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Published by Paydirt Media, 2016-06-20 04:40:36

2015 July GMJ

2015 July GMJ

Keywords: Gold Mining Journal

July – September 2015 VOLUME 1. ISSUE 120
Registered by Australia Post PP 643938/00057

Gold Road:

From dusty track to super highway

• Diggers & Dealers preview ISSN 1324-4396

• Asia-Pacific profle • Africa focus 9 771324 439005

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


7 16 24


Johannesburg correspondent Brendan Ryan looks at For more than two decades Australia’s gold community
AIM-listed Xtract Resources plc’s attempts to reinvigor- has descended on Kalgoorlie for the annual Diggers &
ate the gold sector in Mozambique. In its surf-loving Dealers talkfest. With gold companies making plenty of
chief executive Jan Nelson, he finds a mining execu- headlines in the first half of 2015 and the likes of Jake
tive worthy of investor support Klein and Bill Beament set to address the forum, gold
is certain to be the leading commodity once again this
8 NEWS year. We look at some of the stories set to catch the
eye of delegates at the August event
The World Gold Council has released a new report into
the economic and social impact of gold mining. The 40 AFRICA
Council’s head of investor and stakeholder relations, Ahead of Africa Down Under in September, Gold
John Mulligan, spoke to us about the report’s findings Mining Journal checks in with some of the Australians
and how the Council and its members are using it to on the African mining scene, including features on
better convey the sector’s contribution to developing Gryphon Minerals Ltd, Azumah Resources Ltd and Rift
nations Valley Resources Ltd

Increased resources, share price runs, successful
capital raisings and industry awards, it has been quite
a first half of the year for Gold Mining Journal’s 2014
Explorer of the Year Gold Road Resources Ltd. Now
firmly entrenched as the best development story in
the Australian gold sector, the challenge for executive
chairman Ian Murray and his team is to ensure share-
holders are not short-changed


Gold Road executive chairman Ian Murray has plenty of reasons to be smiling following a successful first half of 2015

GOLD MINING JOURNAL (ISSN 1324-4396) Paydirt Media:
Published by Paydirt Media Pty Ltd. A.C.N. 063 985 133 Executive chairman: Bill Repard
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Editorial: Member of:
Editor: Dominic Piper
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Contributors: Keith Goode, Brendan Ryan (Johannesburg)

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Phone: (+61 8) 9321 0355 Facsimile: (+61 8) 9321 0426


Leaders the fuel for
market support

You’d think, with the spot price stubbornly Alan Bond, the 2010s has brought us new names such as Bill Beament
refusing to take off despite the Greek (Northern Star Resources Ltd), Jake Klein (Evolution Mining Ltd) and
crisis and stock market wobbles in China, Mark Clark (Regis Resources Ltd).
that the Australian gold sector would be be-
The companies these men lead have variously enjoyed strong mar-
reft of enthusiasm. ket support as much through weight of personality as operating perfor-
Instead, this year’s Diggers & Dealers mance and even at the junior end of town, those companies with strong,
innovative leaders continue to prosper.
forum is set to be one of the brightest in
years for the gold bugs. OK, the spot price Our cover story in this edition of Gold Mining Journal looks at a
isn’t setting the world on fire and every company with exactly the type of leadership needed if companies are to
company executive present in Kalgoorlie have any chance of success.
will be able to tell a tale of share price underperformance, but
there is evidence that companies are being backed by investors. Gold Road Resources Ltd made its first discovery at Yamarna in 2010,
Capital raisings are on the increase. It may be that they are being a time when the junior market was flying. The company enjoyed initial
undertaken at a much lower price than previous raisings and even then success with its Central Bore discovery but couldn’t get it to hang togeth-
at a discount to the average price, but they are going ahead and they er as an economic project, justifying experts’ doubts that an economic
are being supported. discovery could be made in such a remote part of Western Australia.
Much like the recent spate of corporate activity, it is an indication that
while the wider market is still turning its nose up at gold stocks, insiders The management team (led by executive chairman Ian Murray) and
see something brewing in the sector. the exploration team (led by Ziggy Lubieniecki, Justin Osborne and
It is similar in the nickel space where the success of the sector’s min- Kyle Prentice) didn’t walk away from the massive land package in the
ers and the enthusiasm generated by Sirius Resources NL’s Nova dis- Yamarna belt. Instead, the company stuck to its guns and retained its
covery has fostered investor support despite the fact the nickel price is disciplined approach to exploration.
trading at historical lows.
Much of the enthusiasm for gold stocks is down to the quality of lead- Eighteen months later that discipline paid off with the discovery of
ership currently active in the local gold scene. Gruyere, which has now grown into a 5.5 moz gold deposit.
In recent times, both Gold Mining Journal and sister publication
Paydirt have ran extensive features on the new generation of leaders Murray could’ve taken Gold Road down a different path but through
in the Australian gold industry. While the 1980s gold scene was syn- perseverance and conviction, the company has developed the most ex-
onymous with the likes of Robert de Crespigny, Joseph Gutnick and citing gold story Australia has seen in more than a decade.

It is that kind of leadership which will ensure the gold sector’s fortunes
may wax and wane but will never wither.

View from the pavilion... or the Palace

Of all the notions that come to mind when the phrase “Diggers & during that maiden Diggers voyage which I still retain to this day – de-
Dealers” is mentioned, I’m sure I’m the only person who thinks spite being a Pom who was revelling in a rare Ashes victory. This is

about the Ashes. Diggers’ finest quality; the ability to bring the most enthusiastic, ambi-

My first Diggers & Dealers was in 2005, the year Freddie Flintoff and tious and optimistic resources people together in one of the most remote
the rest of the England team ended 16 years of hurt to reclaim the urn.
Indeed, 2015 will be the fourth time towns in Australia to revel in the good times or talk about how the bad
times are nearly over.
the Ashes have been on while I am in As Diggers & Dealers rolls
the Goldfields and – at the risk of ex- around again amid a climate which
is as harsh to junior miners as Eng-
... it is comforting, inspir-posing my allegiance as a Pom – I can land in August is to batsmen who
ing even, to realise thereproudly say England have emerged don’t move their feet, it is comfort-
ing, inspiring even, to realise there
victorious the previous three times. are still plenty of people out there

are still plenty of people out thereAt the moment in 2005 when Mi-

“with faith in the industry.chael Kasprowicz was incorrectly
given out caught behind, I was un- with faith in the industry.

derground at Beta Hunt; listening to The market, the mainstream me-

Michael Kiernan telling a group of investors and media how his Con- dia and the politicians may have forgotten about the sector, but those of

solidated Minerals Ltd vehicle was going to be the new Western Mining. us with a vested interest in it remain in solidarity. Always looking for a

Even at the time I had a feeling it was an historic occasion. bright spot, always optimistic, always seeing a new dawn about to break.

Unfortunately, it was historic because 12,000 miles away Billy Bowden Come to think of it, a bit like the Aussie tours of England these last

was putting up his crooked finger, not because Beta Hunt would only 10 years.

stay in production for another 18 months.

By the time we got to the Kambalda Hotel, the match was over and I

had missed one of the great Ashes denouements. I even stayed in the

Palace Hotel until 4am that morning in the hope of seeing a replay of the

day’s play but unfortunately it never came on.

I did, however, make friendships (I can’t bear to call them “contacts”) – Dominic Piper

Page 4 GOLD MINING JOURNAL July – September 2015


Funds splash cash on Kou Sa

Geopacific Re- Geopacific will boost its bank to ensure it can aggressively explore its Kou Sa project in Cambodia
sources Ltd
sparked excitement in ditional wait-and-see approach Heeks said RCF and Tembo’s course, anything that isn’t will be
the junior market last to partner with Geopacific at an investment in the company bode split 50-50 between Tembo and
month when the Cam- early stage. well for its rights issue. RCF.”
bodian explorer an-
nounced its intention “It was very unlike them,” At the time of print, two of the Should the money come in as
to raise $23 million to Heeks said of RCF’s early invest- company’s major shareholders expected, Heeks said Geopacific
advance its burgeon- ment in Geopacific. had committed to taking up their would round out any required
ing Kou Sa copper- full rights and a new investor was work at its flagship Prospect 150
gold project. “They came in when all we had waiting in the wings, according to and improve the credentials of
was geochemistry and that was Heeks. Kou Sa’s 160 and 128 targets.
Geopacific entered into bind- an endorsement of the manage-
ing agreements with Resource ment team. All of us had done “One investor has said he From that point, Geopacific
Capital Fund (RCF) and Tembo business with RCF before and wants to maintain his percent- will aim to establish a minimum
Capital to place 150 million fully they quite like Cambodia; it was age, so that’s more than taking 20,000t copper resource for Kou
paid ordinary shares in the com- an area they wanted to have a up his rights; almost twice as Sa and piece together a scoping
pany at an issue price of 6c/ look at. They came in for a few many in fact,” he said. study for the project.
share. million dollars the first time to
get a feel for the country, project “We are pretty … confident Now with financial stability,
At the completion of the place- and us. They have since come that a fair percentage of the Heeks said the sky was the limit
ment, Tembo will have a 19.9% in several times. They’ve either rights will be allocated and, of for Kou Sa.
stake in Geopacific, while RCF maintained or increased their
maintains its 35.9% share in the stake in the company. They are “I haven’t worked on a project
company. very committed to seeing it right in 30 years … where you can
through to the end.” have such success with your
In conjunction with the place- drilling,” he said.
ment, Geopacific pitched a fully Contrarily, Tembo only made
underwritten non-renounceable contact with Geopacific six “The geophysics is targeting
rights issue, offering 10 new months ago, but had already vis- so exceptionally well that the
shares for every 21 shares held ited Kou Sa on three separate last 18 holes we have drilled into
at its record date of 5.5c/share to occasions to complete extensive brand new areas have hit miner-
raise up to $14 million. due diligence on the project. alisation in their first hole. That’s
unheard of. It tells you that some-
The company agreed to a “We had never done business thing big and interesting is hap-
mandate with Blue Ocean Equi- with them before,” Heeks said. pening in the area.
ties to act as underwriter and
lead manager, while RCF and “They are a third world spe- – Rhys Dickinson
Tembo proposed to act as sub- cialist fund – they can’t invest in
underwriters to the issue. Australia. Most of their money is Ron Heeks
in Africa, but they do have some
Geopacific managing director that can go into Asia.”
Ron Heeks acknowledged the
gravity of the event when con-
tacted by Gold Mining Journal.

“I can’t remember this sort of
thing being done by a junior in a
long time,” Heeks said.

“We are now in a position to
proceed flat out with exploration
at Kou Sa. We will have one RC
and two diamond rigs running
initially and might bring another
RC rig on, as we have one avail-
able in the yard. We can explore
very hard for the next 12 months.
We are looking forward to taking
the project areas that we have al-
ready established forward.”

Much of the landmark deal
can be attributed to Geopacific’s
good relationship with RCF.

Heeks said the company’s
board had a long history with
RCF, which did away with its tra-

July – September 2015 GOLD MINING JOURNAL Page 5


For risk-wary gold miners,
small is beautiful

Bigger isn’t better for the “If there’s going to be some- Miners are opting for smaller projects Gary Goldberg said.
world’s gold miners, who are thing go wrong, you’d rather it go in the current environment “From an investor standpoint,
increasingly making “bite-sized” wrong after you’ve spent $US1
developments that carry less risk billion than $US3 billion or $US4 Andes was mothballed in 2013, it’s a good thing because it mini-
of budget disasters and fewer of billion,” Goldcorp Inc chief exec- bogged down by environmen- mises the risk involved,” he said.
the political and environmental utive Chuck Jeannes said. tal issues, labour unrest, politi-
disputes that have derailed me- cal opposition and development Yamana Gold Inc is build-
ga-mines in recent years. Goldcorp owns stakes in a costs that ballooned to $US8.5 ing Cerro Moro in Argentina for
number of joint-ventured as- billion. $US265 million over 2.5 years. It
Newmont Mining Corp is a sets such as the Alumbrera gold will be Yamana’s smallest opera-
prime example of how compa- mine in Argentina and the Pueblo “A phased approach to devel- tion on a throughput basis, or the
nies are responding to bleak Viejo gold mine in the Dominican oping large, complex capital pro- volume of ore processed each
industry conditions by building Republic. jects makes a lot of sense,” Bar- day.
mines on a smaller scale than rick spokesman Andy Lloyd said.
in the past, with the price of gold The price of gold has fallen as “It’s a sweet spot in terms of
down almost 40% from its peak concerns about inflation receded “There is potential to mitigate manageable capital expendi-
in 2011 and banks avoiding the and the US dollar rose against development risks, reduce up- tures over an extended period of
sector. most major currencies. Gold is front capital requirements and time,” chief executive Peter Mar-
often used as a hedge against expedite initial cash flows from rone said.
The cautious approach will inflation, as prices typically rise the project, which could be used
likely persist even if conditions when the dollar weakens. to fund future expansions.” Last year, the average annual
improve, with miners increas- projected gold output from pro-
ingly teaming up on big, complex Barrick Gold Corp, the world’s Barrick has no new mine plans jects that just went into construc-
projects to share costs, expertise largest bullion producer, could currently, as it sells assets to trim tion and entered production was
and risk, mining executives and be the poster child for problem- a $US13 billion debt. 15% lower than five years earlier,
industry watchers say. plagued mega-mines. according to SNL Financial data.
In June, it announced a stra-
Its Pascua Lama project in the tegic tie-up with Zijin Mining, Last year there were also more
selling a stake in its Papua New small mining debt and equity is-
Guinea mine as a first collabora- sues, correlating to the size of
tive step with the Chinese miner. mines being built.

Newmont, the world’s No. 2 The average issue in 2014
gold producer, decided to start was $US128.1 million, Thomson
small with its recently announced Reuters data shows, while the
Long Canyon project in Nevada. average for the preceding seven
years only fell below $US160 mil-
The first phase is a $US250 lion one other time.
million to $US350 million devel-
opment funded with cash flows The “easy stuff” has already
and available cash, using exist- been discovered, so some of the
ing staff. Payback is projected in most interesting prospects are
just over four years. in areas with different rules and
regulations, according to Sterne
Rather than building all the in- Agee analyst Michael Dudas.
frastructure for future phases up
front, this approach makes each “That makes it a lot more dif-
successive phase carry and ficult to get the confidence level
provide its own return on invest- from the board and investors to
ment, Newmont chief executive take big swings,” he said. “I do
think the industry will be a lot
more collaborative as we move
forward, because investors want
risk-adjusted returns that require
some thought and some rigor.”

To be sure, not all mines can
be built in phases and bigger pro-
jects will find fresh appeal when
gold rebounds from the current

“The market is short-term fo-
cused,” Jeannes said.

“If the gold price were
$US1,800/oz and the equity
markets were wide open... our
investors would be questioning
us if we weren’t going for the full,
large, build-out.”

– Susan Taylor, Reuters

Page 6 GOLD MINING JOURNAL July – September 2015


Nelson back on board
at Fairbride

Investor sentiment for 3.01 g/t at Fair Bride, try. He now owns a surf
the past couple of north of the town of shop at Strand, near
years – with consider- Manica, which is about Cape Town.
270km north-west of
His voicemail mes-

able justification – has Mozambique’s second- sage for about 18
been that the gold largest city – Beira. months went as follows:
“Hi. Sorry I can’t take
Auroch published a

price is moribund; PEA on June 11 esti- your call right now. I’m
gold producers have mating total gold pro- surfing somewhere.
one foot in the grave duction at 331,000oz Leave a message and
over a seven-year life at I’ll get back to you be-

and anyone putting life-of-mine cash costs tween sets.”
money into gold jun- of $US650/oz and an That continued even
all-in sustaining cost
after he signed on as

iors or explorers is a (AISC) of $US769/oz. Xtract chief executive
few bricks short of a Auroch has also iden- and was involved in
load. developing phosphate
tified three additional projects in Chile, but his
targets with mineral re-

sources of more than voicemail returned to a

Yet, had you put money ear- 150,000oz while the ore “normal” business-style

lier this year into either of two body is open down-dip message late last year

bombed-out junior mining stocks and to the west. which I viewed as indi-

– ASX-listed Auroch Minerals NL That clearly prompted Estimated gold production over a seven-year mine life at cating a serious move
or AIM-listed Xtract Resources the move by Xtract but Fairbride, aka Manica, is 331,000oz at AISC of $US769/oz back towards the main-
plc – right now you would be roll- there’s more to Xtract’s

ing in it. involvement than just the num- Whatever the reason, he did In March, Xtract announced

Xtract traded as low as 0.09p bers because Xtract’s chief exec- not forget about Manica, which it had acquired an option to buy

in March this year but it went utive Jan Nelson held the same is the second acquisition that the surface tailings dams at the

up five-fold to reach 0.45p late position at Pan African when Xtract has carried out this year, former Carolusberg and O’Kiep

in May, before pulling back to initial work on the Manica project marking a welcome return to copper mines in the Northern

around 0.28p in early July fol- was conducted. South African mining by Nelson. Cape, which contains an esti-

lowing a share placement raising When Pan African spun out He developed it from an explo- mated 33.8mt of copper tailings.

£4.4 million at 0.3p/share. Manica in 2011 to Auroch, Nel- ration outfit “wild-catting” for gold That’s what got the share price

Auroch was trading around son said at the time: “It was de- in the Central African Republic moving initially.

3.5c/share as recently as mid- cided that Manica was a good to a successful junior producing If Nelson is right about Manica

May but has since shot up to project but the capital cost can- 200,000 ozpa gold from Barber- then there’s more to come be-

around 12c since announcement

of its deal with Xtract on a

Mozambican gold project.

