January - March 2020 Volume 1. Issue 138
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Precious
performance
Bellevue, Evolution take out awards
NEWGENGOLD REVIEW
ISSN 1324-4396
01
9 771324 439005
GOLD MINING JOURNAL (ISSN 1324-4396)
Published by Paydirt Media Pty Ltd.
A.C.N. 063 985 133
EDITORIAL
Editor:
Dominic Piper
Deputy editor:
Mark Andrews
Journalist:
Michael Washbourne
Art director:
Nick Brown
Contributors:
Keith Goode,
Brendan Ryan (Johannesburg) nEWs 5
Australia’s newest gold mine was officially opened in December, with
ADvERTIsIng more than 100 people invited to witness the Gruyere JV between Gold
Advertising manager: Fields and Gold Road in full flow. Michael Washbourne was among the
Richa Fuller attendees and reports on how the mine is on track to meet production
guidance
Subscriptions:
Kate Blanchard
COvER 18
PAyDIRT MEDIA GMJ’s Miner and Explorer of the Year award winners were a couple of
Executive chairman:
usual suspects – Evolution Mining and Bellevue Gold. While there were
Bill Repard
a number of contenders in each category, after much debate it became
Finance manager: clear why both companies prevailed as worthy winners. Dominic Piper
Giovanny Jefferson and Mark Andrews report
Accounts/administration:
Lana Luketic nEWgEngOLD COnfEREnCE 34
About 400 gold bugs descended on the Pan Pacific Hotel in Perth for the
COnfEREnCEs biennial NewGenGold Conference in November. From to start to finish
Melita Fogarty the plenary was jam-packed as the case histories of the world’s best
Namukale Nakazwe gold deposits were presented in great detail. Among the highlights were
Christine Oelschlaeger insightful keynotes from MinEx’s Richard Schodde, China and Russia,
plus the closing panel discussion
Mitchelle Matambo
PRE-PREss AnD PRInTIng:
Vanguard Press
26 John St, Northbridge WA 6003
Member of: Cover image: Winners are grinners: Evolution executive chairman
Jake Klein (right) and Bellevue managing director Steve Parsons
COnTACT Us
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EDITORIAL
Avoiding repeat offences
I s the global gold sector about to repeat mistakes of the past?
It is a question increasingly relevant as we head into 2020 after a year dominated
by headline M&A deals. The past 18 months have seen all the industry majors make
company-redefining corporate plays and the tier of Australian companies below them
launch their own growth strategies.
It has been exciting stuff in a market which had witnessed five years of downsizing
and restructuring. However, could the recent burst of corporate activity be sowing the
seeds for the sector’s next downfall?
Barrick Gold Corp and Newmont Goldcorp’s headline takeovers were designed to
counter the shrinking of specialist gold funds and place them back into the arena
of generalist investors. It is accepted that if generalist funds do return to gold equity
investment, it will only be a single stock, and that usually means the biggest company in the sector. So, Barrick and
Newmont are picking up the old “big is beautiful” mantra to set themselves apart from rivals and make themselves the stock
of choice among the generalist investors.
Remember, it was this strategy – buying ounces and increasing production no matter the cost – which landed the gold
majors in trouble when the gold price dropped in 2013.
On that occasion, generalist investors quickly abandoned the sector, leading to the mine closures and asset sales of the last
six years. The Australian mid-tier companies took advantage of that restructuring, first in Australia and now in North America.
Newcrest Mining Ltd, Northern Star Resources Ltd, Evolution Mining Ltd and St Barbara Ltd have all picked up assets in
North America in the last 18 months, using their relatively high-performing scrip to acquire assets in the region.
They have been rightly lauded for their ambitions, but the jury is still out on exactly how successful the purchases have
been. The problem is, these North American assets have their complications and are generally marginal (hence why
they were deemed surplus to requirements). Northern Star, Evolution and St Barbara did a fantastic job of turning around
operating performance at mines in their own backyard but there will inevitably be cultural differences in North America which
mean the turnaround may not be so swift.
Northern Star is already finding the transfer to North American miner tougher than anticipated at Pogo in Alaska. This is
not to say the acquisition can be deemed a failure, but the company hasn’t turned Pogo’s performance around in quite the
same way it did Barrick’s Eastern Goldfields assets.
Evolution has acquired a mine which posted AISC of $US1,600/oz in 2019 and even St Barbara is taking heat for its
acquisition of the low-cost Atlantic gold operations due to the inflated price it paid; $C722 million.
Most intriguing of the recent M&A has been Saracen Mineral Holdings Ltd’s purchase of Barrick’s 50% share of the Super
Pit. The deal has been widely lauded but there are still plenty of unanswered questions. For now, Saracen is the non-
managing partner in the 50/50 JV with Newmont, but it must surely have ambitions to take the entire asset on. That would
be a huge jump for what, by global standards, is still a junior company.
Gold Fields Ltd has been one of the few large gold companies to shy away from headline acquisitions in 2018, its last major
purchase being its 50% interest in the Gruyere development project in Western Australia. I recently asked chief executive
Nick Holland about the opportunities being generated by the mega-mergers, but he was adamant there was little of interest
for his company.
“It is apparent the best assets won’t be put on the block,” Holland said. “Those assets for sale will be the most undercapitalised
with looming closure cost obligations.”
In the meantime, the exploration sector continues to wither on the vine. As the closing forum discussion at NewGenGold
suggested, the exploration funding model is all but broken. If the mid-tiers are spending money on headline acquisitions,
and then even more money on getting those acquisitions in order, it means less money for exploration and less money for
JVs with juniors.
If this happens, the gold sector is in danger of committing the same mistakes it did last time around, leaving itself with a
group of bloated companies and an understocked development pipeline.
Dominic Piper
[email protected] @Paydirt_Media @paydirtmedia @PaydirtMediaAustralia
Page 4
NEWS
Gold Road chair Cheryl Carolus and her Gold Road counterpart Tim
Netscher mark the opening of the Gruyere mine, 200km east of Laverton
Gruyere on the open road
by Michael Washbourne
ustralia’s most significant gold discovery of the past nearly five-decade long career.
Adecade is now officially an operating mine. “I have worked in the mining industry around the world for the
Gruyere was officially opened on December 3, a little more past 45 years and the most exciting thing about this industry
than six years after Gold Road Resources Ltd’s persistent for me is that we get to build big things in remote places,
team of geologists was finally rewarded for almost a decade of thereby making a positive contribution to the community at
exploration efforts in an untapped region about 200km east of large,” Netscher said.
Laverton, Western Australia. “I have been privileged to be associated with delivering many
Gold Road founder Russell Davis and his long-time associate new mining projects around the world, but none has been as
Ziggy Lubieniecki, who is credited with the Gruyere discovery exciting or as impressive than this new giant mining complex
alongside Justin Osborne and Kyle Prentice, were among in this very remote location.
more than 100 guests at the official opening of a mine which is “This is one of the largest gold mines built and commissioned
forecast to produce 300,000 ozpa for at least the next 12 years. worldwide over the past decade and you don’t get much more
Former Gold Fields Ltd Australasia vice-president Richard remote than this.”
Weston, who brokered the landmark JV that underpinned First gold from Gruyere was poured on June 30 and the
Gruyere’s development, was also in the audience as WA mine was reportedly on track to churn out the guided 75,000-
Minister of Mines and Petroleum, Hon Bill Johnston MLA, who 100,000oz from its first six months of production.
unveiled the customary plaque which will be placed outside
Ramp-up to steady-state production is progressing ahead of
the mine’s administrative offices.
schedule, according to Netscher, who added the project was
There was a clear sense of pride among all Gold Road and delivered on both time and budget.
Gold Fields personnel in seeing a shiny, new mining operation
“In today’s environment, successful delivery against these
emerge from what Gold Road chairman Tim Netscher
three metrics [on time, on budget, fit for purpose] is an amazing
described as “a dusty, semi-desert landscape”.
achievement,” he said.
For Netscher, who joined Gold Road in 2014 shortly after a
“However, the part that I am most proud of is that the project
maiden resource of 3.84 moz was announced for Gruyere, the
has been sustainably delivered. Safety performance has been
mine opening marked one of the most special moments of his
Page 5
NEWS
outstanding. The project required over three million manhours
to be worked and was completed without a single disabling
injury: that’s almost unheard-of in a global context.”
Aside from the breakthrough discovery of the orebody in
October 2013, perhaps the most significant moment in
Gruyere’s history occurred just over three years later when
South African-based miner Gold Fields committed to investing
$350 million to acquire 50% of the project.
The JV agreement received widespread praise, culminating
Gold Road managing director Duncan Gibbs and Gold Fields
in Gold Road and Gold Fields being recognised as Dealer
Australasia vice-president Stuart Matthews
of the Year at the 2017 Diggers & Dealers Mining Forum in
Kalgoorlie. Owners of the land which hosts Gruyere recognised above all SPEAKER HIGHLIGHTS
“We won Dealer of the others, as well as the diverse employment opportunities the
Year not only because it operation was embracing.
was a good deal, but most
“A particular passion of mine is driving diversity in all respects
importantly because it and globally this is recognised more and more as making a
allowed Gold Road, a then-
huge difference in business,” she said.
junior mining company, to be
“It’s not just about doing the right thing, because doing the right
properly funded to thoroughly
thing is always the best thing for business, and that’s what we
do all the work required Bert Witkamp
stand for at Gold Fields.
for delivering a successful Operating Agent
large-scale project – such “In this spirit of encouraging diversity as a key value and - Hybrid Electric Vehicle Technology
Collaboration Programme
as proper project design principle, I wish to particularly urge women to consider Gruyere International Energy Association
and construction, all the and Gold Fields globally for a future career and to build their
associated grade control careers here because you can grow. I’m living proof of that.”
drilling, all the metallurgical Opening Gruyere was also a proud moment for Minister
test work, etc – without Johnston given the discovery hole was co-funded by WA
Carolus and WA Minster of Mines and the need to undertake a Government’s Exploration Incentive Scheme (EIS).
Petroleum Hon Bill Johnston MLA with dilutionary capital raising,”
a Gruyere gold bar Netscher said. “We spent half that money on publicly available geophysical
information and that was just as important as the co-funded
“In addition, a key feature drilling programme,” he said. “What that does is allows
of the Gold Fields partnership is that it is based on mutual entrepreneurs in WA to have a look at what might be out there
respect, which has allowed us to very effectively achieve one by just using that publicly available geophysical information
plus one equals three. I see so many JV relationships and too and that’s what makes WA a global leader for exploration
often you have one plus one equals less than two.” activity.”
South Africa-based Gold Fields chair Cheryl Carolus
said she was proud to welcome Gruyere to the
company’s global operating portfolio, which includes Key learning objectives:
three other mines in WA, two in Ghana and one in
l
l Status of EV sales and development 2009-2019 Electric vehicles: environment and climate change
South Africa.
l Case studies of countries and EU What is driving the transition to zero emission road transport?
l
“When Gold Fields makes these kinds of investments,
l
l How fast can the transition to electric drive go? What are critical raw materials for EV growth?
a priority is of course to reward our shareholders for
the capital they entrust to us with the expectation of
a reasonable return,” she said.
“There is no doubt that with Gruyere they will get
their money back, and plus some.”
More than 250 employees and contractors are
currently based on site after a construction period
which created jobs for 700 other workers. At
present, 23 Yilka people from nearby indigenous
communities are working at Gruyere and both Gold
Road and Gold Fields hope to see that number
increase over the coming years.
Carolus spoke of her pride in seeing the Traditional Carolus and Johnston cut the Gruyere gold bar cake
To present, exhibit or attend as a delegate please contact Namukale Nakazwe
Page 6 on (+61) 8 9321 0355 or email [email protected]
2020 $A990 inc. GST
Early Bird rate
BATTERY available until
th
24 January
2020
MINERALS
4 - 5 March – Pan Pacific Perth
SPEAKER HIGHLIGHTS
Bert Witkamp John Prineas Dan Lougher Andrew Radonjic
Operating Agent Executive Chairman Managing Director & CEO Managing Director
- Hybrid Electric Vehicle Technology St George Mining Ltd Western Areas Ltd Venture Minerals Ltd
Collaboration Programme
International Energy Association
Scott Williamson Allan Mulligan Dr Xiao Lin
Managing Director Director Associate Professor
Blackstone Minerals Ltd Walkabout Resources Ltd Chinese Academy of Science
Announcing a half-day pre-conference workshop:
Electromobility Masterclass hosted by Bert Witkamp, Valuad
Key learning objectives:
Status of EV sales and development 2009-2019 Electric vehicles: environment and climate change
l l
Case studies of countries and EU What is driving the transition to zero emission road transport?
l l
How fast can the transition to electric drive go? What are critical raw materials for EV growth?
l l
www.batterymineralsconference.com
To present, exhibit or attend as a delegate please contact Namukale Nakazwe
on (+61) 8 9321 0355 or email [email protected]
NEWS
Consistency the
key at Co-O
by Michael Washbourne
hen David McGowan joined Medusa Mining Ltd almost
Wthree years ago, the company was scratching around for
infrastructure to ensure its Co-O operations in the Philippines
would continue producing for another quarter.
Fast-forward to today and Medusa is now making arrangements
for several years down the track, completing a remarkable
turnaround which has caught the attention of institutional
investors from Australia, Europe and Asia.
“A couple of years ago we embarked on a path to gain
consistency and gain control of the operation and the last 12
months we have demonstrated that,” McGowan told GMJ.
Medusa exceeded its production guidance in FY2019
“I suppose the pleasing thing is all of this was reasonably
predictable the whole way through. We followed our plan and
it came to fruition. The difference between the plan nowadays Consistent production from the Co-O mine over the past
and what it was 2-3 years ago is that it’s a lot more long-term and year has been underpinned by the E15 service shaft being in
we have a much better idea of how to best use our resources to operation for all of that period. Ore production is up almost 15%
gain the best from our mineral resource. since E15 was commissioned in November 2018.
“We’re putting infrastructure in now for production in a couple With E15 now transporting mineworkers between levels with
of years’ time, whereas 2-3 years ago we were running hard far greater ease and comfort, the outdated L8 shaft is used
trying to put in infrastructure to maintain what we already had. exclusively to hoist ore and waste from the underground.
Now we’re actually able to look forward, we’re able to see “It has also given us some benefits which have led to greater
what we need in a couple of years’ time and start putting that conversations between our people during the day and improving
infrastructure in.” our planning significantly,” McGowan said.
FY2019 was Medusa’s best reporting year for some time with “Previously, people would go down the L8 shaft, they would
the 103,307oz produced from Co-O exceeding the upper end go down to a level and they were basically stuck on that level
of guidance. Costs were also improved and a statuary after- until the end of the shift. Now one of the things we’re seeing
tax profit of $US36.5 million was posted just 12 months after is people come up at crib time and have conversations with
recording a loss of $US55.6 million. their peers about ‘what are you doing on the level above’,
Medusa kicked off FY2020 on the best possible note by churning ‘can I borrow some equipment’, ‘can I do this’, ‘have you seen
out 27,515oz for the September quarter, putting the company on this on this level’, all those sorts of things, and they’re actually
course to meet its stated guidance of 95,000-105,000oz at an tweaking plans by having those conversations. Without those
AISC of $US1,025-1,125/oz. conversations, some of the improvements probably wouldn’t be
there.”
