pd248 April17 mag-web

Cougar pounces on
Madagascan graphite

Cougar Metals Ltd man- Cougar must pay
aging director Randal
Swick is happy to admit the $500,000 by June and com-
company has been late to
the graphite party, believing plete a PEA to secure 49%
the delayed arrival empha-
sises how serious it is about of the project. The original
the assets.
deal allowed Cougar to ex-
“It’s after the graphite
rush but if you get some- tend its holding to 100%
thing because it’s popular
you get left trying to deliver through a $2.5 million pay-
on the undeliverable,” Swick
told Paydirt. ment but it appears likely

Cougar announced in No- Cougar will enter a 50/50 JV
vember that it had signed
a LOI over the acquisition with vendor DMO Metals.
of the Toamasina saprolitic
graphite project in Mada- Swick said the impend-
gascar.
ing drilling campaign would
Swick, well-known in
the mining industry as the allow Cougar to produce a
founder of Swick Mining
Services, had known about maiden resource by June
the opportunity for a num-
ber of years having already with the scoping study/PEA
identified Madagascar as
a likely centre for graphite to follow by October.
mining due to the low-cost
nature of mining of the is- The study will focus on an
land’s saprolitic graphite.
initial modest operation of
“Madagascar is a well
known source of graphite 10,000 tpa.
with more than 100 years
of mining from the saprolitic “Our plan is to start small
material,” he said. “That’s
the key here. The graphite is sitting in the and we can because of the
weathered material at surface, meaning
reduced mining costs because it is all logistics and the size of the
free dig material; there will be no blasting
and no major crushing or grinding.” project,” Swick said. “We will

The project, on the eastern side of start at 10,000 tpa and grow
Madagascar, is also only 50km from the
deep water port of Toamasina and a main with demand. The good
highway runs directly through the prop-
erty, furthering potential for cost savings. thing is we are not reliant on

“It all adds up to significantly reduced economies of scale to build
opex compared to other projects,” Swick
said. the project.”

A full mining licence has already been Marketing a saleable
granted for Toamasina and Cougar will
look to push development over the next product remains a chal-
12 months, starting with resource drilling
in April. lenge for all the ASX graph-

“We are about to start a compre- ite hopefuls and Swick said
hensive drilling programme to define a
JORC-compliant resource. And we are it would be another area of

Cougar signed a LOI to acquire the Toamasina saprolitic focus for Cougar this year.
graphite project in Madagascar “Selling graphite is not
easy, it is the more compli-

confident we will get good conversion cated side of the business but our part-

[from the non-JORC resource] because ner – DMO Metals – is already involved

there is a lot of trenching and pitting al- in graphite marketing.”

ready.” Cougar has also secured a lithium

Artisanal miners are already mining project in Brazil, a country that has well-

on the property, giving Swick confidence known graphite occurrences but Swick

Toamasina will offer up a saleable prod- said the development path was some-

uct. what longer than in Madagascar.

“We’ve only done a little bit of metal- “Brazil is tough to work in but it does

lurgy but there is no doubt the quality is have domestic requirements for lithium

good. There is already graphite being so it is not a bad way to go. There is some

produced and sold by artisanal miners graphite potential there but it is longer

and the limited test work done on fields term. Madagascar is more tangible with

samples came up well.” its modest capex and the Brazilian lith-

The early test work showed more than ium has similar qualities with options to

66% of the samples classified as large, even toll treat it or sell it on.”

jumbo or super jumbo flake which, com- – Dominic Piper
bined with the estimated operating costs,

could make Toamasina one of the high-

est margin graphite operations in the

world, according to Swick.

