for some time and was not brought about by the slump in the nickel price, nor Min- cor’s fight for survival.
“Because I’ve been in the same role for 16 years, and as much as I have always loved the job and the industry, it was sim- ply time for change,” Moore told Paydirt.
“Running a listed mining company car- ries a lot of responsibility towards share- holders and towards employees working in potentially hazardous environments, so there is always something to worry about.
“It’s great stuff and very invigorating, but there comes a time when you want to put that burden down.”
Sullivan has also retained his position on Resolute’s board, now in a non-exec- utive capacity, and insisted the current depressed state of the market had “no influence whatsoever” on his decision.
“In fact, I’ve stuck around through quite a lot of tough times before because of that,” he said.
“I made my choice purely on my own and the company has replaced me with someone I think is very capable. I will continue to sit on the board of Resolute and I’ll follow it with interest.
“I think it’s a good time to still be in- volved. I think it’s a fantastic opportunity at these prices.”
Borshoff also formally steps down from uranium miner Paladin this month, but the 73-year-old remains keen to stay ac-
tive within the industry despite being at an age when most people would be hap- py to call it quits for good. He has been coy on his future plans.
Davis resigned from his post at Silver Lake in September 2014 but remains a non-executive director of the company. His successor, Luke Tonkin, has cer- tainly found the going tough since taking the reins.
Silver Lake’s stocks plummeted from 42c/share in late 2014 to as low as 12c/ share last year as underperforming as- sets threatened the gold producer’s fu- ture, although the company – a winner of Gold Mining Journal’s Miner of the Year award in 2009 and 2010 when Da- vis was at the helm – has slowly regained some traction in recent months.
Mincor was forced to cut a quarter of its workforce and restructure its Kam- balda nickel operations last year to cope with the slump in base metal prices, but Moore said this was not the worst down- turn he had endured.
“It looks like a pretty severe downturn, as perhaps was to be expected after what was a mighty big boom, but the re- sources business is cyclical and things will turn in due course, perhaps quicker than people think given that there is a massive new market, in China, that bare- ly existed 10 years ago and the rest of the world is starting to wake up from the Great Recession,” Moore said.
“It does not look as bad as it did in the late 1990s and early 2000s when the dotcom boom was under way and we were all the ‘old economy’. I think there is renewed understanding that resources are a vital part of the economy, that we are a cyclical business and that the cycle will turn.”
While Moore will remain actively in- volved with Mincor and the broader nick- el industry, he has a series of personal ambitions he wishes to pursue and said the timing of his departure was perfect for all parties concerned.
“It’s best for me because there are a great many things I want to do with my life, so I will be very busy doing them,” Moore said.
“Whether it was the right decision for the company, well, in some ways there is never a good time to go, but on the other hand the graveyards are full of indispen- sable people.
“Right now Mincor has an exception- ally talented person in Peter Muccilli who is ready to step up and, with the nickel price-induced windback of production that we have implemented, it is a great time for him to take over, put his own stamp on the company and rebuild our production base in due course.”
– Michael Washbourne
Kambalda nickel producer Mincor will be steered back on course with Moore serving as deputy chairman
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 51
SKILLS
Executive pay to be results based
Chief executives in the world’s largest mining companies have continued to enjoy salary increases
throughout the commodities down- turn but pressure is mounting on companies to rectify the situation.
In the recently published Rem Report 2015, Swann Global and HR Ascent found chief executive salaries in the 100 leading mining companies increased by 8.8% on average in the year to December 31, 2014. The median fixed pay for chief executives was $US768,000, with a median fixed pay plus short- term incentives of $US1.35 mil- lion and median total package of $US2.2 million.
“Australian companies were slow to react but once they started they have responded very rapidly, possibly due to the rejection of Newcrest’s remuneration report in 2014. Companies need to be more alert to what shareholders are saying.”
The report highlighted the growing acceptance of incentive- based packages among chief ex- ecutives and the Australian junior sector is increasingly adopting such structures.
Sheffield Resources Ltd re- cently appointed experienced mining executive Bruce Mc- Fadzean as its new managing di- rector. McFadzean’s fixed salary
The report highlighted that lit- tle correlation existed between executive pay and financial per- formance. Although there was modest correlation between fixed pay and company EBITDA there appeared to be no rela- tionship between return on eq- uity and pay and very little corre- lation with short-term incentives and market cap net profit.
Additional commentary in the
report from Investec Bank highlighted the desire from shareholders to see in- creased correlation between executive pay and performance.
“Mining company executives will cer- tainly now be judged by whether or not levels of compensation are commensu- rate with the generation of true share- holder value and returns,” Investec said in its commentary.
“
was set at a comparatively low $175,000 p.a. cash and $175,000 p.a. in shares. The incentive component will see McFadzean receive 500,000 Sheffield shares following delivery of a DFS the Shef- field board determines “to be an appropriate level of improvement on the PFS, with a particular emphasis
Lorraine Meldrum
The backlash is more evident in Australia because of the
two-strike rule which is being applied more regularly now. Overall,
the message is getting through.
Australia because of the two-strike rule which is being applied more regularly now,” Meldrum said. “Overall, the mes- sage is getting through.”
been telling us they are sick and Investors have been telling tired of seeing remuneration at
Global – told Paydirt Australian McFadzean himself recog-
Under Australian law, two annual pro- test votes in a row – where 25% of votes are cast against a remuneration report – can lead to a spill of the company’s board. Newcrest Mining Ltd’s 2014 AGM saw 44% of shareholders reject the re- muneration report.
on capital and operating costs; 1 million shares on finalisation of approved financ- ing and 1.5 million shares on first produc- tion from Thunderbird”.
Sheffield chairman Will Burbury told Paydirt the remuneration package had been welcomed by shareholders.
Burbury said. “Investors have
“Shareholders do recognise the need
to pay for strong and experienced m“an- Chief executives in Britain and North shareholders describing it as refreshing,”
agement to carry them through difficult times, but are ever watchful for corporate excess.”
One of the report’s authors
us they are sick and tired of the same level it was five or six
– Lorraine Meldrum of Swann seeing remuneration at the same years ago.”
mining companies were playing nised the image chief execu-
catch-up when it came to more tives could portray through their
incentivised salary packages. “There is a trend towards
incentives-based packages, much more so in the US and Canada,” Meldrum said. However, she expected more Aus- tralian companies to adopt more incen- tive-based salaries following several high-profile votes against remuneration reports at Australian AGMs in recent
years.
“The backlash is more evident in
America generally enjoyed higher sala- ries in comparison to their Australian counterparts but Meldrum said this was largely due to cost-of-living factors. She said that until recently there was a per- ception internationally that Australian chief executives were paid too much.
Meldrum said the Newcrest case had shaken up Australia’s mining industry.
remuneration packages.
“It is easier to get up in front of investors when you can say ‘See, I’ve got as much in it as you’. Remuneration has been a bone of contention in recent times and you have to go with the flow,”
level it was five or six years ago.
“In doing investor briefings around Australia, we have been met with an overwhelmingly positive response to the terms of Bruce’s contract, with many
PAGE 52 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
he said.
– Dominic Piper
Poor leadership hurting industry
Almost two-thirds of senior mining personnel are leaving coveted roles because of dissatisfaction with manage- ment at the top level, according to the lat- est research report from consultancy and advisory firm Stratum International.
A survey of more than 1,200 people employed in senior mining roles found a lack of “inspirational” leadership was the primary reason behind a person’s deci- sion to quit.
To put that in perspective, only 6% of the survey respondents cited dissatis- faction with compensation and benefits as their main reason for resigning, while 10% said they had left their jobs because a more attractive position had become available at a rival company.
The mining industry appears to be the unfortunate forerunner in terms of the level of frustration with top leadership. A similar research piece by LinkedIn found as many as 41% of people had resigned across a range of industries because they were also unhappy with the stand- ard of management.
Stratum managing partner Will Coetzer said it would be interesting to compare his firm’s research findings to figures from similar industries such as oil and gas and construction.
“With these companies where there is a FIFO lifestyle, there’s definitely a stress factor that comes with working on these remote sites...so it would be quite an in- teresting stat to compare and see if it’s also disproportionately high,” Coetzer told Paydirt.
“There has always been a bit of a per- ception from people on mine sites that their leaders are disconnected from min- ing because they work in air-conditioned, ivory towers, so there is always a bit of a rift between these guys anyway.
“Based on this research and certainly the knowledge that we’ve gained
from speaking to people over the years, I think what employees find
very hard to take is the leaders they blame for leading us into this market seem to still be quite se- cure in their roles.”
Stratum’s latest report, The Great Escape, is a follow-up of an earlier research piece, titled The Lost Leaders, which found almost two-thirds of senior mining executives were happy to take a call from another company to talk about moving jobs.
“We wanted to test the as-
sumptions of what actu- ally makes people leave a role,” Coetzer said. “Rather than ask them what would make them their leave their job, we asked them what actually made them leave their last two to get a much clearer intention.”
Poor leadership and
high management turno-
ver rates were suggested
as two of the biggest factors for why peo- ple are quitting.
One respondent stated: “Board fighting led to four managing directors in three years, and a total loss of morale.”
Another said: “A new management team came in with plenty of sizzle but no steak.”
“I think it’s fair to say there was a lot of over-promotion during the boom times out of necessity and a lot of these indi- viduals, as with a lot of the junior compa- nies as well, just haven’t been flushed out yet,” Coetzer said.
“There’s a lot of good people who got unlucky with an asset closing down, but predominately what we see is more than half of people are just not of the calibre that companies would have elected to keep on at senior level, and that’s very hard for some people to accept.”
Only 11 of the 274 respondents who have changed roles in the past 12 months said they were still unemployed, suggest- ing a more active mining career market than what is widely perceived.