McGowan, who was formally elevated to the chief executive’s
chair in March 2019, said maintaining consistent production Medusa recently opted out of an earn-in agreement over two
from quarter to quarter was something all Medusa shareholders gold projects in Central Queensland which failed to deliver
should expect from the years to come. the exploration results it had been hoping for. However, the
company remains on the lookout for other assets in Australia
“To be able to say you’re consistent you have to do it over a
and the broader Asia-Pacific region.
number of quarters, you can’t just hit the mark on one quarter
and say you’re now consistent,” he said. Exploration will continue in the Philippines with Medusa
confident the Royal Crowne Vein project, only 3km from the
“Historically the company had a habit of shooting itself in the
Co-O mill, will soon become a satellite operation and generate
foot; having a really good year followed by a really bad year.
extra cash for the business.
The previous year was a good year, this year has been a better
year and it should be expected that this is what we’re going to Medusa also recently received a Presidential Award for Safety
continue doing moving forward.” and Environment for its Co-O processing plant.
Page 8
The streamers are coming
by Dominic Piper
he direction of most gold deal-flow in 2019 was from
TAustralia to North America but there is one corner of the
sector angling for a reversal of that trend this year.
The North American streaming and royalty sector has
outperformed its mining peers over the last decade with
companies such as Wheaton Precious Metals Inc and
Sandstorm Gold Ltd posting strong profits and growth in
recent years.
While royalty agreements date back throughout mining’s
financing history, streaming is a relatively new form of
funding. Emerging in the mid-1990s, it is based on the
concept of crystallising the inherent value of often ignored
by-product production. Streaming companies will purchase
a percentage of the by-product metals produced by a mine
for an upfront payment plus additional payments when the
metal is delivered.
According to Randy Smallwood, president of Wheaton,
the world’s largest precious metals streaming group, the
structure allows for closer partnerships than traditional
royalty contracts.
Randy Smallwood
“Other than the royalty payments, there is generally little
relationship between the mine operator and the royalty
company. The mine operator receives an upfront payment cash flow when mining companies are struggling to access
in return for a royalty on all expected future production,” capital.”
Smallwood told GMJ. “Typically, the percentage is fixed in
The poor performance of mining-related junior stocks in the
the terms of the contract and does not change. Streaming is
last five years has meant there is little appetite for investment
an ongoing long-term relationship that includes opportunities
in North America. This has led juniors and mid-tier miners
to adjust terms if necessary, as circumstances change over
to seek out alternative forms of project financing; an ideal
the life of a mine.
opportunity for companies like Wheaton and Sandstorm.
“Streaming agreements can also provide the mining
“The bulk of mining finance has traditionally come from
company with more funds upfront compared to a royalty
the specialist funds which invest specifically in mining and
agreement because a royalty valuation is generally reduced
particularly gold,” Ward explained. “In Canada, most of
by higher levels of taxation.”
these specialist funds have shut or are a shadow of their
It has been highly successful with the company now valued former selves. They have experienced seven straight years
at $US12.3 billion. In the September quarter, Wheaton of redemptions and have no capital available to invest. They
produced 184,868oz gold equivalent at operating costs of are defending a core group of companies and are now even
$US424/oz, allowing it to post $US140 million in operating selling core things as well as the redemptions continue. So,
cash flow and $US70 million in net earnings for the period. if a junior comes along looking for project capital, they have
Rival Sandstorm has also enjoyed a stellar year. The no room.”
company was expected to post record cash flow for 2019 Ward said the structural change presented more opportunities
and is forecasting free cash flow of $US80 million in 2020. for his company.
Sandstorm chief executive Nolan Ward told GMJ market “The ultimate funder of these funds are the big pension and
dynamics were creating favourable conditions for streamers endowment funds, sovereign wealth funds, etc. who now
and royalty companies. prefer more passive forms of investment which don’t track
“It has been a good year for us,” he said. “We have got smaller mining companies. It means we are getting junior
a few deals done this year and we are pleased with our companies coming to us more frequently knowing that we
performance. It is a perfect storm to be recording record are willing to invest based on our own valuation.”
Page 9
NEWS
To date, much of the streamers’ activity suspicious that we were doing too well
has been restricted to North and South but they don’t acknowledge the risk we
American interests but with even take on. We’ve got 19 contracts delivering
development stories now drying up in the metal but only one is doing so ahead of
Northern Hemisphere, the companies are schedule. The others are either late or
eager to test new markets, particularly the significantly behind the production levels
buoyant Australian gold sector. they should be hitting. So, when you are
“Australia has had a healthy market for in an industry that has a reputation of
providing financial support and a robust overpromising and underdelivering you
equity market for development, so we have to ensure your investment. We
haven’t seen the level of activity we make those investments upfront and if it
have in North America,” Smallwood said. is late, we suffer. There is no obligation to
“We’ve come close on four transactions. pay into the stream if it is not operating.
The limiting factor for us is that there is All the risk is ours.”
plenty of access to risk capital.” However, with the North American
Nolan Ward
Smallwood admitted breaking into the resources sector continuing to struggle in
Australian market was proving difficult. the face of high-performing alternatives, The premier Africa-Australia mining forum
Royalty agreements are often viewed as an inconvenient Wheaton and Sandstorm are being forced further afield.
historical overhang in Australia, where new owners are “For us to find opportunities we need companies investing
lumbered with net smelter royalties to no benefit. Sandstorm’s into growth because our business is supplying capital,”
engagement with the Australian sector has also proven far Smallwood said. “The problem has been that outside of gold
from fruitful. commodity pricing is not going all that well so there are not a
“We have probably talked to 20 companies in Australia lot of investments into new developments.
without closing a deal, but we do have some existing royalties “This means we have gone further upstream and created
we bought,” Ward said. “We find Australian companies are an early deposit model. A lot of companies are struggling
more reluctant to participate in streams or royalties. In my to even get to the BFS stage which means they only
experience, Australian management teams have been less have access to equity markets. Under this new model, if
reluctant to issue equity, regardless of price, than their North a company has a scoping study or a PEA, we are willing
American peers where management is wary of dilution and to take a look. Obviously, the return is greater because we
is therefore prepared to consider alternatives.” have taken a gamble on some of the cash.”
Smallwood believes Australian miners and developers Smallwood said the early deposit structure was available
should reconsider streaming and royalties as an alternative to companies with assets in Australia and Africa as well as
funding source, much as their North American peers did Wheaton’s traditional Americas domain.
more than a decade ago. “There has been a lot of interest, the problem is there are
“For the first six or seven years of our existence, the simplicity not a lot of good projects around,” he said. “If it is a standout
was confusing to people,” Smallwood explained. “They were project, they are going to have access to equity capital.
Instead, we are looking for the hidden gems. We have done
four deals but have looked at more than 100 projects.”
Sandstorm has also spread its global reach and Ward said
the company was comfortable taking on political risk.
“We have found investors place too much emphasis on
political risk and underemphasise technical risk,” he said.
“Technical problems are 10 times more likely to cause a
mine to close than an expropriation event. You can often ride
out the political risk and I would rather take that political risk
than technical risk.”
Ward sees further opportunities opening up in the base
metals space in 2020 and beyond.
“If we head into a global recession there is going to be
tremendous opportunity in the base metals space,” he said.
“We are already seeing a squeeze on the copper producers
and if prices fall further, they will increasingly look for ways
to realise value from their by-products.”
Construction on gold projects is often frustrated by a lack of access
to traditional sources of project finance
www.africadownunderconference.com
Page 10
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Page 11
NEWS
The revival of the Youanmi district has been led by Spectrum at Penny West
Penny drops for Aldoro
by Mark Andrews
ldoro Resources Ltd has arrived at the Youanmi district the contiguous licence right next door touching it [Penny
Aparty at the right time. West] with a 2.5km strike extension with the same structure,”
“I think anything prospective is gone. You can clearly see Marriott said.
where the structure is running north/south; Spectrum Metals “We have been doing work over the last couple of months
Ltd is there, then there’s us to the south of them and the Rox based on a high-resolution ground mag survey to get a better
Resources [Ltd]/Venus Metals [Corp] JV. There’s a few guys structural and geological interpretation of the area because it
to have picked up some ground off the Spectrum hype to the suffers from about 10m of cover and thick bush.”
east and west with tenements covering 100% granite terrain Marriott said the known geology has been lacking and
with no structure, no continuation, pretty barren, so we think now that the company had a pretty good handle on the
we have the key piece if you like,” Aldoro managing director interpretation of the area it was keen to start drilling newly
Caedmon Marriott told GMJ. identified targets.
GMJ Explorer of the Year nominee Spectrum (see page Spectrum had completed about 30,000m of RC and diamond
30) has reignited the historic Youanmi mining district with drilling before releasing its maiden resource, having
the high-grade Penny West gold project where a maiden benefitted from previous mining and historical drilling.
resource of 355,000oz @ 13.8 g/t gold was announced in
However, Spectrum did start from a low base in 2019 and
October, just nine months after it acquired the project.
has quickly become a crowd favourite.
Aldoro hopes to replicate Spectrum’s success in the next 12
“They made a fantastic discovery under Penny North, under
months.
one random drill hole. We have some similar targets – 3-4
The company received a positive reaction in the market random drill holes if you like – showing good indications for
when it was announced that it would acquire 100% of Altilium us to go and test underneath,” Marriott said.
Metals Ltd, owner of Penny South, Narndee, Unaly Hill South
“Before we do that, we are going to do this aircore
and Windimurra.
programme, which will test the entire strike length because
Altilium’s assets, combined with Aldoro’s prospects in the the actual corridor we see is under drilled.”
Cathedrals Belt, have created a West Australian gold and
Aldoro will target the granodiorite unit within the mag along
nickel focused entity ready for high tide in both commodities.
with shallow surface drilling that was previously done in the
Marriott and Rhod Grivas were managing director and wrong place.
chairman of Altilium, respectively, and are now part of
“We can then test depth beneath that. We are looking for
Aldoro’s board.
shallow gold mineralisation, but also just granodiorite with
At the time of print, Aldoro was awaiting approval to start a pathfinder elements to Penny West and associated lead and
programme of aircore drilling at Penny South. zinc. That can indicate a mineral system as well. We think it
If approval is granted, Aldoro will be drilling at both Penny is very underexplored,” Marriott said.
South and Leinster (nickel) during Q4. “If we can get under the initial surface feature then we will
It is a good time to be in both commodities and any success be doing big drilling at the end of Q1/Q2 2020 and hopefully
could see Aldoro rise quite quickly. we are coming back with a deeper RC programme to test
“Spectrum has done the area [Younami] a great favour in the the initial targets; there is enough time for us to replicate
first half of 2019 with a spectacular discovery and we have Spectrum [performance in 2019] for sure.”
Page 12
Magmatic thinks gigantic
by Michael Washbourne
agmatic Resources Ltd will soon start drilling what it Richardson was quick to dismiss any suggestion his company’s
Mbelieves is a Boda-lookalike target in the prolific East projects were a “nearology” play to Boda. Magmatic has been
Lachlan Fold Belt in New South Wales. active in the East Lachlan Fold Belt since acquiring the ground
Alkane Resources Ltd set market tongues wagging in from Gold Fields Ltd in 2013.
September when it reported a juicy intercept of 502m @ 0.48 At the time, Magmatic was a private entity and remained so
g/t gold and 0.2% copper from 211m at the Boda prospect, until undertaking a $4 million IPO in May 2017. Gold Fields is
prompting a share price run from 37.5c to 86.4c. still a 14% shareholder of the Perth-based company.
Magmatic benefited from the proximity of its projects to Boda “All the reasons that we liked the projects – and now are being
with an equally impressive share price run from 1.8c to a peak rewarded – are still there. What we inherited from Gold Fields
of 20c during November. That same month the company is the most dominant land position in the region,” Richardson
raised $2.2 million and is now planning to drill its Lady Ilse said.
prospect, about 6km west of Boda, this quarter. “Most importantly, we’re on the two most important geological
Following the capital raising, Atlas Iron founder David features which are the two volcanic belts; the Junee-
Flanagan joined the company’s board as a non-executive Narromine that hosts the Cowal, Northparkes and Tomingley
director and Peter Duerden was appointed managing director, mines; the other one is the Molong and that hosts the giant
with David Richardson elevated to executive chairman. Cadia Valley complex.”
Speaking to GMJ after a week-long roadshow on the east Richardson also pointed out that several majors, including
coast of Australia, Richardson was confident his company Fortescue Metals Group Ltd, Freeport-McMoRan Inc and
could deliver further value for Magmatic shareholders. Newmont Goldcorp had entered the East Lachlan prior to the
“We’ve got a very deep portfolio of advanced targets that the Boda discovery, such was their confidence around the region’s
market has now recognised through the Alkane discovery at prospectivity, in particular the opportunity to find porphyries.
Boda,” he said. “In this region, the porphyries occur in clusters and the
“Alkane went from $180 million [market cap] to over $400 opportunity is that you get multiple deposits,” he said. “Cadia
million following the Boda discovery. Our Wellington North Valley is six mineralised areas and at Northparkes they mine
project basically encircles Alkane’s tenement and we’ve got five physical deposits. So, with the Alkane hole, the real
multiple targets within 2-8km of the Boda discovery with the exciting thing is it may just be one deposit.”
same geological signatures.” Lady Ilse and Rose Hill, about 8km west of Boda, are the
two most advanced prospects in Magmatic’s
portfolio. Previous drill hits at Lady Ilse include
78m @ 0.2 g/t gold from 27m (including 10m
@ 0.25 g/t and 18m @ 0.48 g/t), 22m @ 0.54
g/t from 18m and 21m @ 0.56 g/t from 81m.
Richardson said the upcoming drilling at
Lady Ilse would target the western edge of
the intrusion, based on similarities already
observed between that prospect and the
Boda hole.
“We’re really hopeful that we’ll have similar
results,” Richardson said.
“Discovery is all about building blocks and
Alkane have been exploring the North
Molong for over 10 years. It’s no surprise to
us this discovery happened and that’s why
we’ve been there too.
“Most importantly, we don’t think this will be
a one-hole wonder because we have a very
deep portfolio of advanced targets.”
Magmatic is gearing up for a new drilling campaign at Lady Ilse, part of its Wellington
North project in the East Lachlan Fold Belt, NSW
Page 13 Page 13
NEWS
Alto prepares for
2020 exploration reset
by Dominic Piper
lto Metals Ltd will start the year with a fresh exploration with granodiorite-mafic contact. We started focusing on the
Amindset after nine months of corporate wrangling frustrated cross-cutting structures on that contact. Troy got a few sniffs
progress in 2019. from RAB drilling but never followed up, creating interesting
The company spent most of last year repelling a hostile takeover targets for us.”
bid by neighbour Middle Island Resources Ltd. Middle Island Alto is planning a RC programme to test the 3km corridor
eventually walked away from its bid on December 5 after failing between the deposits and chase depth extensions. At Lord
to entice more than 2% of Alto shareholders with its offer of a Nelson, the current 68,000oz gold resource is backed up by
merger to create a single dominant player in the Sandstone historical intercepts of 6m @ 16.4 g/t from 167m and 5m @ 13
district of Western Australia. g/t from 99m. At Lord Henry, deeper hits of 2m @ 51.3 g/t from
With the takeover offer lapsed, Alto can finally get back to the 70m and 6m @ 10.2 g/t from 50m have never been pursued.
business of exploration on its 800sq km landholding on the “There is a bit more cover in the area which is perhaps why it
Sandstone greenstone belt. has not really been drilled,” Bowles said.