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 51

AUSTRALIAN GRAPHITE CONFERENCE PREVIEW

Sovereign certain on low costs

Driven by interest in bat- Sovereign is continuing a programme of downstream test work focused on li-ion battery
tery minerals, investors suitability and expandable graphite applications on Malingunde material
have warmed to cobalt and
lithium companies of late. maiden resource which CSA Global has erate profitably and is instead focused on
been engaged to compile. a low-risk, simple mining and processing
However, it is the graph- operation.
ite market that should not Some highlights of the drilling include
be forgotten about, accord- 34m @ 12% TGC, including 20.3m @ The market will be given an idea of how
ing to Sovereign Metals Ltd 16.3%, 16.3m @ 11.4% TGC, including Malingunde stacks up against other pro-
managing director Julian 3m @ 23.6% and 23m @ 16.3% TGC, jects when the scoping study is released
Stephens. including 13m @ 20.3%. and Sovereign hopes a significant rerat-
ing and value in market cap – currently
“With regards to bat- Stephens said drilling provided further $15 million – receives a boost.
tery material feedstock, we encouragement that Sovereign was on
have seen a distinct shift in to a world-class deposit boasting high- As with any graphite project, off-take
focus towards cobalt and grade, coarse and jumbo flake concen- remains key and Sovereign will continue
lithium in recent times due trates amenable to potentially low capital discussions with potential partners and
to perceived future shortage and operating costs at Malingunde. strategic partners this year, while con-
of those metals. This has tinuing to inform the market on what the
drawn some investor dol- Sovereign is aiming to be at the very graphite sector is all about.
lars from graphite as peo- lowest end of the cost curve from an
ple seek greater short-term opex, capex and capital intensity per- “Investors would benefit from better
returns in that space,” Ste- spective against its peers. understanding the nature of the existing
phens said. graphite market as well as the future de-
“Sovereign has been a first mover mand driven primarily by rechargeable
“Graphite is a more ma- among the listed graphite explorers in batteries,” Stephens said.
ture market on the ASX than making low cost operations the funda-
either lithium of cobalt and mental pillar of our business strategy,” “The current natural flake graphite
investors who want to retain Stephens said. market consumes around 800,000 tpa
exposure to the rise in demand for both natural flake graphite, with batteries and
traditional uses and new technologies “Low costs and high quality products other specialised niche products only ac-
over a longer-time horizon must have will enable profitable entry by Sovereign counting for around 20% of this demand.
exposure to graphite going forward. So, into established traditional markets, dis- Thus, entry into traditional markets – ie
while the short-term market sentiment placing higher cost and lower quality for use in steelmaking and other indus-
may be drawn towards other battery- material. This is a significant advantage trial applications – represents the great-
centric minerals, the longer term funda- compared to our peers and de-risks Sov- est opportunity for natural graphite in the
mentals for graphite are very strong.” ereign from the timing of future battery short to medium term.”
demand growth while catering for the op-
Sovereign’s involvement in the graph- tion of entering the battery market when – Mark Andrews
ite sector will come through potentially demand is crystallised.”
producing high quality graphite concen-
trates from the soft, saprolite-hosted Ma- For the time being, Sovereign is not
lingunde deposit in Central Malawi. banking on downstream revenues, like
building a spherical graphite plant, to op-
The company has a 3,788sq km land
package in Central Malawi which com-
prises several licences.

Malingunde is the main focus and
Sovereign expects to make some game-
changing announcements, including a
maiden resource (expected at the time of
print) and a scoping study by the end of
April.

Metallurgical and flowsheet optimi-
sation work is ongoing, with the latest
flotation test work on the Malingunde
saprolite achieving concentrate purity av-
eraging 98.6% graphite, with 99% grade
achieved across a number of size frac-
tions.

Meanwhile, final assay results from air-
core and diamond drilling completed last
year continue to confirm consistency of
mineralisation along strike and substan-
tial vertical thickness of the deposit.

All information will be added to the

PAGE 52 APRIL 2017 AUSTRALIA’S PAYDIRT

Margosa’s vein plan

Further education about the vein graph-
ite sector is required in the Australian
market, according to Margosa Graphite

Ltd executive chairman John Shackleton.

“Outside of Australia, the European

market understands it, the London mar-

ket understands it because they have

been involved in it for a long time. I just

think that we need to educate Australians

a bit more,” Shackleton told Paydirt.