Turnover levels in the exploration sec- tor also appear to be low, with only 12% of people changing employers in the last year, although that is unlikely to provide much comfort for the 60% of unemployed respondents who have been out of work
Will Coetzer
for more than 12 months. Not one respondent cit- ed a poor salary or a lack of a recent pay rise as
their reason for quitting. Coetzer said the re- search indicated most people were prepared to stick it out in an un- happy work environment because of widespread fears they might not be
able to find another job. “I definitely think there is a wait-and- see attitude at the moment and this is potentially going to cause havoc in the next two or three years as the markets
recover,” Coetzer said.
“As the previous Lost Leaders survey
indicated, two-thirds of everyone in sen- ior and influential roles are already look- ing over their shoulders...call it a future domino effect.”
The mining industry, however, does appear to be leading the way when it comes to providing opportunities for ca- reer advancement. Only 16% of Stratum survey respondents said they left their last job because it was going nowhere, compared to 45% in the wider LinkedIn survey.
“A previous survey we did showed that 22% of all people in leadership roles in mining leave per year, which is a lot, but that’s not necessarily a negative thing if you look at other industries,” Coetzer said.
“On the surface, it appears mining is better at promoting from within, but then the question you need to ask is that be- cause we are a completely closed indus- try and no one else can get, or perhaps it’s because there is a natural high attri- tion rate in mining anyway.”
Coetzer urged key personnel to look at ways to improve their communica- tion skills in a bid to overcome the concerning statistics of poor lead- ership within the mining industry.
“This is not just something you can go and learn in a book,” he said. “It’s a cultural shift of trust in an organisation and you build up on that over time.”
– Michael Washbourne
To view the full report, visit: www. stratum-international.com/great-es- cape-why-mining-leaders-quit/
Breakdown of survey respondents and the length of time in their current job
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 53
SKILLS
Geoscientists in abundance
Employment of geoscientists in Australia has fallen to its worst levels in recent memory.
Since the GFC in 2009, the Australian Institute of Geoscien- tists (AIG) has conducted quar- terly surveys on the employment rate of geoscientists, with the June and September 2015 re- ports making grim reading.
The December 2015 report was to be released at the time of print and with little change in senti- ment for resources companies and continuing low commodity prices there is unlikely to be any improvement in the situation.
“The last two quarters have
been the worst employment cir- cumstances that geologists have
faced since the survey com- menced,” AIG council member Andrew Waltho told Paydirt.
“What is really concerning is that with the unemployment rate sitting at 15% amongst self-employed geologists, a lot of geologists are only receiving about 10% of what they really like to be receiv- ing in terms of the work load, so they are getting some income but it is minimal.
“We really have to see a recovery in demand for commodities to get that re- turn in employment. This downturn has been really savage. The downturn as- sociated with the GFC in 2009 was very short and sharp and saw a really sharp drop in geologists but only for a cou- ple of quarters. This one now has been dragging on for more than a year and re- ally stretching people, and I don’t know how people who are out of work, and have been out of work for more than 12 months, manage,” he said.
With little government support and places limited at universities for people keen on returning to improve their quali- fications, Waltho said professional as- sociations like the AIG were doing their best to provide out-of-work geoscientists with opportunities to
attend seminars and conferences to help them maintain their skills.
Figures from the AIG suggest that 75% of all geoscien- tists in Australia are employed in explora- tion or mining, mean- ing they have felt the
brunt of cost-cutting measures imple- mented by resources companies due to low commodity prices.
However, there is some positive light appearing in the future for geoscientists, according to Waltho.
“I think there has been something of a maturing in the breadth of fields that geo- scientists are employed in Australia,” he said.
“In North America and Europe, the ac- tual numbers of geoscientists in explora- tion and mining are half of what we have in Australia. Mining is not as important a part of their economies as it is in Austral- ia and there are large numbers of geo- scientists there that are employed in all sorts of aspects like resource manage- ment, environmental management, re- mediation... I think that is starting to gain traction in Australia and we are realising that the skills geologists and geophysi- cists have are really valuable in other areas.
“I would think that over the next 10 years or so those fields will develop more and provide a lot more consistent opportunities for people and the ability
for people during their careers to try different strands of employ- ment. That will be a good thing all round,” he said.
Perhaps it is the long-term op- portunities for geoscientists which are keeping people interested in the profession as a career.
Waltho said he was surprised that despite the current lack of work for geoscientists, new stu- dents entering university-level geosciences courses remained solid.
“The anecdotal experience from previous downturns is that when you get a downturn in employ- ment prospects you get a down- turn in enrolments. That flows on to five years down the track when the industry picks up and there is
a shortage of graduates to come into the profession. It is good to see that this time the interest in geosciences among stu- dents is still there, but we have to be in a situation where there are opportunities when they graduate.”
Nurturing the next generation of geo- scientists will be critical in discovering the mines of tomorrow, however, retain- ing the skills sets available today is also important.
Waltho said continuity in exploration projects was being lost as companies managed turbulent times in the mining sector.
“You need an absolutely red hot, high- grade, simple-to-mine deposit that could go from discovery to development in six or seven years, but more likely that gap between discovery and development is 13 or 15 years or even longer, so pro- jects are stretching out to 20-25 years,” he said.
“Those projects may go through four or five cycles with the up and down cycles in the industry, so the companies pursu- ing projects might change hands or have a new team looking at the project which
is sometimes a good thing and sometimes a bad thing. But, over- all it can’t be contrib- uting to exploration success and main- taining the pipeline of projects needed to keep the industry go- ing.”
– Mark Andrews
PAGE 54 FEBRUARY 2016
AUSTRALIA’S PAYDIRT
Battered gold miners mount charm offensive to sell pay
Gold mining companies are run- ning a charm offensive with their biggest shareholders on the thorny
issue of executive pay, keen to hold onto investors angry about ongoing generous compensation after four years of dire stock returns.
Stung by a reprimand from dis- gruntled shareholders in proxy votes last year, some miners are meeting investors earlier than ever to win sup- port for compensation plans months ahead of spring “say-on-pay” votes.
Largely abandoned by generalist funds after a 44% drop in gold prices and 70% slump in stock values since 2011, the mining firms are desperate to avoid a further exodus of sector- focused funds.
“If you have say-on-pay votes against you and ... you’re unwilling to change, people vote with their feet,” Jamie Horvat, who manages the $1.5 billion Vanguard Precious Met- als and Mining Fund, said.
In Canada, home to more large gold producers than any other coun-
try, at least three big miners began talking to shareholders last fall about 2016 executive pay, some six months ahead of when miners typically visited investors in past years – if at all – with pay plans.
Mining executives are generally well paid, but the gold industry “is in its own class,” according to Steve Chan, a prin- cipal at executive compensation consult- ant Hugessen Consulting.
Gold executive pay surged alongside company profits as bullion prices rose nearly five-fold between 2005 and 2011, Chan said. But compensation did not typically follow profits lower as bullion declined.
Cash-strapped miners have reduced costs in every corner – selling assets, closing mines and cutting staff – but chief executive pay at the biggest miners is still increasing, a late-2015 study shows (see page 52).
“The mining industry is in a world of pain and ... this pain is not being felt in compensation yet,” Investec’s Jeremy Wrathall, a study partner, said.
There is little correlation between chief executive pay and a company’s finan- cial performance, measured by market
capitalisation, return on equity and other common metrics, the study said.
That conclusion is at odds with wider trends tying pay to measures like share- holder returns. Last year, 69% of com- panies in the S&P 1500 linked compen- sation to performance, research firm Equilar said.
By November, several miners had called to discuss compensation plans with Joseph Foster, portfolio manager at Van Eck in New York, one of the gold sector’s biggest shareholders. Miners outlined performance goals they want to use to calculate executive pay and asked for input.
“It tells me that the final product, this proxy season, will be different than past proxy seasons and we’ll see stuff that’s more aligned with what shareholders are looking for,” he said.
If not, Foster is prepared to sell: “If it’s something that’s insidious and endemic within a company, then I don’t have to own these companies.”
Kinross Gold Inc, the world’s fifth-big- gest producer, began talking to investors in September, versus November a year ago, a spokeswoman said. Eldorado
Barrick Gold has vowed to fix its pay plans
Gold Inc spoke with top shareholders around November and Yamana Gold Inc began such talks last year.
Of the three Canadian shareholder say-on-pay votes that failed in 2015, two were at miners, Barrick Gold Corp and Yamana Gold, which vowed to fix their pay plans. Eldorado has trimmed its ex- ecutives’ pay.
Goldcorp Inc chief executive Chuck Jeannes said the downturn is reflected in his equity pay, while Kinross chief execu- tive Paul Rollinson said sizeable gaps exist between potential bonus awards and final payouts.
Egregious pay may not deter all inves- tors, some of whom may fear missing a major discovery, 1832 Asset Manage- ment fund manager Robert Cohen said.
“If one of these companies goes really well and they didn’t own it, because they fussed over a CEO making a million dol- lars a year too much, they miss out,” he said.
– Susan Taylor and Nicole Mordant, Reuters
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 55
SKILLS
Mine workers to find right page
Resources companies big and small are alike in their response to the current turmoil in commodity
markets; freeze pay increases and reduce costs.
To implement the latter strategy, jobs have been cut and roles com- bined as employers seek to max- imise productivity with a slimmer workforce.
Therefore, there is little in the way of job creation at the moment from mining companies despite a pletho- ra of talent on the sidelines.
“When we are talking to the em- ployers it is a very good opportunity
for them to stick with what they have
got or potentially up-skill in certain areas. There is some good quality people on the market, they need a
little bit of coercing to leave at the moment if they are in a good job, but you can generally get good quality people for a little bit less than you could have a cou- ple of years ago,” PageGroup Western Australia & Victoria managing director David George told Paydirt.
“It is a good opportunity for our clients to really review what they have got and they can up-skill in certain areas, so there is still a little bit of recruitment go- ing on.”
While there are opportunities for the right candidates, job seekers must be willing to accept terms of employment that probably didn’t have to in the past.
“You need to show flexibility, be flexible on location and be flexible on salaries. Good people generally will get employed but it is taking a bit longer [than in the past],” George said.