“Our shareholders have repeatedly said exploration is
where the value is for Alto and I think that was proven in
their response to the Middle Island offer,” Alto director
Matthew Bowles told GMJ. “We have a dominant
position on a major greenstone belt which historically
produced a lot of gold. We just need to have a fresh
approach and a clear run on exploration.”
Bowles admitted Middle Island’s corporate play had
been frustrating for Alto. Although it engaged with its
rival, no compromise could be found and with the offer
on the table for much of 2019, it was almost impossible
for Alto to tap the market for further funding.
“Fortunately, we have money in the bank [$1.14 million]
to kick-start exploration,” Bowles said.
The limited work Alto did undertake during 2019
involved step out drilling at the Tiger Moth and Vanguard
prospects where depth and strike extensions were
confirmed by hits including 11m @ 3.7 g/t gold from
The Lord Nelson pit at Alto’s Sandstone project
52m and 5m @ 4.9 g/t from 37m.
Exploration also targeted extensions to the south of the Lord Alto is aiming to rectify that in 2020 and Bowles is determined to
Nelson open pit, returning a best intercept of 12m @ 3.4 g/t gold devote the company’s efforts to exploration.
from 66m. Bowles is eager to follow up on that hit in 2020.
“We are going to go hard at exploration through the year and
“When you have such a large position it is important to have a with the current environment we see a lot of upside from a
clear focus and that’s what we are trying to do now,” he said. market perspective for that,” he said. “Shareholders believe in
“We have identified the Lords deposits and the Lords corridor the inherent exploration value which is yet to be unlocked at
as the best for that.” Sandstone and now we have a mandate to execute our strategy.”
In November, Alto announced the 2020 exploration focus would While an agreement with Middle Island couldn’t be reached,
be the corridor between the Lord Nelson and Lord Henry open Bowles said the company would be willing to reopen discussions
pits which produced 207,000oz and 48,000oz gold respectively down the track.
for Troy Resources Ltd a decade ago.
“Maybe there will be a time to talk again but not now, it is way too
“Troy was the only company active in that area before and they premature,” he said.
were chasing only the oxides,” Bowles said. “There are ounces
“Our focus for 2020 is on resource growth and while we will look
at the bottom of the pit which are all transitional and sulphide.
at development options and opportunities for the project, the
“The mineralisation at Lord Nelson and Lord Henry is associated company and our shareholders.”
Page 14
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NEWS
Ausgold has confirmed “positive financial metrics” for its
Katanning gold project, about 275km south-east of Perth
Ausgold scopes out Katanning
by Michael Washbourne
istory will show the best discoveries of recent times The scoping study on a base case 1.25 mtpa standalone
Hwere made in areas where few were prepared to look – operation confirmed the project had “positive financial
think Gruyere, Tropicana and Nova. Ausgold Ltd managing metrics” for 7.2 years of mining, based on a revised resource
director Matthew Greentree is applying that sentiment to of 22.9mt @ 1.1 g/t gold for 1.2 moz. Those metrics include
his company’s Katanning gold project in the underexplored a pre-tax NPV of $77 million, IRR of 28% and net cash flow
South West Yilgarn. of $136 million.
“I think we work in a fairly conservative industry and a lot Pre-production capital is estimated at $102.5 million with
of weight is put on nearology but I think the most valuable C1 operating costs of $1,276/oz and AISC of $1,615/oz to
discoveries have been in areas that haven’t had the maintain an average annual output of 50,000oz gold.
attention,” Greentree told GMJ. “Given this is an exploration project that’s been around
“Gold Road [Resources Ltd] is a classic story on the eastern for some time, I’ve been asked the question by a number
side of the Yilgarn. I worked in Laverton when I was a young of investors and other parties about whether this is a real
geologist and that was as far as anyone really ever went mining project, so we went about proving that,” Greentree
on exploration. So, Gold Road did a fairly ballsy move and said.
stepped out into those untouched areas and were quite “We took a fairly conservative approach because we’ve
successful. seen a lot of our peers fall over by being overly optimistic,
“Tropicana is another example of an area where everyone hence why we went a bit harsh on the resource. We know
thought there might be something, but no one had found we have a large resource there, but some areas are a bit
anything. Nova is in that same belt, but the Albany-Fraser under-drilled, which was highlighted in the scoping study and
was considered the wrong age and the wrong rocks. Now probably added a little bit to the mining costs that are quoted.
it’s got two significant deposits and probably some more we “We also relied heavily on historic processing from the old
haven’t found yet. mill on site and some of the historical metallurgical test work,
“My instinct is that the South West Yilgarn is very similar… so we need to have another look at that. I don’t think this is
and we’ve got some of the best ground available in terms of exactly what the final project will look like and, in a way, we
exploration potential.” never intended for this to be a proxy for a PFS, but we do
While Katanning is far from a greenfields project – small- know we have the basis for an economic project.”
scale mining of the Jinkas and Dingo deposits occurred in One scenario Ausgold is likely to consider in future studies
the mid-1990s – Greentree believes there is plenty of gold is the underground potential of Katanning, particularly at
still to be found in and around the company’s 4,000sq km Central Zone and Jinkas where previous intercepts of 26m
landholding. @ 6.6 g/t from 117m (including 4m @ 37.19 g/t) and 16m
Drilling to test that theory kicked off late last year after @ 6.21 g/t from 114m (including 4m @ 22.38 g/t) were
Ausgold raised $3.6 million from a placement and share recorded.
purchase plan. Funds will also be directed towards additional Greentree is also eager to test a number of regional targets,
metallurgical test work which a recent scoping study identified including the new Burong prospect, which are eligible for the
as an area which required further attention. WA Government’s EIS co-funded drilling grant.
Page 16
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COVER
Evolution spins
for the win
by Mark Andrews
In FY2019, Evolution produced 753,001oz
gold at an AISC of $924/oz to reach eight
consecutive years of production guidance
Congratulations to Evolution Mining Ltd plitting the difference between the performances of an elite
Sbunch of gold miners was a difficult task.
and Bellevue Gold Ltd for taking out the
In the end a panel of industry insiders recognised the
respective GMJ Miner and Explorer of the
conscientious efforts of Evolution Mining Ltd as the 2019 GMJ
Year Awards. Miner of the Year, three years after first winning the award in
2016.
In a year gold producers thrived once again,
“Production and share price movement makes a good gold
Evolution’s low-cost portfolio and headline- miner. Evolution has that and a good deal, which is why they are
grabbing acquisition in late 2019 was in for me,” industry veteran Allan Kelly said.
enough for the ledger to be tipped in the Evolution has been in the mix for the award since 2012, often
competing hotly with Northern Star Resources Ltd for the honour.
company’s favour.
Northern Star was again among the contenders this year,
Meanwhile, as the exploration sector starts however, as the company continues to transition Pogo, Alaska,
to ramp-up again, many will be hoping to to its own business model; judges – Kelly, Regis Resources
Ltd non-executive director Lynda Burnett and PCF Capital
replicate what Bellevue has done. In the
Group managing director Liam Twigger – were keen to see the
past 12 months alone, the company has outcome.
added 800,000oz @ 11 g/t gold and there The challenges bedding down a new project into its own
corporate culture is something for Evolution to consider at its
appears to be more ounces coming.
new acquisition, Red Lake in Ontario, Canada.
Early reaction to Evolution’s purchase of Red Lake has been
positive despite CY2019 production from the complex estimated
to be 150,000-160,000oz gold @ AISC $US1,600/oz.
Page 18
It was a hard task for judges deciding on this
year’s GMJ Miner of the Year
works. We’ve seen the likes of Millennium
[Minerals Ltd, in receivership], the 1 g/t
orebodies are tough work and it is going to
come down to how they work,” Kelly said.
It was not all smooth sailing bringing
Gruyere online, with the project going over
budget by about $85 million and delays in
commissioning openly reported.
Despite the setbacks at Gruyere, Twigger
was still impressed by what Gold Fields had
been able to achieve.
“Gold Fields has done a fantastic job in
Evolution will pay $US375million in cash upon closing of the Red bringing Gruyere into production. Everyone else has failed pretty
Lake transaction (and up to an additional US$100million payable much and gone bust. If they get the opportunity, they need to sell
upon new resource discovery), which will be funded by a new South Deep [South Africa] and their valuation will go through the
five-year $600 million senior unsecured term loan via Evolution’s roof,” Twigger said.
syndicate of lending banks.
“What makes a good gold miner? It’s about line and length,
“We’ve given ourselves three years [to hit 200,000 ozpa at less keep delivering and do everything you say in guidance. Then
than $US1,000/oz AISC],” Evolution executive chairman Jake the next step is bringing in a new operation; Evolution has done
Klein told GMJ. “I think there are going to be quick wins, but it’s a good job, Gold Fields has done a good job, Saracen has done
not going to be a straight road, there are going to be bumps in it, a good job. That’s the difference compared to some of the other
so I think the three-year timeframe is appropriate.” companies that have fallen over and within that Gruyere is a
Deal-making could not be ignored when assessing the standout.”
performance of the gold industry’s high achievers and the next Drawing equal adulation from Twigger was Saracen’s approach
12 months will go some way to revealing more about the nature to growth through buying a 50% stake in the Super Pit, Kalgoorlie,
of the corporate activity which unfolded in 2019. for $1.1 billion.
With the exceptions of Saracen Minerals Holding Ltd and Gold It was thought Northern Star and Evolution were the frontrunners
Fields Ltd, Evolution, Kirkland Lake (Detour Gold, northern to take Barrick Gold Corp’s interest in the Super Pit, with Saracen
Ontario) and St Barbara Ltd (Atlantic Gold, Nova Scotia) have all somewhat the surprise buyer.
looked towards North America to enhance their growth profiles.
Kalgoorlie Consolidated Gold Mines (KCGM) – the Newmont/
St Barbara’s $C722 million takeover of Atlantic Gold was Saracen JV vehicle at the Super Pit – will be headed by Newmont
considered expensive and the pressure is on to make the play a Goldcorp executive Ben Wessely as general manager.
successful one, as production at Gwalia has been impacted by A JV sub-committee structure comprising exploration and
the company’s two-year, $112 million expansion project, which is
growth, technical and operations plus financial and commercial
expected to be completed soon. has been agreed upon, with the sub-committees will report to the
A strong performer in recent years, St Barbara’s plight in 2019 KCGM executive committee of two Newmont and two Saracen
meant it lacked support for a nomination for Miner of the Year. representatives.
One company which has proven to be a crowd favourite in the “It is a huge deal, a good deal and I am not doubting that by any
past 12 months is Gold Fields. means, but they [Saracen] are not running it, although they might
Already with three operating mines in Western Australia, the end up running it, but it is a passive stake right now,” Kelly said.
company officially celebrated the opening of its fourth – the $621 All judges agreed that Saracen’s purchase of half the Super Pit
million Gruyere JV with Gold Road Resources Ltd in the Eastern was on the money, with Twigger labelling it “monumental and
Goldfields – in December. good for WA”, while Burnett said it may prove to be a bargain
First gold from Gruyere was poured in June and the mine was buy.
fully commissioned in late 2019. “They have grabbed that one-off opportunity where their share
“For me, the jury is still out on Gruyere and given what we have price is running and they have grabbed that opportunity,” Burnett
seen with Dacian [Gold Ltd], Gascoyne [Resources Ltd] and said.
these lower-grade things, I want to see more of how Gruyere
Page 19
COVER
“In a few years it might look cheap, so long as nothing goes also some challenges, and that’s what makes this industry so
wrong. I know they are doing a lot of exploration there and are exciting,” Klein said.
adding ounces. That is the risk in my view; if they do end up “You need to be meeting the promises you’re making to
getting the whole thing [100% of the Super Pit] and if something shareholders and that’s producing gold safely and at the costs
goes wrong fundamentally they have all the risk.” you said you were going to produce it at. Then are you spending
Evolution itself will waste no time putting its stamp on Red Lake that money appropriately on behalf of your shareholders or
with an investment of $US100 million committed to on existing alternatively are you giving it back to your shareholders? At
operations, with a further $US50 million in exploration over the Evolution, we’re doing both.”
first three-year period under its ownership. As the company goes from strength to strength and the potential
“Evolution pretty much hasn’t missed a beat with every for more assets to fall from the stables of Newmont and Barrick,
acquisition,” Burnett said. it would be no surprise to see Evolution in the queue to put its
Essentially, it has been the precision and discipline of gold midas touch on another unwanted project or expand its horizons
production at its six mines across Queensland, New South elsewhere.
Wales and WA, over a sustained period of time which enabled “We’re going to keep looking,” Klein said. “We’ve said 6-8 assets
Evolution to create one of the world’s premier gold companies. [is the optimal portfolio]. We want to be a globally relevant mid-
In FY2019, Evolution produced 753,001oz of gold at an AISC tier that prospers through the cycle, so we have a good portfolio,
of $924/oz to reach eight consecutive years of production but the portfolio can always get better and in order to do that
guidance. Evolution has guided FY20 group gold production of we need to keep shining the mirror at ourselves and understand
725,000-775,000oz at an AISC of $940-$990/oz. where our strengths and weaknesses are and continue to try
and improve that quality.”
“We’re ending the year in great shape; lots of opportunities, but
Jake Klein
Page 20
Page 20
Bellevue goes back-to-back
by Dominic Piper
Bellevue Gold Ltd has pulled away from
a wide field to retain its GMJ Explorer
of the Year title for 2019.
ellevue didn’t have quite the standout year on the market
Bit did in 2018 but GMJ’s expert panel still felt compelled
to recognise the company’s achievements, which saw it
add 800,000oz to its namesake gold project, increasing the
global resource to 5mt @ 11.1 g/t for 1.8 moz.
Bellevue’s continued success came amid another generally
tough year for explorers who are still waiting on the
anticipated trickle down of investment from the sector’s high
Steve Parsons
performing producers.
Bellevue was among six contenders for the award but with
over it is still a big concern and will hold them back.”
several yet to post maiden resources after impressive early
success (Apollo Consolidated Ltd, Exore Resources Ltd) and Breaker is another explorer which has performed well
others still overcoming market setbacks (Breaker Resources but is yet to shake off doubts. The global resource at the
NL), the judges’ choice was eventually unanimous. company’s Lake Roe project is now touching 1 moz gold but
it is still playing catch up after disappointing the market with
“If we are looking at proven ounces then it has to be Bellevue.
its maiden resources figures.
What they have done is phenomenal, although it is not a
new discovery,” Lynda Burnett said. “I think Breaker still has to overcome the credibility issue
in the market,” Burnett said. “I was very impressed by their
Allan Kelly agreed: “It is brownfields, but they have done
presentation at NewGenGold but it has taken them a long
everything – from exploration to promotion – well.”
time to understand what they have.”
The GMJ judges found encouraging stories among the other
Perhaps conscious of the backlash Breaker encountered,
contenders but all had question marks of some sort in front
Apollo has taken longer to release a maiden resource for its
of them.
Rebecca project, also in WA.
