia in a women’s soccer game, Even in gold, projects which once looked reckless now stand out.
I would’ve though you mad. De Grey has held the Mallina project since its listing in 2004, but it has
only been in the last four years that it discovered a world-class project
Potash car crash on those tenements.
The potash hopefuls may have flown too close to the sun in the
Sometimes you get it right, sometimes you don’t. When it comes 2020s, but there is every chance they have set the foundations for yet
to the West Australian potash scene, I’ll admit Paydirt jumped on the another world-class WA resources sector in the decades to come.
bandwagon early.
News over the last few weeks has shown that bandwagon has now
crashed spectacularly, losing its wheels, undercarriage and even dig- [email protected] @DominicPiper
PAGE 4 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
Azure dismisses SQM approach
zure Minerals Ltd has rejected a poten- purchase plan. SQM
Atial takeover by one of the world’s largest and fellow major
lithium producers – and its major shareholder shareholder Creasy
– SQM. Group both commit-
Following last month’s Diggers & Dealers ted to participating
Mining Forum in Kalgoorlie, Azure confirmed pro-rata in the place-
widespread speculation it had received ex- ment.
pressions of interest from the lithium giant, Some of the best
with the most recent offer received on July results to date at
12. Andover include
While SQM’s indicative offer price was for 209.4m @ 1.42%
$2.31/share, Azure hit an intraday high of lithium from 219m
$2.96 on August 8. (including 126.2m
According to Azure, the approaches from @ 1.72% from 219m Azure has knocked back an indicative offer
SQM were “non-binding and highly condi- and 19.7m @ 1.54% from 401.6m) and from SQM following an impressive run of
tional”. The company said the expressions of 183.1m @ 1.25% lithium from 170.5m (in- strong lithium intersections at the Andover
interest “did not warrant further engagement” cluding 58.9m @ 1.46% from 170.5m, 30m project in the Pilbara
and there have been no further discussions. @ 1.55% from 284m and 11.2m @ 1.85%
Azure also insisted its relationship with from 332.9m).
SQM remains supportive and positive de- The lithium mineralisation extends for more exploration has been “parked” to allow the
spite the takeover approach. than 1,800m along strike and down-dip from company to pursue its newfound lithium
SQM is Azure’s largest shareholder after surface to vertical depths in excess of 400m. prospects.
it invested $20 million in March to secure a Rovira said the company was hoping to Azure’s efforts in nickel won’t go to waste
19.99% interest in the company. This fund- release a maiden resource in Q1 2024. with environmental baseline studies previ-
ing was earmarked for lithium exploration “These would have to be some of the wid- ously completed for a nickel scoping study to
and development work at the Andover pro- est zones of lithium mineralisation ever re- assist with the lithium work.
ject, which has since yielded several impres- ported in Western Australia and potentially Rovira also hailed the plethora of nearby
sive drilling results. globally,” he said. infrastructure, adding you could not get a
Ahead of Diggers & Dealers, Azure re- “There’s a lot of drilling going on and all the “better-located project for a mining and pro-
leased an exploration target for Andover of focus has been into that target area number cessing operation”.
100-240mt @ 1-1.5% lithium. one, and as a result, we’ve been able to pro- “It’s a two-hour plane flight from Perth
“The exploration target we’ve published duce and publish some of these most amaz- to Karratha and half an hour’s drive along
would put Andover into the top 10 in the ing drill results.” the North-West coastal highway takes us
world, potentially in the top five in the world Rovira also confirmed Azure’s intentions through to the north-eastern part of the pro-
if we get to the upper part of that range,” Az- to progress towards a scoping study. ject area,” he said.
ure managing director Tony Rovira told del- “There’s a lot of work going into what will “We’ve got a gas pipeline, a water pipeline,
egates. be a scoping study, which we aim to complete high voltage power lines all running through
“Having SQM come on board was a very and publish sometime in 2024,” he said. the project area, all of which are available for
strong endorsement for the potential of An- It was only last October that Azure identi- commercial offtake subject to negotiations
dover and that potential is now being real- fied lithium-bearing pegmatites at Andover. and agreements.”
ised with a very large drilling programme. Prior to this, the company was focused on SQM’s pitch for Azure is the second time
We’ve estimated we’ll probably drill about exploring for nickel, establishing a resource this year a major lithium player has attempt-
100,000m in CY23.” of 4.65mt @ 1.11% nickel, 0.47% copper ed to make a move on an ASX-listed junior.
On August 21, a week after confirming it and 0.05% cobalt, containing 51,700t nickel, In March, Liontown Resources Ltd revealed
has rejected SQM’s approach, Azure 21,700t copper and 2,290t of cobalt. it had rejected a third offer from Albemarle
launched an underwritten $120 million However, during his Diggers & Dealers Corp for the company and its under-construc-
placement with supporting $10 million share presentation, Rovira confirmed the nickel tion Kathleen Valley project near Leinster.
Liontown’s current market cap of circa $6
billion is well above Albemarle’s reported fi-
nal bid of $5.3 billion.
Speaking on the sidelines of Diggers &
Dealers, Liontown managing director Tony
Ottaviano confirmed there has been no fur-
ther approaches from Albemarle.
“When we said no on March 28, that was
the last time we spoke,” Ottaviano said.
“Our focus has been very much on build-
ing [Kathleen Valley]. If we get approached
by them or another party, and the offering is
compelling, well, I’ve got a fiduciary duty to
put that to my shareholders. But until some-
thing like that happens, then I’m focused on
building this thing.”
– Yvette Ogilvie
Tony Rovira
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 5
NEWS
WA summit
calls for
change on the
ground
articipants in a mining industry sum- ter a night of heavy
Pmit of more than 1,000 industry rep- drinking, and alco-
resentatives have called for changes to hol consumption
company policies in response to reports was front and cen-
of poor mental health outcomes and sex- tre in discussions
ual assaults at Western Australian mine at the summit.
sites. “We need to see
The August summit was held in the the dial shifted to
wake of the State Government-initiated deliver change on
Enough is Enough report into sexual har- the ground. It’s The Mining Industry Summit: Driving
assment in the FIFO sector, and three really important that we invest in long- Change, held at Perth’s Optus Stadium
months after a judge found former BHP term, meaningful outcomes,” Chamber on August 1 was attended by more than
Ltd worker Ryan John Zabaznow guilty of Minerals and Energy of WA chief ex- 1,100 people
of raping a colleague at a Newman min- ecutive Rebecca Tomkinson said.
ing camp in 2020. As well as limiting access to alcohol
Judge Linda Petrusa told Zabaznow and providing free non-alcoholic drinks, into sexual assault, harassment, men-
his actions had a profound and lasting the CMEWA recommended a review of tal health drug and alcohol use on WA
effect on his victim’s mental health and worker education programmes used to mines in 2022. Professor Sharon Parker
quality of life. combat sexual harassment, eschewing presented her research to the summit,
“You made a deliberate decision to the usefulness of “tick-the-box” training. saying 36% of women in the industry
take advantage of her for your own sex- “The quality of training provided re- had experienced “sexual hostility” which
ual gratification. Whilst it is true you did ally makes a difference to the person included being shown pornographic im-
not use any violence; you didn’t have to. undertaking it and to the learnings that ages or asked questions about their sex
She was sleeping the sleep of the inebri- they take and their ability to apply that. lives.
ated when you started. Although she We encourage person-to-person train- “These forms of harassment are also
woke, the fear and/or shock paralysed ing and in-person training. The intent is more common for women when they’re
her and force was not necessary,” she to make sure that training is meaningful in the minority, that is, working alongside
said at the sentencing. and current,” Tomkinson said. all men or mostly men,” she said.
The court heard the rape occurred af- Curtin University launched a study
PAGE 6 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
The number of women entering the min- A Working with Children Check-style reg- alongside individual company efforts, and
ing industry as apprentices has increased ister suggested in the Enough is Enough that initiatives can be tailored to the specific
recently, with 26% more women starting report will not be looked at by the CMEWA, needs of each workplace,” he said.
mining apprenticeships in 2022 compared according to Tomkinson, who cited social Gold Fields Australia Pty Ltd will partici-
to 2021, according to research. But Tomkin- justice and legal concerns. pate in a 12-month State Government pilot
son said changing industry culture would “We support the principle behind that programme starting early 2024. The com-
not be as simple as employing more wom- recommendation, but we’re not able at this pany will receive guidance on how to review
en. point to be able to facilitate it,” Tomkinson policies and procedures on promoting re-
“We know that cultural change takes said. spectful behaviour.
time, but we also know that it’s a concen- Chief executive of the Association of Min- Curtin University’s Centre for Transform-
trated effort and that it really starts with the ing and Exploration Companies, Warren ative Work Design is conducting studies for
leaders,” she said. Pearce said there was no single solution a fourth report on mental health, sexual har-
The State Government tabled a response to the problem of sexual misconduct and assment and emerging mine safety issues
to the Enough is Enough report in Septem- by improving training, awareness, report- to be published in 2026. Mining industry
ber last year which made several recom- ing and investigation of sexual harassment workers can contact Curtin or the Depart-
mendations such as requiring formal apolo- incidents, mining companies could foster ment for Mines, Industry Regulation and
gies and victim compensation from mining respectful behaviours. Safety if they wish to participate.
companies. “It is important that all measures can work
– Michael Cameron
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 7
OPINION
Five observations on international
tech metal disputes
T he arbitration between Greenland Minerals & Energy – now Energy Transition Minerals
Ltd – and the governments of Greenland and Denmark concerning the Kvanefjeld
project is the latest in a series of disputes and differences between Australian miners and
foreign governments relating to technology metals projects around the world.
Well known examples include the All available legal means should be used EIA that both uranium and thorium could
Manono hard rock lithium project in the to protect the company’s geological data, be extracted safely as part of the exploita-
DRC, the Kangankunde rare earths pro- feasibility work, mine plans and other pro- tion of rare earths. Its EIA was approved
ject in Malawi, the Mrima Hill rare earths prietary information. This applies to all by the Greenlandic Government’s scien-
project in Kenya, and the Lynas Rare mineral exploration projects (especially tific agencies and was in the process of
Earths Ltd advanced materials plant in because IP is usually expressly protected public consultation when, in 2021, NGOs
Malaysia. It is possible to identify strate- as a form of investment under bilateral in- opposed to uranium intensified their cam-
gies that future investors can employ to vestment treaties). But IP protection is par- paign against the project and spread false
mitigate the risks that attach to technology ticularly important where technology metals information. The science stopped matter-
metals projects. are concerned because of the know-how ing as fear took over and the question of
that is involved in the processing stage, as radiation risk transformed into a political
Hot property this is where the real value lies. issue.
IP protection should also consider histor- In the snap election of April 2021, the
Many of the world’s best undeveloped
technology metals deposits are the subject of ic exploration work. Prior to Cortec’s arrival party that ultimately won government was
competing claims (or even claims on claims) at Mrima Hill, some work had been done in ideologically opposed to uranium and cam-
– not just in the national courts but on the in- the 1950s, but it was only when Cortec ar- paigned on the basis that it would shut down
ternational plane. Manono is the archetype. rived that rare earths were discovered. In its Kvanefjeld, which it did when it took power.
The rights to this project are the subject of two subsequent international arbitration against The resulting dispute between Greenland
generations of international arbitration pro- Kenya (for alleged expropriation), the arbi- Minerals and government is now at arbitra-
ceedings: a first generation of proceedings trators ruled against Cortec on its IP claim, tion.
in Paris, brought by the original developer noting the work of prior prospectors and Another illustration may be found in the
(MMCS Strategic 1), and a second genera- finding that “[t]he data was not disclosed on challenges Lynas has faced with its ad-
tion of proceedings brought by Perth-based the basis it was to remain the property of vanced materials plant in Malaysia: despite
AVZ Minerals Ltd and other companies who [Cortec]”. multiple independent scientific reviews
claim rights to Manono. Where a company acquires a technology finding that Lynas’ plant is low risk and fully
Another example is the Kangankunde metals tenement that has been the subject compliant, the facility has been the subject
project: the rights to this project are held by of prior exploration, particular care needs of waves of public criticism (and NGO at-
Lindian Resources Ltd, which acquired the to be taken to document the IP value that tack). Lynas has so far managed to navi-
project from a company controlled by South the company has added through its more gate these challenges (including through
African geologist Michael Saner, whose recent work. The authorship of the technol- the Malaysian courts), but the company
rights to Kangankunde were previously the ogy metals “treasure map” must be made has announced plans to relocate its first-
subject of litigation in Malawi courts and third- clear. The IP generated in the exploration stage processing operations to Western
party claims. and development process – including geo- Australia.
The cases show that any party consider- logical data sets, feasibility studies, EIAs, It must be recognised that the scope for
ing acquiring a technology metals tenement process flow sheets – should be marked rational dialogue on environmental issues
needs to conduct enhanced due diligence to copyright (with the name of the company such as radiation may be limited, and the is-
understand any prior or current claims, espe- and the year on the front page) and its pro- sues can transform into acute political risks.
cially international claims. Newcomers should prietary and confidential nature asserted In some circumstances, external actors
be aware of the risk that they may be sued whenever it is disclosed (including to the may seize upon environmental issues such
for interference by prior claimants (as First host government). as radiation and exploit them for their own
Quantum Minerals Ltd sued ENRC following purposes – for example by funding NGOs
expropriation in the DRC) or asked to help the Environmental issues as a and social media scare campaigns.
host government meet any compensation li- political risk Education is the best countermeasure,
ability that it has to prior claimants. but it may not be enough on its own. Con-
The cases show that, particularly for rare tentious environmental issues should be
approached with the potential for litigation in
IP protection earths projects, it is prudent to approach mind, and, when opposition is encountered,
environmental issues as a specific head of
IP authorship and ownership must be em- political risk. In the example of Kvanefjeld, companies should be ready to ask the age-
phasised from the outset of a mining project. Greenland Minerals demonstrated in its old detective’s question: who benefits?
PAGE 8 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
Investment in the EIA Resource internationalism Conclusion
The EIA process for a technology met- Most major mining projects become po- In many respects, there are strong paral-
als project will often be much more in- litical, to some extent. Where technology lels between the technology metals sector
volved, and require many more expert metals projects differ is that they are af- today and the oil industry in the mid-20th
consultants, than other types of mining fected by the strategic competition between century. The key legal innovation that the
projects. the US and China to secure supply for the oil companies made was the internation-
The Kvanefjeld case illustrates this. energy transition. The resulting confluence alisation of their contracts with host states,
Greenland Minerals’ EIA was a compre- of domestic and international political forc- largely through the inclusion of internation-
hensive document, and the powerful role es produces a different form of sovereign al arbitration clauses: they assumed and
that it now plays in the company’s case risk: not traditional resource nationalism actively planned for future disputes.
can be seen in the Statement of Claim but instead what might be thought of as “re- International arbitration remains the
(which is publicly available). source internationalism”. central pillar of any investment protection
The importance of the EIA process Signs of this can be observed in all the strategy for technology metals today, as
can also be seen in the Mrima Hill case. cases discussed above, including the the cases show, and is now backed by the
A technology metals company needs to Kvanefjeld case (where Greenland Miner- global system of bilateral investment trea-
invest on the assumption that the EIA als has pointed to evidence that US strate- ties and free trade agreements.
process is not just comprehensive in gic concerns about Chinese involvement in If a company plans in a way that will
terms of technical review, but lengthy in the Kvanefjeld may have played a role in allow it access to this system and takes
the community consultation stage. Due the measures taken by government to stop heed of the lessons that may be learned
diligence should be conducted (as early the project). from the cases discussed above, it should
as possible) to understand the local rules The best legal strategy to mitigate geo- be better positioned to reap the rewards of
for the content of EIAs and the procedure political risk is to ensure that the company’s its technology metals investment in the ex-
for their review and approval. The com- investments in the project are protected by citing years ahead.
pany should adopt a litigation-ready ap- a bilateral investment treaty (that allows for
proach throughout the EIA process, care- international arbitration against the host Sam Luttrell is a partner at Clifford
fully documenting all interactions with the state). The available commercial strategies Chance, specialising in international
relevant government agencies and the include non-alignment (or deferred align- arbitration. Elliot Luke is consul at Clifford
instructions they give. ment), diversification of capital base and Chance, specialising in international
off-take relationships, and dual listing (or commercial arbitration.
merging with a foreign listed shell).