“I think we need to educate the Aus-

tralian market that we are in a boutique,

niche product; it is most certainly not

flake graphite, so that is what we will in-

tend to do from here on in, push that bar-

rel a bit and try and educate the Austral-

ian market on vein graphite a bit more.”

Having arrived on the graphite scene Sri Lanka-focused Margosa expects to list on the ASX in May

in Sri Lanka in 2012 – the start of the

latest graphite rush – Margosa enjoyed flake guys; when you talk graphite they An EM survey has been conducted on

first-mover status from an Australian are generally thinking flake,” Shackleton 1sq km of the lease, with four potentially

perspective, and has been able to peg said. significant orebodies identified.

some of the best vein graphite potential Margosa is looking to join Lanka Three of the four targets have been

in country. Graphite Ltd, Bora Bora Resources Ltd drilled for a total of about 900m, with

Shackleton and the team are con- and First Graphite Ltd as an ASX-listed Margosa verifying that vein thickness

vinced by the suite of projects compiled player in Sri Lanka’s vein graphite sec- varies from 2-4.75m at Pathakada.

in the Kalutara, Ratnapura, Kegalle and tor when it lists this year on the back of Metallurgical sampling has returned

Matara districts and is now ready to bring 10 projects covering 15 exploration li- grades between 65-95% graphite, with

Margosa’s value proposition to market cences. Pathakada offering the quickest path to

via an ASX listing. The most advanced asset in Margo- production for Margosa.

A prospectus is expected to be sa’s portfolio is Pathakada which covers Shackleton said the initial drilling pro-
“launched this month, with a listing mid- 7sq km.
gramme at Pathakada indicated that

to-late May. mineralisation dips about

Patersons Securities is the I think we need to educate the 40 degrees and close to
lead broker and at the time of surface, suggesting the po-

print discussions with financial Australian market that we are tential for open-cut mining.
houses in London and Sri Lan- in a boutique, niche product; it is “Our second phase drill-
kan brokers were in progress.
ing around Pathakada has

Shackleton said Margosa most certainly not flake graphite... started and that will be re-
was predominantly an Austral- source definition drilling.

ian company and therefore an We are about to engage a

ASX listing was the preferred company, one of the larg-

option, however, a combined est electromagnetic surveys

listing is not out of the question in Sri Lanka, to do an aerial

at a later stage. survey also,” Shackleton

In the meantime, Margosa’s said.

challenge is segregating the “We have gone through

vein and flake graphite sectors the approval process and

when promoting to investors. we are down to our last

“Flake graphite is generally approval which we expect

large tonnes, huge holes dug shortly. That aerial survey

in the ground requiring huge will start in the next two or

capex and large opex which three weeks [early April],

is typical of gold mining. The subject to getting approvals.

vein graphite sector is more We’ll try and get it ahead of

generalised, typically an un- the monsoon season which

derground operation with veins is coming up.”

that are very high-grade, high – Mark Andrews
purity and low capex. But, in

the [Australian] market we tend

to get lumbered in with the Margosa is one of the few ASX-listed companies chasing vein graphite