“People who are unemployed for a pe- riod of time need to stay positive, don’t get their heads down which can become apparent when they do land a job inter- view. It is challenging market conditions but spirits must be kept up because there are opportunities there.”
To gain employment in the resources sector, candidates must be flexible on location and salary
George said part of being flexible was considering offshore opportunities and perhaps getting used to FIFO rosters that aren’t particularly attractive for the time being.
“Employers [in Western Australia] are looking for 11 out of 10
people because they
can pick and choose
who they want, so if you don’t have everything and something else that they are looking for, then you have got little chance of securing those roles,” George said.
While employees
might not be receiving
the salaries they were a
few years ago, George
believes the cycle will
turn and boom time remunerations will be seen again.
“It is extremely cyclical [the mining industry] and I think it will come back. Some people will learn from their mis-
takes, others won’t learn from their mis- takes. People who have been in the in- dustry for a long time are not surprised they are seeing what they are at the mo- ment, certainly in WA. It is just part of the resources cycle and it will come back.
2015/16 Michael Page Australia Salary & Employment Outlook
Key findings:
• 65% of mining and resources employers are not expecting to increase headcount
• 53% of employers rate the current national economy as “fair”
• 52% of employers rate their overall confidence within the industry as “poor”
• 80% of mining and resources employers will not be rewarding their staff with a salary increase in the next 12 months, and 52% will not be rewarding their staff with a bonus
• 62% of mining and resources employers are offering flexible working hours as part of their work/life balance initiative and 36% are offering the option to work from home
George said mining people with cor- porate experience, such as chief finan- cial officers, had found their way into the aged care and health care industries which offered a degree of job stability compared to the cyclical nature of the re- sources sector.
The mining sector plunge has allowed other industries access to top end talent at an affordable price, but it remains to be seen if the lure of big cash incentives will woo personnel back into the industry once the mining cycle turns again.
– Mark Andrews
PAGE 56 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
David George
Maybe we all did get a lit- tle bit ahead of ourselves in the good times, but I have no doubt we will get back to a good point I just have no idea when that will be. There are no obvious kickers or signs that it will be coming back just yet, but it will do,” George said.
In the meantime, some of the talent lost in the mining industry has been picked up by other sec- tors.
Become a FACE in our BOOK
Connect with us
Follow us at Mining Indaba
#indaba2016
Search for Paydirt Media Australia
www.paydirt.com.au
REGIONAL ROUNDUP
Randgold declines Obuasi invitation
AFRICA
Randgold Resources Ltd will walk away from a proposed redevelop- ment of the Obuasi gold mine in Ghana,
a move which could prove a death knell for the century-old operation.
Randgold announced on December 21 that it would not be pursuing a JV with the mine’s owner, AngloGold Ashanti Ltd, fol- lowing extensive due diligence because the mine did not meet its investment cri- teria. Instead, Randgold will refocus its growth efforts on exploration.
“This is bad news. It’s a major blow given that the roadmap was to start op- erating in the course of next year,” Prince Ankrah, head of the Ghana Mineworkers’ Union, told Reuters.
AngloGold Ashanti laid off thousands of workers at the mine in the central Ashanti region in 2014 but said it would step up investment with a view to reopen- ing one of Ghana’s largest mines in 2016.
However, a lack of available capital meant it was forced to offer Randgold what amounted to a free option to gain a 50% interest in the iconic mine.
AngloGold said both companies tried to improve the pro- ject’s return and se- cure consent from Ghana’s government for a feasibility deci- sion on redevelop- ment in early 2016.
One mining analyst, who did not want to be named, said the companies had been unable to secure sufficient tax breaks from the Government.
“They [AngloGold] are very unlikely to develop the mine without a partner be- cause they don’t have the capital,” the analyst said. “When they say they will talk about options one of those options has to be to close it fully.”
Toni Aubynn, chief executive of the Ghana Chamber of Mines, said Rand- gold’s decision was disappointing but the Government had done everything to fa- cilitate the joint venture.
“We are very confident that this is not the end of the road [for the mine],” he told Reuters.
Following due diligence, Randgold has decided not to pursue a JV over the Obuasi gold mine in Ghana
Toni Aubynn
Ghana is Africa’s second biggest gold producer and gold is the main source of government revenue, ahead of oil and co- coa. However, produc- tion growth has stalled in recent years amid a continued effort by the Government to extract greater revenue from the sector.
Its economy saw years of rapid growth through its exports but it has been hit hard
said in December. “Operating in Ghana is very difficult. It is a sophisticated coun- try but with that sophistication comes so- phisticated complexity.
“I’ve just been to Ghana and put it to the Government that they’re going to end up holding the baby in their lap [if Rand- gold doesn’t commit to the project]. The Ghanaian Government found it difficult because we were saying: ‘We are part- nering with you, not AngloGold and as such we want our participation to be ap- proved through parliament.
“Ghana is a tough place to work and no one has made a lot of money there. The challenge for Randgold is whether we can come up with a plan good enough to carry the liabilities and also fit our 20% return hurdle. [But] I don’t want Obuasi
by a slump in commodity prices. At the same time, a fiscal crisis has forced it into an aid deal with
the International Mon-
etary Fund.
Speaking to Paydirt
last year, Randgold chief executive Mark Bristow warned rede- velopment of Obuasi would be made tough- er by the Ghanaian Government’s atti- tude.
“It has got grade but ithasalsogotalotof baggage and liabilities attached to it,” Bristow
Mark Bristow
to get into our share price; we consider it part of our exploration strategy.”
Closure would be devastating for Obuasi, a town that grew prosperous on its mine. A local un- ion leader, Samuel Dwamenah, said the situation was already “precarious” and most of the men who were employed there had left to seek new jobs.
PAGE 58 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
7 - 9 September 2016
Perth,Western Australia
www.africadownunderconference.com
For all enquiries please contact Tammy Caldwell on (+61) 8 9321 0355 or email [email protected]
SAVE THE DATE
REGIONAL ROUNDUP
New leadership at Elemental
New Elemental Minerals Ltd managing director Sean Bennett and his chair- man, respected South African business-
man David Hathorn, have wasted no time putting their plans for the potash hopeful into effect.
Less than two months after their ap- pointments to the company’s board, Bennett and Hathorn struck a deal with Summit Private Equity to fund the Kola sylvinite project in the Republic of Congo through to the start of construction.
Summit will provide a minimum equity injection of $US50 million at a subscrip- tion price of 20c/share, also allowing the company to pursue development options for its other potash projects, Dougou and Yangala.
Development of the flagship Kola project will revert to a 2 mpta opera- tion, as per the conditions set out in the non-binding term sheet, instead of the phased approach proposed by the previ- ous management.
It also includes provision of a binding EPC contract with a construction con- sortium comprised of Vinci Construction Group, Technip France SA, Egis Group and Louis Dreyfus Armateurs.
Such is the Elemental board’s confi- dence in the proposal, the company has entered into an exclusivity agreement with Summit to complete due diligence and negotiate definitive documentation.
“We’re partnering with people that know how to build in Africa,” Bennett told Paydirt from his base in South Africa.
“They’re big boys in the world of con- struction and they’re going
to do a fixed-price con-
tract for us, so we know
what the returns are going to be for investors, subject to the market.
“Normally these sorts of construction compa- nies wouldn’t build a small mine, but they know Con- go, they know Africa and they have a pretty good handle on potash, so the Summit consortium is ex- citing from that perspec- tive because it de-risks the project significantly for investors.”
Bennett and Hathorn
joined Elemental in November, replacing John Sanders and Tom Borman as man- aging director and chairman respectively.
Bennett, a British national who has
Elemental is funded to complete the remain- ing work on the Kola DFS after partnering with Summit Private Equity
lived in South Africa since 2008, was previously chief executive of UBS South Africa and co-head of HSBC Global Banking for Africa. During his 20-year career in the banking industry, he has advised a number of international min- ing companies such as BHP Billiton Ltd, South32 Ltd and Sibanye Gold Ltd.
Hathorn has served as the chief execu- tive of global packaging and paper group Mondi plc since 2000, having previously worked for Anglo American plc as a divisional finance man-
ager.
“The sheer fact we’ve
got a chairman of the qual- ity of David Hathorn, who I’ve worked with for years and who people have of- ten been quoted as saying is the best businessman in South Africa, the fact he’s willing to put his name to this company should be of huge comfort to share- holders,” Bennett said.
“I’m here to try and make shareholders a proper return and that’s what I’m going to be doing. It’s obviously been a bit of a rollercoaster ride for shareholders to date, but I’m feeling enthusiastic about
what we can do for them.”
Ensuring Elemental is appropriately
funded for all of its proposed work activi- ties has been one of two main priorities on Bennett’s agenda since his arrival. The other key focus has been to reas- sure investors the company has an “end game” and that is to develop and operate a profitable potash mine.
Finalising the BFS on Kola, the most advanced of the three projects on the 1,400sq km Sintoukola permit, will domi- nate the company’s technical efforts during the first half of 2016. An updated PFS, completed in late 2014, flagged a $US908 million capex for a phased de- velopment of the project.
A scoping study on Dougou, released in early 2015, found the project could support a 400,000 tpa operation for an unleveraged capex of $US430 million.
Bennett is also keen to explore further opportunities at Yangala where only two holes have been drilled, with both inter- secting a flat-lying layer of over 4-4.5m @ 57-60% potassium chloride, making it a candidate for the world’s highest-grad- ing potash seam.
“It looks like there is a huge deposit there, quite shallow but also the quality could be phenomenal, so we want to drill that further,” Bennett said.
“Obviously one has to accept the fact that one can’t do everything and we’re only a small company, but I’d like to prove up Yangala and see if, as we think, there is exciting potential.
“We have more than enough to keep ourselves occupied.”
Since joining Elemental, Bennett has come to realise not only what an attrac- tive project his new company has on its hands, but the level of support available from key personnel in the Republic of Congo.
