pd263-Aug18 mag-web

AFRICA DOWN UNDER PREVIEW

massive mines for Angola’s diamond The Mothae bulk sampling plant continues to give Lucapa greater clarity
sector to grow. So, we would look at ad- on the make-up of the deposit
ditional ground but we want co-investors
coming into the country.”

Away from Angola, Lucapa continues
on the development path at its Mothae
diamond project in Lesotho with its on-
going bulk sampling campaign continu-
ing to deliver greater geological certainty
and some large stone sweeteners. In
May, the company reported a 25ct yel-
low diamond had been recovered from
Mothae’s Neck zone. This was followed
by recovery of a 89ct stone from the
South-East zone in June.

“The bulk sampling is doing well,”
Wetherall said. “Those zones were not
in the original mine plan but we wanted
to show that original resource had been
understated, in terms of both value and
grade. We are very chuffed with the re-
sults achieved.”

Lucapa is nearly half way through its
150,000t bulk sampling campaign with
results to be plugged into an updated
resource.

“The resource upgrade will result in a
change to the mine plan; there are a lot
more tonnes to come from the South-
East, Neck and North zones and we are
anticipating a value upgrade as well,”
Wetherall said. “Previous recoveries
from South-East and North zones were
insufficient to allocate in the mine plan.
We want to make sure we are mining in-
pit appropriately and have got all the in-
formation prior to drill and blast.”

He said construction of the main 150
tph plant was progressing well with the
company targeting the end of the year to
reach nameplate capacity.”

“ – Dominic Piper Parcels of Lucapa’s diamonds from Mothae (left) and Lulo

We believe the winds of change are blowing into the Angolan diamond
sector which will result in better marketing structures for producers.

Page 52 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

Spots to clear up

The mining sector rejuvenation of 2018 sons for the market slump, while the sum- that are jumping in are pretty much go-
has hit a blip, but it will only be tempo-
rary, according to Dean McPherson, head mer holiday season in North America and ing around and picking up projects which
of global mining at TMX.
across Europe traditionally meant slower offer great value. We saw a lot of activity
One of the hardest hit commodities
during the mid-year market malaise was market conditions mid-year. picking up in the M&A space, with com-
copper which fell from above $US3.20/lb
in June to $US2.83/lb at the time of print. Therefore, projects and listings in the panies and investors going ahead of the

McPherson told Paydirt jitters in the pipeline have been delayed, with a hive crowd and picking up good assets, while
market were caused by factors outside of
the mining sector and the fundamentals of activity expected from September on- the market waits to pick up.”
behind the recovery remained.
wards. As the mining sector starts to reheat,
“The encouraging thing is that funda-
mentally nothing has McPherson said investors were taking McPherson said African stories fitted
changed and the funda-
mental factors that were time to digest what was happening in the positively in the space, despite legislative
involved in the pick-up are
still strong. The rebound world and were prudently selecting partic- changes in the DRC and Tanzania bring-
has been driven mostly
by base metals and the ipation in the mining sector, which has had ing negative attention to each jurisdiction.
electrification phenom-
enon, with the energy to compete hard for capital investment. “I think the hysteria that we saw in Af-
metals – lithium, nickel,
cobalt plus also copper in rica calmed down and
the base metals space –
all fundamentally strong people are a little less
and pointing to continued
momentum in the sector,” panicky about these is-
McPherson said.
sues,” he said. “A lot of
With half of the world’s
mining companies listed African nations are doing
on the TSX and TSX-V,
which make up the TMX a better job in commu-
group, McPherson is well
placed to gauge what is nicating that they want
happening in the mining
sector. resolutions that satisfy

Last year alone, everyone, and govern-
$C54.5 billion was raised
in Toronto, comprised of ments are not just want-
an average $C73.6 mil-
lion per company on the ing to take over projects.
larger TSX board and $C3.9 million on
the TSX-V, while IPO activity returned to I think they are trying to
2012 levels, indicating a positive turna-
round for the mining industry. work through those is-

Meanwhile, McPherson said, investors sues. There remains a
were sitting on $C5 trillion in Canada and
a further $US20 trillion in the US potential- few of them that have
ly destined for miners and explorers with
compelling investment cases. issues but I’m pretty

“It has been spotty recently, there have optimistic that common
been pot holes in the recovery, but it has
been mostly driven by noise, things that sense is going to pre-
are happening outside of the sector and
spooking investors. These factors are vail,” he said.
temporary because they are not funda-
mental.” he said. One country set to

Global issues and the impact of Donald emerge from years of
Trump’s protectionist policies were rea-
uncertainty in its mining

sector is South Africa.

South Africa’s mining

fraternity has welcomed

the Cyril Ramaphosa-

led government, which
Dean McPherson has openly recognised

the importance of the

Blockchain technologies and cannabis country’s resources sector and engaged

opportunities have caught the attention with industry to thrash out details on a

of retail investors, however, those sectors new mining charter.

appear to be on the wane and the realisa- A successful outcome for the mining

tion of the growing demand for commodi- industry in South Africa has broader

ties is starting to resonate. ramifications, with the country once the

“Inevitably, once this return to funda- pinnacle for mining across Africa.

mentals comes into view, you will see a “I am very optimistic about what will

drop off in investors [in blockchain and happen and I think it will be very signifi-

cannabis] and we believe that is when cant for the rest of Africa,” McPherson

you will see a more general pick-up of re- said.

tail investment activity in the junior mining “South Africa being the largest econ-

space,” McPherson said. omy in Africa, I think what is happening

“What we are also seeing is investors there is very positive and the Govern-

who are more risk-tolerant tend to be ment is doing a lot to put themselves out

jumping into the space a lot more and there.”

taking advantage of the slow down as – Mark Andrews
the general masses catch on. The ones

Page 54 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

Resolute call on local jobs

Resolute Mining Ltd managing director sub-level cave environment that is not extension out to 2032.
John Welborn insists no local jobs will what automation is about,” Welborn told Following the release of the original
be impacted as his company transitions Paydirt.
to autonomous sub-level cave mining at DFS two years ago, Welborn urged his
the Syama gold operation in Mali. “It’s around better controlling the mine, technical team to continue identifying
better safety outcomes, higher productiv- ways to improve throughput and mining
An updated DFS released last month ity and, in an African context particularly, efficiency, processing and recoveries,
confirmed autonomous mining practices the ability to train our local employees and power.
would deliver substantial cost savings, through the use of technology in a way
including a reduced life-of-mine AISC of that hasn’t been possible before. We now A renewed focus on exploration was
$US746/oz, down from the $US881/oz won’t need people who have engineering also a big part of that plan and last month
previously estimated. degrees, we will need people who can Resolute reported the highest-grade in-
adapt to highly automated, high technol- tersection ever made at Syama – 5m @
Resolute has been working closely ogy environments. 493 g/t gold from 167m at the Tabakoroni
with Sandvik Group to incorporate au- prospect, about 35km south of the main
tonomous haulage and trucking into the “The benefit of automation is not to re- deposit.
Syama underground mine plan since the duce our local workforce, but in fact to in-
release of the original DFS in mid-2016. crease it because ultimately our ambition “The journey at Syama over the last
is to reduce our expatriate workforce. couple of years started with a renewed
Sub-level caving of the Syama under- That’s the goal of every African govern- focus and enthusiasm for exploration
ground is on track to begin in December. ment and it should be the goal of most and we’re now understanding the ore-
miners operating there.” body better and we’re focusing on the
Autonomous mining has often been main game which was somewhat hidden
associated with potential job cuts, but Some of the key improvements high- by our oxide journey, albeit one that has
Welborn described that notion as being lighted in the updated Syama under- been successful,” Welborn said.
“horribly incorrect”. ground DFS include a 38% increase in
probable reserves to 35.2mt @ 2.7 g/t “We bought this asset on care-and-
“Automation is premised on a view gold for 3 moz and a four-year mine life maintenance in 2004, we recommis-
that the benefit is around taking out an sioned it in 2009 and almost 10 years lat-
employee and using a robot, but in a

Page 56 AUGUST 2018 AUSTRALIA’S PAYDIRT

until a year ago; now we’ve probably

got about 50,” he said.

“That highest-ever grade hole at

Tabakoroni was a very, very good

hit…but the more significant one

was the 41m @ 12.2 g/t a couple of

hundred metres down. It has very

modest surface oxide, but also what

looks to be this really interesting,

high-grade sulphide shoot.

“We are now really confident

we’re going to get high recoveries

out of the sulphide ore and it un-

leashes our exploration team to go

and look for more like that, which we

Autonomous mining will soon be synonymous with Syama have never looked at before.”
Resolute has guided an output of

er we are as excited as we’ve ever been the project before Resolute picked up the 230,000oz for Syama in FY2019,
about this project. We’re building a brand asset and solved the issues around the having churned out 194,142oz at $US995/
new, fully automated underground mine sulphide content. oz AISC in FY2018. It will represent the
that is capable of future expansion and last period where production is sourced
we’re finally achieving the results that the With the code finally cracked, Welborn from multiple ore sources, including the
orebody justifies, which is a larger scale has thrown down the challenge for his last stockpiled open pit material.
mine with lower costs.” exploration team to find more discover-
ies like Tabakoroni. Group guidance for FY2019 is
Syama’s potential as one of the world’s 300,000oz at $US960/oz, with Resolute
best orebodies has never been ques- “If you look up and down the 80km of hoping to add a further 100,000 ozpa
tioned, but metallurgical processing chal- Syama belt that we control, there’s some- from the mothballed Bibiani mine in Gha-
lenges forced both BHP Ltd and Rand- thing like 3,000 drill holes in our data- na from FY2021.
gold Resources Ltd to walk away from base, but if you exclude the ones that are
100m deep there was only about eight up An updated feasibility study on Bibi-
ani, also released last month, flagged

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 57

AFRICA DOWN UNDER PREVIEW

start-up capital of $US75 million to bring Resources Ltd, preferred investment over three years ago, is expected to remain op-
it back online, with life-of-mine AISC esti- conducting its own greenfields exploration erational for at least another 12 months.
mated at $US700-800/oz. strategy.
“It’s just the gift that keeps on giving and
Bibiani’s current mine schedule supports “The thinking there is to augment our that’s meant we have had the time to pur-
an initial 10-year life, based on a resource own activity, outsource some of the logis- sue the approvals on Buck Reef West,”
of 21.7mt @ 3.6 g/t gold for 2.5 moz. tics, but ultimately also spread our risk and Welborn said.
reward a little bit so that
Coinciding with the feasibility update instead of running a cou- “It’s been a very suc-
for Bibiani, Resolute announced it had re- ple of drill rigs on some cessful mine for Reso-
ceived an environmental permit to recom- greenfields projects, we lute. If you’re looking for
mission the mine and processing plant it end up with a portfolio an example of what we
bought off the struggling Noble Mineral of opportunities where can do, we’ve mined
Resources in 2014. we’re very close and can a 2.5 g/t orebody to
seize on that opportunity 950m underground at
“I’m getting more and more confident that if something happens,” an average cash cost of
in the next 12-18 months we’ll be ready to Welborn said. $US850/oz. When we
start commissioning,” Welborn said. “The built that mine, people
moment we get comfortable that we’ve got “It’s a strategy a lot of didn’t think you could
the available human resources and that the majors have used, mine a 2 g/t orebody un-
Bibiani has the sort of scale and the sort of so we’re not claiming to derground, certainly not
cost, which is to produce 100,000 ozpa for have invented it, but cer- to those depths. Even
10 years at around $US750/oz, then we’ll tainly we’re trying to be John Welborn now, if you put that in a
be making a decision.” smart with what we do.” feasibility study, people
would roll their eyes and
Resolute continues to load up its African Meanwhile, Resolute say you’re exaggerating.”
portfolio with key interests in a number of has received approval to mine the Buck Ravenswood’s mine life was recently
junior explorers. Last month, the company Reef West deposit at its Ravenswood gold extended by three years to 2032, with
took up respective 17% and 27% interests operation in Queensland. Buck Reef West average production of 115,000 ozpa at
in TSX-listed Orca Gold Inc (Sudan) and will now be brought to the front of the mine $US823/oz AISC estimated.
Loncor Resources Inc (DRC) while lifting schedule as operations are gradually tran-
its stake in Manas Resources Ltd (Cote sitioned from the Mt Wright underground – Michael Washbourne
d’Ivoire) to 23%. to the surface.