That’s the attraction of

In my opinion, he’s one of that rareputting money into gold

juniors – when you hit

breed of mining executives worth fol-pay dirt you tend to really

“lowing as an investor – even if he does notstrike it rich. The problem,
not be funded by Pan African. ton and Evander in South Africa. cause he reckons it’s a “compa-
ny-making deal” for Xtract.
Nelson comments: “At
an assumed gold price of
$US1,250/oz this mine is
capable of generating annu-
al earnings of about $US15
million before tax with sig-

of course, is that so many fit the traditional entrepreneurial profile. nificant opportunities to
of them turn out to be no- increase the gold resource

hopers and the underlying and for further consolidation

asset on which these two in the region.

shares have soared is a pro- Our major shareholders want us In my opinion, he’s one of that “The main outstanding is-

spective open-pit gold mine in to focus on the development of rare breed of mining executives sue was the recovery process

Mozambique which appeared to our South African projects where worth following as an investor – but metallurgical recoveries of

have not much going for it. we are also looking at further ac- even if he does not fit the tradi- more than 90% in the oxides and

That’s the Fair Bride – aka quisitions.” tional entrepreneurial profile. 80% in the sulphides have been

Manica – gold project in Mozam- Nelson resigned abruptly from Reason I say that is because achieved from test work to date.”

bique, which Auroch has been Pan African in February 2013 for Nelson is unique in South African Hopefully, it’s a case of “surfs

developing for the past few years reasons that have never been mining circles. After he left Pan up” for Xtract.

since acquiring it from London adequately explained. He cited African he effectively dropped Brendan Ryan is a Johannesburg-

and JSE-listed Pan African Re- “personal issues” at the time out and went surfing. First, he based mining writer

sources plc. but subsequent market specula- did a course at a surf school in

So far, Auroch has deline- tion has been that he was forced Hawaii and then he got seriously

ated a JORC-compliant resource out by Shanduka – Pan African’s into the South African surfing

base of 923,000oz of gold @ BEE partner. scene on his return to the coun-

July – September 2015 GOLD MINING JOURNAL Page 7


Industry economic impact
greater than foreign aid: report

Anew report has
found gold min-
ing’s contribution to
the global economy
has grown sevenfold
to $US171.6 billion
in the past 13 years,
outstripping the com-
mensurate rise in the
spot price during that


The World Gold Council-com- A new World Gold Council report has found the industry’s contribution to the global economy
missioned report, The social and is more than the total overseas aid budget
economic impact of gold mining,
found this contribution was great-
er than the GDP of 150 countries

and larger than the entire over- “While it would be misleading economy was just one of four key was particularly important in low

seas aid budget, particularly per- to claim that this improvement findings in the report, along with income economies.

tinent given 60% of the countries is a direct result of the growth in the impact it has on host nations, “Many of the gold producing

covered in the report are of low gold mining, there is little doubt its investment in people and hu- countries with the least devel-

or lower-middle income status. that the value created by the in- man capital and its support for oped economies are significant

John Mulligan, head member dustry will have made an impor- host communities. recipients of foreign aid – in

of investor relations at the World
Gold Council said the report
highlighted the substan-
tial economic impact of

Many of the gold producing countriesthe industry.
“Our findings highlight

with the least developed economies arethat commercial gold min-

“significant recipients of foreign aid – in someing is a major source of
tant contribution.” On its support for host econo- some of these countries the val-
Gold’s support to the global mies, Mulligan said gold mining ue of the economic contribution

of the gold mining industry
has now overtaken the
value of foreign aid re-
ceived; in all countries in-
dustry growth far exceeds
growth in the value of for-

income and driver of eco- of these countries the value of the economic eign aid.”
nomic growth, playing an The impact of gold min-

important role in support- contribution of the gold mining industry has ing increases when its in-
ing the sustainable socio- now overtaken the value of foreign aid re- direct impact is measured.
economic development of
“The majority of the

host nations and commu- ceived; in all countries industry growth far industry’s economic ex-
nities,” he said. exceeds growth in the value of foreign aid. penditure [70%] goes on
local suppliers and em-
While there are not ployees. The next largest
necessarily causal links,

Mulligan said there was “defi- contribution is through indirect

nitely” evidence of concurrent taxes. Host government treasur-

growth in gold mining’s contribu- ies collect far more revenue from

tion and income status among income and employment taxation

producing countries. than they do from royalties.”

“In 2003, 33 of the countries Royalties and 15% Income and other corporate
covered were classed as low or land-use payments 58% taxes account for almost 60% of
lower-middle income economies direct payments to governments,
by the World Bank while 14 were Income and other compared to 15% from royalties
classed as upper-middle or high corporate tax and land use payments.

income economies. By 2013, Employee taxes 13% Mulligan said quantifying and
amongst that same group of communicating the contribution
countries, 26 were now classed Other 14% the industry made away from

as upper-middle or high income direct royalties and taxes was a

economies, and the number Source: Maxwell Stamp vital goal of the report.
of low income economies had “Direct value is only a small

dropped from 16 in 2003 to five Average composition of the direct payments made to host governments portion of gold mining’s contribu-

in 2013. by the top 21 gold mining companies in 2013 tion to national economies and

Page 8 GOLD MINING JOURNAL July – September 2015

that is not well perceived,” he was increasingly interested in the

said. social impact beyond the mine

The issue of local employ- and the specific contribution gold

ment and procurement has be- mining was making to social pro-

come an increasingly important jects in different countries.

one in resource-rich countries “One area is the Gold for

in the last decade and Mulligan Health initiative which asks how

said the report showed the gold gold mining can have a positive

mining industry’s contribution to impact on community health. We

human capital development was are finding that in countries with

substantial. substantial growth from gold, in

The industry directly employs the majority of cases there was

1 million people around the world a marked improvement in reduc-

and a further 3.2 million indi- tion and prevention of infectious

rectly. diseases. It is a concurrent but

Given that many of these jobs not necessarily causal correla-

are in low- and middle-income tion.”

nations, their impact is even Along with the areas of eco-

more telling. nomic impact and affect on hu-

“The impact of direct employ- man capital, the Council hopes

ment is significant because they the breadth of the report will al-

are high value jobs with consist- low industry members to recog-

ently above-average wages and nise common solutions to such

this is particularly important in issues.

countries with less employment “There have been many suc-

opportunities because each job cesses but they are not often

supports a greater number of shared across companies and

dependents and that has a great countries. This report may be a

impact on the local economy.” catalyst in looking for common Gold mining’s contribution to the economies of low-and-middle-income
Mulligan said the report also indicators of success among pro- countries has been particularly important over the last decade
grammes,” Mulligan said.
showed the gold mining sector

was a leader among extractive The report also highlighted the Where this has occurred, “In most dialogue between

industries when it came to fulfill- need for governments to promote some success can be identified. companies, governments, com-

ing local content requirements. and prioritise transparency if the “In the vast majority of cas- munities and NGOs the concept

“Gold has been more success- gold mining sector is to have a es, those countries with grow- of proving shared value is de-

ful in creating local content op- truly transformative effect on na- ing gold mining industries have bated. That needs some point

portunities and employing locals. tional economies. shown improvement in the Cor- of reference and needs a global

Some 90% of employees are “Governments are really inter- ruption Perception Index. That in context. Previous reports suf-

drawn from local sources so it is ested in this report and we are itself is an indicator of progress,” fered from not communicating

a success story,” he said. hearing from leaders about bet- Mulligan said. across borders. This report, for

Some governments have ter governance,” Mulligan said. The report also demonstrated the first time, allows us to quan-

moved to enshrine local content “The success of the Extractive that notable gaps in the available tify and educate stakeholders on

requirements in law, but Mulligan Industries Transparency Initiative data on the social and economic the impact of gold mining across

said the industry had responded [EITI] has shown that if govern- impacts of gold mining were still the globe.”

well to such challenges. ments are going to encourage apparent. – Dominic Piper
“Some ambitious targets have substantial revenue from gold “Addressing this would be of

been set but that is not neces- then they have to communicate significant benefit to all stake-

sarily an obstacle to progress how it is being spent. If govern- holders and there is an acknowl-

because the industry has been ments are committed to devel- edgement across the board that

strong in its response,” he said. oping gold they need to show more data collection is needed,”

“There are many examples of improved transparency.” Mulligan said.

companies building linkages % local employees
beyond mines to encourage 100
the local economy and local

business and sharing knowl-

edge and infrastructure.”
Such linkages often affect 90

social as well as economic

development and the report
also highlighted the contribu- 80

tion gold mining was making

to supporting its host com- 70


Gold mining companies

spend, on average, around
0.9% of revenue from gold 60

sales on community invest-

ment activities with an in-
creasing focus on healthcare 50
North America Asia Oceania Africa Central/South America
which currently receives 15% Source: Maxwell Stamp
of that spend. Gold mining Oil and gas

Mulligan said the Council Average percentage of gold mining workforces made up of local employees compared to the oil and gas sector

July – September 2015 GOLD MINING JOURNAL Page 9


SA Government drills
for explorers

Aworld-first col- cutting edge technol-
laborative drilling
programme is set to ogy being deployed by the
start in South Aus-
tralia. DET CRC being trialled in

Kingston Resources Ltd and the field in real time to re-
Minotaur Exploration Ltd will be
the inaugural beneficiaries of the fine the drilling and direct
Mineral Systems Drilling Pro-
gramme (MSDP), an initiative de- the drilling as it actually
signed to uncover a new mineral
province in the eastern Gawler happens. There are all of
Craton Olympic Dam copper-
gold region in the northern Eyre these elements at work
here which is why we say
“There is no doubt about it, that
if there are good results coming it is a world first.”
out of any of these holes on our
ground or Kingston’s ground it At the time of print,
will create a rush to that area and
it will be on for young and old. Boart Longyear had rigs
Everyone will be trying to pick up
ground there to get a slice of the ready to send out to King-
action,” Minotaur managing di-
rector Andrew Woskett told Gold ston’s Six Mile Hill project
Mining Journal.
on the eastern margin of
In essence, the MSDP will see
the SA Government fund drilling the Gawler Craton.
campaigns for Kingston and Mi-
notaur, with leading technologies Once necessary clear-
designed by the Deep Explora-
tion Technologies Cooperative ances were in place, work
Research Centre (DET CRC) put
to use in real time. was expected to start im-

Drilling company Boart Long- mediately at Six Mile Hill,
year will also roll out innovative
new technologies, while the Geo- with a host of geophysical
logical Survey of SA (GSSA) and
the Department of targets identified by Mino-
State Development
continues to map taur at its Gawler Ranges
mineral systems
under barren cover. project next in line for drill-

“Other govern- ing in mid-August. South Australian Mineral Systems Drilling Programme participants: (front)
ments – Western Woskett said recogni-
Australia, Queens-
land and New tion from scientific experts Minotaur’s Andrew Woskett and Tony Belperio and (back row) DET CRC chief
South Wales – do
fund direct drilling, at the GSSA for the work executive Richard Hillis, Geological Survey of South Australia director Steve Hill
but this appears to
be a world-first for a and theories put forward and Kingston Resources director Stuart Rechner
government actual-
ly doing the drilling, by Minotaur reinforced its
taking the risk with their costs
and drilling a company’s targets,” reputation and credibility in the partment of State Development than the fact that you have got
Woskett said.
market. and the DET CRC to go and drill.” Investigator Resources [Ltd’s]
“With the GSSA and DET CRC
involved, it is a unique situation A budget of $2 million has Attracting exploration funding Paris silver and other base met-
where you have the world’s first
been allocated for the MSDP, hasn’t been easy, especially in als deposits, but no copper.

with Minotaur receiving the lion’s Australia where exploration ex- You’d have to say it has been

share of funding. penditure has dropped off in the pretty barren from a copper point

Up to 10 holes down to about last two decades. of view as we currently know it.”

600m or so are expected to For all of its mineral output Woskett said the success

be drilled at Minotaur’s Gawler and exploration potential, explo- of testing brand new concepts

Ranges project, which should ration expenditure in Australia and technologies, such as DET

take about 10-12 weeks. has gone from 25% of the global CRC’s Lab-at-Rig which pro-

“About $1.5 budget to just one-eighth in the vides drillers with ongoing analy-

million will be last 20 years. sis for them to determine when

spent drilling our Nevertheless, the export of to terminate a hole, continue or

[Minotaur’s] tene- Australian exploration and min- adjust location or trajectory of a

ments,” Woskett ing technologies brings Australia hole, may prompt other govern-

said. as much wealth as the export ments to consider adopting this

“The Govern- of gold does and Minotaur has collaborative approach to explo-

ment has selected welcomed the opportunity to be ration.

17 of our geophys- involved in the country’s latest “If successful, this could be the

ical targets across groundbreaking venture. catalyst for encouraging govern-

those tenements “If it all turns to porridge it won’t ments to work with explorers and

and this year they have come at too much of a cost the relevant Geological Surveys

Andrew Woskett are aiming to drill for us, but we would have had a in a much more collaborative way
nine or 10 of them. lot of work done for us and on where you can collectively afford

Our contribution the other hand if there is a new to go and do some cutting edge

to that work is about $500,000, discovery we get all the upside,” and high risk stuff,” he said.

with our contributions in-kind be- Woskett said. – Mark Andrews
ing our extensive ground-based “It is very high risk and very

EM over those targets to refine conceptual programme. It is a

and model them. We have re-de- new model [being used], with

signed the drill holes for the De- nothing to compare it to other

Page 10 GOLD MINING JOURNAL July – September 2015

WA miners chip in for industry

Extending the Meanwhile, the State Yamarna greenstone belt,
legacy of Western
Australia’s gold history Government’s Minerals In- which hosts the emerging
has taken another
step with the launch stitute of WA will contribute Gruyere project.
of the Pathways To
High-Grade Ore: 3D $395,000, Northern Star Under the State’s
Gradient Mapping
research project. Resources Ltd $110,000, Exploration Incentive

Analysis of the earth’s crust La Mancha Resources Inc Scheme (EIS), Gold
to develop 3D modelling of gold-
bearing systems in the Eastern $40,000, Saracen Mineral Road will participate in a
Goldfields is a focus of the $1.68
million project, which is being Holdings Ltd $15,000, Ex- $400,000 diamond drill
supported by a host of gold in-
dustry players. celsior Gold Ltd $10,000 hole at Gruyere.

In-kind funding of $1.1 mil- and Ramelius Resources The Government will
lion will be provided by the
CSIRO and will include sample Ltd $10,000. cover half of the costs,
preparation and analysis, data
processing, scanning electron WA Minister for Mines with drilling estimated to
microscope analytics and 3D
modelling. and Petroleum Bill Mar- reach a depth of 2,000m.

mion said the 12-month “This exciting new EIS

project would enhance deep stratigraphic hole is

the prospect of extend- Northern Star leads a contingent of WA miners contrib- going down 2,000m and
ing mine-life at existing uting to the Pathways To High-Grade Ore: 3D Gradient could more than double
operations and potentially the depth of known miner-
unearth future mines, thus Mapping of Mineral Systems research project alisation,” Marmion said.

ensuring a long-lasting gold sec- sors like Northern Star a bright Now in its seventh year, the

tor in the State. future, this research will also help EIS has supported co-funded

“Mining companies are help- point the way to new discoveries efforts in over 550 projects for

ing sponsor the project because in promising greenfields areas more than 350,000m of drilling.

prolonging the life of proven op- such as the Yamarna greenstone Sirius Resources NL’s Nova

erations is very cost-effective, belt, east of Laverton.” nickel discovery in the Fraser

especially when it comes to job Gold Road Resources Ltd has Range will be the first project to

security,” Marmion said. been instrumental in delivering become a mine developed as a

“While we wish industry spon- resources of 6.8 moz gold in the result of EIS exploration.

13 – 14 April 2015 15 April 2015 LATIN

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July – September 2015 GOLD MINING JOURNAL Page 11


AMIRA to wrap up first set

The gold game is Companies have made great savings from technological advances developed in Australia
getting tougher by
the day. leach reagents such as amino in company-wide savings due to 420, which is starting to unearth
acids for leaching gold, silver and guidance from the Project 420 the fundamental issues that af-
Discoveries have dried up and copper, “may prove to be trans- team. fect the flotation of pyrites and
producers are digging deeper formational for the industry”. the related recovery of gold, is
than ever before for an ounce of “Companies used to be a bit scheduled for completion at the
the precious metal. To date, about $18 million has more philanthropic in how they end of May 2016, with AMIRA
been invested in the six itera- supported research back in the hoping for a swift transition into
Therefore, innovation and tions of Project 420 in the past 1970s and were probably more iteration seven.
technology has been a major 20 years, which has been sup- open to supporting specific re-
part of the industry and since ported by the likes of St Barbara searchers, particularly the big Reducing the cost of process-
1994 AMIRA International Ltd Ltd, Newcrest Mining Ltd, Anglo end of town hoping that some- ing lower-grade material and
has been at the forefront with a American plc, Barrick Gold Corp, thing good comes out of it,” Cu- complex ore types will be one of
gold technology research pro- Norton Gold Fields Ltd, plus ser- cuzza said. the focuses of the next iteration,
gramme – Project 420 – which vice providers such as Gekko Cucuzza said.
has saved miners more than Systems and Orica. “These sorts of things were
$200 million in operational costs. common in those days. Now, par- “If you have a look at the prob-
“There have also been in-kind ticularly in this current climate, lems faced by the gold mining in-
Project 420 is a programme of contributions from researchers, people are basically looking at dustry; grades are getting lower,
technology transfer and improve- as well as the companies in- value everywhere and looking ore is becoming more complex
ment which focuses on software volved in terms of site work and for improvements in efficiency and one of the big problems that
modelling in the metallurgy site access,” Cucuzza said. and productivity. Nowadays you the industry is facing is the ability
space. simply can’t go to companies to process refractory ores which
“I would be very surprised if with cap in hand and ask them is a very difficult process,” he
AMIRA International – a mem- you couldn’t add another 25-50% to be philanthropic and support said.
ber-based organisation com- in-kind on top of that $18 million a project.”
prised of mining companies and cash contribution over the years. “I am not saying this new ex-
suppliers – has taken Project 420 These projects are quite sub- The sixth iteration of Project tension is actually going to ad-
through six iterations to date and stantial when you look at cash dress that, but quite clearly it is
is embarking on a seventh, man- and in-kind contributions needed Joe Cucuzza going to be targeted to what the
aging director Joe Cucuzza told to make them happen.” sponsors see as critical issues
Gold Mining Journal. for them.”
Cucuzza said the success
“Our plan is to ensure that it of Project 420, which is run un- Managing costs is one critical
does roll on into the seventh and der the guidance of Professor element essential for the viability
that is why we are working on the Jacques Eksteen from Curtin of gold miners today and iteration
new iteration now,” he said. University in Western Australia, seven will also address lowering
within the Gold Technology inputs of water and energy, man-
“We have started our consul- Group, encouraged continued aging poorer or variable quality of
tation process with our current support from sponsors. water used in minerals process-
sponsors [14 in total] in order to ing, while improving capital and
start making sure we develop One sponsor credited Project labour productivity and maintain-
and design the right programme 420 with saving it $6 million a ing social license to operate are
extensions. Once we have done year in costs and recovery im- on the agenda.
that we hope to get the compa- provements from a mine in South
nies to commit as soon as pos- America, while St Barbara re- – Mark Andrews
sible, so hopefully there will be ports several millions of dollars
no hiatus and there is a smooth
transition from one to the other.”

Major breakthroughs made in
Project 420 include the develop-
ment of a suite of software mod-
els to simulate and optimise car-
bon management within CIP and
CIL circuits, optimisation of grind
size for gravity and leach recov-
ery, an integrated approach to
deportment of gold in operational
circuits, better recovery of valu-
able metal and understanding of
ore characterisation.

Furthermore, AMIRA reports
it is making significant progress
in how low-grade ores will be
viewed through work done in the
area of pre-concentration and
coarse particle gangue rejection.