Of particular note is government legis- lation around an application for a mining convention in the country.
“It’s an incredibly forward way to oper- ate and the fact that it’s set in law should give investors great comfort,” Bennett said.
“If there’s anything I’ve been surprised about it’s the Government in Congo and their approach to this mining industry as a whole. They are incredibly enthusiastic and incredibly commercial.”
– Michael Washbourne
Sean Bennett
PAGE 60 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
AFRICA
Black Rock scopes Mahenge
Mahenge is emerging as one of the better graphite assets in East Africa and project owner Black Rock Ltd can fur-
ther enhance its credentials with a posi- tive scoping study.
Black Rock expects to complete the study on the Tanzanian project in March and be a precursor to a PFS, managing director Steve Tambanis told Paydirt.
“The scoping study under way will eventually incorporate all the numbers from the JORC resource being calculat- ed, as well as the metallurgy,” Tambanis said. “We are going about it the right way, there is no point rushing anything or tak- ing shortcuts, but everything we have seen so far points to solid economics,”
BatteryLimits Pty Ltd is completing a detailed metallurgical test work pro- gramme of Ulanzi and Epanko North, while assays from a 31-hole infill drilling programme at Ulanzi were filtering in at the time of print.
Some of the best intercepts were 84m @ 9.38% TGC, including 32m @ 14.7% TGC, and 78m @ 8.75% TGC, including
50m @ 10.14% TGC. Results from Ulanzi will be incorporat- ed into a resource estimate which is scheduled to be an- nounced this month.
Drilling was being conducted through- out January to widen the resource at Ul- anzi.
“Ulanzi has the po-
tential to be a stan-
dalone resource and
what we did notice is
that when you put all
the sections togeth-
er, if we do a little bit
more drilling we can
substantially add to the size of the Ulanzi resource,” Tambanis said.
“Last year we had intended to drill 40 holes, we did 31, which is why we kept the rigs on site over the Christmas break. We are going to drill another 20 holes
there and I think it is going to pay some good dividends.”
Epanko North has already been drilled with a resource of about 20mt expected there, while Ulanzi is shaping as a 40mt plus deposit.
Additionally, 10-12 holes were planned to be drilled at Cascade after Black Rock was encouraged from four drill holes which re- turned 11 intercepts.
“We would be nuts not to do work there, that is potentially 15-
16mt there standing on its head,” Tam- banis said. “We are not doing this to have a dirty great big resource, but what it will do is allow us gradually to select portions of high-grade near surface materials for the first 10 years of operation.”
Black Rock expects to complete a scoping study on its Mahenge graphite project in March
The Australia-Africa Minerals & Energy Group (AAMEG) is the peak body supporting Australian companies to be partners of choice in the development of Africa’s resources sector.
Across 38 African Countries
Risk Management Social Licence
Members’ Forum
Our Primary Roles
• To create a forum for AAMEG members to network and share operational experience in responsible business practices;
The peak body supporting
Australian companies to be the
Australia-Africa Minerals & Energy Group
partners of choice in the development of Africa’s resources sector
Connecting
• To represent at an industry level on behalf of our members; and
• To assist Australian companies to engage with Australian and African governments and relevant institutions and organisations.
Investment Climate
To network and share
Industry Representation
On behalf of our members
Industry, Governments & Agencies
To enquire about membership, please visit www.aameg.org
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 61
H
o
w
w
e
d
o
i
t
e
r
a
e
w
a
h
t
o
w
W
I
s
n
h
e
s
d
e
u
o
W
s
r
t
r
d
y
d T
d
h
e
A
m
s
e
100+ Member Companies
REGIONAL ROUNDUP LATIN AMERICA
Orocobre goes big with capital injection
Argentine lithium producer Orocobre Ltd has raked in $85 million from do- mestic and international institutional and sophisticated investors.
Orocobre’s recent raising follows simi- lar amounts netted in 2015; a $50 million placement to fund working capital dur- ing production ramp-up and $32.3 mil- lion for the Olaroz lithium facility JV with Sales de Jujuy, which required Orocobre to provide 75% of project funding. The money was used for working capital and capex requirements.
The latest placement of 40.4 million shares at $2.10, a 10.7% discount to the five-day VWAP of the company’s shares prior to January 20, has strengthened Orocobre’s cash balance and will help it with principle and interest payments due in March and September, plus payments to the debt service reserve account.
Meanwhile, other uses of funds raised will be used for things such as corpo- rate costs, a Bateman lithium hydroxide study, sustaining capital, debottleneck- ing payments and redundancy/optimisa- tion programme, plus a cash buffer of $40.7 million.
It is a timely cash injection for Oroco- bre, which is ramping up production to- wards stage one nameplate capacity of 1,450 tpm for 17,500 tpa of battery grade lithium carbonate and an optional 20,000 tpa KCL in September 2016.
Production started in April 2015, with the company reporting lithium carbonate output of 427t in December, an increase
Orocobre has raised $85 million to help it with interest payments at the Olaroz project in Argentina this year
of 62t over November, despite structural repairs required on the purification circuit impacting production.
Additionally, the company has been working through the debottlenecking process, which was expected to be com- pleted last month.
Forecast production in January was estimated to be 600-650t, with commer- cial orders to five battery market custom- ers to be despatched in February and March.
Commercial shipments have been on- going from Olaroz to Europe, Asia and the USA, and it appears Orocobre’s tim-
ing of making product available is right. Prices have been creeping over $US6,000/t for lithium carbonate, with the company stating: “Current market conditions in China are very tight with spot pricing from independent third- party sources being quoted in excess of $US15,000/t. Although contract prices are very different to spot market rates, the behaviour of the spot price in China in recent times highlights tight market
conditions.”
Improving lithium carbonate prices is
not the only thing running in Orocobre’s favour right now.
The introduction of President Mauricio Macri in December has been a boon for the company and country.
President Macri’s intention to open Argentina to the world has started with some key changes, including:
• removing the dollar clamp to allow free flow of capital in and out of Argentina • allowing the floating of the peso, ef- fectively bringing an end to artificially
high official exchange rates
• removing a 5% export duty on lithium
carbonate and refined boron products
• removal of most controls on the im-
portation of goods into Argentina Orocobre welcomed the sweeping changes and said the shift in philosophy was good for the company now and into
the future.
Nameplate production capacity of 1,450 tpm of battery grade lithium carbonate from Olaroz is expected from September
PAGE 62 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
SAVE THE DATE!
LATIN AMERICA
17-18 May 2016, Perth
After four highly successful years in Sydney, Paydirt Media will host the fifth Latin America Down Under conference in Perth,Western Australia. Since its inception in 2012, Latin America Down Under has grown into the premier forum for Australian-Latin American relations, showcasing the very best of this growing relationship.The 2016 event will bring this vibrancy to Australia’s mining capital for the first time, allowing a new dimension to unfold.
The two-day conference will provide prime opportunity for governments, companies, service providers, media and investors to network and share their stories and experiences of operating in one of
the world’s premier mining investment regions.
www.latinamericadownunder.com
To present, exhibit or attend as a delegate please contact Melita Fogarty on (+61) 8 9321 0355 or email [email protected]
EARLY BIRD RATE $A990.00 INC. GST AVAILABLE UNTIL 18 MARCH 2016
REGIONAL ROUNDUP
Orinoco sees Cascavel from dirt to gold
Orinoco Gold Ltd’s am- bition of bringing the Cascavel gold project into
production is about to be realised.
Cascavel, in the state of Goiás in central Brazil, is on track for the start of commissioning this quarter as scheduled.
a stir in the market, but such is the current senti- ment for resources stocks, Orinoco is experiencing the same lack of attention as many of its peers.
“What little risk money there is appears to be chasing other opportuni- ties in other sectors, not mining,” Papendieck said.
“Our strategy since we listed has been to bring on a couple of mines within a 50-60km radius of where
“We have been work-
ing on this project since
we listed in 2012. To take
it from where it was back
then at exploration status
to be able to look at it and see the plant erected 300m away from the portal and walk underground and through part of the orebody is fantastic,” Orinoco managing director Mark Papendieck told Paydirt.
Stoping of high-grade material was ex- pected to begin at the end of January and with construction of the crushing circuit almost completed, commissioning with lower-grade development ore is planned for late February/early March.
Papendieck said while development and construction had progressed well, the company was under no illusions of the work still ahead.
“We are under no misconceptions we have to convert development into solid production as well. That is the next step and we are on track for that as well. The underground development has come on very nicely, we’re ready to start stoping some of our high-grade ore in the second half of January and that is when the rubber hits the road when we start putting the high-grade through the mill,” he said.
Orinoco’s confidence in the high- grade nature of Cascavel is growing and before Christmas a capital rais- ing to net $6 million was launched to enable additional underground mine development to increase production from a planned start-up of 40,000 tpa in the March quarter to over 60,000 tpa in the December quarter.
Should the raising be taken up in full, Orinoco can start plotting further development of Cascavel, including increasing ownership beyond the current 70%, contemplate a drilling programme along strike and down plunge, conduct exploration at Ser-
Commissioning of the Cascavel gold plant is expected to start this month
tao to drive rapid project development, aggressively pursue regional exploration at Faina which hosts Cascavel, Sertao and Garimpo and assess acquisitions or potential earn-ins into other gold proper- ties.
Depending on funding, Papendieck said areas close to Cascavel which have the potential to be monetised quickly would be targeted.
“Cascavel is the most logical place to start; things close to the mill which are suited metallurgically. The most logi- cal way is to find additional ore shoots that we can put through the mill straight away,” he said.
Late last year, Orinoco reported the extension of high-grade shoots – 10.3m @100g/tand11.6g/[email protected]/t–and underground samples of up to 290 g/t from Cascavel.
Such results would once have caused
we are. Cascavel is really important, it has potentially a very long life ahead of it but we have to get it up and running smoothly before the market starts paying any attention to us. Perhaps that is the reality; that we need a year of produc- tion under our belts, showing the grade of Cascavel and showing how profitable it can be and maybe we have to continue to execute the strategy and bring on oth- er projects around as well.”