Kelly pointed to Spectrum Metals Ltd’s remarkable nine-
Liam Twigger felt it was a deliberate move on behalf of
month journey at the Penny West discovery in WA. The
management.
company went from discovery hole to a maiden resource
of 355,000oz @ 13.8 g/t during the year but a legal cloud “Nick Castleden [managing director] is a great guy and he
hangs over the future of company and project. has done a tremendous job,” he said. “I think they were
conscious about coming out with a resource which would
In October, Venus Metals Corporation Ltd launched legal
affect expectations so they’ve just been holding back until
proceedings against Spectrum, alleging breaches of fiduciary
they can produce something sizeable.”
duty, breaches of confidence and misuse of information that
it provided to Spectrum directors Davide Bosio and Paul Castleden told GMJ the company planned to release a
Adams while they were with stockbroker DJ Carmichael. maiden resource for its Rebecca project in the Eastern
Goldfields this year.
Kelly said the project itself was a “fantastic discovery”.
A lack of any resource ultimately put paid to Apollo’s chances
“I’ve been comparing the Penny West discovery to the Andy
of winning the Explorer of the Year race and it was a similar
Well discovery we made during my time at Doray because it
scenario for West African upstart Exore.
is so high grade,” he said. “It is a great brownfields discovery
and I think it will be a nice little mine, whether as a standalone “For them to turnaround a reject like it has and be close
operation or being trucked. But the corporate issues hanging to a maiden resource in 12 months is remarkable but it is
Page 21 Page 21
COVER
Bellevue’s continued success came amid another generally tough
year for explorers
“We plan to come out with a project resource, across
Antoinetta and Veronique, by the end of the second quarter,”
he said. “We were contemplating a resource for Antonietta
Central to show as a milestone but particularly after the
last equity raising there is less pressure to put a maiden
resource out and we can get closer to a resource which
could be moved quickly into a feasibility study.”
The GMJ panel kept its focus to gold-only projects but
Burnett said the copper-gold space had produced some
of 2019’s best exploration stories including the discoveries
in the Paterson province of WA and Stavely Minerals Ltd’s
Thursday’s Gossan project in Victoria.
“There have been some really big discoveries in that copper-
gold space,” she said.
very hard to hand the award to a company which is yet to
Ultimately, it was Bellevue’s weight of numbers which
publish a resource,” Burnett said of Exore which put 34%
swayed the jury, but the retention of the award should not
onto its share price over the 12 months after picking up the
be seen as an indication of a paucity in exploration stories in
Antonietta/Veronique project from Apollo in October 2018.”
Australian gold, according to Burnett.
Twigger said enthusiasm was building for Exore.
“When you look at the list and even some that didn’t make
“A lot of people at Beaver Creek were very interested in the it, there is a lot of good exploration going on,” she said.
Exore story,” he said. “However, in the absence of a solid resource to consider
Speaking to GMJ, Exore managing director Justin Tremain I think you have to go with the market and that means
said the company expected to publish a maiden resource Bellevue as the winner.”
this year.
Drilling continues ahead of another resource update at Bellevue
in early 2020
Page 22
Gold Fields in
Western Australia
Gold Fields has been part of the Western Australian community At Gold Fields, we
for more than 17 years and we are now the third largest Gold pro-
take pride in look-
Gold Fields has been part of the Western Australian community for more than 17 years and we are now the third largest
ing after employee
ducer in Australia with four mines, Agnew, Granny Smith, Gruyere
gold producer in Australia with four mines, Agnew, Granny Smith, Gruyere and St Ives, in the historic Goldfields region
and St Ives, in the historic Goldfields region of Western Australia.
welfare by offering
of Western Australia. industry competitive
In November 2016, Gold Fields entered into a 50% joint venture agree-
ment with Gold Road for the Gruyere deposit. The deposit is now a mine salaries and a suite
of employee benefits
Gold Fields is Australia’s third largest gold producer and we are committed to creating shared value for our local
having commenced production in June 2019. These operations are
including, but not lim-
backed by a strong regional office in Perth, where many support and
communities and contributing to the Western Australian economy through our regional supply chains and the payment
ited to the following:
administrative functions are centralised.
of royalties and taxation.
The future of this portfolio of mines is bright as Gold Fields has invested
significantly in near-mine exploration, continuously extending the lives of
We have the following roles available: Long Service Leave l Performance Bonus l Long Term Cash
these mines. Gold Fields now employs almost 1,600 staff on a residential Incentive Plan l Health Insurance Allowance l Paid Parental
and fly-in, fly-out bases. Geologists Electrical Technicians
Engineers
& Partner Leave l Income Protection & Life Cover
Our employees are by far our most important asset. Our policy is to Mine Foreman
Underground Shift Boss
Maintenance Planners
prioritise and employ local labour and contractors wherever possible. l Employee Referral Reward Program l Educational
Senior Engineers
Mobile & Fixed Plant Fitters
Operators
We believe that responsibility towards our employees begins at the Assistance l Employee Assistance Program
workplace and extends to a mindful approach to their safety, health and
With the intention of creating a rewarding and long-term career path
well-being. www.goldfields.com.au or email us direct at [email protected]
Aiming to be a leading gold miner in the world, overrides our desire to be at our company, every employee works alongside their manager to
the biggest. Instead, our vision is to be the global leader in sustainable design a tailor-made individual development plan, which will assist
gold mining. in achieving their career goals during their journey at Gold Fields.
Our sustainability vision means that we operate through a set of values Our formal Leadership Development Programs are available to all
employees who are potential supervisors up to senior management
that encompass who we are, what we do and how we work. This is and are delivered by industry leading institutions.
evident through our responsibility to environmentally-aware work
practices, a commitment to safety as a way of life, and ensuring local We value exceptional graduates and believe we can learn as much
communities are better-off from our presence. from them as they glean from us. Focusing on highly sought-after,
Diversity is a critical human resource driving force. We are committed industry-based skills-development, our graduate program provides
an excellent start to a career in mining
to increasing our female workforce, with individual targets set for senior
and professional levels at each of our sites. The substantial value that Gold Fields offers industry-leading apprenticeship training at each
diversity brings to the business is equally important with regard to Indig- of its sites. Considered one of the best ways to kick-start a career
enous Australians, particularly in understanding the cultural heritage in in mining, our highly-regarded Apprenticeship Program includes
the areas that we operate. mentoring and skills-development support from some of the most
experienced and knowledgeable leaders in the mining industry.
Given the remote location of our mines, our stakeholder engagement
plans are appropriately focussed on Indigenous community members. www.goldfields.com.au
We actively encourage the participation of Indigenous Australians in our
business, either as employees, business partners or critical stakeholders.
Gold Fields has been part of the Western Australian community for more than 17 years and we are now the third largest
gold producer in Australia with four mines, Agnew, Granny Smith, Gruyere and St Ives, in the historic Goldfields region
of Western Australia.
Gold Fields is Australia’s third largest gold producer and we are committed to creating shared value for our local
communities and contributing to the Western Australian economy through our regional supply chains and the payment
of royalties and taxation.
We have the following roles available:
Engineers Geologists Electrical Technicians
Maintenance Planners Underground Shift Boss Mine Foreman
Operators Mobile & Fixed Plant Fitters Senior Engineers
www.goldfields.com.au
Page 23
www.goldfields.com.au or email us direct at [email protected]
WINNER: MINER
Evolution embraces
portfolio test
by Michael Washbourne
Strategic acquisitions have underpinned Evolution Mining
Ltd’s ascension as one of the world’s lowest-cost gold
producers over the last few years. In 2020, the pressure
will be on the Jake Klein-chaired company to maintain that
position following the first major addition to the portfolio in
more than three years.
volution is purchasing Newmont Goldcorp’s Red Lake We need to demonstrate that
Egold complex in Ontario, Canada for $US375 million,
we’ve bought well, that we’re
plus a contingent consideration of $US100 million for the
going to add value and that this will
addition of up to 5 moz over the next 15 years.
The Red Lake acquisition will be funded by a new five-year “e a cornerstone asset for us.
becom
$600 million senior unsecured term loan through Evolution’s
syndicate of lending banks. The company expects the deal to Speaking to GMJ in early December, Klein conceded Red
be completed by the end of March. Lake’s rising cost profile and recent underwhelming production
Since first production in 1949, Red Lake has churned out numbers were a concern for Evolution during the due diligence
period.
more than 25 moz at an average grade of above 20 g/t gold.
However, the last five years has seen the mine’s output decline “We considered it very deliberately and I think very appropriately,
and its operating costs climb. but you don’t get to buy an asset that was performing like it was
In 2015, Red Lake produced 376,000oz gold at an AISC of five years ago for $US375 million,” Klein said.
$US906/oz. Three years later the output was 276,000oz “[Evolution vice-president of discovery and business
at $US988/oz AISC. Last year production was expected to development] Glen Masterman keeps referring to the fact that
fall back to 150,000-160,000oz at an AISC in the realm of everybody who goes to university to study geology learns
$US1,600/oz. about Red Lake, so the address is great. And, as one analyst I
think quite appropriately described it, it’s a renovator’s delight.
Evolution’s group AISC for FY2019 was $924/oz ($US661/oz)
and prior to the addition of Red Lake the company had guided “We’ve got a lot of work to do to restore it to being a low-cost
$890-940/oz ($US625-660/oz) for FY2020. productive mine, but we can see a lot of the levers that need
Page 24
Page 24
Evolution’s group AISC of $US661/oz for FY2019 ranks it the challenge of integrating a foreign mine into a portfolio
among the lowest-cost gold producers in the world which to date was focused exclusively on Australia.
“Geopolitically it’s a fantastic place to mine, the safety record
at Red Lake is outstanding and I’m sure there’s a lot of things
that we can learn with respect to that to bring to our sites in
to be pulled to do that. It’s definitely got the hardware and now Australia,” Klein said.
it’s going to be a case of getting the site team embracing the
“We’ve been saying for some time that the complementarity
opportunity. And I think they already have; some of the best
of geopolitical risk with North America and Australia makes
ideas are on site right now.”
sense, but we’re also cognisant of the fact that we’re the
Evolution believes it will take up to three years to transform fourth group to acquire something in that part of the world
Red Lake into a plus-200,000 ozpa operation capable of and investors should appropriately say ‘well, show me why it’s
consistently churning out gold for less than $US1,000/oz. good for us’ and that’s the challenge we have in front of us.
The company has committed to spending $US100 million
“We need to demonstrate that we’ve bought well, that we’re
on capital and mine development over that period, as well as
going to add value and that this will become a cornerstone
$US50 million on exploration and discovery.
asset for us.”
Red Lake was an acquisition almost three years in the making,
Reflecting on 2019, Klein is once again delighted with the
according to Klein. With viable and affordable opportunities in
performance of the company’s Australian portfolio – Cowal
Australia drying up soon after Evolution acquired an economic
(New South Wales), Mungari (Western Australia), Ernest
interest in Glencore’s Ernest Henry operation in August 2016,
Henry, Mt Carlton, Mt Rawdon, Cracow (all Queensland) –
the Sydney-based miner started looking
which collectively produced 562,754oz
abroad, mainly in North America, for other
gold at an average AISC of $953/oz for the
Tier 1 assets.
nine months to September.
Klein revealed his company bid
From the company’s perspective, the
unsuccessfully on a handful of other assets
key highlights over the past 12 months
prior to landing Red Lake, while also
were the commissioning of the float
turning down other potential acquisitions
tailings leach project at Cowal which is
which did not fit into the company’s vision.
set to increase recoveries by 5% and
“We’ve maintained our discipline and the discovery success achieved with the
haven’t wanted to overpay because it GRE46 orebody at the same operation.
comes back to that view of if you’re not
“We now have the problem of trying to
going to spend your shareholders’ money
decide what size the underground mine at
in an appropriate way and get them an
Cowal should be,” Klein said. “We’ve said
appropriate return, you’re better off giving
it’s going to produce more than 300,000
it back to them,” Klein said.
ozpa for a long time going forward and the
“This was an asset that just ticked all of question we will have in front of us for 2020
Jake Klein
the boxes. It’s the largest, highest grade is how much more than 300,000 ozpa.
gold camp outside of South Africa and if
“I’m pleased our portfolio of assets continues to demonstrate
you reflect on the last five years of history there, you can quite
the importance of having a portfolio because some of the mines
clearly see there’s going to be a huge amount of opportunity to
which were stellar performers in the first quarter, Mt Carlton
create value because this is a classic case of an asset being
being one of them, is now being helped by Mungari, which
lost in a portfolio which had other priorities.
wasn’t a great performer in the first quarter.
“It’s very similar in many ways to when we bought Cowal; a
“You’re only as good as your next year, so we have to put past
great asset but just couldn’t get the focus and attention that
results behind us, stay humble and stay true to our core values.”
it needed in the Barrick [Gold Corp] portfolio. Like-wise for
As Evolution enters its 10th year, Klein is especially proud
Red Lake; it didn’t get the focus and attention in the Goldcorp
of being able to say his company never once deviated from
portfolio and neither in the Newmont Goldcorp merged entity.
its original vision of creating a “globally relevant mid-tier gold
“Red Lake hasn’t been a cornerstone asset for at least the
miner”. In particular, he singled out past and current employees
last five years for either of its previous owners, but it will
for helping to build a culture which made that possible.
definitely be a cornerstone asset for Evolution going forward
“The thing which makes me proudest – and we talk about it a
and it will get the focus and attention which I think the site
lot in Evolution – is we want everyone’s time at our company to
team has been craving and wanting. That was reflected in our
be a highlight of their career,” he said.
first engagements with them, they couldn’t have been more
welcoming and more positive about being part of Evolution “We hope it’s a long time, but the number of people who do
and wanting to be an important part of our future.” move on to better and bigger jobs and do reflect on the fact
that their time at Evolution has been a highlight of their career
Having already had a taste of overseas mining early in his
is a driving force in our company and a recognition we’re doing
career with Sino Gold Mining, Klein holds no fears about taking
things right.”
on an operation in Canada. However, he is not underestimating
Page 25
WINNER: EXPLORER
Cat
Catch themch themch them
Cat
if y
if you can ou can ou can
if y
Bellevue was almost halfway through an 80,000m infill diamond drilling programme on the Tribune and Viago lodes.
A resource update is on schedule for the first half of 2020
All eyes will again be on Bellevue Gold Ltd in 2020 with a resource update expected in the first
half of the year from its namesake project in Western Australia.
by Mark Andrews
on-stop drilling during 2019 saw 800,000oz @ 11 g/t “Bellevue is certainly one of the better new discoveries that is
Ngold added, giving Bellevue a total inferred resource of happening out there not just in Australia, but globally. The grade
1.8 moz @ 11.1 g/t. stands out and the size is now getting up to global significance,”
News flow continues to provide encouragement to the market Bellevue managing director Steve Parsons told GMJ.
that the rate of discovery success in the past 12 months could The gold sector has been bereft of new discoveries and stories
be replicated and there is no shortage of effort going into making to get excited about hence the significant following Bellevue has
that happen. garnered in a relatively short amount of time.
At the time of print, Bellevue had eight rigs engaged, with two “There has certainly been a lot of interest not only from investors
diamond rigs dedicated to increasing confidence levels in the and analysts, but also on the corporate side as well. This is
resources at the Tribune and Viago lodes. such a standout project and the support we have got from our
Recent results from shallow infill drilling at Tribune (top 200m investors is that we need to be taking this the whole way through
from surface) has delivered what Bellevue was expecting, with into development and production; that is where the real value
highlights from the large portion of the resource infill drilled on uplift will be for the Bellevue shareholders,” Parsons said.
