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Published by Paydirt Media, 2016-03-01 21:36:30

GMJ Jan 2017

GMJ Jan 2017

Keywords: Gold Mining Journal

January – February 2016 VOLUME 1. ISSUE 122
$11.95
Registered by Australia Post PP 643938/00057

St Barbara:

Miner of the Year

GOLD MINING JOURNAL (ISSN 1324-4396)

Published by Paydirt Media Pty Ltd. A.C.N. 063 985 133

Paydirt Media:

Head Office: Executive chairman: Bill Repard

Suite 9, 1297 Hay St, West Perth, Western Australia 6005 Finance manager: Giovanny Jefferson

P.O. Box 1589, West Perth, Western Australia 6872 Accounts/administration: Heather Melling

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

[email protected] www.paydirt.com.au Conferences:

Tammy Caldwell, Melita Fogarty

Editorial:
Editor: Dominic Piper

Gold Road: Explorer of the YearDeputyeditor:MarkAndrews
Pre-press and printing:
Vanguard Press 26 John St, Northbridge WA 6003

Journalists: Michael Washbourne, Rhys Dickinson

Art director: Marian Noonan ISSN 1324-4396
01
• Site visits... Tropicana & Tennant CreekContributors: Keith Goode, Brendan Ryan (Johannesburg)
Member of:

Advertising: Full conference review Australia-Africa Minerals & Energy Group

• NewGenGold...Advertising executive: Tony Mwarey 9 771324 439005
Subscriptions: Magda Thibaut

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



CONTENTS

17 34 43

17 COVER 34 TROPICANA
The stellar years enjoyed by St Barbara Ltd and Gold An emblem of what can still be found in Western
Road Resources Ltd have officially been recognised, Australia, the Tropicana mine hit the 1 moz produc-
with the companies emerging as Gold Mining Journal’s tion milestone in November. Rhys Dickinson was on
Miner and Explorer of the Year respectively hand to join in the celebrations and found an operation
which continues to pursue innovation and improvement
18 MINER OF THE YEAR
It was St Barbara Ltd’s remarkable turnaround in 2015 38 EMMERSON
which earned the company Gold Mining Journal’s Emmerson Resources Ltd has had a plethora of
Miner of the Year award. Mark Andrews spoke to St technical successes since entering the Tennant Creek
Barbara managing director Bob Vassie about the mineral field in 2007 but the major discovery continues
company’s journey back from the edge of extinction. to elude it. However, with Evolution Mining Ltd now
Among the other finalists, we speak with Evolution onboard as JV partner, Emmerson managing director
Mining Ltd, Doray Minerals Ltd and Gold Fields Ltd Rob Bills is convinced a discovery is coming. Michael
Washbourne travelled to the Northern Territory to find
20 EXPLORER OF THE YEAR out why
In a repeat of the 2014 poll, our expert voters narrowly
chose Gold Road Resources Ltd ahead of Dacian Gold 43 NEWGENGOLD REVIEW
Ltd as their Explorer of the Year for 2015. While much The future of gold exploration was on the agenda as
market attention has been focused on development geologists from around the world visited Perth for the
of the Gruyere project, Gold Road’s massive regional 11th NewGenGold conference in November. Fourteen
exploration campaign continues to impress. Dominic discoveries were showcased over two days and the
Piper spoke to executive chairman Ian Murray conference’s traditional closing forum brought together
some of the industry’s leading players to discuss the
COVER PHOTOGRAPH: future of exploration in Australia. Mark Andrews reports

St Barbara chief executive Bob Vassie Paydirt Media:
Executive chairman: Bill Repard
GOLD MINING JOURNAL (ISSN 1324-4396) Finance manager: Giovanny Jefferson
Published by Paydirt Media Pty Ltd. A.C.N. 063 985 133 Accounts/administration: Heather Melling

Head Office: Conferences:
Suite 9, 1297 Hay St, West Perth, Western Australia 6005 Tammy Caldwell, Melita Fogarty
P.O. Box 1589, West Perth, Western Australia 6872
Phone: (+61 8) 9321 0355 Facsimile: (+61 8) 9321 0426 Pre-press and printing:
[email protected] www.paydirt.com.au Vanguard Press 26 John St, Northbridge WA 6003

Editorial: Member of:
Editor: Dominic Piper
Deputy editor: Mark Andrews Australia-Africa Minerals & Energy Group
Journalists: Michael Washbourne, Rhys Dickinson
Art director: Marian Noonan Registered by Australia Post PP 643938/0071. No pages or articles in this publication
Contributors: Keith Goode, Brendan Ryan (Johannesburg) 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
Advertising:
Advertising executive: Tony Mwarey
Subscriptions: Magda Thibaut
Phone: (+61 8) 9321 0355 Facsimile: (+61 8) 9321 0426

EDITORIAL

Gold trends turn again

Ifeel we have reached an in- spread across plus-150,000 ozpa gold production, can have a
flection point in the Australian more dramatic effect on cash costs.
gold sector.
The bigger-is-better attitude is one which is spreading into
I am not talking about the future of the exploration space. While the gold miners enjoyed a com-
the gold price, even the well-paid ex- paratively strong 2015, gold explorers, by and large, continued
perts apparently gave up on predicting to struggle with investors unwilling to commit.
where that was going a long time ago.
Rather, there has been a change in in- Those who have gained traction – like the two companies
which fought it out for the Explorer of the Year title; Gold Road
vestor appetite. Resources Ltd and Dacian Gold Ltd – are not concerned with
A few years ago, the trend among finding small deposits. They are after large gold camps which
can provide longevity.
gold investors was to look for early
start-up, low capex operations which would not be negatively It is another change in investor appetite.
impacted by the desultory equity and debt market. Ten years ago, as the commodity boom gathered pace, inves-
Some proponents of such projects were very successful, chief tors were willing to believe even the most fanciful “blue sky” ar-
among them Doray Minerals Ltd and its Andy Well mine near gument and any company which could prove there was potential
Meekatharra in Western Australia. Doray managed to build a for major discovery – however remote – could receive backing.
high margin 70,000 ozpa gold operation relatively cheaply in a As markets awoke to reality, investors switched focus to ex-
tough environment. plorers who could provide pathways to early cash flow genera-
However, that was a fit-for-purpose development. It was not a tion and low capex. However, Dacian and Gold Road’s share
plan necessarily designed to win favour with the market but what price performance is evidence a further switch has occurred.
suited the orebody best and Allan Kelly and his team have kept it Now, investors are not interested in early cash flow (what’s the
running smoothly since operations began. point when the gold price is as low as it is). Instead, they are only
Not every company is so fortunate to have strong manage- willing to back companies which have genuine prospects of find-
ment and an orebody ideally suited to the low capex, early cash ing major deposits and that is somethintg Gold Road and Dacian
flow model. Others have tried to impose the model on unwilling – each in very different environments – are providing.
orebodies and, like their larger counterparts, soon run into op- Both companies have the backing of shareholders to make the
erational difficulties. discovery and have been given time to do so.
The problem with smaller operations is that while they can At Mt Morgans, Dacian is doing exactly that. It has assuaged
have good margins when prices are healthy; they are so small the reserve ounces already on offer in favour of attempting to
that when prices do fall as they did in 2015, there is little room build a 200,000 ozpa, long-life operation. This is no quick-fix
to play with. project, if the company gets it right it has the potential to herald
While bigger operations can adjust scheduling, head grades, a new era of gold production in the area and could unlock the
operational improvements etc... the smaller mines are so tightly depth potential of another mature goldfield.
run that there is little that can be done. Again, Doray has done Gold Road is in a similar position. Having patiently picked over
an admirable job, with record production in FY2015 and con- its massive land package in the first four years of its existence,
tinual cash cost and AISC improvements. But, the margins are the company has found a major deposit in Gruyere. With that
still tight and investors are beginning to doubt others can pull off under his belt, exploration director Justin Osborne is now being
a similar effort. backed to successfully pick over the rest of the unexplored belt.
The ability of the larger mines to benefit more from improved It may not yield another Gruyere in the next few years but the
operational performance is highlighted by our Miner of the Year company has now bought itself plenty of time and goodwill in
for 2015. St Barbara Ltd has been one of the great underper- which to get there.
formers of the last decade, limping along, seemingly always at Most companies are not lucky, smart or brave enough to se-
the brink of extinction. cure the kind of projects Gold Road and Dacian have on their
Yet, 2015 saw a dramatic reversal and the company enjoyed books but their success should stand as a guide to how explor-
strong operational performances at both its mines; Gwalia in WA ers should operate; with bravery, patience and conviction.
and Simberi in Papua New Guinea.
Both orebodies are exceptional and always had the potential to – Dominic Piper
be quality mines but had largely failed to meet expectations. The
impact on margins has been dramatic and could not be equalled
in the low capex, small production scenarios many juniors have
been pursuing in recent years.
Instead, investors have been enthused by the success of
the likes of Northern Star Resources Ltd and Evolution Mining
Ltd who have brought efficiencies and performance to larger
mines. In these operations, management restructuring strate-
gies around mine plans, scheduling and cost-saving measures,

Page 4 GOLD MINING JOURNAL January – March 2016

NEWS

Oro Verde and Newcrest
meet in Nicaragua

Newcrest Mining The potential for multimillion ounce deposits has tempted Newcrest with larger companies like
Ltd has returned to JV with Oro Verde on the Topacio project in Nicaragua Newcrest who have the finan-
to the Americas to cial and technical capacity to
partner ASX junior Outside of the resource Chile, Argentina, Peru advance exploration activities
Oro Verde Ltd on the area, Oro Verde has identi- and Nevada are parts of the on those tenements.”
Topacio gold project fied at least 10 new drill tar- Americas Newcrest flirted
in Nicaragua. gets within its 93sq km con- with in the 1990s/2000s, The spokesperson said
cession, to further endorse however, exploration budget Newcrest was talking with
The $11 million farm-in ar- Topacio as an emerging cutbacks and a focus on Asia numerous exploration com-
rangement will see Newcrest Nicaraguan gold project. Oro Pacific had taken the compa- panies about potential part-
fund $6.1 million in explora- Verde became involved in ny away from the region. nerships and farm-in oppor-
tion and expenditure – in- Topacio in February 2015. tunities.
cluding the cost of exercising Newcrest has been suc-
Oro Verde’s option to acquire “It is one of the better ex- cessful in Papua New Guinea With Oro Verde already in
100% of Topacio – to earn an ploration projects and we with the Morobe Mining JV at the frame, Woolfe said the
initial 51% interest. have done very well to get our Hidden Valley with Harmony company would not discount
foot on it,” Woolfe said. Gold Mining Company Ltd forging a closer relationship
Newcrest may then take its and the acquisition of Lihir with Newcrest as it looked to
stake to 75% by spending a “The country has a strong Gold assets, also in PNG. expand its portfolio.
further $4.9 million over the mining history and it already
following three years. has some multimillion ounce The farm-in with Oro Verde “We have a great deal with
gold mines and districts. is Newcrest’s first exploration Newcrest right now and it will
Topacio, in south-eastern Newcrest doesn’t come into play in Central America but depend on their appetite for
Nicaragua, currently hosts a country or project that it the company will consider projects right now and our
resources of 2.7mt @ 3.9 g/t doesn’t see potential for mul- other opportunities in the fu- appetite and ability to pursue
for 340,345oz gold (1.5 g/t timillion ounces. It already ture. projects on our own. Most
cut-off). has 340,000oz gold and, companies would prefer to
along with some of the things “The Americas is a highly hold things 100% and we are
Oro Verde managing direc- that we have identified over prospective part of the world no different. If we can form a
tor Trevor Woolfe said work the last 9-10 months with for gold and copper depos- strong alliance with Newcrest
would start in earnest in Jan- our exploration, it really does its and we will continue to the possibilities are pretty
uary. have that potential to go to assess opportunities in that strong down the track as well
multimillion ounces.” region,” a Newcrest spokes- if both parties are happy,”
“To get multimillion ounce person told Gold Mining Woolfe said.
deposits you need to be Civil war during the 1980s Journal.
thinking of big concepts and held explorers back from fully “We are certainly not sitting
big models. We will be focus- tapping Nicaragua’s mining “With some limited excep- back and putting all of our
ing on those bigger concepts potential and while the coun- tions, Newcrest takes a glob- eggs into the Topacio basket.
and the big exploration tar- try remains underexplored al approach to exploration We have great ambitions for
gets and doing the work we relative to other jurisdictions and we will go where the gold Topacio, but we also want to
need to really validate and in the Americas, there is no is. The country [Nicaragua] build a pipeline of exploration
test those theories,” Woolfe shortage of gold-rich districts. is geologically prospective projects so that if Topacio
told Gold Mining Journal. for gold and copper deposits is successful we also have
The Bonanza (8 moz gold), with a stable government that some other projects moving
Prior to Newcrest’s involve- La India (3 moz), El Limon has a positive attitude toward in behind it.”
ment at Topacio, Oro Verde (3.5 moz) and La Libertad (2 foreign investment. Several
added the Mauricio epither- moz) are the scale of bounty junior exploration companies In addition to Topacio, east
mal gold vein (7.5 g/t gold and Oro Verde and Newcrest are hold tenure in the country and of La Libertad, Oro Verde has
4.4 g/t) to a list of other high- aiming for. many are seeking to partner the early stage San Isidro
grade target areas including gold project which is near the
Isabella (up to 6.8 g/t), Topa- 2.3 moz gold La India project.
cio West (5.9 g/t), Tamara
(2.3 g/t gold and 66 g/t silver), While the company is ac-
while sampling from an older tively searching for other gold
trench at Dispute returned projects, Oro Verde is also
1.4m @ 9.2 g/t gold within keen on copper in Nicaragua
3.9m @ 4.8 g/t. and hopes to add to its port-
folio in the coming months,
Woolfe said.

– Mark Andrews

January – March 2016 GOLD MINING JOURNAL Page 5

NEWS

New prepayment
opportunities arise

Australian gold Mike Rosenstreich need a working capital injec- trust can be built and we can
miners have tra- tion,” Rosenstreich told Gold begin looking at other oppor-
ditionally shied away the past three years but hav- Mining Journal. tunities.”
from royalty deals, ing reached agreement with
gold loans and pro- a multibillion dollar North He said the North Ameri- Such cash injections would
duction streams but American investment fund, can fund was keen to become be most attractive to those
Mike Rosenstreich be- he is now ready to offer a very involved in the Australian companies struggling with
lieves his new venture different package. gold market and wanted to cash flow. Rosenstreich
could offer producers prove its long-term commit- hasn’t missed the irony that
just what they’ve been “I am seeking out gold min- ment by offering custom-built he is bringing the product to a
missing. ers, particularly those who commodity-based funding, market which is widely thriv-
hybrid lending structures and ing.
A former resource financier equity investments.
at Rothschild and managing “I’ve been pleasantly – or
director of Tasmanian base “It wants to be a flex- perhaps even unpleasantly –
metals miner Bass Metals ible and supportive partner,” surprised by the quality of the
Ltd, Rosenstreich has fo- Rosenstreich said. “We have balance sheets of the Austral-
cused on consultancy work identified gold as the simplest ian gold producers; they are
entry point and believe gold actually in a very healthy po-
purchase and prepayment sition compared to their base
facilities offer a good way to metals peers. That means
start a relationship with com- we have to work harder and
panies.” find companies that have less
cash and need the injection.
Australian gold companies
have largely been reluctant “They would be perhaps
to enter streaming and pre- start-ups or companies which
payment arrangements but have had technical problems
Rosenstreich believes Key- and need some working capi-
stone’s short-term structure tal.”
could prove more palatable.
He said the Keystone pre-
“The first response from payment would not come with
companies is usually that caveats over what the cash
they are not interested in could be spent on.
streaming or royalties but we
are not looking at that sort of “It doesn’t have to be for a
arrangement. We want the specific purpose. The cash
prepayment to be the start of might be needed to put a drill
a relationship with the com- rig out or an underground de-
pany and are prepared to de- cline in; that is for the com-
velop that relationship.” pany to decide.”

The purchase and prepay- Companies struggling with
ment is drawn down and re- operations would be an obvi-
paid on an ongoing, revolving ous target and Rosenstreich
basis, meaning the lock-in believes his own experience
period is shorter than most will also add benefits to any
facilities. relationship.