Welborn said his company, which also Mt Wright, which was flagged for closure
has a 10% interest in Mali-focused Oklo

Helping companies and African Geopolitics helps companies
African governments in the natural resources industries
and African governments work
work together together successfully on the
successfully on the African continent.
African continent Our advisers are highly respected
Independent and trusted resource industry, business and
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Proven track record in understand the economic, legal,
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to facilitate dialogue.
Our goal is to enable effective
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outcomes.

www.africangeopolitics.com

Page 58 AUGUST 2018 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 59

AFRICA DOWN UNDER PREVIEW

Quartermaine bids to be
Mr Consistency

Like the A-Team’s Hannibal next development project, Ya-
Smith, Perseus Mining Ltd oure, to be developed using in-

managing director Jeff Quar- ternal capabilities.

termaine loves it when a plan “Funding Yaoure’s develop-

comes together. ment without recourse to equity

“It is always nice when a plan markets is becoming a realistic

comes to fruition,” Quarter- proposition.”

maine said after the company Yaoure could push Perseus

posted record group production to the 500,000 ozpa mark by

figures for the June quarter. 2022 but if that is to occur it

The period saw West Afri- must ensure existing opera-

can-focused Perseus produce tions at Edikan and Sissingue

83,881oz of gold at an average are performing to expectations.

all-in site cost of $US913/oz. Edikan, on Ghana’s Ashanti

The number included 26,020oz gold belt, has provided a con-

gold from its new Sissingue stant challenge in this regard

mine in Cote d’Ivoire. throughout its six-year exist-

Quartermaine said the suc- Perseus’ newly minted Sissingue mine produced 26,020oz ence but Perseus appears to
cessful ramp-up of Sissingue gold for the June quarter. The company expects it to hit be at last achieving consistent
and the posting of a sixth output at the mine.
consecutive quarter of pro- nameplate capacity of 80,000 ozpa by the end of the year
“The trend of strong production

duction improvement point- in the previous five quarters has

ed to Perseus’ ability to execute its end of the December quarter.” continued,” Quartermaine said.

strategy. Perseus now boasts a net cash posi- In the June quarter gold production

“The results achieved in the June tive positon against its debt of $85 mil- was up 6% with mill runtime up 5% but

quarter and the June half are our best lion, giving the company greater options the company is confident it can improve

ever and validate the company’s corpo- in executing its growth strategy. things further.

rate strategy of transforming from being “We are in a position where we could “It is a challenging mine with precious

a single mine operator to multi-mine, totally extinguish the Sissingue debt and little room for error,” Quartermaine said.

multi-jurisdictional gold producer,” Quar- the working capital facility and still have Just how acute the varying challenges

termaine said. “But we don’t see this as cash in the bank,” Quartermaine said. are was highlighted in the June quarter

cause for special celebration, it is just a “Both mines have been fully paid for.” figures. Gold recoveries at Edikan fell

result of executing a plan to improve the In response to analyst questions after from 84% in the March quarter to 78.5%

quality of the portfolio and consistency his presentation, Quartermaine said the in the June quarter as Perseus juggled

of performance which can be relied on company would likely close the debt on the mix between the four pits currently in

by our shareholders to deliver attractive Sissingue and activate a revolving line of production.

outcomes.” credit which would allow the company’s “The reduced recoveries at Edikan go

The record production also came with to a blending issue,” Quartermaine said.

improved all-in site costs of $US913/oz, a “Unfortunately, the high-grade material

13% improvement on the March quarter. is quite fine-grained and associated with

At cash margins of $US399/oz it meant carbonaceous material. The temptation

Perseus could boast free cash flow of is to put the high-grade material through

$US33.4 million for the quarter. Quar- the mill as we mine it but as we do that

termaine said generating such numbers we experience a drop in recoveries. So,

would be vital to the company in coming there is a need to balance out the high-

years. grade with other material in order to keep

“We have an eye on the future and recoveries up. Some of the high-grade

as such the cash build is very important material is stockpiled and we are pro-

particularly for improving the portfolio gressively feeding that through. We try to

and towards our goal of being a 500,000 maintain a blend of 10% but every now

ozpa producer by 2022,” he said. and then enthusiasm gets the better of

“Obviously not all the cash went in the us and we put more through and after a

direction of our bank – there was debt couple of days we can see an impact on

servicing and exploration as well – but recoveries.

our cash at bank number is now $89.9 “It is a day-to-day proposition and to

million, 51% more than at the end of the get the balance right is tricky and we

March quarter and 98% more than at the Jeff Quartermaine have to be disciplined in not overdosing

Page 60 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

with high-grade material.”

Recoveries had rebounded in the first

two weeks of July with Quartermaine

confident the increased recoveries could

be maintained throughout the quarter.

Perseus declined to post 12-month

guidance numbers in July, choosing in-

stead to restrict forecasts to six months.

“We are fairly certain over the next

six months but beyond that, there are

maybe changes which improve cash

flow. We didn’t want to make a full-year

statement and alter it later, we decided to

stick to what we are confident with. It is a

very geology-intense mine which means

we have to work very hard to capture full

value and if we do we stand to be suc-

cessful from it.

“We are always looking for ways to

improve the business, and we are work-

ing on a number of initiatives aimed at

improving cash flow from the mine. We

hope to be able to mature these and

share them with the market in the near Edikan enjoyed a sixth quarter of increased production in the June quarter
future.”

Having a second operation could have “As we transition to harder ores, the a supergene occurrence over the fresh
proved a distraction for a company of assumptions on performance are yet to material or we can expect them going
Perseus’ size but Quartermaine believes be validated,” Quartermaine said. “By into the orebody,” Quartermaine said.
Sissingue’s emergence may allow Edi- September, we will be through the worst
kan’s potential to be unlocked. of the wet season and would’ve started “There are a few unknowns as we
mining the transitional and fresh material move forward with development so there
“Having a second mine in production so should be in a position to modify the is an element of conservatism in our
means we are not totally reliant on Edi- guidance.” guidance.”
kan and can start thinking outside the
square for the first time. And, hopefully, Head grade and recoveries have been Costs are expected to increase as the
create additional value for sharehold- higher than forecast but Perseus is still operation moves into drill-and-blast but
ers,” he said. coming to terms with certain characteris- with a cash margin of $771/oz for the
tics of the orebody. June quarter, free cash flow generation
Sissingue’s production has met most is likely to be maintained from Sissingue.
expectations since commercial rates “In the upper benches we expected
were reached at the end of the March Sissingue to have higher tonnages, “It is smaller than Edikan but very lu-
quarter. The mine is consistently deliver- lower grade and less gold, but now there crative and has seriously punched above
ing a 2.1 g/t gold head grade and the mill is significant overcall on grade and con- its weight,” Quartermaine said. “Its sin-
is running at 200 tph on 92% availability. tained metal as well as higher tonnes. gle biggest issue is the mine life; which
What we are not absolutely clear about is 4.5 years but the exploration team is
The next major milestone will be main- is whether the results we are seeing are following-up on near-mine targets and
taining those figures as mining transi- we are confident more than one of them
tions from oxide to fresh material. will yield additional feed.”

At Yaoure – the company’s second

Ivorian development – Perseus has be-

gun work on the front-end engineering

design work with Lycopodium.

“We are well-known to each other be-

cause we worked at the Edikan under-

ground and on Sissingue,” Quartermaine

said. “We learned a lot of lessons there

and at Lycopodium’s other recent suc-

cessful developments in West Africa.”

Yaoure’s mining licence application

has been lodged with the ministry before

eventual consideration by the president.

A cabinet reshuffle in June delayed the

process but Quartermaine is confident

he will meet with the new minister shortly

and begin negotiations over the mining

convention.

Perseus is working on a number of initiatives at Edikan it hopes – Dominic Piper

will improve performance at the mine

Page 62 AUGUST 2018 AUSTRALIA’S PAYDIRT



Namdini moving closer
gold project to fruition

in Ghana

Cardinal Resources Ltd’s Namdini average head grade of approximately 1.3 Upper East Region of northern Ghana.
gold project in north-east Ghana has to 1.5 g/t gold, based upon the existing It is approximately 60km south of the
moved closer to fruition as the company PEA results and the final throughput size Ghana-Burkina Faso border and 15km from
evaluates larger ore throughput options selected.” Cardinal’s Ndongo East Prospect. Namdini
after reporting a significant increase in the Cardinal’s PEA for Namdini, released to the lies within the Nangodi greenstone belt,
mineral resource. market in February, indicated the project one of a series of southwest–northeast
In March, following an intensive infill could deliver a technically and financially trending granite-greenstone belts which
drilling programme, Cardinal upgraded the robust low-cost mining operation. host significant gold mineralisation in
Namdini indicated mineral resource used The study evaluated three separate Ghana and Burkina Faso.
in the Preliminary Economic Assessment production throughput rates – 4.5 mtpa, 7 Cardinal holds a 100% interest in the large-
(PEA) from 4.3 moz to 6.5 moz gold with 0.5 mtpa and 9.5 mpta – which all resulted in scale mining licence covering 19.54sq km of
moz gold in the inferred mineral resource very strong returns. its Namdini project. During the December
category. Given current market conditions in the 2017 quarter, a large-scale mining licence
The infill drill programme – 15,684m across global gold sector, the preferred scale covering the Namdini mining lease was
35 drill holes – also incorporated grade of development has yet to be decided assigned to Cardinal by the Minister of
control, pit geotechnical, hydrogeology and but consideration is being given to a Lands and Natural Resources under the
tailings infrastructure drilling to contribute phased approach, commencing with a 4.5 regulations of the Minerals and Mining Act
to Cardinal’s ongoing work towards a pre- mtpa throughput with allowance for later of Ghana 2006 (Act 703). The large-scale
feasibility study for Namdini that is due to expansion. mining licence is valid for an initial period of
be completed next quarter. The existing PEA based on the 4.5 mtpa 15 years and is renewable.
Cardinal managing director Archie option and a $US275 million development Although the presence of gold in the region
Koimtsidis said the infill drilling had greatly capital cost suggested a potential mine life was recorded in the 1930s, it was not until
increased the size and level of confidence of 27 years and a post-tax internal rate of the Namdini deposit was discovered by
in the Namdini resource and suggested return of 41%, while the 9.5 mtpa option Savannah Mining in February 2015 that
further potential given the resource (capital cost of $US426 million) offered a modern exploration techniques were
remained open both along strike and down mine life of 14 years and a post-tax IRR of employed in the area.
dip, with mineralisation intersected down to 44%. Cardinal signed an agreement with
650m vertical and still open. Based on the current larger resource of Savannah over the Namdini area in July
“With the majority of the indicated mineral 6.5 moz (indicated) and 0.5 moz (inferred), 2014 and commenced drilling later that
resource continuous from surface to a announced by Cardinal in March, the
vertical open pit depth of approximately company expects the Namdini mine life to
400m, we anticipate a greater conversion increase materially, hence the company is
of mineral resources to ore reserves within also exploring the possibility of studying
a simple, single, large-scale open pit, with even larger throughputs.
a very low strip ratio of approximately Cardinal is currently updating the PEA
1.2:1 over the life-of-mine as the preferred based on the updated resource figures.
mining method,” Koimtsidis said. Following this update, the company plans
“The higher-grade areas of the deposit, to revise and complete the pre-feasibility
close to surface, will be targeted within the study next quarter.
Stage 1 pit in the early years of production. Permitting and approvals work is
As the recent results of our PEA indicate, also continuing in line with Cardinal’s
this Stage 1 pit will be the area most likely to expectations. The Namdini mining
repay capital investment soonest. licence is located 50km south-east of the
“The Stage 1 pit will see approximately 1 regional town of Bolgatanga, the capital
moz mined over three to four years at an of the Bolgatanga Municipal District and