40m x 20m spacing including 9.6m @ 14.1 g/t gold from 107.9m, Bolstering the team with the requisite skills to take Bellevue to its
3m @ 33 g/t from 162m, 1.9m @ 29.3 g/t from 58m, 5.2m @ 5.4 desired outcome of developing a mining project, 400km north-
g/t from 203m, 0.6m @ 273.5 g/t from 155m. west of Kalgoorlie, has begun. Former Northern Star Resources
The second diamond rig conducting infill drilling at Viago ready Ltd general manager Craig Jones was appointed chief operating
for conversion to a higher resource confidence is also going well officer at Bellevue in December.
with hits of 0.7m @ 74.8 g/t gold from 590.4m, 5m @ 11.1 g/t Dewatering activities were scheduled to start post-Christmas
from 606m, and 3m @ 19.8 g/t from 580.5m reported. and carry on through to May/June.
Meanwhile, six rigs were in operation at the new Deacon and The historic Bellevue mine produced 800,00oz @ 15 g/t gold
Mavis discoveries where step-out expansion drilling and testing in its heyday, and with some underground infrastructure to
of several significant off-hole DHEM conductors were targeted be leveraged from, there may be an opportunity for some
in late 2019. underground material to be extracted for cash flow in 2020.
Page 26
The support we have got from Steve Parsons
our investors is that we need to
be taking this the whole way through
into de
“velopment and production; that
is where the real value uplift will be for
the Bellevue shareholders.
By the end of 2020/early 2021, Bellevue’s path to production
should be better known, with one certainty being that capital costs
will be low given the plus-10 g/t gold material the company is
dealing with.
Grade remains king in the gold sector, which has been reinforced
in the past 12 months by the trials and tribulations of the low-grade
producers and wannabe producers in WA, a Tier 1 jurisdiction.
“Starting a mine doesn’t get better than this in WA,” Parsons said
about Bellevue, which is 30km from Leinster.
The gold price has never been better either, and Parsons is
encouraged by the enthusiasm of investors and analysts for
continued momentum in the precious metal.
“The key driver for that is low interest rates globally, so what you
are going to see, and it has already started, is the big groups trying
to add more ounces very quickly.
They might not be the most profitable ounces, but they are adding
ounces into the inventory,” Parsons said.
“Kirkland Lake’s [Gold Inc] acquisition of Detour [Gold Corp] is
about adding ounces to the production base and that is assuming
that the gold price is strong. Moves like that are really good for gold
companies like Bellevue because that means there is going to be
void of $1-3 billion type gold companies that are new producers.
That is hopefully something companies like us can move into.
While the bigger companies get bigger; we move up the ladder.”
Driving Bellevue up the value curve by becoming a producer will
be done while maintaining a steely focus on exploration.
Bellevue has shone for the company, however, there is further
prospective territory Parsons is eager to learn more about.
“Our exploration team is very, very good. There are certainly some
interesting areas that we really like in Western Australia, however,
we have a big landholding that sits on our existing properties and
this next 12 months is really focusing on that,” Parsons said.
“You will see a whole bunch of exploration happening at our
[South] Yandal project, which we have done nothing on in the last
18 months. We will have a budget for that on great ground that
hasn’t been explored for about 20 years. We will also be stepping
out on that 20km strike on that Bellevue trend, which, again hasn’t
had that work done on it so that is going to be our focus for the
next 12 months.”
Page 27
EXPLORER OF THE YEAR
programme at Kouri in north-east Burkina Faso. Kouri is in the
fault system which controls a number of multimillion ounce
Bellevue Gold Ltd’s back-to-back gMJ deposits, including West African Resources Ltd’s Sanbrado
project.
Explorer of the Year awards sparked
Carawine Resources Ltd (ASX:CWX)
much discussion as to which exploration
Market cap: $18 million. Share price: 24c
companies are in the mix to rival the With the heavy lifting to be done by Rio Tinto Ltd and Fortescue
Steve Parsons-led juggernaut. Metals Group Ltd over tenure in Western Australia’s Paterson
province, Carawine is freed up to explore its gold-copper Hill 800
project in Victoria. A drilling programme initially targeting down-dip
extensions of gold and copper mineralisation at Hill 800, about
80m and 160m below the current limit of drilling, before targeting
Alkane Resources Ltd (ASX:ALK)
nearby magnetic anomalies for potential porphyry systems
Market cap: $283 million. Share price: 56c beneath and adjacent to Hill 800. First assay results are expected
early in Q1 2020.
A hint of Cadia-style mineralisation at the company’s gold-copper
Boda prospect in New South Wales set the market alight.
Highlights from drilling at Boda included KSDD003: 502m @ Musgrave Minerals Ltd (ASX:MGV)
0.48 g/t gold, 0.2% copper from 211m (including 313m @ 0.62 g/t, Market cap: $36 million. Share price: 9c
0.17% from 228m, including 12m @ 3.28 g/t, 0.67% from 419m)
and 35.8m @ 0.21 g/t, 0.49% from 735m to end-of-hole. Assays A new high-grade link lode was reportedly intersected at Break
also confirmed strong gold-copper porphyry mineralisation 200m of Day at the Cue project. The intersection included 45m @ 11.8
south-east of the small near-surface Kaiser deposit. Drill intercept g/t gold from 144m down hole including 11m @ 14 g/t from 144m
highlights included KSRC027: 40m @ 1.30 g/t gold, 0.22% copper down hole (including 5m @ 29.2 g/t from 150m and 23m @ 16.2
from 0m (including 10m @ 2.86 g/t, 0.36% from 0m), 2m @ 3.24 g/t from 166m down hole). A resource update is scheduled for Q2.
g/t, 0.26% from 25m and KSRC029: 32m @ 0.53 g/t, 0.27% from
2m (including 11m @ 1.09 g/t, 0.4% from 9m). Saturn Metals Ltd (ASX:STN)
Market cap: $17.8 million. Share price: 34c
Magnetic Resources NL (ASX:MAU)
A RC drilling programme was in progress in late 2019 at the
Market cap: $100 million. Share price: 50c company’s 100%-owned Apollo Hill gold project (pictured), 60km
At HN9, a significantly sized north-northwest 3km gold mineralised from Leonora, Western Australia. The programme of up to 13,000m
zone has been outlined; 200m wide and open to the north-west, at Apollo Hill is part of the company’s strategy to rapidly expand the
south-southwest and at depth. Within the 3km zone there are 272 newly discovered high-grade hanging wall zones and to grow the
intersections (ranging from 1-8m) greater than 0.5 g/t gold, which Apollo Hill’s 781,000oz resource. Drilling results from exploration step-
includes 134 greater than 1 g/t, 49 greater than 2 g/t, 24 greater outs to the east and down dip included 5m @ 5.19 g/t gold from 44m,
than 3 g/t and 18 greater than 4 g/t. All the intersections are very within 16m @ 1.69 g/t from 44m, 11m @ 1.2 g/t from 180m within
shallow and within the first 50m of the surface, with the highly 25m @ 0.61 g/t from 166m and 7m @ 2.13 g/t Au from 64m.
prospective zone just 15km north-west of Granny Smith and 10km “Results continue to confirm our thesis for step change growth
north-east of Jupiter. immediately adjacent to the Apollo Hill main lode. We are
extremely encouraged by the widening gold system, further
higher-grade intersections, and the extension of the hanging wall
Tietto Minerals Ltd (ASX:TIE)
system down dip. We are pressing ahead with our accelerated
Market cap: $80 million. Share price: 26c exploration effort as our confidence in the geological picture and
gold system grows,” Saturn managing director Ian Bamborough
Existing shareholders and leading global institutional investors
firmly committed to supporting a $17 million capital raising for said in an ASX release.
50,000m of diamond drilling to be completed to grow the 2.2 moz
gold resource at the Abujar project, Cote d’Ivoire. (see page 42) Oklo Resources Ltd (ASX:OKU)
Market cap: $60 million. Share price: 14c
Meteoric Resources NL (ASX:MEI)
The Dandoko project in West Mali is in gold-rich terrain.
Market cap: $59 million. Share price: 5.3c A 10,000m resource definition programme was in progress
towards the end of 2019, with a maiden resource from Seko
Following a $2.7 million capital raising in August, firm
commitments for a further $7 million raising were received in expected this year. (see page 28)
November. The cash will be used to accelerate exploration at
Novo Astro and Juruena in Brazil. The programme will include
5,000m of diamond drilling at Juruena to expand known resources
and test additional target, as well as 3,000m of diamond drilling
at Novo Astro testing under known artisanal open cast mines and
20,000m of percussion/air core drilling to define the scale of the
mineralised system outside historical mining areas. The proposed
geophysical programmes at Novo Astro and Juruena (1.3mt for
261,000oz gold @ 6.3 g/t) will also be expanded.
Golden Rim Resources Ltd (ASX:GMR)
Market cap: $13.96 million. Share price: 1.2c
At the time of print, the company had three rigs undertaking
a 9,200m RC, 4,000m diamond and 15,000m auger drilling
Page 28
One of Australia’s highest grade gold projects
Historic Bellevue Gold Mine
• A rapidly growing high-grade gold discovery in Western Australia
• +1.8 Million Ounces @ 11.1g/t gold delineated in less than 12 months
• Multiple drill rigs turning for a resource upgrade in 2020
• Strong cash positive of $30 Million to fund further reserve growth
• Highly experienced team with a track record of exploration success and corporate
growth
+61 8 6424 8077
[email protected]
bellevuegold.com.au ASX: BGL
FINALIST: EXPLORER
Back to resource
extension for Breaker
by Dominic Piper Senior geologist Mike Outhwaite
on the Bombora project
reaker Resources NL’s appearance at November’s first time in three years. That allowed us to do some detailed
BNewGenGold conference was confirmation of the solidity of interpretation and plan the next phase of drilling which started
its 1 moz Lake Roe project, but the company now must find the in November.
optimum path for growth on the asset. “We have a good understanding of it now; we’ve confirmed the
Lake Roe’s immediate path appeared defined last year with projected lodes and targeted those with step-out drilling and we
Breaker spending much of 2019 working on a PFS around are starting to get them at depth so this next programme will be
the Bombora deposit. However, as Breaker’s self-imposed very interesting.”
October deadline approached the company began to reassess Greenfields stories have failed to excite a market more attune
its strategy and has now put the PFS on ice as it refocuses to brownfields plays. Sanders admitted it had been challenging
attention on resource growth. explaining Breaker’s approach to investors eager to see a flurry
Although markets don’t take kindly to companies failing to of high-grade hits.
meet promises, Breaker executive chairman Tom Sanders is “Sometime people don’t realise what we are trying to do at Lake
unperturbed. He believes ultimately the decision to delay the Roe,” he said. “They think of the typical brownfields environment
PFS will be of benefit. of finding the deposit and then drilling it out but that is not the
“PFS was always going to continue to grow and change,” case here.
Sanders told GMJ. “We have drilled 233,000m at Lake Roe and “It is almost a reverse of that brownfields environment where
the system is still open in all directions. At the same time, we you define a big global resource before infill drilling brings
wanted to do some preliminary mining studies to ensure what you back to the mineable component. We are starting with a
we were outlining was mineable.” smaller indicated resource and working our way out with step-
Meeting expectations has been a constant challenge for out drilling.”
Breaker since it announced the discovery of Lake Roe – 100km That strategy and postponement of the PFS indicates a
east of Kalgoorlie – in 2016. The company’s share price hit 72c reluctance to pursue an early-start scenario.
in September that year and reached 78.5c 11 months later as
“The smart thing to do is keep all options on the table and
the discovery began to take shape. However, this was followed
the early start is certainly possible. We had expressions-of-
by a strong retraction in April 2018 (to 27c/share) after the
interest from parties over that, but they didn’t equate to value
company’s maiden resource for Bombora – 624,000oz @ 1.6
for shareholders.”
g/t gold – underwhelmed.
Instead, Breaker struck a deal with US private equity group
It has been a case of steady recovery since and Sanders was
Electrum Strategic Opportunities Fund II. Electrum took an $8
eager to avoid another market correction by releasing a PFS
million placement (at a 10% premium) in Breaker on November
which didn’t reflect the overall size and growth potential of the
13, handing it a 9.95% stake in the explorer. Sanders said
project.
Electrum’s investment strategy – which has seen it take sizeable
“We decided it was always going to be a Stage 1 PFS but the positions in the 45 moz Donlin and 11 moz Livengood projects
problem with releasing such an early PFS is that it sets market in Alaska – was well-matched to Breaker’s outlook.
expectations about what the project is.”
“Electrum’s strategy is obvious,” he said. “They pick up large
Instead, Sanders is focused on building the Lake Roe resource, deposits with potential and allow them time to grow; that
which stands at 23.21mt @ 1.3 g/t for 981,000oz gold (80% approach suited our low-risk growth strategy.”
indicated).
Sanders appears comfortable with Electrum’s longer-term
“It is a case of progressively building the picture,” he said. expectations at a time when the domestic market is fixated on
Part of the challenge has been the greenfields nature of gold producers and rapid developers.
Lake Roe which has led to the “nice problem” of intercepting “It takes some of the risk off the table for our existing investors
mineralisation almost everywhere holes are drilled. around early-stage single asset development and the
“We have made at least one discovery every quarter for the associated dilution,” he said. “The Australian market just doesn’t
last three years. It is a big area – 8km of strike – with a lot of have the depth to have a fund like Electrum. We do intend to
complexity and building an understanding of it takes time. After develop our North American and European investor bases off
the last resource update, we put a pause on drilling for the the back of this deal.”
Page 30
Spectrum
goes full on
Within nine months of 2019, Spectrum drilled
by Mark Andrews 30,000m and produced a resource at Penny
West in Western Australia’s Youanmi district
enus Metals Corp’s court claim against Spectrum Metals Ltd reach wider audiences in North America and Europe.
Vover the acquisition of Penny West has been a distraction, Within six months of discovery Spectrum was able to
but that has done little to stop momentum on the project. institutionalise its share registry with 1832 Asset Management
After starting the year with a market cap around $4 million, (9%) one noticeable big hitter showing interest. Adams said the
Spectrum closed 2019 valued at around $107 million, enough to high-grade, advanced status of Penny West was an attractive
make it a popular contender for GMJ’s Explorer of the Year. proposition for people to buy into and may eventually be a
The company managed two capital raisings throughout the year complimentary asset for another company.
– $5 million in March and $7.25 million in August – which helped How others view Penny West will play out in the long run, with
with 30,000m of RC/diamond drilling culminating in a maiden Adams’ primary concern being to continue the emphatic work
resource released in October from Penny West. The resource rate which has lifted Spectrum to prominence in quick time in
of 355,000oz gold @ 13.8 g/t within 80-320m depth, includes the last 12 months.
75% in the indicated category. “We knew we were in a high tenor system,” Adams said.
Standout intercepts from the Penny West project, south-east “It has been a phenomenal year, but I don’t think any of us
of Mount Magnet, included 14m @ 14.5 g/t gold from 124m, could have really anticipated this when we started. We didn’t
including 8m @ 23.4 g/t, 6m @ 47.7 g/t from 150m, including anticipate what lay north of the pit at all and now a good portion
2m @ 140 g/t, 9m @ 24.1 g/t from 265m, including 3m @ 69.3 of 2020 will deal with project development to get to [a decision-
g/t and 11m @ 25.8 g/t from 120m, including 6m @ 46.8 g/t. to-mine] as soon as we can.”