Establishing consistent operations at Cascavel is the main game and it is un- likely Orinoco will be rushing to bring on a second mine within the next 12 months.
Despite having a number of poten- tial mine sites to consider, Papendieck couldn’t put a timeframe on when it would unveil its second producing asset.
“Sertao is one of those we were drill- ing in the second half of last year. We will update the market on that pretty shortly.
That is an option [to be the next mine] it is a little bit further away, about 28km from Cascavel,” Papendieck said.
“We already know the metallurgy is different to Cascavel, so the plant that we built to treat Cascavel ore doesn’t necessarily suit that ore. However, there are a number of other prospects around Cascavel, including two other prospects within 3.5km of Cascavel, that are not as advanced as Sertao but might represent other opportuni- ties to add ore to the Cascavel mill. We know where the work needs to be done, so it becomes a question of funding and timing.”
– Mark Andrews
PAGE 64 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
Completing a successful $6 million capital raising and rights issue will allow Orinoco to increase targeted production rates by 50%
LATIN AMERICA
Brazilian police line up Samarco executives
Brazil’s federal police informed mining company Samarco Min- eração S.A. that some of its execu-
tives are accused of crimes relating to a dam burst in November that killed 17 people, a company repre- sentative said in mid-January.
Brazilian news website G1 said miner Vale SA, which co-owns Sa- marco along with BHP Billiton Ltd, Samarco chief executive Ricardo Vescovi, and a consulting firm that had audited the broken dam were also accused of unspecified crimes.
Following the report, the com- pany announced Vescovi and director of operations Kleber Terra had temporarily stepped aside to focus on preparing their defence.
Samarco said in an e-mailed state- ment that commercial director Roberto Carvalho would serve as interim chief executive while Maury Souza would step in as director of operations.
The Brazilian federal police could not be reached to confirm the report. In Brazil, only prosecutors, not police, can press formal charges and open a law- suit, but the police accusations could be a sign charges are on the way.
Vale said in a statement it had been surprised by reports of the accusations and would prove that Vale was not re- sponsible.
“Vale received the news of its indict- ment regarding the accident at Samar- co’s Fundão dam, with surprise. The indictment reflects a personal under- standing of the delegado [public prose- cutor] and comes at a time when the real causes of the accident have not yet been technically confirmed and are therefore unknown. In addition, Federal Police suppositions on a theoretical responsibil- ity of Vale are based on assumptions that have no causal link to the accident, as will be technically demonstrated by Vale in due course,” the statement said.
Vale and Samarco are already facing civil lawsuits over the November disas- ter but individual executives of the com- panies have not yet been prosecuted in what the Government considers Brazil’s worst-ever environmental disaster.
Samarco said in a statement it did not agree with the accusations as a technical analysis of the causes of the dam burst
The Samarco dam burst in November killed 17 people
the social components of the commu- nities. The Government is certainly taking a harder line on tailings dams. We don’t have one, we are dewater- ing all of our tailings and dry stacking them, so that certainly seems easier for us from a licensing perspective and the Government loves that ap- proach,” Papendieck said.
“Those that do have tailings dams certainly have been cracked down upon. The community we operate in is about 12km away and has a popu- lation of about 5,000. We employ all our people from there and buy
had not been completed.
The tragic events have caused much
community angst, and Brazilian Presi- dent Dilma Rousseff has called for Sa- marco to be held accountable for the tail- ings dam disaster.
While communities affected by mining operations hosting
tailings dams have
been particularly
shaken by the Sa- marco incident, the Government has come down hard on companies which have a tailings dam component to their projects.
Orinoco Gold Ltd managing director Mark Papendieck told Paydirt the company had good relations with its nearby community which was impor- tant in times of in- cidents such as Sa- marco.
ASX-listed Ori- noco is develop- ing the high-grade Cascavel project, in the state of Goiás, which does not re- quire a tailings dam to be built.
“There are two aspects to consider there; the Govern- ment and the licens- ing authorities and
supplies from there, so it really hasn’t changed the community’s perception of us. We haven’t had any hard questions from them, they know we don’t have a tailings dam at the mine plus we are in a different state [to Samarco].”
– Paydirt staff and Reuters
LATIN AMERICA
29-30 May 2013, Sydney
The CD-Rom of Paydirt’s 2015 Latin America Downunder Conference ORDER NOW!
CD-Rom for non-conference delegates – $175 (inc.GST) CD-Rom for conference delegates – $115 (inc.GST) Phone (+61) 8 9321 0355 or email [email protected]
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 65
REGIONAL ROUNDUP
India to open coal gates
India is getting ready to open up commer- cial coal mining to private companies for the first time in four decades, with the aim
of shifting the world’s third-biggest coal importer towards energy self-sufficiency.
Anil Swarup, the country’s top coal bu- reaucrat, told Reuters in January that the Government has identified mines it plans to auction, and is now finalising other terms such as eligibility criteria for com- panies to take part and whether and how to set up revenue sharing.
He said a plan should be ready in 2-3 months, setting a clear timeline on a plan that has previously only been vaguely marked out.
India has an ambitious plan to double its coal production to 1.5 btpa by 2020, as part of Prime Minister Narendra Modi’s push to bring power to 300 million peo- ple who live without electricity, and give a boost to manufacturing.
It would also support the Govern- ment’s efforts to develop eastern parts of the country, which are resource-rich and hold most of India’s coal reserves but have lagged the western states in de- velopment.
State-owned Coal India is on track to produce 1 btpa by the end of this decade, and India is counting on private firms to produce the remaining 500mt, which may prove a tough target to achieve.
As of now, only Coal India and a small
India will open up its coal industry to private companies
government-owned company are al- lowed to mine and sell coal in India.
“It’s imperative that India opens up the sector so that private companies can bring in new technologies and the efficiencies that we keep talking about,” Dipesh Dipu at energy-focused Jenissi Management Consultants said. “But, I don’t think private companies will be able to produce more than 100mt this decade as the process has yet to start.”
The move is likely to attract coal block bids from Indian conglomerates such as the Adani Group and GVK, but the Gov- ernment may find it harder to lure big multinational miners such as Rio Tinto Ltd, BHP Billiton Ltd, Anglo American plc and Peabody Energy Ltd. Rio Tinto did not respond to requests for comment.
Coal prices are at multi-year lows amid global oversupply, and foreign compa- nies have faced obstacles to investing in
India, such as problems in getting land and environmental approvals. Some pri- vate companies also worry that the best quality mines would be left for Coal India.
Swarup was handpicked by Modi to lead a turnaround in the coal sector soon after the Prime Minister came to power in 2014.
Under Swarup’s watch, Coal India has seen record production growth, and the Government auctioned off a series of coal blocks successfully. Coal imports fell for a sixth straight month in Decem- ber.
Until last year, India spent around $16 billion a year importing foreign coal, even though it sits on the world’s fifth-biggest reserves of more than 300bt.
Swarup said there were still some as- pects of the plan to bring in private play- ers that needed to be examined carefully.
The Government, for example, has to make sure that companies do not under report sales if a revenue-sharing model is adopted, he said.
Companies can do that by selling coal to their units at discounted rates, and by calculating the Government’s share based on that instead of the market price.
Swarup declined to say where the identified mines were located. Most of India’s coal is in the eastern states of Jharkhand, Odisha and Chhattisgarh.
– Krishna N. Das, Reuters
the material in early 2014, forcing China to seek supplies elsewhere.
But that frenetic growth has sparked uproar over its environmental impact, with bauxite mining blamed for turning the waters red on a stretch of coast and surrounding rivers in eastern peninsula Malaysia late last year.
The cabinet wants to temporarily halt bauxite mining until regulations, licensing and environmental protection can be put in place, the source told Reuters.
Meanwhile, any suspension in mining could see more demand for material from rival suppliers such as Australia or India. Australia’s Rio Tinto Ltd announced a $1.9 billion mine expansion in northern Australia late last year.
– Joseph Sipalan and Melanie Burton, Reuters
Malaysia to halt bauxite mining
Apotential suspension on bauxite min- ing in Malaysia, the world’s top ex- porter of the aluminium-making ingredi- ent, could dent stockpiles in China but is unlikely to curb breakneck output in the aluminium sector there, industry and ana- lysts said in January.
The South East Asian nation is push- ing to suspend bauxite output due to concerns over its impact on the environ- ment, threatening to interrupt supply to No.1 aluminium producer China, a cabi- net source said.
The councillor in charge of the environ- ment for Malaysia’s main producing state of Pahang, Mohd Soffi Abd Razak, told Reuters that Pahang’s chief minister and the national resources minister would make a joint statement on the issue “very soon”.
World prices for aluminium, used in everything from planes and trains to
packaging, sank to their lowest in more than six years last November as China grapples with oversupply fuelled by its slowing economy.
That forced China’s loss-making in- dustry to band together to pledge pro- duction cuts, with markets looking out for any other signs output could ease.
“[A suspension in Malaysian bauxite mining] will impact stockpiles, but it won’t impact China’s metal production,” Paul Adkins, managing director of consul- tancy AZ China, said. He added that a three-month ban could shave about 6mt off China’s current bauxite stockpiles of around 25-30mt.
Malaysia accounted for over 40% of China’s 49mt of bauxite imports across January to November last year.
The country’s largely unregulated bauxite mining industry has grown rap- idly since Indonesia banned exports of
PAGE 66 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
ASIA
Sri Lanka’s graphite rebuild
The Sri Lankan Government will team with ASX-listed Lanka Graphite Ltd to rebuild the country’s graphite sector.
A feasibility study on graphite and graphene industry development will be undertaken by Lanka Graphite under terms of a MoU signed in late 2015.
A graphite industry development committee comprised of govern- ment and Lanka Graphite repre- sentatives will serve to reinvigorate one of the country’s oldest indus- tries.