This particular work, involv-
ing the potential usage of benign

Page 12 GOLD MINING JOURNAL July – September 2015

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Green shoots emerge in
withered gold mining sector

The global gold Barrick’s Australasian assets have drawn multiple offers “I don’t think commodity prices
mining industry indicating there is an appetite for gold projects are going to dramatically go up
is showing signs of from here but I do think that the
life as merger activity is not forecast to recover this executive of Grayd Resources individual companies’ ability to
picks up and indus- year, a rebound could start next Corp before it was sold to Agni- cut costs will differentiate their
try veterans set up year, albeit slowly. GFMS is co-Eagle Mines Ltd in 2011 for performance,” he said. In the
new companies and forecasting an average price of $US275 million, says conditions gold sector, he favours South Af-
hunt for projects, $US1,170/oz this year, below the are good for a full time return to rica’s AngloGold Ashanti Ltd.
taking advantage of current $US1,185. Its 2016 fore- the industry.
weak prices to lay cast is $US1,250/oz. A few large generalists have
the groundwork for a Helping fuel optimism for a come onto Kinross Gold Corp’s
rebound. “We felt that finally it looked as revival is the return to the sector share register in recent months,
though you might be able to pick of so-called generalist investors, Andrea Mandel-Campbell, a
Almost four years after the up projects,” Marc Prefontaine, money managers whose focus spokeswoman for the world’s
price of gold began tumbling, chief executive of Canadian gold isn’t exclusively on gold mining seventh biggest gold producer,
cash-starved and debt-ridden miner Orla Mining Ltd, which companies. Their flight from the said. She declined to name them.
miners are selling, merging or started operations in June, said. mining sector helped fuel a 36%
closing shop, pushing the value collapse in the market value of “There is recognition that there
of completed gold mining merg- Prefontaine said he didn’t the top 40 global miners between is value in the sector and the
ers and acquisitions in the first know when the gold market 2012 and 2014 to $US791 billion, market is starting to sense that
five months of this year to $US3 would rebound, “but we just felt it PwC data shows. the companies are better man-
billion, twice what it was in the was not going any lower”. aged now,” Joseph Forster, port-
same period in 2014, according “There has been more inter- folio manager at Van Eck, one of
to Thomson Reuters GFMS, a Prefontaine, who was chief est from generalists at the broker the gold mining sector’s biggest
metals research consultancy. conferences for meetings,” David shareholders, said.
M&A activity has rejuvenated Harquail, chief executive of gold
At the same time, with stock the gold sector royalty company Franco-Nevada A number of assets put up
markets near record highs, some Corp, said. for sale, including Barrick Gold
fund managers are examining Corp’s Australasian assets, have
the sector. In the first quarter, “Often these generalists have drawn multiple offers, a potential
Paris-based asset manager Car- no positions in the gold sector,” sign of better days ahead for the
mignac Gestion bought 11.65 Harquail said. industry.
million shares of Goldcorp Inc
the highest valued gold mining Non-gold focused mutual “The fact that a number of com-
company, making it the Vancou- funds nearly doubled the number panies are potentially fighting for
ver-based miner’s eighth biggest of shares they hold in 11 of the an asset in the gold sector at this
shareholder, Thomson Reuters’ world’s biggest gold miners in time, let’s face it, is positive,”
data show. the first five months of this year, according to Douglas Forster,
according to data from Thom- chief executive of Canada-based
Carmignac declined to be in- son Reuters’ Lipper service. The Newmarket Gold Inc, which last
terviewed for this article. number of funds holding gold month unveiled a $US190 million
shares also increased. merger. Newmarket is backed
“The perception that mining by Lukas Lundin and Randall
equities show good value is start- South Africa-based Investec Oliphant, well-known gold min-
ing to spread,” Hedley Widdup, fund manager Hanré Rossouw ing industry veterans.
a fund manager at Melbourne- said he has been debating on
based Lion Selection Group, whether now was the right time For others, the signals for get-
which invests in small mining to invest again in mining shares. ting back into the mining sector –
companies and explorers, said. stronger demand, weaker supply
and specifically for gold, a weak-
“Since the start of this year, er US dollar – are not yet evident.
there has definitely been a
change in sentiment,” he said, “I’m not really bearish but I
though it “is far from pervasive”. don’t see the trigger yet to get
really bullish. As a result I am
To be sure, no one is expect- still more on the cautious side
ing an overnight resurgence and and that’s why we have very slim
signs of pain are still widely vis- holdings right now,” Darren Lek-
ible – in bankruptcy filings, job kerkerker, a portfolio manager
cuts and an industry preoccupa- for Fidelity Investments in To-
tion with reducing costs. ronto, said.

And though the gold price – Nicole Mordant, Reuters

Page 14 GOLD MINING JOURNAL July – September 2015

Case histories of discovery

The world’s pre-eminent
gold exploration event

Pan Pacific Perth Pan Pacific Perth
November 17-18 November 17-18


Presentations as follows: Haile (USA) – Romarco Minerals Inc.
Gruyere (Australia) – Gold Road Ltd Amaruq (Canada) – Agnico Eagle Mines Ltd
Didipio (Philippines) – OceanaGold Corp Pegasus (Australia) – Northern Star Resources Ltd
Invincible (Australia) – Gold Fields Ltd Coffee (Canada) – Kaminak Gold Corporation
Kiaka (Burkina Faso) – B2Gold Corp Borden Gold (Canada) – Goldcorp Inc.

Petowal (Senegal) – Toro Gold Ltd Nuevo Chaquiro (Colombia) – AngloGold Ashanti Ltd
Galat Sufar South (Sudan) – Orca Gold Inc. Merian (Suriname) – Newmont/Surgold LLC

Salares Norte (Chile) – Gold Fields Ltd Cukaru Peki (Serbia) – Freeport McMoRan Inc/
Aurora (Guyana) – Guyana Goldfields Inc. Reservoir Minerals Inc.

Richard Schodde, Minex Consulting – “Long term trends in gold discovery”

Jointly organised by:

Keith Yates & Associates Pty Ltd

Sponsors to date:

Exhibitors to date:

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


Gold Road opens the
land of opportunity

Page 16 GOLD MINING JOURNAL July – September 2015

In a market barren “The remote nature of Gruyere has proven no impediment to its growth into WA’s largest gold development project
with truly exciting The best sign that management is pany but the entire Australian
opportunities, Gold doing its job is that there is takeover gold exploration sector.
Road Resources speculation around the company.
Ltd is a beacon; for Here was a genuine junior
explorer success story, the
kind the modern Australian

gold industry was built on;

one with themes of persistence,

shareholders, ambi- perseverance and risk-taking.
tious gold producers
The achievement was recog-
nised by Gold Mining Journal

and even those ro- with the 2014 Explorer of the
mantics who believe Year award and by AMEC in
June when the geologists at the

Australia still contains heart of the Gruyere discovery –
world class, multimil- Ziggy Lubieniecki, Kyle Prentice
lion ounce deposits. and Justin Osborne – collectively
received the 2015 Prospector


It shines so brightly because in Attention has now turned to

its Gruyere gold deposit – part of Gruyere’s development with the

its Yamarna gold project 450km company pushing towards a

north-east of Kalgoorlie in West- March 2016 deadline for release

ern Australia – it has the largest of a PFS; the question, however,

greenfields discovery made in is whether Gold Road will still be

Australia for more than 15 years. Gruyere’s owner by the time that

When Gold Road announced PFS is released.

a resource upgrade for Gruyere The Australian gold sector

early this year, the new resource has seen more than $5 billion in

of 5.5 moz took it past the 4.6 M&A deals in the last 18 months.

moz resource of another recent Murray with exploration manager Justin Osborne. The company’s Most of that value came from the

discovery, Tropicana, and deliv- recent success comes after five years exploring the massive trading of established operations

ered a boost not only to the com- Yamarna tenement holding with Northern Star Resources

July – September 2015 GOLD MINING JOURNAL Page 17


Ziggy Lubieniecki received AMEC’s Prospector award on

“ behalf of Gold Road in June
People recognise the Gruyere
deposit is one of the best in
Australia. If someone pays the right
price, then it will happen.
Sirius Resources NL in May set son why shareholders would al-
Ltd and then Evolution Mining to move into the development a new benchmark. Widely con- low anyone to pick up Australia’s
Ltd finding value in assets North sidered the best base metals dis- best recent gold discovery on
American majors such as Barrick space and make a headline ac- covery of the last 20 years, Siri- the cheap. Similarly, he believes
Gold Corp and Newmont Mining us’ Nova-Bollinger nickel project Gold Road remains the best ve-
Corp had grown tired of. quisition. has been brought from discovery hicle through which to drive the
hole to construction in less than project’s greatest value.
What was missing from this With the rate of discovery in four years.
surge of M&A activity was a “All shareholders know that
move towards the junior sector. Australia lamentable and the That Gold Road and Gruyere’s we can add best value by doing
While the aspiring mid-tier min- story has been remarkably simi- it ourselves. Gruyere’s resource
ers have found bargains in the market still reluctant to give any lar to Sirius and Nova, has alert- was built for a $2/oz discovery
unwanted assets of the majors, ed market watchers to the poten- costs; no one else could deliver
they have so far been reluctant weight to exploration and de- tial for another headline takeover that and I genuinely believe we
bid. have the best exploration team
velopment plays, the predators in Australia. And we will develop
“Gold Road is an obvious more mines across the belt.”
have hesitated. takeover target,” Morgans CIBC
resource analyst James Wilson Murray said an internal strat-
However, Independence told Gold Mining Journal. “It egy session conducted in March
has the biggest project in the had solidified the company’s
Group NL’s $1.8 billion friendly gold space and is a near-term strategy.
takeover bid for nickel developer “We looked at all possible sce-
The rumours pose Gold Road narios for this project; going it
executive chairman Ian Murray a 100%, JVs, asset sales, royalty
challenge. streams, etc and at end of that
process we decided; ‘why give
“The best sign that manage- away all the upside when we can
ment is doing its job is that there give 100% to our shareholders?’
is takeover speculation around
the company,” Murray told Gold “Between now and the DFS we
Mining Journal. will continue to visit these ques-
tions and if something comes
Not that he is avoiding the is- along that is favourable to share-
sue outright. He recognises the holders obviously we will look at
size of Gruyere compared to it.”
the market cap of the company
means Gold Road will always The completion of feasibility
be near the top of any bargain studies will give a clearer indica-
hunter’s list. tion of what confronts Gold Road.

“People recognise the Gruyere “All study work will put us in a
deposit is one of the best in Aus- better position. Once that is done
tralia. If someone pays the right there is less risk and more accu-
price, then it will happen.” rate discussions can take place.”

However, Murray sees no rea- Gold Road is also enjoying

Page 18 GOLD MINING JOURNAL July – September 2015

the lull in the local industry with Gold Road’s discoveries have come at the remarkably cheap $4/oz cost
people, contractors, equity and
debt providers all starved of op-

“To build a mine is all about
expertise and at the moment in
WA there is access to people,
resources and capital,” Murray
said. “If you look at Sirius and
Nova, the capital and equity
came very easily and given there
has been no big gold project in
this country since Tropicana, we
expect to find the same.

“Even though it is very early
days a lot of banks have ap-
proached us but until we have
completed a PFS, we have no
concrete information for them.
Whatever the outcome, it will be
a very competitive process.”

Like Sirius, the challenge
for Gold Road is to maintain
momentum; ensuring the com-
pany’s market cap matches the
perceived market value of the
project while also ensuring the
project progresses.

Early June saw Gold Road an-
nounce the finalisation of a $39
million institutional placement
and details of a share purchase
plan designed to generate a fur-
ther $10 million in funds.

The raising has ensured the
company will not need to return
to the market before a DFS is

“We’d completed the resource
upgrade and were busy with the
PFS so we need to raise money,”
Murray said. “The traditional
route is to do a capital raising af-
ter completing the PFS but that
means you are stop-start-stop-
start. We didn’t want to slow the
momentum so decided that given
the rearranging we had after the
resource announcement, we had
the opportunity to secure funding
right through to the DFS.

“We now have money for the
PFS, DFS and for regional ex-
ploration, without the need to
worry about the market. We don’t
know where the share price and
the gold price are going to be in
the next six months, but we know
we can deliver now regardless of
where they are.”

The placement also brought
with it new sophisticated inves-
tors who Murray is confident will
back the company against any
hostile offer.

“It is a good sign that there was
so much new institutional sup-
port, particularly from Sydney
and Melbourne and there is also
growing interest from the United
States and Canada.”

One of the company’s biggest

July – September 2015 GOLD MINING JOURNAL Page 19


Kalgoorlie MLA Wendy Duncan (centre) discusses the importance of exploration to her

Founding director Ziggy Lubieniecki has been electorate. Duncan is flanked by JV partners, Sumitomo Metal Mining Oceania managing
“instrumental in Gold Road’s remarkable rise
director Hitoshi Ito and Gold Road chairman Ian Murray

supporters is Re- All shareholders know that we can add best cific funds are really
source Capital Fund value by doing it ourselves. Gruyere’s re- interested in us.”
(RCF) which has
9% of the company. source was built for a $2/oz discovery costs; no Whether such in-
Murray said man- one else could deliver that and I genuinely believe terest eliminates or
agement retained fuels further M&A
the strong backing of speculation is open
to debate but regard-

RCF and other insti- we have the best exploration team in Australia. less of the takeover
tutional investors on And we will develop more mines across the belt. talk swirling around

the register. the company, Mur-

“RCF picked us ray is determined the

up after the first company keeps its

hole drilled at Gruyere and has focus on completing the Gruyere

very supportive of management. PFS, set for release in the March

RCF sees Western Australia as 2016 quarter. He knows techni-

the perfect storm for developing cal and economic confirmation of

gold projects at low cost. There Gruyere’s potential will only add

are good people available, engi- value to any imminent bid.

neering firms are affordable and For its part, the Gold Road

capital is accessible.” development team is putting the

Platypus has an 8% holding corporate equations out of mind

and New York fund Van Eck 6% and concentrating on delivering

while the entire institutional sup- its technical studies.

port equates to 49% of the reg- Given the interest sparked by

ister. Murray said they shared Gruyere over the last two years,

the board’s belief that Gruyere it is easy to forget that even the

was still best suited under Gold one technical assessment Gold

Road’s control. Road has undertaken, a prelimi-

“For the institutions to budge nary scoping study completed in

there would have to be an offer January this year was done when

that represented fair value and the resource stood at just 96.9mt

well above our current market @ 1.2 g/t for 3.84 moz gold.

cap to encourage them to sell,” The scoping study was based

Murray said. on a 5 mtpa operating scenario

The interest from the US and and suggested a project capa-

Canada has been a particular ble of producing net cash flow

bonus for Murray, particularly of $550 million over its 11-year

given the company is still two mine life.

years away from production. However, given the increase in

“Since we discovered Gruyere resources in May, the first major

we’ve had a lot of attention from question for the PFS is one of

North American resource funds scale.

and they continue to be sup- “We started by looking at 5, 7.5

portive and continue to follow and 10 mtpa options but we’ve

us. We are different from other already put a line through the 5

ASX companies in that we have mtpa option because it is far bet-

scale; a 5.5 moz gold resource ter for shareholders to increase

and a plus-10 year mine life production, lower the cash costs

which is unique and that is why and have a better NPV,” Murray

North American resource spe- said.

Page 20 GOLD MINING JOURNAL July – September 2015

To solve the question of scale, Gold Road chairman Ian Murray with WA Minister of Mines Bill Marmion and
Gold Road has broken the PFS Traditional Owner H.M. on site at Gruyere
into two components. The first
will see the 7.5 mtpa and 10 mtpa said the PFS was considering mont’s Boddington. the wider infrastructure equa-
assessed with a decision made an array of options, including “It is very interesting. It means tions correct becomes more ap-
by the end of September. That the high pressure grinding roll parent when Murray discusses
will then allow a fully-focused techniques that have been imple- higher capex but lower opex so his greater vision for the entire
PFS to be completed by the end mented at Tropicana and WA’s we have to analyse those trade- Yamarna belt.
of the March quarter. other major new gold mine, New- offs.”
Gruyere was actually Gold
“It is important that we narrow The importance of getting
it down so that when we get to
the DFS, we are not looking at
anything else. It will then be all
about implementation rather than
scenarios in the DFS and so will
be quicker and lower cost.”

GR Engineering Services was
appointed as process engineers
for the PFS in May with AMC
Consultants acting as mining
consultants and Gold Road self
appointing an owner’s team ear-
lier in the year.

Murray said all key appoint-
ments were now in place for the

“GR Engineering and AMC
have provided first class teams
and we have appointed our own
internal metallurgy manager and
approvals manager.”

Gold Road has also appoint-
ed a power expert as it looks to
solve the perennial challenges of
reducing power costs in the most
remote parts of WA.

“We are looking for an answer
to the power question in the first
part of the PFS process. Having
decided on the increased capaci-
ty, we are looking at a doubling of
diesel truck movements and that
is huge therefore we are carefully
looking at gas as an alternative.

“Our recently appointed power
expert has been in contact with
the major players in the gas
space and we are also investi-
gating the idea of constructing a
power line, possibly from Tropi-
cana’s substation. There are also
other options including lithium
ion batteries, solar and wind. We
will look at all of them but not for
base load power, only as non-
core supply.”

Murray said he did not ex-
pect mining or metallurgy to be
a major challenge for the PFS
consultants. Even taking into ac-
count the pit expansion likely to
be included in the PFS, the strip
ratio is expected to be less than
2:1 for the life of mine while gold
recoveries in the oxide mate-
rial have averaged 97% with re-
coveries from fresh material at
93.5%. Gravity recoveries have
averaged 55-60% in the oxides
and 50-70% in the fresh.

The one challenge will be the
hardness of the ore and Murray

July – September 2015 GOLD MINING JOURNAL Page 21


In just three years since discovery, Gold Road has built a 5.5 moz resource at Gruyere Ten gold camps have been
identified along the belt and Gold
Road’s second discovery on the deposits can get found, devel- year. Road has split the large land
belt and although the first – the oped and processed through that “We never actually stopped package into three areas; the
1.26 moz Atilla Trend – has so far single plant,” Murray said. “Once South Yamarna JV with Sumi-
proven uneconomic, Murray, ex- you have the infrastructure, the the regional work; Gold Road tomo, Gruyere-Dorothy Hills and
ecutive director Justin Osborne gas pipeline plus a big process- has always been about the entire North Yamarna.
and founding director Ziggy Lubi- ing plant, the smaller, potentially Yamarna belt, not just Gruyere,”
eniecki are in no doubt the build- uneconomic deposits become Murray said. “All three have senior geolo-
ing of the Gruyere plant will open economic.” gists running them, all of whom
the belt up to more economic The company controls are former exploration managers
discoveries. The end of the resource drill- 5,000sq km covering the belt, in- with responsibility for their area.
ing and the recent cash injection cluding 2,900sq km which Japa- The areas could be and are be-
“Once we have an operating means Gold Road will return with nese miner Sumitomo Metal Min- ing run like listed vehicles in their
gold plant in this area, smaller vigour to regional exploration this ing has recently earned a 30% own right with their own dedicat-
interest in. ed budgets.”

A budget of more than $10
million will be directed to vari-
ous drilling programmes across
South Dorothy Hills, Pacific
Dunes-Corkwood, and Sun
River-Wanderrie camps. The
aim over the next 12 months is
to complete 90,000m at North
Yamarna with an additional $2
million set to go into the South
Yamarna JV.

“At the Smokebush JV, Su-
mitomo has approved diamond
drilling for the first time,” Murray

Gold Road is also participating
in a co-funded hole as part of the
WA Government’s exploration in-
centive scheme (EIS).

The hole will be drilled 2,000m
into the Gruyere porphyry at a
depth of 1,250-1,500m, poten-
tially doubling its known limits.

The $400,000 hole is being
co-funded by the EIS.

The Gruyere deposit is par-
ticularly important because it is
the first major gold find in what
industry and EIS research indi-
cates is a promising new mineral
province,” WA Mines and Petro-
leum Minister, Bill Marmion, said.