“Companies don’t want “I think my technical back-
to be locked into long-term ground helps in that regard,”
commitments but this is not he said. “We can provide
a long-term loan,” Rosenstre- technical expertise, industry
ich said. “We are offering a insight and ongoing relation-
5,000oz/month facility and ship management in Austral-
will prepay for that privilege. ia. In this sort of environment,
we don’t expect to pick only
“A facility of that size can the low hanging fruit.”
be amortised over just three
or four weeks. From there – Dominic Piper

Page 6 GOLD MINING JOURNAL January – March 2016

OPINION BRENDAN RYAN

Simple truths the hardest to admit

After reading the ways been a leading dividend whoever “miner could be simpler?
latest trading
statement from Lon- player. It’s not a big concern 2” is – who posted Back then gold
don and Johannes-
burg-listed gold miner for us.” at the bottom of mining compa-
Pan African Resourc- Basically, Loots was say- a Miningmx.com nies also just
es plc what jumped
into my mind were the ing Pan African would easily story on the trad- mined gold. If you
lyrics from a song by
American country leg- make up the missing cash in ing statement: wanted a diversi-
end Charlie Daniels
called “Simple Man”. its operations between June “OK, so let me fied mining invest-

The song starts off: “I ain’t and December when the divi- understand this ment you bought
nothing but a simple man,
They call me a redneck, I dend would actually be paid. clearly. We have a shares in a mining
reckon that I am, But there’s
things going on, That make That was back in Septem- revolving credit fa- house like Anglo
me mad down to the core”. ber. The trading statement cility [normal peo- Neal Froneman American plc. Pan

Daniels was on a rant for the six months to end- ple call this a debt African has just
about the state of American
society in the 1980s. My December was published on facility]. We tell the market we bought a coal mine which
beef is nothing so dramatic
– just a heartfelt complaint November 26. In it manage- have reduced debt and will Loots says is a “specific op-
about what is going on re-
garding the common sense ment said that “cash flows pay dividends ultimately fund- portunity” because the mine
rules that used to be ap-
plied to most mining com- have been robust and excel- ed by the revolving debt facil- is “an asset that is as good as
panies such as “you don’t
pay dividends out of bor- “lent progress has been made ity... I am not sure where they they come which will give us
rowings”. in redeeming debt”. are going with this but I have cash flows that could view as

That’s precisely what Pan My sentiments precisely but I a credit against costs on the
African intends doing to fi- come from a different era that gold side.”
nance the R210 million divi-
dend it declared in respect of pre-dated the major changes made to Loots maintains that Pan
its financial year to end-June accounting methods over the past 15 or African will, however, re-
when it reported a 53% drop so years which have greatly complicated main a precious metal pro-
in headline earnings but only getting to grips with a set of accounts ducer with a particular focus
cut the dividend by 17.8%. As to see what is really going on – not the on gold and does not aim to
of end-June, Pan African had be a diversified miner.
just R64.2 million on hand in
cash and cash equivalents At least Sibanye Gold Ltd
while debt amounted to R500 chief executive Neal “Pac-
million. man” Froneman is making

Clearly, it was going to pay sanitised version touted by management no bones about his strat-
most of that dividend out of at the front of the annual report. egy to become a diversified
debt but, when I voiced my miner with his acquisition of
concerns at the time to chief
executive Cobus Loots, he Rustenburg Platinum and
brushed them aside saying:
“Forget the financial report- Management added that a feeling it will end badly”. an on-going move into coal
ing period. That’s just num-
bers. You need to look at the net debt was now down to My sentiments precisely through which he bought
trend because we have done
this before and we have al- R70 million and “the group is but I come from a different control of Waterberg Coal

able to draw on its revolving era that pre-dated the major and has expressed interest in

credit facility to the extent of changes made to accounting buying Anglo American’s SA

R800 million which adequate- methods over the past 15 or coal interests.

ly provides for payment of the so years which have greatly Froneman’s underlying as-

proposed dividend of R210 complicated getting to grips sumption is clearly that his

million in December 2015”. with a set of accounts to see group can mine platinum and

Subsequently, I saw a cou- what is really going on – not coal just as easily as it can

ple of UK research reports the sanitised version touted mine gold. I guess time will

basically saying “bravo” and by management at the front tell.

welcoming the hefty payout. of the annual report. So that’s the situation.

I started wondering if I was Back in the 80s, South Af- What should an investor do?

now in some parallel universe rican gold mining companies Let me conclude with more

where this kind of financial reported to a very simple – words of wisdom from Charlie

largesse was the new norm there’s that word again – set Daniels which I think are ap-

and I was terminally pes- of rules. Each quarter all of plicable to the financial world:
simistic. Don’t these people the costs incurred – includ- “You better watch where
realise what can go wrong in ing capital expenditure and
any mining operation which exploration – were deducted you go and remember where
can scupper that style of fi- from revenue. If there was you been, That’s the way I
see it, I’m a simple man.”

nancial planning? cash left over after that the Brendan Ryan is a freelance writer,

There was one voice of mine had made a profit. If based in Johannesburg

sanity in the wilderness – not, it had made a loss. What

January – March 2016 GOLD MINING JOURNAL Page 7

NEWS

Mint deal for the ASX

The Perth Mint and Recognised as an
ASX will develop
new precious metals international author-
derivatives products
to be traded and ity in precious metals,
quoted on the ASX,
with the first product The Perth Mint could
to be launched in the
second half of 2016. prove the perfect part-

Precious metals market ner for the ASX as it
participants will be afforded
the opportunity to access looks to grow its com-
a transparent and forward
price curve for more effective modities products and
hedge exposure through the
derivatives products. services in a highly

Perth Mint manager, analy- competitive mar-
sis and strategy, Bron Su-
checki told Gold Mining ket. In recent years
Journal that working with
the ASX on exchange-traded gold future contracts
products would broaden out-
lets for Australian gold. have sprouted on the

“We want to make it as Shanghai and Singa-
easy as possible for people
to trade gold and this con- pore exchanges, while
tract will be another distribu-
tion channel. Not every miner the New York Stock
or trader will use this, but it
may provide another channel Exchange’s electronic
which will suit certain people
for who a futures contract is The Perth Mint and ASX signed an agreement late last year to develop new trading platform – In-
easier than other funding/ precious metals derivatives products to be traded on the ASX tercontinental Ex-
hedging arrangements,” Su- change (ICE) – is eye-
checki said.
24-hour trading platform, with “We are very focused on ing more action in the Asian
“Hopefully we may be able
to pick up some institutional Perth Mint’s storage facilities making sure we continue market as is CME Group, the
money. The flexibility of the
Mint to be able to store gold providing physical support. to be a major CCP [central world’s most diverse deriva-
easily, as either unallocated
or allocated, makes it an op- The derivatives and OTC counterpoint party] in the re- tives marketplace.
tion for professional investors
who don’t want to get caught side of the ASX business de- gion and also expand both Nevertheless, there was an
on having to roll contracts if
they are looking to hold a long livers about 30% of revenues our client footprint in the re- opening on which the ASX
position for some time. We
want to make it easy and con- and it is hoped the precious gion and, where relevant, our and Perth Mint could capital-
venient for investors to hold
gold and hopefully that might metals derivatives will meet product footprint,” Lofthouse ise, according to Suchecki.
help drive the gold price up at
some point.” some of the demands cus- said. “Following the LIBOR inter-

It is proposed the deriva- tomers in Australia and Asia She said given Australia’s est rate scandals, regulators
tives products will be offered
to customers using the ASX’s have for investment and risk position as the world’s sec- have been shifting towards

management products. ond largest gold producer more transparency in trading

and India and China’s posi- and moving away from OTC,”

tion as the world’s largest Suchecki said.

gold consumers, Perth was “There is a quite a lot of

an ideal benchmark pricing trading in the Asian markets

location for the region. in gold so a gold futures con-

“I think having precious tract was the most obvious

metals contracts – which are thing we thought we should

well structured for regional start with. Our view is that it

users – being traded in this is makes sense for a futures

time zone will suit users. In contract to be based on loca-

terms of regional footprint, tions where there is a source

the biggest users of precious of supply or the end target

metals are typically located in location where the demand

the Asia-Pacific. is, with modern logistics gold

About 300-400t of gold can ship from point to point –

is refined at The Perth Mint, there isn’t a need for transit

Helen Lofthouse which makes up about 10% locations.”

of the global gold refining – Mark Andrews
market, while it stores about
ASX executive general

manager, derivatives and $2.7 billion worth of gold and

OTC markets, Helen Loft- silver (75% of which belongs

house signed the deal with to international clients) and

The Perth Mint and said it processes about $15 billion

was an important strategy for worth of gold and silver a

the ASX in a regional context. year.

Page 8 GOLD MINING JOURNAL January – March 2016

Best of both worlds for Musgrave

Base metals explor- Musgrave intends to start drilling gold targets at the Cue project this year
er Musgrave Min-
erals Ltd has added further spend of $1.8 million drilling data, we have the Corunna, last July due to the
an advanced gold over a two-year period. geophysical and geochemi- lack of discovery success
project to its portfolio. cal data available so that and poor market sentiment
Musgrave can increase its gives us a good head start on towards greenfields explora-
Musgrave entered into a stake in the project to 80% by the work that we want to do,” tion.
farm-in and JV agreement spending a further $1.8 mil- Waugh said.
with Silver Lake Resources lion within an additional two Waugh labelled the Cue
Ltd in late November to earn years. Subsequent milestone “It means that we can fo- acquisition as a “new begin-
up to 80% interest in the Cue payments of up to $250,000 cus on high priority areas and ning” for his company after a
project in Western Australia’s can be paid either in cash or make our drilling more effec- challenging past 18 months.
Murchison province. in shares. tive.
“The Murchison is obvious-
Silver Lake is one of Mus- “It’s a relatively low entry “This is one of those oppor- ly a well-endowed region with
grave’s major shareholders. price for Musgrave and its tunities that has both exten- a long history of gold mining
shareholders,” Waugh said. sional and new [drill] targets, and there’s now a more re-
Cue consists of the Moya- so we’re looking at a mix of cent history of copper explo-
gee (1.93mt @ 2 g/t gold for “The reward for our share- brownfields and greenfields ration success and, as such,
126,900oz) and Hollandaire holders will come from exploration. It really is quite a we think there’s better bang
(2mt @ 1.9% copper for spending money on exploring good fit for us.” for shareholders’ buck to do
38,000t) resources. Hollan- and identifying resources and extensional drilling around
daire also boasts reserves of I think generally that’s what With Cue likely to be the Cue,” Waugh said.
400,000t @ 3.3% copper for most shareholders want to company’s main focus in
14,700t. see; the money they invest 2016, Musgrave will look to “There is definitely more
being spent wisely on explo- strings to our bow now and
Musgrave managing direc- ration and development.” Rob Waugh we think 2016 will be a much
tor Rob Waugh said acquir- brighter year than 2015 was.
ing a project with exposure to Musgrave expects to sat- secure JV partners for its ex- We look forward to sharing
both precious and base met- isfy the conditions precedent isting projects, including the in any exploration success
als was ideal for his company in early January and kick off Mamba nickel project in the with our shareholders and
given the current state of the a drilling campaign targeting Fraser Range and the Co- hopefully pushing the project
market for junior greenfields extensional work around the runna silver-lead-zinc-copper through to development at
explorers. Lena deposit by the end of project in the Southern Gawl- some stage in the near fu-
the month. er Craton. ture.”
“The focus for the company
was to diversify a little bit into Extensional drilling will also Musgrave terminated a Cue was one of two pro-
gold, but also maintain our take place at Hollandaire, farm-in and JV agreement jects Silver Lake elected to
strength in base metals ex- which has demonstrated over the Menninnie Dam divest late last year. The em-
ploration, so we jumped right VMS potential and other geo- zinc-lead-silver project, near battled producer also struck a
on this opportunity,” Waugh logical similarities with Sand- deal with Metals X Ltd for the
told Gold Mining Journal. fire Resources NL’s DeGrus- Comet gold project, also in
sa copper mine. the Murchison, for $3 million.
“We’ve obtained 126,000oz
in gold resources through this Musgrave also obtained Silver Lake is retaining the
acquisition and there’s oppor- access to an extensive re- Tuckabianna mill and associ-
tunity to potentially toll-treat source database on Cue as ated tenements.
some of that and to discover part of the acquisition and
additional ounces through Waugh said initial glances at – Michael Washbourne
exploration and extensional the available information had
drilling.” been inspiring.

The only cash Musgrave “As well as the obvious
must fork out for the Cue pro-
ject will go directly into the
ground. The company will ini-
tially place $75,000 worth of
ordinary shares in voluntary
escrow and must spend a
minimum $900,000 on explo-
ration within 12 months. Mus-
grave will earn an initial 60%
interest in the project with a

January – March 2016 GOLD MINING JOURNAL Page 9

NEWS

ABM hopes to right Old Pirate

ABM Resources behind. Although analysis of Mike Etheridge not been performing well and
Ltd’s board was the material is incomplete, we have been losing money
lucky to avoid walking preliminary estimates indi- ing relatively narrow mineral- by mining those, but there
the plank at its AGM cate that several hundred ised quartz veins from within are areas that are performing
on November 24. ounces of gold are poten- fresh, blasted rock,” he said quite well,” he said.
tially lodged behind the mill in the November 20 update.
More than 40 agitated liners. However, this quantity “Some are outperforming
shareholders attended the fo- of gold only represents less At the AGM, Lambert said expectations and in those ar-
rum demanding an explana- than 10% of the apparent ABM was in the process of eas we can make a margin.
tion for the poor performance shortfall between the mine doing a bench-by-bench The overall margin of the op-
of the company’s high-grade and the mill. Other sections analysis of Old Pirate’s four eration can be improved if we
Old Pirate mine, which deliv- of the plant have been closely pits to establish parameters can drop those poor perform-
ered 30% less gold than ex- examined, but only relatively needed to adjust its mining ing areas off. That will cost us
pected since processing an small amounts of trapped inventory model. mine life, because we will be
initial 10,000t parcel of “com- gold have been identified and dropping material that was
missioning ore” through its recovered.” “We have, under the cir- already part of the mine plan,
Coyote gold plant in July. cumstances, decided to ap- but what we are hoping is in
Upon confirming lock-up ply a lower top-cut to the the areas that are performing
On September 21, ABM an- wasn’t the issue, ABM put grades used,” Lambert said. well, we will be able to ex-
nounced the first 15,000t of forward a list of alterna- tend those further down. We
Old Pirate’s mineral inventory tive reasons for Old Pirate’s “What we are looking at do- are hoping we will be able to
since its parcel milestone av- plight, including deficiencies ing in the remodelling, even bring in higher value material
eraged just 9 g/t gold – 1.9 g/t in the mine’s inventory model though the geology and the at the expense of the under-
less that its mine claim total and mining method. statistic doesn’t support it, is performing stuff.”
average. reducing our 300 g/t top cut
Lambert said in addition to to 50 g/t top cut because we Shareholders said it was
The company also con- production falling short of the have got to try and better es- time for ABM to come clean
firmed its mill reconciled at an mining inventory forecast, it timate what we think we are with the market.
average 7.3 g/t gold (it fore- was possible levels of min- going to get out of the mine.
cast 12 g/t) and recovered ing inventory loss and dilu- Now that doesn’t reduce it “The uncertainty we have
just 11,256oz gold (mid-range tion were greater than ABM down to the level the mill is at the moment is not helping
guidance was 18,333oz) from predicted. indicating it is, but it brings it the company or the share-
July 1 to October 31. somewhere more in line and holders,” one shareholder
Brett Lambert presents a more conservative said.
An independent review of approach to estimating the
ABM’s grade control prac- “Key underlying causes grade in grade control.” “This kind of ‘she’ll be right’
tices and processing opera- are likely to be the inability to approach, I’m afraid, is not a
tions offered no explanation assign an appropriate repre- Lambert also told share- good look and this is why the
for the shortfall and it was sentative grade to individual holders ABM had engaged share price has been under
hypothesised a considerable mining blocks, due to the a consultant to produce a pit such attack.”
lock-up of coarse gold in the highly variable grade distribu- optimisation study, which was
plant’s ball mill, pump boxes, tion, coarse gold effect and due for completion at the time Another added: “The mar-
sumps and other areas of the difficulty in cleanly excavat- of print. ket isn’t a fool. We’ve been
plant was to blame for the sold down to buggery; way
discrepancy – a logical as- “There are obviously areas below resource fire sale.”
sumption given the company within our deposits that have
experienced lock-up issues Chairman Mike Etheridge
during Old Pirate’s trial min- said ABM was committed to
ing exercise in 2013. resolving Old Pirate’s issues
and hoped the bench analy-
However, on November 20 sis and pit optimisation study
ABM delivered the news no- would set the company on a
body wanted to hear – the path to recovery.
gold wasn’t in lock-up.
“We are planning to find out
ABM chief executive Brett more over the next… weeks
Lambert said: “In an effort and we will make another an-
to assess the level of gold nouncement,” he said.
lock-up in the mill, a section
of the mill lining was removed “It hasn’t been a good time
to recover material lodged for any of us.”

– Rhys Dickinson

Page 10 GOLD MINING JOURNAL January – March 2016

SAVE THE DATE

20 April 2016 – Hilton Adelaide

saresourcesconf.com

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NEWS

Excelling in gold

Excelsior Gold Ltd The old Zoroastrian underground mine was developed in the early 1900s and produced about
does not have the 56,000oz. The old workings were exposed in the northern end of the Zoroastrian open pit
biggest project on the which was mined by Aberfoyle Gold in the late 1980s/early 1990s
block, but there is no
shortage of interest in January,” Hamlyn said. for our project is probably the currences of gold. We have
its gold pot. Excelsior has locked in 70- underground,” Hamlyn said. 22 resource areas at the
moment and another 70-odd
“It is a great time to be 75% of production hedged at Open pit and underground targets to test. We are con-
developing a gold mine and $1,570/oz over the first two reserves currently total centrated on mining to get
even for a small operation like years of operations which is 297,000oz, with 170,000oz to production and cash flow.
ours there was a lot of inter- essential to paying back a @ 3.65 g/t gold credited to We are looking to mine five of
est from earth moving con- loan from Macquarie of $4 the Zoroastrian underground. the 22 occurrences because
tractors,” Excelsior managing million. they are more advanced than
director David Hamlyn told With a focus on produc- the others. With reserves of
Gold Mining Journal. The Castlereagh and Jack- tion in the past two years, 300,000oz at the moment
orite open pits were the first Excelsior has slowed the rate we have enough to kick off
Such interest is a reflec- within Kalgoorlie North to be at which it has added to the production and develop with
tion of the commodity cycle – mined in late 2015 and along resource base at Kalgoorlie cash flow later and build as
iron ore had dipped to below with Big Blow South and Zo- North. the underground comes in
$US40/t in December while roastrian Central will be the with a scope to build on oth-
nickel fell to 12-year lows – in main ore sources from which Nevertheless, since 2009, ers.”
which contractors are com- Excelsior will deliver to Pad- the company has increased
peting for jobs of all sizes, dington for a total of 1.36mt resources from 267,000oz to Hamlyn said 50,000 ozpa
including Excelsior’s flagship @ 2 g/t gold until mid-2018. 1.4 moz gold at a discovery gold production was a good
Kalgoorlie North gold project. cost of $15/oz. stepping stone for the com-
From 2019 onwards, Excel- pany to build on through ac-
First gold production from sior is targeting a production Excelsior’s patch in the quisitions of early stage pro-
the project is imminent, with profile above 50,000 ozpa Bardoc Tectonic Zone covers duction opportunities.
life-of-mine average produc- gold, with over 50,000oz @ 134sq km of granted mining
tion of 37,000 ozpa @ $1,219/ 5.5 g/t from the Zoroastrian tenements, which has been a While the company recent-
oz. underground set for delivery hub of M&A activity in recent ly retained some nickel rights
in 2020. times. in the region, Hamlyn said
Excelsior is aiming for gold remained the priority in
about 25,000-30,000 ozpa “I see a change in philoso- “We are not being dis- Kalgoorlie, however, Excelsi-
gold production from 2016 to phy over the next few years, tracted [by M&A activity], we or was also prepared to look
2019. with high-grade underground have a set plan and we are elsewhere for opportunities.
projects operating on smaller not concerned by being taken
The current size of the mills coming into play,” Ham- over by Paddington but we – Mark Andrews
Kalgoorlie North project does lyn said. “Essentially, our first are happy to be tied up with
not justify a standalone plant four years will be open pit pro- them because we see it as
with Excelsior engaging Zijin duction, then 450-500,000 a win-win situation,” Hamlyn
Mining to help with process- tpa from the underground said.
ing. and really the long term future
“We have intense gold min-
Zijin, owner of the Pad- eralisation with over 90 oc-
dington mill, will treat ore for
Excelsior which has an allo-
cation of 500-650,000 tpa for
an initial 2.9mt of ore.