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 53

SPECIALTY METALS

Wolf ready for rebound

It has been a bumpy ride but Wolf the long run,” he said. “We have seen “Even if new mines were put into devel-
Minerals Ltd could be about to production fall 2% and demand rise 4% opment today, you are still looking at 3-4
in the last year; the market is tightening. years until they get to full production; that
finally realise some of its potential. But, nobody else has built a new mine equates to a seven-year window in which
in the last three years apart from Wolf. Drakelands is the only new producer.”
UK-focused Wolf has flattered to de-
ceive over the last three years with pro- Russell Clark The problem for many would-be tung-
gress at its Drakelands tungsten mine in sten developers is that spot prices for
Devon, south-west England, hamstrung concentrate are derived from prices for
by ramp-up issues and a falling tungsten ammonium paratungstate (APT).
price.
However, given this market is domi-
Managing director Russell Clark admit- nated by China, Western tungsten users
ted to Paydirt the company’s profile had may find their suppliers coming under
suffered due to each issue but he is now increasing economic pressure. Clark be-
optimistic of a turnaround on both fronts. lieves this should lead to current pricing
mechanisms being readjusted.
“It has been a journey,” Clark said. “The
tungsten price has fallen from $US300/ “Western concentrate production is
mtu at the time of the feasibility study, tight. China and Vietnam can’t increase
to around $US250/mtu during construc- concentrate exports and the mines in
tion and $US150/mtu by February 2016. Spain and Portugal are into their final
It has bounced back to $US210/mtu but years of reserves,” he said. “Almonty In-
most producers need at least $US250/ dustries [the largest Western producer]
mtu to break even.” recently struck a deal over production
at its Panasquiera operation in Portugal
The recent 40% rebound should give worth $US270/mtu when current pricing
Wolf a boost as it pushes towards full was around $US180/mtu and it is now
production at Drakelands but Clark also aiming to have 80% of its production in
sees a silver lining in the previous down- fixed-price contracts.
turn.
“It means traditional pricing mecha-
“I actually see it as a positive for us in nisms are starting to fragment. Almonty

PAGE 54 APRIL 2017 AUSTRALIA’S PAYDIRT

Wolf continues to encounter problems in Drakelands’ processing plant. However,
following a major shutdown in February it hopes to hit nameplate capacity
before the end of the year

has provided an opportunity for others producing 4,500 tpa versus 3,500 tpa Last year, Wolf and GRES formulated
to follow. It is in the interests of Western previous and it should see us achieve a work programme to tackle the process-
downstream producers to have a more lower unit costs.” ing problems and a major shutdown in
stable, transparent pricing mechanism to February allowed for the installation of
enable concentrate producers to develop Mining at Drakelands – 30km from the new equipment.
assets capable of supporting their down- port city of Plymouth – has been going
stream businesses.” well since the middle of 2016 and in the “I think you will see the effects of that in
December quarter head grades were coming months,” Clark said.
Until that occurs, concentrate buyers ahead of mining plans.
will only be able to source additional sup- It has been a trying time for Wolf but
ply from one place; Drakelands. Wolf’s However, the processing plant contin- Clark pointed to the ongoing financial
task is to ensure the mine is capable of ues to cause the company headaches, commitment of major shareholder Re-
delivering. particularly as the mining fleet continues source Capital Fund (RCF) as evidence
to work through the weathered material the operation was still highly thought of.
It is a task still not complete following at the top of the orebody.
a series of ramp-up problems since con- In March, Wolf drew down the final £10
struction started three years ago. “Mining has been concentrated on the million of RCF’s £30 million bridging facil-
near-surface material and there are a lot ity to fund the changes to the processing
Clark acknowledges the problems en- more fines than we anticipated,” Clark plant.
countered at Drakelands but believes the said. “That adversely affected the recov-
company is once again capable of defy- eries in the plant, particularly creating “The raw numbers don’t look pretty but
ing expectations. bottlenecks in the thickener.” the fact that RCF continues to support us
tells you of their feelings about the pro-
“Everyone has always said it wasn’t Equipment failures have also been ject but they are keen to see us proactive
possible to build this project but we have commonplace but Clark said Wolf and on things,” Clark said. “They see there
consistently jumped all the hurdles; per- project engineer GR Engineering Ser- is nothing fundamentally wrong with the
mitting, financing, construction,” he said. vices (GRES) continued to work through project. The mechanics work, the ore is
“The final hurdle was getting our plan- the problems. there and it has been de-risked. It’s not a
ning permission extended from 2021 complicated nuclear reactor; it is just big
and we achieved that last year. We are “The plant is working well… when it bits of steel.”
now permitted to 2036 and can run 24/7 works,” he said, pointing to problems with
as opposed to the previous 5.5 days a both front-end screens and the back-end With the new equipment installed, Wolf
week. That means we will be capable of kiln. is now forecasting Drakelands to hit de-
sign levels by the end of 2017.
“There is a challenge with the big
screens which have failed on a number “That is quite conservative,” Clark said.
of occasions. We know what the issue “The work to make the step change will
is and the company making them is ad- be done in the next three months and
dressing it.” then it will be about tweaking the metal-
lurgy as the orebody will already be sort-
At the back-end of the plant, in particu- ing itself out by then.”
lar the kiln, has meant stockpiling pre-
concentrate material. If Wolf can meet its operational goals,
it could be able to marry them to an im-
“The kiln and the surrounding equip- proving tungsten market.
ment has been struggling which has
stopped us getting concentrate out of the “We’ll find ourselves in the right spot, at
plant,” Clark said. “But we have a huge the right time,” Clark said.
stockpile of pre-concentrate material
ready to go through.” – Dominic Piper