Trusted independent financial
advisor to the mining sector
T +61 2 9133 9000 | www.icapartners.com.au
ABN: 55 158 181 241 AFSL: 470003
2023: Ongoing advisor 2023: Ongoing advisor 2023: Advisor to 2022: Advisor to Iluka 2022: Defence Advisor
to Black Rock Mining to Astron Perseus Mining Resources to Demetallica
Financing of the Mahenge Financing of the Donald US$300m syndicated A$1.25bn financing of the Unsolicited A$36m takeover
Graphite Project in Rare Earths and revolving corporate facility Eneabba Rare Earths by AIC Mines
Tanzania Mineral Sands Project in refinancing and upsize Refinery
Victoria
2022: Advisor to 2021: Advisor to 2021: Advisor to 2021: Advisor to 2021: Advisor to
Sibelco Pembroke Resources PYBAR Geopacific Resources Diversified Minerals
A$49m investment in A$500m multi product A$99m sale of PYBAR US$100m financing (Loan A$200m sale of the Dargues
Diatreme Resources debt financing of the Olive Mining Services to and Stream) for the Gold Mine to Aurelia Metals
Downs Coking Coal Project Mastermyne greenfield Woodlark Gold A$27.5m sale of the Henty
Project Gold Mine to Catalyst Metals
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 9
NEWS
OreCorp finds silver lining
&A activity in the Australian gold sector company was a major shareholder in ASX-
Mhas extended across the Indian Ocean listed explorer Chesser Resources Ltd which
after Tanzanian-focused Orecorp Ltd accept- recently accepted a takeover offer by Fortu-
ed a takeover offer from Silvercorp Metals Inc na Silver Mines Inc.
last month. The scheme of arrangement is valued at
The scheme-of-arrangement – worth 60c/share – OreCorp was trading at 43.5c
$266 million – would see TSX-listed Silver- prior to the announcement – comprising 15c/
corp acquire OreCorp and its 3.2 moz Nyan- share in cash and one Silvercorp share for
zaga gold project in Tanzania. every 10 OreCorp shares. On completion, OreCorp managing director Henk
In August 2022, OreCorp published a DFS OreCorp shareholders will hold 17.8% of the Diedrichs (right) and chairman Matthew
for Nyanzaga, demonstrating a project capa- combined company. Yates on site at the Nyanzaga project,
ble of 242,000 ozpa gold production over Diedrichs said Silvercorp’s plan for devel- Tanzania
10.7 years at a capital cost of $US474 mil- opment was very similar to OreCorp’s but
lion. The company had been actively seek- would include greater depth in the open pit Having built a close relationship with host
ing project finance for development but with by utilising lower grade ore and a phased communities since the company acquired
investment markets hostile to single-asset approach to development which would see the project in 2015, OreCorp looked closely
gold developers, it had found options limited. underground only started after open pit min- at Silvercorp’s ESG performance before
In contrast, Silvercorp controls two high- ing had started, followed by expansion of the agreeing to the merger.
grade silver-lead-zinc mines in China, boasts plant. “We conducted a site visit to their China
a market cap of more than $US510 million With the scheme-of-arrangement set to operations and were very impressed by
and will fund the acquisition off its balance take several months to complete, Silvercorp the way they conduct their business,” Die-
sheet. committed to a $28 million placement in drichs said. “Their housekeeping was to a
Speaking at Diggers & Dealers following OreCorp at 40c, the first tranche being paid high standard, they had modest visual and
the board’s unanimous recommendation of on August 8. environmental impact and good interaction
the offer, OreCorp managing director Henk Diedrichs said the cash injection was cru- with the host community. We left the site visit
Diedrichs declared the deal “would bring cial for Nyanzaga. highly confident they are a highly responsi-
value forward and increase trading liquidity, “That funding is very critical to maintain ble operator.”
as well as ongoing exposure to Nyanzaga”. momentum with the implementation of the
For Silvercorp, it represents the biggest resettlement, inclusive of compensation pay- – Dominic Piper
leap yet into the African gold scene. The ments,” he said.
Australian M&As buck global downturn
ajor mining deals have helped the Australian market buck fuel-dependent companies are attracting surprisingly strong inter-
Mglobal M&A trends, with deal values up in the first half of est.
2023, in comparison to a wider downturn in corporate takeovers. “We’ve seen some transactions where one of the big [power]
Newmont Corp’s $30 billion bid for Australia’s biggest gold generators might be looking to offload coal-fired power stations,”
miner, Newcrest Mining Ltd, led the way but was not the only re- Hough said. “There’s quite a bit of interest from people who are
sources deal in play with the energy, mining and utilities sector less concerned about their ESG footprint but can see that for the
accounting for 80% of M&A value in the June 2023 half. next 5, 10 or 15 years those stations are still going to have to
Pitcher Partners’ Dealmakers M&A 2023 report showed that be run because otherwise we’re going to have a massive energy
while worldwide M&A activity had dropped for the third half-year shortage.”
in a row, Australian M&A values had increased 13% in the period. Hough said investments in fossil fuel-related companies could
“I don’t necessarily think that it’s been a stellar year for M&A in be a M&A “win-win” for institutional investors with fewer reserva-
Australia but when you compare Australia to global M&A, we’re tions about ESG concerns.
doing pretty well,” Pitcher M&A lead Andy Hough told Paydirt. “The buyers of those businesses can see that it’s a good deal
Hough underlined the fact that although key economic indica- that could make a financial return. We expect to see continuing
tors had shifted in the last year, Australia was still seen as appeal- activity in that sector.”
ing in global M&A terms. Even without the Newmont-Newcrest deal, energy, mining and
“Some of the strong fundamentals of Australia – a relatively utilities have accounted for more than 50% of M&A values so far
stable political environment, as well as relatively under control in 2023.
inflation and interest rates – make it quite an attractive place for BHP Ltd executed a $9.63 billion takeover of Oz Minerals in
M&A,” he said, adding that while much investment is coming from May and Mineral Resources Ltd acquired more than 80% of Nor-
traditional economic powerhouses like North America and Eu- west Energy NL shares at a total value of $497 million in April.
rope, Asia-Pacific-based institutional investors were also active Tattarang-owned Wyloo Metals also completed a compulsory
in Australia. acquisition of Mincor Resources in July, having reached the 90%
A global shift towards decarbonisation is driving much of the ownership threshold.
activity – ASX-listed lithium company Allkem Ltd and US-based
Livent Corp inked an all-stock $10.6 billion deal in May – but fossil – Michael Cameron
PAGE 10 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
The WA potash sector appears
over before it even truly began
Potash scene turns to dust
everal more nails were hammered into “The improved production rate is a direct which makes it even more disappointing
Sthe coffin of the West Australian potash outcome of progressing the implementa- that we have been unable to secure equity
industry last month with news of one admin- tion of the plant performance improvement funding.
istration and one admission of defeat in the plan,” Morin said. “During the planned July “We stress to shareholders that all pos-
once vibrant sector. shutdown, the team successfully tied in the sible options have been vigorously pursued
Just three years ago, WA appeared to be new R10 heat exchanger to the SOP plant in our efforts to preserve optimal value in
witnessing the birth of a new mining sector which will provide additional cooling capac- the Lake Wells project.”
with half a dozen companies developing ity in the schoenite circuit. This lack of cool- On the same day as APC’s announce-
remote salt lakes in the State’s north into ing capacity was limiting the feed through- ment, another WA potash flag-bearer,
evaporative sulphate-of-potash (SOP) op- put rate that could be achieved.” Keren Paterson, tendered her resignation
erations. Morin also said in the June quarterly the to Trigg Minerals Ltd, the company she
It was estimated the industry could be company would continue to work with its founded and listed with the intent of devel-
worth $1 billion a year within a decade, lenders and broker Argonaut Securities to oping the Lake Throssell potash project.
however since sector leader Salt Lake Pot- “progress the strategic process” to rescue Last group standing in the now-desolate
ash (SO4) blew up in 2021, the descent to- Beyondie. WA potash scene is Agrimin Ltd which is
wards oblivion has been dramatic as capital Argonaut was appointed in June as an advancing its Mackay project.
cost blowouts and convoluted processing independent financial advisor to reposition In July, the company said it was continu-
flowsheets made project financing and suc- the company’s capital structure. However, ing FEED studies to improve confidence
cessful development almost impossible. with lenders, buyers and strategic partners around the harvest salt preparation and
SO4 was the brightest and quickest to shy following the mounting SOP failures, conversion stage of the process flowsheet,
burn. The company launched into con- the company couldn’t find a white knight. seemingly with other failures in mind.
struction at its Lake Way project in 2020 McGrathNicol Restructuring is handling “Over the coming months we will be test-
and continued to claim it would be stretch the receivership, with KPMG having previ- ing the key operating parameters of the
targets for construction throughout 2021. ously been brought in as administrators. conversion step being particle size, tem-
However, by July that year, it declared first Kalium’s demise had a domino effect. On perature and residence time using a range
production targets would be missed due to August 15, just 11 days after Kalium called of harvest salts that we expect to encounter
underperformance of its processing plant in the receivers, Australian Potash Ltd during the start-up stage of the project,” Ag-
and evaporation ponds. A failed $100 mil- (APC) announced it would be handing back rimin chief executive Mark Savich said.
lion capital raising followed before the com- the mining leases covering the Lake Wells With $2.3 million in the bank at June 30,
pany was placed into administration in No- SOP project, blaming the failure of Kalium Agrimin can continue working steadily for
vember 2021. and SO4 for causing reputational damage now but as the cash position dwindles, it
The surviving potash players took a repu- on the sector. may be facing the same reckoning as its
tational hit from SO4’s demise but soldiered The company said despite the high- peers.
on. However, news last month that the sec- quality work it had put into the Lake Wells BCI Minerals Ltd was also set to produce
ond producer in the pack, Kalium Lakes Ltd, project, and the $0.7-1.02 billion valuation SOP as a by-product at its upcoming Mar-
had also been forced to appoint receivers, placed on it last year, all potential funding die salt operation in the Pilbara, but recently
has proven the fatal blow for many. avenues had been exhausted and the com- deferred funding arrangements for that as-
Like SO4, Kalium had struggled to pany would therefore be surrendering the pect of the processing plant.
achieve slated production rates at its Be- mining leases. “Almost a quarter of the contingency is
yondie operation. In the June quarter, the “The directors of APC are extremely dis- for the SOP plant, which is proportionately
company produced 2,747t of SOP, the high- appointed that the demise of local high pro- quite a bit larger than the rest of the project,
est quarterly output, but was still well short file potash projects has largely contributed and that’s indicative of the certainty that we
of the annualised 90-100,000 tpa target of to the lack of investment support for our still need to progress on the design,” BCI
feasibility studies. sector and project,” APC chairperson Na- managing director David Boshoff told Pay-
Kalium acting chief executive Jason talia Streltsova said in an ASX announce- dirt in July.
Morin said the improved June performance ment. “Matt Shackleton [APC managing
demonstrated the ongoing problems in the director] and his team have shown profes- – Dominic Piper
processing plant were being addressed. sionalism and commitment to the project
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 11
NEWS
Aussies still punting on
Canadian lithium
pcoming IPO James Bay Minerals ties. They are the right Archean rock age – “We welcome it, it really solidifies our
ULtd (JBY) is banking on the likelihood 2.6-2.8 billion years old – they sit on large thinking and research and how we got to
of Patriot Battery Minerals Inc’s CV5 regional faults; the larger the regional fault, that region,” Dornan said. “There are a
prospect not being the only major new the larger the opportunity for the giant LCT significant number of eyes on Patriot and
lithium discovery in the famed Canadian pegmatites. Also, they sit on or are in close where that could potentially end up in a
mineral district. proximity to greenstone belts, which is re- year or so.”
JBY has launched a $6 million IPO ally encouraging for early-stage lithium Dornan said his team undertook a two-
which will fund a grassroots exploration projects. year global search for potentially lithium-
programme on a 224sq km package of “Should we get a good indication that rich areas, deciding Western Australia’s
tenements about 100km west of CV5, the we’re on to some good ground, we’ll be lithium exploration sector was too com-
largest known lithium resource in North looking to accelerate through the pro- petitive, whereas Quebec offered greater
America. gramme.” potential due to “unloved” tenements with
CV5 currently hosts an inferred re- Australian companies have been very the right geologic composition.
source of 109mt @ 1.42% lithium and 60 active in the Canadian lithium exploration “Canada is the region with some of the
ppm tantalum. scene for the past three years. Patriot’s largest [lithium] discoveries occurring at a
“Where large LCT pegmatites form, maiden resource for CV5 has only en- very fast rate,” Dornan said.
other LCT pegmatites do pop up in the re- hanced the spotlight on the James Bay JBY will focus on hard rock exploration,
gion,” JBY executive director Andrew Dor- region, giving the JBY team further con- a decision based on current extraction
nan told Paydirt. fidence its story will resonate with inves- technology and available expertise.
“Sedimentary and unconventional [lithi-
um extraction] are not really commercially
proven so we didn’t dig too much into that,”
he said. “Brine has its own challenges with
its extremely water intense process and
hard rock is what we are experts in.”
Dornan expects investment in Canadian
exploration to accelerate quickly because
of North America’s potential to host large
critical minerals deposits, as a growing
number of battery minerals companies es-
tablish vital foundational positions across
North America.
Temperatures are notoriously cold in
James Bay – dropping to as low as minus
23C in February – but Dornan said Cana-
dian mining personnel were well-prepared.
“A lot of the drilling equipment is en-
closed and heated and in a lot of instanc-
es they prefer to undertake exploration
through the wintertime. The lakes and
land up there freezes over so it can make
it easier,” Dornan said.
“Remoteness in Quebec is always going
to be a big challenge, but we’ve worked in
challenging environments in Australia over
JBY’s Joule, Aero, Aqua and Le Grande prospects sit on Quebec’s La Grande greenstone belt
the years and it’s really no different to that.”
JBY will not be the only new Australian
“From the likes of Pilgangoora and Min- tors and potentially attract the attention of company entering Canada over the com-
eral Resources’ Wodgina, we see that some big-name lithium players. ing months with Pioneer Lithium Ltd also
there’s huge potential for other large de- Albemarle Corp sunk $C109 million into launching an IPO for $5 million to explore
posits to be found along the similar trend Patriot the same day the CV5 maiden re- the Root Lake project, located between
that Patriot and Winsome [Resources Ltd] source was announced. Rio Tinto Explora- Green Technology Metals Ltd’s Root Bay
sit on currently. tion Canada Inc also executed an option and Morrison/McCombe lithium deposits
“The properties that we’ve acquired sit agreement worth $C64.5 million for prop- in Ontario.
within what we see as three key ingredi- erties in James Bay from Midland Explora- To present, exhibit or attend as a delegate please contact Angelique Julien
ents for being prospective lithium proper- tion Inc in June. – Michael Cameron
on (+61) 8 9321 0355 or email [email protected]
batterymineralsconference.com
PAGE 12 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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NEWS
Investors keep faith in Panoramic
anoramic Resources Ltd managing in, the price would have been much differ- 26-41% more nickel, 36-52% more cop-
Pdirector Victor Rajasooriar remains ent. It was a shame that IGO couldn’t, they per and 9-36% more cobalt in FY24 on the
adamant investors are standing behind wanted to, but they had their own internal back of new mining levels now being open
the company despite another setback at issues they were dealing with, so the tim- in Savannah North and the impending first
its Savannah nickel operation in the Kim- ing didn’t work. ore from Savannah Extension. C1 costs
berley. “Our second largest shareholder came are also expected to fall below the $13.25/
Rajasooriar cited irreparable damage in at double what they should have done lb averaged over FY2023.
to the Fitzroy Crossing bridge earlier this so there was certainly support there. We “Since the filter press was fixed on July
year and the recent failure of a filter press have some interesting new shareholders 9, we’ve had a good run rate, we were tar-
head plate in the refurbished processing that have popped up, who really like the geting on average this year 73,000 tpm
plant as the primary causes for reduced nickel, copper and cobalt space.” and the last 30 days we’ve hit 70,000 tpm,”
productivity and loss of revenue over the Alongside the fully underwritten place- Rajasooriar said. “More importantly, the
first half of the year. ment, Panoramic opened a share pur- grade has been much better than we antic-
While full access to site has been re- chase plan to raise an additional $5 million ipated and it’s certainly helping the whole
stored and the plant is back up and run- with the ability to take oversubscriptions. project. We’re off to a very good start for
ning near capacity, Panoramic was forced It is scheduled to close on September 5. this financial year.”
to undertake a $40 million raising in late Panoramic also successfully negotiated Rajasooriar admitted the recent strug-
July to cover a significant financial loss an extension to the maturity date of its gles at Savannah – which has been re-
incurred from missing a concentrate ship- $US15 million revolving credit facility with started twice in the last five years – had
ment during that period. offtake partner Trafigura until the end of only fueled the company’s desire to add
It was the company’s third major capital next year. a second operating asset or development
raising since Rajasooriar took the reins in Rajasooriar said advantages of having project to its portfolio.
November 2019. a strengthened balance sheet to complete However, he conceded the search can
Adding salt to Panoramic’s wounds, ma- the ongoing operational ramp-up at Sa- only begin in earnest once Savannah has
jor shareholder IGO Ltd did not participate vannah could not be overstated. achieved its targeted production rate of
in the recent placement and it was steeply “If this was a BHP asset or an IGO as- 9,383 tpa nickel, 5,056 tpa copper and 710
discounted as a result. set, we wouldn’t have heard about the tpa cobalt.
Speaking to Paydirt on the sidelines of problems, it could have just been fixed… “I reckon in 12-18 months time we need
Diggers & Dealers, Rajasooriar insisted but when you’re a junior company, you to be expanding,” Rajasooriar said. “Once
shareholders were still supportive of the have to disclose everything, your balance this project starts generating cash, every-
company’s long-term strategy and vision sheet is stretched and you then have to go one goes, ‘yep, that’s fine, it’s done’, there
for its only operating asset. and raise money,” he said. will be more opportunities in front of us.
“It’s going to be on the critical metals
side. So nickel, copper, cobalt, maybe
zinc, we’re pretty much open to that, but
we prefer an operating asset because
that’s where we bring the right skillset. I
think we’re very good operators, the chal-
lenges are there, but we’re good at it, we
operate a lean business and we know how
to run the ops.
“We’ve kissed a lot of frogs, nothing has
popped out at the moment, we just have to
keep looking for the right one.”
As this edition went to print, Panoramic
confirmed it was transitioning to an owner-
operated processing model at Savannah
after concluding its contract with Primero
Group Ltd by mutual agreement.