Graphite mining in Sri Lanka dates back to the 1840s, with Lan- ka Graphite keen to exploit the his- toric and new mine potential in the country’s centre and south-west.
While there has been a ground
swell of graphite activity in other parts of the world, particularly East Africa, few companies have ventured into Sri Lanka thus far.
But, with conflict subsiding after almost 30 years of war between the Govern- ment and the Liberation Tigers of Tamil Eelam (LTTE), Lanka Graphite executive chairman Jitto Arulampalam told Paydirt there was a new wave of interest in Sri Lankan graphite.
“The war only finished five years ago and there has hardly been any activity in graphite. We are now seeing investment dollars flowing in with some of the larger plays coming in and looking for supply of vein graphite. Sri Lanka is the only place where vein graphite is available and we are seeing Canadian players as well as Chinese and Koreans coming in,” Aru- lampalam said.
While rivals may just be starting to scratch the surface, Lanka Graphite’s ducks are lining up already.
The MoU with the Government – formed to evaluate project potential and investment required to make Sri Lanka the vein graphite and graphene hub of the world – is validation of Lanka Graph- ite’s work over the past few years.
Lanka Graphite was born following the merger of Viculus Ltd and Euro Petrole- um Ltd, via an off-market takeover, with the company starting trade on the ASX in August 2015.
However, its entry onto the bourse wasn’t an initiation to the graphite game as Arulampalam had assembled a team to stake out vein graphite opportunities in Sri Lanka three years prior.
Assays from powder samples and rock graphite have returned over 99% total carbon purity from Lanka Graphite’s tenements in Sri Lanka’s south west
is really exciting. Our process- ing costs locally are very low and we had done some numbers which showed the capex is hard- ly anything. Once the reserves are proven up, given it is nuclear grade, it could be sold for anything between $5,000-20,000/t which is quite an attractive proposition,” Arulampalam said.
Encouraged by the initial as- says, Lanka Graphite was work- ing on completing a geophysics programme it started late last year, with a view to start drilling in Q1.
“We have identified the exact spots where we want to start [drill- ing] at four or five tenements,” Aru- lapalam said.
“Our exercise was to go in for a land grab and pick the best we could at that point in time and given my Sri Lankan heritage we had a very good team. We went about looking at the previous graph- ite mining historical records. Everyone associates Sri Lanka with tea without realising graphite is the oldest industry in Sri Lanka. We have been able to pick some of the large areas where some of the larger mines were operating about 100 years ago,” he said.
Arulampalam has not been disappoint- ed with the suite of exploration licences acquired in Sri Lanka’s south-west, with assays from vein graphite rock and pow- der samples returning over 99% total carbon purity.
“We knew the grades were fairly high but we weren’t actually sure of the spe- cific numbers. We engaged ALS soon after we listed and what has come back
Drilling is on the horizon for Lan- ka Graphite which has a few more boxes to tick before contemplating pro-
duction plans.
“We are engaging with the end-user
market and trying to build some strate- gic partnerships, so by the time we get to production we have the support of some serious players in the game,” Arulam- palam said.
“We have a view of not necessarily just selling our graphite but to form partner- ships that gives us a stake in the value- added process by way of joint ventures.”
The National Taiwan University of Sci- ence and Technology is one partner that will take Lanka Graphite’s material for research purposes, while a commerciali- sation agreement with a Taiwan-based hi-tech company for the future rights to the IP from the university’s research has also been signed.
– Mark Andrews
Sri Lanka hosts much sought after nuclear grade vein graphite
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 67
REGIONAL ROUNDUP
FinnAust takes off from base
FinnAust Mining plc is entering new ter- ritory and it will do so armed with high levels of geological information in order to
hit the ground running.
Late last year FinnAust – the noted
base metals explorer of which Western Areas Ltd is the 60% major shareholder – made the move to acquire the Pituffik ilmenite asset in Greenland through pur- chase of an initial 60% of project owner Bluejay Mining Ltd.
Based in London, FinnAust’s original interests had been the Hammaslahti copper, Kelkka nickel-copper and Outo- kumpu copper projects in Finland, while it also has an 80% interest in the Mitter- berg copper project in Austria.
With both nickel and copper prices struggling at the moment, Pituffik of- fers FinnAust exposure to a potential near-term producing asset, according to new FinnAust managing director Rod McIllree.
“Potentially we can get something up in 2017, a minimum 10,000-50,000t mar- keting testing parcel is a pretty real sce- nario,” McIllree told Paydirt.
“What sets Pittufik apart is it is a low impurity product. There is an enormous amount of dirty ilmenite in the world but not much clean ilmenite to blend it with. We are not going to be doing millions of tonnes, but chugging away at 0.5-1.5 mtpa over 20-30 years is the current strategy, which is easy to achieve and profitable. It will be demand depend- ent and can be ramped up.”
McIllree has recently taken over as managing director of FinnAust, with Graham Marshall joining Dan Lougher as a non-executive director.
It was always part of Western Ar- eas’ plan to loosen Lougher and Mar- shall up from FinnAust duties and the tie up with Bluejay seems a perfect fit.
“We are always looking for alterna- tive corporate action for FinnAust and we have put the effort into looking at those VMS deposits in Finland where most of the work has been done. We had the view that to take the company forward we really needed to get some sort of different project,” Lougher said.
“We are still talking to people – Bo- liden – and a few other guys on po- tential JVs in Finland on the copper in the Outukumpu area because they are very active there now. During that process, we came across Rod and the mineral sands project he was ba- sically developing and had it valued by
Exploration in Greenland could become easier as permafrost melting in the past 15-18 years has allowed for greater accessibility to regional areas
SRK. It is different to base metals but you have to keep an open mind about these things. It is not Western Areas, it is Fin- nAust’s business and at the end of the day we are just a shareholder. We [Fin-
nAust] are listed and Bluejay are not, so basically they are bringing in the equity of the project, the asset value into Fin- nAust.”
McIllree’s knowledge of Pituffik is ex- tensive and his understanding of Greenland’s mining sector is equally impressive.
It was McIllree who founded rare earths and uranium hopeful Green- land Minerals and Energy Ltd, so tapping into the regulatory system during the EIA and exploitation per- mitting process at Pituffik (to start this year) won’t provide FinnAust with a headache.
“FinnAust shareholders can ben- efit from 10 years of our experience and 50 years of Danish geological experience in Greenland,” McIIlree said.
The Bureau of Minerals and Pe- troleum took control of the minerals industry from Danish authorities in 1998, however, Greenland remains protected under Denmark’s military.
Therefore, Greenland is one of the safest countries in the world, with outstanding geology to match, McIllree said.
McIllree added mining and explora- tion could become easier as perma- frost melting in the past 15-18 years, allowing for greater accessibility.
PAGE 68 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
Pituffik offers FinnAust exposure to a potential near-term producing mineral sands asset
“We have been working in Greenland for almost a decade and I can say that it is under appreciated in the minerals space. It does have its logistical challenges [81% of the country is ice capped] but it is more than compen- sated by being one of the safest countries in the world and the prospectivity is out- standing.”
Pituffik may well be one of the country’s best emerging mining prospects given the simplicity of the deposit.
“It is a pure ilmenite pro-
ject and extremely high
grade, with some samples
up to 95% ilmenite. It is a deposit that can almost be direct shipped because of the very low impurities. There are no sec- ondary processes, it is pretty straightfor- ward which will give us the ability to get something up hopefully in 2017, subject to permitting, and we understand how to get that done,” McIllree said.
Onshore and offshore sampling results are expected in Q1 before FinnAust can launch geological modelling and work programmes.
A simple boat-borne, campaign-based dredging operation straight from the sea floor is being planned at Pituffik
Following that, FinnAust plans to en- gage the Geological Survey of Green- land and Denmark (GEUS) to analyse technical work, while it hopes to expand its existing licences to include offshore areas before preparing samples to initi- ate off-take discussions.
Results received so far indicate there is potential for large volumes of ilmenite- bearing sediments about 1km from shore at depths in the vicinity of 30m which could be amenable to offshore dredging.
The simplicity of the Pituffik deposit has it touted as one of the country’s best emerging mining prospects
McIIlree said the company was fo- cused on developing a boat-borne, cam- paign-based dredging operation straight from the sea floor.
– Mark Andrews
Muga takes potash hopeful to Highfield
ASX-listed High- field Resources Ltd’s Muga project has been endorsed as potentially the highest margin pot- ash producer in the world.
An independent re- port by Argus FMB, commissioned by the European project finance banking syn- dicate for Muga, re- vealed Highfield was likely to be the lowest cost potash producer with a total cash mar- gin of 61% in 2015.
Based on 2015 cal-
endar year prices and
delivery to customers in Europe, Brazil and the US, Highfield rated the best of its competitors on the basis of a sales ratio of 75% into Europe and 25% into the US.
“We continue to believe we have the most compelling potash project globally and this is the first of our portfolio of five
vanced and the com- pany completed an optimisation study late last year, which indicated a mine life of 47 years for the production of 1.08 mtpa granular K60 muriate of potash (MOP) expected.
A term sheet for €222 million in pro- ject finance has been signed with four com- mercial European banks, with pre-pro- duction capital costs of €267 million re- quired to build Muga.
Cash costs of are estimated at €130/t, with North West Europe 2015 spot prices
(October) fetching about €300/t. Highfield has forecast production of 2 mtpa MOP by 2020, with Muga coming
on stream in Q3 2017.
Muga has been billed as the world’s highest margin potash producer
projects that all appear to exhibit similar characteristics,” Highfield managing di- rector Anthony Hall said.
Muga is the company’s flagship, how- ever, Hall has openly stated Vipasca could be the best project.
Nevertheless, Muga is the most ad-
EUROPE
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 69
SIGNED, SEALED AND DELIVERED
world’s only significant source of truly rare and highly valu- able blue diamonds.
Thiess extends key coal mining contracts
CIMIC Group Ltd contract- ing arm Thiess has signed a $760 million contract exten- sion to continuing operating at Glencore’s Mt Owen coal mine in New South Wales.