Such comments highlight
the importance of Gruyere, not
just to Gold Road, but to the ail-
ing Australian gold sector as a

The only question remaining is
whether Gold Road retains its in-
dependence long enough for it to
be remembered as the company
which built Yamarna, as well as
the one which opened the belt

– Dominic Piper

Page 22 GOLD MINING JOURNAL July – September 2015

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Predators and prey
ready to mingle

There is one thing that the recent flurry of corporate activity in the gold sector has assured; come the annual
Kalgoorlie shindig, it will be those in the “Dealers” hats who will be in the ascendency.

Thanks to the glut of deals struck in both gold and base metals, values have now been set and the ground
laid down. The challenge for Diggers & Dealers delegates is to identify the companies who will be launching
takeovers from those who will be fighting them off or praying for such a lifeline.

The Prey has on the now proven Yamarna confident the deal was the right The company is conducting a
belt, the overall package is made one to make but the market is scoping study over two scenar-
Gold Road Resources Ltd more attractive for any company always harsh on companies who ios at its Mt Morgans project in
looking to fill its project pipeline. fail to get the most out of acquisi- WA and plans to have feasibility
Focus of our cover story this tions immediately and the share studies completed by the end of
edition and by far the most obvi- Doray Minerals Ltd price could come under further 2016.
ous target for takeover. pressure.
Undoubtedly second on the Dacian listed in November
As executive chairman Ian most desirable list, any success- It is likely would-be predators 2012 on the back of a $20 million
Murray admitted during a re- ful suitor of Doray would essen- will decide to take a watching IPO and while it still had more
cent interview with Gold Mining tially pick up a company capa- brief until Kelly and his team do than $6 million in the bank at the
Journal: “We are in a strange ble of producing 150,000 ozpa all the hard work of ironing out end of the March quarter, the dif-
space; being a high market cap – enough to take it into the Top the creases at Deflector. ficulty in raising large amounts
explorer but not developing yet. 10 of ASX-listed gold producers of capital may make a corporate
So, for exploration-focused in- – for $107 million, based on the Once that is done and the deal more attractive to share-
vestors, we are perhaps too big current market cap. Doray share price has been ham- holders.
but for some funds as the com- mered down, expect those with
pany grows out of exploration Doray has enjoyed strong pro- cash to pounce on their prey. Gryphon Minerals Ltd
portfolio, we need to get into the duction from its high-grade Andy
development phase to keep with- Well mine near Meekatharra, Dacian Gold Ltd Away from the Goldfields
in their parameters and the cash including a record month of heartland, there is opportunity
will allow.” production in June. The prob- With a dearth of exploration- emerging for bargain hunters in
lem is the company is trading stage targets, Dacian’s recent West Africa.
A market cap of $284 million at an almost 50% discount to its success will undoubtedly place
would suggest the exploration 12-month high. it near the top of any shopping The region’s Australian explor-
company is fully valued but when list. Managing director Rohan ers may have flattered to deceive
that company is in possession There are other challenges on Williams proved during his days in recent years but Gryphon
of the largest Australian gold the operational front. Managing at the head of Avoca Resources – trading at 10-year lows – has
discovery of the last 15 years, director Allan Kelly admits that that he is far from averse to cor- redrawn the scope of its Banfora
valuations are bound to change. there were a few skeletons found porate plays and despite the Da- project in Burkina Faso.
When you add the 5,000sq km in the closet following the ac- cian share price enjoying a good
landholding the company also quisition of Mutiny Gold Ltd and run in 2015, the company could Gryphon was trading as high
its Deflector project. Kelly is still still be willing to discuss terms. as $1.94/share four years ago
and although the heat may have

Page 24 GOLD MINING JOURNAL July – September 2015

come out of the West African given the bubble has been de- Star Resources Ltd’s Bill Bea- from Noble Mineral Resources
gold space, Banfora’s resource flated for so long, perhaps we are ment and Evolution Mining Ltd after initially lending the
of 3.6 moz gold has not shrunk finally in a moment when value is Ltd’s Jake Klein. struggling junior cash through a
and means the project still re- beginning to show. convertible note. Could the com-
mains an intriguing proposition. Of the foreign raiders, Zijin pany employ similar tactics on
WAF has actually enjoyed a Mining has made its full takeo- some of West Africa’s other bat-
An updated scoping study re- good run in the last 12 months, tlers?
leased in July showed an initial having broken the 10c/share bar- ver offer for Phoenix Gold Ltd
heap leach followed by bolt-on rier several times this year on Closer to the Diggers back-
CIL operation would have a pro- the back of a positive PFS for its and has long-held ambitions to yard, Saracen Mineral Hold-
ject NPV of $210 million. Mankarga 5 project. ings Ltd has been tipped by
expand its footprint in Australia. some analysts to be preparing
Gryphon’s market cap is far Mankarga 5 is one of the few Of the others, Resolute Min- for corporate expansion.
from the heady days of 2011 and projects in West Africa which is
like fellow Burkina Faso explorer showing signs of progress and ing Ltd is a candidate. Having turned around a sink-
Ampella Mining, it may be time with a number of TSX, AIM and ing ship, Raleigh Finlayson is
for new owners to revive momen- even ASX companies beginning With a new chief executive – full of confidence these days.
tum in the project. to rebuild their interest in the re- In a recent interview with sister
gion, it could be time for Connelly John Welborn – set to take up his publication Paydirt, Finlayson
West African Resources Ltd to put his Dealer hat on again. denied the company was keen
position and recent expansion on inorganic expansion but with
Another Burkina Faso ex- The Predators its Carosue Dam operation now
plorer, West African Resources projects committed to could it be making good money, the window
(WAF) has appointed arch- The first group of predators is of opportunity could be opening.
dealmaker Mark Connelly to its easy enough to predict given that time for Resolute to expand its
board as chairman. Connelly is those companies most likely to
no spiv but he certainly knows do a deal are those who have just footprint in West Africa?
how to dress up a company for done a deal. Therefore, compa-
takeover given his recent history nies looking for white knights are The company has been one of
at Adamus Resources and Papil- sure to be angling to get some
lion Resources. one-on-one time with Northern the quiet achievers of the Aus-

The West Africa space has tralian gold scene and while its
disappointed for a long time but
Queensland operations continue

to perform admirably, its growth

focus is very much West African

with the decision to head under-

ground at Syama in Mali and a

positive outcome from work on

another underground at recently

acquired Bibiani project in Gha-


Resolute picked Bibiani up

July – September 2015 GOLD MINING JOURNAL Page 25


Ramelius times its run

Ramelius Resourc- Blast hole drilling at Kathleen Valley’s Mossbecker prospect below the maiden resource es-
es Ltd’s 2014 timate returned high grade inter-
tory of 451,000t @ 7.6 g/t for [late June]. Both projects as of sections of 10m @ 15.76 g/t gold
master plan is coming from 104m and 10m @ 3.81 g/t
109,000oz gold. June 30 are up and running.” gold from 63m.
to fruition.
Metallurgical tests on Vivien Zeptner said Ramelius expect- “We will do some extra drilling
New managing director Mark and see what that does for our pit
Zeptner says the company is ore have achieved 95% gold re- ed to mine first ore from Kathleen optimisation,” Zeptner said.
one step closer to achieving its
100,000 ozpa gold target follow- coveries, with 60% gravity recov- Valley at the time of print, but “All of that work will happen
ing the start of mining at its two within the next six months. The
newest operations, Vivien and erable. Vivien wouldn’t start producing overall production profile pub-
Kathleen Valley. lished by Ramelius does not cur-
Ramelius intends to mine the until November. rently include any contribution
Ramelius green lit both Vivien from Blackmans and the fact that
and Kathleen Valley for produc- deposit as a three-year under- Ramelius will truck ore from we have some excellent intersec-
tion in May following their re- tions that currently sit outside the
spective acquisitions in July and ground project. both Kathleen Valley and Vivien mineral resource highlights the
September last year. potential positive impact that this
Zeptner said work started on to its Mt Magnet processing facil- project may have on the compa-
And while some might think ny’s future gold production.”
a crystal ball guided Ramelius’ both projects last quarter. ity.
decision to invest in the mines Ramelius has initiated herit-
ahead of the Australian gold mar- “The decline has started at “They are both going to have age and environmental work with
ket’s recent resurgence, Zeptner a view to gaining all required per-
assured Gold Mining Journal Vivien,” he said. an impact [on Ramelius’ produc- mitting by early 2016.
the purchases were more pru-
dent than prophetic. “At Kathleen Valley it’s a simi- tion profile] to varying degrees, Zeptner said the company also
entered into a farm-in agreement
“The primary focus of the lar scenario; we’ve done all the but in the 2016 financial year,” with Clancy Exploration Ltd to
Vivien and Kathleen Valley buys explore its Condobolin gold
was getting a high grade, under- infrastructure on surface – of- Zeptner said.” and base metals project in New
ground mine in respect to Vivien South Wales.
and an open pit mine at Kathleen fices and workshops – and we Exploration continues to be
Valley,” Zeptner said. Ramelius has the right to earn
started mining about a week ago a priority for Ramelius, which 80% of the project by funding $2
“It’s high grade projects that million for exploration over four
you go after because they can announced a maiden years.
stand the test of a changing
gold price. There are many pro- resource at its budding Zeptner said Ramelius gen-
jects around that are more mar- eral manager exploration and
ginal and they go underwater Blackmans project last business development Kevin
pretty quickly with a drop in the Seymour had always been inter-
gold price, which is what we re- month. ested in the Condobolin region’s
ally saw in 2013 and a lot of geology.
2014. We weren’t really pre- The 490,000t @ 2.5
dicting an upturn; we knew “[Seymour] has a different ra-
we needed grade because g/t gold for 39,000oz re- tionale or a different theory on
that’s a buffer against future the mineralisation in that area,”
lower gold prices.” source is appropriate for a Zeptner said.

Kathleen Valley, 50km shallow open pit operation, “He’s long liked it, but we
north of Leinster in Western haven’t been able to structure a
Australia, offers a 1.8 mt according to Ramelius. deal. We are going in low level to
@ 2.8 g/t gold resource for start with. We’ll do an IP survey
163,000oz. The new resource es- to test his theory and possibly
drill a bit later on this year.”
Two open pits, Moss- timate was generated fol-
becker and Yellow Aster, Should everything go to plan,
are expected to produce a lowing recent RC drilling by year’s end Ramelius will be
total of 418,000t @ 4.1 g/t a 100,000 ozpa gold miner and
gold for 56,000oz over a conducted by the compa- on the lookout for more profitable
1.5 year mine life at a cash mines, according to the manag-
cost of $925/oz and AISC of ny in December and Feb- ing director.
ruary, as well as previous “At that point you become a
The Vivien gold project material producer and obviously
was acquired from Gold RC drilling by Harmony you want to be making a good
Fields Ltd and features a margin at that rate to put some
high grade, quartz vein Gold Ltd in 2006. money in the bank and look at
hosted gold lode deposit other high grade opportunities if
with a total mining inven- “It’s just 70m deep and they are around,” Zeptner said.

being 30km north of Mt – Rhys Dickinson

Magnet, again, it fits nicely

into that ‘truck it down to

Mt Magnet’ scenario very

nicely,” Zeptner said.

Deeper drilling carried

A jumbo boring Vivien’s decline out at Blackmans in May

Page 26 GOLD MINING JOURNAL July – September 2015

Emmerson breaks new ground

Emmerson Re- Emmerson is applying the first seismic survey over the Tennant Creek mineral field
sources Ltd has
taken a leaf out of the whole geology of the Tennant ing some diamond drilling at the And, like his Evolution counter-
book of its JV partner Creek field and give us some Goanna prospect, will be co- part, Bills believes some explora-
– Evolution Mining Ltd new ideas about how the whole funded by the Northern Territory tion sizzle could help ignite some
– and is conducting a thing formed.” Government. The Perth-based much-needed interest and finan-
seismic survey over company expects to carry out cial investment into a struggling
the Tennant Creek Evolution has poured about the diamond drilling for a very junior sector.
mineral field in the $4 million into the JV, with the economical $90-100/m.
Northern Territory. Jake Klein-led company required “I think unfortunately with the
to spend $15 million over three “I think it’s testament to the downturn in iron ore – and oil and
A trademark exploration tool years to earn 65% interest in the kind of exploration that we’re gas to a lesser extent – we’ve all
of Evolution, seismic geophysics tenements. doing because you don’t get co- been tarred with the same brush,
has helped the company boost funding for doing drill-outs and so there’s been quite a negative
reserves and resources at its Evolution also has an option to things like that unless you bring feeling about the resources in-
Pajingo and Cracow gold mines spend another $10 million over something new to the table,” Bills dustry as a whole,” Bills said.
in Queensland. two years to acquire a further said.
10% interest. “But if you look at it sector by
Evolution committed to a $15 “What I think is important for sector, that’s not the story at all
million farm-in arrangement with Emmerson expects more than us this year is to make some dis- and as Jake has said, the Aus-
Emmerson over the Tennant $5 million to be spent on explo- coveries or at least move close tralian gold price is actually pret-
Creek field last year and the es- ration at Tennant Creek in 2015, to discoveries. Hopefully some of ty healthy, particularly if you take
tablished producer’s influence including work to the east of the these gold geochemical anoma- into account that cost structures
seems to be rubbing off on the main project area where the lies we’re going to drill in the are starting to come down quite
junior explorer. Billy Boy prospect has already next round of drilling will in fact significantly and I think that’s a
returned some encouraging re- be some of these high-grade dis- good thing for the industry.”
A 60km regional seismic re- sults. coveries.”
flection traverse that will run the With Evolution committed
length of the mineral field began Results from a recent 18,000m Should Emmerson taste dis- to sole-funding exploration ex-
in mid-June and is expected to RAB geochemical programme covery success, it could move penditure for at least the next two
provide both companies with completed earlier this year were relatively quickly through the next years, cash will not be a problem
more detailed information about being assessed at the time of stages of development given the for Emmerson (balance of $5.1
the deeper geology and struc- print ahead of a decision on the company owns the only gold mill million at the time of print) for
ture of the 2,500sq km tenement next phase of exploration. in the region and has easy ac- some time and Bills knows that is
package. cess to infrastructure and power. a major advantage for a junior in
Emmerson’s upcoming ex- the current market.
This will be followed by the ploration programmes, includ-
first 1,200m deep drill hole at the “You need longer timeframes
historic Gecko deposit as Em- Upcoming diamond drilling programmes will be co-funded and a very systematic approach
merson seeks to unearth a ma- by the Northern Territory Government if you’re going to be successful in
jor gold discovery beneath the Tennant Creek – unless it’s just
known copper mineralisation. outright luck – because it is a
tough field and you need to have
Only 8% of all historic drilling these programmes underpinned
at Tennant Creek has penetrated by long-term funding to actually
below 150m while Emmerson be able to do the things we’re do-
has covered less than 6% of its ing,” Bills said.
total tenement package using in-
novative technologies. “You can’t expect to go out and
have a postage stamp-type tene-
Emmerson managing director ment and drill a hole and find a
Rob Bills hoped the survey would high-grade orebody. That’s just
provide some new geological not how it works here.”
context around the formation of
the mineral field. – Michael Washbourne

“The idea in Tennant Creek
is the copper is higher up in the
system and the gold sits under-
neath, but up until the seismic
became available we didn’t have
a technique to look under the
cover,” Bills told Gold Mining

“It’s the first time seismic has
ever been used in the Tennant
Creek field so it’s a pretty excit-
ing survey. It could rewrite the

July – September 2015 GOLD MINING JOURNAL Page 27


ABM focused on next milestone

ABM Resources vidual targets close to Old
NL manag- Pirate.

Reconnaissance work

ing director Darren and mapping at the Vam-
Holden’s phone has pire prospect, north of Old
Pirate, is continuing after

rarely been away from assays up to 161 g/t gold
his ear since the first were reported last year.
gold bar from the Old Several samples of quartz
vein with visible gold have

Pirate deposit was also been collected.
poured on June 18. Work programmes for

the series of adjoining ten-

ABM celebrated the pouring of its first gold bar from Old Pirate in mid-June ements ABM recently ac-

“I’ve probably had more calls quired from Altura Mining

on that than anything that’s ever ue adding across the business.” Holden said a staged ap- Ltd, taking the company’s total

happened,” Holden told Gold The high-grade Old Pirate proach to mining at Old Pirate ground holding in the Northern

Mining Journal in early July. deposit is part of ABM’s expand- was the best option available to Territory beyond 50,000sq km,

It is a perfect example of the ing Twin Bonanza project, about the business because it carried a are also in development.

current demand from investors 14km east of the Western Aus- much lower capital risk. “We haven’t done a lot of ex-

to see junior explorers transition tralia-Northern Territory border, “Our orebody has some com- ploration in the last few years

into production and realise im- and has been the company’s pri- plexities which we’ve never shied while we’ve been focusing on

mediate value from the improving mary focus for the last two years. away from and it’s the kind of production of Old Pirate, but

Australian dollar gold price. A successful trial mining orebody that will never have a re- now we’ve moved into the de-

While production has long process in 2013 produced a ally long mine life, but could keep velopment, commissioning and

been the main target for his com- head grade of 15.4 g/t gold and going provided we maintain our production phase, we’ve started

pany, pouring first gold is a mere prompted the company to look at close observation of the geology to do some more exploration,”

milestone for ABM in the North- its near-term production options. and we understand the system,” Holden said.

ern Territory, Holden says. ABM snapped at the chance Holden said. “It’s where a lot of the true

“This whole industry is a se- to push ore through Tanami Gold “We probably could have had value lies, isn’t it? The idea is

quence – there is a beginning, a NL’s 240,000 tpa Coyote pro- a conversation about buying that you make a little bit more than

middle and an end to just about cessing plant, about 77km from plant from Tanami Gold, or build- the value of the commodity itself

everything that goes on, whether Old Pirate, under a lease agree- ing our own plant for that mat- in the ground via mining, but the

it be exploration to discovery or ment with an option to purchase. ter, but we felt that what was the true value is created on discov-

discovery to mining and that first Commissioning of the plant best thing from our shareholders’ ery where you convert rock that

gold bar,” Holden said. was continuing at the time of point of view is to lease the plant has no value into something that

“First gold, to me, is a mile- print. ABM intends to process because at the end of the day we has real value.”

stone, but it is a milestone and 150,000t of ore in the first year don’t need the plant, we need the Holden said Northern Star Re-

not a destination. The destination and will operate the plant on a gold. sources Ltd’s recent venture into

is long-term sustainable produc- campaign milling basis of two “If we get comfortable with the Tanami district had reminded

tion, multiple discoveries and val- weeks on and one week off. the orebody we can elect to pur- his company just how prospec-

chase if need be. We tive it was, describing it as “the

also have the ability to best available Proterozoic min-

walk away, but I think it’s eral belt in the world”.

safe to say that our aim The underexplored nature of

is to build a long-term the sand-covered region, which

sustainable gold mine also hosts Newmont Mining

and that will require us Corp’s Callie-Granites opera-

to move towards a pur- tions, has ABM’s geology team

chase at some point.” confident of unearthing a major

With production plans discovery with further drilling.

for the next two years “We’re not going to have a min-

now all but settled, ABM eral future unless people can be

is relishing the chance bold enough to go and drill those

to restart exploration holes like what happened for Sir-

work around the wider ius [Resources NL] at Nova and

Twin Bonanza gold Gold Road [Resources Ltd] with

camp. Gruyere,” Holden said.