Page 64 AUGUST 2018 AUSTRALIA’S PAYDIRT

“Clearly, it’s a vote of
confidence in the Cardinal
team and our Namdini
project in Ghana as well
as giving Gold Fields a
strategic position going
forward,” Archie Koimtsidis

month, with the first results announced in Cardinal team and our Namdini project to factor those prospects into Namdini’s
August 2014. Drilling continued throughout in Ghana as well as giving Gold Fields a development studies, the potential exists
2015 and 2016 and Namdini’s maiden strategic position going forward,” he said. for any discovered satellite deposits to
resource was announced in November “Ultimately, we are not privy to Gold Fields’ further enhance the greater Namdini
2016. long-term intentions. We remain focused on resource and project footprint.
Follow-up exploration in the area included progressing Namdini to deliver value to all The RC drilling at Ndongo returned several
aeromagnetic surveying, regional- and our shareholders which includes board and shallow gold intersections including:
prospect-scale geological mapping and management who also have hard currency
rock chip sampling. Ground magnetic and invested.” • 9m @ 23.3 g/t gold
IP surveys and subsequent geological and While work is progressing on the Namdini (including 3m @ 59.2) from 60m,
structural interpretations were completed development studies, Cardinal is continuing • 9m @ 11.5 g/t from surface
over the deposit in 2016. its exploration focus at nearby prospects (including 3m at 29.8 g/t),
The success of Cardinal at Namdini that could provide significant additional ore • 9m @ 2.4 g/t from 43m,
attracted the interest of Gold Fields in April feed. • 7m @ 4.4 g/t from 14m,
2017 and resulted in the South African In May, Cardinal reported encouraging • 6m @ 2.0 g/t from 11m,
major gold producer acquiring a substantial results from first-pass shallow RC drilling • 24m @ 1.2 g/t from 2m, and 14m
stake via on-market share purchases designed to test one of its six coincident @ 1.4 g/t from 46m,
throughout 2017. Gold Fields, which has gold-in-soil and geophysical targets on • 4m @ 1.2 g/t from 20m, and
been operating in Ghana for more than 25 the Ndongo licence within the Bolgatanga • 8m @ 1.4 g/t from 1m.
years, controls 11.2% of Cardinal shares and project, located 15km north of Namdini.
8.7% of the listed options – a position that Cardinal’s interest at the Ndongo project Koimtsidis said the company planned
Koimtsidis, a resident in Ghana, says he is covers an area of 295sq km, having further infill and extensional drilling with
comfortable with. been augmented by the addition of two both RC and diamond drill rigs at Ndongo
The investment by Gold Fields led to exploration licence areas from Kinross Gold to target the strike and dip extensions of the
market speculation that it has earmarked Corp in August 2017. mineralisation.
Namdini as a potential addition to its Ndongo is one of three prospects – the “We are highly encouraged with the results
existing Ghanaian portfolio, though this is a other two are Bongo and Kungongo – at Ndongo, particularly given the strong
topic Koimtsidis will not be drawn on. that are within trucking distance of the grades we are seeing near surface,” he said.
“Clearly, it’s a vote of confidence in the Namdini project. Although it is too early “These results further strengthen our
resolve that the Ndongo licence is highly
prospective with several untested drill
targets which could deliver another
significant gold discovery.”

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 65

AFRICA DOWN UNDER PREVIEW

Government transition stalls Kefi

It has been a frustrating two years for Tulu Kapi remains a gold project in waiting in Ethiopia
Kefi Minerals plc, as government chang-
es in the two jurisdictions it is concerned An expanded nameplate capacity was tries have emerged with demonstrably
with – Ethiopia and Saud Arabia – have opted for in the newest version of Tulu pro-development new government lead-
slowed the company’s progress. Kapi to make the most of stockpiles and ership.”
expand cash flows to $73 million pa over
Construction at Kefi’s most advanced the first eight years. Anagnostaras-Adams said Ethiopia’s
project – Tulu Kapi – was meant to have new government led by Prime Minister
started already, however, with the Ethio- Anagnostaras-Adams said as the Dr Abiy Ahmed had responded positively
pian Government a key player in the company advanced through the develop- to the project finance plans for Tulu Kapi
consortium looking to fund the 135,000 ment to production, work would continue in July.
ozpa gold project, delays have been in- on changes to planned production and
evitable. lowering costs, while senior manage- He said all government agencies were
ment appointments would be made in supportive of the project and were driv-
“Kefi [has] suffered delays over the preparation for the start of production ing all formalities to be implemented for
past two years in particular, during which in 2020. Project financing for Tulu Kapi project financing to be issued.
both Ethiopia and Saudi Arabia have un- is expected to be completed sometime
dergone substantive political changes. this year. “It looks quite possible that the gold
This has cost us dearly in having to raise sector will grow rapidly, as have other
capital at disappointingly low share pric- “Kefi has assembled TKGM [Tulu Kapi [sectors] like airlines, textiles and pow-
es to fund our activities,” Kefi executive Gold Mines S.C, a JV between Kefi Min- er-generation in what is Africa’s highest
chairman Harry Anagnostaras-Adams erals Ethiopia and Ethiopian Govern- growth country,” Anagnostaras-Adams
said. ment] for the full project funding consor- said.
tium including contractors, equity and
Coming in alongside the Ethiopian non-equity capital. In essence, we have “Kefi stands ready to develop Tulu
Government, Kefi and other additional taken what was originally a $300 million Kapi as Ethiopia’s first modern gold mine
Ethiopian institutions to fund the $160 project and arranged all major project and then pursue organic growth via our
million Tulu Kapi gold project are Austral- development funding at the project level. already-established project pipeline in
ian services companies Ausdrill Ltd and The finance plan remains subject to com- Ethiopia and in Saudi Arabia,” he said.
Lycopodium Ltd. pletion of all formalities in government
processes, due diligence and documen- The 2018 plan for Tulu Kapi sees capi-
Ausdrill will supply and operate the tation,” Anagnostaras-Adams said. tal payback within a three-year period,
mining fleet and Lycopodium is to pro- with Kefi poised for significant cash flow
vide performance guarantee on a pro- “Whilst we cannot underestimate the generation towards the end of 2022.
cess plant designed and supplied for a work ahead to close our financings and
fixed price at Tulu Kapi, which according start development, we can certainly say Cash flow will allow Kefi to advance ex-
to the 2018 plan will process 1.9-2.1 mtpa that we have assembled a first-class ploration activities in Ethiopia, while also
at a head grade of 2.1 g/t over an initial platform to complete the task, that all entertaining other development opportu-
eight-year mine life. consortium members are hard working nities such as underground operations at
and focused and that both our host coun- Tulu Kapi.
A DFS on Tulu Kapi was only updated
last year, with a smaller 1.5-1.7 mtpa for – Mark Andrews
115,000 ozpa gold project the desired
outcome.

Harry Anagnostaras-Adams

Page 66 AUGUST 2018 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 67

AFRICA DOWN UNDER PREVIEW

EMR goes long for copper

Global private equity fund EMR EMR managing director Jason Chang have five copper projects around the
Capital expects returns arising world, all mines, so we are going to
from the mining sector to continue to $US97 million when a deal with African look for more as a means of tapping
improve amid a positive outlook for the Rainbow Minerals Ltd (ARM) was set- into growing economies, but also as
industry. tled earlier this year. a good link into new technologies,”
Chang said.
Coming off the headline buy of Within the next two years, EMR plans
the Cerro Colorado copper mine in to double production at Lubambe – pre- “If you think about copper mines and
Chile from BHP Ltd, EMR Capital viously held by ARM and Vale – and how long it takes to build one and that
managing director Jason Chang told also start developing another mine on is what is going to drive appetite for the
Paydirt that investors were waking the concession such is its bullishness sector. Commodities like copper, gold
up again to the value presented in the for the red metal. and hard coking coal are going to get
mining space, with an increase of capi- more and more scarce, yet demand
tal flow into the sector expected. The purchase of Cerro Colorado, is compounding at plus-3% per an-
which could see EMR pay BHP up to num and that is going to happen over
“We are a global fund [working] with $US320 million, followed and Chang is the next few decades. I think investors
capital from the US and Europe and we willing to do more in Tier One copper will understand this is a great themat-
are seeing good appetite and patient hubs such as Chile and Zambia. ic for investing, but on the other side,
capital going back into mining. We are the mining sector is going to confront,
excited by that,” Chang said. “We are long copper and we now I think, more regulation and hopefully
governments will be more sensible in
While general sentiment across the how they go about that.”
global mining sector is good, Chang
highlighted increased government reg- As a private equity outfit, Chang said,
ulation as a potential disruptor to the EMR watched how regulatory environ-
wave of momentum generated in the ments were being framed in countries
sector in recent times. of interest while enjoying strong ties
with governments in countries it oper-
“I think we are going to see more ates in.
government regulation going forward,
we are seeing that already in all coun- Although retaining a keen eye on
tries. More and more regulation could political developments Chang does
mean things might take a little longer not keep a constant tab on day-to-day
to do and simply means that supply is commodity price fluctuations, even in
going to continue to be constrained.” commodities of most interest – copper,
gold, hard coking coal and potash.
Legislative changes in Tanzania and
DRC are widely known about, while “We don’t look at the screen every
relations between industry and gov- day and see what the price is, you
ernment over a new mining charter in
South Africa appear to be pro- can’t be sensitive to that,” he said.
gressing well. “Obviously, it is important and rel-
evant but from that perspective
Zambia has proposed changes we are looking at assets of qual-
to its mining law by calling on ity when there is an opportunity
miners and other businesses to to deploy our operational experi-
transport 30% of their product by ence and improve our value.
rail.
“We are continuing to see in-
There has been push back teresting opportunities. We are
against the Statutory Instrument not cycle-driven; we are not price
proposed by the Zambian Gov- predictors so we have to be able
ernment, which is expected to to invest in any cycle. Primarily,
bank good revenues from strong returns are driven by our operat-
performance of its copper sector ing expertise to improve the asset
in 2018. value by improving and optimis-
ing production, operational ef-
Copper production from the ficiencies, cost optimisation and
major mines in Zambia in Q1 reserve/resource expansion. So,
2018 eclipsed output recorded in we typically only derive our re-
the corresponding period in 2017, turns from non-price related ini-
with some forecasting production tiatives.”
this year could exceed 800,000t.
– Mark Andrews
EMR made its first foray into
Africa through the acquisition of EMR executive chairman Owen Hegarty will present
an 80% majority stake in the Lu- the group’s story at Africa Down Under this year
bambe copper mine, Zambia, for

Page 68 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

Mod takes control
in Botswana

Mod Resources Ltd of total tonnes now in the indicated cat- couraged Mod to plough
has cleared the path egory. ahead with regional explo-
towards funding for its ration.
T3 copper project in Bot- The updated resource will be plugged
swana after striking a deal into the company’s feasibility studies as Transported cover has
with JV partner Metal Tiger it looks to improve the numbers gener- long been an obstacle to
plc to take on 100% of the ated in a PFS released in January. The further discoveries being
project. company is now reviewing how the ex- made on the Kalahari cop-
panded resource could impact the eco- per belt. However, T3’s
Mod and Metal Tiger nomics of a project already slated to pro- discovery via airborne
hold the project – in the duce 23,000 tpa copper over a 12-year EM has given the region
Ghanzi district of northern mine life. The expansion case as laid a new focus and Mod has
Botswana – in a 70/30 JV out in the PFS suggested an increase to recently begun its quest of
but an agreement reached 28,000 tpa copper was possible. repeating the discovery.
in July will see ASX-listed
Mod take over its AIM- “As a minimum, this upgrade would In June, it announced
listed partner’s share in appear to support the compelling expan- drilling on the new A4
exchange for 17.2 million sion case pit model announced in the Dome target had inter-
shares and 40.6 million PFS,” Hanna said. “We… believe there sected “multiple traces of
options, valuing the deal at is potential that production and mine life visible, vein-hosted cop-
$26.6 million. The options could be extended beyond the expan- per mineralisation” in the
are at a zero exercise price sion case.” first two holes of a region-
and can be converted into al exploration programme.
Mod ordinary shares with- The increased resource has also en-
in three years, provided “Drill hole MO-A4-001D
their conversion does not has intersected the con-
take Metal Tiger’s holding ductive marker unit exact-
in Mod above the current ly as predicted by the EM
12.5% mark. modelling and has also
confirmed the presence of
Metal Tiger will continue copper sulphides in veins
to fund its 30% share of within the underlying sedi-
the JV’s 4,000sq km of ments, similar to T3,” Han-
tenements outside T3 with na said. “Now we can start
Mod having the right to drilling specific structures
purchase them. within these large domes
where veining may be bet-
Mod managing direc- Julian Hanna ter developed and more
tor Julian Hanna said the strongly mineralised.
agreement had the potential to add “sig- “Because the buried domes defined
nificant value” for shareholders by con- by EM appear to be intact and are not
solidating ownership of the project. eroded at surface, any mineralisation
that was deposited within these domes
“[It]… should underpin the future of this should still be there.”
company for many years,” Hanna said. In July, the second hole at A4 was re-
“This transaction also lays the founda- ported to contain “potentially significant
tion for the financing and development visible copper mineralisation” in veins
of the T3 project and positions Mod as within a zone extending up to 67m down-
a dominant player in the Botswana cop- hole some 1.8km west of the first hole.
per belt.” “Our geologists are excited that MO-
A4-003D has intersected a mineralised
The likelihood of Mod pushing ahead stock work vein system, within what ap-
with an expanded vision for T3 has also pears to be a large, intact dome,” Hanna
increased after resource drilling deliv- said. “This opens up the possibility that
ered a 44% increase to total copper any copper that was deposited in the A4
tonnes. Dome is still there.”