The new agreement contin- ues the contractor’s 20-year association with the mine, near Ravensworth in the Hunt- er Valley.
Thiess was first contracted to build mine infrastructure at Mt Owen in 1995, including the design and construction of the coal handling prepara- tion plant, site office and work- shop, fuel facilities, water sup- ply roads and wash bays.
On completion of construc- tion commitments, Thiess as- sumed responsibility for min-
Following a competitive tender pro- cess spanning five months, Golding was selected based on an all-inclusive pric- ing structure which categorises activities into three operational areas of waste re- moval, coal mining and coal processing.
Golding will take on full site responsi- bilities including statutory positions, op- eration of Stanmore’s dragline, supply of ancillary equipment, hire of operational personnel and plant maintenance.
In relation to the wash plant activities, Golding will engage an experienced sub- contractor to provide operational exper- tise and personnel.
The first coal shipment from Isaac Plains is due in April 2016.
WorleyParsons wins Loy Yang extension
TWPS, a JV between WorleyParsons Ltd and Broadspectrum Ltd, has secured a five and a half year contract with AGL Energy Ltd at the Loy Yang power station in Victoria.
The contract, valued at about $200 million, includes power station and mine maintenance services to the Loy Yang A power station and the adjacent mine.
It is a continuation of the role under- taken at Loy Yang since July 2010.
“We are pleased to continue to support AGL Loy Yang in their commitment to the Latrobe Valley and power generation in Victoria,” WorleyParsons chief executive Andrew Wood said.
MinesOnline.com removes listing fee
Global online marketing platform Mine- sOnline.com has removed its upfront project listing fee in a bid to increase site traffic and improve the success rate for completed deals on listed projects.
Founded by PCF Capital Group Pty Ltd, MinesOnline.com was established more than five years ago and has pre- viously demonstrated its ability to adapt to changing market conditions, including removing past subscription fees.
“The online project divestment market is all about getting eyeballs onto websites and we have learnt that putting up any sort of paywall just creates a barrier to potential transactions, which is contrary
Amec Foster Wheeler will undertake EPC work on Pe- tra Diamonds’ expansion of the Cullinan mill facility
Amec Foster Wheeler for Cullinan expansion
Petra Diamonds Ltd has awarded Amec Foster Wheeler the EPC contract for the mill extension project at the Cul- linan diamond mine, near Pretoria, South Africa.
The contract is valued at around $US113 million and will see Amec Foster Wheeler subsidiary MDM Engineering provide design, procurement and con- struction services for the mine’s 6 mtpa milling, DMS and sorting process facili- ties.
Amec Foster Wheeler’s group presi- dent for Asia, Middle East, Africa & Southern Europe, Roberto Penno, said: “We have a wealth of experience in the South African diamond industry and are pleased to use it to not only take the prestigious Cullinan project to the next important phase of development but also to further our partnership with Petra Dia- monds.”
Cullinan is one of the world’s most celebrated diamond mines and is a source of large, high-quality Type II gem diamonds. The mine is famous for large, high-quality diamonds and has produced more than 750 stones of greater than 100ct and more than a quarter of all dia- monds of greater than 400ct. It is also the
ing operations and has remained active on site ever since.
Mt Owen is renowned for its complex- ity, consisting of multiple seams of coal dipping at angles of up to 45 degrees and mine in thicknesses between 0.4- 4m. Average production from the mine is 7.6 mtpa.
Meanwhile, Thiess has signed a four- year contract extension to continue oper- ations and maintenance delivery at Ener- gy Resources LLC’s Ukhaa Khudag coal mine in southern Mongolia until 2022.
The contract extension follows on from the eight-year agreement signed in 2008 and is expected to deliver up to $1 billion of revenue over the next seven years.
Current services overseen by Thiess at the mine include fleet operation and maintenance for overburden stripping, coal mining and blast drilling under an alliance structure, mine planning and health, safety and environmental man- agement.
Golding contracted for Isaac Plains restart
Stanmore Coal Ltd has awarded a mining services and coal preparation contract to Golding Contractors Pty Ltd for the restart of the Isaac Plains coking coal mine.
PAGE 70 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
to the primary objective of MinesOnline. com,” managing director Liam Twigger said.
“Following the decision to drop our subscription fee, we are pleased to an- nounce the second stage of our client-fo- cused growth strategy, with the removal of the previously charged $6,000 upfront listing fee and a move to an eBay-style revenue model, where parties pay a 3% success fee on completed deals.”
Since moving to a free-to-access plat- form, MinesOnline.com has enjoyed a 700% increase in site traffic.
The company’s decision to implement a new business strategy follows the com- pletion of a selective buy-back of all of the shares held by TSX Inc in Decem- ber. PCF Capital Group is now the sole shareholder of the online platform.
MinesOnline.com has an enviable listed project transaction success rate of 43% and has facilitated 72 success- ful project deals since 2009. The website has about 4,500 users from more than 100 countries.
Roy Hill takes delivery of 100th Pit Viper
Roy Hill Holdings Pty Ltd has taken de- livery of the 100th Pit Viper rotary blast hole rig in Australia.
The rig, an Atlas Copco PV271 has a 75,000lb/34t bit load capacity and can drill a 55ft (16.8m) clean hole in a single pass.
It is the fourth rig in Roy Hill’s fleet of Pit Vipers and will help complete the Pil- bara site’s entire production blast-hole drilling requirements.
The Pit Viper fleet was delivered with the SmartClutch technology, providing fuel savings of more than 20L per hour, compared to a machine with direct com- pressor engagement.
Roy Hill mining general manager Bill Lamb said recent trials using the auto- drill feature had produced promising results, while high productivity and reli- ability meant the drilling programme was running ahead of schedule.
DRA adds Darwendale to PGM portfolio
DRA Group Holdings Pty Ltd will over- see the feasibility study on the Darwen- dale PGM project in Zimbabwe for Great Dyke Investments Pvt Ltd.
The feasibility study award covers a range of project components, including mining, processing and associated infra- structure assessments.
Darwendale is set to be implemented over three phases, headlined by the Phase 1 development of a 3.25 mtpa open-pit mine and concentrator.
It is expected operations will move un- derground and more concentrator facili- ties will be added as required.
Initial trade-off and optimisation stud- ies have begun and the full feasibility is due for completion in late 2016.
Darwendale, in northern Zimbabwe, is part of the Great Dyke ore reserve and is recognised as one of the largest PGM resources in the world, estimated at 45 moz PGMs.
DRA Group chief executive Paul Thomson said the contract award rec- ognised the engineering company’s in- house expertise in mining, processing and infrastructure development, espe- cially in the PGM sector.
“DRA has by far the largest track-re- cord and highest level of expertise in the PGM industry in South Africa and Zim- babwe of any our peer organisations,” Thomson said.
“Earlier projects [overseen by DRA] in Zimbabwe have included the Mimosa, Ngezi and Unki developments. Similarly, in South Africa, the large majority of PGM production is via DRA’s concentrators. In addition, we were recently pleased to an- nounce the award of the feasibility study of the Platreef PGM project by Ivanhoe Mines Ltd.
“We now look forward to the opportu-
nity of adding Darwendale and Platreef to our already long and successful list of PGM projects.”
First automated mine in Africa goes live
Randgold Resources Ltd’s Kibali gold mine in the DRC has become the first au- tomated underground mine in Africa.
It is also the first time Byrnecut Off- shore has implemented automation into its fleet of mining vehicles.
Byrnecut Offshore maintenance man- ager David Cornish said the size and scale of Kibali tempted the contractor to tender for automation to be incorporated into its underground mining fleet.
Automation – the process of replac- ing human labour with machines – was originally driven by the desire to increase safety, but is now heavily influenced by the pursuit of operational efficiency.
Byrnecut Offshore has used tele-re- mote technology in previous contracts, but it often carried increased mainte- nance costs through accident damage. However, Murray Engineering’s latest au- tomation offering – laser-guided, point- to-point tramming – provided the solution to Byrnecut’s tele-remoting concerns.
Murray Engineering delivered its first automation project for the Waihi gold mine in New Zealand four years ago.
Kibali has become the first automated gold mine in Africa
AUSTRALIA’S PAYDIRT FEBRUARY 2016 PAGE 71
COMINGS AND GOINGS
Grant Davey
Boss Resources Ltd has appointed Grant Davey as an executive director. Dav-
ey will work exclusively on the development of the Hon- eymoon uranium project in South Australia. Meanwhile, Tom Grove has stepped down from the board.
Tim Markwell has resigned from Predictive Discovery Ltd’s board. At the time of print the board was consid- ering candidates to replace Markwell, who served the company for two years.
Talga Resources Ltd has appointed Stephen Lowe as a non-executive director. Lowe was actively involved in managing the recapitalisa- tion and re-listing of the firmer Croesus Mining NL shell into Sirius Resources NL, where he served for four years as non-executive chairman and a non-executive director dur- ing the discovery and devel- opment of the Nova-Bollinger nickel project. Lowe is cur- rently a non-executive direc- tor of Windward Resources Ltd and Coziron Resources Ltd.
Aurelia Metals Ltd has ap- pointed Michael Menzies and Rune Symann as non- executive directors. Menzies and Symann were nominated by Glencore as its represent- atives on the board as part of the companies’ recent settle- ment and funding agreement.
Latrobe Magnesium Ltd has appointed David Wand- maker as general manager,
operations for its new Mor- well-based magnesium pro-
eadell Resources Ltd has
appointed Timo Jauristo
duction facility. Wandmaker recently managed the oper- ating and asset strategy for Silcar’s Koniambo power sta- tion. Most of his early career was spent at Yallourn Energy.
Mozambi Resources Ltd has appointed Stephen Hunt as its new chairman.
Hunt has more than 25 years’ experience in worldwide mar- keting of steel and mineral products and was a found- ing director of graphite junior Magnis Resources Ltd. Hunt will be tasked with overseeing potential off-take contracts and investment discussions with strategic end users.
director of Anglo American plc. Bennett was previously the chief executive of UBS South Africa.