Hamlyn sees the deal with
Zijin as more cooperative
than a straightforward tolling
agreement.

The deal is for an initial five
years, with five-yearly exten-
sion options thereafter.

“It is essentially a 10-year
milling agreement which
works for both parties as we
try to keep milling costs down.
First dirt is to be delivered in

Page 12 GOLD MINING JOURNAL January – March 2016

Great Southern Gold

Southern Gold sees several years of underground production from Cannon following the end of open pit operations in 2017

Southern Gold its after repayment of costs and the company will take on but they may not be as hard
Ltd will be in the
which are charged on an at- all mining costs and retain all to get into production plus
money this year.
cost open book basis by Met- profits, with both parties open we will look at things further
Production from the Can-
non open pit mine, 35km from als X. to discussions on exploitation afield which can be moved
Kalgoorlie, started in Novem-
ber, with a total of 2,591oz “I think there was a little of underground opportunities. into JORC resources relative-
gold poured at the time of
print. bit of scepticism out there Meanwhile, Southern Gold ly quickly with minimal drilling

Cash generation of $12-15 that in some ways Metals X is already assessing under- expenditure,” he said.
million in the next 18 months
or so is expected as Southern would take Southern Gold ground scenarios at Cannon. Smaller satellite pits such
Gold looks for its niche in the
gold market. to the cleaners, but the deal Cannon open pit opera- as Monument, 800m from

“I think we are trying to we have is where costs are tions are expected to take Cannon, and Tooting Bec (4-
carve out our own end of the
market,” Southern Gold man- open book. Most of the costs Southern Gold into the sec- 5km from Cannon) are exam-
aging director Simon Mitchell
said. are fixed, so we have a pretty ond half of 2017. ples of projects from which

“I came to Southern Gold good idea of where costs are Total measured and indi- Southern Gold envisages fu-
with the philosophy that we
don’t necessarily need to be and to some extent Metals X cated resources at the Can- ture cash flow.
the operator of a project. We
don’t need to be 80 or 100% needs to perform to that cost non open pit are 753,207t @ The company is also open
owner of a project as long as
at the end of the day we can specification,” Mitchell said. 3.75 g/t gold for 90,927oz. to acquisitions of projects
get good cash flow from it.”
“From our perspective we Mitchell said depending on with potential for open pit de-
In these lean times any
cash flow is good, particularly will watch it with interest, but cash flow, a budget of $1 mil- velopment.
for small companies bereft of
support and attention in the we are pretty mindful that lion would be set aside for ex- However, Mitchell said the
market.
there aren’t too many people ploration drilling, with a focus traditional path taken by jun-
Enabling Southern Gold
to see money in the bank in making money out there at on advanced opportunities iors of working up large pro-
2016 is a crafty deal con-
structed with Metals X Ltd. the moment, so it is not a bad which could be transitioned jects would not be Southern

Metals X financed the position to be in.” into mines. Gold’s strategy.
project and will process ore
through the Jubilee mill at its It would appear Southern “These opportunities may “I think we probably need to
South Kalgoorlie operations,
35km from Cannon, with both Gold shareholders are happy not be as big as Cannon, see more of this in the junior
parties receiving 50% of prof-
as well, with the stock – space and probably a little

27c/share in late Novem- less of the typical objec-

ber – moving 60% this tives of companies that

year. want to find 1 moz depos-

“Clearly it is going in the its and mine 100,000 ozpa

right direction and right gold for 10 years – the

now we are starting to think cookie cutter approach I

about what is going to hap- call it. I think those days

pen after the Cannon open are just not there, you will

pit,” Mitchell said. struggle to raise finance at

Southern Gold and Met- the moment for that any-

als X have expanded the way. For me it is about how

Cannon agreement to you deploy capital in a way

include the George’s Re- that is efficient and at the

ward deposit which strad- end of the day generates

dles the Cannon bound- At Southern Gold’s election, Metals X can cash flows for sharehold-
ary. provide a guaranteed gold price on the ers,” Mitchell said.

George’s Reward is first 30,000oz gold production at a spot – Mark Andrews
wholly owned by Metals X price less $25/oz

January – March 2016 GOLD MINING JOURNAL Page 13

NEWS

Teck of approval for Zenith

Zenith Minerals Ltd’s Ka- Teck must complete a minimum 1,500m drilling at Kavaklitepe, a good relationship with the
vaklitepe gold project in western Turkey, under a JV agreement with Zenith Minerals Mines Department,” Clifford
Turkey will be managed by said.
Canadian powerhouse Teck ment they were laying off g/t gold, while results from
Resources Ltd. 1,000 people, which made us other rock chip sampling in- “We’ve always liked the
think of where we stood [at clude 28.2 g/t, 21.7 g/t, 6.7 g/t project but it has been slow
Under a new option agree- Kavaklitepe],” Zenith manag- and 3.66 g/t gold. getting it permitted and ready
ment, Teck may earn a 70% ing director Mick Clifford told for drill testing. It might be a
interest in Kavaklitepe by Gold Mining Journal. Drill permits have been few months yet [before drill-
spending $US700,000 on submitted and an operational ing starts].”
exploration, including a mini- “It is an endorsement for licence approved, meaning
mum 1,500m drilling. the project though that they Teck is ready to drill upon be- When drilling starts, the
carried through with the JV.” ing granted a permit. aim will be to test one or two
The deal relieves Zenith of soil anomalies to help get a
expenditure and cash com- Kavaklitepe, in western “The Teck guys have a lot handle on depth and continu-
mitments under the initial Turkey, has shown potential of in-country experience and ity of mineralisation.
Turkish agreement. to be an exciting prospect have had a presence for over
with continuous rock chip 30 years in Turkey, with many Teck has taken over man-
With a market cap of $5.8 samples returning 54m @ of their guys going through agement of the project,
million and cash of $490,000, 3.33 g/t gold and 21m @ 2.67 university there and having meaning Zenith can focus
Zenith is in a similar position on its priority project, Develin
to many ASX-listed explorers, Creek in Queensland.
however, Teck’s involvement
at Kavaklitepe is a major win The Develin Creek copper-
for the company. zinc-silver-gold project is
Zenith’s leading asset in a
The deal comes at a time portfolio also including man-
when Teck is looking to ganese and iron ore projects.
downsize its workforce and
cut costs as a result of a lull in Clifford said the company
commodity prices. would sit on those assets for
the meantime, as its immedi-
“We’ve been negotiating ate efforts will be concentrat-
with Teck for a little while and ed on copper and gold.
they made the announce-
– Mark Andrews

Tyranna scores hole in one on Golf Bore

Tyranna Resources Ltd ia’s Western Gawler Craton. thanks to the compa- the role of manag-
has launched a new The new four-hole pro-
phase of drilling at its Golf ny’s sale of its 57m ing director.
Bore prospect, as it begins gramme was designed to
feasibility work on the project. target deeper zones of miner- powered barge for “The trans-
alisation first identified in the
The new phase of drill- September programme. The approximately $2.85 formation of the
ing began following the re- results of the gold intersec-
lease of “outstanding” gold tions were promising with hits million. The com- company is now
assay results from drilling of including 2m @ 31.6 g/t and
the supergene zone at Golf 1m @ 27.9 g/t. These tests pany said proceeds complete” chief ex-
Bore. Tyranna completed a resulted in the identification
4,829m drilling programme at of likely high-grade gold in from the sale of the ecutive Ian Finch
Golf Bore in September. The at least three primary feeder
success of that programme shoots. barge would be used said. “Bruno’s ex-
has motivated the company
to begin feasibility work on Tyranna, which claims to mostly to fund ex- perience, enthu-
the project. have the largest and most
prospective land holding in ploration and devel- Bruno Seneque siasm and zeal
The Golf Bore prospect the Western Gawler, started opment activities at make him the ideal
is one of several advanced the new programme on De-
prospects within the com- cember 1 last year. Jumbuck. person to take the
pany’s 8,000sq km Jumbuck
gold project in South Austral- The project has recently “The sale provides a boost company forward and guide it
received a funding boost
to Tyranna’s ongoing re-cap- to its goal of becoming a sig-

italisation programme and nificant Australian gold pro-

follows the company’s recent ducer in the near-term.”

successful $700,000 capi- Finch will step down as

tal raising” Tyranna said in a chief executive, taking on the

statement to the ASX. role of non-executive chair-

The new drilling programme man.

coincided with the appoint- – Selina Kerse
ment of Bruno Seneque to

Page 14 GOLD MINING JOURNAL January – March 2016

Kabore wins Burkina Faso
presidential election

Roch Marc Ka- Burkinabe people are looking forward to a period of stability managing director Richard
bore has become following democratic presidential elections Hyde said it was a surprise
Burkina Faso’s first to see a clear result after just
new leader in dec- ing car and motorbike horns. Kafando will step down one round of voting.
ades in a move which Compaore seized power by once the results are con-
may bring stability to firmed by the constitutional “In Burkina, traditionally, if
the gold-rich West force and won four elections, court and the new leader is there is no clear winner and a
African nation. all of which were disputed. He sworn in. A parallel election candidate doesn’t win 50% of
was toppled by protests after for the National Assembly the vote, the two leading can-
The election of the former trying to change the constitu- also took place on November didates run off against each
prime minister represents a tion to extend his rule even 29. other,” he said. “We were ex-
pivotal moment for the West further. pecting that to happen.”
African nation, which – since Kabore’s election victory
gaining independence from The vote could serve as an will be viewed as a boost to Although gold mining oper-
France in 1960 – has experi- example of democratic tran- the country’s gold mining ations have been only lightly
enced multiple coups. Kabore sition to other countries in sector. impacted by the political tur-
served as prime minister and Africa, where veteran rulers moil, Hyde said he expected
head of the National Assem- in Burundi and Republic of Burkina Faso has seven security within the country to
bly under President Blaise Congo changed the constitu- gold mines which contributed improve markedly following
Compaore, who was toppled tion this year to pave the way to production of 1.19 moz in Kabore’s victory.
by an uprising in October for a fresh term in office. 2014. The country’s budget
2014 after 27 years in power. for gold exploration last year “I think you will find that
Kabore split with Compaore Kabore heads the Move- was $US99.8 million, accord- now there is some stability in
early last year and formed an ment of People for Progress ing to SNL Metals & Mining Government. During the up-
opposition party. (MPP), made up of disaffect- data. rising last year we got all of
ed former allies of Compaore. our ex-pats out of the country
“My first thought is to rec- Roch Marc Kabore and we didn’t do a lot of work
ognise the honour of this high Many people say their pri- between the end of October
office and to feel the weight ority is for the new president There are a number of Aus- and Christmas. We got work-
of its great responsibility,” Ka- to promote economic growth tralian companies active in ing again in January and then
bore said in a speech to thou- in the landlocked country, Burkina Faso, including Pre- more recently in September,
sands of his supporters after which produces gold and dictive Discovery Ltd, Gryph- when the attempted coup
being declared winner. cotton but remains impover- on Minerals Ltd, Carbine took place, we had one ex-
ished. Corruption and justice Resources Ltd, West African pat in country; so it slowed us
Provisional results from are also important issues. Resources Ltd and TSX-list- down a bit.
November’s election showed ed Sarama Resources Ltd.
Kabore won 53.5% of the The election was pushed “In total we probably lost
vote to defeat former Finance back from October 11 due to West African Resources six months when you actu-
Minister Zephirin Diabre, who an abortive coup in Septem- ally look at the delays and
scored 29.7%, and 12 other ber by members of the elite how long it takes to get start-
candidates, the electoral presidential guard, in which ed again. The project is still
commission said. Turnout transitional President Michel there and the gold is still in
was about 60%. The outright Kafando and his prime minis- the ground though.”
majority means there will be ter were taken hostage.
no run-off. Hyde was also encouraged
That coup cost the country by Kabore’s pro-investment
“This election went off in more than $US50 million in stance.
calm and serenity, which revenue, trimming growth by
shows the maturity of the 0.3%. The guard has since “Kabore has been a former
people of Burkina Faso,” been disbanded. minister in the previous gov-
Barthelemy Kere, president ernment as well as the prime
of the electoral commission, minister,” he said. “He is re-
told a news conference. ally well educated. Kabore is
pro-business. The first thing
Crowds celebrated the he said was: ‘We need to get
news in the streets of the to work’. I know he is very
capital, Ouagadougou, honk- mining focused.”

– Selina Kerse and
Reuters

January – March 2016 GOLD MINING JOURNAL Page 15

SAVE THE DATE

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GOLD MINING JOURNAL AWARDS

Explorer of the Year

In an era when the gold in- continuing with its ambitious For our Miner of the Year, improvements at its Simberi
dustry continues to lament a regional exploration plans voters decided that a com- gold mine in Papua New
lack of new discoveries, Gold despite also building the de- pany named after the patron Guinea and Gwalia mine in
Road Resources Ltd’s green- velopment case for Gruyere. saint of miners would win for Western Australia.
fields gamble continues to its resuscitation story.
defy the odds; winning Gold Gold Road chairman Ian “I think the team deserves
Mining Journal’s Explorer of Murray (pictured) told Gold Although Evolution Mining to be recognised by indus-
the Year for a second suc- Mining Journal the company Ltd finished just a few votes try because it is one of the
cessive year. was still committed to region- behind, it was the remark- bigger turnarounds that you
al exploration. able turnaround story of St would see out there and now
Gold Road was a standout Barbara Ltd which won over we have to keep delivering,”
winner in 2014 thanks to the “Our regional exploration the experts. It was a year in Vassie said. “There were
rapid delineation of resourc- budget for FY2016 is $12 which the Melbourne-based some hard things there to do
es at its Gruyere deposit on million; that is big given it is miner went from basket case but they were the right things
the unexplored and remote all greenfields work,” Murray to bright light, thanks to the to do. It has proven to be a
Yamarna belt in Western said. “Nobody is spending sale of its troublesome Gold very quick turnaround in 10
Australia. This year, experts these sorts of dollars, even Ridge project in Solomon Is- months.”
rewarded the company for globally, on greenfields ex- lands and vast operational
ploration.”

January – March 2016 GOLD MINING JOURNAL Page 17

MINER OF THE YEAR: ST BARBARA

Four-man band has
St Barbara marching

The domination of Northern Star Resources Ltd and Evolution Mining a tight ship alongside Tim
Ltd in the Australian gold space has perhaps allowed St Barbara Ltd to Netscher (non-executive
set about getting its house in order under the radar. chairman), Kerry Gleeson
(non-executive director and
Facing closure a little over David Moroney (non-execu-
tive director).
12 months ago, St Barbara
He said there was pres-
has bounced back to be a ently no need to add to the
St Barbara board, despite
“must watch” stock. greater expectations on the
company to sustain its high
“I guess I have exceeded level of performance.

my own expectations and that “To have returned 1,000%,
there are some pleased peo-
of the board and some share- ple out there. We were facing
a second strike last [AGM]
holders. We always had the time but we avoided that and
are now experiencing very
view that we could recover strong support. We have a
new board, only four people,
from that position – 7c/share and it is a good time to refresh
our strategy,” Vassie said.
in December 2014 – which
Operations improved, the
was really a factor in us going key to the company’s future
success lies in rectifying its
out of business and running balance sheet.

out of money,” St Barbara A record 248,000oz gold @ $841/oz was produced Continued cash flow gen-
from Gwalia in FY2015 eration from Gwalia and
managing director Bob Vas- Simberi has allowed St Bar-
sie told Gold Mining Journal bara to reduce its debt, with
$US69 million of the $US250
in Perth late last year. out of the Solomons and the Gold Ridge vulnerable to ille- million notes issued in 2013
big thing was turning PNG gal miners; a major issue for repurchased ($US181 million
St Barbara’s rapid share around, and it is now actually St Barbara to deal with. remains outstanding), while
making money.” a $US46 million debt facility
price surge to a high of Meanwhile, across the with RK Mine Finance (Red
St Barbara exited the Solo- ocean at Simberi in PNG, Kite) also remains.
$1.44c/share in October 2015 mon Islands for little more things weren’t happening
than pocket change however for one of Australia’s highest In November, $US20 mil-
was on the back of shrewd disconnecting from Gold grade miners either. lion was pre-paid to Red Kite,
Ridge has saved the com- leaving St Barbara with an
management decisions, pany. Poor equipment reliability aggregate cash balance of
and availability, higher than $94 million to the end of No-
which now has analysts and Gold Ridge and Simberi expected mining costs and vember.
were part of the package the lower gold production had put
banks initiating coverage with then-Tim Lehany led St Bar- St Barbara on the back foot Throughout this prolonged
bara took on when it acquired at Simberi and cast doubts period of woe, Gwalia has
target prices in the vicinity of Allied Gold for $556 million in on the merit of the Allied Gold acted as a backbone to the
2012. transaction. company and will be the pillar
$1.80-$2/share. It has also of its rejuvenation.
The idea of creating a di- Furthermore, the compa-
started to receive coverage versified international gold ny’s liabilities and debt posi- “There is a lot more interest
producer with output of tion were starting to pile up. nowadays in what the future
from various outlets as it re- 435,000 ozpa in FY2013 res- of Gwalia can look like. It has
onated with the investment “The Pacific assets – Sim- one of the best reserve po-
entered the ASX300 in 2015. community, with St Barbara beri and Gold Ridge – were sitions and [we are happy] it
shares reaching a recent high a failed acquisition,” Vassie has been able to go on and
Re-taking its place among of $2.37 late in 2012. said.