Total resources at T3 – part of the – Dominic Piper
company’s wider Kalahari copper pro-
ject in northern Botswana – now stand at
60mt @ 0.98% copper and 14 g/t silver
for 590,000t copper and 27 moz silver
with 70% of contained copper and 61%

Page 70 AUGUST 2018 AUSTRALIA’S PAYDIRT



Capital Drilling Ltd (LON:CAPD) Capital pany’s upgraded revenue guidance for
has picked its moment to Drilling FY2018 to $105-115 million.
expand activities in West Africa makes its Prior to establishing new regional bases
to perfection. mark in Bamako, Mali and Yamoussoukro, Côte
d’Ivoire, Capital Drilling has enjoyed suc-
“We made a concerted decision towards now have ongoing work with OreCorp cess in various parts of Africa including
the end of last year that we were going to [Ltd] and Algold in Mauritania, Resolute Egypt, Kenya, Mauritania and Tanzania.
make a big push further into West Africa [Mining Ltd] in Mali and we have picked “We originally started on the east coast
and we are really pleased that it has paid up further work with Hummingbird Re- in Tanzania and have expanded opera-
off,” said Stuart Thomson, Capital Drill- sources plc, also in Mali.” tions across the continent,” Thomson
ing Executive - Business Development To further enhance the company’s capa- said.
and Strategy, bility, Julian Blake has been appointed Capital Drilling has recently been en-
Capital Drilling has doubled its fleet into Business Development Manager for the gaged by the world’s leading diamond
West Africa and will have 30 rigs in the region and will initially be based in Gha- company, De Beers, for work in Botswa-
region during the second half of the year. na. na and hopes to strengthen the relation-
Thomson says the key to the company’s “He will help us to grow, he has plenty ship in the future.
progress in West Africa has been having of local experience and he has recently Thomson said Capital Drilling welcomed
a presence on the ground. been at our Geita project in Tanzania, the opportunity to further operate in a
“The markets continue to grow and we getting familiarised with how we oper- jurisdiction such as Botswana, which is
made the call that basically if we move ate” Thomson said. “Services conduct- often touted as one of the best places in
into the region, we should get the busi- ed on site by Capital Drilling at Geita Africa to conduct mining business.
ness. We were finding that we were comprise blast hole, grade control, sur- “Botswana is a great jurisdiction to op-
talking to people, but you needed to face RC and diamond exploration and erate in, not as geologically attractive as
be in country and ready to go to meet underground diamond drilling. The port- the West African greenstone belt is right
the quick turnaround times required by folio now also includes underground RC now, but things are starting to pick up,
some programmes” Thomson said. drilling – a relatively new innovation to particularly on the copper front,” Thom-
“Our presence in the region has changed the region and a valuable new string to son said.
substantially from where we were early our bow.” “In addition, having De Beers to serve is
last year, when we had intermittent pro- The good progress being made in West good for us because they tend to invest
jects in Mauritania and a base at Tasiast Africa was a key component in the com- hard when they find something and they
with Kinross [Gold Corp] - a long-term also appreciate the focus on safety and
project we have been associated with quality delivery aspects of our business.”
through various exploration cycles. We

Page 72 AUGUST 2018 AUSTRALIA’S PAYDIRT

Like any company associated with the blasting contracts continued through- see improvement in pricing in the near
mining sector, Capital Drilling’s number out the downturn. They provided a base term, albeit off a low base.”
one priority is the safety of its workforce. business that delivered continuous vol- In the year ahead, Capital Drilling aims
Earlier this year, major safety milestones umes during the downturn period.” to consolidate its presence in the West
were achieved at two of the company’s “Now the market has improved and African region.
largest operations – North Mara and the overlying exploration business has “It would be nice in the next 12 months
Geita, both of which are in Tanzania. come back on, having all these rigs to have really solid base businesses in
At Acacia Mining plc’s North Mara ready to go has given us the ability to Mauritania, Mali and Cote d’Ivoire with
gold project, two years LTI free was move them quickly into West Africa to several operations up and running in
reported, while at AngloGold Ashanti take advantage of the opportunities in each of those countries,” said Thomson.
Ltd’s Geita gold mine one-year LTI free these markets. This is going to be our “I’d also like to see Botswana continue
was achieved by Capital Drilling during lowest capital outlay for creating rev- to pick up and grow. It is another re-
March. enue.” ally good jurisdiction, in a similar vein
Capital Drilling is well poised to capi- it would be good to see some stability
talise on the uplift in activity seen by “We are seeing rigs starting to get tight return in Tanzania,” he said.
the increasing interest in gold. The now, but pricing hasn’t moved much at Capital Drilling has been operating in
Mauritius-headquartered, multifaceted this point in time. There has been excess Africa since 2005 and has successfully
services outfit now has a fleet of 93 drill capacity in the market but I expect to grown its business despite a number of
rigs, including blast hole, diamond, re- challenges, including the sheer size of
verse circulation (RC)/grade control and the continent, the different geographi-
multi-purpose rigs. cal environments, fluctuating commod-
The company attributes its standing ity prices and changing political situa-
during the great mining downturn of tions.
recent times to this rounded business “The conditions our team operates in
model and prudent management. during the wet season and what they
“We fared well during the downturn be- have to go through – wow! One day
cause I don’t think we over leveraged. they’re in Mauritania operating out in
We saw what was happening so there the middle of nowhere in the desert,
was a lot of work done back in 2012 then not too much further south and
to scale the business back to meet the you’re in the jungle and its pouring with
conditions at that particular time. I don’t rain. When you overcome the challeng-
think the business was over leveraged,” es, and still manage to deliver a profes-
Thomson said. sional service, the sense of achievement
“The other key thing was our large-scale is great.”

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 73

AFRICA

Nigeria backs
explorers

Nigeria will offer a $41.6 million mining contract to eight com-
panies in exploration and consultancy, the country’s junior
mining minister announced last month, adding both foreign and
local firms were encouraged to participate.

Nigeria’s economy, one of Africa’s largest, has been built
largely on its rich crude oil reserves, leaving other sectors to
stagnate. In an attempt to diversify, President Muhammadu
Buhari’s administration is now seeking to build up other sec-
tors, including mining, though results have been mixed, ac-
cording to economic data.

“Today, the Federal Executive Council [Nigeria’s cabinet] ap-
proved the contract for exploration and consultancy on some
of our targeted minerals – like gold, industrial minerals, earth
metals, iron ore – for four companies in exploration and four
companies in consultancy,” Abubakar Bawa Bwari, the Minis-
ter of State for Solid Minerals, told reporters after the cabinet
meeting in mid-July.

Bwari said the exploration and consultancy work would re-
sult in data that would encourage potential mining firms to in-
vest in Nigeria.

“Our major challenge is the bankable data, most mining
companies will not want to come into your country when they
are not sure of what they are going to meet,” he said.

– Felix Onuah, Reuters


To encourage participation in its mining sector,
Nigeria has offered $41.6 million in mining contracts

to eight companies in exploration and consultancy



AFRICA DOWN UNDER PREVIEW

The Symbol for mining in Nigeria

Australian mining companies are well- made exceptional progress in the last six Wither said the presence of some lith-
known for being trendsetters across months. It is quite an achievement con- ium pegmatites up to 40m thick provided
the globe and Symbol Mining Ltd is the sidering the location we are in; Nigeria is encouragement for Symbol to pursue,
latest example. only just starting its path in mining and while Nigeria’s historical record in tin has
attracting the foreign investment for it,” also perked the interest of the company.
The company is the current “poster Symbol chief executive Tim Wither told
boy” for mining in Nigeria, after it re- Paydirt. “Nigeria used to be one of the largest
ceived a mining licence and activities tin producers in the world and there are
started at the Macy zinc-lead project last “Macy is a 12-month project and we tin opportunities within the country which
month. are aiming to do 50,000 bcm per month. are quite great and we’d be interested in
We are looking at a high-margin project tin and lithium, which fit in the green en-
Nigeria has been pushing to diversify to generate profits and we will look to put ergy story,” Wither said.
its economy away from the heavy reli- that profit into the ground.”
ance on the oil and gas sector for some “There is not a lot of data to work with,
years and while a roadmap is in place Macy, hosted within the Imperial JV but the Nigerian Mining Cadastral office
to do so, small scale and with Goidel Resources has been helpful in providing us with
artisanal mining dominate Ltd (40%) which covers what they have. We are breaking new
the industry. three exploration leases ground with what we are doing. Our min-
covering some 510sq km, ing licence of large scale is one of the
Symbol’s mining lease is poised to deliver life-of- first the Mining Secretariat has issued.”
approval means the way mine cash flow of $20.3
has been paved for Nige- million from a shippable While keen for exposure to lithium
ria’s first industrial-scale product of 28,250t zinc and tin in Nigeria, Wither said Symbol
mining operation in sev- (50% zinc concentrate), strongly believed in the zinc-lead funda-
eral years to start. 2,900t lead (60% lead mentals, despite depressed zinc prices
concentrate) and a mixed at the time of print.
At the time of print, product of 6,950t (30%
Symbol announced an zinc concentrate). “Zinc follows copper and we believe in
off-take and marketing “Our model will see us the fundamentals of both, so our focus
agreement with Noble Re- is definitely Nigeria and base metals. We
sources International Tim Wither have about $12-14 million want to build our credibility and have al-
Pte Ltd, which includes cash by July next year, but ready started to do so as we are receiv-
conditions on shipping ing offers to partner with people every
and sales plus a short-term $US3 million we would want to have started invest- day. These guys want honest partners to
loan facility going towards development ing some of that by then. In the short to partner with as they have been let down
of Macy. medium term, say 6-8 months, we would many times in the past. There has been
like to have found another Macy; a 2-4 minimal modern-day mining exploration
Having achieved the most recent mile- year project to invest in and build a pro- done in the country and there are only
stones, Symbol is set up for first ship- ject and plant,” Wither said. two or three drill rigs in country with any
ment of high-grade zinc-lead product merit. There has been very limited explo-
and positive cash flow generation from “We’d also want to build on the region- ration,” Wither said.
Macy in Q3 2018. al stuff and more acquisitions in-country
also and our third step is to go and look In addition to the Imperial JV, Symbol
“Not only for us, but also the country at some tin and lithium opportunities.” has the Tawny JV with Adudu Farms Ni-
it is a great achievement and we have geria (40%) over 7sq km of highly pro-
spective lead-zinc ground, 150km east-
south-east of Abuja.

Through successful partnerships,
Symbol hopes to provide others with a
model to follow when doing mining busi-
ness in Nigeria, with Wither encouraging
more locals to capitalise on the opportu-
nities in front of them.

“We’re somewhat of a poster boy for
Nigeria, with an exciting opportunity. The
Government knows they need to move
away from hydrocarbons. I’d like to think
we will provide a good model for doing
that, but we’d also like to see more Ni-
gerian entities active. One of the things
I like is the entrepreneurial spirit of the
Nigerians,” Wither said.