Exploration pro- “You’ve got to have courage

grammes kicked off to drill those holes and test deep

early last quarter, with targets. In the Tanami district,

about two-thirds of a due to low levels of previous ex-

15,000m shallow drilling ploration, many of our targets are

campaign completed by also in the near-surface.”

early July, along with – Michael Washbourne
ABM has adopted a staged approach to mining of the high-grade Old Pirate deposit drill testing of eight indi-

Page 28 GOLD MINING JOURNAL July – September 2015

Hanking Gold catches M&A bug

Emerging Chinese- needed foreign investment from Hanking Gold has 600,000oz of available gold reserves
backed producer cashed-up Chinese stocks. at its Southern Cross operations
Hanking Gold Mining
Pty Ltd has flagged Hanking Gold is expected the central Cornishman deposit, of room to improve on the costs,
the acquisition of a to produce 100,000oz from has added 222,000oz to the re- given the changes in the mining
second Australian its Southern Cross opera- serves and more than $100,000 industry,” Qiu said.
gold asset. tions this year and has flagged in value to the Southern Cross
steady growth in produc- operations, according to feasibil- “We are producing 13,000
Just months after restarting tion to 140,000oz in 2016 and ity study estimates. ozpm, the new cyclones are
operations at the mothballed 160,000oz in 2017. ready, the gravity circuits are
Southern Cross gold mine, the It will be the company’s big- fully operational and our recov-
company has tabled an offer for C1 cash costs and all-in sus- gest open pit and is forecast to eries are up to 92-93%, up from
another producing asset it wants taining costs are estimated at generate $80.5 million in free- 86-87% from a few months ago.”
to add to its portfolio. $700/oz and $1,000/oz respec- cash flow and an IRR of 218% for
tively. C1 cash costs of less than $800/ Qiu, a former long-serving ex-
Hanking Gold managing di- oz over the initial three years of ecutive at SinoGold Mining Ltd,
rector Mark Qiu told Gold Min- “By 2018 we hope we can pro- mining. expects more Chinese-backed
ing Journal his company had duce more than 200,000 ozpa companies to take a closer look
assessed the potential of three from this operation,” Qiu said. “In Australia we believe there at the Australian gold mining in-
gold projects in Australia, with is lots of potential for discovery dustry in the wake of the down-
one emerging as the preferred “That certainly is more than and also the cost structure has turn in the iron ore markets.
acquisition. we thought we could produce downsized and there is still lots
from our original mine plan when “We have a good relationship
However, it could be a while we acquired the operation. We’re with the Chinese financial indus-
before the subsidiary of Hong just trying to make the best of try and we can access capital
Kong-listed powerhouse China what we can from these assets.” relatively easy from China and
Hanking Holdings Ltd finds out if that’s what I see is the advantage
its bid for the undisclosed asset When Hanking Gold acquired for Hanking Gold,” Qiu said.
has been successful. the Southern Cross operations,
near Kalgoorlie, from a struggling “In the last two months Shang-
“We have made an offer on St Barbara Ltd in April 2013, the hai has become the second
one and we’re waiting for the re- project had 2.4 moz gold in re- biggest stock exchange in the
sult, but it may take a long time,” sources but no reserves. world, second only to New York,
Qiu said. so there’s lots of capital in China
Following some aggressive and we want to take advantage of
“It’s a good market for new exploration over the past two that situation.
acquisitions and we looked at years, the total resource base
three projects because we want for the 930sq km project area “We want to use the technical
to grow the gold business.” now sits at 3 moz and the avail- strengths of Australian mining,
able reserves are a very healthy exploration and services and
A second producing asset is 600,000oz. then have the advantage of being
also central to Hanking Gold’s able to access capital from China
plans to spin out from its iron ore- Mining is currently taking and Hong Kong.”
focused parent company and place at the Cornishman South
float on one of the ASX, SEHK or open pit and Nevoria East under- – Michael Washbourne
SGX public markets. ground deposits. Open-cut min-
ing at Axehandle is expected to
Qiu previously stated his fa- start as soon as possible.
voured bourse for a gold com-
pany was the ASX, but recent Axehandle, about 7km from
market activity and investor sen-
timent has forced a change in Mark Qiu

“We are trying to compare and
see which one is best and at the
moment the Hong Kong market
is looking pretty good, but we
haven’t made our decision yet as
we are continuing to investigate,”
Qiu said.

“At the same time we are look-
ing for new acquisitions in Aus-
tralia and we want to consider
having possibly two operations
before we list the gold business.”

Any new acquisition would
certainly put Hanking Gold on
the map in Australia and signal
the likely return of some much-

July – September 2015 GOLD MINING JOURNAL Page 29


Southern Gold fires first
salvo at Canon

When Southern Metals X’s Jubilee mill at its a PFS into a potential sce-
Gold Ltd starts South Kalgoorlie operations
mining at Canon in and profits from Stage One nario indicating the Canon
August, it would have open pit material split 50/50,
defied critics betting while there is also an option underground was viable at
against the company regarding potential under-
becoming a miner. ground activities that can be $1,500/oz.
“I think there was a bit of scep- “I hope in the next few
ticism about us going ahead with Total upfront capital costs
this, but this is real and it will hap- of $895,000 will be covered months we will have an idea
pen. We should start the physi- by the financier and opera-
cal act of mining in the next six tor of the project – Metals of what the medium term
to eight weeks,” Southern Gold X – with Southern Gold ex-
managing director Simon Mitch- pected to reimburse the full looks like. We will launch
ell told Gold Mining Journal in amount by mid-2016 from
early July. projected cash flows. the small open pit as soon

The company, along with Can- Cash margins from Stage as possible and I would like
on’s co-developer Metals X Ltd, One have been estimated at
pushed the button on project go- $350/oz which will give Southern to be able to articulate a
ahead in June. Gold money to play with.
clearer strategy for inves-
Initially, Stage One at Can- “We will be in a pretty elite
on, 30km from Kalgoorlie, will position for a junior with several tors from there,” Mitchell
comprise an open pit operation million dollars in cash flow for
of 152,000t @ 3.1 g/t gold for a number of years. We will use said.
15,000oz (13,500oz gold recov- that to position ourselves to see
ered) at total costs, including what’s around because we know One thing Southern Gold
$66/oz capital costs, of $1,150/ there are plenty of unloved as-
oz. sets out there,” Mitchell said. is clear on is being fully fo-

Ore will be processed through While keen to participate in Simon Mitchell cused on the Kalgoorlie re-
project acquisitions in the future,
Southern Gold’s foremost con- gion.
cerns are at Canon.
753,207t @ 3.75 g/t gold for The company did have an in-
Resources at Canon are
90,927oz terest in Cambodia, however, it

“The Stage One open pit is just executed a sale, purchase and

the beginning,” Mitchell said. JV agreement with Mekong Min-

“We have a number of options erals Ltd in June.

at the project; we could opt for a The agreement sees Mekong

larger open pit which could oper- take over Southern Gold’s sub-

ate for a number years. It could sidiary in Asia.

unfold in many ways, as we start In return, Southern Gold re-

to mine the open pit our under- ceives a 15% free-carried inter-

standing of the geology will go up est and 2% gross sales royalty

tenfold.” in the Kratie North, Kratie South

The company has not dis- and Memot projects.

counted the prospect of an un- “We have done a deal in Cam-

derground operation either, with bodia where we don’t have to

spend any money or manage it

and if anyone can make a crack

at finding a discovery they can

[Mekong],” Mitchell said.

“Our focus is the Kalgoorlie re-

gion and developing something

substantial there.

“For a small company it is dif-

ficult to do justice to something

offshore when we are focused in


Mitchell said he believed the

potential was good for discover-

ies in Cambodia and other parts

of Asia, however, some of the

jurisdictions in the region were

becoming increasingly difficult to

work in.

“We think the political or sov-

ereign risk has gone up a few

notches. Some of the risks in

those [Asian] jurisdictions re-

quire a lot of corporate effort,

which for a small company like us

in Kalgoorlie, is not in our sphere

of influence right now,” Mitchell


With cash to burn, Southern Gold is set apart from other gold juniors – Mark Andrews

Page 30 GOLD MINING JOURNAL July – September 2015

Boorara shines as gold
stocks climb

Macphersons Recent drill core shows the potential for high grade gold down to nouncement is drill holes capped
Resources Ltd’s 40m beneath Boorara’s current ore reserve and pit design at 100m, if you consider that the
Boorara gold project nearest mine goes down 1,400m
can no longer be menting a conventional process- circuit. That’s the even more ex- with the same geology, potential-
referred to as Nimbus’ ing circuit. citing part of the study that’s un- ly there is 14 times the opportu-
measly little sister, der way at the moment.” nity at depth.”
according to manag- “If we went to conventional mill
ing director Morrie and agitated leach processes Goodz said Macphersons Goodz was also buoyed by
Goodz. we would increase the recover- hoped it had merely discovered the fact Macphersons had only
ies substantially and that would the tip of the iceberg at Boorara. explored the first 100m of a 2km
The recent resurgence of the increase the size of the deposit strike, which itself was part of a
Australian gold price has prompt- and therefore the conversion To date 90% of the company’s 20km structure.
ed Macphersons to take Boorara of resource to reserve,” Goodz drilling has not tested depths
from the bench and put it back in said. beyond 70m and Goodz is con- “If you consider that we’ve only
play; a move which now looks to fident there’s a much bigger tested that tiny little bit … less
be a potential game changer for “We’ve done some tentative story below Boorara’s current than 2% of our tenement oppor-
the company. studies and it suggests that the resource. tunities … from that perspective
pits will be essentially double the sky is the limit,” Goodz said.
Macphersons’ renewed focus their size at present. The pits that The managing director said
at Boorara resulted in a change we designed for the heap leach, the project shared structural In addition to its work on
of strategy late last year. we really only designed them to similarities to Kalgoorlie Consoli- Boorara, Macphersons also in-
mine the oxide and some of the dated Gold Mines’ Mt Charlotte creased Nimbus’ mining invento-
The discovery of strong con- transition ore. But the fresh ore operation, which is only 12km ry to 12.1mt @ 0.2 g/t gold, 52 g/t
tinuity of gold between a series is actually a higher grade. Taking away, 1,400m deep and has silver and 0.9% zinc containing
of planned open pits encouraged that into consideration, with the been mined for more than 50 78,000oz gold, 20.2 moz silver
Macphersons to revise its plan to higher grade and much larger years and 104,000t zinc.
develop Boorara as a maximum deposit in the fresh rock, all of
three open pit project – rather sudden we can justify having a “When we look at the geology, The growth represented a 66%
than the company’s original sev- much larger open pit and tradi- Boorara is exactly the same,” he jump in the project’s gold stocks.
en pit proposition. tional milling and carbon leach said.
Goodz said gold occurred in
A rigorous infill drilling pro- “When you think that all we are two ways in Nimbus – as a by-
gramme earlier this year resulted talking about in this reserve an- product to its massive sulphides
in a huge bump in Boorara’s re- and in quartz veins adjacent to
source to 10.8mt @ 1 g/t gold the main deposit – and Macpher-
containing 340,000 oz. sons was examining the best way
to extract its full value.
“The infill drilling increased the
size of the resource substantially, The resurgence was not only
by 47%, and then when we did a win for Macphersons, but for
our modelling based on a heap Kalgoorlie as a whole, according
leach processing facility that we to Goodz.
had the PFS completed on, that
suggested an increase in the re- He expected the mining hub to
serve by 32%,” Goodz told Gold be “buzzing” come Diggers and
Mining Journal. Dealers.

“Effectively that was one great “Diggers always brings its own
outcome of the work, but the effervescence and excitement to
second great outcome was an in- the town, but the industry is see-
crease in the size of the deposit ing a lot of mergers and acquisi-
such that the grade appears to be tions, particularly on gold assets,
going higher as we go deeper.” and so Kalgoorlie will be the fo-
cus of attention when people are
Engineers overseeing the talking about project and compa-
evolution of Boorara said the ny developments,” he said.
continuity of the project’s gold at
depth warranted more investiga- “That’s really what Diggers
tion, specifically regarding the is about: new discoveries, new
proposed processing method. developments and new deals.
I think gold is very much the fo-
Macpherson subsequently cus and flavour of the market and
kick-started studies to evaluate Kalgoorlie will shine during Dig-
the upside of moving away from gers.”
a heap leach process and imple-
– Rhys Dickinson

Recent test work has revealed the presence of a second dolerite zone with
significant gold bearing mineralisation at Boorara

July – September 2015 GOLD MINING JOURNAL Page 31


Sheffield in the Fraser
Range spotlight

Sheffield Resourc- Sheffield’s exploration efforts in the Fraser Range appear to have struck a ers this year.
es Ltd has created chord with investors Potential suitors may be aware
some excitement in
the market of late, is anticipated to begin in 2018. The company can be excused that the seven gold exploration li-
however, managing “We hope to deliver an update for focusing on its most advanced cences recently granted to Shef-
director Bruce Mc- project, but the inherent value of field were once in the hands of
Quitty can’t figure out on the PFS in the next three to its Fraser Range prospects – in- AngloGold Ashanti Ltd and Sipa
exactly what is captur- four months and then we will cluding seven gold targets iden- Resources NL.
ing investors’ atten- need to raise some more capital tified by explorers honing in on
tion. to get us through the DFS stage,” Tropicana-style gold mineralisa- McQuitty said AngloGold and
McQuitty said. tion – are not being ignored. Sipa had spent large amounts of
The company is currently money on geochemical explora-
updating its PFS on the Thun- Bruce McQuitty “We are not going to rush tion and shallow aircore drilling
derbird minerals sands project, out there with a drill rig straight on the properties, but despite en-
near Derby in Western Austral- away,” McQuitty said. couraging results no concerted
ia’s north-west, while building efforts have been made to follow
momentum at its suite of nickel “We are examining alternative up with drilling.
and gold prospects in the Fraser ways of funding the Fraser Range
Range. exploration for nickel, copper and Aircore drilling by AngloGold
gold, and if we receive a bit of at the Dragon Fly prospect re-
Its most recent announcement interest there then we could go turned a best hit of 9m @ 1.3 g/t
at the time of print was related to with a JV arrangement or even gold from 24m, including 4m @
the identification of 12 gold and consider an outright divestment 2.67 g/t from 28m.
nickel targets on newly granted of certain projects. If we don’t
tenements at its Fraser Range get the arrangement we want, AngloGold struck similarly en-
project. then we will look to sole fund the couraging hits at Scorpion (2m
exploration once we have raised @ 2.6 g/t gold from 115m), Theo-
The news resulted in a 17% more capital.” frastos (10m @ 1.29 g/t gold from
spike in share price for the com- 64m, including 1m @ 7.8 g/t from
pany, which was trading at its McQuitty said Sheffield had 71m), Heraclitus (1m @ 9.1 g/t
highest levels – 57.5c/share (at conjured some good interest gold from 93m), Leuccipus (7m
the time of print) – since May. in its Fraser Range projects for @ 0.37 g/t from 20m to end hole,
some time and hoped to promote including 1m @ 1 g/t gold from
“I am not certain [what’s caus- them further at Diggers & Deal- 26m) and Leila (2m @ 1.46 g/t
ing the interest in the company], gold from 20m and 5m @ 0.24
but this announcement follows g/t from 24m).
the one we put out in June re-
garding some compelling results “I think the main message is
we put out on our Red Bull nickel that a lot of gold mineralisation
project at the Stud target,” Mc- has been identified and there is
Quitty said. lots of smoke. It is in a very prom-
ising structural setting and basi-
“The Stud target is a combina- cally there are identified targets
tion of a bedrock conductor and to be drilled and in some cases
strong geochemical anomalism walk-up drill targets,” McQuitty
in aircore drilling, so it has a lot of said.
the right criteria for a nickel de-
posit. I think our good quality tar- “The remainder of that belt has
gets in that part of the world have basically had one pass of explo-
attracted investors’ interest. Peo- ration by either AngloGold in JV
ple may also be waking up to our with Independence [Group NL]
Thunderbird project as well and in the Tropicana JV or the likes
recognising that we have been of Sipa Resources who also joint
oversold on the PFS we put out.” ventured some of their projects
with Newmont [Mining Corp]. It
In May, Sheffield released a is still relatively underexplored,
PFS indicating the viability of certainly more underexplored
a 32-year mineral sands pro- than lots of the greenstone belts
ject producing 114,000t zircon, in the Yilgarn.”
439,000t ilmenite and 30,000t
HiTi84 leucoxene from Thunder- The tenements recently grant-
bird. ed to Sheffield, are 240km south
of the 3.6 moz Tropicana gold
Commissioning of the project mine and 30km north-west of
the Nova-Bollinger nickel copper

– Mark Andrews

Page 32 GOLD MINING JOURNAL July – September 2015

8 October 2015
Pan Pacific Perth

Register now for Australia’s
only nickel event

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

Images courtesy of Western Areas NL


Matsa puts Mt Henry
on the table

Matsa Resources a corker of a project.”
Ltd’s Mt Henry Alternatively, if the gold price
gold project appears
to be the gift that did find some legs and started
keeps on giving. running, a buyer would be laugh-
ing all the way to the bank.
In 2012 Matsa sold 70% of the
Poli said the project was very
project to now JV partner Pano- sensitive to the gold price and a
$100 jump in the gold price would
ramic Resources Ltd for a cool see Mt Henry’s predicted $40
million NPV more than double.
$5 million cash and 14 million
Two Australian banks have
fully paid Panoramic shares. also provided indicative term
sheets for debt financing of the
And now, almost exactly three project, which Poli said indicated
a significant portion of the project
years later, Matsa executive could be debt funded.

chairman Paul Poli hopes the A recent spate of mergers and
acquisitions gave the executive
West Australian asset will deliver director confidence Mt Henry
would be snapped up shortly.
again as the company looks to
“My view is that the world is
offload its remaining 30% stake not a bad place, and that’s good
for gold,” he said.
in the project following the re-
“I think that it’s worth look-
lease of a tantalising DFS. ing at the activities of Northern
Star [Resources Ltd], of Metals
Mount Henry’s DFS is com- X [Ltd] and others. They are very
aggressive at buying gold as-
pelling reading: 21.1mt @ 1.41 sets and I think that is confirma-
tion of my view that gold is posi-
g/t gold reserve containing tive. They’re putting their money
where their mouths are. We ex-
961,000oz to be mined by con- pect the project to sell fairly read-
ily. We expect to achieve a sub-
ventional open pit methods. stantial sale price. I think the sale
price will surprise many people
Ore is intended to be pro- Matsa’s exploration team sampling historic drill holes at Mt Henry – but it won’t surprise us.”

cessed on site through a central- Poli said a sale would do won-
ders for Matsa, ensuring the
ly located 3 mtpa conventional Henry was the best path forward it or spinning it out into an IPO. company’s longevity, enabling
it to continue exploration in the
CIL process plant at an average for Matsa. We are doing that as I speak in Fraser Range and Thailand and
providing the capital to develop
gold recovery of 90% over a 7.3 “I am loathe to sell it, because conjunction and collegiately with or purchase a going concern
mine life. I think its potential is huge,” Poli Panoramic.”
The project will take 16 months told Gold Mining Journal. Poli said one of Mt Henry’s big- “We like all of our assets, we
manage our cash carefully, we
to construct at a total capital cost “We would prefer not to sell gest selling points was the sheer are not entirely enamoured with
everything and we take a prag-
of $186 million. it, but I don’t want to put the amount of work that had gone matic view of all of our projects
and hopefully that determination
Mt Henry’s predicted life- company in a position where it into the project to date, which and sensible view will reward
shareholders long term and we
of-mine cash costs come in at is severely diluted in raising the would give a buyer confidence in think the monetisation of Mt Hen-
ry for Matsa will be significant,”
$1,024/oz and AISC at $1,106/ capital required to put it into pro- the future of the project. Poli said.

oz, reaping an EBITDA of $366 duction. “The other thing that’s attrac- – Rhys Dickinson

million over the life of mine and “Panoramic have their reasons tive is that you’re producing gold

post-tax cash flow of $120 million why they’d be interested in the from the first shovel,” Poli said.

over the mine life. sale, but from Matsa’s point of “There’s no lead time to pro-

Poli said although it seemed il- view it’s purely capital. It’s a good duction once you commence

logical to talk about selling such project and we are going to try mining activities. The whole pro-

a cracking asset, monetising Mt and monetise it by either selling ject is licenced and ticked off. It’s

ready to go right now. There are

so few brand new, bulk tonnage,

open cut gold deposits remaining

in the country.”