Victor Rajasooriar Rajasooriar flagged immediate operat-
ing costs savings behind the decision to
“I have to say, even with the one-off rain “I think it’s just a one-off thing and you end Primero’s contract with 12 months still
event, I did think investors could be a little have to deal with it. Our mine is actually set to run. Panoramic will not incur a penalty
bit peed off because this is the third time up now. It’s a low-grade project, compared for the early termination of the agreement.
I’ve gone to raise money but, surprising- to Nova and Forrestania, but the volume is About 80 Primero employees at Savan-
ly, everyone understood what the issues there. It’s a very clean conc that we make, nah have been offered employment with
were,” he said. there’s no arsenic in it and it’s sought after Panoramic as part of the transition.
“IGO unfortunately didn’t participate and by all the traders because all the smelters .
that meant other people could come in and like mixing this stuff.” – Michael Washbourne
they dictated the price. If IGO had come Panoramic has forecast production of
PAGE 14 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
A true believer in copper
arely six weeks after listing on the ASX,
BTrue North Copper Ltd has produced its
first batch of copper sulphate.
True North confirmed last month its re-
furbished solvent extraction and copper
sulphate crystallisation plant in Cloncurry,
Queensland was now fully operational and
an offtake agreement had been struck with
Kanins International Pty Ltd over the entire
copper sulphate production line.
Melbourne-based Kanins is one of Aus-
tralia’s largest suppliers of copper sulphate,
distributing into industries such as agricul-
ture, mining, water treatment and chemical
manufacturing.
While it might seem inconceivable that
True North could achieve production so True North managing director Marty Costello (right) with chief operating officer Peter Brown
soon after listing, the milestone has been
carefully planned since long-time business
partners Marty Costello and Peter Main LME spot prices – and that product is bought ing a deferred payment of $15 million due
pounced on the Cloncurry assets previously at our mine gate, so we’ll get paid very quick- within two years of deal completion) of Mt
held by the embattled Round Oak Minerals. ly, within 48 hours after we produce it, which Oxide with its very first drill hole intersecting
The quest to become Australia’s next es- is very important for any sort of start-up busi- 66.5m @ 4.95% copper, 32.7 g/t silver and
tablished copper producer began in earnest ness,” he said. 685 ppm cobalt, including 20.6m @ 10.51%
in February when refurbishment works start- “We’re quite fortunate that Russia is one copper, 63 g/t silver and 1,149 ppm cobalt.
ed on the plant and the proposed reverse of the largest producers of copper sulphate “To be clear, Mt Oxide is not an exploration
takeover of ASX-listed Duke Exploration crystal, all of which has obviously been em- project, it’s a development project with some
was announced. bargoed, so it really plays into your hands in very exciting exploration,” Costello said.
Costello was subsequently appointed terms of being able to provide this product. “We expect to apply for the mining lease
True North’s managing director. From his in November, we’re allowing for a three-year
perspective, the company’s rapid progres- development timeframe. We’ve got consult-
sion to producer status has been anything ants working on the scoping studies at the
but a surprise. moment.”
“It’s a big milestone, we’ve done a hell of Costello is joined on the True North board
a lot of planning to get here,” Costello told by chairman Ian McAlesse (who held the
Paydirt. same position at Duke) and non-executive
“Our board and our senior management directors Tim Dudley, Paul Frederiks and
team were able to attract proven indus- Jane Seawright.
try professionals that know how to deliver. Bell Potter and Morgans Corporate were
There was a lot of onboarding of very high- joint lead managers and underwriters to
quality team members and when you can do True North’s somewhat unconventional jour-
that it results in being able to do what you say ney to the ASX via the merger with Duke.
you’re going to do. Costello believes the company’s decision
“We’ve been working quite tirelessly on to undertake a reverse takeover instead of
this since February, so it’s good to see it all True North produced first copper sulphate walking the more traditional IPO path will ul-
coming together.” just six weeks after listing on the ASX timately prove correct.
At the time of print, True North was finalis- “When we started True North and started
ing plans to restart full-scale mining at Great raising the pre-IPO money, there was a lot
Australia, which hosts an initial reserve of “Also fortuitously, we’re situated next to of concern around the number of compa-
4mt @ 0.74% copper and 0.08 g/t gold, by a number of large polymetallic concentrate nies that had raised pre-IPO funds but then
the end of this month. plants and copper sulphate crystal is a nec- shelved their IPO because of market condi-
True North is anticipating production of essary reagent in their process. We know of tions,” he said.
10,000-15,000 tpa copper metal from both at least three plants within 100km of us that “We made the conscious decision to go
copper sulphate crystal and copper-gold actively need our copper sulphate crystal.” through a [reverse takeover] RTO process to
concentrate. True North also has big plans for its Mt ensure our investors had absolute transpar-
Notwithstanding the growing demand for Oxide project which hosts the flagship Vero ency and certainty with respect to getting to
copper sulphate both domestically and in- resource of 15.98mt @ 1.43% copper and market. Not only that, in aligning ourselves
ternationally, Costello is salivating over the 6.91 g/t silver. Some $52 million was spent with Duke – an existing Queensland copper
premiums the company’s products are ex- on the asset between 2008 and 2012, in- exploration company – we shared likemind-
pected to command. cluding 110,000m of diamond drilling and ed shareholders and the synergies were just
“Copper sulphate is very cheap to pro- construction of an accommodation camp. undeniable.”
duce and we’ll get a premium for it – above It didn’t take long for the company to be re- – Michael Washbourne
warded for its $30 million acquisition (exclud-
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 15
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COVER
Bellevue chimes gold
sector charm
G iven the struggles of most start-up gold producers in Western Australia over
the past decade, the pressure is certainly on the next cab off the rank –
Bellevue Gold Ltd – to be an overwhelming success.
y the same token, managing direc- tra bucks to do it, but what it could save mines in recent times. Many consider only
Btor Darren Stralow and the rest of the us if something went wrong definitely out- Karlawinda (Capricorn Metals Ltd) and
Bellevue team are feeling the love of their weighs that extra cost.” Gruyere (Gold Road Resources Ltd/Gold
peers in the beleaguered WA gold sector Construction of the Bellevue project has Fields Ltd) have achieved pass marks in
as the company enters the crucial com- remained on, even sometimes ahead of, the last five years, although the latter still
missioning phase at its namesake 3.1 time and budget since works began last experiences the occasional setback.
moz project near Leinster. September. First gold from the company’s “I think you can’t put your blinkers on
“It’s fair to say that everyone in the in- own 1 mtpa processing facility remains on and expect that things are just not going to
dustry is really rooting for us,” Stralow told track for next quarter. happen to you,” Stralow said. “That’s why
Paydirt last month. In a boost for the company ahead of we’ve been using all of the networks we’ve
“They’ve been there for discussions on that maiden pour, Bellevue last month cel- built over our careers – understanding that
what went right, what went wrong. We’ve ebrated delivery of the first gold bar under gold mining is actually a really small indus-
been able to do site visits, we’ve been its toll treatment arrangement with Gen- try – and having those discussions around
able to get information based on recent esis Minerals Ltd’s Gwalia operation. solutions to some of those common prob-
ramp-ups so that we can use the most up- Bellevue also obtained an additional lems before they arise.
to-date information in our commissioning $25 million debt facility limit from Macquar- “You can’t help but be a little bit nervous
plans and our ramp-up plans. The industry ie Bank Ltd, lifting its total proforma liquid- because there are things outside of your
wants a good story, they want a success ity to $133 million (excluding any cash flow control during that [commissioning] period,
story because a rising tide lifts all boats. from toll treatment production) and further but I think the general feeling through the
“We do feel the support, but at the end strengthening its balance sheet ahead of whole team is one of genuine excitement.
of the day it comes down to us needing to the start of commissioning. We’re into the high-grade ore, we’re see-
perform. We’re putting everything in place. While Stralow might be feeling the love ing everything so visually now. It’s all com-
We brought our commissioning team on of the industry, he acknowledges Belle- ing together exactly as we planned it. And I
early, we’ve brought our full operational vue does have its sceptics given the love it when a plan comes together.”
team on early. It cost us a couple of ex- limited number of successful new gold The first underground stope was fired
PAGE 18 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
while Stralow was doing the rounds at the derground mining. A lot of that was focused part of because there was so much growth
annual Diggers & Dealers Mining Forum on setting up our capital infrastructure – and so many different projects to do, but I
in Kalgoorlie. That panel is now complete declines, ventilation, pumping, electrical got to a stage where my journey through
with the stope pulling to full height of 24m infrastructure – and now we have this really that system was done and I wanted to have
and planned minimum width. strong jumping off point that allows us to a bit of a look around. So when Steve said
Development ore drives have also ac- come really quickly out of the blocks.” the Bellevue job was available, I grabbed
cessed three of the four planned produc- An underground mining engineer, it with both hands because I knew of the
tion areas – Armand, Marcelline and Belle- Stralow rose to prominence as chief de- quality of orebody.
vue South. Stoping will occur in each of velopment officer and general manager “The thing about management in mining,
these areas in the pre-production phase to operations at Northern Star Resources it doesn’t matter how good you are, if the
provide stockpiled tonnes for commission- Ltd during the last decade. Following the gold’s not there in the first place, there’s
ing of the process plant. company’s merger with Saracen Mineral nothing you can do with it. With Bellevue, I
Stralow considers this to be an important Holdings in early 2021, he was poised to was confident that the gold was there and
de-risking factor for the project. take an extended break from the sector to everything beyond that was something that
“Having multiple areas that we can mine consider his next move. we could have influence over.
in conjunction with each other creates flex- Those plans were quickly thrown out the “To build a team, to build a culture and
ibility and de-risks your mine plan,” he said. window after an approach from Bellevue’s to build a company around a mine that has
“If you have an issue in one area, you can founding managing director Steve Par- true Tier-1 characteristics was an opportu-
hit another area harder and then come sons. nity that you just couldn’t look past.”
back and grab it from that area later on, “The company was at a transition point, The Bellevue project could still be lying in
rather than being overly reliant on one min- they were about to sign some really huge wait if it not for some clever detective work
ing sequence. If you miss something in that contracts, including the underground min- by Parsons in late 2016. After completing
sequence, it’s very hard to pick it back up. ing contract, and Steve tapped me on the sale of Gryphon Minerals to Teranga
“These are also multiple mining areas in the shoulder and said he was looking for Gold (now part of Endeavour Mining Corp),
the same orebody, they’re quite similar in someone to come in and really build a the intrepid geologist set about on a new
terms of rock type, grade, thickness and team and build a culture to move things adventure to find the world’s next hidden
geometry, allowing us to build that innate forward,” Stralow recalled. high-grade gold deposit.
flexibility into the mine plan. “I’d worked in Northern Star for a long His search led him to the historical
“We’re benefiting from three years of un- time, it really was a fantastic company to be Bellevue mine which produced about
Development ore drives have
accessed three of the four
planned production areas
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 19
COVER
PAGE 20 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
800,000oz before being shuttered in the will tell us whether the ounces are there decisions, particularly around the crusher,
late 1990s due low gold prices at the time. or not.” which is capable of running at 1.7 mtpa.
It then essentially dropped off the public Stralow hailed the performance of the This means the plant is expandable and
radar following the discovery of the nearby key contractors on site, including Develop the crusher is no longer a bottleneck. It
Cosmos nickel mine, currently being re- Global Ltd (underground mining), GR En- also means we can crush when we have
vived by IGO Ltd. gineering Services Ltd (processing plant) high renewable energy available and we
“It nearly fell through the cracks of his- and Australian Underground Drilling Pty can turn it off when there’s no renewable,
tory,” Stralow said. “During the time that Ltd, which has been achieving under- which ties into our net zero strategy.
Cosmos was operating, Bellevue was ground drilling rates of up to 70m per shift, “Should we be able to mine at a higher
used as a depository for the nickel water. more than twice the industry average of rate than 1 mtpa, we’ll be able to process
“There was no exploration done on it for 35-40m per shift. it. It won’t just sit on stockpiles. And as we
20 years until Steve came along. It’s really Bellevue expects to be able to push open the mine up, as we get more areas
quite phenomenal all of that gold is still throughput of the processing plant to 1.2 operating and we get more contingency
there. You had Jundee up the road pro- mtpa under the current configuration and built into the mine plan, we’ll be able to
ducing 200,000 ozpa then 300,000 ozpa is already considering an expansion to 1.5 learn what the right level is for running both
for that entire 20 years, while Agnew to mtpa via the addition of another mill and the mine and the plant in a consistent and
our south was also doing 200,000 ozpa. two extra tanks for minimal capital outlay. sustainable nature.”
Nobody touched Bellevue and yet here
we are finding extensions to known areas,
mining them and about to start producing.”
Since Bellevue took control of the pro-
ject, it has built up a 9.8mt @ 9.8 g/t gold
for 3.1 moz resource and 6.8mt @ 6.1 g/t
for 1.34 moz reserve. The current life-of-
mine inventory of 9.9mt @ 5.8 g/t for 1.85
moz supports at least 10 years of high-
grade gold production.
On the eve of Diggers & Dealers, Belle-
vue was buoyed by a series of high-grade
intersections from infill drilling at the Belle-
vue South and Armand Main mining are-
as. These included 10.2m @ 61.1 g/t gold,
18.4m @ 52.9 g/t, 11.7m @ 49.7 g/t and
10.4m @ 36.9 g/t.
Stralow joked the company was produc-
ing “more hits than Taylor Swift”.
“Everyone’s up and about, there’s noth-
ing like seeing it in the flesh,” Stralow said.
“The stuff we’re seeing is actually not too
much of a surprise. The data points are
higher than both the resource grade and
the reserve grade. When you have a look
back at the old Bellevue mine, there were
some high-grade shoots that went through
there, so we somewhat expected be hit- Project geologist Kacee Grant. Bellevue has 40% female participation across the business
ting some of those high-grade shoots and
high-grade zones once we increased the We made a conscious decision at Bellevue a
density of our drilling.
“I’m a data scientist, as everybody is in “ few years back to go down the harder route
this game, and we’ve always tried to back and try and get scientifically-based ESG outcomes
up our statements and everything we say
with data to show that we’re not fudging out of the company and out of the project from
the numbers. This is why we put out our day one.” - Darren Stralow (pictured opposite)
face sample grades, why we put out our
grade control results, because you don’t
want to just sit there and say something “At the end of the day, we’ve got to be If attaining reliable production rates and
is going to happen and then not have the able to crawl before we can walk, we’ve winning over a sceptical market wasn’t
data to back it up. got to be able to walk before we can run, enough of a challenge for a junior com-
“We truly believe we have all of the avail- so the first step we have to achieve is what pany, Bellevue has also set itself the task
able data points to back up the forecasts we’ve told the market, which is a 1 mtpa of achieving net zero emissions by 2026
that we’ve put out in the past. So when you run rate for our mill, at 6 g/t which is our and pioneering the sale of “green gold” in
see those grade control results, it just cre- reserve grade,” Stralow said. conjunction with ABC Refinery.
ates more data points for us to say, ‘yes, “Beyond that, we have a good contin- Bellevue – a member of the Electric
it’s real; yes, it’s there’. The next biggest gency for growth into the infrastructure Mine Consortium – has partnered with
data point for everybody is us turning on we’ve put on site. My background is min- leading energy provider Zenith Energy Ltd
the mill – or the big lie detector – which ing productivity, so we made some early to build and operate an 88MW wind and
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 21
COVER
“ The next biggest data point
for everybody is us turning
on the mill – or the big lie detector
– which will tell us whether the
ounces are there or not.
PAGE 22 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
The first gold bar poured under
Bellevue’s toll treatment agreement with
the Gwalia mine
“The best growth for us is going to be
growth from our existing asset.”
At the time of print, Bellevue was yet to
set a specific date for its first gold pour in
the December quarter. If Stralow has his
way, it will be sooner rather than later.
“All our costs are locked in, so no mat-
ter when in the quarter it happens, we will
keep spending money,” he said.
solar plant near the mine. The company project for its next phase of growth. “It’s in our best interest to make it as
anticipates its operations will be powered “The way we think about our strategy soon as possible in that quarter, but what
by up to 80% renewable energy sources is; the first stage of success is getting the that means is we don’t want to cut any cor-
and 100% during peak times. mine into production; the second is hitting ners either. We will be ticking all the boxes
“We made a conscious decision at the run rate that we’ve told the market; and and making sure everything’s going well.
Bellevue a few years back to go down the then the third is maximising growth from “We’re not expecting to be immune from
harder route and try and get scientifically- the Bellevue asset,” Stralow said. all issues and that everything will be fine.
based ESG outcomes out of the compa- “That third stage gate includes growing We’ve built a lot of contingencies into the
ny and out of the project from day one,” resources, growing reserves and doing ramp-up plan so if everything goes well,
Stralow said. proper exploration, and we think that will then so be it. But if not, then we’ll be able
“The opportunity to target net zero by very quickly follow first gold and hitting our to deal with it quickly, move on and con-
2026 was something that we didn’t do targeted run rate. So, once we’re in cash tinue to keep the big wheel turning.”
lightly, but we put together a plan that flow, we can bring in more drill rigs and do
showed it was actually achievable us- more pure exploration. – Michael Washbourne
ing current technology, using our current
baseline plan, so why would we not have
a crack at it?
“We’re firmly on that pathway to try and Bellevue is already considering expansion options for its processing plant
achieve it. And it’s actually helped us in at-
tracting and retaining a really high quality
workforce. Lots of people have come out
of other gold mines or other gold mining
companies that haven’t really focused on
ESG outcomes. It’s just been about op-
erations and productivity and cash flow,
which are all super important to us, but if
you can do that and have an ESG focus
on it, we’ll be able to do something that no
one else is doing.”