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 55

SPECIALTY METALS

Australian Mines scoping
Sconi project

Scandium is a commodity rela- Australian Mines plans to have a BFS at the Sconi cobalt and scandium project
tively unheard of in Australia. completed by the end of the year
But Australian Mines Ltd is poised to
capitalise on a lack of supply in the “There is no one producing commer- so meet growing demand, particularly
global market. cial size quantities of scandium. [Austral- the expected surge in demand from the
ian Mines is] looking at producing quite electric vehicle market,” Bell said.
Australian Mines managing di- large volumes, up to 50 tpa. At the mo-
rector Benjamin Bell said there ment it sells for about $2,500/kg. We’re Following the success of the scoping
were only three mines in the world looking at selling it in the order of $1,200/ study, Flemington has moved into PFS
– Ukraine, China and Russia – pro- kg. So that is about half the market price. phase.
ducing scandium. By bringing the price down and giving
them [off-takers] a certainty of supply, Bell said Sconi, 250km east of Towns-
“In each case the scandium is a that will drive demand for the product. ville, had received final approvals on min-
by-product from the extraction of That is what we are counting on.” ing leases and environmental reports,
other elements. As such, volumes and the next step for the project would be
and product quality are both unreli- Australian Mines aims to establish a project finance followed by construction,
able and inconsistent,” Bell said. commercial level of supply through its which is set to begin next year.
Sconi cobalt and scandium project in
Scandium, discovered by Swed- Queensland, and a recently acquired “We are also finishing off the final
ish academic Lars Frederik Nilson tenement in Flemington, New South bankable feasibility studies for Sconi. So
in 1879, was derived from the Latin Wales, which is adjacent to Cobalt Blue that will be finished, fingers crossed, at
name for Scandinavia, “Scandia”, Holdings Ltd’s Thackaringa project. the end of the year.”
and in addition to the unusual name,
the element also has some unusual Australian Mines announced the fa- Australian Mines also plans to build a
properties. vourable findings of a scoping study at demonstration plant in Welshpool, which
Flemington, which indicated a long oper- it hopes will be up and running in the next
Scandium has a density almost ating mine life of 45 years and an after- six months.
as low as aluminium, but it has a tax cash flow of $677 million over the first
much higher melting point, which 18 years of the project’s life. “We will start building that to produce
means it is an extremely light and a product and get that across to clients.
weldable material. “The results of the scoping study rep- That is all we really need to do for that,
resent another step forward in our strate- because [the plant] has got all its approv-
Scandium and aluminium alloys gy to establish a dominant position in the als in place,” Bell said.
have been used in Russian MIG global supply of scandium and in doing
fighter planes for decades. – Jonathon Daly

Bell told Paydirt that Airbus had begun
trialling scandium alloys in its mid-sized
airplanes.

“Because it is weldable, you don’t
need to rivet the plane. About 10-15%
of a plane’s weight is rivets. So you can
reduce 10% of the plane’s weight just by
getting rid of that. That is the attraction
for Airbus,” Bell said.

Scandium alloys also have promising
uses in car chassis for the automotive
industry.