Buyers would also be en-

thused by the recent uptick in the

Australian gold market and the

travails of the Australian dollar,

according to Poli.

“If you read all the pundits’ pre-

dictions they say the price of the

Australian dollar is going to come

down,” he said.

“Even if the price of gold is not

going to significantly increase in

Mt Henry boasts a 21.1mt @ 1.41 g/t gold mining US terms it will increase in Aus-

reserve containing 961,000oz sie terms and you’ll have yourself

Page 34 GOLD MINING JOURNAL July – September 2015

Chen bids farewell to Norton

Departing Norton was acting as a “bridge” between Dianmin Chen ton’s Paddington operations and
Gold Fields Ltd Australia and his native China. have since been integrated into
chief executive Dian- to $960/oz in 2013, $880/oz in the company’s portfolio.
min Chen has left the “I’ve helped Australians into 2014 and the company remains
door open for a pos- China and I’ve helped the Chi- confident of hitting an even lower Norton, now as a wholly
sible move into the nese into Australia, so I have mark in 2015. owned subsidiary of Zijin, is look-
blossoming base met- been a bridge on both sides,” ing to acquire the assets of strug-
als space or the strug- Chen said. Conversely, production has gling junior Phoenix Gold Ltd, a
gling iron ore sector also increased from 150,000oz move that will potentially lift the
– but gold remains his “My position has always been in 2012 to 172,000oz in 2013, company’s resource base be-
commodity of choice. a bit of a pivot point. Our main 178,000oz in 2014 and is tipped yond 40 moz.
shareholder has a Chinese cul- to surpass 190,000oz in 2015.
Chen will step down from the ture, but our workforce and our “My experience in M&A has
role later this quarter following community has an Australian cul- “When I took over Norton, the helped me to understand the
Norton’s delisting from the ASX ture, so my role is really to be the price was high but as a leader of other side of the business and
on July 1 after major shareholder bridge and put these two cultures the company you really need to helped to have a good valuation
Zijin Mining Group Co Ltd ac- together and be able to set up a know what comes next, so that’s on the ASX,” Chen said.
quired 100% interest of the com- new culture. why we started our cost-cutting
pany. much earlier than anybody else,” “I think in the last three years
“You can’t let one culture dom- Chen said. the M&A experience has given
As part of the corporate re- inate or let the two cultures fight me a lot more confidence in
structure, Norton is relocating its each other. If you pit two cultures “These are just the hard num- terms of understanding how
head office to Kalgoorlie but the against each other, it’s only go- bers to show we turned the com- we look at the asset, how we’re
popular Chen will remain in Perth ing to drag the company down. pany around and achieved those going to run the asset and how
with his family and pursue other If you want to be successful in a targets, but there is still a long we’re going to maximise the in-
business opportunities. different culture, you need to put way to go to cater for all unex- vestment.”
the positive sides of both cultures pected situations.
“At the moment I think the together to generate some posi- Chen, who first came to Aus-
mining/resources industry is still tive results.” “I don’t know where the gold tralia in 1990 to complete a PhD
in good shape and maybe it’s a price will go, but we work as a on rock mechanics at the Uni-
good opportunity for setting up Chen’s appointment in August team to try and reduce our costs versity of Wollongong, expects
something new,” Chen told Gold 2012 coincided with Zijin acquir- to the minimal level and keep do- China’s love affair with the coun-
Mining Journal. ing a controlling stake in Norton, ing our best to reduce our costs try to continue for some time and
which has been plagued by high and increase our production.” he will again act as a “bridge” be-
“I’m thinking possibly in gold or cash costs and inconsistent mar- tween the two cultures when and
base metals, or possibly in iron gins for several years prior. It is no secret Chen is a fan of where required.
ore. I want to set up something M&A – and he has a strong track
new which can play an important Against a falling gold price, record of success to go with it. He will also continue to have
role in the resource development Chen helped Norton success- In 2013, he led a friendly merger an ongoing role with the Gold
of Western Australia or possibly fully reduce group C1 cash costs with Kalgoorlie Mining Company Royalties Response Group,
[other parts of] Australia. across its Kalgoorlie operations Ltd and last year he orchestrated where he has become one of
from about $1,400/oz in 2012 the unsolicited takeover of Bul- the main figureheads in the cam-
“We’ll be talking to the inves- labulling Gold Ltd. All acquired paign against a proposed gold
tors and talking to the govern- assets had obvious links to Nor- royalty hike by the WA Govern-
ments and any other interested ment.
parties who will be able to help
us set up a team and set up a “The reality is there are a lot of
project. These low prices always gold mines which closed down
offer the best opportunities and due to the gold price coming
I’m pretty sure I will be able to do down in the last couple of years
it again and maximise value for and I think the Government is
the investors.” obligated to understand the diffi-
culties being faced by the indus-
Chen – who has worked for try and to listen to the industry,”
Barrick Gold Corp, Rio Tinto Ltd Chen said.
and SinoGold Mining Ltd since
arriving in Australia 25 years ago “I can’t make the decisions for
– gave the country’s gold mining the politicians, but any increase
industry a glowing endorsement in the gold royalty will cause jobs
and predicted good times ahead to be lost and put the industry in
for the sector despite the current a difficult situation. It’s not a good
malaise. thing to do, so we are against any
increase in the gold royalty and
In his three years in the top job we will fight any increase in the
at Norton, Chen has helped the gold royalty.”
company achieve plenty, includ-
ing two M&A deals and another – Michael Washbourne
in the pipeline, but his biggest joy

July – September 2015 GOLD MINING JOURNAL Page 35


IronClad drops iron ore
bundle for gold

Mining industry The Challenger mine has been the focus of attention, however, there are many more
veteran Ian Finch untouched opportunities within striking distance of the 1 moz gold mine
is shaping up to take
IronClad Mining Ltd Finch said there were in the and Camp Fire Bore prospects at IronClad has the upside in terms
into a new era. order of 300 anomalies in the Jumbuck. of what is around [Challenger].
original surface calcrete surveys We actually own 100% of the
Earlier this year Trafford Re- that were as big or bigger than IronClad owns 53.4% of Golf ground in parts of the area and
sources officially merged under the anomaly at Challenger. How- Bore and Camp Fire Bore (1m @ control the gold JV with Kings-
the IronClad umbrella and to re- ever, the Challenger anomaly at- 25.3 g/t gold from 118m and 3m gate. What Kingsgate can sell is
flect the combined entities focus, tracted the most attention. @ 6.7 g/t from 142m from previ- what is down the mine and that is
it has been proposed IronClad be ous drilling), with Kingsgate hold- it. I think some of the buyers, as
re-branded Tyranna Resources. “I think 40 of the 300 anoma- ing the remaining interest in the I understand, that have looked at
lies were ever looked at and of JV. it are concerned by the increase
Shareholders will ratify the those only eight of them pro- of cost in producing gold and
name change in the near-term, duced commercial levels of It is known that Kingsgate will deeper levels of the mine while
however, work has started on gold,” Finch said. entertain the potential to offload ore at that particular mine is run-
the company’s flagship Jumbuck the Challenger mine, as costs ning out,” Finch said.
gold project, 45km from Kings- “The merger has presented are starting to spiral and ore re-
gate Consolidated Ltd’s 1 moz the company with a plethora of serves are depleting. Finch is certain there is nearby
Challenger gold mine. opportunities and we see the potential to feed the Challenger
major one as the gold opportu- Kingsgate reported production mill and time will tell how quickly
At the time of print, IronClad nity around the Challenger mine of 18,639oz gold @ 4.49 g/t at IronClad can be a part of the pic-
was waiting for a crew to arrive in SA.” operating costs of $US1,049/oz ture.
at Jumbuck and start a 6,000m in the March quarter. The head
drilling programme, to be partial- The upcoming drilling pro- grade was lower in the quarter The immediate challenge is to
ly funded ($75,000) by the South gramme will comprise a com- due to orebody complexity and produce head turning drill results
Australian Government’s PACE bined 110 aircore and RC holes scheduling constraints. and promote IronClad’s vision for
initiative. at the Golf Bore, Golf Bore North Tyranna.
A review of the mine plan con-
With Jumbuck in an area of the Ian Finch tinues, with mine life currently “As most things in the mar-
north-western Gawler Craton re- dependent on further drilling ket at the moment, the merger
gion previously locked up by the and successful conversion of re- was received with a resounding
Woomera Prohibited Area, com- sources to reserves. yawn. Irrespective of that, that
panies have found access to the is what we had to do and that is
region difficult. As it stands, reserves at Chal- what we have done,” Finch said.
lenger are expected to be ex-
However, the SA Government hausted by the end of financial “We knew it was going to be
and Australian Defence Force year 2016. a long process and we knew it
have opened the area up to ex- wasn’t going to get the market
plorers, which could spurn an Therefore, any mining poten- excited straight away, but we did
exciting new chapter of mineral tial uncovered in the Kingsgate/ it for the longer term strategy,
discoveries in the State. IronClad JV may be an element than just getting excitement out
worth considering for suitors pre- of the market.”
“When you look at all of the pared to take a punt on the exist-
data there is a pipeline of pro- ing Challenger mine. – Mark Andrews
jects around the area which is a
very exciting area,” Finch said. “If I was a buyer of Kingsgate I
would want the upside and I think
“Over the last 15 or 16 years
Dominion and Resolute [Min-
ing Ltd] have gone and had a
sporadic look and realised there
is gold all over the place. I am
always using the term that the
area is ‘polluted with gold’ within
a 50km diameter of Challenger.
There are eight projects where
any one or more of those pro-
jects could be a major project or
provider of ore to the Challenger
mill or even a Challenger look-
a-like [deposit], so there is huge
amount of opportunities. I think
that is the major story going to
come out is that Challenger is not
alone out there.”

Page 36 GOLD MINING JOURNAL July – September 2015


Mark Andrews Dominic Piper Bill Repard Tammy Caldwell


M: (+61) 407 477 697 M: (+61) 424 934 494 M: (+61) 418 768 578 M: (+61) 413 085 536
E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Michael Washbourne Rhys Dickinson Tony Mwarey Melita Fogarty


M: (+61) 400 956 703 M: (+61) 421 336 909 M: (+61) 451 280 482 M: (+61) 420 495 163
E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Come see us at booth #009

at Diggers & Dealers


Inca eyes partner with new permit

Inca Minerals Ltd subjected to significant would return to the site of
has faith the adage, amendments as recently
as January. its last drilling campaign,
CH-DDH012, which net-

‘Good things comes Brown said the up- ted a standout intersect of
to those who wait’ will dated permitting system 55m @ 2.3% copper, 0.6
ring true at its flagship extended the rights of the g/t gold and 42.9 g/t silver.
permit holder, while at the
“The new targets are

Chanape project in same time increasing the quite compelling, but our
Peru. protection of the environ- last hole, CH-DDH012 …
ment and local communi-
we are going to go back to

ties. that and approach it from

Inca returned to drilling last Although frustrated another angle and plat-

month after almost a year while by the waiting game, the form to see if it grows into

it waited for an upgrade to its ex- drilling pause appeared something significant,”

ploration permit at Chanape from worthwhile when Inca Brown said.

the Peruvian Government. was finally granted its “It will be hole 13 – un-

Inca exhausted the limits of its sdEIA, which granted lucky for some, but that

previous DIA permit last August, it access to 100% of its will go straight into the

which restricted it to exploring land holding for the first mineralisation that’s in

just 10% of its land holding and time and a green light to CH-DDH012. That’s a rel-

drilling from a maximum 20 pads. pursue up to 22,500m atively deep hole that will

Managing director Ross drilling over two years. not only target the miner-
Brown told Gold Mining Jour-
nal while he was well aware the Inca was far from idle alisation in CH-DDH012,
during the application but also some very strong

Government would take time to process, using the time surface gold mineralisa-

accept its application for a semi- to cut the fat from its busi- tion. We are hopeful that

detailed environmental impact ness. will be positive for us,

assessment licence (sdEIA), the “In the interim period Channel sampling being undertaken by community and then we’ll move up to
approval took much longer than we sharpened our pen- members at Inca’s Summit prospect, Peru Summit.”
the company anticipated. cils and we cut significant Brown had his fingers

“The larger (sdEIA) permit has costs,” Brown said. physics work. crossed Inca’s new exploration

a lot more scrutiny by the Gov- “Administration-wise, we prob- Brown said the company iden- permit, coupled with some fa-

ernment and a lot more opportu- ably cut our costs by half. We tified multiple attractive surface vourable assays in the near fu-

nity for things to get clogged up reduced our overheads, moving targets warranting follow up in ture, would woo a prospective JV

in the system,” Brown said. away from West Perth into Subi- the coming months. partner for Chanape.

“Whereas a permit should aco for one, and reduced the A first phase channel sampling He said numerous major com-

have taken three to four months amount of staff without decreas- campaign targeting previously panies had contemplated joining

to get the tick of approval, it took ing our capacity. We also re- sampled, but undrilled brec- forces to work on the project in

more like 10 to 11 months. That leased some of our projects and cia occurrences netted hits of the past, but its limited permitting

was a long time to stand still.” tenements in Western Australia.” 12.65 g/t gold and a subsequent had been a hindrance to finalis-

Many of the delays resulted Inca continued exploration 135 grab surface sampling pro- ing a deal.

from the introduction of new min- during the period too, focusing gramme late last year returned “There’s a major in the data

ing legislation in Peru, which was on surface exploration and geo- peak values of 12.9 g/t gold and room as we speak,” he said.

5.94 g/t gold in the summit and “Majors over the last couple of

southern areas of Chanape. years have realised they’ve let

Brown said Inca honed in on exploration teams go. They’ve

its new Summit prospect while high-graded their existing op-

awaiting its sdEIA approval. erations for high profitability, so

“We also tweaked the geo- what that tends to do is shorten

physics and the chargeability life of mine expectations. So

anomaly, which we know is very majors are looking for explora-

closely linked to the porphyry tion projects now. We’ve had a

mineralisation at depth that dozen or so majors look at our

comes up to the surface at the project and the basis for negotia-

Summit,” he said. tions has always been, at least

“We’ve got the coincidence of for me, are that we are happy for

the gold anomalies at the surface you to come in, but we would like

and the really large chargeability you to commit to drilling. Without

anomaly coming up to the sur- a large drill permit, we couldn’t

face at the Summit. So we’ll do consummate that deal. Now that

an occasional deeper hole un- the permit is here, I’m expecting

derneath the gold into what could renewed interest.”

very well be a second porphyry.” – Rhys Dickinson
Tempting as it might be to fur-

Preparations were under way for Inca’s 13th hole at Chanape ther probe Summit, Brown said

at the time of print with its sdEIA permit in hand Inca

Page 38 GOLD MINING JOURNAL July – September 2015

Bidding war for Phoenix Gold

Phoenix Gold Ltd Phoenix Gold is on the market and attracting interest from major gold players such as Zijin and Evolution
executive chair-
man Dale Rogers has cess going on in the background, largely untouched Zuleika and just the nature of the beast. It’s
welcomed the com- but it’s good there is some com- Kunanalling shears. been a success story and it’s at-
petitive bidding war petitive tension because you’d tractive.”
between two major rather that than only having one Over the next five years, Phoe-
gold producers for interested party,” Rogers told nix built up the project area’s re- Phoenix started mining at the
control of the Kalgoor- Gold Mining Journal. source from 595,000oz gold and Kintore deposit in August last
lie-based junior. no reserves to more than 4 moz year and high hopes were held
“I think there’s some great wins and 1.16 moz reserves. for the company’s future as a
Zijin Mining Group Co Ltd, to be had here. There’s years of small but developing gold pro-
through its wholly owned sub- exploration that has gone into “It’s a feather in the cap to eve- ducer.
sidiary Norton Gold Fields Ltd, that ground so whoever ends up ryone involved in the company,”
has launched an unsolicited 10c/ with these assets is really posi- Rogers said. But it all came crashing down
share cash offer for Phoenix and tioning themselves for a long, just six months later when at-
the Chinese-owned company profitable and glittering future.” “The vision was consolidating tempts to selectively mine high-
has until mid-August to submit a those two major regional struc- grade areas proved too chal-
formal bidder’s statement. Phoenix emerged last year as tures. That is what we set out to lenging and Phoenix suspended
one of the most promising gold do and that’s effectively what we mining operations in April to
Evolution Mining Ltd, now the juniors on the ASX after releas- did over a period of about five focus on the Norton JV and the
second largest gold producer on ing a positive DFS on the Castle years. It’s now a significant lease heap leach development project
the ASX, is also in the market Hill project area and adopting a holding in a great province in the at Castle Hill.
for Phoenix despite a failed at- staged approach to mining the Goldfields.
tempt to form a strategic alliance various deposits. Stockpiled ore from Kintore
and snare 20% ownership of the “We’ve had a lot of success was still being processed at the
company. The company formed in 2009 in terms of drilling and explora- time of print, but that final milling
on the back of acquiring and tion and I think we’ve only just campaign will conclude later this
Phoenix has urged sharehold- consolidating more than 20 dif- scratched the surface at Castle quarter.
ers to take no action on Zijin’s of- ferent tenement leases along the Hill. The fact other people are
fer – for now – and withdrawn a now interested in it, well, that’s “It was good to see the compa-
shareholder vote on a resolution ny have the opportunity – if only
that would have effectively dou- The last milling campaign from Kintore will end this quarter, on a small project – but it’s really
bled Evolution’s existing 9.36% less than a year after Phoenix entered production been about discovering ounces,
stake. finishing the feasibility study, es-
tablishing reserves, the consoli-
Both Zijin (8.91% stakehold- dation [of ground] and the hard
ers in Phoenix) and Evolution are effort that went into all of that,”
keen to access different aspects Rogers said.
of the junior’s prospective tene-
ment package in the north-west- “I think it’s a fantastic asset
ern quadrant of the Goldfields. and clearly I’m always going to
talk up our book, but quite genu-
Zijin is understood to be eye- inely Castle Hill is a gold prov-
ing off Phoenix’s low-grade ince. It’s not one deposit, it’s a
Castle Hill project for feed to its province.
Paddington mill, while Evolution
has expressed interest in the “Likewise with the Zuleika
underexplored ground along the shear. It’s 20km, untouched vir-
Zuleika shear for future process- tually since the 1990s with only
ing through its recently acquired two holes deeper than 70m, so
Mungari plant. [it is] one of the great mineralised
corridors in the Goldfields.”
Northern Star Resources Ltd
is another which could make a – Michael Washbourne
play for the company given its
Kundana operations and tene-
ments are immediately south of
Phoenix’s ground.