Australia’s top 300 compa- A cyclone and subsequent “But we survived it and are
heavy rains in Solomon Is- actually making money out of
nies by market capitalisation lands severely hampered PNG now. I think people will
Gold Ridge operations in say we have re-earned our
– $554 million late last year 2014 which caused signifi- stripes from the support we
cant flooding and damage at
– came following the compa- the mine. are seeing as a board and for
our management teams.”
ny’s divestment of its the Gold Surrounding infrastructure
was also damaged which left Vassie was installed as
Ridge project in Solomon Is- managing director in mid-
2014 and has been running
lands and the sharpening of

operations at Simberi, Papua

New Guinea.

“Certainly the Pacific ac-

quisition into the Solomons

and PNG had drained the

cash,” Vassie said. “Essen-

tially, we knew if we could

stop the bleeding there, and

with such strong cash gener-

ation from Gwalia in Western

Australia, we could reduce

our costs corporately. We got

Page 18 GOLD MINING JOURNAL January – March 2016

on like it has,” Vassie would make a pretty
said.
good exploration com-
In FY2015, a record
248,000oz gold was pany. We haven’t been
extracted from Gwalia
at AISC of $841/oz. spending a lot of money

Current reserves at on that lately but we are
Gwalia are 5.3mt @ 9.4
g/t for 1.6 moz gold. able to turn it over a

Deeper drilling below bit now. It is not being
current underground
workings is in progress, valued in the portfo-
while St Barbara con-
tinues to assess mate- lio at the moment, but
rials handling systems
and the potential for I think that will start to
deeper mining.
get some value,” Vas-
Preliminary scoping
studies on a shaft with skip sie said.
hoisting, a shaft with vertical
conveying and slurry pump- Organic growth is
ing to surface, which all re-
quire underground crushing, part of the immediate
have been carried out, with
higher level studies now tar- future but there are
geted.
also questions now be-
“If we can get that shaft
down and if we can find some St Barbara has locked in a gold hedge of $1,600/oz at Simberi ing asked about St Bar-
way of handling the ore down bara’s M&A prospects.
to depth then we don’t need
to wait seven years to put that end of guidance. million, predominantly on However, with the Allied Gold
in. If we can get it in earlier
then we can get the benefit Developments at Gwalia near-mine exploration at Sim- transaction still fresh in the
straight up,” Vassie said.
are expected to be closely beri and Gwalia, in FY2015, memory and Vassie intent
St Barbara is working to-
wards an investment decision watched, but market onlook- the company will spend $10 on exploring organic growth
on the materials handling
study in Q2 2017. ers will also be interested million on similar activities opportunities, it appears St

“If we can do 250,000oz [in to see whether Simberi can this financial year. Barbara will remain on the
FY2016], which is what we
did last year, or even more perform at the desired rate of However, Vassie sees sidelines for now.
potentially with the shaft, it
is going to print money for 100,000 ozpa gold. great potential in its regional “Honestly, we have great
a long period of time and is
going to be a great corner- “There are some ques- exploration projects; Tabar & organic opportunities at the
stone,” Vassie said of Gwalia.
tions about the sustainability Tatau in PNG, Pinjin (south of moment. That shaft or what-
“A lot of people would like
to have a cornerstone like at Simberi. The previous fi- Gwalia) and Centenary (north ever system we put in there
that in their portfolio and it is
important to us. We’re not into nancial year production was of Gwalia). is going to take some money
asset sales but a lot of people
are interested in the future 45,000oz, just gone [FY2015] “We are not throwing mon- so we can still crunch through
opportunities for us and how
we will get rid of our debt.” it was 80,000oz,” Vassie said. ey around at any dirt, but our debt,” Vassie said.

Debt reduction will follow “We are at breakeven be- three main plays put together “When you look at the con-
on from cash flow generation
from Gwalia where 230,000- cause we were losing solidation that has hap-
250,000oz @ $875-940/oz
has been guided for FY2016. money in the first half pened in the gold indus-
Capital expenditure in the pe-
riod is expected to be $30-35 and gaining money in try; Northern Star and
million with St Barbara confi-
dent AISC will be at the lower the second half.” Evolution have done a

Production from fantastic job of getting

Simberi in Q1 was those assets together.

30,000oz, well above We are probably one of

the rate required for St the better companies

Barbara to hit guidance in that next grouping

of 90,000-110,000oz down, so we could par-

@ $1,275-1,400/oz ticipate and further con-

AISC for FY2016. solidate but it has to be

Reserves at Simberi sensible.

are 19.9mt @ 2 g/t for “You could add a lot of

1.3 moz gold, with four ounces but not at a very

years of oxide mine life good margin, you’d be

remaining, while 15 upping ounces and still

years of sulphide mine be fragile on the margin.

is potentially in the We are in such a good

pipeline. position on Gwalia on

A PFS on process- the margin. We even

ing the sulphide ore is have a good margin

due for completion in on Simberi now as we

the March quarter, the did hedge Simberi at

results of which could $1,600/oz gold [October

play a big part on de- 2015 to June 2016].”

ciding St Barbara’s – Mark Andrews
future, as will explora- Group production for St Barbara in FY2015 was

tion. 377,000oz @ $1,007/oz AISC, a record

After spending $8 for the company

January – March 2016 GOLD MINING JOURNAL Page 19

EXPLORER OF THE YEAR: GOLD ROAD

Gold Road leading to
more than Gruyere

Most junior companies would be all consumed by development of a 5.5 falls under a JV with Japa-
moz project but Gold Road Resources Ltd is seemingly cognisant of nese metals conglomerate
the need to keep its exploration momentum going. Sumitomo.

The company has enjoyed Gruyere opportunities,” Mur- 5,000sq km of an unexplored “Each has a dedicated sen-
widespread praise for the ray said. “The global spe- gold belt.” ior geologist who put their
discovery of the Gruyere de- cialist resources funds on own programmes together
posit – which is now in PFS our register recognise the Such is the size of Gold with the motivation of access-
mode – but with a 5,000sq wider potential of Yamarna Road’s land package in the ing capital from the company
km landholding on the green- and have always said to us: belt, the company has split based on the exploration re-
field Yamarna belt, the com- ‘Gruyere is great but tell us its efforts among three ex- sults they achieve,” Murray
pany knows there is still much when you find the next one’. ploration teams; South Dor- said.
value to be created through They understand we are othy Hills (which includes
exploration. uniquely placed on a global Gruyere), the rest of North The exploration teams have
scale given that we control Yamarna and the South tested six of 10 camp-scale
“The true strength of Gold Yamarna tenements, which targets identified since 2013,
Road is the 5,000sq km each of which have returned
landholding we have in this Ian Murray encouraging intercepts. The
untested belt and there are focus for the rest of FY2016
strategic benefits to retain- will be on the Washburn
ing the exposure across the prospect at Corkwood in the
belt in one company,” Gold North Yamarna package, the
Road chairman Ian Murray Supergroup prospect at Wan-
told Gold Mining Journal. derrie and the Smokebush
Gold Road began work on its prospect within the Sumitomo
Yamarna holdings – 150km JV.
east of Laverton, Western
Australia – upon its listing Murray said Osborne and
in 2009. Early success was the exploration teams were
achieved at the Central Bore intrigued by the potential for
and Attila prospects but it various styles of mineralisa-
wasn’t until Gruyere was un- tion across the belt.
covered in 2013 that it set
out on the development path. “We have a strike length of
The company has since built more than 200km. In Kalgoor-
Gruyere into a 5.51 moz re- lie, there are hundreds of de-
source and is currently pre- posits of many different styles
paring a PFS for the project. in the 100km between St Ives
However, it is only one of 10 and Paddington,” he said.
potential gold camps across
the Yamarna belt and Murray Gold Road has parked a
and executive director Justin RC rig at the northern end of
Osborne continue to pursue the 200km strike, with initial
further discoveries. drilling focused on the Pacific
Dunes-Corkwood area which
A recent international road covers 13km of the Yamarna
show saw Osborne largely shear.
ignore the impending release
of the Gruyere PFS in favour “We drilled 25,000m of air-
of explaining Gold Road’s ex- core in 2014 and then went
ploration plans for 2016. back in September 2015 hav-
ing narrowed down the 100sq
“Because the Gruyere PFS km area to seven specific tar-
will take centre-stage when gets.”
released, this was the last
chance for us to talk non- Twelve RC holes were
drilled at the Washburn and
Gibson targets in September
with seven of eight holes at
Washburn intercepting gold
mineralisation.

Page 20 GOLD MINING JOURNAL January – March 2016

“That drilling included hit- institutional shareholders are Justin Osborne initial 30% and are likely to
ting 3m @ 13 g/t in the first prepared to trust Justin’s tar- reach the 50% milestone in
hole we drilled into bedrock. geting techniques,” Murray borne’s strategy is Sumitomo Q2 2016,” Murray said. “They
That is a remarkable achieve- said. which joined Gold Road in a are very encouraged by the
ment and one achieved be- JV over the South Yamarna results across the belt. It is
cause we spent our time Among those trusting Os- tenements in June 2015. a big company and they are
interpreting the geology,” very keen on greenfields ex-
Murray said. “They have earned their ploration. They have a lot of
copper-gold projects in Latin
Meticulously building the America but we are the sole
geological models has been gold-only project Sumitomo
at the heart of Gold Road’s is involved with.”
strategy on the Yamarna belt.
Having taken the initial dis- Murray said the JV was
coveries of Central Bore and most excited by the Smoke-
Attila to an underwhelming bush dolerite prospect where
feasibility study in 2011, the a 2km-long demagnetised
company returned to explo- zone has been identified.
ration determined not to take
its time to understand such a “We initially drilled across
grassroots project. a 1.2km mineralised strike in
the south of the prospect and
“We’re not ones for rushing the northernmost hole hit 6m
in,” Murray said. “Too many @ 31 g/t gold. Since then we
companies rush into explo- have interpreted a 2km de-
ration but we have taken our magnetised zone to the north
time to come up with theories which we plan to test next. It
and strategies and then test is similar to the dolerite-host-
them in our exploration.” ed St Ives systems and has
Justin excited.”
At the recent NewGenGold
conference (see page 43), The company is spending
Osborne reiterated the need $12 million on exploration in
to build the knowledge base FY2016, a figure Murray be-
before committing to full ex- lieves is unmatched in green-
ploration programmes. fields exploration.

“The time taken to do the “That is big given it is all
project targeting was the key,” greenfields. There is nobody
Osborne said. “That was 18 spending these sorts of dol-
months to two years and a lot lars, even globally, on green-
of effort went into that and it fields gold exploration,” he
was on the back of that prep- said.
aration that we identified the
key areas to explore. Shareholders may have
shown patience for such ef-
“There are lots of tools out forts but Murray is also con-
there but the important thing scious of the need to make
is to take your time and map the next discovery to confirm
properly and model what you the Yamarna belt’s endow-
are going to process...You ment.
have to be really strict and
disciplined.” “At the moment Gold Road
equals Gruyere in many
Such an approach may be people’s eyes,” he said. “But
good in theory but with many one more discovery and you
junior explorers struggling to start asking how many more
keep investor interest piqued, there are. And each of the
it is not always an option. five camps tested so far have
Murray admitted the Gruyere delivered with another five
discovery had also bought still to be tested down the
the company time. track. Remember, this ground
has only been systematically
“Now that we have made worked since 2009.”
the Gruyere discovery there
is less pressure on the – Dominic Piper
company than there would
be for a company which is Gold Road has already confirmed mineralisation on six of the 10
yet to prove itself,” he said. camp-scale prospects it has identified along the Yamarna belt
“Yamarna is proven now so

January – March 2016 GOLD MINING JOURNAL Page 21

MINER OF THE YEAR FINALISTS

Klein salutes career-best year

Evolution executive year, Evolution was set to Jake Klein generalist Australian funds
chairman Jake complete a hostile takeover looking for gold exposure, so
Klein cannot think of of Phoenix Gold Ltd at the “Our eyes are firmly fo- I think there’s still a lot of op-
a better 12 months in time of print and consolidate cused on the future and try- portunity for offshore funds to
his 25-year career in about 900sq km of prospec- ing to maintain the momen- start to notice just how much
the resources indus- tive tenure around its Mungari tum which we’ve built this the Australian gold industry
try. operations. past year. Obviously from has recalibrated,” Klein said.
an investor perspective, the
Klein may have spear- “We will produce 800,000oz thing we need to do now is “I expect Evolution would
headed development of the [in FY2016] of what is now deliver two or three quarters feature amongst those op-
first foreign-owned gold mine low-cost gold – very low-cost of demonstrable evidence portunities they look at. We
in China, but he considers gold if you convert it to US that these assets have trans- are definitely getting signifi-
transforming Evolution from dollars,” Klein said. formed us.” cantly more interest, whether
unheralded miner to Austral- it’s from equity analysts, gold
ia’s second largest gold-pro- “I think investors are start- The performance of the five funds or strategic investors
ducing company as his great- ing to look again at Australia, mines the company was built because we have, in some
est professional achievement particularly Australian gold on in 2011 – Pajingo, Cracow, ways, delivered a product
to date. producers, and obviously a Mt Rawdon and Mt Carlton in which investors are attracted
company with liquidity and Queensland and Edna May to.”
“It’s hard to find a better scale like Evolution has been in Western Australia – was
year in the 25 years I’ve had able to generate is of sig- also impressive, producing a Exploration is one area
in the industry,” Klein told nificantly more interest than record 437,570oz in FY2015 the company hopes to grow
Gold Mining Journal. “It re- where we were 12 months and playing a pivotal role in in 2016, with $25-30 million
ally has been a phenomenal ago.” helping Evolution success- set aside to work up regional
year for us.” fully expand its portfolio. prospects, continuation of the
Evolution’s September JV with Emmerson Resourc-
Evolution started 2015 quarterly results provided a “There’s no doubt the es Ltd at Tennant Creek in the
with a market capitalisation “teaser” of what sharehold- platform for our acquisition Northern Territory (see pages
of about $450 million and a ers could expect in 2016. The activity was laid by the op- 38-41) and begin drilling at
portfolio of reliable yet ma- company only had full owner- erational performance of our the Puhipuhi project in New
ture assets. By year’s end, ship of Cowal for 69 of the 92 existing assets over the last Zealand.
the company boasted a re- reporting days and Mungari four years,” Klein said.
vised market capitalisation of for just 37, yet generated re- “We’ve done a lot of inter-
$1.8 billion after acquiring two cord free cash flow of $105 “I could talk about the esting work, but we haven’t
new assets which account for million. Evolution’s free cash transactions [as the main yet delivered a discovery,”
50% of production. flow for FY2015 was $137.8 highlight], but really the thing Klein said. “We see it as a
million. which has stood out for me core part of our business, so
Acquiring the Mungari most about this past year has we’re going to continue in-
operations, 20km west of Under Evolution ownership, been the capacity and the vesting in it and we’re confi-
Kalgoorlie, from La Mancha Cowal produced 46,400oz at willingness of our people to dent we’ll deliver the upside.”
Resources Australia in April an AISC of $524/oz until the step up and go the extra mile,
was the catalyst for Evolu- end of September, substan- to act like owners and just de- As for further M&A in 2016,
tion’s stellar year. The deal tially below the $860-950/oz liver for us.” Klein isn’t prepared to rule
saw La Mancha owner, Egyp- cost guidance. Mungari also anything out, including a po-
tian billionaire Naguib Sawir- pumped out 48,538oz for the Attracting greater recog- tential overseas play.
is, become the company’s quarter despite a forecast nition from international in-
largest shareholder at 31% full-year production guidance vestment markets is next on “We’re in a fortunate posi-
interest. of 120,000-135,000oz. Klein’s wishlist. tion where we don’t have to
do M&A,” he said. “We have
Sawiris also agreed in-prin- Evolution also wiped $77 “Probably the biggest new a great company as it is, but
ciple to provide Evolution with million of debt from its books investors for us have been we will continue to look for
up to $100 million to pursue during the quarter and Klein other opportunities where
other acquisition opportuni- expects his company will they improve the quality of
ties and only one month later clear the $530 million owing our portfolio, as we always
the company picked up an in next to no time if those per- have, and we do see opportu-
asset Klein has long desired, formance trends continue. nity in the exploration and de-
Barrick Gold Corp’s 5.1 moz velopment area where there
Cowal mine in New South “As we’ve said several are a number of companies
Wales, for $US550 million. times before, the last peri- that do have some interesting
ods of production and perfor- projects but not easy access
Capping off a memorable to funding.”
mance are only useful in that
it impacts our future perfor- – Michael Washbourne
mance,” Klein said.