Diamond and RC drilling is continuing, with strong gold intercepts
reported from extensional drilling at Penny North (2.87m @ 14.7
g/t gold, including 1.26m @ 31.7 g/t from 365.17m, 2m @ 26.7
g/t with an additional 8m @ 4 g/t gold and 2m @ 1.73 g/t from
225m) about 100m north of the existing Penny North resource.
Meanwhile, infill drilling at Penny North has returned 1.85m @
25.4 g/t gold from 303.12m and 1.65m @ 11.6 g/t from 252.35m,
as RC drilling at Magenta and other areas north of Penny North
remain ongoing ahead of a resource update in the first half of REVEALING REBECCA
2020. Spectrum also expects to have a verdict on Venus’ claims A NEW EASTERN GOLDFIELDS DISCOVERY TAKES SHAPE
on Penny West in the first half of next year with a court hearing
scheduled in early March.
“We believe the claim has no merit and we will be vigorously l Three mineralised systems ✓ Rebecca
defending it,” Spectrum managing director Paul Adams told ✓ Duke
GMJ in relation to Venus claiming breaches of confidence
✓ Duchess
and misuse of information regarding Spectrum’s acquisition of
Penny West. l Rebecca – 1.7km Strike with multiple gold surfaces
Corporate affairs aside, Spectrum’s ambitions for 2020 l High grade to drive commerciality
*
include completing a fair portion of work committed to project 49m @ 4.57 g/t au
development at Penny West. 42m @ 7.75 g/t au
*
*
Baseline flora/fauna studies have been completed, mining 25m @ 7.88 g/t au
studies initiated and drilling will be in full flow to determine if l More than 30 holes with >50grm intercepts
Penny West can be in production within 18-24 months.
l Drilling continues
“We have a view to developing it ourselves,” Adams said.
Helping the company to achieve its production ambitions will
be founding Silver Lake Resources Ltd managing director Les
Visit us at www.apolloconsolidated.com.au
Davis, who joined Spectrum as a non-executive director in
December. Email: [email protected]
Tel: (08) 6319 1900
Davis joins at a time when the Spectrum story is starting to
Page 31
FINALIST: EXPLORER
Apollo shoots for the stars
by Dominic Piper
pollo Consolidated Ltd’s progress in 2019 has managing resource, it needs someone else for that” – he sees a clear path
Adirector Nick Castleden confident the company can start for Apollo in Rebecca’s development.
putting preliminary numbers around its Lake Rebecca gold “It is a hell of a discovery and at a low cut-off there will easily
discovery this year. be 1 moz,” he said. “That is a lot of gold looking for a home and
The company has drilled 33,000m of RC and 1,100m of we’ve been finding that if we went to a dig-and-truck scenario
diamond holes at Lake Rebecca – 150km east of Kalgoorlie, the low-grade material wouldn’t travel very far. So, it is probably
Western Australia – over the last 12 months, scoping out the more suited to a standalone operation; that’s how the grade
high-grade Jennifer lode and identifying several other lower- distribution looks best.”
grade positions along the mineralised trend. Apollo’s clean capital structure means it is also in charge of its
“We are making some good progress and we are at the point own destiny.
now where we are starting to look at potential scale,” Castleden “We are not obliged to talk to anyone because there is no
told GMJ. producer on the register, that gives us flexibility in planning.”
Identified via hits of 17.84m @ 15.95 g/t gold and 49m @ 4.57 Although resource estimation is the priority in 2020, Castleden
g/t during diamond drilling in late 2017, Lake Rebecca has been is keen to see step-out exploration continue.
Apollo’s sole focus for two years.
“We are starting to get into more conceptual targets and the RC
The first 12 months were devoted to understanding the Jennifer rig will test them in the next six months.” Depths extensions will
lode – a high-grade system which had produced further hits of also be tested according to Castleden.
42m @ 7.75 g/t gold, 50m @ 4.05 g/t, 25.8m @ 6.71 g/t, 25m @
“If we can find any high-grade material under the future pit it
7.88 g/t, 59m @ 3.22 g/t and 21m @ 5.56 g/t.
adds a huge amount of value and longevity to the project.”
Since then, the company has identified the Laura and Jennifer
NE zones and recently intercepted a new prospect to the west
of Jennifer through a hit of 29m @ 4.1 g/t gold. Castleden said
the recent intercepts suggested Apollo could add volume to
Jennifer’s high-grade potential.
“It is now about bolting on things to the Jennifer high-grade
RESOURCES
material,” he said. “There is a lot of volume sitting in that 0.5-
2 g/t range in many prospects, parallel to surface. We haven’t
wireframed these surfaces; we are just putting the effort in now.
There is a lot of the material in those plates.” Strategic 2,000km 2
landholding in
Castleden said the extensional work would continue but the
immediate focus would be on building a maiden resource for Northern Cote d’Ivoire ASX: ERX
West Africa
Rebecca.
Prolic, proven, gold region
“We have got to a point where the near-surface material is at a
density a resource geologist can work with,” he said. “And, it is Recent results at
the logical progression because we are at the point where the Antoinette Discovery Veronique Discovery
underfoot targets are beyond a RC rig’s capability.” 25m @ 6.87g/t gold 4m @ 76.31g/t gold
Prospects such as Laura, Duke and Duchess will add valuable 11m @ 12.79g/t gold 12m @ 7.00g/t gold
volume to a maiden resource, but the Jennifer lode will underpin 15m @ 9.96g/t gold 8m @ 4.30g/t gold
the commerciality of Rebecca.
Well Funded for Continued
“While the Jennifer lode will be swamped by volume it will be the
Drilling and Exploration Success
central focus of mine planning and scheduling,” Castleden said.
“As a matter of course, you would tack on the low-grade material
to the north, but we are certainly conscious of putting out
ounces that are no good [in a mining sense]. We will calculate
intersections and look at the mineability and whether we need
L2, 18 Kings Park Road West Perth WA 6005
to do more work to fill in the gaps.”
+61 8 6117 0446 PO BOX 71 l West Perth WA 6872
While Castleden is humble enough to admit mining engineering www.exoreresources.com.au l twitter @ExoreResources
is not his skillset – “I’m not the guy to take it beyond a robust
Page 32
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NEWGENGOLD REVIEW
For gold we must trust
All eyes were on where the next greenfields discoveries will be made
NewGenGold 2019 showcased the discovery histories of 13 world class gold deposits from some eight
countries, with the 400 people in attendance also presented with keynote addresses on the spectacular
projects hosted in China and Russia. The biennial conference’s closing forum saw exploration experts
discuss the merits of brownfields and greenfields exploration.
The question was posed to panellists about how the current focus on brownfields exploration would affect
future rates of gold discovery.
by Mark Andrews
buoyant gold price over a lengthy period has done “Probably the biggest mistake I have heard coming
A nothing to inspire investors to look towards companies from government agencies, research organisations and
grafting away in greenfields terrain. universities is the idea that you should be going into
Top end gold M&A has been the dominant theme among the greenfields areas and finding Tier 1s. This is just setting up
sector’s majors and mid-tiers while finding ounces in familiar the next generation to do what the previous generation didn’t
pastures to keep raising the bar in production levels has largely succeed with.”
also been favoured over high-risk, high reward exploration Depressed market conditions for juniors has meant
in “frontier” parts of the world. greenfields exploration activity has been stagnant across all
Given the track record of broken promises within industry, commodities.
investors have approached speculative plays with caution The penny has dropped in other sectors with diversified
and instead have shown a willingness to support companies majors BHP Ltd and Rio Tinto Ltd both increasing spending
with production credentials and healthy returns. Therefore, on greenfields exploration, while companies in the rung
maintaining production profiles has mainly been done below have started collaborating with cash-strapped juniors
through near-mine exploration and potential extensions to exploring in prospective but challenging, often never-before
existing mines. explored territory.
It can’t be denied that industry has successfully delivered on However, the trend has not yet fully reached the gold sector,
this strategy, with Callie, Jundee, Bronzewing and Sunrise leaving industry insiders wondering where the next wave of
Dam among Australian examples of projects displaying discoveries will come from.
significant growth from their initial reserve bases. “The exploration scene covers about 60% of the ounces
“Because brownfields [exploration] has been so successful, discovered, so the smarts are out there. The money is also
greenfields can live off that. To find a Tier 1 greenfields there, it is a matter of using that same innovative pull that
deposit; it has to be big enough to mine and get social you use in discovery to complement what you do to raise
licence and the like to operate,” Julian Vearncombe from money,” Breaker Resources NL executive chairman Tom
SJS Resource management said during the NewGenGold Sanders said.
Conference panel discussion. “The exploration industry is high risk and it needs a model
Page 34
Breaker executive chairman Tom Sanders, Western Mining Services’ Dr Jon
Hronsky, company director Lynda Burnett, Paydirt editor Dominic Piper, Resolute
general manager exploration Bruce Mowat, OceanaGold Corp manager, project
generation (Asia Pacific) Peter Caristo and Gold Road executive director, exploration
and growth Justin Osborne gave their thoughts on where the gold mining industry
is heading at the closing panel discussion of NewGenGold Conference 2019
to get that consistency in funding later in
cycles which is very critical. To a large extent,
the funding model is broken and desperately
needs fixing; it is not going to come from the
top, it is going to have to come from us [junior
sector].”
Funding conundrums in the junior sector are
not new and despite the value greenfields
explorers can deliver, raising enough money to
sustain proper exploration programmes is as
nuanced now as it was 20 years ago.
The declining success of genuine Tier 1
greenfields discoveries is one reason for
the dilemma and the overall performance of
industry has left investors scorned.
“There is too much spruiking going on at
the moment, there are too many projects
that haven’t delivered and too many large-
scale projects that have required money, so Osborne said. “The courage the company had to keep
investors have lost confidence in the industry,” Gold Road investing was built on good geology, trust in our own team,
Resources Ltd executive director, exploration and growth building up relationships with our investors so we could raise
Justin Osborne said. money and then at the end of it not being fixated on building
“If we don’t deliver on what we say we are going to deliver; the project ourselves.
that trust you need is not there. Every time you put out an “We could have raised a lot of debt and capital and diluted
ASX release or something in the media, make sure it is true our shareholders, but we had the courage to build the
to your word and you deliver on it.” relationships with our shareholders and the courage to do
There are few currently qualified enough to speak of the a JV,” he said.
travails of taking a greenfields play all the way through to Gruyere Mark II may potentially be in the making now
production than Osborne. that Gold Road can continue to pioneer exploration in the
At the time of print, the tape was being cut on Gold Road’s Yamarna targeting 1 moz gold discoveries on substantial
Gruyere mine just six years after discovery. budgets (2019: $20 million).
Of course, Gold Road has benefitted from having global gold Osborne is confident Tier 1 projects are still lurking in
heavyweight Gold Fields Ltd as a 50/50 JV partner through jurisdictions like Australia, albeit under cover, and believes
the construction phase at Gruyere. there are a number of belts in the country yet to be fully
recognised for their potential.
Nevertheless, Gold Road’s portion of the mine sees it valued
at $1 billion. Meanwhile, Gold Road still retains 100% of “It requires courage from companies and their decision-
makers at board level to start providing exploration funding
5,000sq km of prospective tenure in the Yamarna greenstone
belt which could potentially host a Gruyere replica. to go into these areas. It requires more courage from the
majors to start putting money into these areas also, which
The position Gold Road has established could mean it
we are starting to see from the diversified majors, but we
has the capacity to develop another Gruyere on its own.
aren’t seeing it from the gold majors yet,” Osborne said.
However, the initial mine building experience has been a
sobering experience for Osborne. “I think there is tremendous opportunity in Canada; the
difficult thing is that some of the riskier jurisdictions you are
As well as dedicating boots on ground to developing a 3.9
starting to see pressure come in the financing space and the
moz reserve and 6.6 moz resource at Gruyere, Osborne has
increasing focus on ESG. There are countries out there with
pounded the pavement across the world building belief in
fantastic geological opportunities that probably won’t qualify
the Gold Road story.
under ESG ratings, which is going to make it harder and
Over 2,000 investment meetings in the past six years has
harder to explore.”
resulted in Osborne helping to take Gold Road’s retail/
Outgoing Sipa Resources Ltd managing director Lynda
institutional shareholding from zero to 70%.
Burnett faced a similar scenario during her time at the
“A lot of that is building trust within the investment scene,” company.
Page 35
NEWGENGOLD REVIEW
bullish long-term projections for gold prices.
Should gold prices continue to be strong, there is a belief
that risk appetite will return and companies will become
more expansive in their approach to exploration.
Resolute Mining Ltd appears to be striking the balance
between keeping its finger on the pulse of opportunities in
emerging jurisdictions while maintaining a healthy pipeline
of growth through brownfields exploration.
Through its cash flow, Resolute is able to spend $10 million
a year on select greenfields prospects.
“The market is expecting 1 moz-plus maiden resource [from
greenfields],” Resolute general manager exploration Bruce
Mowat said.
“A maiden resource [20 years ago] was 250,000oz gold but
Intertek once again sponsored a gold nugget lucky dip draw at that is not what we expect anymore. Companies I speak to
NewGenGold. Intertek global minerals, exploration and production leader won’t release their maiden resources until they get 2 moz.
John Fowler (right) presents the nugget to Andrey Butnyakov The majority of Resolute’s exploration funding in the past
10 years has “astronomically” added reserve and resource
ounces to the company’s inventory.
Burnett, now a non-executive director at Regis Resources
Ltd, was bullish about the base metals potential Sipa had in “But it doesn’t go on forever and we realise that. Most
Uganda, however, the noise emanating from the Paterson boards of medium-capped companies are somewhat wary
province in Western Australia had investors more interested of greenfields exploration and when I say ‘high risk high
in the Tier 1 jurisdiction opportunity. reward’ they only hear high risk,” Mowat said.
“My shareholders don’t like the fact that we are in Uganda,” Nevertheless, Resolute has gone through a process of
Burnett said before leaving Sipa. backing six juniors in the Africa space and if Mowat had it his
way, branching out further would be the path taken.
“I think the challenge for us is to educate our investors about
what greenfields exploration is about. Now we are drilling “I am incredibly encouraged by what I see in the Arabian
under cover [in the Paterson], drilling for fundamental geology Nubian Shield; it is the last frontier in Africa,” Mowat said.
and to ground-truth geophysics; that is a big difference from “We have invested in Sudan and Egypt and we hold equity
just drilling a target to make that discovery. [Shareholders] in a 5 moz gold deposit in Sudan. I am incredibly positive
don’t see the difference, so we have to communicate our about greenfields exploration in Africa. Everything we have
stories to get the investors on board.” found in the last five years has been outcropping, so there
Introducing and convincing shareholders to support high- are things to be found but they are in difficult jurisdictions.”
risk, high-reward greenfields exploration endeavours is just
part of the task for companies in Tier 1 jurisdictions, let alone
the intrepid explorers taking on unknown territory. NewGenGold co-convenor Keith Yates with Dr David Gellatly at
NewGenGold 2019
OceanaGold Corp manager, project generation (Asia Pacific)
Peter Caristo said attitudes towards mining in general were
matters requiring attention regardless of jurisdiction.