Bellevue has also placed high impor-
tance on leading the sector in gender di-
versity. At the time of print, 40% of its em-
ployees are female, including greater than
35% female participation in the process-
ing plant and 33% female representation
at board level.
Another KPI above industry average is
indigenous employment. Like its neigh-
bour Liontown Resources Ltd, the compa-
ny continues to maintain strong ties with
the Tjwarl Traditional Owners and has
been a strong supporter of community
and social initiatives in the Leinster region.
Bellevue appears to have made a
seamless transition from explorer to de-
veloper and now imminent producer, but
given discovery remains in the company’s
DNA, Stralow is looking forward to firing
up the drill rigs again and setting up the
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 23
DRIVING SUSTAINABLE CHANGE
DIGGERS REVIEW MACA.NET.AU
Lithium proves catalyst
for electrified Diggers
P rices may have wobbled but 2023 was emphatically confirmed The Pilbara Minerals team with their
Digger of the Year award
as the year of lithium at Diggers & Dealers with all three
company awards claimed by firms focused on the battery mineral.
ilbara Minerals Ltd reinforced its reputation counts for 8% of global lithium supply, making Henderson said the midstream project
Pas Australia’s most upwardly mobile miner it the standout independent lithium producer. could be a major step, not only for Pilbara’s
by taking out the Digger of the Year award. Henderson said the company had no inten- downstream ambitions, but for the lithium
The West Australian-only producer was joined tions of settling for what it currently has. industry’s pursuit of better environmental out-
in the winner’s circle by multinational lithium “We’ve got the foot down and will make the comes.
group Allkem Ltd which took out Dealer of the most of the environment and capitalise on “The idea is to achieve three things; more
Year, while Canada-focused explorer Patriot our lead… because of three factors; people, value-adding at the mine site to produce a
Battery Minerals Inc was voted Best Emerg- expertise in operations and development and more valuable product, a step down in carbon
ing Company. potentially an incredible runway ahead of us energy intensity and to drop out the alumina/
The clean sweep of the gongs confirmed in value-addition,” he said. silica waste at the mine site. What heads out
the mood of the entire three-day forum in The immediate prospects are obvious, the gate is a high-grade lithium chemical salt
Kalgoorlie. While lithium companies such as expand current spodumene concentrate pro- which we think will be the product of the fu-
the three winners, Azure Minerals Ltd and duction at Pilgangoora through the execution ture,” he said.
Delta Lithium Ltd were ebullient thanks to of its P680 and P1000 projects. Ramp-up “The lithium industry has to find more sus-
climbing share prices and market interest, of P680 – which will see production reach tainable methods and Pilbara is having a red-
junior gold explorers and developers were 680,000 tpa – will be achieved over the Sep- hot crack at this process. We think it shows
morose due to a lack of investor enthusiasm tember quarter before the company embarks promise, but we know there are other solu-
and no clear path forward. on the P1000 expansion to hit the 1 mtpa con- tions out there.”
No company sums up the current outlook centrate mark. Moves are also afoot to take Pilbara further
better than Pilbara Minerals Ltd. Just three A 109mt increase in global resources to downstream through its JV with Korean giant
years ago, former managing director Ken 414mt @ 1.15% lithium was announced in the POSCO. The partnership is building 43,000
Brinsden was almost apologetic in his ap- hours prior to Henderson’s presentation. He tpa lithium hydroxide facility in South Korea
pearance on the Diggers main stage as the said the upgrade would be enough to confirm with Pilbara able to increase its share to 30%
company stared into the abyss thanks to a flat the P1000 expansion. in the near future.
lithium market and the faltering performance Away from mining basics, Pilbara is also The POSCO deal was formed after Pilbara
of its Pilgangoora operation in the Pilbara. close to revealing a pathway to the much- ran a partnership process for a downstream
This year, however, Brinsden’s successor vaunted downstream battery supply chain. JV over a portion of Pilgangoora’s initial pro-
Dale Henderson could only revel in the re- On August 2, it confirmed FID had been tak- duction in 2018. POSCO was one of only four
markable turnaround which had transpired in en on construction of a demonstration plant participants in that process but when Pilbara
the intervening period. for its midstream product. launched a similar endeavour this year for the
“This company was on its knees in 2019 A JV with Calix Ltd, the midstream project 300,000 tpa available after the P1000 expan-
but is now the leading growth stock on the will see Pilbara use Calix’s patented elec- sion, it found more than 70 interested candi-
ASX, up 114% in FY23,” Henderson said in tric kiln technology to produce a high-purity, dates, pointing to both the change in market
his opening morning presentation. lithium-rich chemical salt, lithium phosphate, conditions and the strength of Pilgangoora’s
Pilbara now boasts a market cap of around which will fetch higher prices than spo- reputation.
$15 billion and output from Pilgangoora ac- dumene concentrate. “This is one of the most compelling lithium
PAGE 24 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
DRIVING SUSTAINABLE CHANGE
MACA.NET.AU
transactions in the market today,” Henderson is using direct lithium extraction. In hard rock, it province,” he said. “You can count on one
said. “Tonnes from an existing operation and has a 50% share in the Nemaska spodumene hand the geological provinces of that scale.
available from 2025 as part of P1000.” project just 100km from our James Bay pro- We have the maiden resource at Corvette but
While Pilbara’s operational performance ject, and a 50% share in the associated con- that is just the beginning. It is one of the big
was enough to bag it the Digger of the Year version facility nearby. ones, if you keep drilling, you will keep increas-
title, Allkem’s Dealer accolade was all about ing the resource.”
corporate execution. The company was cre- There is still plenty left to drill, with Patriot
ated in 2021 through the $4 billion merger of only testing 4km of 45km of prospective geol-
two ASX-listed lithium producers, Galaxy Re- ogy. Brinsden said the exploration approach
sources and Orocobre. was straightforward.
Today, the company boasts a $9 billion “You can see the spodumene in outcrop,”
market cap and this year secured another tie- he said. “All the hard work was actually done
up with North American lithium group Livent in collating the land package in James Bay
Corp which will create a $15.7 billion company. when it wasn’t sexy to be in lithium.”
Bookending Henderson’s opening speak- Patriot has already attracted the attention of
ing spot with the last address of the forum was major lithium players, with Albemarle spend-
Allkem head of Australian operations Liam ing $C109 million to secure a 4.9% stake in
Franklyn, who used the platform to reiterate the junior. Brinsden said his company had in-
how transformational the Livent merger would Ken Brinsden sisted on a standstill clause to that placement
be for the company. to ensure Patriot shareholders didn’t miss out
“It is a really exciting opportunity,” Franklyn “Both companies had significant growth on the longer-term opportunity.
said. “It is a complementary merger. Allkem pipelines before the merger. But, under New- “That was deliberate because we believe
is a resource company with a solid track re- Co, if every lithium company in the world de- shareholders have more to gain,” he said. “We
cord in operations, Livent has a track record livers on their growth projections in the next are taking a similar logic to Greenbushes, this
in operating downstream facilities across the three years, we would be sat at No.3 in the project is big enough to supply four or five dif-
globe.” world for lithium production capacity [behind ferent conversion facilities.”
Franklyn said the merger was compelling Albemarle and SQM].” It will be a fine balancing act, however.
because of the scale, vertical integration and If Allkem and Pilbara’s honours represent- Pilbara built its initial success on established
accelerated growth option it presented Allkem ed a nod to the established end of the lithium Chinese lithium demand, but Brinsden said
shareholders. sector, Patriot’s award reflected the next gen- Patriot was looking at the North American
Livent is not well known in the Australian eration. The company only joined the ASX in lithium scene for support. The only problem
mining industry but has been active in the lith- December, choosing to dual list after Brinsden being that market is still in its infancy.
ium business since the 1940s and, in tandem came on board as chairman. “In WA, we have the benefit of a ready-
with Sony, developed some of the world’s first Patriot has built a dominant position in the made market in China,” he said. “That is not
portable lithium-ion batteries in the 1990s. James Bay lithium district and already defined the case with Patriot. It has to develop with the
Franklyn said that depth of knowledge and a 109mt @ 1.42% lithium resource at its Cor- industry downstream, the balance of the sup-
experience would be beneficial to Allkem’s vette project. Brinsden, who had planned on ply chain. We have to work hard to see how to
ambitions to be vertically integrated. a sabbatical after leaving Pilbara, explained it interconnect mines and chemical conversion
“Allkem announced earlier that vertical inte- was these strong fundamentals which pulled capacity, they need to come on at the same
gration and downstream processing was part him back in. time.”
of our strategy and this deal is complementary “I couldn’t help myself because it is incred- – Dominic Piper
to that,” he said. “Livent has the Guemes brine ible what has been discovered and the pack-
operation near our Sal de Vida mine where it age Patriot has drawn for this new lithium
Warbo gets his gong
ell-regarded mining identity Neil Warburton was this year’s
Wrecipient of the GJ Stokes Memorial Award at Diggers &
Dealers.
Warburton’s extensive career is almost the personification of the
Diggers & Dealers spirit, starting at Australian behemoth Western
Mining, before taking in more than a decade with leading mining
contractor Barminco, including five years as chief executive.
Since then, he has held a series of executive and non-executive
board roles with the likes of IGO Ltd as well as several juniors and
pre-IPO start-ups.
The Diggers committee recognised Warburton for his “leader-
ship and support of the next generation” during his 40-year career.
Other award winners on the night were Brad Thompson of The
Australian Financial Review (Media Award) and Luca Danovaro
Hanza (The Ray Finlayson Award for Leadership and Academic
Excellence).
GJ Stokes Memorial Award winner Neil Warburton with wife Rebecca
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 25
DRIVING SUSTAINABLE CHANGE
DIGGERS REVIEW MACA.NET.AU
Lynas holding court in Malaysia
ynas Rare Earths Ltd managing direc- in Malaysia. Your
Ltor Amanda Lacaze has played down “In Malaysia, there’s an increasing un-
speculation the company’s longstanding op- derstanding they can’t rely on oil and gas
erations in Malaysia could be coming to an forever and they have a unique opportunity
untimely end. in rare earths, both upstream – because reliable
In late July, Lynas filed two judicial review Malaysia has its own upstream resources
proceedings before the High Court of Ma- – and also in downstream industry develop-
laysia seeking judicial review of its in-coun- ment.”
try operating licence conditions which state Lynas recently achieved its second con- refining
the import and processing of lanthanide secutive quarter of record production from
concentrate will be prohibited after January its Malaysian facility.
1, 2024. Lacaze also confirmed first production
Lynas has previously declared the licence from the company’s newly minted Kalgoor-
conditions will limit operations at its Malay- lie refinery was to take place this month partner
sian facility and represent a “significant vari- with only construction of the waste gas
ation” from the terms under which the com- treatment plant still to be completed at the
pany made its initial decision to invest in the Amanda Lacaze time of print.
country more than a decade ago. “The actual commissioning has been
On the eve of Diggers & Dealers, Lynas development of the US facility signalled the very smooth, we’ve not had any significant
signed a follow-on contract with the US De- end of the company’s time in Malaysia. hiccups, we’ve done up to stage four com- Trusted by the mining industry for more
partment of Defence for the construction of “Malaysia will remain an important part of missioning in all areas except for one,” she
its long-awaited heavy rare earths facility in our business, I believe, for certainly some said. than 120 years, and offering one of the
Texas. The contract is expenditure-based, time, and I believe that ultimately, as we “We had final approvals for the Kalgoorlie most advanced and best equipped
meaning all of the company’s properly allo- have seen over the past decade, the Malay- facility in February last year, the fact that we
cable construction costs can be reimbursed. sian Government will make decisions which are now at stage four commissioning less precious metals assay laboratories
The US Government is expected to con- are based upon evidence and science, as than 18 months later, I think is quite remark-
tribute about $US258 million to the project, opposed to purely on politics,” she said. able.” in the southern hemisphere,
up some $120 million from the original con- “We’ve made a series of investments in The Perth Mint continues to redefine
tract announced in June 2022. Malaysia on the basis of a certain set of li- – Michael Washbourne
Speaking to media on the sidelines of the cense conditions, and we have met those. the refining process – and set the
conference, Lacaze dismissed suggestions We continue to engage with Government
benchmark in metal accuracy and
Curtis home on the range operational sustainability.
Discover what makes us Australasia’s
ore than two decades after laying the and terbium at its Browns Range project in FID early next year and first production in refining partner of choice.
Mfoundations for Lynas Rare Earths the Kimberley. It is also understood to be 2026.
Ltd to become the dominant supplier of the world’s highest-grade deposit contain- Northern Minerals has already inked an perthmint.com/refine
neodymium and praseodymium it is to- ing two of the key ingredients in permanent agreement to supply all of the concentrate
day, Nicholas Curtis believes Northern magnets. it can produce from the known resources
Minerals Ltd has the potential to be a Since 2018, Northern Minerals has op- at Browns Range to Iluka Resources Ltd’s
world leader in the production of another erated a full-scale pilot plant at Browns upcoming Eneabba processing facility.
set of rare earths. Range on a commercial level, selling more “I believe this is a great opportunity not
Northern Minerals hosts the world’s larg- than 1,000t of concentrate. just for us and our shareholders and com-
est known hard rock source of dysprosium Curtis, who joined the company as munity but broadly in Australia to have
chairman in late 2021, believes the time such a facility there,” Curtis said.
has come for the full potential of Browns “We will be 20% of the feedstock into the
Range – including its flagship Wolverine Eneabba plant. It will be the only plant in
deposit – to be realised. the Western world and probably the only
“We think we can scale this ultimately to single rare earths operation where you will
be the world’s leading supplier of dyspro- be able to source the exact combination of
sium and terbium,” he said. metals that you need to produce rare earth
Northern Minerals is in the process of magnets.”
updating the DFS first published in 2015 Curtis hinted Iluka would be an eq-
at a time when the company was unable to uity participant in the development of the
monetise Browns Range. scaled-up plant, open pit and underground REDEFINING
Discussions with a number of potential mine at Browns Range, which is forecast R G
funding partners, including the Northern to be in the vicinity of $500 million. E F I N I N
Australia Infrastructure Facility (NAIF), are
advancing rapidly as the company targets – Michael Washbourne
Nicholas Curtis
PAGE 26 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Core lines up second
lithium mine
ore Lithium Ltd is expected to make an in- “We’ve started production out of the Grants
Cvestment decision on the BP33 resource pit and we started quite quickly, so in less than
at its Finniss lithium operation in the Northern two years we’ve gone from broken ground to lion programme now under way. Some 78%
Territory early next year. producing concentrate.” of the company’s exploration budget is being
An early works programme and feasibility Manderson said it was the right time for the spent north of Finniss.
study into BP33 is under way with excavation company to look at its next phase of growth, “What we’ve actually seen in 2022 is the
and construction of the box cut starting in Au- but that a smooth transition from exploration continuation of our good turnover on invest-
gust. The launch of development work comes to production was still a priority. ment in exploration, so about $2 in exploration
five months after Core more than doubled the “Keep in mind that two years ago Core was spend is turning into 1t of resource,” Mander-
BP33 resource to 10.1mt. an explorer, we’re moving into that mining op- son said.
“As a demonstration of the prospectivity erations phase,” Manderson said. Post Diggers & Dealers, Core completed
of the leases in and around the Finniss area, “We’re into our third phase of trials, under- an institutional placement of $100 million at
after the 2022 drilling we’ve seen more than standing our grade curve and starting to work 40c/share to be spent on improving site ac-
130% increase in the resource at BP33,” out the parameters that will optimise the op- cess, completing the box cut and continuing
Core chief executive Gareth Manderson said. eration of the facility.” with surface works for water management at
Metallurgical testwork demonstrated BP33 Core shipped its first two cargoes of lithium BP33.
contained similar characteristics to the estab- concentrate in H1 2023. A third shipment will About $35 million will go towards 90,000m
lished Grants lithium resource, where Core be the first exported to Chinese battery com- of drilling, regional exploration at Anningie,
has been mining since last year. panies Ganfeng Lithium and Yahua under Barrow Creek and Shoobridge, as well as a
Manderson said recent optimisation of ore offtake agreements signed in 2021. revised feasibility study for BP33 and Carlton,
processing from Grants would speed up the Those contracts account for 80% of Finn- which increased its resource by 50% earlier
BP33 resource production timeframe. iss’ lithium concentrate over its first four years this year, from 4 mt to now over 6 mt.