Page 22 GOLD MINING JOURNAL January – March 2016

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MINER OF THE YEAR FINALISTS

Northern Star defies
the doubters

Northern Star Bill Beament plans, converting its eight Beament said.
Resources Ltd’s new discoveries from FY2015 “The $US1,000-1,100/oz
two year-reign as pouring $50 million into an into resources and $39m to
Gold Mining Jour- exploration campaign which bring future deposits online gold price makes it interest-
nal’s top miner might increased measured and in- and lift group production. ing times for those that work
have come to an end dicated resources by 42% to offshore. It will be interest-
in 2015, but that has 4.4 moz gold, enhanced its Part of that money will be ing how that plays out; how
barely dampened reserves by 26% to 1.5 moz assigned to bringing Plutonic the debt repayments and the
the company’s spir- gold and improved resources up to speed, a mine that some financing goes across the
its following another to 8.9 moz – all at a discovery in the market view as North- majors and the senior inter-
watershed year for the cost of $19/oz. ern Star’s problem child. mediaries will be a really in-
mid-tier heavyweight. teresting space to watch over
“We put an additional At AISC of $1,550/oz, Plu- the next two to three years.
Managing director Bill Bea- 2.7 moz on the books and tonic has proved challenging I think when that comes
ment said Northern Star’s that’s even after depletion of for Northern Star compared around and if there is still a
greatest accomplishment in 622,000oz,” Beament said. to Kanowna Belle, Kundana, $1,000-1,100 US gold price
2015 was proving its naysay- Jundee and Paulsens, where there could be some inter-
ers wrong. “At a $19/oz discovery average costs for FY2015 esting assets that potentially
cost that’s huge. That return were $1,001/oz. fall out of portfolios. That’s
“When we bought these on invested capital is simply where the opportunity lies for
assets last year everyone stunning considering these Beament believes relief companies like us in years to
thought it was a case of are upper head grade-type is in sight at Plutonic, which come.”
Chicken Little and the sky ounces sitting at $400-500/ is reflected in Northern Star
was going to fall in on North- oz margins. Pure and simple, setting a guidance of 75,000- Beament said 2016 could
ern Star, but we never missed we bought $220 million worth 80,000oz at ASIC of $1,300- be another landmark year
a beat,” Beament said. of assets…and we turned 1,400/oz for Plutonic this for Northern Star and he
[Northern Star] into a $1.5 bil- year. was excited by the promise
“You tell me how many lion company.” of Kanowna Belle’s Velvet
people in the industry have “[In 2015] we had to in- discovery, Kundana’s Millen-
actually achieved what we The company kicked off crease capital development nium play, the evolution of its
achieved?” this financial year with an- accessing Plutonic’s new ore- Pegasus project and, hope-
other sizable coup, signing bodies,” he said. fully, the steady decline of the
Beament said if at times a farm-in and JV heads of Australian dollar.
he failed to adequately com- agreement deal to progres- “That investment is really
municate the company’s suc- sively acquire 60% of Tanami paying off now; we’re getting “When you spend a bit of
cess in FY2015, Northern Gold NL’s 2.7 moz Central into these new ore zones. money and have the risk pro-
Star’s numbers did the talking Tanami project in the North- file of a company like North-
for him. ern Territory. “We are just starting to pro- ern Star you are bound to find
duce out of them; now they a lot more gold,” Beament
Northern Star produced It also committed to parting need to get through the mill said.
622,000oz gold at AISC of with $74 million investment and prove what they are. The
$1,065/oz, increased its un- capital to build on its good proof will be in the pudding.” “We had 30 drill rigs spin-
derlying NPAT by almost work last year – $35 million ning in June and we are spin-
200% to $108.9 million and for targeted drilling to bring Beament also made it clear ning 26 at present. These are
boosted its underlying cash more resources into mine Northern Star’s $74 million all diamond rigs, not RC or
flow to $186.5 million, a 318% commitment to asset devel- RAB. You only do that when
improvement on FY2014. opment and optimisation was you’ve found deeper gold,
a sign of its exit from the M&A you’re doing infill drilling or
Northern Star has always scene – for now. you’re extending known ore-
had a knack for foresight bodies. When you spend the
and much of its success in He reckoned Australia’s money you will find a lot more
FY2015 could be attributed to best mid-tier assets had been stuff and that’s what we will
its exploration vision. snapped up and were unlikely continue to do on these sys-
to leave their owners’ portfo- tems.”
The company allayed con- lios.
cerns about short mine lives – Rhys Dickinson
across its suite of assets by But, interestingly, Beament
admitted he would be keep-
ing an eye on opportunities
abroad in the coming years.

“Where I do see potential
in the coming years is what
happens on a global scale,”

Page 24 GOLD MINING JOURNAL January – March 2016

Gold Fields eyes Aussie mines

Gold Fields Ltd months, while AISC de- mining history made it the
chief executive creased 9% to $1,173/oz.
Nick Holland is seek- In US dollar terms, AISC priority destination.
ing more Australian was 15% lower at $US859/
assets for his com- oz. While M&A will be a
pany’s production
portfolio. Net cash flow from Aus- strong focus for Gold
tralia was $US64 million,
Continued strong perfor- compared with $US40 mil- Fields in 2016, explora-
mances from the company’s lion in the June quarter.
four operating mines in West- tion of regional projects is
ern Australia – Granny Smith, Gold Fields churned out
Darlot, St Ives and Agnew/ a combined 725,400oz again high on the agenda.
Lawlers – coupled with a from the four mines in the
weakening Australian dollar first nine months of 2015 The company has tipped
has Holland searching the and could yet surpass the
country for new assets to in- magical 1 moz mark with more than $100 million
corporate into his Johannes- another strong quarter of
burg-based business. gold production. into the ground over the

“I’m not afraid for us to take “I think overall we didn’t past two years and an-
more exposure to Australia,” expect to do more than 1
Holland told Gold Mining moz for the year – maybe other big budget is likely
Journal. the split of how we thought
we were going to do it was to be set aside for the year
“If there are opportunities different – but what’s been
for us to buy things that are good is that when one opera- ahead.
maybe small but incremental tion has a bit of a decline [in
to our operations, that’s great. performance], another opera- “I think we’re in a good
If we can buy standalone op- tion picks up,” Holland said.
erations, we would love to do space for now, but these
that too. “It’s a great portfolio and
a good place to operate. We are a bunch of operations
“One of the opportunities like the work ethic in Aus-
we’ve got is that we’re only tralia, we like the ethos, the that do require a lot of care
using about 60% of our total focus on safety continues to
nameplate capacity in the be really good, the skills are and effort, particularly in
four mines. good and geopolitically it’s
one of the best places to be.” Nick Hollland terms of replacing ounc-
“To that extent, we could es,” Holland said.
do tolling arrangements or Granny Smith continues
we could acquire deposits to be the “pick of the bunch” lower output of 89,200oz at “They’re orogenic systems
within economic trucking dis- for Gold Fields in Australia,
tance. It’s one of the things according to Holland, with St Ives. which means they’re not
we’ve been thinking about if gold production up 10% to
we’re not successful in buy- 82,100oz in the September Holland said the invest- bulk-disseminated orebodies,
ing standalone operations in quarter.
Australia.” ment markets were slowly they tend to happen in clus-
A focus on mining higher
Australian operations have grades from the Lords South beginning to understand the ters, they pinch and swell and
accounted for 42% of group Lower deposit helped lift
production since Gold Fields production at Darlot by 46% value the former Barrick as- they’re discrete deposits that
acquired Granny Smith, Dar- to 25,500oz gold during the
lot and Lawlers from Barrick same three-month reporting sets were bringing to Gold don’t necessarily continue for
Gold Corp in mid-2013 for period.
$US270 million. Fields. many kilometres.
Challenging ground condi-
Production from Australia tions did not seem to impact “When we bought Granny “You have to look under
totalled 249,000oz gold for operations at Agnew/Lawl-
the September quarter, up ers, with production up 7% Smith the market really ham- cover… so it’s becoming
6% on the previous three to 57,500oz. However, the
company said a drawdown in mered us and said: ‘Why are tougher, but the one thing
gold-in-circuit during the June
quarter contributed to the 6% you buying Barrick’s dying about WA is there’s a lot of

mines?’, but we didn’t see gold left in the Yilgarn Craton.

it that way and so they said It’s still largely underexplored

‘show us’,” Holland said. so I think there are big pos-

“Barrick consolidated the sibilities for us to fund more

three mines we bought and gold and I certainly hope that

reported that as one compo- we do.”

sition, called Yilgarn South, Improved production num-

but the analysts in Canada bers from the flagship South

didn’t really have the insight Deep operation in South Afri-

into the individual mines that ca helped Gold Fields gener-

are now with us. ate $US75 million in net cash

“We took some analysts out flow from all operations in the

to all of our mines in Australia September quarter for ASIC

in the middle of 2014 and I of $US948/oz, down 8% on

think we changed people’s the June quarter costings.

views. Slowly but surely we’re Net earnings attributable to

starting to be given more rec- shareholders for the quarter

ognition.” were $US18 million, up $US6

Holland said he was pre- million on the previous report-

pared to look outside WA for ing period but down $US1

potential new gold projects, million on the September

such was his company’s 2014 quarter.

love affair with Australia, but – Michael Washbourne
admitted the State’s strong

January – March 2016 GOLD MINING JOURNAL Page 25

MINER OF THE YEAR FINALISTS

Saracen to flex muscle in 2016

Saracen Mineral underground plus is our focus. We are a pro-
Holdings Ltd was
a worthy contender for 60,000oz of stock- gressive company with an
Gold Mining Jour-
nal’s Miner of the piled ore, will see ear to the ground for opportu-
Year award in 2015,
however, it will be Saracen reach its nities that come up but unless
perhaps this year in
which the West Aus- production guid- we see something value ac-
tralian gold producer
is re-rated. ance. cretive we don’t have any set

That is because production Finding near- of targets or milestones that
from Thunderbox, south-east
of Leinster, is scheduled to mine extensions we feel the need to be rushed
start in 2016, triggering Sara-
cen’s transformation. at Karari has been into.”

“Thunderbox is a big chunk the main focus Having achieved success
of our five-year plan, with
production doubling from Saracen is targeting 300,000oz gold of exploration for by sticking to its guns, the
150,000 ozpa to 300,000 production in FY2018 Saracen, with the Saracen story appears to be
ozpa gold. There are obvi- exploration team resonating with an interna-
ously a lot of questions [from
shareholders] about how Saracen’s resources within also toiling away on gravity, tional audience as well.
[Thunderbox] is progressing
and we are looking at starting trucking distance by about magnetic surveys and recon- Finlayson said Saracen
early in the calendar year...we
are months away, not quar- 20% to 2.4 moz. naissance work on green- had been warmly received
ters or years,” Saracen chief
executive Raleigh Finlayson Finlayson said the deposits fields areas. during a recent trip to the
said.
were nice bolt-ons for Thun- “This type of work is not of- UK, despite it being the com-
The only downside to the
new asset has been seeing derbox, with immediate value ten seen from a shareholder pany’s first visit there, and felt
money leave the bank ac-
count, but it won’t be long seen from Kailis, 80km south perspective but it is all around compelled to return on regu-
before Saracen sees a return
on its $65 million investment of Thunderbox. planning. We are looking to lar basis.
made to reinvigorate the
mine. “It [Kailis] is an open pit cut- be more aggressive on the On the back of one road

“We will be getting money back, it has only had a small drill bit next year once we get show, UK-based shareholder
out of it early in the year,” Fin-
layson said. mine there previously down to Thunderbox going and gen- interests doubled to 6% of the

Thunderbox was acquired about 50m,” Finlayson said. erating cash flow,” Finlayson Saracen register. US-based
from Norilsk in 2014 for $20
million and Saracen now has Resources at Kailis in- said. shareholdings also increased
it poised for long-life open pit
production of 125,000 ozpa clude 1.08mt @ 3.3 g/t for “We’re looking at an [explo- in 2015, from 13% to 16%.
gold @ AISC of $1,032/oz
from FY2017. 114,000oz gold, while King ration] budget of around $15 “We have been pitching

There is potential for un- of the Hills is comprised million, hopefully on the ba- there [US] for three or four
derground ore to be sourced
from Thunderbox, while the of 1.29mt @ 6.7 g/t for sis of being able to ramp up years and they are starting
recent acquisition of Kailis
and King of the Hills from St 279,000oz. our greenfields exploration in to get a good sense of what
Barbara Ltd has increased
“We are trying to pull the the next couple of years, con- we are about and we have a

whole system apart at King tinue to drill out Karari and do good name there. I had zero

of the Hills and look at the some follow up drilling on in- expectation in the UK, I had

southern end which hasn’t tercepts at Thunderbox.” been to the UK in May for the

been touched at all from an With $45 million in the bank first time in my life, so I had

underground mining perspec- (to September 30, 2015), my eyes wide open,” Finlay-

tive. We see some potential Saracen is well son said.

longer term, but we don’t positioned to Finalyson is

have any plans to dive into it,” conduct mean- also acutely

Finlayson said. ingful explora- aware of volatil-

King of the Hills will en- tion, however, ity in commodity

sure Saracen’s pipeline is full it will not be prices at the mo-

down the track, but for now it reckless with its ment and made

is the Carosue Dam opera- cash, an inten- the decision to

tion which is fuelling growth. tion which ex- hedge another

Carsoue Dam is forecast to tends to the pur- 40,000oz gold

produce 150,000-160,000oz suit of growth @ $1,600/oz of
@ $1,025-1,075/oz AISC in through M&A. Raleigh Finlayson Carosue Dam

FY2016, on the back of re- “M&A can production,

cord output of 167,000oz in work drastically against you which gives Saracen short-

FY2015. if you pick the wrong asset term protection through to the

The successful start-up of at the wrong time,” Finlayson start of operations at Thun-

the Karari underground held said. derbox, which will produce

the company in good stead “We are ticking along with 20,000oz gold for FY2016.

in 2015 which, combined our organic pipeline which – Mark Andrews
with the 6-7 g/t Red October doubles our production; that

Page 26 GOLD MINING JOURNAL January – March 2016

Doray sees green and
gold future

Doray Minerals Allan Kelly Construction at Deflector is on schedule and on budget,
Ltd might have according to Doray
missed out on a top lower grade areas of its flag-
gong in this year’s ship Andy Well project in late Andy Well started firing on September quarter.
Gold Mining Journal 2014. all cylinders in the June quar- Managing director Allan
Miner and Explorer of ter, churning out 28,180oz at
the Year awards, but Doray proved sceptics $518/oz before turning in a Kelly said Andy Well had
the company appears wrong in the March quarter of tempered 25,690oz for the exceeded expectations in
poised to make a run last year, producing a healthy 2015.
at both titles again in 21,328oz – including a then
2016. record monthly production of
9,308oz in March.
Doray mounted a com-
mendable fight-back in 2015
after the market suffered a
bout of BFS-memory loss
and showed little love for
the Murchison-based jun-
ior as it temporarily mined

January – March 2016 GOLD MINING JOURNAL Page 27

MINER OF THE YEAR FINALISTS

“It’s been a good Doray recently re- looking for a Tropicana.”
Doray’s Horse Well JV was
year,” he said. ceived its first signs
another virgin project that
“We’ve been in pro- of potential project life had Kelly champing at the bit.

duction for 2.5 years since signing a farm-in The company recently com-
pleted an 18-hole, 3,940m
now and for the first agreement with Iluka RC drilling programme at
Horse Well’s Dusk ‘til Dawn
two years we have Resources Ltd to ex- prospect which returned in-
tercepts of 16m @ 7.2 g/t gold
done better than we plore the virtually un- from 109m and 44m @ 1.4 g/t
from 122m.
expected in the origi- touched tenement,
“We’ve made a discovery
nal BFS. We put out identifying a number of there – we’re not sure how
big it is yet – but it’s definitely
a pretty conservative gold and pathfinder ele- hanging together as a prima-
ry orebody with some super-
guidance [for FY2015] ment anomalies by as- gene mineralisation around
it,” Kelly said.
because in the BFS we saying more than 2,000
“You’ve got a granite with a
knew the second year bottom-of-hole samples greenstone wrapping around
a granite and then some lit-
of production would generated during Iluka’s tle pressure shadows. It’s a
classic Granny Smith-style
be tougher. Halfway mineral sands explora- proposition, and that is what
we originally went there look-
through the year we tion programmes. ing for. To the east of that is
an area called Django, which
recognised we were “Those samples were is a target where we’ve got
some mafic rocks and they
going to get more ounc- all neatly catalogued come in next to the granite
and they’ve been de-magnet-
es at a better cost than and were just sitting in a ised, and usually that’s a sign
of alteration. That is a dead
we thought – as we had shed in Adelaide,” Kelly ringer for Jundee.”

really good success at said. Kelly said although he had
genuine concerns for the gold
turning around the dilu- “It was as simple as sector due to a lack of green-
fields investment, Doray was
tion issues that we had looking at the map, making the best of a bad situ-
ation and laying the ground-
underground – so we Kelly reckons Horse Well is a “dead ringer working out where our work for its future.
upgraded our guidance for Jundee” targets were, finding the
and we ended up pro- holes that sat over those “It’s good for us, in a per-
verse sort of way,” he said.
ducing 89,000oz, which was able to pay that debt down targets with basement sam-
“Not to be too mercenary
a great result.” very quickly, like we did at ples and going to Adelaide about it, but because we’ve
got money and we are mak-
As good as 2015 was, Kelly Andy Well. With the two pro- and getting the samples and ing a commitment to explora-
tion we are seeing a lot of op-
reckons Doray is primed for a jects generating [good] mar- assaying them. As an ex- portunities. This is the time,
when you’ve got money, to
bigger 2016. gins that debt will get reduced ploration geologist that’s the put your foot on stuff and if
things turn you’re in the box
Cash flow generated from pretty quickly.” stuff I love doing; getting a seat. You have to take a long-
term view and I think explo-
Andy Well last year helped While the prospect of hav- big land holding, looking at ration guys are probably the
best at taking long term views
Doray cut a better deal for ing Deflector up and run- the dataset and pulling tar- because they know how long
projects take to get into pro-
Deflector’s debt facility. ning shortly excites Kelly, he gets out of it. We started drill- duction.”