“It is getting harder and harder in some parts of the world,
you could be in a Tier 1 country, but then you might be
battling anti-mining sentiment,” Caristo said.
OceanaGold owns the Haile project in South Carolina which
doesn’t quite have the mining-friendly reputation Nevada
does.
“The opportunities are there and you can work those
opportunities, but there’s an uneducated workforce, they
don’t know what mining is; the next largest employer in the
district is a jail,” Caristo said.
“It is a good jurisdiction, but there are other challenges.”
North America and Canada have provided growth
opportunities for Australia’s mid-tier gold companies recently.
While some of the North American and Canadian acquisitions
made are high-cost operations, it is an indication from
industry that bigger production profiles are better amid
Page 36
NewGenGold as early
showcase for future M&A
NewGenGold organisers have always prided themselves on picking the hottest new exploration stories
across the gold sector to showcase to the entire industry. The forum’s ability to identify potential early was
confirmed in the days after the 2019 edition when two projects which featured on the 2009 programme
(Detour Lake and Red Lake) were acquired for a combined $4.5 billion. We take a look back at the last
decade of NewGenGold conferences to find which other assets have changed hands.
2009 status unknown in Newmont
Goldcorp
Detour Lake:
Acquired by Kirkland Lake Galat Sufar:
Gold Inc made a $C4 billion Resolute Mining Ltd
offer in November 2019 acquired 17% share in Orca
2018
Bruce Channel/Red Lake:
OceanaGold Corp spent $C856 million in scrip to acquire Romarco
Acquired by Evolution Minerals and its Haile gold mine in South Carolina, US, just a year Haile:
Mining Ltd in $553 million after Romarco presented at NewGenGold Acquired by OceanaGold
deal in November 2019 Corp via $C856 million all-
Cerro Negro: 2011 2013 scrip takeover of Romarco
Minerals
Acquired by Goldcorp for Canadian Malarctic: Fekola:
$US3.4 billion in 2011 Acquired in 2014 by Yamana Acquired by B2Gold Corp for Petowal (Mako):
Acquired by Resolute in its
Cerro Moro: Gold Inc and Agnico Eagle $US650 million in 2014
Acquired by Yamana Gold Metals Inc in a 50/50 JV Twin Bonanza: $US274 million takeover of
Corp in $C395 million worth $C3.9 billion Now in private hands after Toro Gold in July 2019
transaction in 2012 Camino Rojo: ABM fell into administration
Caspiche: Acquired by junior Orla Buriticia:
Goldcorp paid $US185 Mining in 2017 in $C42 In December, Zijin Mining
million for the asset in 2017 million scrip deal made a $US1 billion bid for
Chucapaca:
Koka: project owner Continental
Buenaventura took full
Sold to China SFECO Group Gold Inc
ownership in 2014, still at
for $US80 million in 2012 B2Gold Corp president Clive
PFS stage
Banfora: Johnston on the cover of GMJ
Konkera/Batie West: July ‘14 with Papillon Resources
Acquired by Teranga Gold
Acquired by Centamin plc chief executive Mark Connelly
Inc 2016 as part of its
for $40.9 million in 2013 after the deal for Fekola was done
$US63 million takeover of
Gryphon Minerals Tujuh Bukit: Gruyere: Gold Fields Ltd paid $US350
Controversially lost to local
million for 50% interest in 2016
partners in 2012
2017
Moose River:
Acquired by St Barbara Ltd
as part of its $C722 million
takeover of Atlantic Gold in
2018
Cascabel:
2015 BHP Ltd and Newcrest
Coffee: Mining Ltd now hold more
Sold to Goldcorp Inc in than 14% in SolGold
2015 for $C520 million,
Evolution’s acquisition of the Red Lake gold
complex comes a decade after the discovery was
featured on the NewGenGold programme
Page 37
NEWGENGOLD REVIEW
New gen funding
by Mark Andrews
he interface of trust between the junior mining sector and “I think it is a real problem that is getting worse,” Hronsky said.
Tsophisticated holders of risk capital has collapsed and now “In 2000, they were raising $4-5 million and 20 years later they
innovative solutions to repair the damage must be delivered. are still raising $4-5 million; that isn’t enough.”
Dr Jon Hronsky from Western Mining Services Pty Ltd, believes Majors such as Rio Tinto Ltd and BHP Ltd have started beefing
there is an ever-increasing pool of sophisticated risk capital up their exploration expenditure in the greenfields space across
available in the world, but a major reluctance for it to be spent various commodities, however, gold majors have focused on
on junior company investments. M&A to increase their scale.
“In a world where interest rates are so low that the capital pool is Hrosnky said the pipeline of quality gold projects available was
increasingly looking for valid, high-risk, high return investments starting to thin out and companies were now realising the value of
– it should be a match made in heaven,” Hronsky said. greenfields exploration.
“The challenge for us in industry – and there are some ideas of But, has that realisation arrived too late?
how we do attract that capital – is to build that interface to tap
“Robert Friedland made a comment a few years ago saying if you
into that risk capital which is really sitting there quite lazy and
are living in the present, you are 3-5 years behind other people. I
looking for opportunities to get a decent return on investment.”
think that is the story with greenfields. I think the smart money is
Juniors trying to attract funding is difficult at any point of the in the companies who have realised that you have to move into
commodities cycle and it is perhaps the failed trends of the past greenfields,” Hronsky said.
that continue to hamper the sector now, according to Hronsky.
However, the greenfields environment can be unforgiving,
He said that 20 years ago, juniors didn’t raise enough money to particularly for adventurous junior companies.
sustain proper exploration programmes and the situation hasn’t
Breaker Resources NL found this out the hard way. Despite
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Page 38
releasing a maiden resource of 11.8mt @ 1.6 g/t gold for 624,000oz
from limited, early-stage resource drilling at its Bombora deposit
within the Lake Roe project in Western Australia, the market
reaction to Breaker’s first resource was negative.
While Breaker stated it generally takes at least three years for a
deposit to progress from discovery hole to a potentially economic
resource, the market appeared to give little consideration to that
and the company found its share price falling from 51c/share to
24c in the weeks after the announcement.
The reaction to Breaker’s maiden Bombora resource in a Tier 1 Jon Hronsky
jurisdiction amplifies how fickle the investment community can Gold Road Resources Ltd executive director,
be. exploration and growth, Justin Osborne said
the significant growth of ETFs and index-hugging passive funds
The shallow open pit resource at Bombora, 100km east of
in the gold sector was essentially sidelining cash for greenfields
Kalgoorlie, has since grown to 23.2mt @ 1.3 g/t for 1 moz
explorers.
gold, with Breaker recently raising $8 million in a placement to
a prominent US fund to ramp up RC and diamond drilling to “All the money that was available for greenfields exploration has
increase the resource. really dried up. In the last few years you have seen brownfields
exploration increasing globally and greenfields decreasing
“The impression I get is that their preference is for Tier 1
globally,” Osborne said.
jurisdictions like Australia. First pass greenfields [exploration]
is relatively cheap and the reward from that particular phase, if “There is a lot more money going into brownfields exploration,
successful, is obviously very high. The trick is to be very decisive but not giving the returns. In 2007, 40% of global gold exploration
at that moment to keep on,” Sanders said. was greenfields by the end of 2016 it was down to 25% and all of
that money is going into brownfields exploration. And, it is having
Whether or not the success of Breaker and the likes of Bellevue
a variable return, there is a lot of brownfields exploration not
Gold Ltd to raise money and deliver on market expectations
delivering significant returns. If you made a decent discovery in
drags others in the junior space along and traditional resources
greenfields the return would be greater.”
investors back into the game remains to be seen.
Mobile Laboratories
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Mineral Mapping
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Page 39
NEWGENGOLD REVIEW
Find more gold: Schodde
by Michael Washbourne
esearch from MinEx Consulting’s Richard Schodde has better at exploration. I’d like to think we will see both.”
Rindicated the industry is not finding enough gold to replace In a wide-ranging presentation featuring a number of statistics,
what is being mined. Schodde noted today’s global spend on gold exploration of
In his first address at NewGenGold since 2015, Schodde said $US4.4 billion was down 62% on the 2012 peak of $US11.8
for every 1.4oz of gold found over the last decade, one ounce billion. Discovery rates have also plateaued at 35-45 deposits
was being extracted from the ground. annually.
However, he pointed out that not all gold discoveries were being The size of new deposits is also declining, according to
converted into mines and for those deposits which were being Schodde, with the current average of 3.2 moz significantly down
developed, the time lag between discovery and start-up was on the 5 moz reported during the 1980s and 1990s despite the
now 20 years – and rising. better exploration techniques that exist today.
“The industry is struggling to sustain itself,” Schodde said. “There has been a slow decline in the size of deposits being
“We’re not finding enough economic and socially acceptable found, but grades have remained relatively constant,” Schodde
gold to replace what we mine when you take into account that said.
only half of all deposits actually turn into mines. And those that “My comment would be that the last decade or so is probably
do turn into mines, only about three-quarters of the ounces are underestimating the true size of these deposits because these
there. things do grow over time. If I come back and revisit this chart in
“There’s two things that have to happen; either the price of gold a decade’s time, I’m sure it will be lot larger than 3.2 moz.”
goes up so it brings extra spend into the market or it brings Australia continues to outperform its peer countries in
marginal projects into production, or we have to be smarter and exploration expenditure, Schodde added. While that spend is
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For details or to download
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Page 40
Richard Schodde
down 22% since 2012 in US dollar terms, it is actually at an all-
time high from an Australian dollar perspective.
“The exploration spend in Australian dollar terms is actually
higher than it was back in 2012,” he said. “We haven’t felt the
pain as much as some of the other countries. I’d make the
comment Australia has found its mojo and Canada is still in a
haze of marijuana smoke.”
Schodde says: “One of the real challenges for the industry is it does take time to Schodde says: “The reason why we had a large blowout in our
drill out and properly understand the size of the resources that we have. For a lot discovery costs in the last decade is because the market got too hot.
of the stories we’ve heard at this conference, the gestation period between that It cost you a lot of money to hire a geologist, it cost you twice as
initial discovery hole and the maiden resource is in the order of 3-5 years.” much to drill a hole.”
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Page 41
v
AFRICA
Tietto’s tin stacked
by Mark Andrews
t is often hard for some juniors to fund themselves from one Having established the
Iexploration campaign to the next, not so for Tietto Minerals company with 2.2 moz gold
Ltd. at Abujar, Tietto is starting
After two resource updates in 2019 and a year-ending 2.2 moz to see a flow of deals
gold resource to show for in Cote d’Ivoire, Tietto locked away come its way and remains
$17 million in a placement (before costs) to shareholders and open to picking up more
global institutions in November. prospective tenure.
“For a junior like Tietto, it means we won’t need to go back to “We were able to pick up
the market for three years,” Tietto non-executive director Mark ground under the noses of
Strizek told GMJ. Perseus and Exore right up
in the triangle near Tongon.
The placement of 65.4 million fully paid ordinary shares at 26c/
We are well connected
share boosts Tietto’s cash backing to $20 million and allows
and have guys looking for
Tietto to continue drilling at the Abujar gold project uninterrupted.
opportunities all the time,”
“It guarantees our future and if you want to be involved in
Strizek said.
Tietto you have to buy on market. The placement allows us to Abujar hosts a resource of
“We have been able to
generate a continuous stream of drill results. We have our own 45.5mt @ 1.5 g/t gold for
spend money through thick
drilling company and we just acquired another rig,” Strizek said. 2.15 moz of contained gold,
and thin and prove we’re
A fourth rig purchased by Tietto, plus other mobile equipment with a high-grade core near
not fair-weather friends.
gives the company capacity to drill 50,000m of diamond holes surface at the northern end
That has meant from local
to grow the existing 2.2 moz gold resource within Abujar of the Abujar Gludehi (AG) of
government, right through
Central, while a further 25,000m (diamond and aircore) will be 1.4 moz @ 2.2 g/t
the different levels they
dedicated to exploration on targets at Abujar South and Abujar
know Tietto is a company
North.
that put its money where its mouth is.”
Adding high-grade ounces to the resource is the aim for Tietto,
Consistently delivering on its expenditure commitments has
with the company expecting to double the amount of drilling at
taken Tietto into an “exclusive 2 moz-plus club”, taking some in
Abujar in the next 10 months, culminating in a resource update
the industry by surprise.
in Q3.
Strizek said results had done the talking for the company at
The metreage completed based on 60,000m drilling per annum
Abujar, with investors now encouraging greater promotion of
will be down at an industry-low $US35/m, essentially saving
Tietto.
Tietto $12 million a year by utilising its 100%-owned equipment.
“I think people are pleasantly surprised and some are kind of
Having its own drill rigs also gives Tietto the advantage of
kicking themselves that they didn’t get in earlier; we definitely
accessing equipment on its own terms, a benefit which may
focus on putting money into the ground,” Strizek said.
become increasingly important as activity in Cote d’Ivoire’s gold
Hartleys Ltd was the lead manager in the latest placement,
mining and exploration sector shifts into over-drive.
with Blackwood Capital Pty Ltd and Euroz Securities Ltd co-
Endeavour Mining Corp’s successful upsizing of the Ity gold
lead managers to the placement which will not only afford
mine CIL plant from 4 mtpa to 5 mtpa was realised recently,
Tietto the chance to buy another rig but also to access long
while Perseus Mining Ltd is targeting first gold production from
lead items associated with a PFS, including environmental and
Yaouré in December 2020, less than two years after bringing its
metallurgical studies plus working capital.
Sissingue mine online in 2018.
“It has been one of those years where people may feel that
Exore Resources Ltd (see page 33) is forging ahead on the
it has not been as good as it actually has been, it has been
exploration front, while Endeavour and Roxgold Inc are also
an absolutely phenomenal year for us. And, if you look at
reporting exploration success at their respective properties.
examples of West African [Resources Ltd] getting away at
“The rewards are going to be quite substantial,” Strizek said. Sandbrado and Bellevue’s [Gold Ltd] continued success, when
“Our drilling [at Abujar] will be focused around Abujar Gludehi you clear the clutter and look at the facts the gold industry has
[AG] deeps and the southern end as well, but also at APG. We developed and gold mining and exploration has been the place
have also got 23 very rich targets, inclusive of those two, to test.” to be,” Strizek said.
Page 42
AFRICA
Artisanal mining is a hard, dangerous, often
life-threatening pursuit but one on which
millions of families rely for their livelihood
Australian documentary photographer Hugh Brown was
the keynote speaker at this year’s NewGenGold conference
dinner. He took delegates through his adventures
documenting just a few of the 30 million men, women
and children mining by hand in some of the world’s most
dangerous environments.
His quest has taken him to the cliff faces of earth’s highest mountains, the
crater of an active volcano, the interior of world’s most dangerous mountain,
areas of active terrorist insurgencies and the Siberian Sub-Arctic in mid-winter,
one of the world’s coldest places.
The result is Brown’s newest book, The Cruellest Earth – Man’s Quest for
a Better Life, to be published in 2020. Here, we display just a few of the
thousands of images Brown has taken of artisanal gold miners in West Africa.
“The book is 75% done,” Brown told GMJ. “It will feature 10 of the most
incredible and spectacular mining locations on earth; men, women and
children mining with their bare hands.”