F
Zhensheng to sit on Haw- thorn Resources Ltd’s board in place of the outgoing Ye Xiaohui. Liu, a professor-level senior engineer and a mineral processing engineer, is also director and deputy general manager of Guangdong Ris- ing Mining Investment Ltd.
B
as a non-executive director of the company. Jauristo was most recently executive vice president, corporate develop- ment of Goldcorp Inc.
B
has been replaced by Greg Starr. Starr has been a non- executive with the company for the past two years.
With the retirement of Neil Fearis as chair- man of Tiger Resources Ltd, Mark Connelly has taken on the role. Connelly joined the board as a non-executive di- rector last year.
Mark Connellly
eak Resources Ltd has
appointed Peter Harold as
non-executive chairman. Har- old is currently the managing director of Panoramic Re- sources Ltd and a non-execu- tive director of Pacifico Miner- als Ltd. Harold takes over the chairmanship from Jonathan Murray, who will continue his role as a non-executive direc- tor of Peak’s board.
Jon Price
ormer Phoenix Gold Ltd
managing director Jon
Price has been appointed to takeover at Intermin Re- sources Ltd. Price replaces Michael Ruane.
M
bert to its board as a non- executive director. Schubert, who has a significant share- holding in Magnetite Mines, has more than 20 years’ ex- perience as a private inves- tor, primarily in the small-to- medium Australian resources sector.
E
as its new managing direc- tor and David Hathorn as the company’s non-executive chairman following the res- ignations of John Sanders (chief executive) and Tom Borman (chairman). Hathorn is currently the chief execu- tive of the Mondi Group and was previously an executive
F
eng Hua Investment Hold-
ing Ltd has nominated Liu
rian Wesson has resigned
from KBL Mining Ltd and
P
PAGE 72 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
agnetite Mines Ltd has
appointed Peter Schu-
Brian Wesson
ndrew Bell has resigned
as director of Star Striker
Ltd to focus on other business interests. Bell was a director of Star Striker for more than eight years.
H
Dietz as an independent non- executive director. Dietz was formerly chief operating of- ficer of Potash Corporation of Saskatchewan and was also president of nitrogen dur- ing his 17-year career with PotashCorp. He is currently a non-executive director of Rentech Nitrogen Group.
lemental Minerals Ltd has
appointed Sean Bennett
ighfield Resources Ltd
has appointed James
A
Dianmin Chen
D
directors as the nominee di- rector for Rich Lead Pte Ltd. Chen’s appointment follows CuDeco’s inking of a $30 mil- lion share placement to Rich Lead. Chen is currently a non-executive director of Nor- ton Gold Fields Ltd.
ianmin Chen has joined
CuDeco Ltd’s board of
Please fax your subscription through on (+61) 8 9321 0426 or subscribe on-line at www.paydirt.com.au
SUBSCRIPTION FORM
Australia’s Paydirt Gold Mining Journal Both magazines
(Up to 10% for 24 month option) 12 months 24 months 12 months 24 months 12 months 24 months
Within Australia
Within Australia – Airmail PNG, New Zealand & Asia
Elsewhere
First Name:
Company Name:
Postal Address:
State: Country: Phone:
Surname: Industry: Position:
q $A130.00 q $A180.00 q $A205.00
q $A250.00 q $A325.00 q $A370.00
q $ A240.00 q $A430.00
Single issue price – $11.95 inc GST. Prices valid from 1 August 2010 (GST included where applicable)
q $A50.00 q $A95.00 q $A110.00
q $A100.00 q $A170.00 q $A200.00
q $A125.00 q $A225.00
q $A180.00 q $A265.00 q $A305.00
q $A350.00 q $A475.00 q $A550.00
q $A345.00 q $A620.00
Postcode:
Fax:
Email:
How did you hear about us? q Advertising q Direct mail q At a conference q Colleague q Other, please specify
Payment: q Cheque (payable to Paydirt Media Pty Ltd) q MasterCard q Visa q EFTBank details – Paydirt Media Pty Ltd, ANZ Bank,West Perth
BSB: 016 498 Acc: 8371 62319 (International SWIFT Code: ANZBAU3M) (Please quote company name) q Amex* q Diners* (* A 3.8% surcharge will be added if paying by American Express or Diners Club)
Card Number: Amount: $AUD Expiry Date:
Exact name on card: Signature:
CSC No:
PO Box 1589, West Perth, Western Australia 6872 Email: [email protected] Phone: +61 8 9321 0355 Fax: +61 8 9321 0426
LEFTFIELD
CSIRO golden breakthrough
Traditional concepts of how gold de- posits are formed could be open for debate following the findings of a new study by the CSIRO.
Gold deposits have long been as- sumed to form when gold is transported through the crust in sulphur-bearing flu- ids and deposited when the fluids react with iron-rich host rocks. However, the study, led by CSIRO geologist Dr Mark Pearce, found that the low observed fluid-to-rock ratios at the Junction gold deposit in Western Australia would not have allowed a deposit of that size to be formed.
“Our models imply that the gold con- centration levels that led to the forma- tion of Junction would have been 10,000 times higher than what could have been dissolved and transported in a sulphur- ous fluid, so an alternative gold trans-
porting agent is required,” Pearce said. Speaking to Paydirt following the re- lease of the report, Pearce said the find- ings had come to light during micro-scale observations of the chemical reactions involved in the formation of gold depos-
its.
Using CSIRO’s state-of-the-art Ad-
vanced Characterisation Facility in com- bination with advanced computer model- ling, Pearce and his team were able to conduct detailed analysis which found gold mineralisation wasn’t as deeply as- sociated with sulphides as traditionally thought.
“For instance, we’re finding that the key chemical reactions involved in creating a gold deposit are localised, often within a few millimetres of the gold grains rather than metre-wide alteration zones,” he said. “At the micro scale we found the
fluid in the gold was not closely associ- ated with sulphide minerals but within carbonate metasomatism. Gold pre- cipitation was intimately associated with biotite breakdown where calcite is locally absent.”
The findings go some way to dispelling the accepted model of gold deposit for- mation in greenstone belts such as those of WA’s Eastern Goldfields.
“While it doesn’t mean that existing geological models are always wrong, it does indicate that there are other geo- logical processes at play that need to be identified to improve their accuracy.”
Pearce said the team was now look- ing at other deposits where low volumes of fluid had been observed in an effort to find how the gold was being moved around.
– Dominic Piper
INDEX
Accent
Adani
Aditya
Alcoa
Alt 32, Anglo American 7, 60, 66, AngloGold 7, Antofagasta
36
66
39
15
35
70
58
14
36
25
72
42
Bannerman
Barrick
Base
Bass 36 BCD 46 BC Iron 37 Beadell 72
Energy Metals
Energy Resources
European Metals
Evolution 19 Explaurum 36
Ferrum Crescent 37 FinnAust 68-69 FMG 4 Focus 6
Leigh Creek Energy Lithium Australia
Magnetite Mines Magnis
Mantle
Matsa
37 5-6
River Rock RNI
Roy Hill
S2 Resources
Segue
Sheffield 18-25, 52
Ardiden
Atlas Iron
Aurelia
Australian Bauxite
21,
Sibanye Gold
Silver Lake
Soon Mining
South32
Southern Gold
Stanmore 70 Star Striker 72 Stavely 45-46
BHP Billiton
Black Rock Boss Brockman
Cannindah Cauldron Centrex Corazon Coziron CuDeco
Dart
De Beers Drake DRDGold Diatreme
Eastern Iron Eldorado Elemental
37, 64,
52 4 72
65 62
36
4, 7, 16, 32, 34, 60, 65, 66 61 72 25
37
37
25
36
72
72
48 7 36 7 45
47 55 72
72
32
72
40
32
71
68
72 72 36
55 24, 30-31
26-27, 28,
29,
Stellar Strandline Syra
Talga
Talison
Tiger
Toro
Tungsten Mining
Vale Vango Venture Vimy Vital
Western Areas Windward Wolf
World Titanium
Xingang
Yamana Yunnan
Zijin
37, 43 28 28
72 5 72 37 6
4, 16, 65 37 40 10 37
4, 68 72 44 24, 31
36
55 38
37
29, 36, 36, 60,
36 58, 71 37
Glencore 14, Golden Eagle
Goldcorp
Grange
Graphite Corp Great Dyke Greenland Minerals
Hawthorn Highfield Hodges
IBML
Iluka 19, Image
Imperial
Independence
Intermin
IronRidge
Ivanhoe
KalNorth KBL Kenmare KGL
King Island Kinross Korab
Lanka Graphite Latrobe Magnesium
70, 55,
69,
49 23, 30 29 14 50 72 32 71
36
72
24
37
44
55
37
67 72
12, 32,
33,
36, 50-51 72 72 66 72 37 37, 70 5-6 72 72
36 70 6
72
72
49
37
19
37
36
37, 38-39 50-51 37 37 49 72 36
32 39 71
Mawson West Maximus Mega Uranium Metals X Mincor Minotaur Monax Morning Star Mozambi
MZI
Newcrest Norilsk Norton
Orinoco Orocobre
Paladin
Pacifico Panoramic Peabody
Peak
PepinNini
Petra
Pilbara Minerals PotashCorp Predictive
Ram
Randgold
Regal
Resolute 50-51 Rio Tinto 4, 5, 16, 19, 21, 25,
30, 66
60 39, 46, 50-51 32 32, 34, 60 37
37,
32, 33 37
PAGE 74 FEBRUARY 2016 AUSTRALIA’S PAYDIRT
AUS TR ALI AN
GRAPHITE
22 March 2016 - Novotel Perth Langley
www.australiangraphiteconference.com
For all enquiries please contact Dominic Piper on +61 424 934 494 or email [email protected]
paydirt
front and back cover supplied seperately
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Discover the best professional documents and content resources in AnyFlip Document Base.
Search