Doray originally announced is equally enthused about ing there…at the beginning of – Rhys Dickinson

in August it had secured Doray’s long list of explora- October and now we are drill-

debt and equity funding for tion plays. ing at the main target, Target

the construction of Deflec- A healthy cash balance al- A. There are gold numbers

tor, including a new $90 mil- lowed Doray to embark on not of up to 100 ppb. We are out

lion corporate finance facility only extensional and regional there drilling some aircore in

from Westpac, but the miner exploration at Andy Well last unknown territory, so hope-

rolled the balance of its exist- year, but an unparalleled fully by the New Year we

ing Andy Well project finance greenfields campaign, most will have enough data to talk

facility ($25 million) into the notably at its South Australian about some of the stuff we

new facility. Western Gawler project. are seeing. We’re out there

As a result, the new cor-

porate facility provided new

debt funding of $65 million for

the construction and develop-

ment of Deflector.

“The next milestones there

will be the commencement of

open pit mining in February,

underground mining in May

and then… the commission-

ing of the processing plant

in mid-to-late May or early

June,” Kelly said.

“Hopefully we will see the

best part of a full month’s pro-

duction in June. Even at the

current gold price, we will be Doray’s Andy Well mine produced 88,736oz in FY2015

Page 28 GOLD MINING JOURNAL January – March 2016

Williams evokes old spirit
at Dacian

Dacian has enjoyed exploration success from its revised assessment of the Westralia pit, part of the Mt Morgans project

When you look why, then, hasn’t it been done 70% of the ounces had been Williams’ enthusiasm for the
at exactly how before? Well, it has and it so mined from underground yet historic producer. Like most
Dacian Gold Ltd has happens that the same man Higginsville didn’t have an of WA’s gold prospective
risen to prominence was at the heart of it. underground, we went look- ground, exploration at depth
and a place among ing for it.” around Mt Morgans has
Australia’s best gold In 2005, Avoca Resources been severely limited. Given
explorers, it all seems won Gold Mining Journal’s Avoca reinterpreted the the prolific nature of adjoin-
so obvious; find a his- Explorer of the Year award area surrounding the old ing projects, Williams is con-
toric gold producing thanks to its discovery and Poseidon South mine and vinced rectifying this will bear
area which has been development of the Trident its deeper drilling uncovered fruit.
neglected. underground deposit at Hig- Trident. The new discovery
ginsville, also in WA. The dis- eventually turned into a 1 moz “I am convinced Mt Mor-
“We are trying to recognise covery of Trident in a mature deposit and subsequently gans is highly endowed el-
underexplored, highly en- district such as Higginsville opened up the entire Higgin- ephant country that has been
dowed mineralised systems,” surprised the WA gold com- sville goldfield to new oppor- poorly explored. Within a
Dacian executive chairman munity and set Avoca on the tunity. 25km radius there is Sunrise
Rohan Williams told Gold path from junior explorer to Dam, Wallaby and Granny
Mining Journal. “The first near-300,000 ozpa producer. “That original hypothesis Smith but there is a real lack
question I ask is ‘Is this area As managing director of Avo- was proven right at Higgin- of exploration at Mt Morgans.”
likely to be highly endowed?’ ca, Williams led that growth sville and it is the same at
and the second is ‘Has it and is happy to admit the Da- Mt Morgans,” Williams said. That Williams was so ada-
been well explored before?’ If cian exploration team is try- “When I first went there I was mant the Avoca model could
the answers are yes, then no, ing to replicate the strategy. looking at the core yard and be applied again convinced
we take a look at it.” asked where the rest of the investors the Dacian team
“It is the same old story and core was; ‘This is it’ was the was worth backing again. In-
It is a simple strategy but precisely the model we used reply and I thought that was stead of raising the usual $5
at Avoca,” he said. “Higgins- perfect.” million at IPO, Dacian tested
ville had the same geology as such loyalty by announcing a
St Ives and Norseman where The lack of exploration, $20 million float.
particularly at depth, fired

January – March 2016 GOLD MINING JOURNAL Page 29

EXPLORER OF THE YEAR FINALISTS

“Our track record al- schedule. However, half
lowed us to raise $20 mil-
lion at IPO. That allowed of the resource is in-
us to go out and really ex-
plore the ground, mean- ferred, so we will under-
ing we wouldn’t have to go
back to the market after a take 80,000m [drilling] in
year or 18 months.”
2016, most of which will
The company has
spent the intervening go into converting that
three years putting the
$20 million to good use. inferred component to
Exploration has focused
on the Jupiter and Wes- indicated and then into
tralia mineralised systems
and when Dacian announced reserves,” he said.
an updated resource of 3.01
moz gold for the project in “If we can do that, we
September, it represented a 1
moz increase on the resource will deliver a significant
it acquired in 2012, achieved
at a $7/oz discovery cost. Dacian has taken advantage of Mt Morgans lack of deeper drilling (above), mineable reserve of 1
adding more than 2 moz gold (below) since acquiring the project moz gold.”
“We told investors: ‘sup- It may appear to be an
port us and we will support
you’ and it was three years ambitious target but Williams
and one week until we had
to raise money again. We did is confident in Dacian’s ability
what we said we would do
and investors like that.” to achieve a high conversion

The large IPO also bought rate.
the company time and money
to apply its knowledge to Mt “Historically, this area has
Morgans. Previous owner
Range River Gold NL had converted from inferred to
tripped up in its efforts to ex-
ploit the modest existing re- indicated at about 75-80%.
serves and despite the trend
among gold juniors of looking Both Jupiter and Westralia
to early cash flow opportuni-
ties, Williams was determined are significant mineralised
Dacian wouldn’t get caught in
a similar trap. systems; 1.8km and 2km re-

“If there is potential beyond spectively and that means
what little reserve there is,
then back yourself to fulfil that there is a reasonable chance
potential,” he said. “We had
that modest reserve but once of getting some infill and our
you go down that path you
are committed to developing hit rate of high-grade inter-
the project and the greater
exploration strategy can fall cepts is very good.”
by the wayside.”
Dacian’s ability to build the
Dacian chose to assuage
what was immediately on of- Over the three years which The company released a resource at Mt Morgans has
fer in favour of building a larg-
er resource base. have followed, Dacian was scoping study in September, won support among domes-

“We learnt from the last able to build Jupiter and Wes- pointing to the robust eco- tic institutions who were the
company who was there; they
did that. We have since had tralia into 1 moz deposits nomics of the two deposits. strongest supporters of the
a good look at those reserves
and we are certainly happy each and for Williams the op- The study pointed to a $157 recent capital raising.
we didn’t mine them.”
portunity was obvious. million project capable of “Of the $25 million we are

“You can actually see Wal- producing 220,000 ozpa at raising, $15 million was of-

laby – which is more than 7 AISC of $929/oz over an ini- fered to institutions with the

moz – from Heffernans Hill tial seven-year mine life. The remaining $15 million a rights

at Jupiter but the last drilling operation would comprise issue, which was part of our

here was in 1996. Between four open pits and three un- support for shareholders.

2000 and 2013 there were derground mines, serviced by We expect shareholders to

only two holes drilled. We a standalone 2.5 mtpa plant. take up around $8-9 million of

started drilling in September Following the release of the that rights issue, leaving the

2013 and have since added scoping study, Williams led institutions free to take the

1.1 moz gold.” Dacian back to the market shortfall.”

At Westralia, Dacian has to raise the necessary funds The junior gold sector has

now defined a continuous to complete feasibility stud- suffered from willing inves-

zone of high-grade miner- ies. Once again, the capital tors unable to find suitable in-

alisation over 2.8km for a re- raising is about more than vestments but Dacian’s latest

source of 9.1mt @ 5.15 g/t for keeping the company’s head capital raising efforts appear

1.5 moz gold. Jupiter’s strike above water. to have broken the paradox

has been extended to 1.8km, Williams said the $25 mil- and has left the company in

containing a resource of 27mt lion being raised would large- an enviable position.

@ 1.3 g/t for 1.1 moz gold. ly be spent on conversion “It gives us a good, mature

The exploration success drilling as the company aimed register with seven institu-

has continued since the lat- to define a reserve robust tions now on it. In many ways,

est resource update, with the enough to support a DFS. it is probably a better register

company identifying several “The scoping study is a than what we had in the Avo-

drill-ready targets along two high quality analysis of the ca days because there are so

new syenite corridors at Ju- resource as it stands and the few opportunities available to

piter. resource fits our production funds in the gold space.”

Page 30 GOLD MINING JOURNAL January – March 2016

Even Williams himself was Heffernans Hill on the Jupiter prospect at Mt Morgans. Despite being The DFS is due for release
surprised by the enthusiasm a historically prolific producer, Jupiter witnessed just two drill holes before the end of 2016 and
with which the capital raising between 2000 and 2013 when Dacian began work there Dacian may then be in a posi-
was taken up. tion to repeat the feats of its
Consensus among ana- less than $1,000/oz AISC predecessor.
“Three weeks before we lysts covering the company which equates to a 50%
launched it, everything was is that strong conversion to margin at a $1,500/oz gold “We have every chance
looking rosy for gold. North- indicated ounces could lead price,” Williams said. “And, it of being another Avoca be-
ern Star [Resources Ltd] to a NPV of more than $300 is a good time to be building cause we’ve already got two
and Evolution [Mining Ltd] million for the project and a project. Labour costs are 1 moz deposits; that is essen-
had hit 12-month highs and given its location 25km south down, steel costs are down, tially two Tridents at once,”
it was all positive. Then it just of Laverton, Mt Morgans is diesel costs are down. In Williams said.
dropped as investors began blessed by infrastructure, the scoping study, the capex
to assume a US rate rise was adding capex and opex ad- came out the same as for The Avoca experience will
coming. But we had worked vantages. Higginsville and that was built likely hold Dacian in good
through a timeline and stuck in 2006!” stead. Key members of the
to our guns.” “We think we can do it for original team are back in
place at the new company
It is the robust nature of the and can now call on their
project which has dragged previous development expe-
many investors over the line. rience.

“It looks to be a good pro- “We learnt quite a few
ject with a high margin,” Wil- things at Higginsville which
liams said. “The scoping we will apply here, particu-
study obviously didn’t include larly around the feasibility
reserves but the technicals study,” Williams said. “Get the
and financials behind the feasibility study right and get
study are very robust and I Tier 1 people working for you
think the market saw a $50 and things will go right.”
million company with a large
project and recognised the – Dominic Piper
opportunity.”

· Scoping & Feasibility Studies
· Design
· Process Optimisation
· Sustainable Asset Management
· Operational Readiness
· Reliability & Maintenance
· Audits & Investigations
· Project Management
· Construction Management
· Expert Advice & Consulting Services

Level 3, 516 Hay Street Tel: (08) 9442 3333
SUBIACO WA 6008 Fax: (08) 9442 3399

ABN: 64 064 105 488 [email protected]

January – March 2016 GOLD MINING JOURNAL Page 31

EXPLORER OF THE YEAR FINALISTS

Tanlouka takes shape in
Burkina Faso

West African In the PFS we got up the delivery of the BFS
Resources to 440,000oz in pit as a
Ltd (WAF) manag- probable ore reserve. because of the new dis-
ing director Richard That also included about
Hyde was surprised to 22,000oz of inferred covery at Mankarga 3,”
receive a nomination ounces in the pit as well
for this year’s Explorer and subsequently we he said.
of the Year award not have been drilling to try
because his company and convert that into in- “It makes sense to do
hadn’t had a good dicated material so we
year, but because a can include it in the next as much drilling there as
lot of good work in optimisation update.”
West Africa went un- possible and get those
noticed in 2015. If Hyde had one regret
it was that WAF didn’t shallow oxide ounces
The Burkina Faso-focused do more drilling before it
junior failed to fly under Gold published the study. into the mine plan. It
Mining Journal’s radar and
was duly recognised not only But the managing di- makes an enormous dif-
for a consistent year of drill- rector’s disappointment
ing, but a string of promising quickly turned to excite- ference to the funding
results at a new target that ment when an auger drill-
could propel the company’s ing programme north-east scenario. The first three
Tanlouka gold project on to of Mankarga 5’s proposed
bigger things this year. starter pit demonstrated a years of the project are
continuation of mineralisation
WAF started 2015 with a along strike for 1.5km. pretty solid, with a head
head of steam, releasing a
PFS for an oxide heap leach The 245-hole campaign grade of roughly 1.5 g/t
starter project at Tanlouka’s returned a peak result of 635
Mankarga 5 prospect. ppb gold in addition to other gold, but you can see
high tenor hits of 228 ppb,
The study, based on a 224 ppb and 218 ppb gold. Richard Hyde from some of the ex-
$US1,300/oz gold price, fore- ploration results from
cast 69,000oz production for Just two days later WAF
the project’s first three years announced an auger drilling 8m @ 31 g/t gold intercept,” Mankarga 3 we can prob-
at an enviable cash cost campaign at its Mankarga 1
of $US428/oz and AISC of prospect, 500m north-west he said. “We haven’t even fol- ably jam some 2 g/t dirt in
$US538/oz, minimal $US46.6 of the Mankarga 5 starter pit,
million pre-production outlay, had returned several high- lowed them up yet, but I think there as well. Getting that pay
63% IRR, a 14-month pay- grade hits along strike and
back on capital due to strong, parallel to artisanal workings we’ve done quite a lot on a back on capital down makes
early project cash flow and and historic drill holes.
post-tax NPV of $US86 mil- limited budget.” the banks more comfortable
lion. The drilling achieved a
standout 3.85 g/t gold hit In August, WAF’s persistent about funding a project.”
Hyde said the PFS show- and, like at Mankarga 5, WAF
cased how far WAF had identified a 1.5km extension auger drilling at Tanlouka de- At the time of print, WAF
come since acquiring the pro- of the mineralised trend.
ject in January, 2014. livered the company’s biggest was drilling Mankarga 1 and
A first pass RC drilling cam-
“We’ve been building,” he paign at Mankarga 1 proved coup of 2015 – the discovery intended to revisit Mankarga
said. “The original scoping the promise of the prospect,
study we put out in 2014 was returning an 8m @ 1.5 g/t of a new gold zone just 2km 3 soon after.
roughly 300,000oz in pits. gold and 6m @ 1.5 g/t inter-
cept. from Mankarga 5’s oxide “The plan is to keep drilling

Hyde said WAF was far starter pit and 500m west through next year because
from done at Mankarga 1.
and parallel to its Mankarga every 100,000oz we add to
“Some of the historical re-
sults here are exciting, like an 1 play. the project is potentially $20-

Mankarga 3, as it would be- 30 million in free cash flow at

come known, returned a peak the current gold price, and

result of 12.77 g/t gold over a that’s significant,” Hyde said.

1.3km strike. “We also hope to get the

Following its tried and test- project shovel-ready and

ed strategy, WAF rolled an permitted. We’ve finished our

RC rig out to Mankarga 3 and ESIA, applied for our mining

achieved a first pass hit of licence using our local DFS

32m @ 5.02 g/t gold in oxide and we’re running our BFS in

near-surface and later drilling parallel with that. We would

returned intercepts of 25m @ start to look to move dirt in

2.45 g/t gold, including 17m Q3.”

@ 3.35 g/t from 12m, 20m @ – Rhys Dickinson
2.8 g/t, including 8m @ 4 g/t

from 24m, 5m @ 2.17 g/t from

40m and 9m @ 1.11 g/t from

19m.

Hyde said WAF’s Mankar-

ga 3 find forced the company

to change its development

schedule.

“We have pushed back

Page 32 GOLD MINING JOURNAL January – March 2016

Cardinal keeps the hits coming

Industry insiders are Namdini’s potential, however,
bullish on Cardinal managing director Archie Ko-
Resources Ltd being imtsidis said Cardinal would
the ASX’s next big in not rush into any resource
West Africa. announcements.

And it is not hard to see For now the focus is on ex-
tending mineralisation along
why. strike to 1.1km and building
knowledge on structural data
The company started 2015 relating to orientation of min-
eralisation, as well as litholo-
at 4c/share, but as the drill gies and hydrothermal altera-
tion.
bit started to talk, Cardinal’s
Observers of the local
share price begun to grow. bourse will certainly be tak-
ing note of what Cardinal is
By late last year the company doing, and one wonders how
long before more internation-
was trading at 16c/share and Cardinal watched its share price rise by more than 400% in 2015 on al investors jump on board.
while its latest results at the the back of stellar exploration results at Namdini
Amid the Australian contin-
time of print from the first two gent with large stakes in Car-
dinal is US Global Investors
diamond holes – 133.75m @ with its own rigs, Cardinal has likan told Gold Mining Jour- Inc, which holds 5.2%.