“Start early, produce concentrate, learn of production. – Michael Cameron
how to process the orebody and get the sys- Manderson said exploration would be an-
tems and processes up and running,” he said. other growth focus for Core, with a $25 mil-
Neometals presents no digging option
he Reed name has long been associated for the flowsheet, using solvent extraction es- According to Reed, that will be Neometals’
Twith Diggers & Dealers, with David Reed sentially to pull out the sulphates,” Reed said. first step in an industry which could eventually
integral from the very start, but the family’s lat- From there, Neometals struck a JV with rival primary extraction in the battery supply
est venture could never be tagged traditional major German plant manufacturer SMS chain.
or standard. Group to design and construct a hub-and- “Over and above the ESG tailwind, re-
The Reed Diggers mantle has been taken spoke battery recycling model. cycling is needed to create resilient sup-
up by David’s son Chris in recent years and “All of these hundreds of gigafactories are ply chains,” he said. “If you take the lithium
his presentation to the 2023 forum highlighted going to need a recycling plant and the ques- and you take the by-product credits off, you
just how much diversity the conference now tion was who was going to build the plants for become the lowest-cost lithium producer
showcases. Where David presided over a these guys? That is why we partnered with in the world with a production cost of about
forum dedicated solely to gold and nickel min- SMS. They are a plant builder and can build $US2,700/t.
ing and exploration, Neometals Ltd has nei- whatever plant is needed,” Reed said. “If we recycle batteries and end-of-life pro-
ther in the portfolio, and doesn’t even harbour Under the commercial model, Primobius duction scrap, we can overtake mined pro-
ambitions to become a miner, having sold its can provide principal, partnership or licensing duction between 2038-2040. And if you look
interest in the Mt Marion lithium operation to agreements to build the recycling plants con- at what happened in lead acid battery recy-
Mineral Resources Ltd in 2018. nected to gigafactories. cling that results in a significant decrease in
“We did well out of Mt Marion, but the board “The ideal model is that we supply the price.”
wanted bigger exposure [to the battery sup- plant, install it and commission it and then Bringing it back to traditional Diggers &
ply chain] and I thought: ‘well, there’s no one pick up a royalty.” Dealers reference terms, Reed said his com-
recycling these batteries at the end of life,’” Primobius is already processing batter- pany was sat on the equivalent of the only
Reed explained at the conference. “But these ies for every carmaker in Germany and the gold processing technology commercially
batteries are incredibly valuable. An NMC 811 group’s first technology partnership was ex- available.
battery is the same as having 1t of ore at the ecuted with Mercedes-Benz last year. “By 2030, there will be more than €600 mil-
concentrator that is grading 15% nickel, 15% “Our plant will go inside their new gigafac- lion recoverable materials in batteries in Eu-
copper, 2% cobalt and 2% lithium.” tory, and we will start installing next quarter,” rope,” he said. “That is the equivalent of 300
An opportunity identified, Neometals set about Reed said. “We are giving them a 10 tpd plant moz gold at 4 oz/t, growing at 50 mozpa, but
defining the processing flowsheet and commer- on a royalty-free basis because by 2030 they nobody has a processing plant to handle it.
cial pathway to realising some of this value. will be producing 500 tpd of battery scrap and That’s where we come in.”
“We developed patent-pending technology will need much greater capacity.”
– Dominic Piper
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Galan approved to construct
alan Lithium Ltd has been given the projected to generate average annual free “We’re doing exactly what is being done
Ggreen light to start construction of cash flow of $US54 million and achieve in Australia to produce lithium concentrate,
Phase 1 operations at its Hombre Muerto payback within 2.2 years of first production. the only difference our lithium concentrate
West lithium brine project in Argentina. Phase 1 capex is estimated at $US104 is in liquid form,” he said.
On the eve of managing director Juan Pa- million. “If you are familiar with spodumene and
blo Vargas de la Vega’s inaugural presenta- “Some of that capex has already been concentrate, we’re doing exactly the same.
tion to Diggers & Dealers, Galan received sunk,” Vargas de la Vega said. We want to get to market as soon as pos-
confirmation from the Catamarca Ministro “We are looking for offtake agreements, sible, we want to hit the market while the
that the company had been granted full we’re looking for pre-payment, we’re look- prices are high and we want to do this in an
construction permits for the proposed 5,370 ing also within our solutions to get a toll organic way, step-by-step. We want to be a
tpa LCE operation at Hombre Muerto West. treatment agreement within Argentina so miner before being a chemical company.”
Galan will now work towards delivering we can be producing lithium carbonate
first lithium chloride in early 2025. without being a carbon- – Michael Washbourne
“We can be a lithium producer generat- ate producer.”
ing cash flow in 18 months,” Vargas de la The DFS for Phase
Vega declared. 2 operations to lift pro-
Early construction works were expected duction to 20,000 tpa
to begin at the time of print, including the LCE is due this month.
installation of a 200-bed camp. Cash flow from Phase
Vargas de la Vega, who was on the 1 is expected to fund
ground in Argentina the week prior to Dig- development of Phase
gers & Dealers, said work had also started 2, Phase 3 (40,000 tpa)
on the applications for the Phase 2 con- and Phase 4 (60,000
struction permits. tpa).
“Last Thursday, we had a meeting with a Now in his sixth year
Mines Minister and the message was, ‘let’s at the helm of Galan,
work together so you can get the permits Vargas de la Vega said
for Phase 2 before you finish constructing investors should not be
Phase 1’,” he said. concerned about the
According to the DFS for Phase 1 op- company’s focus on Ar-
erations at Hombre Muerto West, Galan is gentina. Juan Pablo Vargas de la Vega
Delta charges towards development
elta Lithium Ltd is on track to begin lithium. The nearest gold processing plant matites around 1.5km long and 50-100 m
Dmining operations at its Mt Ida pro- is a brand new $300 million plant built by wide to at least 350 m depth.
ject in Western Australia before the end Aurenne [Group Mining] about 12km away Flanagan’s team had drilled over
of this year. from our lithium mine.” 54,000m at Yinnetharra so far.
An initial resource of 12.7mt @ 1.2% Hancock Prospecting Pty Ltd, Mineral “We acquired this project in August last
lithium oxide was reported for Mt Ida last Resources Ltd and Waratah Capital Advi- year. Since then, we’ve drilled 285 holes,
October. An update is expected this month sors have all bought Delta shares on the we are preparing ourselves for a very busy
after Delta released results including inter- market this year, while renowned global 2024,” he said.
cepts of 27m @ 1.3% lithium from 848m manufacturer Idemitsu inked a $46.4 mil- According to Flanagan, Delta is spend-
and 17.6m @ 1% lithium from 477.9m in lion strategic investment with Delta in ing up to $300,000 a day on exploration
August. June. Flanagan praised the Japanese and development across its portfolio. And
While Delta executive chair David Flana- company’s chemical engineering exper- he insists the company is not done yet.
gan did not give a timeframe for construc- tise and pointed to Idemitsu’s JV with “Between now and Christmas, we’ve got
tion during his Diggers & Dealers address, carmaker Toyota as a bonus for a battery offtake agreements, scoping studies and
his enthusiasm for the Mt Ida project was minerals company such as Delta. mining approval [to finalise],” Flanagan
unwavering. “It turns out globally, historically, that’s said.
“Mt Ida produced about 300,000oz of one of the biggest investments by a tradi- “We’re building camps, awarding con-
gold at 18 g/t over 80 years,” Flanagan tional energy company into a critical min- tracts, there’s just so much going on. If you
said. erals company.” he said. want to invest in a company that’s having
“It turned out that in the [historical] Delta’s Yinnetharra project in the Gas- a red-hot crack, that’s us. We are giving it
drilling, they hit lithium spodumene in a coyne region of WA will be another focus absolutely everything we’ve got.”
pegmatite. It’s safe to say that we would for the company next year. Drilling at the
expect to gain credit through the sale of Malinda prospect showed lithium minerali- – Michael Cameron
gold that gets liberated when we’re mining sation of up to 3% from two parallel peg-
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 29
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AVL puts faith in ‘unique’ orebody
emand for battery-bound vanadium shipbuilding, jet engines, EV charging ent, thick, high-grade seams of magnetite
Dwill increase to as much as 50% of systems and lithium-ion battery cathodes. we’re targeting that have high-grade vana-
supply by 2030, with Australian Vanadi- AVL plans to become the fourth-largest dium,” he said.
um Ltd (AVL) looking to capitalise on this vanadium primary producer in a market “We’re able to then underpin the capex
anticipation. dominated by China, Russia and South we need to build a downstream facility
“As a near-term producer, that’s a pretty Africa. because we have that really consistent
exciting dynamic and change in the indus- The company is seeking $US435 million quality concentrate for our downstream
try that we would love to be a part of,” AVL in capital expenditure to bring the AVP into processing.”
chief executive Graham Arvidson said. production by 2025. Arvidson said plans to export the AVP
“Previously, less than 1% of vanadium A BFS estimated cash costs of less than ore through the Geraldton port of WA were
has gone into batteries. From 2019 until $5/lb of vanadium pentoxide, which Arvid- based on long-term infrastructure benefits
2022, that changed to 7% of the global an- son considered a sign AVL could endure and the potential for increased returns.
nual market. This year, we’re on track to market volatility. “It creates a few important outcomes,
being 10-15% of the market.” “The 25-year consistent head grade one of them is the availability of very com-
The Australian Vanadium project (AVP) mine life will underpin our remit to build mercial gas,” he said. “Expandable gas
near Meekatharra has the potential to pro- a downstream processing plant and pro- options will be the heart of our process.
duce up to 11,200 tpa of vanadium pentox- duce high-purty vanadium pentoxide that There’s a growing hydrogen industry there
ide – estimated to be around 5% of global can suit the steel, battery and critical min- where green hydrogen will be available
vanadium demand. erals space,” he said. to us. There’s also rail and port which im-
“Where else is better than Western Aus- Arvidson cited the “uniqueness” of the portantly enables us to export an iron ore
tralia to create a new, vertically integrated AVP orebody as a core strength of AVL’s byproduct.”
vanadium industry?” Arvidson said. plans for vertical integration.
Vanadium is a critical mineral used in “There’s many kilometres of consist- – Michael Cameron
SolGold preparing for time in the sun
olGold plc is in the market for a stra- of the project, owning about 20% between would not develop Cascabel alone, how-
Stegic partner to develop its Cascabel the two and there are a lot of people com- ever Caldwell said myriad options were
copper-gold project in Ecuador and is ing to Ecuador because it has the right still available to the company.
fielding plenty of interest, despite the po- rocks,” Caldwell said, pointing to the suc- “We think we are coming up with a good
litical instability in the country. cess of the Fruta del Norte (500,000 ozpa plan that would allow us to execute on our
SolGold has been a standout in the at around 12 g/t) and Mirador (150,000 tpa own if we want to,” he said. “The orebody
nascent Ecuadorian mining sector in the copper) mines in the country. itself gives us flexibility because it is large
last decade thanks to its discovery of the Cascabel, with its massive resource and has some very good grade, so there
massive Cascabel copper-gold porphyry of 2.6bt @ 0.53% copper equivalent and are lots of ways you could develop it.
project in the Andean nation. BHP Ltd and 100-year, 25 mtpa mine life, could one day “We are looking at all possibilities, may-
Newcrest Mining Ltd have already been rival those projects. be a strategic partner who might want to
attracted to the asset, taking a combined SolGold signed an exploitation agree- help us develop Cascabel, perhaps with
20% interest in the company, with others ment with the Government in July, paving an offtake from a smelter, that is one of the
thought to be circling. the way for development to start in ear- options but there is no timeline.”
Investor interest in the country remains nest. As well as Cascabel, SolGold controls
strong in the face of political uncertainty. In The agreement allows for an eight-year 300,000ha of exploration ground in Ec-
August, prominent politician Fernando Vil- construction period which Caldwell said uador. Caldwell said such a position was
lavicencio – a candidate in the upcoming would be needed as SolGold launched highly sought after given the lack of ground
presidential elections – was assassinated. the intensive underground development of in the country.
The murder was believed to have been Cascabel. “The cadastre system has been closed
conducted by organised crime gangs. Vil- “Having received the exploitation per- for a number of years, so if you want to get
lavicencio had long campaigned against mit, we have now broken the rest of the into Ecuador, you are going to have to ac-
the infiltration of organised crime and drug permitting strategy into four modules; quire a package from another company,”
cartels into Ecuadorian politics and public early works, underground, concentrator Caldwell said. “That is why we have had
life. and tailings, then pipeline and power infra- interest in the exploration ground as well, a
Speaking at Diggers & Dealers, SolGold structure,” he said. “The advantage is we lot of people want to get into Ecuador be-
chief executive Scott Caldwell said the can begin the underground development cause it has the right rocks.”
company considered Ecuador still “open early.” – Dominic Piper
for business”. With big names already on the register,
“BHP and Newcrest are shareholders the market has long assumed SolGold
PAGE 30 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Liontown holding all the aces
iontown Resources Ltd continues to hold ers which didn’t exist when the first batch “They’re a tremendous partner, I love the
Lan enviable position in the global scram- offtake was up for grabs are certain to be at way they come and tackle a problem,” he
ble for new lithium supply, but managing di- the negotiating table. said.
rector Tony Ottaviano is looking no further “When I did my offtake agreements, we “When you say to the Japanese – and
ahead than the challenge of successfully didn’t have the Inflation Reduction Act, so Sumitomo are very much in this world –
commissioning the company’s Kathleen my next suite of offtake agreements will Australia’s got high capital costs. They say
Valley project. have the IRA and the European equivalent ‘yes, Tony-san, but in Australia, if we don’t
Having swiftly rejected a $5.3 billion well and truly in my focus,” Ottaviano said. agree with you, we can sue you. We can
takeover offer from Albemarle Corp ear- “If every customer that buys an electric rely on a very transparent and reliable ju-
lier this year – just months after revealing a vehicle gets a subsidy that is enabled by a diciary duty, we can rely on stable govern-
$350 million cost blowout – Liontown is now raw material from this country, especially ment policy’. And once you sink that capital,
charging towards first production in mid- from our mine or from some of my col- then it’s forgotten, it’s all around delivery
2024 with mining of the Kathleen’s Corner
and Mt Mann open pits and construction
of the 3 mtpa processing facility well under
way.
Liontown estimated 60% of its capital re-
quirements had been committed at the end
of FY2023.
On the opening morning of Diggers &
Dealers, Ottaviano unveiled the next steps
for Kathleen Valley, including a potential
downstream partnership with Japanese
trading house Sumitomo Corp.
Liontown and Sumitomo have agreed to
jointly fund a study investigating whether
spodumene from Kathleen Valley can be
used to produce lithium hydroxide in Japan.
The study is non-binding and expected to
run for two years.
Ottaviano denied the company was de-
viating from the “business as usual” ap-
proach it has steadfastly maintained since
knocking back a third and final offer from
Albemarle in late March.
“Our strategy remains firm and consist-
ent,” Ottaviano said. “It’s all about maximis-
ing value at Kathleen Valley and the focus
is to bring it into production.
“When you have an asset like Kathleen
Valley – its scale, its position on the cost
curve – it will underpin further investment.
But, I’m not going to simply follow the down-
stream course if it doesn’t make good busi-
ness sense.
“We’re understanding what that means
and we’ve asked ourselves a series of stra-
tegic questions. We’re using partners that
are well versed in this to assist us in that
understanding.”
Liontown has previously inked offtake Chief operating officer and experienced project developer Adam Smits is overseeing
agreements with Ford, Tesla and LG for al- construction of the 3 mtpa processing facility
most 90% of the planned spodumene pro-
duction from Kathleen Valley over the first leagues, then we need to get a piece of that and efficiency.
five years. The remainder will be sold in the action.” “Don’t you just love their long-term think-
burgeoning spot market. Asked by Paydirt why Liontown selected ing?”
When those contracts are due to expire, Sumitomo as its preferred partner to con- Alongside the Sumitomo agreement, Li-
the company is likely to have committed to sider downstream options for Kathleen Val- ontown also announced it had received a
heading downstream or remaining a con- ley, Ottaviano cited his past working history three-way letter of support from the inter-
centrate producer. In either event, custom- with other Japanese trading houses. national export credit agencies of Australia,
PAGE 32 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Kathleen’s Corner is one of two open
pits currently being mined ahead of
planned first spodumene concentrate
production in mid-2024
South Korea and the US for non-binding There will be a working capital component. “We’re not trying to set a record on DSO.
and conditional finance of up to $300 mil- We’ll be mining at a 3 mtpa rate, which we It’s a campaign of 250,000-300,000t. We’re
lion. need to support through working capital. doing that in the next six months.
The proposed collaboration between “Finally, we’ll have the customary re- “Once we get into first production, if I’m
Export Finance Australia, K-Sure and the serves that the banks typically want you to producing more DSO, I would typically put
Export-Import Bank of the US would offset have around your creditors, but also I want it through my plant because I could produce
most of the additional capex requirements to have, because I’m entering the most risky 6% conc, but I have that optionality.”
for Kathleen Valley. part of my project, which is the commission- If Liontown is successful in producing an
Ottaviano described the collaboration as ing. I want to go in with a bit of buffer finan- accepted spodumene concentrate at Kath-
“an unprecedented amalgamation of gov- cially so I can weather any particular issue leen Valley, Ottoviano cautioned any as-
ernment policy banks willing to support our that comes our way.” sumptions the company would automatical-
project”. At the time of print, Liontown had just one ly pull the trigger on a downstream strategy.