The first shipment of high-grade zinc-lead concentrate and positive cash flow – Mark Andrews
generation from Macy is expected in Q3 2018

Page 76 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

Delayed benefits for Opuwo

Celsius Resources Ltd has delayed of the process flowsheet, but it wanted to focused on producing a simple cobalt
the release of a scoping study on its do more test work to enhance the leach- concentrate. However, with cobalt prices
Opuwo cobalt project in Namibia after ing phase. continuing to rise and available infra-
identifying some potential cost savings structure in Namibia emerging, the com-
for the planned downstream refinery. “The thing that’s a little bit different that pany is now looking to add enhanced
we’re doing – and which is part of the products such as cobalt sulphate and
The scoping study was originally reason why we need to do a bit more test hexahydrate to the mix.
scheduled for completion last month, but work – is that we’ll be taking our concen-
Celsius decided to push back its release trate and we’ll be leaching that directly,” Most of the major scoping study work
until early Q4 2018 due to positive metal- Borg told Paydirt. items – including power, infrastructure,
lurgical test work results pointing to re- environmental and social studies – have
duced operating and capital costs. “We don’t have a need in our process been completed, with Celsius in the final
for any sort of roasting steps, so we’ll be stages of wrapping up the mine design.
Additional metallurgical test work able to cut that out and just leach the
to help Celsius refine its processing concentrate directly to get the metals of Borg said the delayed release of the
flowsheet for Opuwo was under way at interest into sulphuric acid solution. It’s a scoping study would have minimal im-
the time of print and is expected to be standard process, but it’s basically been pact on the planned modules for the PFS
completed later this month. tweaked to suit our particular ore to get on Opuwo, assuming a positive outcome
the best possible outcomes with respect on the former.
The processing flowsheet for Opuwo to the reagent consumptions and power
is comprised of conventional froth flota- consumptions and things like that. To ensure the PFS remains on track for
tion to produce a mixed sulphide concen- completion by late Q1 2019, Celsius has
trate, oxidative leaching to extract cobalt, “Every time we go back and do another resumed drilling to the west of the exist-
copper and zinc metals into solution and round of testing we’re seeing that we’re ing resource (112.4mt @ 0.11% cobalt,
standard SX-EW processing to recover able to improve the process significantly 0.41% copper and 0.43% zinc, based on
saleable products. in terms of the reagent consumptions a 0.06% cobalt cut-off grade) which Borg
and the leaching conditions.” hopes will have wrapped by the end of
Celsius managing director Brendan this year.
Borg said the company was largely satis- When Celsius began work on the
fied with the front and back end stages scoping study last year, it was primarily

Page 78 AUGUST 2018 AUSTRALIA’S PAYDIRT

on the economics nology changes as we move through this
period, so we’re conscious of getting this
of the project.” thing developed as quickly as we can,”
Borg said.
With $14 mil-
“We have been able to define a re-
lion in the bank, source that we think is of world signifi-
cance in terms of its size and the fact
Celsius is funded that we’re not in the DRC and we have a
100mt-plus resource which should hold
through to com- us in good stead if we can continue to get
through these studies and demonstrate
pletion of the PFS, that the project will be economic.”

having raised $9 Development of Opuwo, north-west-
ern Namibia, would be welcome news
million from a for a country heavily reliant on uranium
as a major export. However, few op-
placement and $3 erations are turning a profit due to de-
pressed yellowcake prices.
million from a sep-
Paladin Energy Ltd’s recent decision to
arate SPP earlier mothball Langer-Heinrich was a further
blow for Namibia’s resources industry,
this year. but Borg believes that could prove to be
an unlikely win for Celsius.
Opuwo is
“The Government is really keen to see
emerging as one projects like this get up, especially up
in the region we’re in, which is probably
the most promis- one of the more disadvantaged parts of
Namibia in terms of economic develop-
ing cobalt plays ment,” he said.

on the ASX, with – Michael Washbourne

Celsius will release a scoping study the project be-

on Opuwo in early Q4 2018 ing compared to

those in the DRC

“We have cobalt intersections in wider- where questions remain over ethical pro-

spaced drilling across another 5km west duction standards.

of where the resource ends,” Borg said. Borg said the company was keen to

“We don’t necessarily think we need a reach a decision to mine by the end of

bigger resource because we’ve obvious- next year as it looks to take advantage of

ly got over 100mt there already, but what elevated cobalt prices.

we do think will benefit the project will be “We’re certainly very confident cobalt

if we can delineate more resources clos- will continue to be used in lithium-ion bat-

er to surface, potentially open-pittable teries for at least the next 5-10 years, but

resources, that will have a positive effect who knows what will happen with tech-

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Birimian races the clock

Birimian Ltd chief executive Greg initial 16-year mine life, including life-of-
Walker concedes his company has
just six months to secure off-take and mine EBITDA of $2.69 billion ($US2.02
development funding for its Goulamina
lithium project in Mali if it is to realise its billion) and life-of-mine operating
ambition of first production in 2020.
cash flow of $2.36 billion ($US1.77 bil-
“We set that timeframe because what
we’re hearing from the marketplace lion), based on average production of
is that there will be strong demand for
product in 2020 and that’s when people 362,000 tpa of 6% spodumene concen-
want to see product coming on,” Walker
told Paydirt. trate.

“I think realistically if we are going Key financial estimates for the pro-
to meet our timetable of getting this on
stream in 2020, then we really need to posed 2 mtpa operation include a
have addressed the issue of off-take ar-
rangements and also project financing construction capex of $196 million
during the course of this year, or early
next year at the latest, otherwise we ($US147 million), C1 cash costs of
won’t make the timeframe that we’ve set.
$374/t ($US281/t) and AISC of $425/t
“There’s challenges there in terms of
getting a lot of work done in a relatively ($US319/t). The updated PFS assumed
short space of time, but hopefully we’ve
shown some track record in doing that a lithium concentrate price of $888/t
over the last 12 months and I think we’ll
continue with that.” ($US666/t) FOB.

Prior to the release of the updated

Greg Walker PFS and maiden reserve estimate

of 31.2mt @ 1.56% lithium oxide for

Birimian is stepping up negotiations Goulamina, Walker attended the 10th

with potential financiers and off-take Lithium Supply & Markets Conference in

partners after releasing an updated PFS Las Vegas. He returned confident Birim-

for Goulamina last month which forecast ian had the four key metrics needed to

a pre-tax NPV of $920 million ($US690 develop a sustainable lithium operation.

million) and IRR of 49.5%. “Size of deposit, grade, low on the cost

Goulamina is projected to generate curve and speed to market…I would like

strong earnings and cash flow over its to think that of those key metrics, we tick

Page 80 AUGUST 2018 AUSTRALIA’S PAYDIRT

all the boxes and then some,” Walker said. they rank Mali second only to Ghana as an of those gold assets,” Walker said.

“People have been quite keen to see Africa jurisdiction and ahead of four Aus- “There’s no doubt the focus is very firm-

what the project fundamentals are going tralian states. I think that says it’s not a bad ly on lithium and bringing Goulamina into

to look like, as expressed in the PFS, so place to do business.” production. Clearly it’s one of the biggest

I think that now we’ve got the maiden ore Birimian has enjoyed a largely positive and I would argue one of the best projects

reserve and the PFS update out, we’ve re- run on the ASX since emerging from a worldwide and I think it’s now being recog-

ally got a solid foundation to take those fi- fourth-month suspension last September nised as such.”

nancing and off-take discussions forward.” as the new-look board and management Walker, who spent 18 years at Rio Tinto

“In parallel to the project finance and off- team ran the ruler over the company’s pre- Ltd and has operated projects in several
take discussions, Birimian will African countries, said leading a

progress the DFS on Goulam- company into an advanced po-

ina, as well as finalise the out- Size of deposit, grade, low sition in the burgeoning lithium
standing regulatory approvals on the cost curve and speed sector was proving to be one of
needed to build a mine in Mali, the most exciting challenges of

on similar timelines. to market... I would like to think that his decorated career.
Walker said there was noth- of those key metrics, we tick all the “It’s tremendously exciting

ing standing in his company’s and hugely satisfying to be

way from a country-risk per- boxes and then some. involved in a project and in a
spective. commodity area which is quite

“Dealing with the Govern- literally at the cusp of being

ment in Mali is relatively straight forward. vious corporate and governance history. transformational in terms of the way that

Their standards are high, but there’s trans- Walker and fellow directors James McKay, we will look at global transportation,” he

parency in the process and they deliver,” Gillian Swaby and Noel O’Brien shifted said.

Walker said. the company’s focus to its lithium oppor- “We’re very conscious of what’s hap-

“We’ve had discussions with people tunities rather than the gold projects which pening, but really the focus is looking at

who have done projects there recently, in- the previous management and board were our project and how we maximise that and

cluding the guys who built Yanfolila, which pouring their efforts into. demonstrating to people, both potential

came on stream in January, and they said “Birimian is now very much a lithium off-take partners and potential funders,

their experience had been very good. company, albeit a lithium company with that this is a spectacular project.”

“If you look at the Fraser Institute’s an- some very significant gold assets and – Michael Washbourne
nual survey of mining competitiveness, we’re still looking at how we make the most

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AUSTRALIA’S PAYDIRT AUGUST 2018 Page 81

AFRICA DOWN UNDER PREVIEW

Time to Tando in South Africa

Tando Resources Ltd’s SPD vanadium aging director Bill Oliver told Paydirt. over $US15/lb in 2018, with competition
asset is receiving the kind of results While cobalt and lithium have been for vanadium from steelmakers and bat-
desired early in a project’s life. tery manufacturers being one of the driv-
central to the current battery minerals ers of price growth.
After entering the vanadium fray in craze, vanadium shouldn’t be forgotten
South Africa with the acquisition of SPD in the mix. In the past, vanadium prices have not
in March, Tando had reported another enticed wannabe players to the market,
seven vanadium-bearing pipes taking “The vanadium story has been there while those contemplating entry have
the total number of pipes identified from through the years, but investor take-up struggled to determine what grade a pro-
fieldwork to 12. has been a bit up and down depending ject needs to be economic.
on certain factors, especially Chinese
Furthermore, assays from two of the demand. There is certainly a new-found appetite
pipes returned high-grade vanadium in for the commodity and Tando appears to
the order of 2%. “We have something that is a bit inde- be well placed in the field.
pendent of the Chinese economy which
Such is the high-grade nature of the is the energy storage and EV approach, “At Maracas, they are putting in 0.7%
vanadium from rock chip assays at SPD, so I think there are opportunities to sup- to 0.9% vanadium and then upgrading to
comparisons are being made to the Ma- ply into that sector. The key is what tech- 1.5%, but we are getting 2% at surface
racas Menchen mine in Brazil. nologies does that sector want and it is and that won’t need any upgrading, so
not up to us to answer; it is up to us to we need to make that into some sort of
“Maracas has a run of mine grade of find the supply and provide the raw sup- product for a customer,” Oliver said.
about 3% and we are seeing hand speci- ply when the world wants it,” Oliver said.
mens that are grading over 2% vanadium “There is the head grade and the con-
at SPD. There is no other mine in the Demand for vanadium flow redox bat- centrate grade, which people need to
world that I know of that produces that teries is no doubt increasing, however, consider, just which grade works is the
sort of head grade. Most of Bushveld its use as an additive to strengthen steel question. You see people with very high
[Minerals] has a run-of-mine of about consumes 90% of production. concentrate grades, but what is the cost
1.5%, which is post-mag separation so of producing that concentrate? In our
their head grades are around 1% or lower The commonly traded intermediate case, we potentially have something that
and are upgraded to 1.5%,” Tando man- product of 98% vanadium pentoxide has is 2% and won’t need much to produce
surged from $US3.50/lb early 2017 to

Page 82 AUGUST 2018 AUSTRALIA’S PAYDIRT

Mapochs mine allows Tando to con-
sider the potential of a quick turn into
production at SPD.

Tando aims to have a scoping
study done by late 2018/early 2019,
with drilling the immediate priority at
SPD, which could potentially host a
DSO resource.

SPD currently hosts a SAMREC
Code resource of 500mt which is not
compliant with Australian standards.

“We will convert that into a JORC
indicated resource so we can com-
plete a scoping study and in parallel
with the drilling we will have metal-
lurgical test work, as well as mine
scenarios being developed,” Oliver
said.