“A lot of car manufacturers use alu-
minium. One of the bigger ones would be
Audi. But they [car chassis] have to be
handmade, because you cannot roboti-
cally weld aluminium. So a lot of those
guys are looking at using a scandium al-
loy, which is 2% scandium with alumin-
ium. You can weld the product, so you
can make a car that is as strong as steel
for about one-tenth of the cost of carbon
fibre.”

Bell said the element would be adopt-
ed in airframes and cars, it was simply a
matter of having enough material avail-
able in the marketplace.

PAGE 56 APRIL 2017 AUSTRALIA’S PAYDIRT

Cobalt content fires up Ardea

Exposure to one of the cobalt supply outside of the
world’s largest cobalt re- DRC, which currently domi-

sources has helped Ardea nates the market, is also a

Resources Ltd burn up the hot topic among investors.

bourse during its first two Painter, who worked al-

months of trading. most exclusively in copper

Spun out of Heron Re- for a decade with Namibia-

sources Ltd, Ardea finished focused explorer Sabre Re-

its opening day of trade on sources Ltd, believes non-

February 9 at 18c/share. traditional metals such as

Since then, the company’s lithium and cobalt are here

stock has skyrocketed, peak- to stay.

ing at 69c on February 24. “We’re dealing with a

At the time of print, Ardea revolution in the automotive

was trading at 62c/share and sector where basically eve-

in the throes of drilling one ry single carmaker has said

of its key cobalt prospects at they want a range of electric

the Kalgoorlie Nickel Project vehicles by 2021,” he said.

(KNP) in Western Australia. Ardea is focusing on the cobalt content of the Kalgoorlie Nickel Project “Whether they’re full-blown

“We always believed in the electric, hybrid or whatever

projects so it’s quite satisfying to see that Painter, an experienced geologist, said it might be, certainly Tesla is not going to

belief carried through to the market,” Ar- previous work carried out on the project have that market to themselves for very

dea managing director Matthew Painter was proving to be beneficial for his com- long.

told Paydirt. pany. “I think this interest is going to be here

“It got a bit carried away there for a “Without that dataset, it would be sev- for a while, and that’s just in the automo-

while, but we seem to have settled down eral years work, at least, and to do it to tive sector, not taking into account thin

into a good level. It’s a fascinating thing the quality it’s been done would be sev- gs like power sources for homes and

to watch the market respond to a good eral more years on top of that,” he said. what have you. This is a massive shift

cobalt story, which is basically what “Basically we’ve got a head start of 3-5 we’re seeing and we’re going to need to

they’re responding to in Ardea. years with the quality of data we’ve got lithium, we’re going to need cobalt and

“We’re getting recognised for having a so far. It’s not something we take lightly, there’s going to be some nickel and cop-

good spread of projects, but it’s certainly but we have to augment that and supple- per thrown in there as well.”

the cobalt that’s driving a lot of excite- ment that with our new data and we have Ardea has also started drilling at the

ment. Without the cobalt story, I think to bring in new processes and new eco- Lewis Ponds zinc-gold project in New

we’d still be trading really well, but there’s nomics as well. South Wales, with the first diamond hole

no doubt that’s what has sparked a lot of “New drilling, new metallurgy work and intersecting over 50m of massive, band-

people’s interest.” some new modelling will see us out for ed and stringer zinc mineralisation.

Ardea hopes to complete a PFS on the year. It’s a lot of work, but we can do A second hole has been drilled and the

what the company has dubbed the KNP it.” company was awaiting the assay results

Cobalt Zone by January 2018, incorpo- Cobalt has fast become the commod- at the time of print, although sphalerite,

rating previous studies and results from ity on most people’s lips on the back of its pyrite and pyrrhotite were noted as the

Heron and Vale Inco. links to electric vehicles and other battery main zinc and iron sulphides.

Prior to completing a $5.1 million IPO, technologies. A desire for an established “It’s extremely clear already just by

Ardea announced a revised re- looking at the core that’s come out

source estimate of 49.7mt @ 0.12% that these rocks are being altered

cobalt and 0.86% nickel following and sheared very strongly, which is

an extensive review of KNP’s cobalt not something that’s really been ac-

content. The project’s global re- counted for adequately in the past,

source still stands at 805mt @ 0.7% as far as I’m concerned,” Painter

nickel and 0.05% cobalt. said.