“To me, it underpins the commitment major contract – structural, mechanical and Ottaviano said all risk factors needed to
these various governments have on creat- piping – to award after confirming Byrnecut be considered, especially given the com-
ing a new supply chain, outside the current Australia Pty Ltd had won the race for the missioning challenges the Kemerton and
existing players,” he said. prized $1 billion four-year underground min- Kwinana lithium hydroxide plants had expe-
“This will service the required project ing services contract at Kathleen Valley. rienced to date.
capex that we need to complete the build. Byrnecut will mobilise to site this month “I don’t want to rush this because it’s
with first development metres expected in technically challenging and I need to make
the December quarter. It will also commit a bet as to what chemistry is going to win,”
$125 million towards procuring new plant he said.
and equipment to execute those works. “If I become a lithium hydroxide producer,
With a renowned underground contrac- I’m betting on NCM batteries, but the things
tor in place, Liontown is expected to confirm are too fluid and dynamic. So Is it NCM? Is
imminently the revised estimated operating it LFP? Is it lithium chloride that then goes
costs for the project. Dry commissioning of onto solid state batteries? It’s a big call and
the plant is also anticipated before the end I’ve got to get the strategy right.
of the year. “There’s a lot of merit in being a second
Liontown is also proceeding with delivery mover here, or a fast follower. Let’s see
of a DSO product as an early source of rev- what the ones here in Australia, whether
enue ahead of first concentrate production they can get to nameplate, and then let’s
next year. Material will be liberated through learn from those issues that they’ve had,
mine plan optimisation and sits outside the like we’ve done with the plant [at Kathleen
existing reserves of 68.5mt @ 1.34% lithium Valley]. We’ve taken a lot of learnings from
and 120 ppm tantalum. the first-generation lithium producers here
“We’re targeting our first shipment at the in WA.”
end of this calendar year, and we’ll be an-
Liontown worked closely with the Tjwarl nouncing shortly who our customer is to buy – Michael Washbourne
Traditional Owners to construct an access the DSO,” Ottaviano said.
bridge over the sacred Jones Creek site
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 33
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Revenge of the gold miner
volution Mining Ltd executive chairman The fruits of an intense period of capital is 12 moz in the ground right at the moment
EJake Klein does not believe investors expenditure at Cowal in New South Wales – then it makes the hard work worthwhile.”
have lost faith in gold companies. However, are set to be realised in FY24 with a 15% Klein said his company had not closed
he concedes they need to be reminded just increase in production guided. the door on further acquisitions. This could
how valuable the precious metal is at a time Ernest Henry has also returned to full include any unwanted assets which New-
when battery mineral-related stocks are production after being suspended for three mont may dispose of following completion
dominating the commodities markets. months following a significant rainfall event of its $29.4 billion takeover of Newcrest
Klein’s presentations at Diggers & Deal- in north-west Queensland which impacted Mining Ltd, although he hinted the final say
ers are always highly anticipated, but per- many other mines in the region. might be left to some of his employees.
haps none more so than this “We’ve always said we want 6-8
year with Evolution coming off its assets, but we want to buy them
toughest period since climbing wholesale and convert them into
to the top of the Australian gold retail assets, so we’re not going
sector on the back of acquiring to do something stupid, we have
assets such as Cowal, Mungari great growth opportunities in our
and Ernest Henry. portfolio, we don’t feel a compel-
Evolution posted group pro- ling need to grow our asset size,”
duction of 651,155oz in FY23, he said.
up marginally on the previous fi- “I think our organisation and our
nancial year, but AISC increased company could manage a couple
15% to $1,450/oz, with the com- more assets, but frankly we’ve
pany’s share price also plummet- had a challenging 12 months op-
ing to its lowest levels since 2016 erationally so just delivering pre-
during the past 12 months. dictable, reliable, consistent per-
Despite the torrid year, Evolu- formance would be good for us
tion still delivered a fully franked from a shareholder perspective.
2c dividend, its 21st consecutive That said, you never know when
payment to shareholders for a an opportunity is going to come
total of $1.128 million since 2013. up.
Speaking to media on the side- “One of the benefits and disad-
lines of Diggers & Dealers, Klein vantages we have when we think
denied gold had fallen out of fa- about some assets is that we have
vour with investors, especially a number of people who used to
with battery minerals such as work at Newcrest, who have had
lithium and rare earths dominat- experience with some of these
ing conversation at the annual assets before, and generally their
Kalgoorlie forum. Jake Klein recollection of the experience that
“I don’t think they have, they they had at Newcrest wasn’t that
just need to be reminded how important While the performance of its Red Lake positive on some of those assets.”
gold is as a commodities market,” Klein mine in Canada again fell short of expecta- Klein, who is also revered for leading
said. “I think there’s very good reasons to tions, Evolution still posted record produc- Sino Gold Mining prior to Evolution, said
believe why gold is going higher. tion under its ownership and is forecasting he was saddened to see the disintegra-
“The gold story is compelling. It’s a store a significant improvement from its most tion of Australia’s relationship with China
of value. And as people think about their maligned asset in FY24. since the two countries signed a free trade
portfolio, it is an alternative to the US dollar. Klein said despite the company’s chal- agreement back in 2015.
Everyone seems committed to the US dol- lenges at Red Lake since acquiring the for- “I’m very concerned, I spent the first part
lar up to now, but if you think about the de- mer Newmont Corp mine in late 2019, Evo- of my career building gold mines in China
coupling of the world, I think people will be lution had never been more determined to right through that golden period of globali-
looking for alternatives to just the US dollar. realise success from the asset. sation, it was a fantastic window to be part
And it will be gold.” “It has been a challenge, but nobody of,” he said.
Evolution is anticipating group production who has been to that asset has ever said to “The China and Australia relation-
will increase by about 18% to 770,000oz at me that what we are trying to achieve is not ship was amazingly strong and everyone
a reduced AISC of $1,370/oz in FY24 as possible,” he said. thought that integration was going to con-
several growth projects come into play and “Everyone comes back and says this is tinue, but that seems to have decoupled.
major setbacks are overcome at some of deliverable. We are absolutely committed And that’s worrying. Unfortunately, it’s
its operations. to making Red Lake a success. It has been good for gold.”
In June, the company approved the ex- more challenging than we expected, but it
pansion of its existing plant at Mungari from goes back to our fundamental premise that – Michael Washbourne
2 mtpa to 4.2 mtpa by way of a $250 million if the geology is right and there is a lot of
capital investment. gold there – and in Red Lake’s case, there
PAGE 34 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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De Grey the brightest forecast in Aussie gold
e Grey Mining Ltd managing director viders further confidence, Jardine said. Jardine expects the extensional drilling to
DGlenn Jardine posed, and answered, “The potential is we could’ve recorded continue feeding future mining scenarios.
perhaps the easiest question at all of Diggers larger production profile and reserves but we “We can see more things in terms of that
& Dealers – why is the company’s Hemi gold wanted to make sure it was done at sensible annual run rate and relatively early in the mine
project so attractive? operating costs,” he said. life too,” he said.
The answer was both simple and obvious The DFS will also reinforce the two-year There is also a focus on underground po-
– 500,000-600,000 ozpa of forecast produc- payback thanks to the lucrative nature of the tential, with the 20,000-25,000oz per vertical
tion, low capital intensity and lowest quartile Brolga starter pit. metre endowment suggesting up to 1 mozpa
cash costs, make Hemi the best Australian “It has just over 1 moz from the PFS at 1.7 could be won from underground positions.
gold find in a generation. g/t, with very low strip ratio and operating “Even at relatively small percentages of
Those numbers will be further ratified this costs in the mid-$800/oz, that generates $1.6 success you can see how underground pro-
month as the company releases a DFS for billion free cashflow at $2,400/oz,” Jardine duction could add successfully to the base
Hemi, less than four years after the deposit said. case,” Jardine said.
was found in a previously unloved region of With feasibility drilling complete, rigs have The one question investors are still unsure
the Pilbara. turned back to extensional and regional drill- about is whether De Grey would go it alone
Jardine said the DFS would deviate little ing with the first results from outside the Ea- in building the project, but Jardine used the
from the PFS and would be more about fur- gle and Diucon pit shells returning high-grade Diggers platform to reiterate the company’s
ther de-risking. hits in August. desire to fly solo.
The PFS considered total production of 6.4 “We haven’t got an ideology that we have
moz over 13.6 years of mine life. The DFS will to develop and produce from Hemi,” he said.
incorporate the expanded indicated resource “But we see a significant re-rating coming to
of 165.7mt @ 1.3 g/t for 6.87 moz gold. us on Hemi’s development alone and that is
Total indicated-inferred resources stand at the greatest return for shareholders relative
236.5mt @ 1.3 g/t for 9.05 moz gold while the to other options, and we’ve looked at many of
reserve is currently 103mt @ 1.5 g/t for 5.1 them.”
moz gold. – Dominic Piper
Some 95% of the DFS ounces would come
from reserve, giving the market and debt pro-
Glenn Jardine
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AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 35
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Capricorn eyes Karlawinda replica
fter two successful years of operations contemplating developing at Mount Gib-
Aat its Karlawinda gold mine, Capricorn son.”
Metals Ltd is hoping to achieve a similar Clark expects construction for Mount
outcome at its Mount Gibson project in the Gibson to begin in the second half of 2024
Murchison. with first production targeted for the second
The company acquired Mount Gibson in half of 2025.
July 2021 and has since built up a healthy The development of Mount Gibson is an-
reserve of 48.7mt @ 0.9 g/t for 1.45 moz. ticipated to be partly funded through cash
A PFS for the project was released last flow from the Karlawinda operations, which
April and forecast $1.5 billion of operating generated a $139 million increase in net
cash flow over a 10-year mine life with a cash in the 18 months to March 31.
pre-tax NPV of $828 million. Production Capricorn’s corporate lender Macquarie
is expected at 138,000 ozpa with develop- Bank has also provided the company with
ment costs of $260 million for a plant and a non-binding indicative term sheet for a
$79 million for pre-production mining. $200 million extension of its current facility
However, Capricorn executive chairman to fund Mount Gibson.
Mark Clark acknowledged investors’ wari- Clark also flagged the potential for Mt
ness over studies that don’t come to fruition. Gibson to grow organically.
“In terms of validating what we’ve done “There’s currently 1.25 moz of reserves,
so far in our studies at Mount Gibson and which is about a 10-year mine life, but Mark Clark
our credentials for taking that project for- there’s another 1 moz of resources that sit
ward, I think what we’ve done at Karlawinda primarily immediately down dip of the cur- “We haven’t hit anything of scale yet, but
really ticks all the boxes,” he told delegates rent reserve pit shell,” he said, we’ve had some really good results,” he
at Diggers & Dealers. Efforts are also being made towards said.
“What we’ve achieved there over the last growing the resource at Karlawinda, with “They’re refining our understanding and
3.5 years is really the template for the suc- the project area largely underexplored. pointing us towards hopefully finding some-
cessful development on the Mount Gibson Clark said exploration at Karlawinda in thing more meaningful to add to the mining
project.” the last 12 months has targeted near-mine operation in the coming quarters.”
“It’s a very similar scale to what we’re prospects.
– Yvette Ogilvie
Genesis begins Gwalia revival
aving won the battle for St Barbara and this is the fundamental reason why this Genesis was looking to achieve to simplify
HLtd’s Leonora assets, Genesis Miner- transaction makes lots of sense.” administration, but he was unable to com-
als Ltd will work to optimise its operations to Genesis is hoping to use its Admiral open ment on how it would occur.
achieve production of 300,000 ozpa. pit and Ulysses underground deposits to “What we do next will remain consistent
In June, Genesis completed its acquisi- fully utilise Leonora’s mill capacity. The with the M&A criteria that we articulated in
tion of the Gwalia underground mine, the company expects this to boost production our vision back in April 2022,” he said.
1.4 mtpa Leonora mill and the Tower Hill from 120,000oz to 200,000oz. “We will remain in gold, remain in Aus-
project for $370 million cash and 205 mil- Additionally, Genesis will utilise produc- tralia, remain focused on WA and remain
lion Genesis shares. tion from Tower Hill and the restart of Mt focused in Leonora. Everything will be de-
However, the company faced competi- Morgans to reach its targeted 300,000 signed around sticking to our vision.”
tion in its bid to secure the assets with Silver ozpa. – Yvette Ogilvie
Lake Resources Ltd also throwing its hat in In the coming months, the company is
the ring late to deny the smoothest of trans- due to launch a strategic review of Gwalia
actions. and provide a five-year outlook to the mar-
With the corporate tryst now behind ket in the first quarter of 2024.
the company, Genesis managing director “We have a capital-light production
Raleigh Finlayson said a key focus was growth with all of our infrastructure already
achieving full utilisation rates in the Leonora in place,” Finlayson said.
mill. “It’s not about the next five years, it’s
“The last time that mill was at full capacity about the journey for us and filling that gap
was back in 2015,” he told delegates at Dig- up to the ASX100 gold producers.”
ger & Dealers. Genesis also controls a 78.3% interest in
“That mill has been run fully manned, ful- Dacian Gold Ltd but has not been able to
ly costed, but without having the advantage sweep up the remaining interest.
of being able to fill that bit of infrastructure Finlayson noted this was still something
Raleigh Finlayson
PAGE 36 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Ramelius right on Cue
hile unlikely to match the speed of Acquired by Musgrave in late 2015 when combined resources of nearly 3 moz – as
Wits last acquisition, Ramelius Re- the gold price was just $1,200/oz, Cue sits its third processing hub.
sources Ltd remained on track to take about 40km north of the 2 mtpa Checkers A PFS on Rebecca-Roe is due for com-
control of in-demand gold explorer Mus- mill at Mount Magnet. pletion early next year.
grave Minerals Ltd at the time of print. Musgrave managing director Rob “Both projects have the same pastoral-
As of August 16, Ramelius held 37% of Waugh urged shareholders to accept the ists, the same Native Title groups and are
Musgrave as shareholder acceptance of Ramelius offer, which was extended to in the same shire, simplifying the combi-
the recommended 34c/share carrying an September 1 at the time of print, in the ab- nation of what I believe are the two best
implied total value of $201 million contin- sence of a superior proposal. resources in this part of the world,” Zeptner
ued to be slow. “Musgrave shareholders will benefit said.
Musgrave directors have maintained from this by being Ramelius sharehold- Ramelius is also preparing to bring its
shareholders should accept the Ramelius ers,” Waugh told delegates at Diggers & Symes project into the Edna May produc-
offer since it was first tabled on July 3. Dealers. tion profile during the first half of next year,
In contrast, Ramelius completed its ac- “We think this offer really de-risks the much sooner than originally planned.
quisition of Breaker Resources in just 48 project…the opportunity here is to get the “Given the Edna May mill is currently run-
days earlier this year. Cue ore processed at ning at around 90% capacity, we figured
Ramelius managing Mount Magnet more an earlier start at Symes to get that capac-
director Mark Zept- quickly and efficiently.” ity closer to 100% made a lot of sense,”
ner said his company Waugh also said Zeptner said. “And given that its soft oxide,
intended to bring the Musgrave’s Mount shallow, high margin material, we think this
high-grade ore from Magnet South pro- will make for strong cash flows for the year
Musgrave’s Cue gold ject, while early stage, or so that the Symes project is running.”
project into the Mount would also benefit Ramelius has guided production of
Magnet produc- from being part of the 250,000-275,000oz at an AISC of $1,550-
tion profile within 18 Ramelius portfolio. 1,750/oz for FY24, having churned out just
months of completing Musgrave has con- over 240,000oz from its Mount Magnet
the takeover. tinued to advance ex- and Edna May processing hubs last finan-
“This project is ploration and develop- cial year.
bread and butter ment work at Cue with “Importantly, we were able to add al-
Ramelius – a small recent grade control most $43 million to the coffers in the June
high-grade open drilling returning sev- quarter – surely a sign of positive things
pit and then under- eral impressive hits to come at Ramelius with our high-grade
ground, with modest Mark Zeptner such as 19m @ 112 g/t Penny mine hitting its straps, further sup-
capex and exception- gold from 27m (includ- porting our claims that our AISC, while cur-
ally fast payback periods,” Zeptner told ing 3m @ 676 g/t from 31m), 28m @ 65.8 rently pretty competitive, will reduce even
delegates at Diggers & Dealers. g/t gold from 21m (including 4m @ 410.6 further through FY24 and FY25,” Zeptner
“It has a high-grade, high core margin g/t from 34m) and 10m said.
that is open pittable and one that we be- @ 102.8 g/t from 25m “We are forecasting
lieve will provide a healthy return, assum- (including 1m @ 780.7 pretty modest capex
ing we bring it into the Mt Magnet profile g/t from 29m). non sustaining capex
within the next 18 months. “Some of those for FY24, just $55 mil-
“The tenement packages almost adjoin grades have been lion at the midpoint,
our own, both in the north with respect instrumental in the lower than we’ve seen
to the main Break of Day tenements, but economics and how it in previous years, add-
also Mount Magnet South where we’re in looks in this project,” ing further impetus to
porphyry-style rocks looking for similar Waugh said. the strong cash flows
deposits to our own Eridanus and Bartus “Understanding that we expect going for-
deposits.” high-grade compo- ward.
Ramelius moved on Musgrave after rival nent in these deposits “Everything else be-
producer Westgold Resources Ltd’s ear- will unlock significant ing equal, we are aim-
lier bid was swiftly rejected by the target. value moving forward.” ing for a cash balance
Musgrave found itself in play after pre- Zeptner noted his in excess of $400 mil-
senting a robust PFS for a standalone company’s acquisition lion by June 30 next
500,000 tpa plant at Cue back in April. of Breaker and its flag- Rob Waugh year. Who said gold
Capex was estimated at $121.3 million ship Roe project in the Eastern Goldfields miners don’t make money?”
to produce 337,000oz of gold from up to was the fastest transaction in its history.
six deposits – including Break of Day and Ramelius plans to develop Roe and the – Michael Washbourne
White Heat – over an initial five-year mine nearby Rebecca project it acquired via its
life. takeover of Apollo Consolidated in 2021 –
PAGE 38 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Karora nears production goal
arora Resources Inc’s Beta Hunt under- “We’ve got extensions all over the place,
Kground mine in Kambalda will be front there’s in-mine exploration upside here that
and centre as it works to achieve production I’ve never seen.”
of 200,000 ozpa by 2024. While gold is the current focus for Karora,
The TSX-listed company released its the company also mines nickel at Beta Hunt
growth plan in June 2021, seeking to dou- and has a second gold mining operation in
ble consolidated production through the ex- its Higginsville project.
pansion of Beta Hunt. Junk said there is a lot of exploration up-
As the 2024 deadline closes in, Karora side at Higginsville, but it hasn’t received
has steadily increased production, most re- much attention lately due to the focus on
cently achieving record quarterly output of Beta Hunt.