“As well as drilling out this es-
tablished resource, we want to test
some of these pipes and test the
sub-surface extent to determine the
tonnage that is there, which will give
Tando’s SPD vanadium project is in a similar geological setting to Glencore’s Rhovan, us an idea of how big an operation
Bushveld Minerals’ Vametco and International Resources Ltd’s Mapochs mines in the we can build and how that fits in with
Gauteng and Limpopo provinces developing a larger resource.”

it. That is a real opportunity; people don’t nity we see.” – Mark Andrews
The fact there is a live mining right ap-
like the long-lead time with larger pro-
plication on SPD, which is near power,
jects, so the opportunity to disrupt that water, rail and other facilities at the idled
and move into production is the opportu-

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 83

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Black Rock in the pilot’s seat

Black Rock Mining Ltd chief trying to sell whatever comes
executive John de Vries off the back of it,” de Vries told

could not have asked for a Paydirt.

better start to his company’s “It’s going to cost you $90

search for customers for the million to build the mill, so I

high purity product flagged for think it’s probably better off if

production from the Mahenge you spend a little bit of money

graphite project in Tanzania. early on and make sure that

Feedback from 22 potential you’re actually producing stuff

customers was nothing but people want. It’s basic risk-

positive for the Mahenge con- management.”

centrate which met a range of De Vries said he was not

product specifications across aware of another graphite de-

multiple graphite-related in- posit capable of producing a

dustries, including applica- 99.3% concentrate at scale

tions to the battery, graphene and using just standard flota-

and expandable markets. Black Rock is set to complete a DFS on Mahenge this quarter tion, as demonstrated by the
It comes two months af- test work completed by SGS

ter Black Rock was able to wrap up a DFS on Mahenge in the com- Lakefield.
produce a high purity 99.3% ing months and secure project finance Black Rock reprocessed
graphite concentrate using just flotation and off-take to start construction before
methods – which de Vries believes is a year’s end. 200kg samples generated from the initial
world first – from recent pilot plant testing 90t pilot plant run through a polishing cir-
in Canada. “We’re going to build a mill that produc- cuit to produce the high purity concentrate
es products customers want rather than using the double loss on ignition method.
De Vries said the customer feedback going out and building the mill and then
was crucial for his company as it looks to “It’s worth noting the samples came off
the pilot plant, so they’re what we think

Page 84 AUGUST 2018 AUSTRALIA’S PAYDIRT

will be representative of our production, Another key milestone was proof of “We have a very deliberate strategy
not exploration samples across the ore- concept for rail haulage, with a 530t sam- to surround ourselves with friends. If
body,” de Vries said. ple exported from Ifakara, north of Ma- you’ve got a bunch of Tanzanian entities
henge, to the port of Dar es Salam, using and Tanzanian businesses on your side,
“We knew in a lab basis we’d been the Tanzania Zambian Railway Authority you’re part of their success and part of
able to get to better than 99%, but that as a logistics partner. their profit equation, so the chances of
was just a beaker-full, not 200kg, so we a random legislative event impacting the
ran that 200kg back through the polishing “I have a view that says if you’ve got a project hopefully become a little bit less.”
circuit and refloated it, and that’s where 32-year mine life you’ve got to plan this
we produced the 99.3% average across thing for the long haul,” de Vries said. While the proposed changes to Tanza-
the 200kg. And the pleasing part about nia’s mining code have put some groups
that was because it was reprocessing we “Firstly you need to get it technically offside, de Vries has remained relatively
didn’t lose any graphite. unfazed. In fact, he feels his “business
Pilot plant test work produced a 99.3% as usual” approach has been justified
“Nobody has actually been able to pro- concentrate from the Mahenge material through three Tanzanian banks express-
duce that grade concentrate off a pilot ing serious interest in funding develop-
plant or a proto-commercial scale before. right, which we’ve done with the pilot plant ment of Mahenge.
People have done in it in a lab, but no- and all the studies, but you also need to in-
body has actually done it in a pilot plant, tegrate yourself into the fabric of your host De Vries also remains adamant a sup-
so it’s a world first. We just put man on the country because that is the most effective ply crunch is coming for graphite, par-
moon on that one. risk mitigation you’re ever going to get. ticularly on the back of the battery and
electric vehicle revolution continuing to
“We were also able to produce high- captivate the world’s investment markets.
grade raw float without that chemical sig-
nature. Now what does that mean for mar- “We know it’s coming and we know it’s
keting? Well, the answer is I can’t tell you going to be profound, but what we don’t
because we’ve just developed a product know is the date,” he said.
nobody has ever had before, hence, the
need for approaching customers.” “As we’ve seen with the trade war
emerging between the US and the rest of
Positive feedback from successful test the world, things can happen when you
work capped an impressive first half of least expect them to, and that can signifi-
the year for Black Rock, which lodged its cantly disrupt many things.”
environmental and social impact assess-
ment for Mahenge in early June. – Michael Washbourne

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 85

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Ngualla licence imminent

Peak Resources Ltd appears des- going to look like necessarily, so from
tined to finally be awarded a mining
licence for its Ngualla rare earths project that perspective we’re pretty comfort-
in Tanzania, almost 12 months after sub-
mitting its initial application. able,” Peak chief executive Rocky Smith

Following the official inauguration of told Paydirt.
Tanzania’s new Mining Commission in
late May, Minister for Minerals Angel- “We’ve become even more comfort-
lah Kairuki stated Peak’s Special Mining
Licence (SML) application was among able over time as we’ve met and talked
those she wanted to see processed as
quickly as possible. to more of the Tanzanian Government

Peak representatives met with Kairuki officials and can talk to them about our
in Dar es Salaam in mid-June and were
told the Ngualla licence was being fast- process and give them the education
tracked and was likely to be granted “with-
in weeks, not months”, paving the way for around the rare earths. We’re different in
the company to begin its crucial off-take
and project financing discussions. a lot of ways to many of the other mining

The Ngualla SML was submitted just companies in that rare earths are almost
weeks after the Tanzanian Government
announced a massive shake-up of its min- impossible to have artisanal mines be-
ing regulations, consigning Peak to a frus-
trating waiting game as details of the new cause of the complex recovery process-
legislation were finalised.
es and things of that nature.”
Fortunately for Peak, the thoroughness Peak is awaiting a mining licence for its The long-awaited award of the SML
Ngualla rare earths project in Tanzania will allow Peak to effectively kick-start

development of Ngualla, widely consid-

of its application meant many of the gener- ered the world’s best undeveloped ne-

al issues raised by the Government were odymium-praseodymium (NdPr) deposit

already addressed and required little, if outside of China.

any, revision. An optimised BFS released last Octo-

“Our SML was actually pretty well com- ber further confirmed Ngualla’s position

plete with the information required for at the lower end of the cost curve, with its

these new regulations, even though we estimated operating costs of $US32.24/kg

didn’t know what these regulations were NdPr rivalling many of the best rare earths

Page 86 AUGUST 2018 AUSTRALIA’S PAYDIRT

mines already in production. 90% of the value of the rare work on the Teesside refin-
Pre-production capex of $US365 million earths.” ery having been awarded
a planning permit for the
for the combined development of Ngualla Smith and his team are Wilton-based refinery and
and the Teesside refinery in the UK also confident of overcoming environmental approval ex-
positions Peak as one of the cheapest some potential hurdles with pected to be granted within
start-ups for an integrated rare earths pro- the new regulations in Tan- the next month or so.
ducer. zania, in particular the re-
quirement for mining com- With respected invest-
Ngualla is forecast to produce 2,810 tpa panies to source funding ment banker Peter Meurer,
NdPr oxide for an initial 26 years of opera- from an indigenous bank. of Nomura Australia, joining
tions and Smith said now was the time to Rocky Smith the company as non-exec-
test the market’s appetite for the project’s Recent meetings with utive chairman in May, Peak
proposed output, particularly with some Kairuki and her ministry ap- was subsequently able to rat-
respected rare earths experts tipping a pear to have eased those tle the tin for $7.33 million. The placement
near-term shortfall for the permanent mag- concerns, with amendments made to the was oversubscribed and also coincided
net metals. legislation which accept locally registered with the establishment of the new Tanza-
banks as a suitable alternative. nian Mining Commission.
“We are actively looking for off-take Smith said some of those funds would
partners and we believe that will be key to “They’ve already made some adjust- be used to help raise the company’s profile
our financing going forward as well,” Smith ments to the regulations and we’re now as it enters the critical development phase
said. talking to them about what concerns we at Ngualla.
have with the remaining regulations and “We have to start building confidence in
“We’ve been very careful about off-take what things we would see as necessary Tanzania and the fact supply from Tanza-
until now, we haven’t sought low-grade off- for us to have a viable, investable deposit nia is viable,” he said.
take agreements. We’ve been looking for and process,” Smith said. “We’re going to spend a lot of time talk-
high-quality agreements with partners that ing to a number of people in the investment
can actually help us on the financial side of Smith, who succeeded Darren arena. We’re going to build our brand and
the business. Townsend as chief executive of Peak last we’re going to explain to people just how
November, said it was unlikely the com- positive this development is going to be.”
“We decided early on that we were go- pany would begin final engineering and
ing to separate all of our elements, unlike a FEED work until after the SML was grant- – Michael Washbourne
lot of our peers, because the best value for ed and potentially not prior to the signing of
rare earths is with separated products and the first off-take agreements.
luckily for us the deposit in Ngualla is well
suited for recovery of NdPr, which is about Peak will soon undertake more definitive

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AUSTRALIA’S PAYDIRT AUGUST 2018 Page 87

AFRICA DOWN UNDER PREVIEW

Tietto times its run

Tietto Minerals Ltd may now be trad- Cote d’Ivoire at a time when the coun-
ing as a listed entity, but little else
has changed for the West African-fo- try was still caught up in a civil war.
cused explorer.
Since the election of President Alas-
Since listing on the ASX in January
following a $6 million IPO, Tietto has sane Ouattara earlier this decade, Cote
continued to be aggressive with the drill
bit in Cote d’Ivoire while reviving explo- d’Ivoire has emerged as an attractive
ration plans for its projects in Liberia.
resources destination, particularly for
“I think we were well received by the
market when we started, but in general gold exploration due to its prime posi-
we have still operated the same as we
always did when we were in private sta- tion along the Birimian greenstone belt.
tus,” Tietto managing director Caigen
Wang told Paydirt. The likes of Newcrest Mining Ltd,

“Our focus is still on the resource defi- Randgold Resources Ltd and Endeav-
nition and on quickly growing the min-
eral resource in that project which has our Mining Corp have since all estab-
really huge upside. We really don’t put
too much effort on the marketing side lished large assets in the country, while
just yet.
several ASX-listed companies, includ-
“Listing was always on the company’s
growth agenda. One year ago we thought ing Predictive Discovery Ltd, Apollo
it was the time to get listed. We had a
reasonably well defined, medium-sized Consolidated Ltd and Mako Gold Ltd,
resource at that time and we had big up- Tietto is set to drill at least 15,000m across have made Cote d’Ivoire their home

its Abujar gold project in Cote d’Ivoire base.