1.61 g/t gold from 3m (verti- not disappointed. nal. However, extensive road
showing around the world, in-
cal) and 87m @ 1.08 g/t from “It’s been a while since a While much more drilling cluding Europe, with London
Mines & Money the last stop,
28m – didn’t ignite the market West African gold explora- needs to be completed, there could be the fillip for more off-
shore investment in Cardinal.
like earlier in 2015, Cardinal tion story has generated this is potential for Namdini to de-
Helping Cardinal cast its
has certainly become an ex- much interest. When you con- velop into something special, network further is Mark Con-
nelly, appointed non-execu-
plorer to follow. tinue to report these types of according to Millikan. tive chairman in November.

“I think this could be a In a research note re- “Cardinal is at a very early
stage but there is clearly up-
monster and is very exciting,” leased in November, Millikan side and it is certainly looking
very interesting. It is excit-
Stavely Minerals Ltd manag- gave the stock a speculative ing because it is in the early
stage of drilling and it is in a
ing director Chris Cairns said buy recommendation with a prospective area. My view is

of Cardinal’s virgin discovery 12-month price target of 27c/ that there could be a cou-
ple of million ounces there
at Namdini in Ghana’s north. share. [Namdini] but it is going
to take some time to work
What Cairns would have “They have mineralisation that up,” Connelly said.

noticed throughout the year over 900m of strike, which While Namdini is the fo-
cus of attention, Cardinal
were drill results including needs to be in-filled to prove also has the Bolgatanga
and Subranum gold pro-
36m @ 0.97 g/t gold from up continuity, but it’s the width jects in Ghana to explore
in the future.
28m (including 6m @ 1.55 of mineralisation that is re-
– Mark Andrews
g/t); 83m @ 1.41 g/t from ally getting our attention. It’s

20m (including 31m @ 2.52 shallow, wide, with economic

g/t); 67m @ 3.1 g/t from 6m grades, so good hallmarks for

(including 3m @ 15.3 g/t) and an early discovery with signif-

“34m @ 2.49 g/t from 51m; Archie Koimtsidis icant potential,” Millikan said.

99m @ 1.2 g/t from 0m

(including 35m @ 2.5 g/t They have mineralisation over 900m
and 43m @ 1.55 g/t from of strike, which needs to be in-filled
to prove up continuity, but it’s the width of
30m; 51m @ 1.02 g/t from mineralisation that is really getting our at-
49m; 67m @ 1.78 g/t from
0m and 48m @ 1.15 g/t
from 28m.

While many juniors in tention. It’s shallow, wide, with economic
the West African gold grades, so good hallmarks for an early
space have struggled for discovery with significant potential.
momentum and cash,

Cardinal has not.

The company rat-

tled the tin and raised about gold intervals in a mineralised Results from maiden dia-

$7 million from institutional corridor that remains open, mond drilling, which was be-

and sophisticated investors people take notice,” Hartleys ing conducted late in 2015,

throughout 2015 and, backed resources analyst Mike Mil- will reveal further detail on

January – March 2016 GOLD MINING JOURNAL Page 33

TROPICANA SITE VISIT

Tropicana toys with
trailblazing plan

Tropicana mining manager Richard McLeod, left, says Havana 2 will carry the JV in 2016

There was a point As preparations for an way. tured everything that has
during AngloGold evening of revelry ensued, “You must be pretty hap- made Tropicana the success
Ashanti Ltd and Inde- AngloGold Ashanti Australia story it is to date: minimal re-
pendence Group NL’s senior vice president Mike py…that you have hit this flection and a dogged focus
November celebra- Erickson, Tropicana general milestone about a year before on the future.
tion of Tropicana’s 1 manager Duncan Gibbs and Kalgoorlie’s Super Pit did. Is
moz milestone that it Independence managing di- that something you’re proud At present, the JV is hatch-
dawned on the JV’s rector Peter Bradford fronted of?” a reporter said. ing an audacious plan to
leaders how much an obligatory press confer- potentially triple Tropicana’s
they had achieved in ence, no doubt expecting a The trio paused, looked mine life.
such a short period of long list of questions they at each other and almost si-
were suitably prepared for. multaneously said, “I did not Gibbs said management
time. know that”, before erupting was piecing together an in-
But one query caught them into laughter. ternal project dubbed “Long
off guard in the most pleasant Island” which proposed a
It might have been for all cutback of the project’s entire
of a brief moment, but it cap-

Page 34 GOLD MINING JOURNAL January – March 2016

“That’s one of the features here; there is a host rock
sequence and the waste above it has virtually no min-
eralisation. Other gold mines have got little bits and pieces
(of mineralisation) here and there and that makes it difficult

to mine because you want to selectively take parts of ore.

Peter Bradford, Duncan Gibbs and Mike Erickson with Tropicana’s one millionth ounce gold bar

featured sheet-like minerali- because they’ve got a coal want to selectively take parts
sation seam that’s not coal,” he said. of ore.”

“If that sheet exists we can “That’s one of the features Bradford added: “It’s not
make a big pit that might ex- here; there is a host rock se- any magic that the coal min-
tend mine life by two-to-three quence and the waste above ing method delivers, it’s just
times,” Bradford said. it has virtually no mineralisa- we’ve got a long strike that
tion. Other gold mines have allows us to schedule within
Gibbs said the geometry of got little bits and pieces [of the pit, so we can start mining
Tropicana’s orebody lent it- mineralisation] here and at one end and as we retreat
self to a strip mining method, there and that makes it dif- away from that we can start
which was typically reserved ficult to mine because you backfilling with waste. If you
for large coal projects.
strike, consolidation of the It took more than 134mt ore, nearly 600,000 truck trips, 12.2mt
mine’s Tropicana, Havana “Rather than mining all of of plant throughput and 4,800 Olympic swimming pools worth of
and Boston Shaker pits and the dirt out of the pit and tak-
the implementation of a strip ing it to surface, we will basi- water to produce 1 moz at Tropicana
mining method to halve op- cally mine a block, take that
erating costs and double the to surface, and each block
project’s strip ratio. after that we will backfill the
pit with,” Gibbs said.
Bradford said while the ma-
jority of Western Australia’s “That reduces the num-
gold mines had a vertical ber of trucks you need, and
orientation which resulted in trucks are the biggest cost
a conical-shaped pit, Tropi- driver in a mining operation.”
cana’s horizontal structure
led management to believe it Erickson said although
strip mining had never been
trialled at a gold operation,
management held no fears
about being an industry trail-
blazer.

“In the coal industry they
refer to the material overlain
waste as overburden, simply

January – March 2016 GOLD MINING JOURNAL Page 35

TROPICANA SITE VISIT

AngloGold Ashanti and Independence hope minor upgrades to Tropicana’s processing facility will increase throughput to 7.5 mtpa

are simply carrying the waste the end of this year. tween the mill and the high to get the overall plant avail-
less distance then you’ve got In the here and now, Anglo- pressure grinding roll,” Gibbs ability a bit higher, probably
less cost associated with do- said. another 4-5% in mill runtime,
ing it, so you can increase Gold and Independence have and to achieve that we would
your strip ratio.” pooled their top talent togeth- “What we know is the high need a number of small im-
er to unlock the full potential pressure grinding roll is really provements through the
The viability of Long Island of Tropicana’s processing only about 50% utilised, so if plant. We also plan to reduce
ultimately hinges on whether plant. we increase the recirculated maintenance and do mainte-
there is enough gold between lode through the high pres- nance more efficiently.”
Tropicana’s established pits Gibbs said the debottle- sure grinding roll we can get it
to make the venture possible. necking investigation aims to to do more work, feed slightly Tropicana is also on the
do two things: increase the more product to the mill and cusp of another significant
At the time of print, multi- plant’s throughput and avail- that helps us process more cost-cutting coup – the com-
ple drills rigs were being de- ability. tonnes per hour. We could missioning of a 292km gas
ployed to test those areas. go from about 800 tph to 900 pipeline which will connect
“The main piece of work we tph. the project with APA Group’s
Management expected the are doing there is increasing Goldfields Gas Pipeline.
Long Island conceptual min- the speed of a number of our “The other side of it is trying
ing study to be completed by conveyors, particularly be- Bradford said at the time of
entering the agreement (July
Tropicana’s one millionth ounce gold bar fresh from the furnace 2014) management predicted
a switch to gas power could
save the project up to $30/oz,
but recent falls in oil prices
had cut into that figure.

Regardless, the JV is confi-
dent the transition will benefit
Tropicana in the long run.

“The decision also factored
in the uncertainty of oil pric-
es,” Gibbs said.

“Not that long ago we had
oil prices of about $140 a bar-
rel. There is also some uncer-
tainty about the taxation side
of things regarding fuel re-
bates. For an operation such
as ours, on a decent price

Page 36 GOLD MINING JOURNAL January – March 2016

Tropicana’s mining fleet will be reviewed if it achieves increased plant throughput this year

the power for the cost of op- duction of gas would also de- 118,204oz gold from 6.22 mil- the world’s most reliable
erating the plant is nearly half risk Tropicana’s infrastructure lion bank cubic metres at an mines.
driven by the fuel and power by reducing the number of AISC of $US674/oz.
input costs. That certainty of trucks and diesel on its road In another brief moment of
price is actually quite impor- network. Gibbs said the quick imple- reflection, he said: “One thing
tant to us in terms of making mentation of the proposed that Tropicana will always be
long-term investment deci- “It will reduce wear and plant upgrades encouraged remembered for is the incred-
sions.” tear and also reduce the risk management to set a guid- ible predictability of the ore.
of an accident occurring on ance of 380,000-420,000oz The way the plans actually
Gibbs said he expected the road. They are all factors in 2016. delivered quarter-after-quar-
Tropicana to be powered taken into account in the deci- ter is almost exactly where
mostly by gas by the end of sion-making process.” Erickson said he had no we thought we would be back
this quarter. doubt the project would meet in the original DFS. Year-on-
In the September quarter, guidance, because if any- year it has delivered guid-
Erickson said AngloGold Tropicana produced a healthy thing, Tropicana was one of
and Independence were ance in terms of produc-
also investigating the tion and cost. The actual
upside of converting reconciliation of the ore
Tropicana’s mining fleet and the nature of the
to gas. gold in the orebody have
been quite remarkable in
“When we’ve got gas its cooperation in terms
we actually end up at of being able to estimate
an incrementally lower how much is there and
cost once we get above predict what the future
a certain level of power,” production is going to
he said. be. It has been a really
tightly done start-up pro-
“It could perhaps en- ject. It is a truly remark-
able something like a able performance.”
different class of equip-
ment in a bigger pit that – Rhys Dickinson
is energy intensive. We
are not wedded to the Photos courtesy Aar-
scale and size of equip- on Bunch and Philip
ment we’ve currently got Gostelow
working in our pits.” Tropicana’s staff revelled in the 1 moz milestone

Bradford said the intro-

January – March 2016 GOLD MINING JOURNAL Page 37

EMMERSON SITE VISIT

Exploration is
Emmerson’s game

Emmerson holds 2,500sq km of prospective tenure in Tennant Creek, which equates to about 95% of the entire mineral field

Balancing long-term sections of the investment “Exploration is really a of that as much as possible
exploration ambi- community have lost sight longer-term value creation in- to your shareholders – some
tions with short-term of the role junior explora- dustry and the share market, get it, some don’t – and that’s
financial constraints tion companies were initially in some respects, particularly fine, you need a bit of both,
has been a constant slated to play in the broader for junior companies, is more but it is very hard to get trac-
challenge for Em- resources space. of a short-term thing, so basi- tion on the reasons for stay-
merson Resources cally what you’re trying to do ing put because that’s where
Ltd managing director “Unfortunately people have is match a long-term endeav- the value accretion is.
Rob Bills over the past become fatigued and lost in- our with short-term funding.
eight years. terest in junior exploration,” “It is a fairly long path to
Bills told Gold Mining Jour- “You can try and commu- success. I think back to my
nal. nicate the value composition Western Mining days and

Emmerson has worked up Local prospector Bill O’Shea explains the lay of the land to Emmerson management,
several pieces of prospective directors and shareholders
ground in the Tennant Creek
mineral field since setting foot
in the Northern Territory in
late 2007, but a major discov-
ery still eludes the company.

Bills, a geologist with more
than three decades of expe-
rience, acknowledged the
increasing market pressure
on junior exploration compa-
nies such as Emmerson to
unearth Australia’s next great
gold deposit, particularly
those that have been active
on certain land packages for
many years.

However, Bills feels some

Page 38 GOLD MINING JOURNAL January – March 2016

Emmerson managing director Rob Bills Some of Emmerson’s ground is on Native Title land, but the company has the
at the Mauretania discovery hole support of the Traditional Owners and the Northern Territory Government

sometimes we went for 8-10 tania discovery and Emmer- you have good people at your average grades of 15-20 g/t
years without any explora-
tion success and then all of a son’s stock jumped from just disposal then you are going gold and 2-4% copper over
sudden you would find some-
thing like Olympic Dam. The below 3c/share to almost 6c/ to be successful.” almost three decades from
reward is there, but you do
have to be patient because it share in the week that fol- Tennant Creek remains one the early 1960s.
does take time.”
lowed the ASX announce- of Australia’s richest pros- Emmerson currently holds
A major discovery may be
non-existent for Emmerson ment. pects for high-grade gold and around 2,500sq km (roughly
at present, but the company
has enjoyed varying degrees “I think a lot of the bigger copper discoveries. Historical 95% of the entire Tennant
of exploration success in the
prospective Tennant Creek companies have lost sight of deposits such as White Devil Creek mineral field) of pro-
mineral field, particularly in the importance of good ex-
recent times. ploration results,” Bills said. “and Nobles Nob churned out spective tenure and has
If you plot out the total drilling
Emmerson has high hopes “The industry is at a crisis done in the Tennant Creek min-
for the Mauretania prospect, point, as we all know. There’s eral field, only 7% of those holes are
which returned an enticing geologists getting laid off and below 150m – and the deeper holes
intercept of 30m @ 3.22 g/t that’s a loss of knowledge are around the known deposits.
gold and 13.1 g/t silver from in the industry which is now
57m, including 15m @ 5.67 out on the streets. And once
g/t gold and 14.7 g/t silver that’s lost it’s very hard to get
from 60m and 3m @ 21.3 it back.
g/t gold and 5.01 g/t silver
from 63m, during a field pro- “One of the big
gramme in October.
strengths of Emmerson
Six RC holes have been
punched into the ground since has been that we’ve
the initial discovery as well as
10-12 shallow RAB holes and kept the same team of
two diamond holes. Further
drilling was planned to follow people together, many
up a number of Mauretania-
lookalike targets before the of them have been
wet season arrived in mid-
December. working for Emmerson

Investors reacted gener- since 2007. Our aver-
ously to news of the Maure-
age length of service

would be about five

years and for any junior

company that’s almost

unheard of.

“If you lose that ex-

pertise you’ve got to

start again and I don’t

think it’s quite appreci-

ated just what a loss

that is. This business Evolution chief geologist Roric Smith assesses potential mineralisation

is all about people and patterns with Emmerson exploration manager Steve Russell and

at the end of the day if non-executive director Allan Trench

January – March 2016 GOLD MINING JOURNAL Page 39

EMMERSON SITE VISIT

Emmerson hoped to complete 3,000m of drilling to test strike extensions at Mauretania ing, but it’s very shallow and
before the end of 2015 because of the nature of the
deposits in Tennant Creek a
built up a resource of 6.8mt taken that view. “There’s a great argument lot of it has been pretty inef-
@ 1.8% copper and 1.1 g/t “If you plot out the total around exploration maturity fective.”
gold for 122,000t copper and at depth…so it’s actually very
246,000oz gold. drilling done in the Tennant immature and this is what we Mauretania was the first big
Creek mineral field, only 7% always try to explain to our success under the company’s
Many prospectors would of those holes are below shareholders and to our JV JV with Evolution Mining Ltd.
consider Tennant Creek to 150m – and the deeper holes partners. Yes, there has been Australia’s second largest
be a brownfields play, but are around the known depos- quite a bit of [historical] drill- gold producer is sole-funding
Bills and his team have never its,” Bills said. $15 million of exploration until
June 2017 to earn 65% inter-
est of Emmerson’s tenure in
Tennant Creek. Evolution
also has an option to commit
a further $10 million over an
additional two years to boost
its stake to 75%.

Bills had no hesitation in
declaring his company’s part-
nership with the Jake Klein-
led company as the best JV
he has ever been involved
with during his professional
career in the resources in-
dustry, including those during
his time at Western Mining
and BHP Billiton Ltd.

Emmerson previously part-
nered with Ivanhoe Australia
Ltd (now Inova Minerals Ltd)
in a lucrative deal valued at
the time at almost $30 million.
It yielded promising resourc-
es at Gecko (1.5mt @ 2.5%
copper) and Goanna (2.9mt
@ 1.8% copper) as well as
the Monitor discovery (12m
@ 17 g/t gold).

Bills said attracting the likes
of Evolution and Ivanhoe to
Tennant Creek further vindi-
cated his company’s decision
to continue pursing “a poten-
tially very rich prize” despite
little reward thus far.

“There’s absolutely no way
you would get those calibre of
companies in as JV partners
unless they actually believed
in the science and the poten-
tial of the field, so I think it’s
testament to our approach
there,” Bills said.