40,823oz in the second quarter of this year. “We’ve got nearly 2,000sq km of the
Year-to-date production to the end of the Norseman-Wiluna belt, which is one of the
second quarter totalled 80,650oz with the most productive and prospective green-
company on track to achieve its 2023 pro- stone belts in the world. We sit on the bot-
duction guidance of 145,000-160,000oz. tom end of the St Ives gold system there, so
Karora managing director Leigh Junk the opportunity for plus-1 moz discoveries
said not many people were aware of the is really big,” he said.
expansion activity happening at Beta Hunt. “Our exploration team is doing a really
“We’ve just completed a second decline Leigh Junk good job there. Two-thirds of our budget
that’ll enable us to really get that production keep this production rate up.” has been spent underground at Beta Hunt,
up,” he told delegates at Diggers & Dealers The Western Flanks zone is currently the so they’ve had limited funding to date, but
“All our trucks will go down one decline largest known shear system at Beta Hunt they’ve done a really good job working
and up the other. We also put in three new and the company is hoping to grow the these projects up and I’m looking forward
raise bores, we’ve done two out of three Beta Hunt resource through this zone. to giving that a big shake-up going forward.”
and we’ll finish the third one in this calendar “Western Flanks has a 1.5 moz orebody – Yvette Ogilvie
year, so that will help us going forward to and is growing,” Junk said.
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AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 39
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Northern Star drops
$235m on drilling
fter kicking off work on the long-awaited “We see a massive, multi-decade life
AKCGM mill expansion, Northern Star here in an underground and that’s Northern
Resources Ltd has announced plans to Star’s DNA and why we’re attracted to this.”
spend $235 million on drilling over the next Northern Star acquired 50% of KCGM in
12 months. January 2020. A year later, the company
Every single one of the company’s as- merged with JV partner Saracen Mineral
sets will benefit from the aggressive drilling Holdings to consolidate 100% ownership. It
strategy, with the gold miner hoping it will was the first time Kalgoorlie’s most iconic
drive the next leg of “value creation” for the mining operation became entirely held by a
business. single company.
One key area of attention will be the After gaining control over KCGM, North-
underground operations at the KCGM ern Star launched a five-year growth plan,
(Kalgoorlie Consolidated Gold Mines). De- which aims to achieve 2 mozpa of produc-
spite hosting an underground resource of tion across all of its gold producing assets two years. Steady-state production is tar-
8.7 moz gold, only 15% is in reserves. by FY26. geted for FY29.
Ahead of Diggers & Dealers, Northern Under this strategy, the company will The total mill expansion will cost $1.5 bil-
Star managing director Stuart Tonkin said mine 1.1 mozpa from KCGM, 600,000 ozpa lion, which will be fully funded by cash on
the company hoped the drilling would shore from Yandal and 300,000 ozpa from Pogo. hand and forecast cash flow.
up the long term future of the operation af- The centrepiece of the five-year strategy Northern Star chief operating officer Si-
fectionately known as the Super Pit. is the KCGM mill expansion which will in- mon Jessop said the expansion would el-
“We see absolutely a ‘Super Under- crease processing capacity from 13 mtpa evate KCGM to a top five global gold mine.
ground’, the Super Pit is just the top of it,” he to 27 mtpa. Construction is expected to “Beyond FY26, we really do see that the
said during a pre-Diggers site visit. take three years with a ramp-up period of investment phase is complete, and that’s
While the KCGM underground resource totals
8.7 moz, only 15% is currently classified as
reserves
PAGE 40 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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recovery by 1-2%...it’s just simply larger We expect that to be completed in the next
equipment,” he said. 12-18 months and Steve McClare heads
“It results in $7/t reduction in terms of that up as our chief technical officer and his
the operating cost, increased reliability, in- goal is to get the next renewable project,
creased uptime, less maintenance and ul- which will absolutely be a lot bigger for the
timately that will maximise the margin and Kalgoorlie region.”
the value opportunity at KCGM.” Despite a notable increase in battery
With an estimated gold price of $2,600/ metal representation at the usually gold-
oz, the feasibility study for the expansion in- centric Diggers & Dealers this year, Tonkin
dicated a payback of 4.6 years and post-tax does not believe this is to the detriment of
IRR of 19%. the precious metal.
Northern Star expects the expansion will “We see gold as a mainstay, it’s been
deliver a lower cost base and increased around for thousands of years,” he said.
free cash flow. Upon the achievement of
steady-state production, AISC at KCGM is
estimated at $1,425/oz.
“Everyone will agree KCGM is a world-
class asset, there is no doubt about that,
and we see that getting bigger as we go
Northern Star sold 1.56 moz of gold, forward,” Jessop said.
generating $4.1 billion in revenue and net “We are growing but the most important
cash of $362 million thing is profitable growth. You’ve seen us
turn off processing plants to maximise
because we’re building the KCGM mill the margin across our business, finish up
expansion over the next few years, but all mines, start new mines, we are absolutely
of this is underpinned by significant cash focused on profitable growth and with that
flows coming from the business,” he said being a responsible producer.”
during the company’s Diggers & Dealers Northern Star has committed to reduc-
presentation. ing its carbon footprint by 35% by 2030.
“Once you get past the KCGM mill ex- To support this, the company has pursued
pansion, we’ll see the cash flow generation renewables at its Jundee operations within Post the three-year construction phase,
of a material step change as the backstop the Yandal production centre. it will take another two years to ramp up
for the business and ultimately that leads to The gold miner executed a long-term production to the targeted 27 mtpa
superior returns.” power supply agreement with Zenith En-
Jessop said the expansion would involve ergy, which will incorporate 40MW of wind
a simplified plant design, from five mills to and solar generation. This is expected to
three. He also highlighted the company’s provide 56% of the mine site’s power based “We don’t see that it is off-flavour, but we
plans to remove three existing thickeners on recent modelling. also absolutely accept that the renewable
and replace them with a single 60m thick- Jessop said this marked the company’s space, the demand for battery minerals, fu-
ener, as well as seven big float cells. first major renewables project and hinted it ture-facing metals is going to be increasing.
“It’s a proven metallurgical process, we’re would not be the last. “The only impact on us is the supply of
just going to enhance it, improve it and get “For January alone, that will reduce the people or skills or infrastructure, but as far
a longer residence time and improve the carbon emissions of that operation by 50%. as the commodity, no, we don’t have any
concerns.”
At the time of print, the gold price was
Construction has started on the $1.5 billion KCGM mill expansion trading near all-time high levels at $2,959/
oz.
However, amid the increasing appetite
for battery minerals, some gold miners
have also entered the copper space. When
asked if Northern Star would consider cop-
per opportunities, Tonkin flagged it was a
possibility.
“We’re not adverse copper, if you look at
our refractory processing facilities, we have
the skill set to be able to find, mine and pro-
duce concentrates, it’s just not in the green-
stone belts that we operate in,” he said.
– Yvette Ogilvie
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 41
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Regis professes start of new era
ash margins at Regis Resources Ltd out of an intense investment phase and “For the last couple of years, we have
Care set to increase from FY25 as the into cash harvesting mode on its two WA been in an investment phase,” he said. “At
company closes its onerous hedge book. assets; Duketon and Tropicana. Tropicana, the Havana pit has been in a
Regis has been looking on enviously at In New South Wales, FID is expected major cutback stripping phase and will con-
peers in the West Australian gold sector to be taken this financial year on the tinue to be so for another 12-18 months. By
as they cashed in on record gold prices. McPhillamys gold project after receiving then, we will have broken the back of the
In contrast Regis, which has two operating environmental approval in March. cutback and total material movement and
assets in WA, was locked into hedging on Beyer said $350 million had been invest- costs will continue to drop off, taking it into
400,000oz gold production. ed in the last few years on the cutback of a real cash harvesting phase.
The hedge position of $1,571/oz is being the Havana pit at the 30/70 Tropicana JV “Similarly, at Duketon, we completed
filled at a rate of about 25,000oz a quar- and the development of underground and commercial start-up of the Garden Well
ter and cost Regis around $35 million in satellite pits at the 100%-owned Duketon South underground in the June quarter.”
lost gold sales revenue in the June quarter operation. At full flow, the two WA operations will
alone. keep Regis’ production profile above
The company plans to meet the re- 400,000 ozpa for the remainder of the
maining 120,000oz requirement over the decade but with the McPhillamys project
course of FY24, leaving it hedge free from closer than ever to development, Beyer
July next year. now has eyes on even greater production.
“It has been quite painful for us to watch “We see we have a pathway to get to
that [forward sold gold] go out, but we 500,000 ozpa from FY2027,” he said. “We
are into the last 120,000oz and that will see Duketon at 250,000 ozpa and Tropi-
be gone by the end of June at the latest,” cana continuing to run as it is. At McPhilla-
Regis managing director Jim Beyer said. mys, we will make an investment decision
“At current prices, that will mean an extra this year. Two years of construction would
$150-160 million into cash flows. That is make FY27 the first full year of production
the equivalent to a new mine coming on- [at 165-180,000 ozpa].”
stream, but without the risk of building it.”
The timing of the hedge closure is even – Dominic Piper
more beneficial as Regis is also heading
Jim Beyer
Paulsens primed to purr again
he operation which served as the foun- Cat managing director Gareth Solly played
Tdation for Northern Star Resources Ltd’s down any concerns over the modest three-
ascent to the top of the Australian gold sec- year mine life.
tor could be producing again as early as “This mine has never really had a long
next year. mine life anyway,” Solly said. “Traditionally,
Black Cat Syndicate Ltd has started re- there’s been 112,000oz in the production
viewing potential funding options to restart target. We’ve already got more resource
the Paulsens mine in the Pilbara. The com- [4.1mt @ 3.6 g/t gold for 471,000oz] than
pany has already appointed a general man- the average. We’ve increased that with
ager, a processing manager and an un- seven months of drilling by about 3.7 times.
derground mine manager and has started “If you look at the history of production Gareth Solly
fielding expressions of interest from several there, although it had a 112,000oz target,
former workers considering a return to the it produced consistently between 70,000-
operation. 80,000 ozpa and produced over 1 moz.” Black Cat’s strategy to become a 150,000-
A restart study published in July found The refurbishment process is expected 180,000 ozpa gold producer.
just $42.3 million is required to refurbish to take about six months, with mining likely Cash flow from Paulsens is earmarked
the existing processing facility at Paulsens, to start two months prior to commissioning. for the restart of the Coyote mine (capex
restart underground mining and develop an If Black Cat can secure the requisite debt of $80.2 million) in the Tanami before the
initial open pit at Belvedere. term sheets to fund the restart of Paulsens company looks to develop its foundational
Black Cat’s initial mine production target this year, Solly believes the company could asset Kal East (capex of $99 million) in the
for Paulsens is 136,000oz @ 4.2 g/t gold be pouring gold during the first half of 2024. Eastern Goldfields.
with an estimated AISC of $1,892/oz. Pay- “This is an approved mine site that just “We’ve got a low-risk strategy to sequen-
back is achieved within 14 months of first needs the mill to be refurbished and mining tially develop each of our projects and mini-
production. to recommence,” he said. mise dilution to shareholders,” Solly said.
Speaking at Diggers & Dealers, Black Restarting Paulsens is the first step in – Michael Washbourne
PAGE 42 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Davyhurst still standing
tepping up to address delegates at Dig- Creagh believes the real value driver for
Sgers & Dealers, Ora Banda Mining Ltd the company lies in uncovering a second
managing director Luke Creagh acknowl- underground and is confident both the Mis-
edged many were surprised to see the com- souri and Sand King orebodies have high
pany still standing. potential.
In the last year, Ora Banda has under- “It’s really early days but we’re pretty ex-
gone a string of changes under its “opera- cited because both of these and Riverina
tional reset plan” to try to keep its troubled South are presenting like Riverina did 12
Davyhurst gold project afloat. months ago and we’ve done a lot in there,”
“We embarked on an operational im- he said.
provement journey and that’s been a big Creagh joined Ora Banda in July last
effort by the team and I can’t understate year, having previously served as chief op- Luke Creagh
that it’s been a pretty big year – a pretty wild erating officer at leading gold miner North-
year,” Creagh said. ern Star Resources Ltd. He believes the
Ora Banda has directed its efforts into company is getting stronger each day and FY24 guidance is targeted to sell 67,000-
achieving process plant stability and FY24 will be an easier run than FY23. 73,000oz of gold at AISC costs of $2,200-
streamlining open pit operations. It also dis- “There’s still 100km of unexplored tene- $2,400/oz, marking a 40% improvement in
covered and approved the development of ments that once we unlock a second under- ounces and a 25% decrease in costs from
the Riverina underground mine. ground, we can really deploy our rigs on,” the previous year.
Riverina hosts a resource of 303,000oz he said. Over the next two years, Ora Banda is
gold, with a maiden reserve of 73,000oz @ “We’re certainly moving from the back hoping to lift its gold production from 50,000
4.3 g/t. The system is open in all directions foot to the front foot, and we’re really look- ozpa to more than 100,000 ozpa.
and further resource conversion is limited ing forward to what we can do in the next – Yvette Ogilvie
by drilling. 12 months.”
Fingall makes Westgold great again
estgold Resources Ltd used the Dig- “This was quite a complicated business tinue to invest in technology,” Bramwell said.
Wgers & Dealers platform to announce and FY23 was about resetting the narrative While the company’s three mining hubs
the start of development on its Great Fingall with the business streamlined and simpli- in the Murchison have a reputation for being
underground mine near Cue in Western Aus- fied,” Bramwell said. “We said to ourselves: mature districts, Bramwell believes the com-
tralia. ‘Let’s be far more diligent about how we de- pany has considerable exploration upside.
Great Fingall is one of the icons of the Mur- ploy our capital.’” “We have drilled more than 100km of
chison gold district, having produced 1 moz The immediate result has been 257,116oz core in the last 12 months and we will spend
gold historically but hasn’t been mined since at $1,999/oz AISC for FY23 and two succes- $25 million this year, much of it at Great Fin-
2020 when Westgold pulled out 54,000oz sive quarters of positive cash flow genera- gall,” he said. “Exploration success is key to
gold before leaving the pit floor 170m below tion, taking the company’s net cash position changing perceptions of the business and
surface. to $192 million with no debt. assets.”
The company will spend $30 million in “For FY24, the plan is just to keep it sim- On the investment in technology, Bram-
FY24 and FY25 on Great Fingall with first ple, continue to operate, continue to gener- well said Westgold would continue to see
ore production expected before December ate free cashflow, continue to drill and con- the benefits from both financial and sustain-
2024. Some 300,000 tpa will be delivered ability perspectives.
to the nearby Tuckabianna mill, with 45,000 “In the last 12 months we set about con-
ozpa expected to be produced as a result structing 84MW across our business,” he
from the 5 g/t orebody. said. “We are running on our first hybrid
Westgold managing director Wayne power station as we speak and by the end
Bramwell said it was an indication of the of the year all our operations will be running
company’s willingness to invest in new pro- on a combination of gas, solar and batteries.
jects. “Westgold was also the first gold miner in
“It is something I am really proud of,” he WA to purchase the CAT R2900XE hybrid
said. “This will be a fantastic long-life, low- loader. It is a fantastic machine and uses
cost, high-margin underground mine.” 32% less diesel, and can make these mines,
The decision on Great Fingall comes after in some sense, far more productive.”
an 18-month period of restructuring at West-
gold as the company strived to re-establish – Dominic Piper
its investment case with shareholders. Wayne Bramwell
PAGE 44 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Battery the talk of Diggers
but gold still critical
he essential role critical minerals play in
Tthe globe’s decarbonisation ambitions
took centre stage at this year’s Diggers &
Dealers Mining Forum across a range of
commodities spanning some 67 presenta-
tions.
The importance of critical minerals in the
transition to renewable energy has become
a familiar industry mantra.
At the 2021 forum, the Chamber of Miner-
als and Energy of Western Australia (CME)
noted that a fire had been lit under WA’s bat-
tery minerals sector.
Two years later, the fire is roaring.
But the conversation at this year’s Diggers
has evolved beyond the mere opportunity to
extract these minerals to utilise in the many
moving parts that make up the renewable
energy transition.
The importance critical minerals will have
on Australia’s sovereign economic and de-
carbonisation ambitions now headlines
many industry discussions.
But with that comes a sense of shared re-
sponsibility.
Alongside the buoyant mood across the CME WA chief executive Rebecca Tomkinson with Northern Star Resources managing
more than 2,600 delegates who converged director Stuart Tonkin at Diggers & Dealers
on Kalgoorlie-Boulder for the three-day min- With more than two-thirds of the world’s amid all the fanfare surrounding critical and
ing talkfest, the battery and critical mineral rare earths production coming from China, battery minerals at the conference, at least
producers seemed all too aware of what is operations such as Lynas have increasingly 35 presenter companies were gold focused.
at stake. strategic relevance. That seems fitting for a city that boldly de-
And that responsibility extends beyond But as Lynas chief executive Amanda clares at its airport that it is “Australia’s Gold
Australia’s borders. Lacaze warned during her presentation at Capital”.