Rogers, who stepped into an
executive role following the res-
ignation of founding managing
director Jon Price in May, said
a competitive bidding process
could have a positive outcome
for Phoenix shareholders.

“The company has effectively
been put in play so there’s a pro-

July – September 2015 GOLD MINING JOURNAL Page 39


Revised studies boost Banfora

An up-scaled scop- Gryphon has increased the NPV of the Banfora gold project, scenario, although the life of
ing study has Burkina Faso, from $90 million to $210 million mine reduces from 9.2 years to
delivered Gryphon seven as result of the faster pro-
Minerals Ltd a poten- construction of the 1 mtpa CIL oz) and AISC of $US800/oz duction rate.
tial 233% increase in operation from cash flow and an (down from ($US868/oz).
NPV for its Banfora up-scaled case comprising the Gryphon managing director
gold project in Burkina simultaneous build of both facili- A simultaneous build of both Steve Parsons said the latest
Faso. ties. the heap leach and CIL plants study outcomes had provided his
would command a capex of company with plenty of develop-
Gryphon investigated whether The up-scaled case presented $US130 million, which is only ment flexibility to consider.
a simultaneous build of the pro- compelling economics, includ- an extra $US33 million on top of
posed 2 mtpa heap leach and 1 ing a $210 million NPV (up from the feasibility study estimate of “Gryphon will be able to up-
mtpa CIL plants would yield bet- $90 million in the 2014 feasibility $US97 million for the construc- scale the project using a low-cost
ter financial returns than those in study), an IRR of 42.2 % (up from tion of a standalone 2 mtpa heap staged approach potentially from
last year’s feasibility study. 20.5%), life of mine revenue of leach facility. cash flows of the initial start-up
$US1.16 billion (up from $US808 heap leach operation at the Ban-
Recent grade control drilling million), C1 cash costs of Gold production also in- fora gold project,” Parsons said.
data, including hits of 17m @ $US707/oz (down from $US743/ creased from 70,600 ozpa to
8.2 g/t gold and 14m @ 64.6 g/t 130,000 ozpa in the up-scaled “With the optimisation and
gold, was factored into the latest additional capacity studies com-
study and resulted in a number of pleted and a granted mining per-
improved financials, including re- mit in place, Gryphon can now
duced costs and greater produc- move to completion of debt fund-
tion returns. ing due diligence, which is one of
the final hurdles to commencing
Using a gold price of initial development at Banfora.”
$US1,250/oz, the scoping-level
study looked at three different Gryphon hopes to complete
development options for the 3.6 that due diligence process with
moz gold resource – a 2 mtpa Macquarie Bank during the sec-
standalone heap leach opera- ond half of 2015.
tion, a base case 2 mtpa heap
leach operation followed by Along with $20 million in the
bank, the company has a financ-
ing mandate for up to $US60 mil-
lion in a senior loan facility with
the bank for the development of
a 2 mtpa heap leach operation.

Burkina Faso imposes new mining code

Burkina Faso’s transitional Burkina Faso has abolished a 10% tax IAMGold Corp and Avocet Min- Burkina Faso’s interim leader-
parliament passed a new break on mining company profits ing plc. They had previously ben- ship is due to usher the country
mining code in June that abol- efited from corporate tax rates to elections later this year.
ishes a previous 10% tax break power. lower than other nations in West
on mining company profits and Burkina Faso is Africa’s fourth Africa. But the new authorities are
obliges firms to pay into a local having to shore up revenues in
development fund. largest gold producer and the “We think that in the context in the face of slowing economic
precious metal accounts for which we are living today it’s time growth as the political instability
The adoption of the new code, roughly 20% of GDP. to move from an attractive code has exacerbated the impact of
which replaces 12-year-old min- [for miners] to a code for com- lower commodity prices and a
ing regulations, was among Two dozen firms operate in munity development,” Energy regional Ebola outbreak.
requirements set by the World the sector, including Semafo Inc, and Mines Minister Boubacar
Bank for the release of $US100 Ba, said. The World Bank has provided
million in budget support for the around $US300 million in sup-
West African country. Under the new regulations, port to Burkina Faso in each of
companies with exploitation per- the last four years.
The funds were frozen in Feb- mits will pay the normal tax rate
ruary pending passage of the on profits of 27.5%. The new mining code includes
new code and an anti-corruption provisions for the creation of a
law, which was adopted in March. Firms with industrial mining fund to rehabilitate artisanal min-
licenses will pay 1% of monthly ing sites and prohibit the use of
The two pieces of legislation turnover, excluding taxes or 1% harmful chemicals, and another
had long been called for by do- of the value of extracted minerals to finance geological research
nors and among those demand- into a local development fund. It and support education in earth
ed by protesters who took to the was not clear how it would be de- sciences.
streets in October last year, forc- cided which of the two payment
ing veteran leader Blaise Com- measures would be used. – Joe Bavier, Reuters
paore to step down and flee the
country after nearly 30 years in The State will also pay 20% of
its mining revenues into the fund.

Page 40 GOLD MINING JOURNAL July – September 2015

Azumah freshens up in

Industry, suppliers, ognising the situation.” Chinese rail investment group,
contractors and other Azumah first completed a fea- Sichuan, over the Little Evie cop-
per project as evidence of the
sibility study for Wa in August value of such deals.

stakeholders have to 2012. That original study con- “We are looking at a similar
accept the gold price firmed a 74,000 ozpa gold op- structure. The equity is just not
is flat-lining and we all eration at cash costs of $782/oz there in this market, particularly
could be built for $144 million. for projects where the capex is
orders of magnitude more than
have to work together The feasibility was subse- your market cap.”
to build projects that quently updated in 2013 and
2014, with a revision in March With traditional markets in
Australia, North America and
can work at current this year confirming the pro- Britain still shut to junior devel-
prices.” ject could produce 90,000 ozpa opers, Stone said he was finding
gold over an initial seven years more interest from other sources.

for AISC of $830/oz and capital “We’ve seen a lot of interest
from mainland Europe, Asia and
Stephen Stone’s comments costs of $168 million (plus $27 even the Middle East,” he said.
“These are companies that we
may sound defeatist, but the Az- million for a mining fleet). wouldn’t usually approach but
have come to us unsolicited.”
umah Resources Ltd managing Stone said a new review would
After recent visits to the United
director is far from despondent leave the technical aspects of the Stephen Stone Arab Emirates, Stone felt there
was an underlying demand for
about the future of both the gold project intact, instead focusing physical gold which was not
translating to the spot price.
mining sector and his company in on realising significant savings market cap, trying to finance a
“These companies are keen
particular. in both capex and opex numbers. $160 million project is very diffi- to source the physical gold. At
a precious metals conference I
“I think we are going through “The technical and logistical cult,” Stone said. attended in Dubai, there were a
number of refineries saying they
a cathartic and generational work is done, the mining licences While other companies hold were keen to secure different
sources of dore and ethical dore.
change at the moment and the are in place and we are working onto 100% of their projects in the
That’s what is driving the de-
industry will come out of in a through the environmental ap- hope market conditions will turn mand.

lot better shape, despite all the proval. The focus will be on those in their favour, Azumah has its “It creates a lot of optimism
for the future of the gold
pain,” he added. cost savings and there is plenty sails up in preparation of catch- price.”

Azumah’s recent travails are to be made. Contracts and ma- ing any favourable breeze. Stone said talks would
continue as the company
typical of the challenges facing terials have gone down consider- “In the current climate we see completed its feasibility
study update.
gold explorers in the current hos- ably and we are certain there are the only way to bring Wa to de-
Offers are also coming in
tile investment climate. savings to be made. velopment is through a partner- from TSX-listed companies
keen to put M&A deals to-
In late 2010, the company had “We are looking at buying a ship at the project level,” Stone gether, but Stone said there
“a market cap of more than $200 appeared to be few prospec-
second-hand mining fleet and said. “We are talking about part- tive deals that could add
million and was in the pro- value for Azumah shareholders.
cess of building a resource We have a very good, robust study “At the moment it is very hard
base of 2.1 moz gold at its Wa done by GR but we have to go back to see any M&A proposals which
project in northern Ghana. and reduce capital and operating costs have that ‘1+1=3’ aspect to them.
where we can. There is certainly room to The TSX-listed companies are
Less than five years on driving those discussions very
and despite a positive feasi- hard and while Azumah remains
bility study in its possession, open to discussions it has got to
Azumah is now capped at make sense and add value for
$10.6 million and looking for do that because prices have come down a our shareholders.”
new ways of making Wa fly.
But Stone has experienced lot in the intervening period and suppliers – Dominic Piper
any number of booms and are recognising the situation.
busts during his career and

is unlikely to start panicking


Instead, he is keen for the there is a huge surplus of Cat nerships to various parties and

company and GR Engineering 777s around the world. There are have been pleasantly surprised

Services to revisit the feasibility also opportunities to save on key by the level of interest.”

study and find what he believes plant suppliers as well as lower Stone said the company rec-

are inevitable cost savings. prices for steel, concrete, cya- ognised project equity was the

“We have a very good, robust nide, etc.” only thing the company had to of-

study done by GR but we have to Updating the feasibility study fer prospective partners.

go back and reduce capital and to recognise the today’s cost “That remains the best result

operating costs where we can,” environment will be a first step, for our shareholders because
Stone told Gold Mining Jour- but the greater leap remains in currently the value of the project
nal. “There is certainly room securing funding for the project. is not being reflected in our share

to do that because prices have “Undoubtedly, the biggest price,” he said.

come down a lot in the interven- challenge is to get the finance. Stone pointed to deals such

ing period and suppliers are rec- When you have a $12 million as Altona Mining Ltd’s tie-up with

July – September 2015 GOLD MINING JOURNAL Page 41


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

2015 keynote speakers:

Hon Julie Bishop MP, Hon Ngouille Ndiaye, HE Tolesa Shagi, Hon Bright Msaka,
Minister for Foreign Affairs, Minister for Industry & Mines, Minister of Mines, Minister of Natural Resources,
Federal Democratic
Australia Republic of Senegal Republic of Ethiopia Energy & Mining,
Republic of Malawi

Hon Nii Osah Mills, Hon Lebohang Thotanyana, HE Omar Hamidou Tchiana,
Minister of Lands & Natural Minister of Mining Minister of Mines &

Resources, Kingdom of Lesotho Industrial Development,
Republic of Ghana Republic of Niger

Other presenters to date:

Steve Stone, Managing Director, Azumah Resources Ltd Brad Marwood, Managing Director, Tiger Resources Ltd
Andrew Spinks, Managing Director, Kibaran Resources Ltd Tim Carstens, Managing Director, Base Resources Ltd
Allan Mulligan, Managing Director, Walkabout Resources Ltd Stephane Brabant, Partner, Herbert Smith Freehills

Lynda Daley, Managing Director, Sipa Resources Ltd Rick Yeates, Managing Director, Middle Island Resources Ltd
Paul Donaldson, Managing Director & CEO, Danakali Ltd John Welborn, CEO, Resolute Mining Ltd
Michael Blakiston, Partner, Gilbert + Tobin
Otsile Matlou, Director, ENSafrica TBC, First Quantum Minerals Ltd
Trish O’Reilly, CEO, AAMIG

2015 sponsors to date


Auroch homecoming on the cards

Aurcoh Minerals NL Initial capex has Auroch has sold the Manica gold project, Mozambique, which contains the
appears destined been estimated at 331,000oz Fair Bride deposit, to AIM-listed Xtract Resources
for Australia. $US28.4 million, which
will be confirmed in at the time of print. look at gold, but there are many
The ASX-listed gold hopeful more detailed studies The company’s market cap people looking for gold and very
recently conjured a deal to sell currently under way. few have come up in the last two
its Manica gold project in Mo- was about $7 million, with the years,” Whiddon said.
zambique to Xtract Resources Whiddon said at- company to receive a cash boost
plc for a consideration of $US11 tracting money to take of about $US4.5 million once the “We will be quite careful, but
million in cash and equity, with the project forward transaction was completed. if it is a short-term play it would
Xtract also agreeing to settle up wouldn’t be a problem have to be something in a good
to $US1.5 million to project-relat- for AIM-listed Xtract, Having cash in hand, Auroch jurisdiction and closer to home,
ed creditors. which has copper and will be active in the project acqui- so probably Australia. I think our
gold development pro- sition space, however, Whiddon Aussie investor base is [interest-
Auroch chairman Glenn Whid- jects in South Africa is mindful that the perfect play ed], certainly in terms of precious
don said Xtract was a natural fit and Chile. for the company might not be an metals.”
for the project. easy catch.
“They do have more – Mark Andrews
“I really think that southern access to capital in the “We are always looking at pro-
Africa is more appropriate for London market,” he jects and this will give us more of
South Africans to operate, so it said. a choice. We will definitely look
was also more of a geographi- at more opportunities. We would
cal fit where their geological “They are a very
knowledge, expertise and better liquid stock, they had
understanding of the investment about $7-8 million
market in southern Africa makes when they announced
more sense,” Whiddon said. the deal, so we feel
the project is in good
“We ran our own process and hands.”
had one preferred party who had
done significant due diligence, Early indications are that
but at the end of the day they shares in Xtract will be distrib-
couldn’t complete the deal. Then uted to Auroch shareholders,
Jan [Nelson] came along at the pending tax advice, however,
very end and got it done.” Whiddon had no qualms retain-
ing an interest in Xtract.
Jan Nelson, chief executive
of Xtract, knows the project all “We do like the project and
too well, having connected with whether the stock is distributed
Manica when it was in its infancy. to shareholders or the stock is
held by the company, I think we
Back then Nelson was at the will be a good loyal shareholder,”
helm of AIM-listed Pan African Whiddon said.
Resources plc – the company
Auroch went on to acquire. The deal for Manica appeared
to be well received in the market
Whiddon said the company with Auroch trading at its highest
had lost a bit of traction in the levels for some time at 11c/share
market last year, with a PEA tak-
ing place at Manica. Australian projects are on the cards for cashed-up Auroch

In June, Auroch released the
PEA on the Fair Bride deposit
at Manica, which demonstrated
the viability of a seven-year pro-
ject producing 331,000oz gold @
3 g/t from open pit and shallow
underground mining, including
an additional year of production
from low-grade stockpiles.

Auroch was lining up produc-
tion of 46,700 ozpa gold from
throughput of 500,000 tpa.

Whiddon expects the study to
take another six months and in-
dicated construction may start in
February 2016, with production
following in January 2017.

The project, about 100km from
Beira port, is supported by rail,
road and power, making it an at-
tractive near-term proposition.

Page 44 GOLD MINING JOURNAL July – September 2015

First gold poured in Liberia

Aureus Mining @ 3.4 g/t gold for
Inc is on track to
reach full-scale com- 924,000oz and, ac-
mercial production at
its New Liberty gold cording to the DFS,
project in Liberia from
next quarter. the new mine is

Aureus, listed on both the TSX expected to run for
and AIM markets, is ramping up
the plant feed to the full design eight years and pro-
throughput of 95,000 tpm and
the company expects to be run- duce 119,000 ozpa
ning at full capacity before the
end of September. in the first six years

Full scale production follows of production.
the first gold bar being poured
from New Liberty – Liberia’s first Meanwhile, Au-
commercial gold mine – on May
29. reus has increased

Mining activities are advanc- its Bea Mountain
ing at both the Kinjor and Larjor
pits, with ore being stockpiled for mining licence –
near-term processing.
which hosts New
Aureus president and chief ex-
ecutive David Reading said it was Liberty – from 457sq
testament to his staff for keeping
the New Liberty project develop- km to 478sq km
ment on schedule despite recent
setbacks, including last year’s to now include the
Ebola outbreak in Liberia.
promising Leopard
Liberia was declared Ebola-
free on May 9 following 42 con- Rock gold target.
tinuous days without a confirmed
case of the deadly virus. Previous drilling

“This is a significant milestone at Leopard Rock has
for New Liberty, the company
and the Republic of Liberia as a Aureus has celebrated the first gold pour from its New Liberty project in Liberia returned a number of
whole, and is the culmination of a
encouraging inter-

tremendous amount of hard work the milling and gravity circuits, cepts, including 4m @ 17.6 g/t

by the company’s employees with work progressing on the gold, 4m @ 13.9 g/t, 6m @ 9.4

and contractors through what extraction circuits, including the g/t and 3m @ 9.5 g/t.

have often been difficult and ad- CIL, elution and detox circuits. “The inclusion of the Leop-

verse conditions,” Reading said. All steel erection and civil ard Rock gold target within our

“Aureus has taken New Liberty works in the plant have also been existing mining licence area will

through feasibility, development completed and work is set to re- allow Aureus to develop the en-

and now into production as Libe- sume on the TSF Penstock line tire 13km gold corridor under the

ria’s first commercial gold mine. in the next dry season. same fiscal and operating terms

The building of New Liberty is a The flood bund and drainage as the New Liberty project,”

credit to the whole team at Au- works around the Larjor deposit Reading said.

reus and to the crucial support have been completed, protect- “This consolidation enables

given by both the local commu- ing the pit from water ingress us to focus our efforts solely on

nities and the National Govern- during the approaching wet sea- defining a second economic pro-

ment, without which this project son. The flood bund is also being ject rather than negotiating a new

would not have been possible.” extended to cover the northern mineral development agreement

Commissioning has been boundary of the Kinjor pit. for a portion of the corridor.”

completed on the front-end com- New Liberty has proven and

munition circuit, including both probable reserves of 8.5mt

Tanzania jails former finance, mining
ministers over gold deal

ATanzanian court sentenced anti-graft drive. Lawyers said the trate’s Court in Dar es Salaam. in 2005, disregarding a team set
two former ministers to three ex-ministers would appeal. Court documents seen by up to review the deal.
years in jail on July 6 over cor-
ruption charges related to the Businesses have long com- Reuters showed the ex-ministers Mramba was also convicted
award of a gold audit tender, ac- plained that graft is a major rea- were accused of abusing their of using his position as finance
cording to court documents. son for the high cost of doing authority in 2002 by “arbitrar- minister to unlawfully exempt a
business in the East African na- ily” awarding a contract to audit local subsidiary of the auditor of
The convictions of former Fi- tion. gold production from Tanzania, paying 11.75 billion Tanzanian
nance Minister Basil Mramba Africa’s fourth biggest producer. shillings ($US5.3 million) in gov-
and former Energy and Miner- Former Finance Ministry per- ernment taxes.
als Minister Daniel Yona repre- manent secretary Gray Mgonja, The court also convicted
sent two of the most high profile who was jointly charged with the Mramba, 75, and Yona, 76, of – Reuters
convictions in the Government’s former ministers, was acquitted illegally extending an audit con-
by the Kisutu Resident Magis- tract for two years after its expiry

July – September 2015 GOLD MINING JOURNAL Page 45


South African gold sector ready
for protracted wage battle

Negotiations over Briggs said.
wage increases in The producers also of-

fered a package for profit

the South African gold sharing and the creation
sector look set to drag of a special fund for hous-
on after the two sides ing and living conditions.
Workers in higher-paid

were worlds apart in categories were offered
their initial proposals. increases of 4.5-6%.