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Page 44
NEWGENGOLD PREVIEWAFRICA
African Gold in the places to be
by Mark Andrews
ust where the next West African gold acquisition will emerge from African Gold was undertaking a range of early-stage geological
Jis a question African Gold Ltd’s chief executive Glen Edwards work and drilling across its properties in Mali in late 2019 and hoped
continues to ask himself. to have a steady stream of news flow to market through to mid-
As the intrigue builds, Edwards aims to give African Gold the 2020.
best chance of being the go-to West African explorer by building Among the news items will be results from Agboville, Cote d’Ivoire,
a substantial package of well-endowed gold plays in Cote d’Ivoire whereby follow-up work was being concluded after a maiden
and Mali. shallow reconnaissance-style aircore drilling programme was
Having only listed in February 2019 with interests in Cote d’Ivoire, completed.
African Gold has quickly cobbled together some 436sq km of land A total of 174 holes were drilled on 17 short traverses over 10km
in west and south Mali amid heightening levels of artisanal activity in strike of the 20km-plus long Tyche gold-in-soil anomaly, with a
the country’s Kenieba Inlier hosting the prolific Mali-Senegal Shear bedrock source to gold anomalism and potential for a large gold
Zone. system confirmed.
The Faleme and Abra Resources Pty Ltd permits recently acquired Drill intersections of 9m @ 1.24 g/t gold from surface, 6m @ 1.12 g/t
in west Mali are close to the 15 moz AngloGold Ashanti Ltd/ from surface and 6m @ 1.42 g/t from 8m indicate width and grade
IAMGold Corp Sadiola mine and Barrick Gold Corp’s 14 moz Loulo- potential across the entire 10km of the anomaly drilled so far.
Gounkoto mine, while a sixth permit in the country’s south is near “We did some extra soil samples to extend that soil anomaly to
Resolute Mining Ltd’s Syama mine. the south, then we did some trenching and we are awaiting those
While African Gold’s permits are in prospective terrain, Edwards is results. It is a big system, it is going to take time,” Edwards said.
clear on the company’s strategy. “It will take a bit more drilling. We did the trenches as an attempt to
“People must remember that in Mali we didn’t have any properties see if it was an effective alternative to aircore drilling to get down
to start with and we have now picked up 450sq km in really great into basement. It is a very expensive exercise with clearing and
areas, mostly in the Kenieba window, but also along strike of Syama. compensation and it is a slower process, so further work through
We have some ideas for that, but we won’t dwell on the properties, aircore rather than trenching will need to be done to further define
we will assess them, make a decision and move on if necessary. that anomaly.”
We won’t drag our heels on a deposit, we are still looking for that Agboville, 50km north west of Abidjan, is an area of Cote d’Ivoire
elusive 5 moz gold project,” Edwards told GMJ. not previously exposed to any drilling, with Edwards “quite pleased”
“It is particularly busy [in Mali] and across the river [in Senegal]. I at having defined a big robust system and extending the anomaly
think there is a lot more genuine activity and the artisanal activity is during first-pass activities.
amazing; definitely a lot more artisanals on the side of the road than No doubt there will be keen eyes on African Gold, which is driven
there were three months ago. by Evan Cranston (non-executive chairman), Steve Parsons
“I am not saying the artisanal activity is economic, but they are (executive director), Tolga Kumova (non-executive director) and
making new discoveries and there is certainly more gold than I have Michael Naylor (company secretary/chief financial officer), as
ever seen in Kenieba. I think there are more deposits to be found interest returns to greenfields exploration companies.
there and not massive quartz vein. The artisanals are only targeting Edwards said that companies had finally realised the cupboard was
one style of mineralisation, but Randgold managed to find three or bare of new opportunities to buy in Africa, which had put a renewed
four different types of mineralisation which is encouraging because focus back on the greenfields sector.
it means that this system is robust rather than having one type of
“I don’t see where the next acquisition in Africa for a Newmont
deposit. In terms of geological prospectivity, this is one of the hottest
[Mining Corp] is. Endeavour [Mining Corp] is finding their own stuff,
places,” he said.
but if you were a mid-tier company, where would you buy your next
deposit? I think that there is an enthusiasm back into generative
stuff; it is high risk, but it is a lot cheaper than trying to buy a deposit,”
Edwards said.
“Our Ivory Coast package is quite big [1,800sq km] and if you pick
the right pieces of ground in Mali then you don’t have to sterilise or
generate targets. It is amazing how many properties we have been
offered in Mali. We have got good JV partners and we have got a
country manager who is a well-known Malian with connections. We
African Gold picked up highly prospective tenure in west are flooded with opportunities because we are good at working and
and south Mali in 2019 honouring deals.”
Page 46
Tie�o Minerals
African Gold in the places to be A rapidly emerging
West African Gold Company
Abujar Gold Project in Côte d'Ivoire
70km of proven mineralised strike
2.2Moz shallow open pit resource
Only 10%of the total strike potential tested
50km of diamond drilling underway
Four company owned diamond rigs
providing continuous newsflow and
resource growth in 2020
Well funded with A$20M cash
ASX:TIE
AFRICA
Oklo gets resource ready
by Mark Andrews
ust-watch West African gold explorer Oklo Resources “There’s been interest from the corporates, obviously there
MLtd is confident its maiden resource from the Seko are some pretty big corporates around us, and we believe
prospect will hit the mark in 2020. we are onto the right style there for a [potential] Tier 1
First assay results from a 10,000m resource definition deposit,” Taylor said.
drilling programme at Seko, within Oklo’s Dandoko project “Certainly, we have similar alteration in the core that we see
in Mali, has revealed potential for a new high-grade shoot at in the big mines around us.”
the “lightly tested” northern end of SK1. Former Papillon Resources general manager Andrew Boyd
Results from the first five holes available at the time of print heads Oklo’s exploration at Dandoko, while Mark Connelly
included 47m @ 10.97 g/t gold from 48m, including 7m @ is the company’s non-executive chairman.
60.57 g/t from 54m, while other significant intersections Connelly and Boyd were key players in Papillon’s successful
included 20m @ 1.98 g/t from 60m and 8m @ 2.11 g/t from delivery of Fekola and the subsequent $615 million merger
142m, with the hole ending in mineralisation. with B2 Gold in 2014.
Aircore drilling had been completed in late November, with Oklo’s success at Dandoko, where there is a number of
RC and diamond drilling ready to start as Oklo was on track prospective targets in the pipeline so far, has not escaped
to have the resource finished in early Q2. attention.
Juniors have recently been marked hard for maiden BlackRock Group (13.64%), Resolute Mining Ltd (9.12%),
resources, but it is a situation Oklo managing director Simon 1832 Asset Management (7.56%), Hawkestone Group
Taylor is unconcerned by. (6.58%) and Ruffer LLP (5.75%) are among the top 20
“We are in a geological belt that is world class, our drilling shareholders which comprise 71% of Oklo’s share registry.
is less than 100m deep and what we will be doing with the Top-end support for the company also demonstrates how
resource is going for quality,” Taylor told GMJ. comfortable investors are with Dandoko’s location given the
“We’re keen to show the market what we have been drilling security concerns in parts of West Africa.
is comparable to the mines around us.” Parts of Burkina Faso have been targeted by terrorist groups
Taylor’s confidence in the Dandoko project is understandable in recent times and parts of Mali have also come under
given the star-studded West Mali neighbourhood it is in. attack.
With IAMGold Corp’s Diakha (1.6 moz gold) and Boto (2.6 However, Taylor said it was important for people to recognise
moz) to the south-west, B2 Gold Corp’s Fekola (7.1 moz) to exactly where the trouble was occurring.
the west and Barrick Gold Corp’s Gounkoto (5.4 moz) to the “Obviously there are issues in Burkina Faso, [but] we are a
north-west, Dandoko is not only surrounded by well-endowed long way from that. That is right over on the eastern side of
gold mines but also good infrastructure complementing the Burkina and we are a long way away on the western side of
operations. Mali,” Taylor said.
The shallow aircore component of resource definition drilling at Seko has been completed,
with deeper RC and diamond drilling ongoing in late 2019
Page 48
M&A levels touching
top of pyramid
by Muvija M and Zandi Shabalala, Reuters
old miner Centamin plc rejected a $US1.9 billion all-stock broker Peel Hunt said.
Gtakeover proposal from Canada’s Endeavour Mining Corp, Endeavour said Sukari would also benefit from the fact that La
saying it did not offer enough value to Centamin shareholders. Mancha – a private gold mining group chaired by Egyptian billionaire
Endeavour announced its offer, a 13% premium to Centamin’s last Naguib Sawiris – would become a key investor. The Sawiris family
closing price on December 3, seeking to gain control of Centamin is Endeavour’s top shareholder with a 30% stake.
assets that include the Sukari mine and Cleopatra project in Egypt “We believe in the strategic rationale for this proposal and are fully
and exploration projects in West Africa. supportive,” Sawiris said in a statement, urging Centamin’s board to
The Toronto-listed firm, which owns four West African mines, said engage with Endeavour.
Centamin had rebuffed several attempts to engage in talks. A top Centamin investor said Egyptian government approval would
“The terms of the proposal provide comparatively greater benefit be key to sealing the deal.
to Endeavour’s shareholders, do not adequately reflect the Endeavour first showed interest in Centamin in 2018 with a
contribution that Centamin would make to the merged entity,” proposal that was promptly rejected. It then sent a formal proposal
Centamin said in a statement. last month, hoping to engage with Centamin’s board.
Endeavour said it planned to offer 0.0846 of its own shares for The Canadian miner Centamin’s board had refused talks without
each Centamin share, worth about 126.27 pence per share. a so-called standstill agreement, which could restrict Endeavour’s
The combined entity would have produced 1.2 moz of gold in options in pursuing a deal.
2019 at AISC – a key industry benchmark – of $US875/oz, which If Endeavour succeeds in its plans, its shareholders would own
would make it one of the world’s largest and lowest cost miners, about 52.9% of the merged entity, while the rest would be held by
Endeavour said. Centamin shareholders.
Centamin shares, which have underperformed Endeavour’s over
the last two years, were up 13.5% higher at 127.30p, on track for
their biggest one-day jump since 2015 and signalling investors
think the proposed bid could be increased.
Endeavour’s shares fell 3%.
“My idea of fair value is a lot higher up, it probably starts with a
2,” said Eric Moore, portfolio manager at Miton Group, the ninth
biggest shareholder in Centamin with a stake of about 1.4%, Perth, Western Australia
according to Refinitiv Eikon data.
“It might be this is just an opening shot and we’ll see how it
evolves.” The USB of Conference
The gold industry has seen a flurry of deals over the past year as Proceedings for the 2019
companies attempt to squeeze more value from operations after
years of subdued activity and low returns. Africa Down Under Conference
Barrick Gold Corp’s purchase of Randgold was followed by the is Now Available
Newmont Mining Corp and Goldcorp tie-up, and, more recently,
the $US1 billion takeover of Continental Gold Corp by Zijin Mining Conference Proceedings Includes:
Group.
• Over 70 presentations • Global media coverage
Mark Burridge, fund manager at Baker Steel Capital Managers
• Australia’s Paydirt preview and review editorial coverage
which owns shares in Centamin and Endeavour, said the deal
• Conference Sponsors
was compelling because it would create a larger and “more
investible” entity.
Centamin has struggled shifting from open pit to underground at
the Sukari mine and said in October it was looking for a new chief $100 (incl. GST)
executive after its incumbent retired. Phone (+61) 8 9321 0355
“We believe the Endeavour all share merger proposal for or email [email protected]
Centamin would provide the management and operational www.africadownunderconference.com
direction Centamin has lacked for the past two years,” analysts at
Page 49
REGIONAL ROUNDUP
Sun shines on Mithril
by Mark Andrews
T here will be new look about Mithril Resources Ltd in 2020. “As well as being a good project technically, there are good
people behind Sun,” Hutton said.
A well-known acquirer of projects on the ASX, the company
made moves to streamline the business in the past 12 months Stewart and Hall were instrumental in the exploration and
and the tidy up has resulted in a diversified strategy in both development of North American outfit Coeur Mining Inc’s
jurisdiction and commodity. Palmarejo silver-gold mine, which after nine years of production
“We have done three farm-out deals in the past six months or so, boasted proven and probable reserves of 693,000oz gold and
which was a broader strategy to clean up the company. There 50.2 moz silver, as reported in December 2018.
were a lot of projects and in the current environment you can’t Palmarejo is north of Copalquin within the Sierra Madre trend,
spread yourself too thinly,” outgoing Mithril managing director which also hosts Agnico Eagle Mines Ltd’s Pinos Altos, Newmont
David Hutton told GMJ. Goldcorp’s El Suazal Mine (depleted), First Majestic Silver Corp’s
“If anything we have allowed ourselves to be spread too thinly San Dimas, Fresnillo plc’s San Julian and La Cienega mines and
even though we have had a focus on the Billy Hills zinc project in the now shuttered Ocampo mine.
the Kimberley, so it was important for us to bring value-add to the There are multiple opportunities that excite Mithril across the six
lower priority projects to tighten the focus and bringing the focus mineral concessions covering 7,005ha at Sun’s Copalquin, not
down to Billy Hills has allowed us to pursue other opportunities.” the least historical high-grade drill intercepts of 17.77m @ 45.16
The company’s focus will now be on the high-grade Copalquin g/t gold and 118.2 g/t silver from 30.98m at El Cometa mine,
gold-silver project in Durango, Mexico. 7.9m @ 6.54 g/t gold and 140 g/t silver from 143.1m at El Refugio
and 4.53m @ 28.99 g/t gold and 2,350.3 g/t silver from 138m at
Copalquin has been held by private Australian company Sun
the La Soledad mine.
Minerals Pty Ltd which will be acquired 100% by Mithril.
Sun has spent $2.5 million in the last two years at Copalquin
An entitlement issue to existing shareholders to raise $4.9 million
and with a team with over 50 years’ experience in Mexico the
(before costs) is a condition of the transaction while Hutton, who
company will be well positioned to forge ahead at the project with
is a top 20 shareholder, will step down as managing director in
access to the market.
the first half of 2020.
“With the new management and new direction, the Mexican
Hutton’s departure opens the way for Dudley Leitch to become
opportunity will be the clear focus for the company,” Hutton said.
executive chairman of Mithril at Sun’s nomination.
“The constant struggle for juniors is the merry-go-round of raising
Furthermore, Sun’s exploration director Hall Stewart and
capital. It seems when you finish one capital raising you are onto
managing director John Skeet will boost the capacity of the
the next one. If we are successful here, we will do a large capital
company on the ground.
raising that will basically remove the need of every six
months going back to the market and doing a continually
dilutive capital raising. We have always been known as
conservative, with a high level of technical experience,
and that won’t change as the technical guys coming
across to this project are smart operators.”
While Copalquin will take top billing for Mithril, work will
continue at Billy Hills, north-west Western Australia,
where a heritage clearance survey for drill testing at
Firetail was conducted in early November. In addition to
the survey, more mapping and rock chip sampling was
also completed.
“The work we have done has done nothing to diminish
the Billy Hills project and ironically when you think about
the field seasons of the two projects, they are two
different seasons. The Billy Hills season wraps up as
the Mexican field season starts, so they don’t directly
compete for logistics and funds. They do have the ability
Copalquin contains 32 historic underground gold and silver mines, including
La Soledad and El Refugio to work side by side.”
Page 50
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