“It has been a journey, I
admit, and our shareholders
have been on this journey
as much as I’ve been on this
journey, but we’ve always tak-
en the strategic view that we
needed to do things different-
ly to past explorers otherwise

Page 40 GOLD MINING JOURNAL January – March 2016

Emmerson has been a strong supporter of the local community
since arriving in Tennant Creek in 2007. Here chairman Andrew
McIlwain presents a donation to Clontarf Foundation students

Caiden Holt and Wade Gillett

we would just end picking up gold under the agreement.
the crumbs.
Edna Beryl reportedly pro-
“We’ve had to apply some
new thinking and some new duced grades of up to 53 g/t
technology, but when you
start stepping outside the during the early 1950s and
box, it takes a bit of time to
work out exactly what these was most recently explored
things are throwing up. But I
absolutely think our approach by Giants Reef Mining in the
is right and I think we’re now
starting to see that with Mau- late 1990s.
retania.”
“It increases our ability to
Gold production will soon
resume in Tennant Creek find more Edna Beryl orebod-
after Emmerson signed a
tribute agreement with Edna ies at depth without having
Beryl Mining Company
(EBMC) to conduct small- to drill through thick rock up
scale mining activities on the
northern tenements. near the surface,” Bills said.

Final approval of the mine “The resource at Edna Ber-
management plan from the
NT Government was immi- yl is not JORC-compliant and
nent at the time of print and
EBMC had almost completed to make it compliant we would Imminent gold production from Edna Beryl will provide Emmerson
refurbishing the existing un- actually have to do a lot more with risk-free cash flow and underground exploration opportunities
derground shaft at the high- work and it’s just not worth
grade Edna Beryl deposit.
the time and effort required cialists Kenex Ltd to identify “My sense of the whole
As well as generating risk-
free cash flow for Emmerson, to go through the whole pro- new gold and copper oppor- exploration industry is this is
the tribute agreement also
allows the company to po- cess, so the idea is to prove it tunities elsewhere in Aus- where the industry is weak-
tentially gain a greater under-
standing of the mineralisation up from the underground.” tralia. est; being able to predict the
around Edna Beryl.
With a sniff of discovery The strategic alliance, next big deposit,” Bills said.
Emmerson is targeting “If we can increase the
5,000-10,000t @ 20-30 g/t “success in the air, Tennant struck in August, played a
There’s absolutely no way probability of success at the
you would get those calibre of front end, then it saves a
companies in as JV partners unless whole lot of churn of projects
they actually believed in the science down the track to find one of
many that could become a
successful mine. We’re not
looking for some small de-

and the potential of the field. posit, we’re looking for the
next mining district and ob-

viously it will be under some

Creek will remain Emmer- part in the discovery of Mau- cover otherwise it would have

son’s home for a number of retania a few months later been found.”

years to come, even though and has since helped gener- – Michael Washbourne
the company has partnered ate a number of other targets

with spatial modelling spe- in the field, including Mulga.

January – March 2016 GOLD MINING JOURNAL Page 41



NEWGENGOLD REVIEW

NewGenGold:
the next generation

Now in its 11th edition, the NewGenGold conference was held at the Pan Pacific Hotel in Perth on
November 17-18. Despite a commodity price board full of red – including a gold price which was test-
ing the $US1,000/oz mark at the time – 200 delegates attended the conference to hear about some of
the world’s best gold discoveries. Presenters provided in-depth analysis of how major discoveries were
made and there was much discussion on how the next generation of gold deposits could be unearthed.
Gold Mining Journal provides a wrap-up of all the proceedings across two days of NewGenGold 2015.

Pulling together coveries to fill a programme Keith Yates a challenging task to fill the
the NewGenGold of 15-16 projects every two programme with that number
2015 programme was years is becoming increas- ery rate around the world of papers of high quality dis-
not easy given the ingly difficult,” NewGenGold brought about by the fall in coveries.”
relative lack of re- organiser Yates said. the gold price and the gener-
cent gold discoveries al malaise in equity markets To be considered for a
across the world. “The decline in the discov- is making exploration tough. berth on the conference card,
It means it has become quite a company must fulfill the
The world’s pre-eminent strict criteria of having a 1
gold exploration conference, moz deposit to talk about.
hosted biennially by Keith
Yates and Paydirt Media, is “We are finding in the or-
held in high regard for the der of 25-45 deposits each
quality of projects presented year, of which only a handful,
by leading global gold com- perhaps three or four, are the
panies but Yates admitted 1 moz gold-plus which are
recent editions of the confer- worthy of being NewGenGold
ence had taken a little longer conference category,” MinEx
to put together. Consulting managing director
Richard Schodde told dele-
“It was quite a task putting gates during his presentation:
the programme together be- Long term trends in gold ex-
cause discoveries around the ploration.
world aren’t coming thick and
fast. Finding the quality of dis- One reason for the severe
drop off in world-class dis-
coveries is dwindling invest-
ment in the global exploration
sector.

January – March 2016 GOLD MINING JOURNAL Page 43

NEWGENGOLD REVIEW

From a peak of $US10.5 Richard Schodde a change in circumstances so exploration is a dampener,
billion in 2012, global explo- we can ensure future confer- however, Yates is confident
ration expenditures in 2014 “It is among the worst ences don’t have that. We’ve the industry is filled with the
dropped 55% to $US4.7 bil- slumps I have seen in my had to bend our back quite fundamental skills for discov-
lion in 2014, according to career and in terms of as- a deal to ensure this confer- ery success.
MinEx Consulting. sembling the NewGenGold ence was the success it has
programme over the last 20 been.” But just where will the next
Schodde’s research indi- years, I would have to say that generation of Tier One gold
cates the extreme cyclical 2013 and 2015 are among A range of commodi- deposits emerge from or
nature of global exploration the toughest in terms of put- ties reached decade-long “have we fished all the big
expenditure, with $US4 bil- ting together a programme lows in 2015 and gold didn’t fish from the pond?”
lion spent in 1987 down 63% of quality discoveries,” Yates fare much better trading at
to $US1.5 billion in 1993, said. $US1,071/oz late in the year. “The world is a dynamic
$US4.8 billion in 1997 down place in terms of where to ex-
75% to $US1.2 billion in 2002. “One can only hope we see Australian dollar gold plore,” Schodde said.
prices mostly ranged from
Taking into account the $1,500-1,600/oz for the year, “There are 10 hot places
past trends, it is estimated while the Canadian/US dollar that I can see, with the break-
the current spend could fall a exchange rate also provided ing play probably being Su-
further 10-20%, according to some relief for Canadian gold dan, but we shouldn’t neglect
Schodde. companies. places like Australia, Canada,
US and Mexico. They are low
“The industry is cyclical, The improving exchange risk and [provide] remarkably
money is often down and rates – combined with the good return on your invest-
there is probably a bit more positive stories presented – ment.”
pain to go in the current busi- created some buoyancy on
ness cycle,” Schodde said. the Pan Pacific exhibition Schodde identified West
floor. Africa, Central and North
“The industry is currently East Africa, South West
only getting back 65c on eve- “The whole conference USA/Mexico, Alaska/Yukon,
ry $1 it spends. That should had an uplifting, inspirational Latin America, Northern On-
improve over time as we get impact on delegates which is tario, Turkey/Carpathian Belt,
out of the business cycle and something of great value in Western Australia, China and
the discovery costs come these times, as it is very easy Far East Russia as the 10
down with [the availability of] to get depressed with the way current hot spots for gold ex-
cheaper drilling and cheaper things are panning out,” Yates ploration.
geologists.” said.
– Mark Andrews
The once thriving junior The provision of capital for
gold exploration sector will
no doubt benefit from better Major sponsor of the NewGenGold 2015 was Intertek Minerals. The leading service provider in
labour and services rates, mineral analysis sponsored the traditional gold nugget lucky dip. The winner was Gold Road
however, merely surviving in
the current environment is a Resources Ltd executive director Justin Osborne (middle) who was presented with the nugget by
challenge in itself. Intertek Minerals business development manager John Flynn (left) and NewGenGold conference

manager Melita Fogarty (right)

Page 44 GOLD MINING JOURNAL January – March 2016

The changing face of
gold exploration

Despite glum times for the mining industry, positive vibes were felt throughout NewGenGold 2015

Gold exploration is chemistry.” in Canadian exploration and expensive because of the
getting tougher, The Canadian projects remains confident there are remoteness and depth [of de-
however, if proof were decent-sized gold projects posits].”
needed that there is Balkau referred to were Bor- still to be found, albeit at low-
some low hanging den (3.9 moz gold), Coffee er grades than in the past. According to MinEx Con-
fruit left to be picked, (4.1 moz) and Amaruq (2 sulting research, gold discov-
the discoveries pre- moz). However, recent trends eries made around the world
sented at the New- in global exploration have from 2005-2014 were found
GenGold Conference Kaminak Gold Corp owns caused concern for Gosselin. at an average depth of 64m at
provided just that. Coffee, in Canada’s Yukon an average cost of $US42/oz.
Territory, which was a true “At the end of the day we
“Of the 14 papers that were geochemical discovery, ac- end up accessing more re- Canada performed the best
presented in the last two days cording to vice president of mote [prospects] and it is in terms of discovery costs –
I was surprised to see that exploration Tim Smith. more expensive. One scary $US31/oz – despite deposits
only four of those were blind thing is that we see peak of in the period 2005-2014 be-
or under cover, the rest were “It proves that new discov- exploration [spend] up to ing found under an average
all actually outcropping,” Re- eries can be made in old dis- $12 billion but we haven’t got 120m of cover.
gis Resources NL general tricts,” Smith said. much back out of that peak,
manager exploration Jens discovery-wise. Essentially, Jamie Rogers, now chief
Balkau said. “However, access to site it is getting more and more exploration geologist at
has been a bit problematic; Northern Star Resources Ltd,
“This is a pretty good sign it’s a bit off the beaten track.”
as there is a lot more to be 2015 NewGenGold presentations
found out there. Of those 14, For those companies able
three were in Canada and I to overcome accessibility Probe Mines Ltd (Gold Corp Inc.) AngloGold Ashanti Ltd
was surprised to see all three problems in the often extreme
of those were outcropping conditions of a Canadian win- Borden 3.9 moz Nuevo Chaquiro 6.2 moz
and amenable to soil geo- ter, the rewards are obviously
great and Balkau believes Kaminak Gold Corp Guyana Goldfields Inc
good opportunities still exist Coffee 5.1 moz Aurora 6.5 moz
in such places.
Agnico Eagle Mines Ltd Newmont Mining Corp/
Guy Gosselin, Agnico Ea- Amaruq 2 moz
gle Mines Ltd vice president Surgold LLC
of exploration, is well versed Merian 4.8 moz

January – March 2016 GOLD MINING JOURNAL Page 45

NEWGENGOLD REVIEW

Gold Mining Journal editor and forum panel convenor Dominic Piper led discussion on a range of spent the period 2006-2014
topics regarding the gold industry. Sharing their thoughts were Regis’ Jens Balkau, Agnico Eagle’s with IAMGold Corp and ad-
mitted his “mind was twisted”
Guy Gosselin, Newcrest’s Fraser MacCorquodale, Northern Star’s Jamie Rogers and when he first arrived in Can-
Gold Road’s Justin Osborne ada.

“I looked at a long sec-
tion and it was drilled out to
200-300m like spaghetti and
I thought ‘wow’ this has been
done. The zone they were
actually exploring was 300m
and further down,” Rogers
said.

“The challenges are geo-
tech challenges and all that
comes with that. However,
that discovery was eventu-
ally made and that is the mind
space they are in.”

Having carved a success-
ful career with IAMGold, first
as exploration manager and
then chief geologist, Rog-
ers returned to his explora-
tion roots in Kalgoorlie late
in 2014 to take up his current
role with Northern Star.

Prior to making his way with
IAMGold, Rogers was sen-
ior generative geologist with

Case histories of discovery Pan Pacific Perth
November 17-18
The world’s pre-eminent
gold exploration event The 2015 Conference Proceedings
book and CD-Rom are now available!
Pan Pacific Perth
November 17-18 Download an order form at www.newgengold.com
Phone (+61) 8 9321 0355 or email [email protected]

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TO ALL SPONSORS, SPEAKERS,
EXHIBITORS AND DELEGATES

Page 46 GOLD MINING JOURNAL January – March 2016

Placer Dome in Kalgoorlie. Keith Yates exploration footprints, he said Gold Fields Ltd
After a decade with IAM- researchers could perhaps Salares Norte 3.1 moz
above 200m and there was help the local industry to bet-
Gold, Rogers now sees not much left when you look ter understand where it stood B2 Gold Corp
Kalgoorlie from a different at that map on that scale,” vertically in deposits, particu- Kiaka 4.8 moz
perspective of exploring at Rogers said. larly the orogenic-type.
depth. Toro Gold Ltd
“The amount we have test- “We are really crap at Petowal 1.3 moz
“Thinking back to Placer ed below 200m is minimal knowing where we are verti-
Dome in Kalgoorlie, we had and in that sense there is still cally in the system; the por- Orca Gold Inc
all the ground between Pad- a lot to do.” phyry guys and epithermal Galat Sufar 1.6 moz
dington and Ora Banda out guys know exactly where they
to Kanowna and Kundana. I While Rogers applauded are by just looking. We have OceanaGold Corp
remember someone showing Australia’s expertise in map- no idea whether we are 1km Didipio 2.1 moz
me a map of all of the drilling ping and conducting geo- above the system, 2km above
chemistry and geophysical the system or whether we are Gold Road Resources Ltd
activities to create massive 10m above the system. I think Gruyere 5.6 moz
understanding this will be one
of the big ways forward and if Northern Star Resources Ltd
we can crack that we will go Pegasus 1.2 moz
some way to finding things in
mature belts,” Rogers said. Gold Fields Ltd
Invincible 1.3 moz
The combination of more
research and better technolo- no doubt more discoveries
gies will hopefully provide the will be made in Australia,
answer for better exploitation even at depth.
of mature jurisdictions and
while it will be a challenge, At Cadia in New South
Newcrest Mining Ltd’s gen- Wales and Golpu, Papua
eral manager of exploration New Guinea, Newcrest has
Fraser MacCorquodale has demonstrated its supreme
deep exploration skills in the
Asia-Pacific region and is

January – March 2016 GOLD MINING JOURNAL Page 47

NEWGENGOLD REVIEW

backing itself in jurisdictions mining that is going to unlock If you look at the Archaean in Justin Osborne said it was
considered exhausted by oth- it.” anything but.
ers. WA, 60% of that is under cov-
Trends identified by MinEx “The time taken to do the
“It is one of the reasons why Consulting indicate that gold er. You’d say that 40% of the project targeting was the key,”
Newcrest has gone into Mun- discoveries in Australia from Osborne said. “That was 18
gana in North Queensland. It 2005-2014 were found at an area is pretty well explored months to two years and a lot
is a historic mining centre that average depth of 65m. of effort went into that and it
has produced 3 moz gold, but and 60% isn’t. was on the back of that prep-
exploration has only really Therefore, Balkau said, aration that we identified the
been done in the top 100m. testing potential prospects “I take a very optimistic key areas to explore, which I
Once you go further down, all through shallow cover should think helped it. I think that is
of a sudden you go into ter- not be ignored. view, particularly over the Ar- helping us now. We took all
rain that is under explored,” that time out and we are now
MacCorquodale said. “There are obviously major chaean of WA. It has got a lot going in systematically target-
opportunities for discover- ing projects identified which
However, MacCorquodale ies under cover. The issue more new discoveries to be we believe have the highest
said, it was more than ex- of course is to not just jump probability of making discov-
ploration capability that one straight away down to 100m, made but they are going to be eries,” Osborne said.
needed to make deep depos- you have to start looking at
its work. shallow cover. If you look at a lot more challenging under- “There are lots of tools out
the last four discoveries – there but the important thing
“You have got to be able Tropicana, Gruyere, Garden cover.” is to take your time and map
to back that up with under- Well/Moolart Well – they are properly and model what you
ground mining capability,” he all under shallow cover, very Balkau said the basics of are going to process. You
said. shallow cover, but they don’t have to be really strict and
respond to geochemistry,” good geological procedures, disciplined.”
“We are really fortunate at Balkau said.
Newcrest to have bulk un- good science, boots-on- – Mark Andrews
derground capability which “I would tend to think, from
allows us to search for lower my experience, at least in the ground exploration, under-
grade deposits. I think the Archaean of WA, that it is get-
next discoveries are not just ting more difficult, but I think standing the regolith and
about exploration, it is also there is still a lot to be found.
geochemistry practices

would lead to more discover-

ies, however, applying such

methodologies would take

time and patience.

Perhaps an example of

great reward for sheer persis-

tence is Gold Road Resourc-

es Ltd’s 5.6 moz Gruyere de-

posit.

While it may have ap-

peared a simple discovery,

Gold Road executive director

Page 48 GOLD MINING JOURNAL January – March 2016

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INDEX

ABM 10 Excelsior 12 Musgrave 9 Saracen 26

Agnico 45, 46 Sarama 15

Anglo American 7 Goldcorp 45 Newcrest 5, 46-48 Sibanye 7

AngloGold Ashanti 34-37, 45 Gold Fields 25, 47 Newmont 45 Silver Lake 9

Gold Road 4, 17, 20-21, 44, Norilsk 26 Southern Gold 13

B2 Gold 47 46-48 Northern Star 4, 18, 19, 24, Stavely 33
Barrick 22, 35
Bass Metals Guyana Goldfields 45 31, 45-47 St Barbara 4, 17, 18-19, 26
BHP Billiton 6
40 Gryphon 15 Surgold 45

Harmony 5 OceanaGold 45, 47 Teck 9
Orca 47 Toro Gold 47
Carbine 15 Oro Verde 5 Tyranna
Cardinal 33 9
IAMGold 46, 47
Dacian 4, 29-31 Iluka 28 Pan African 7 West African 15, 32
Doray 4, 27-28 Independence Phoenix Gold 22
Ivanhoe 34-37 Predictive 15
40

Emmerson 22, 38-41 Kaminak 45 Regis 45-48 Zenith 9
Zijin 12

Evolution 4, 17, 18, 19, 22,

31, 39, 40 Metals X 9, 13 Sandfire 9

Page 50 GOLD MINING JOURNAL January – March 2016


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