With a rich natural endowment and strong the forum, to take full advantage of that, it is And while gold might not be the most
environmental and social governance cre- more important than ever that infrastructure talked about commodity of the moment com-
dentials, WA’s mining and resources sec- provided by the Federal Government to sup- pared to its critical minerals counterparts, its
tor should and must be a pivotal player in port those ambitions is ramped up. ongoing contribution to the state and nation-
forming strategic geo-political and economic Lacaze’s comments drew some parallels al coffers should not be underestimated.
partnerships in the shift to renewables. with the earlier observations made by lead- Recent analysis by Melbourne-based
One illustration of this is Perth-headquar- ing economist and Diggers’ keynote speaker Surbiton Associates estimates Australia
tered Lynas Rare Earths Ltd. Dr Linda Yueh. is “probably” the world’s largest producer
The commissioning of Lynas’s $575 mil- Dr Yueh observed in the conference’s of newly minted gold (in other words, gold
lion cracking and leaching plant on the west- opening presentation that half the world that has been mined in Australia rather than
ern fringe of Kalgoorlie-Boulder is imminent. might be considered “middle class” by 2030 bought from elsewhere and refined).
Feedstock for the plant comes from a col- and the growth of the consumer was set to As Evolution Mining Ltd chairman Jake
lapsed volcanic pipe which makes up the rise dramatically. Klein noted in his rally cry for the precious
mineralised deposit at the company’s Mt Meeting the demands of the increased metal at the forum, “don’t forget gold”.
Weld operations near Laverton. appetite for goods while developing new With the current gold price nearing record
After being processed at Kalgoorlie, it will products to power the renewable transition highs, long may this commodity – which has
then be shipped to Lynas’ plant in Kuantan, creates a competitive economic climate. been the bedrock of the Goldfields com-
Malaysia, for further refinement. Australia needs to take advantage of that. munity for more than a century – continue
In the interim, Lynas – which is already WA’s resources sector stands ready to to shine.
heavily backed by the Japanese Govern- do its part, but it needs the Federal Govern-
ment – is eyeing a heavy rare earths plant in ment to join it on the ride for the benefit of the Rebecca Tomkinson is chief executive of the
Texas that will see the construction of facility whole country. Chamber of Minerals and Energy WA
bankrolled by the US Defense Department. Separately, it was interesting to note that
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 45
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Strandline bewails share decline
espite completing seven shipments of The company has shipped about 65,000t “After doing some commissioning shut-
Dheavy mineral concentrate (HMC) from of HMC since the start of production late downs to rectify some deficiencies that
its Coburn minerals sands project, Stran- last year, generating sales revenue of $69 you’re undoubtedly going to encounter,
dline Resources Ltd is not feeling the love million. we’re back on track and I’m really hoping
from the market. to get some shipments out of that premium
Since the Gascoyne-based project en- zircon and into the European market,” he
tered production last November, Strand- said.
line’s share price has been on the downfall Coburn’s current mine life sits just under
with shares trading at 17c/share at the time 38 years with the project expected to gener-
of print. ate $4.4 billion in revenue during this time.
Strandline’s market cap sits around $250 Excluding the ramp-up phase, the project
million, a figure well below Coburn’s pre-tax is anticipated to deliver an average annual
NPV of $705 million. EBITDA of $104 million.
Managing director Luke Graham ac- “As we continue to ramp the project up, it
knowledged it was a tough market. establishes us as a multi-decade sustain-
“Clearly the market’s not taking into con- able business in critical minerals and an
sideration the cash flow generation poten- exciting platform for growth,” Graham said.
tial of this business, let alone our growth While production may have only just
projects,” he told delegates at Diggers & kicked off, Strandline is already weighing
Dealers. Luke Graham up expansion cases given the project’s long
On the eve of the conference, Strand- mine life.
line completed a $33.8 million institutional Unlike its peers, Strandline chose to bring The company has launched a scoping
placement, with a share purchase plan in a mineral separation plant (MSP) early to study that will seek to expand Coburn’s pro-
for circa $5 million to follow. The company the project. Construction was completed duction rate by up to 50% to over 320,000t.
plans to use the proceeds to support the on the MSP in March and commissioning Strandline hopes the expansion will allow
ramp-up at Coburn. is under way. it to leverage existing infrastructure to capi-
Strandline stated a nine-month ramp- Graham said the MSP was brought on talise on elevated mineral sands prices.
up in its feasibility study for Coburn, which early so the company could add value
aligns with the end of the September quar- through final products of zircon, ilmenite – Yvette Ogilvie
ter. and rutile.
Peel pursuing rapid development
PFS to move Peel Mining Ltd’s high- Okeby said preparations were well under Technical director Robert Tyson de-
A grade Mallee Bull and Wirlong cop- way to develop Mallee Bull and Wirlong as scribed Peel’s brownfield exploration op-
per resources south of Cobar, New South quickly as possible. portunities, including the extension of the
Wales, into production is due before the “We’ve got our long-lead items ad- Southern Nights and Wirlong projects, as
end of the year. vanced, including environmental studies, “standout” growth opportunities.
“We are proceeding to advance these permitting studies, heritage studies and “Southern Nights has some wonderfully
into production as two underground mines,” we’ve also sought early approval from the high-grade mineralisation within this sys-
Peel chair Mark Okeby said. regulators for an exploration decline at tem. There’s a couple of stellar hits there
“We have a clean, premium product Mallee Bull,” he said. – 18m @ 55% combined lead/zinc – that
which is of market interest, and we can “We’ve also undertaken ore-sorting test- speaks to the tenor that can exist within
deliver that from both Mallee Bull and Wir- work, which confirms that we can use ore- these systems,” Tyson said.
long.” sorting to improve the mining and trans- Peel’s 2023-24 exploration targets are
Peel has been awarded $500,000 from porting of ore to a central processing plant.” “in the Federation discovery corridor”, ac-
the NSW Critical Mineral and High-Tech Peel is not alone in the Cobar Basin; cording to Tyson, who also said rock chips
Metals Activation Fund to fund some of the Metals Acquisition Corp purchased the suggested elevated potential for multi-ele-
cost of the PFS. Cobar copper mine to the tune of US$775 ment mineralisation.
South Cobar hosts a 20mt resources million cash and $US100 million in shares “We’ve identified five targets and each of
which includes 10.6mt @ 1.85% copper at from Glencore plc in June. Aurelia Metals these has already got significant geochem
Mallee Bull and Wirlong, with 70% classi- Ltd also invested $108 million into the de- anomalism coupled with magnetic and in
fied as indicated. velopment of its Federation deposit which one case IP anomalism,” he said. “The
Last year’s drilling returned intercepts of hosts 5mt @ 9.2% zinc, 5.4% lead, 0.3% IP chargeability that’s co-incident with the
29.9m @ 6.52% copper, 110 g/t gold and copper, 0.9 g/t gold and 6 g/t silver. magnetic anomalism is reminiscent of the
0.15 g/t silver from 635.1m at Mallee and “This is a region familiar with mining. It Federation discovery.”
18.8m @ 3.35% copper and 13 g/t gold has considerable existing infrastructure
from 293m at Wirlong. and a mining workforce,” Okeby said. – Michael Cameron
PAGE 46 SEPTEMBER 2023 AUSTRALIA’S PAYDIRTAGE 46 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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Paydirt journalist Yvette Ogilvie inside the Mt Charlotte underground mine
at Northern Star Resources Ltd’s KCGM operations
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Boss enters Honeymoon period
s Boss Energy Ltd gears up for the executing a strategy to maximise share-
Arestart of the Honeymoon mine in holder value by preparing for the turn in the
South Australia, the company is hoping commodity cycle that we’re now seeing,”
to lock in contracts of varying tenures to Craib said.
capitalise on the future uranium price. Honeymoon is anticipated to produce
Activities at Honeymoon are currently 21.81 mlb of uranium over a mine life of 11
running on time and on budget with pro- years.
duction expected to start in the fourth Total project payback is 3.5 years while
quarter of this year. AISC comes in at $US25.62/lb.
The move towards a restart comes as Boss is fully funded to production, hav-
the uranium price continues to climb, hav- ing raised funding through equity markets
ing reached $US56/lb in August, up from in March 2022.
$US30/lb just 24 months previously. While the company prepares for the pro-
Boss managing director Duncan Craib duction restart, it hasn’t lost sight of grow-
said the company has been resisting en- ing its mine life. The current LOM plan at
tering contracts because it expected the Honeymoon is based on 50% of the exist-
price to rise. However, he is now keen to ing resource. Additionally, the company
lock something in before production be- released a string of drill results last month
gins. in which all 21 holes drilled intersected
“Our well-defined strategy is to enter into uranium mineralisation.
market-related contracts with varying ten- Duncan Craib Craib is hoping a successful at Honey-
ure to keep growing with the market and moon will be able to fund further growth
layering into that rising price,” he told del- Honeymoon previously operated be- for the company.
egates at Diggers & Dealers. tween 2011 and 2013 before production “With our first-mover advantage we can
“We firmly believe that there’s going was suspended due to low uranium prices. really lock in, generate cash and become
to be a pinch point within the next one Boss subsequently acquired the project a bigger player through organic explora-
to three years and that’s likely to give an in 2015 and released an enhanced feasi- tion and funding further acquisitions,” he
overreaction to the commodity price be- bility study in 2021, which reinforced the said.
cause there’s simply not enough supply or financial viability of a restart.
inventory to meet demand.” “Since acquiring the project, we’ve been – Yvette Ogilvie
Paladin locks in contracts
head of the restart of its Langer Hein- Paladin acquired Langer Heinrich in
Arich uranium mine in Namibia, Pala- 2002 and started production in 2007. Over
din Energy Ltd has secured a contract 10 years, the mine produced over 43 mlb
book accounting for 50% of production. of uranium before it was placed onto care-
Langer Heinrich is running on time and and-maintenance in 2018 amid low ura-
on budget with first commercial production nium prices.
scheduled for the first quarter of next year. With commissioning due to occur later
The company has secured six offtakes for this year, Langer Heinrich is set to produce
about 18 mlb of uranium. 17 mlb uranium over a 17-year mine life.
Paladin chief executive Ian Purdy said Purdy lauded the excellent local infra-
the company was comfortable with its structure capable of facilitating the pro-
level of contracting but would look to layer ject’s purported success.
in contracts to capture value from future “It’s set up for the export of uranium,
uranium prices. there’s a deep-water port, all the roads, Ian Purdy
“We’ve secured contracts with the larg- all the licensing, it’s a uranium-friendly ju- ing programme; we’ve only drilled 15% of
est players in the US, we’ve secured a risdiction and we’ve got really strong sup- the leases and we think there’s lots of op-
contract with one of the largest players in port,” he said. portunity there.
Europe and we’ve also got a contract with Once Langer Heinrich is up and run- “We’re targeting near-surface exten-
the largest player in China,” he told del- ning, Paladin plans to turn its attention to sions and we’re doing the groundwork to
egates at Diggers & Dealers. its Michelin project in Canada. map out the development pathway, so this
“We are in all the markets we want to be, Purdy said the company was planning to time next year when Langer Heinrich’s up
we are diversified and the credit worthi- update the prior concept study. and running, we’re ready to go on Michelin
ness and the quality of our counterparties “We’re looking at development path- with our preferred pathway forward.”
is best in market.” ways,” he said. “We’ve got a modest drill-
– Yvette Ogilvie
PAGE 48 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT
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AR3 eyes 1.4bt resource at Koppamurra
ustralian Rare Earths Ltd (AR3) is ppm TREO with 22.5% combined neo- resulted in 90% of the magnet rare earths
Adoing its best to level the rare earths dymium/praseodymium and 2.4% dyspro- being contained in 64% of the ore.
playing field – and non-executive chair sium. Mineralisation also extends north “The potential impacts on processing
Dudley Kingsnorth hopes the company’s and south of the Koppamurra resource. costs, and therefore the overall econom-
100mt resource at Koppamurra in South Assays in May included intercepts of 3m ics of the project and shareholder returns,
Australia is up to the task. @ 1,311 ppm TREO from 4m, with 21.7% are extremely substantial,” AR3 technical
“Koppamurra is a multi-generational combined neodymium/praseodymium and director Rick Pobjoy said in an ASX state-
province for the production of rare earths,” 2% dysprosium, and 2m @ 2,181 ppm ment.
Kingsnorth said. “In the next couple of TREO from 3m, with 19.5% combined During his Diggers & Dealers presenta-
months, there will be an update on that neodymium/praseodymium and 3.4% dys- tion, Kingsnorth underlined the necessity
resource. We have an exploration target, prosium. for his company to push into vertical inte-
based upon the drilling to date, of about AR3 signed a MOU with Canadian firm gration, while also suggesting Australian
300mt to 1.4bt.” Neo Performance Materials for develop- rare earths companies had work to do to
AR3’s latest drilling north of the Kop- ment of rare earth projects, offtake and enable further downstream value.
pamurra resource returned 3m @ 1,811 technical collaboration in 2022. Neo re- “What we aim to do is to be able to chal-
cently finished construction of a bonded lenge China, to be vertically integrated by
rare earth permanent magnet production collaborating with partners in the supply
facility in Estonia. chain,” Kingsnorth said.
“AR3 is delighted to partner with Neo, a “The Australian mining industry re-
world-leader in the rare earths industry, to ally has to work harder, [companies will
accelerate the development of our world- have to] talk to the original machinery and
class Koppamurra project,” Kingsnorth equipment manufacturers and make them
said. realise that the supply chain does begin
In March, AR3 produced its first mixed at a mine. There are some strong obliga-
rare earth carbonate from an 800kg Kop- tions that are going to be put in place very
pamurra bulk sample. Metallurgical tests soon, right through the supply chain, which
found a more cost-effective method of ex- includes the mine. We are going to have to
tracting rare earths and improving grade. demonstrate compliance with international
Separating the ore through beneficia- environmental standards.”
tion allowed larger particles to be sepa-
rated from the downstream process. This – Michael Cameron
Dudley Kingsnorth
ASM hunts for alloy customers
emand for high-tech rare earth alloys ASM recently signed an agreement with the complex process of mining and pro-
Dfrom Australian Strategic Materials Ltd’s Vietnam Rare Earth Company (VTRE) for cessing rare earths.
(ASM) Korean facility is growing by the day, 100t of rare earth oxides to be used as “The financials are strong; a summary
according to managing director Rowena feedstock at the company’s Korean facil- from an optimisation study that we did in
Smith, as the company prepares to build its ity. The company’s Dubbo facility is in pre- December of 2021 found that it throws out
flagship Dubbo project in New South Wales. production. terrific cash once it’s up and going, $425
ASM’s Korean plant, about 115km south In May 2023, ASM received a $6.5 mil- million per year with an IRR of 23.5%,” she
of Seoul, has installed capacity to produce lion dollar grant under Tranche 2 of the said.
600 tpa of light rare earth and specialist Australian Government’s Critical Minerals Neodymium and praseodymium from
alloys. Smith said it could be ramped up Development Programme to help fund non- ASM’s Korean plant have been sold to Ko-
to 3,600 tpa should customer demand in- process infrastructure for the Dubbo pro- rean magnet producer NS World, while No-
crease. ject’s processing plant. veon Magnetics has bought 100t of ASM’s
“We’re in a number of other product vali- Profits from its Korean plant are also ex- high-tech iron boron alloy.
dation processes at the moment, with glob- pected to be spent on development of the The company signed a three-way MOU
al customers, in the United States, in Korea, Dubbo processing facility and mine, which with VTRE and Blackstone Minerals Ltd
in Japan and in Europe,” Smith said. is forecast to be finished 2H 2026. in July to cooperate on an integrated rare
“We are metalising the light rare earths “We feel this project has got the right tim- earths value chain.
currently and we are making the specialist ing at this point in what the world is looking “It is not often that you find a potential
alloys that go into high performance, per- for,” Smith said. partnership in which the strategic advan-
manent magnets. First production and revenue from Dubbo tages and core competencies of each party
“We’re building an alternative supply is expected in 2027. Australian government are so complimentary,” Blackstone’s man-
chain. We’re already in production of high- statutory body ANSTO helped ASM to aging director Scott Williamson said.
tech metals and building our customer develop a flowsheet for the project, which – Michael Cameron
base.” Smith said was essential to understanding
AUSTRALIA’S PAYDIRT SEPTEMBER 2023 PAGE 49
NEW SOUTH WALES
New South Wales turns
onto critical minerals
super highway
here will be bumps along the way, but the
T New South Wales metals sector appears on
the road headed for a new era of exploration and
development, driven by critical minerals and a
more functional approvals system.
Broken Hill, one of Australia’s most iconic
mining towns, could be set for rejuvenation
thanks to the dawn of the critical minerals era
espite hosting some of the coun- Labor State Government reiterating its has had a reputation for being a complex
Dtry’s largest mines and deposits, predecessor’s Critical Minerals and High- jurisdiction but government has worked
NSW suffers from a negative perception Tech Metals Strategy, the mood within the hard to improve tenure and assessment
among vast swathes of the Australian re- State’s mining industry is much changed. processes and I think the approval of the
sources industry with a reputation for an “In the last few years, the Government McPhillamys and Bowdens projects is
unwieldly bureaucracy, hostile land-users has been truly open for business and has proof of that.”
in the regions and anti-mining sentiment offered the industry strong support through Labor’s Minister for Natural Resources
in the cities. its Critical Minerals and High-Tech Met- Courtney Houssos is the first woman in
However, with two long-stalled projects als Strategy, its Future of Mining Strategy NSW history to hold the portfolio and it
receiving the green light from the Inde- and several other policies,” Association of feels like she is ready to bring a fresh ap-
pendent Planning Commission (IPC) of Mining & Exploration Companies NSW proach to her Government’s interaction
NSW this year and the recently elected director Lucy McLean told Paydirt. “NSW with the sector.
PAGE 50 SEPTEMBER 2023 AUSTRALIA’S PAYDIRT