“The Cote d’Ivoire part of the green-

stone belt is really underexplored, that

side which requires big market support was the main thing that attracted us,”

and financial resources from different Wang said.

parts of the world, so we think it’s better “The investment environment in Cote

to get listed and get better exposure to d’Ivoire for gold projects is very, very

investors.” attractive. The fiscal regime, the tax re-

Wang founded Tietto in 2010, making gime and exploration tenure is all quite

the company one of the first movers in good compared with the neighbouring

Page 88 AUGUST 2018 AUSTRALIA’S PAYDIRT

countries in West Africa and even other diamond drilling on its activities in
parts of the world.” returning encour- Cote d’Ivoire.
aging intercepts of
Tietto’s flagship asset is the Abujar 13m @ 5.11 g/t gold At the time of
gold project, which hosts a JORC-com- for 238m (including print, Tietto was
pliant resource of 10.4mt @ 2.1 g/t gold 1m @ 46.98 g/t defining multiple
for 703,000oz across the granted tene- within 5m @ 11.44 targets for drilling
ments. g/t from 246m) and at its two projects
4.65m @ 8.69 g/t – Dube South and
Up to 15,000m of drilling (13,000m gold from 267.35m Cestos – from late
of RC and 2,000m of diamond) is be- (including 0.63m October.
ing punched into the project ahead of a @ 50.85 g/t within
scheduled resource update next quarter. 1.63m @ 21.91 g/t “I would like to
from 269.63m). emphasise that Li-
A further 10,000m of aircore drilling beria is still a good
could also be completed, pending rig Wang said re- gold investment
availability, with infill drilling to upgrade sults such as those destination and
the resource category at Abujar pen- were attracting Caigen Wang they have a new
cilled in for later this year. plenty of interest from key players in the Government that
region. came into place earlier this year,” Wang
“The reasons the project attracted said. “Generally speaking, Liberia is not
us was the potential size of the mineral “We’ve been approached by a number tough to work in, but communication is
resource,” Wang said. “This part of the of major mining houses and investors as very important for all stakeholders. We
country was really untouched by previ- well, discussing possible co-operations are making very good progress at both of
ous explorers so we are really the first on our projects and other Ivorian pro- our Liberian projects since we resumed
pioneers doing exploration in this part of jects,” he said. operations there earlier this year.”
Ivory Coast.” With more than $9 million of cash and
“Particularly in the last two years, receivables on hand, Tietto is funded to
Test drilling at numerous targets across Cote d’Ivoire has become a really highly complete all planned exploration work
the 1,114sq km Abujar property is also on sought gold investment destination.” in both Cote d’Ivoire and Liberia until at
the immediate agenda using Tietto’s own least the end of the 2019 field season.
portable diamond rig which is capable of Having first entered Liberia six years
drilling down to 600m. ago, Tietto resumed exploration work in – Michael Washbourne
the country in March after placing it on
Tietto has defined more than 1km the backburner for several years to focus
of mineralised high-grade gold at the
Gludehi prospect at Abujar, with recent

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 89

AFRICA DOWN UNDER PREVIEW

Roxgold ready for feast

Roxgold Inc president and chief ex- “We spend a lot of time looking to be the at operating costs of $C450-475/oz and
ecutive John Dorward would not be diner and trying to find a new project that AISC of $C740-790/oz for Yaramoko
surprised if his company ends up being we can deploy capital into and our team in 2018. It comes after the company
“dinner” for someone else. However, he is into, because we think we’ve got a good smashed guidance in 2017 with produc-
preparing the unheralded gold producer for proven team that can add value,” Dorward tion of 126,990oz at an operating cost of
its own feast. told Paydirt. $C438/oz and an AISC of $C740/oz, with
$C84 million of cash flow generated from
TSX-listed Roxgold has not missed a “We also have a very strong balance operations.
beat since switching the lights on at Yar- sheet and very strong cash flow coming up
amoko, Burkina Faso’s first underground in future years that we think we can deploy Yaramoko churned out a record
gold mining operation. The company re- into a good growth opportunity and that’s 40,452oz in Q1 2018 and Dorward said
cently celebrated the two-year anniver- very topical for us. Q2 2018 was expected to deliver a similar
sary of first production and passing more outcome.
than 5 million LTI-free hours. “In terms of the question ‘are we dinner
for someone else?’ those conversations “Ever since start-up, it’s really never
With production forecast to jump about are starting and I think it’s fair to say are missed a beat,” he said. “It’s been a really
40% to 160,000oz next year following the starting to pick up a little more, not just for well behaved and easy to get along with
introduction of the Bagassi South min- us but also within the industry you’re see- project, unlike some that I’ve worked with
ing centre, Roxgold is shaping as a tasty ing a little more action on the M&A front. in the past.
proposition for interested parties seeking
exposure to the resurgent West African “I think when we come through the end “When we started the project in 2016
gold sector. of this year and at the start of next year it ramped up very smoothly and was at
and we’re a 150,000-160,000 ozpa-plus nameplate very comfortably. This year has
For Dorward and his team, it is a case of producer…with a plus 10-year mine life at been largely about pushing the tonnes a
“controlling the controllables” until a poten- some of the lowest costs that you see in little more and we’ve seen better-than-an-
tial offer is made. In doing so, the company the industry, it’s not that surprising and I ticipated productivity out of the mine and
remains focused on optimising Yaramoko expect that we’ll continue to garner inter- also through the mill.”
while searching for a second project op- est.”
portunity. One of the signature hallmarks of Yar-
Roxgold has guided 120,000-130,000oz amoko since day one has been its ability

LATIN

AMERICA

16-17 May 2018

Pan Pacific Perth

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Page 90 AUGUST 2018 AUSTRALIA’S PAYDIRT

to recover around 99% of the gold pro- Roxgold is expanding its Yaramoko mining operation in Burkina Faso
cessed. With Roxgold striving to increase
throughput this year, the mine’s industry- ozpa to Yaramoko’s production profile. Roxgold is also tipping $C9 million into
leading recoveries were in danger of being Construction capex of $C29.6 million is exploration this year as part of an aggres-
compromised, but Dorward said that had being funded from internal cash flow. sive campaign that includes some ex-
not been the case. tensional drilling at 55 Zone and Bagassi
“I was on site a couple of weeks ago and South and follow-up work on a number of
“We’re not seeing that traditional trade- it’s all trucking along very nicely,” Dorward promising targets along the Boni Shear.
off with recoveries and throughput; basi- said.
cally the gold is still falling out of it pretty “The payback for us to find another de-
readily,” he said. “The box cut is officially done, our un- posit is not that profound,” Dorward said.
derground mining crew is collaring the por- “Those sorts of expansions are generally
“The mineralogy is very good. A high tal ready to get into the underground and very accretive if we can find another high-
proportion of the material comes out in we’re then into underground development. grade deposit somewhat similar to Bagas-
gravity, probably 70% comes out in the We access ore pretty quickly so I think in si South or 55 Zone.”
gravity circuit and then the rest leaches re- terms of the mine development we’re look-
ally quickly through the CIL.” ing very good at Bagassi South.” – Michael Washbourne

The two big work items for Roxgold in
2018 are the processing plant expansion
and the addition of Bagassi South to sup-
plement feed from the primary 55 Zone
mining centre.

Throughput is being increased from 750
tpd to 1,100 tpd via the addition of a sec-
ondary crusher and some extra CIL tanks
which had already been “ghosted” into the
original design.

Expansion works are on track to be
completed in Q4 2018, coinciding with
commissioning of Bagassi South, about
1.8km south of the plant.

Bagassi South, another underground
mine, is set to add another 40,000

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AFRICA DOWN UNDER PREVIEW

Take four for Morocco tin

Kasbah Resources Ltd managing di-
rector Russell Clark is hoping it is
fourth time’s a charm in regards to the

company’s Achmmach tin project in Mo-

rocco.

In July, the company released a third

updated feasibility study for Achmmach

since an initial economic assessment

was made in 2014, pointing to a project

capable of delivering a NPV of $US98.1

million and IRR of 23% from 4,500 tpa

tin-in-concentrate production across a

10-year mine life.

Clark, who took over the management

of Kasbah in November, said the outlook

was different for Achmmach after three

previously stalled development attempts. Unlike many of its neighbours, Morocco boasts extensive infrastructure

“There are new eyes looking at it, the which Kasbah intends to take advantage of

price environment is better and we are

using new technology,” he told Paydirt. used in the August 2016 study to private equity funds out there willing to

“It has demonstrated that there is still a $US23,025/t in the new assessment. lend. We are also looking at Japanese fi-

real project there.” “I think everyone has missed tin’s role nance [Toyota Tsusho Corporation (20%)

The new technology comes from the in the EV market,” Clark said. and Nittetsu Mining Co Limited (5%) are JV

introduction of high pressure grinding “For all these EV cars you are going partners in the project] which has advan-

rolls (HPGR) and ore sorting into the to need the infrastructure in place to tages of probably being cheaper and over

Achmmach flow sheet. charge them and that requires tin solder. longer terms.

“The technology made up a huge We have seen the runs lithium, cobalt “They would likely want all of the offtake

part of this study,” Clark said. “The last and graphite have had off the back of the and may want to take on greater ownership

study, I think, was taking quite a risk with EV story; tin’s time hasn’t come yet.” of the project; all of which is manageable.”

some of the kit being used but this ap- Clark is confident tin’s ascendency will Away from marketing and financing, Kas-

proach reduces that risk. The ore sorting coincide with Kasbah’s project marketing bah is also moving to have EPC and mining

means the back-end of the plant is much which will now begin in earnest. contractors selected before the end of the

smaller, resulting in lower capex and the “The next step following release of the year.

HPGR allows us to get away from a rod DFS is to finalise offtake,” he said. “We “We have started that process and we

mill which reduces opex.” have spoken to four or five interested will hopefully have it all done in the next six

months,” Clark said.

When it comes to project development,

Clark sees advantages in Achmmach’s

location in one of Africa’s most developed

economies.

“A lot of investors, particularly in Aus-

tralia, don’t have a strong understanding of

Morocco,” he said. “There are no security

issues, there is good infrastructure and few

of the challenges you get in other parts of

Africa. Part of my job is to educate the mar-

ket in that regard and appearing at events

Kasbah has redrawn the DFS for its Achmmach tin project in Morocco for a fourth time such as Africa Down Under is a part of that.”

The one major in-country milestone to

The project will see underground opera- parties and we are looking for someone reach is agreement with the Moroccan

tions mine 750,000 tpa at an average head who can help with the finance as well, Government over the terms of Kasbah’s

grade of 0.82% tin to produce 4,500 tpa of whether via debt or equity.” investment.

tin in a 60% concentrate. In conjunction with offtake, Kasbah will “The project is fully permitted, now we

The tin price environment is also provid- sharpen its project finance options. have to negotiate the investment agree-

ing some tailwinds. The previous three it- “There are a number of banks we have ment with the Government but it already

erations of the DFS saw ever-decreasing begun discussions with and we will now has a map for that,” Clark said. “I am going

tin forecasts being used but with the metal move towards getting actual terms off there at the end of July to meet with of-

enjoying good recoveries in 2017 (despite them,” Clark said. “The plan is to pursue ficials to discuss the next step.”

a recent softening) Kasbah has been able classic project finance but if we can’t find – Dominic Piper
to lift forecast prices from the $US17,830/t that for whatever reason there are many

Page 92 AUGUST 2018 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER PREVIEW

Vital goes forward in Niger

With West African gold plays back in Drilling hits in the ilk of 4m @ 157 g/t gold at Bella Tondi has encouraged Vital
vogue, Vital Metals Ltd has decided to go-ahead to earn a 50% interest in the Bouli project, Niger
to proceed with a 50% earn-in at the Bouli
project in Niger. Strizek told Paydirt. working with AMS on that. We have been
“One of the things we’d like to do is get doing diamond [drilling] with FORACO
The company entered an exploration and having a multi-rig programme going
agreement with multi-faceted private a big RC rig on the ground and we are
Turkish company SUMMA late last year
and has since seen enough encourage-
ment at Bouli to take the next step to-
wards a 50:50 JV.

Over the next two years, Vital has com-
mitted to spending $US5 million to earn
its half and on establishment of the equal
JV, the company can acquire SUMMA’s
stake for a 2.5% gross revenue royalty.

While eager to get the JV going, Vital
was stopped in its tracks somewhat at
the time of print, with work on the ground
subject to wet season weather condi-
tions.

“There is enough money to take us
onto the stage of something big, but at
the moment it is a bit of a watching brief
on the weather and as much as we’d like
to be on the ground we are watching the
weather,” Vital managing director Mark

Page 94 AUGUST 2018 AUSTRALIA’S PAYDIRT

would be ideal.” Mark Strizek hope to land with the project,” Strizek
Prior to committing to the JV, Vital had said.
many, where initial sampling of the his-
spent $US1 million on aeromagnetic sur- toric Stolln Mullock dump returned 0.8% “We’d like to have a cleaner vehicle
veys and drilling, mainly at Bella Tondi. cobalt and 1.3% nickel from the old ura- for the market and each project could
nium exploration waste dump. stand on its own feet. We want a sim-
A headline intercept of 4m @ 157 g/t ple company structure, we’d love to see
gold at Bella Tondi and core sampling Strizek said further soil sampling and Aue have some legs and move it into a
results which suggest potential for mul- other low-cost activities would be the or- separate vehicle. With Burkina Faso and
tiple parallel lodes is enough reason for der of the day at Aue. Niger we have a centre of gravity in West
Vital to get back in the field as soon as African gold and we will keep working at
possible. “The company’s No.1 belief is in the it.”
opportunity that presents there at Bouli,
Weather conditions should subside it is fairly aggressive one with where we While Niger might not be attracting
by September and by then Vital should the attention of more fancied exploration
have completed the sale of the Water- destinations like Cote d’Ivoire, Vital has
shed tungsten project in Queensland to prime real estate in the country.
Tungsten Mining NL for $15 million cash.
Exploration at Bella Tondi, 25km north
“Both parties are committed to making of the 2.5 moz Samira Hill gold mine, has
it happen and this has taken a little bit of identified an emerging high-grade gold
extra time, but we will be in a nice posi- zone, with visible gold detected in core
tion when it happens,” Strizek said. samples boosting Vital’s enthusiasm in
Niger.
Vital raised $3.8 million in March to
further work at its tungsten and gold “Cote d’Ivoire went off the boil despite
projects and now with the sale of Water- having red-hot acreage and is now see-
shed, the company wants to push on as ing a lot of activity which is good for the
a West African gold entity despite some region. We are very satisfied with the
of the potential emerging in other areas level of government support we are get-
of its portfolio. ting; Samira Hill was a company-maker
and we hope that lightning strikes twice.”
“We have a steely focus on West Af-
rican gold and if and when that project – Mark Andrews
warrants we’d like to move Aue into its
own vehicle,” Strizek said.