South Africa’s mostly

black mining labour force

Opening the negotiations in is increasingly restive

late June, South African gold two decades after the

producers AngloGold Ashanti end of apartheid, with

Ltd, Harmony Gold Mining Com- perceptions prevalent

pany Ltd and Sibanye Gold Ltd that the earnings which

and two smaller producers pro- have been made in the

posed increases of up to 13% industry have not flowed

for the lowest paid workers. The fairly to workers.

firms also offered artisans and Investor are jittery

other categories 4.5% to 6% about the talks, fear-

wage hikes to cover a five-year ing they may drag on as

period. long as 2013’s platinum

However, the two unions in- worker negotiations. That

volved in negotiations – the protracted dispute para-

National Union of Mineworkers lysed South Africa’s PGM

(NUM) and the Association of sector with an estimated

Mineworkers and Construction 1 mozpa PGM production

Union (AMCU) – have demanded lost due to an associated

around 80% and 100% increases five-month strike.

respectively for entry level work- In a departure from

ers who are currently earning past practice, the gold

around R6,000/month. sector talks are begin-

Solidarity, a smaller union rep- ning with neutral chair-

resenting high-skilled workers, persons who will act as

said it was seeking a 12% raise facilitators.

for its members, for the retire- Another departure is

ment age of 60 to move to 63 and an industry proposal to

for companies to increase their offer labour an “econom-

contribution to medical insurance ic and social compact” or

to 60%. a welfare package which

The miners said such de- it says is needed to keep

mands were “unaffordable” and the shafts profitable while

could add R16.5 billion ($US1.3 providing for the welfare

billion) to the sector’s wage bill. of miners.

They said in a statement that the South African gold mine workers are demanding up to 100% increases in wages The Chamber of Mines

industry’s total wage bill in 2014 said in June this would

was R23.5 billion. ber of Mines – which represents fered a 7.8% hike, Sibanye Gold include proposals to share the

“Acceding to these demands the gold miners – costs rose be- pitched a 11.1% increase while gains of a rising gold price with

would threaten the sustainability tween 2008 and 2014 by an aver- AngloGold Ashanti proposed a workers while also sharing the

of our industry, and would jeop- age of more than 20% per year. 13% raise. pain of price declines. Propos-

ardise almost all current jobs,” Production over the past decade “We need to place the viability als on housing, retirement ben-

the companies said. has declined by almost 8% annu- and sustainability of our industry efits and employee debt will be

The producers said they are ally. and the jobs it provides at the included.

“under pressure from soft metal For each year of the five-year centre of our discussions,” Har- But union leaders have public-

prices, high electricity costs agreement, Harmony Gold of- mony chief executive Graham ly poured water on the initiative,

and thinning margins and saying they only want to

could not afford higher We need to place the viability and sus- talk money.
wage hikes as it would tainability of our industry and the jobs
lead to the closure of it provides at the centre of our discussions. – Zandi Shabalala and
shafts and job cuts. Ed Stoddard, Reuters

According to the Cham-

Page 46 GOLD MINING JOURNAL July – September 2015

Rift Valley returns to Tanzania

Rift Valley Resourc- tersections gave Rift Valley Adding ounces to Miyabi is a priority for Rift Valley this year
es Ltd might be confidence it could add substan-
the only junior ex- tial ounces to Miyabi’s current go’s previous RAB and aircore producing diamonds and oil, An-
plorer that welcomed 520,000oz gold resource base. intersections. gola’s hard rock mining industry
the slowdown in the was in its infancy – and Rift Val-
commodities game. “These results demonstrate “Getting those six holes drilled ley reckons it has a lot to offer.
that the potential of Dalafuma shows the Government that we
Although the company’s share and the Dalafuma North West want to keep the project ticking The Government, with funding
price was hit just as hard as its prospect are yet to be fully de- along,” Gilmour said. support from the National Geo-
peers’, mining’s fall from grace fined and that the main zone has logical Survey, is currently con-
presented an opportunity to re- not yet been closed off,” he said. “It also gives us a chance to ducting a nationwide aeromag-
claim two of its flagship projects catch our breath, review all of the netic and coincident radiometric
that went missing during the in- Rift Valley was waiting on its data and look at where our next survey of the country.
dustry’s boom. final results from the 26-hole campaign should be.”
programme at the time of print, As that takes place, Rift Val-
Managing director Geoff Gil- but Gilmour said it had already While Rift Valley was happy ley is preparing for its first drilling
mour told Gold Mining Journal pencilled in further geophysical to be back working at Miyabi programme at its Cassenha Hill
Rift Valley fell victim to the “Af- work with the hope of finding new and Kitongo, it was most excited copper-gold prospect.
rican cycle” during the sector’s targets at Miyabi. about exploring its untouched
high time and it was just now re- Ozango project in Angola. Diamond drilling will target
turning to work at its Miyabi and “If we can add further high depth extensions of high grade
Kitongo projects in Tanzania. grade into it and then use the Though it had a rich history of intersections from costean sam-
geophysics to look at some more pling at surface and channel
“When things were good and targets, there might be some ex- sampling from within exploration
the commodities were booming tension drilling at not only Dalafu- adits at Cassenha Hill.
the Government got very lax in ma, but Dalafuma North West,”
protecting those who were hold- he said. The company is also conduct-
ing tenements from illegal opera- ing a wide stream sediment pro-
tors,” Gilmour said. “There’s plenty of work to be gramme at Ozango.
done. We are still aiming to get
“Now the world is tightening Miyabi to a 1 moz project, mini- More than 600 samples will
up in the commodities area and mum.” be collected in a first pass pro-
we are one of the only compa- gramme to complete a geochem-
nies that are drilling in Tanzania, Rift Valley also returned to Ki- ical screen over the project’s
certainly around Lake Victoria for tongo in July to follow up on 21m 3,762sq km concession, with
gold. We are now getting a good @ 2.68 g/t gold, including 12m particular focus on the project’s
hearing from the Government, @ 4.14 g/t, and 18m @ 1.55 g/t Bongo gold prospect.
who are now helping us with the intersections from a brief drilling
illegal operators, and we are get- campaign late last year. “Our job as explorers is to add
ting a good legal run. We now more ounces to our Tanzanian
have our projects clear, full ac- The in-progress six-hole RC projects and to get our Angolan
cess and we can get on and drill.” programme will test 300m of prospect drilled so we can start
strike at the project’s southern to get a handle on that,” Gilmour
Rift Valley commenced a 26- limb, immediately north of Kiton- said.
hole RC programme at Miyabi in
late May with a focus on following “We are one of the first com-
up compelling targets identified panies in Angola in terms of hard
in its last exploration campaign rock exploration. From a geo-
in 2012. logical point of view, it looks very
The programme also included
infill and extension drilling at the Rift Valley is eager to drill Angola’s Cassenha Hill – Rhys Dickinson
project’s high grade Dalafuma copper-gold prospect for the first time
prospect, discovered by Rift Val-
ley in 2011, and the further prob-
ing of Miyabi’s Dalafuma North
West, Chui and Contact Zone
prospects, where the company
intersected 59m @ 1.98 g/t gold
from 6m, 12m @ 6 g/t from 33m
and 19m @ 1.4 g/t from 53m re-

First assays from the pro-
gramme returned hits of 23m @
4.22 g/t gold from 45m, 27m @
3.64 g/t from 78m and 6m @ 2.51
g/t from 18m from Dalafuma and
Dalafuma North West.

Gilmour said the positive in-

July – September 2015 GOLD MINING JOURNAL Page 47


Red time for Batangas

Red Mountain Min- Red Mountain released some
ing Ltd expects interim DFS financials in Janu-
to have completed a ary, predicting free cash flow
DFS and received all of $45 million and operating
the necessary per- cash flow of $67 million over the
mitting inputs for its initial 5.2 years of mine life at
Batangas gold project Batangas.
in the Philippines by
the end of this quarter. Other key financials included
a capex of $22.7 million, NPV of
According to managing direc- $28.5 million, IRR of 65%, oper-
ating costs of $US703/oz and net
tor Jon Dugdale, the company revenue of $165 million, based
on a $US1,290/oz gold price.
has deliberately run both pro-
Red Mountain has also identi-
cesses simultaneously so there Red Mountain expects to complete the Batangas DFS this quarter fied an early mining opportunity
at the South West breccia lode
is no lag between DFS comple- where some high-grade surface
trench results have been inter-
tion and final ministerial approval penditure commitment to earn sciences Bureau (MGB) before it sected, including 8m @ 18 g/t
gold, 2.6m @ 28.6 g/t and 3.5m
for the project. 15% interest in Red Mountain’s is signed off by the secretary of @ 25.9 g/t gold.

“There is no use us spend- wholly owned operating subsidi- the Department of Environment “Initial mining of even a mod-
erate parcel of ore would be
ing all our money completing an ary. and Natural Resources (DENB). very cheap, so it’s really just a
matter of finding somewhere to
all bells and whistles feasibility Those funds, along with the “People keep asking us ‘when either sell that ore or process it
using a toll milling arrangement,”
study to bankable standard and remaining $US500,000 to come are you going to get your permit- Dugdale said.

then waiting six months to get our in once Bluebird completes its ting?’ and ‘are you pressuring the “We’ve been discussing a
permitting,” Dugdale told Gold listing on the AIM market, will be department?’ and we say ‘when potential arrangement with two
Mining Journal. directed towards completing the the whole process is completed Chinese groups, one local group
who have got a small process-
“We’ve obviously generated DFS and the final permitting in- is when we can say we’re ready ing plant nearby and other more
significant Philippines-based
the work we’ve needed to keep puts. for our permits’,” Dugdale said. processing plants. We’ll continue
to discuss that [early mining] op-
the permitting process ticking Red Mountain ticked off the “We can’t go to the secretary tion, which potentially gives us
an early start on cash flow, as
over, but our aim here is to de- first of the three-step permitting of the DENR and say ‘give us our soon as we get our permitting in
liver the feasibility work just be- process in May when it received permits’ because we’re not there
Red Mountain remains fo-
fore permitting is achieved in local government endorsement yet. All the balls are in their court. cused on discovering a new high-
grade orebody in its licenced
September.” from the Lobo Municipal Council, And, using the Wimbledon tennis Lobo region, about 120km south
of Manila, and the company is
Red Mountain has teased the having previously had the project analogy, we’ll soon have two sets upbeat about a new lode it has
unearthed in the footwall of the
market with some encouraging endorsed by the 10 Barangay and we just have to win a third.” main South West breccia struc-
interim DFS results, but Dugdale township councils in January. Upon completion of feasibility
“The next step is a bit of ad-
said one of the main reasons for Red Mountain is currently fi- and permitting, Bluebird will com- ditional soil sampling, some ad-
ditional trenching just to see if we
not going “the full monty” with nalising its environmental com- mit to a second stage investment can find evidence of the footwall
lode along strike from where
the study just yet was so the pliance certificate (ECC) with of $US4.5 million to fund the we’ve found it so far,” Dugdale
company could establish where the Environmental Management initial development of Batangas
“Then we would plan to do
the project financing was likely to Bureau (EMB) before tackling and earn a further 35% interest some drilling, probably immedi-
ately after the stage one funding
come from. the final step of declaring mining in the operating subsidiary. from Bluebird is through. We’ll be
saying more about that hopefully
The company’s strategic fund- project feasibility. Red Mountain expects the as we get more results to firm up
that target.”
ing partner, Bluebird Merchant The final permitting step is Bluebird funding to provide the
– Michael Washbourne
Ventures Ltd, has put up half of initially processed by the Central equity component of the pro-

the first stage $US1 million ex- Government’s Mines and Geo- ject financing and the company

has also received indicative

terms from a handful of debt

providers for up to $10 mil-


“There may be some ad-

ditional [feasibility] work we

have to do to satisfy say a

bank or we may finance the

project using some other fa-

cility like a gold loan, or even

equity,” Dugdale said.

“If our share price appre-

ciates to the level that we’d

like, maybe we’ll do it all with

equity. Who knows which

of the options we’ll take in

terms of the financing, but

Philippines-based geologists study the high-grade South West breccia orebody it’s nice to have options.”

Page 48 GOLD MINING JOURNAL July – September 2015

Placement propels Kula in PNG

Kula Gold Ltd budding Watou pros-
recently raised
$2.2 million to con- pect in the June quar-
tinue exploration at its
Woodlark Island gold ter, completing 1,378m
project in Papua New
Guinea – a strategy it of infill trenches, which
hopes might attract a
JV partner to develop confirmed the pres-
the promising play.
ence of at least two
Kula chief executive Stuart
Pether hoped the equity place- zones of surface miner-
ment would help the company
sell the full potential of Woodlark alisation demonstrating
Island, which already boasts a
2.1 moz resource and ore re- strike continuity.
serve of 766,000oz based on a
$US1,200/oz gold price. Standout grabs in-

“The company remains fo- cluded 8m @ 4.46 g/t
cused on advancing exploration
and corporate opportunities and gold, 23m @ 2.04 g/t,
maintaining the significant infra-
structure and excellent commu- 5m @ 4.07 g/t and 2m
nity relationship at the project,”
Pether said. @ 9.28 g/t.

Company chairman David Kula also delineated
Frecker told shareholders re-
cently it had been a difficult time a new, third strike zone
for the company, but he remained
positive following the finalisation in Watou’s south with
of permitting for the project late
last year. widths ranging from


At the time of print

further trenching was

being planned to con-

Kula are considering a JV to advance its Woodlark Island project firm strike continuity of

that zone.

Kula also received written con- contributions to future explora- Three dimensional model-

firmation from the PNG Govern- tion and development. ling of 2014 helimag data also

ment that it would exercise its “The PNG Government’s de- identified several new targets at

state equity option to participate cision to acquire equity in the Woodlark’s Kulumadau deposit

in the development of Woodlark project for landowners and the area.

Island by acquiring 5% interest, provincial government is further Kula initiated a surface map-

to be held on behalf of landown- evidence of the strong support ping programme to gain more

ers and the provincial govern- Kula Gold is receiving from the knowledge about the areas ge-

ment. Government and local commu- ology and the company expects

The purchase price would be nities on Woodlark Island for more targets will be generated by

5% of Kula’s accumulated explo- the development of the project,” the campaign.

ration expenditure on the project Frecker said.

and thereafter proportionate Kula honed in on Woodlark’s

Medusa not shafted by underground works

Despite the installation of a in April. ating efficiencies at Co-O, where
service shaft at its Co-O un- “The construction of the ser- probable reserves of 450,000oz
derground gold mine in the Phil- @ 7.2 g/t gold exist at the mine.
ippines, Medusa Mining Ltd has vice shaft has got off to a great
forecast a substantial increase in start and should be completed The shaft will have a rope-
production for the 2015-16 finan- within the estimated timelines guided cage sufficient to handle
cial year. with all long lead times items or- the weight of 30 people and up
dered and being manufactured,” to 3t per load, which includes all
Medusa managing director Davis said. underground equipment.
Geoff Davis said the company
anticipated forthcoming produc- The service shaft to Level 8 Therefore, underground equip-
tion to increase by 20-30% to (L8), about 390m below surface, ment will no longer need to be
120,000-130,000oz gold at AISC is expected to be completed by broken down and reassembled
of $US960-1,060/oz. September 2016. for underground transportation.

The company has budgeted to Construction of the service shaft to The construction of the ser-
spend about $US81 million at the Level 8 at Co-O is on track for com- vice shaft was approved in
mine in this financial year, with April and upon completion will
half dedicated to development missioning in the back half of 2016 increase rock hauling capacity
expenditure. from 1,400 tpd to 1,700 tpd from
L8 and boost total mine capacity
Capital expenditure of $US10 to 2,700 tpd from all shafts.
million (1.4 year payback period)
is being spent on the service Medusa expects the shaft to
shaft, with work having started service the mine for at least 10
years and hopes it will help oper-

July – September 2015 GOLD MINING JOURNAL Page 49


Dome waits to unleash in Fiji

Fiji is the focus The company has managed a Dome has budgeted $2 million for exploration at Ono Island
for Dome Gold series of small placements this
Mines Ltd, however, year and has about $1 million
company chief execu- cash.
tive Jack McCarthy
believes there are At the time of print, Dome
gold elephants lurking announced all formalities had
across Asia. been completed for it to offer an-
other share placement to raise
“I would think that there are $412,000.
opportunities, Dome itself won’t
be looking [right now] because “We are still seeking to raise
we are focused on Fiji, but from those funds [$2 million] and we
an exploration point of view plac- are reasonably optimistic of do-
es like Burma, Cambodia, Thai- ing that, but the fallout of the
land, Laos and even Vietnam are Greek default is still to be seen in
attractive,” McCarthy said. terms of the financial markets of
the world,” McCarthy said.
In the past 10 years, Australian
explorers have drawn support Australia’s investment commu-
from the investment community nity remains reluctant to invest in
to pursue mining opportunities explorers, however, the capital
in patches of Africa and Latin pond has not completely dried
America. elsewhere, McCarthy said.

McCarthy said the success “There happens to be inves-
of explorers in such areas, par- tors in Asia that take a differ-
ticularly in the West African gold ent view on investment. They
space, was one reason Austral- look at projects and if they think
ian companies had left Asia be- there are reasonable prospects I
hind. guess they are willing to invest.
In this part of the world [Australia]
“There was more effort put into at the moment people are very
Asia earlier this century and cer- reticent to invest unless it is an
tainly less in the central or west- actual project that is going into
ern part of the African continent. production or is near production.
Now there have been gold and We have to go where we can find
other mineral discoveries in Af- the funding and Japan is a good
rica and I think that has attracted place to go.”
attention,” McCarthy said.
Dome hopes to secure funding
“Whereas in Asia, the first for its exploration campaign at
push of exploration has gone Ono Island sometime in August.
through and produced some ma-
jor deposits and now we are in a “Then we’d be looking to com-
later stage of activity and Asia plete an IP survey from which we
is a mature jurisdiction. I guess hope to identify some initial drill-
different regions fire for different ing targets,” McCarthy said.
reasons at different times with
regulations being updated all the The Ono Island epithermal
time. But, I don’t see [Asia] as project is comprised of the
any less prospective in geologi- Naqara West and Naqara East
cal terms.” prospects where an IP survey is
planned to cover an area 4.5km
While confident Dome is in by 1.5km, with initial 200m line
the right place at its Naqara spacing for 20.5 line km.
gold-silver-copper prospects on
Fiji’s Ono Island, garnering the Dome believes there is poten-
finances to conduct meaning- tial for gold-silver-copper depos-
ful exploration has been difficult its 200-300m below surface and
for a company which is currently hopes to confirm more about the
market capped at $91 million and project later in the year.
trading at 40.5c/share.
Meanwhile, after completing
A budget of $2 million has a PFS at its Sigatoka iron sands
been set for exploration at Ono project, also in Fiji, Dome is
Island this year, with half of that awaiting the renewal of an explo-
intended for diamond drilling (10 ration licence, while the EIA ap-
holes for 5,000m). proval process is under way.

– Mark Andrews

Dome has targeted the Asian investment community for exploration funding

Page 50 GOLD MINING JOURNAL July – September 2015

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