Aue is a cobalt project in Saxon, Ger-

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 95

AFRICA DOWN UNDER PREVIEW

Azumah digs deep

Deeper drilling has all but confirmed nership with private equity group Ibaera Stone, who has guided Azumah for
Azumah Resources Ltd managing Capital, which is investing $17.5 million more than a decade, was always con-
director Stephen Stone’s long-held belief for a 47.5% share in Wa. fident Wa had the potential to one day
about the underground potential of the become an underground operation, but
Wa gold project in Ghana. Since striking the deal with Azumah the junior was restricted with what work it
last September, Ibaera has been on a could undertake due to a combination of
Recent RC drilling (with diamond tail) mission to increase the size of the exist- factors, including lack of capital.
of the main Kunche deposit has pro- ing reserve from 624,000oz to at least 1
vided the company with further “proof of moz, as well as exploring its largely un- “When I got involved with Azumah, it
concept” for a possible feeder zone that tested depth potential. was pretty much a blank canvas because
could lead to a deepening of the exist- there was very little evidence of any sub-
ing shallow pit design and for an under- “All of our pits are pretty shallow, be- stantial mineralisation there,” Stone said.
ground mining option to be scoped. tween 80m and 120m, but given that
these are structurally controlled orogenic “Over the years, we’ve built up the re-
Intercepts of 4m @ 3.2 g/t gold from gold deposits, there’s every possibility sources, built up the reserves and did a
178m and 7m @ 1.90 g/t from 186m – they will go down several hundred me- feasibility study that didn’t quite get over
within an overall hit of 15m @ 1.95 g/t tres as is the case with many other simi- the line and was completed pretty much
from 178m – were recorded below a pre- lar projects in West Africa,” Stone told at the same time as there was a perfect
viously reported intercept of 27m @ 2.43 Paydirt. storm with the gold price and the mar-
g/t from 137m. kets. So, we never really followed through
“That ‘proof of concept’ intercept we got on that underground opportunity.
The latest drill results follow a previ- is really a result of the Ibaera team, par-
ous hit of 45m @ 5.37 g/t gold from 99m, ticularly [global targeting and research “It’s really exciting that Ibaera have
including 20m @ 10.27 g/t, described manager] Jon Hronsky, specifically look- come along and are trying to put some
by Azumah at the time of reporting as ing to see if there was a structurally con- flesh on the bone there. With the grades
a “game changer” for the Wa project, trolled feeder zone into the main Kunche we’re seeing from the drilling, there’s
northern Ghana. deposit. It is a breakthrough for the un- every chance that going underground
derstanding of the geology and is likely could be viable.”
Azumah’s success with the drill bit is a to see a deepening of that Kunche pit.”
direct result of its new project-level part- Azumah and Ibaera are targeting an

Page 96 AUGUST 2018 AUSTRALIA’S PAYDIRT

interim resource update (cur- tion up there. It was his percep-
rently 41.5mt @ 1.5 g/t gold
for 2.06 moz) by the end of tions of the project that drove
this month. An interim re-
serve update is slated for the Ibaera to engage with us.”
end of the year, to be sup-
ported by some optimised Should Azumah and Ibaera
capital and operating cost
estimates for the project. proceed to development mid-

A development decision next year, Wa could be con-
has been pencilled in for Q3
2019 following the release of structed in reasonably quick
a full feasibility study.
time given two 15-year mining
“The fresh set of eyes
has been really good for the licences have already been
project,” Stone said. “The
view at the moment is there awarded for the project.
won’t be any major structural
changes to what was already “We’ve almost totally de-
planned in terms of develop-
ment, but there will be a lot risked the project, or effec-
of finessing on several fronts that, com-
bined, will certainly improve the expected tively what the Canadians call
IRR and NPV for the project, along with
the fundamental increase in the reserves almost ‘shovel-ready’,” Stone
that will flow from all that.”
said.
Ibaera’s investment in Azumah marks
the group’s first formal union with a re- “There’s obviously been a lot
sources play.
of money spent to get it to this
Stone said the Ibaera partnership had
been “transformative” for his junior company. stage which doesn’t have to be

Azumah will announce an updated resource for spent between now and the

the Wa gold project in Ghana later this month delivery of the revised study.

“It has exceeded my expectations in It’s important for investors to
terms of the way we’ve bedded every- understand that the actual cost of getting
thing down and the way we’re all working through to that development decision is
together as a JV,” he said. not that great from here on.”

“It’s an unusual transaction because – Michael Washbourne

often a private equity group will invest

the money, but in this case it comes with

some very, very good people. We’re very

privileged to have the likes of Jon Hron-

sky overseeing and directing the explora-

AUSTRALIA’S PAYDIRT AUGUST 2018 Page 97

AFRICA DOWN UNDER PREVIEW

Becoming more predictable

Predictive Discovery Ltd man- prospective shareholders under-
aging director Paul Roberts is stand the benefit of that kind of ap-

seeking to improve the market’s proach.”

understanding of the methodology In a bid to change investor per-

behind his company’s project gen- ceptions of what a project genera-

eration strategy in West Africa. tion company is all about, Predic-

Investors have gradually jumped tive is undertaking a review of its

off Predictive over the past two corporate pitch to those prospec-

years despite the company making tive shareholders.

a wave of promising discoveries One of the options being con-

in Cote d’Ivoire and Burkina Faso sidered is to compare Predictive’s

during that period. business model with several suc-

Roberts, who recently increased cess stories from North American

his own holding in Predictive by groups with similar strategies.

40%, attributed the drop-off to a “In North America, this is a mod-

lack of understanding around the Predictive recently drilled 13m @ 5.35 g/t gold, with the hole stop- el that is actually well understood

role of a project generator, particu- ping in mineralisation, at Ferkessedougou North in Cote d’Ivoire and there have been substantial

larly one listed on the ASX. successes for companies that are

“A lot of investors are looking for holders, with the expectation that over known as prospect generators,”
single project companies and that’s partly time more than one of these projects can Roberts said.
because they’re looking for simplicity and generate significant returns for our share-
they’re looking for focus,” Roberts told holders. We offer perhaps a slightly lower “We’re looking to highlight how compa-
Paydirt. potential reward, but a much higher likeli- nies of this type have generated very, very
hood of reward in a relatively low dilution good returns for investors in other areas.
“Our approach is to spread the risk with model. In terms of short-term returns for investors,
many opportunities, any one of which can I think we’re essentially a few good drill
produce significant returns for our share- “I’ll admit I’ve still got a job to do to help holes away from doubling or quadrupling

Page 98 AUGUST 2018 AUSTRALIA’S PAYDIRT

the valuation of the company – and that’s auger over an area where full ownership.
what happened in 2016.” previous soil geochemis- “It’s better for us to move
try returned some “spotty”
As the wet season rolls through West results at Ferkessedougou to essentially a free-carry
Africa, Predictive is now reviewing results North. Work will be com- situation, accept some
from recently completed exploration pro- pleted in conjunction with cash and save ourselves
grammes in both Cote d’Ivoire and Burkina JV partner Toro Gold Ltd. from contributing to that
Faso. when we’ve got much more
Up to 2,500m of dia- exciting things happening
Ferkessedougou North continues to mond drilling could also be elsewhere in the portfolio,”
emerge as a promising new gold discov- completed through the wet Roberts said.
ery for Predictive in Cote d’Ivoire, with season, pending favoura-
broad gold mineralisation intercepts identi- ble weather conditions, on “It’s a sensible deal,
fied on the first section of the most recent an area to the west of the given the alternatives, and
campaign and gold intercepts reported main discovery where sev- one that is entirely consist-
over 1.4km of strike length in the southern eral gold-in-soil anomalies Paul Roberts ent with our business mod-
mineralised zone. have been identified. el. We’re in the business
of getting returns to our shareholders, but
Best fire assays included a hit of 25m Predictive is not short of opportunities in also husbanding our cash so that we don’t
@ 3.06 g/t gold, including 13m @ 5.35 g/t, Cote d’Ivoire, with the company also set to end up diluting everyone incessantly.”
which stopped in mineralisation with the follow up on promising targets at Boundiali In Burkina Faso, Predictive has identified
last 4m averaging 13.78 g/t gold. North and Nyangboue later in the year. anomalies extending 20km along strike to
the south-west of the Bira project where up
“We’ve only tested a very small propor- Future exploration at Bobosso will be to 20,000m of RC drilling is planned from
tion of the potential,” Roberts said. “On funded and completed by Progress Miner- November.
most of the cross-sections – and they’re als Inc after Predictive reached an agree- “In many ways the opportunity with Bira
not completely drilled by any means – ment with its JV partner to be removed of is a little bit like Ferkessedougou North, ex-
we’ve seen gold mineralisation and widths its obligation to contribute towards 30% of cept it’s more advanced because there’s a
and grades which are certainly of some costs. body of mineralisation we know about al-
economic interest. Not all of them will con- ready from the first drilling programme,”
tain gold mineralisation, but there’s a lot Under the revised agreement, Predictive Roberts said.
of space and a lot of potential there. It’s a will be eligible for one or more payments in
very encouraging first phase of drilling.” cash and/or shares, with Progress to pay – Mark Andrews
$C5 million on achieving several condi-
Roberts said the company was consider- tions precedent before eventually taking
ing further bedrock sampling with a power

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Strandline pushes on in Tanzania

Strandline Resources Ltd outlined the viability of a 2
managing director Luke Gra-
ham has backed the Tanzanian mtpa operation from reserves
Government’s “good intentions”
to pull the mining sector into of 12.3mt @ 3.9% total heavy
shape.
minerals for 480,000t con-
“We genuinely feel that the
sector needed reform and [to] tained heavy minerals com-
re-baseline the high integrity
practices and CSR; we do feel prised of 42.3% ilmenite,
Tanzania will change,” Graham
told Paydirt. 18.2% zircon, 4.4% rutile, 1.2%

“The underlying motives will leucoxene and 1.5% monazite.
hold the industry in good stead
for future generations. It is im- The company refers to Fun-
portant to get it right and have
quick stability, which is what I goni as its starter project with
want to see for our projects.”
capital costs of $US30 million
While confident the Government
is on the right path to future prosperity in required.
the mining sector, Strandline – like many
other companies in the country – would Construction was estimated
have welcomed a quicker resolution to
mining legislation and the issuance of to take 12 months and payback
mining licences in Tanzania.
from first production scheduled
Strandline, perhaps more so than
to take 18 months. An environ-

Coburn is 250km north of the Geraldton Port mental certificate has been
granted and mining licence ap-

some others at the moment, would have plication submitted and waiting
benefitted greatly from certainty in the approval.
Tanzanian mining sector, given it has
the Fungoni mineral sands project, 25km In a perfect world, Fungoni is ripe for
from Dar es Salaam, raring to go. production sometime next year amid a
good market for zircon and ilmenite.
A DFS on the premium-grade zir-
con and ilmenite Fungoni project Strandline has more than 90% of
was delivered in October 2017 and Fungoni’s forecast sales under take-or-
pay contracts in light of China’s Maoming

YTGOOEUDTRASY 7

Past and present Conference Proceedings
and CD-Roms are available for sale

For details or to download an order form visit
www.newgengold.com

Phone (+61) 8 9321 0355 or email [email protected]

Jointly organised by:

Keith Yates & Associates Pty Ltd

Page 100 AUGUST 2018 AUSTRALIA’S PAYDIRT