Cobalt-focused RC drilling began “Certainly we know there’s plenty

at the Kalpini target last month, with of zinc, there’s lead and a bit of cop-

the rigs to be switched to the Black per thrown in and we know there’s

Range prospect upon completion of a bit of gold floating around as well.

the 28-hole programme. We’re of the opinion there’s quite a

Kalpini is not currently in the KNP bit of potential for gold and silver

Cobalt Zone, while an inferred re- mineralisation as a later event out-

source of 20mt @ 0.10% cobalt side of the zinc.”

and 0.75% nickel has been defined – Michael Washbourne
at Black Range. Both targets have Managing director Matthew Painter and chair Katina Law

been approved for drilling. ring the bell to mark Ardea’s first day of trade on the ASX

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 57

SPECIALTY METALS

Riva rejects cobalt
contamination claims

Riva Resources Ltd has basin – and something
hit back at suggestions different – and I guess

it is promoting a “scurril- it shouldn’t surprise us

ous” cobalt play. there’s something go-

The company, formerly ing on because we’ve

known as Dragon Energy, already got the world’s

was forced to put out a largest lead carbonate

number of spot fires last deposit in Magellan 4km

month after an analyst from our door.”

report by Far East Capi- Riva raised $2.2 mil-

tal Ltd’s Warwick Grigor lion via a heavily over-

raised concerns about the subscribed placement

legitimacy of Riva’s Tabac in late February to fund

cobalt-gold project, 30km the proposed exploration

west of Wiluna. work at Tabac, including

Under a section titled “a a 54-hole programme,

scurrilous cobalt promo- once all approvals are in

tion”, Grigor drew atten- place.

tion to historical drill results The company has also

which Riva reported when entered into a JV agree-

it acquired the project last Riva is keen to hit the ground running on exploration of its Tabac cobalt-gold ment with Rosslyn Hill

September, claiming the project and adjoining tenements held by Rosslyn Hill Mining Mining Pty Ltd, a wholly

assays were contaminated owned subsidiary of

from a saw blade used to cut the core. said his company’s only failure was not TSX-listed LEADFX Inc and the owner-

“It astonishes me that Riva is out there properly informing shareholders of the operator of the adjacent Paroo Station

promoting this as a cobalt play today, giv- perceived discrepancy before it was re- lead mine, to earn up to 75% of the co-

en that history,” Grigor wrote. “It is a very ported by Far East Capital. balt, gold and copper rights on a 46sq km

high risk strategy because if they fail to “We thought our shareholders had neighbouring tenement package for a $6

deliver, which is the most likely outcome, been fully advised, but obviously they million spend over four years.

there will be egg on faces.” weren’t because they reacted in a way “It’s a fantastic JV for us,” King said.

Riva said it had held discussions with that wasn’t expected,” King told Paydirt. “We get access to key infrastructure, we

the geologist at the time, Andrew Drum- “We needed to better inform the mar- get all of their experience and all of their

mond of Australian Consolidated Miner- ket of how we arrived at our decision knowledge of the area and we can bring

als, after it had become apparent during and help our shareholders appreciate it into our work programme.

its own due diligence that an inconsist- that there are a lot of questions over that “Not only that, we have a reciprocal ar-

ency existed between the primary and historical work and really the only way to rangement whereby they have the option

limited secondary check assays. answer those questions is to twin those to farm-in on our ground for the equiva-

However, the company has queried holes and test for cobalt.” lent of what we’re paying to farm in on

the contamination theory, questioning Riva has been unable to hit the ground their ground, so it’s $6 million for $6 mil-

how the contamination could be confined running at Tabac due to delays in receiv- lion. The commodities groups differ, but

to the same geological interval and rock ing the required approvals to explore the the great news is they could spend $6

type in two holes 7.3km apart, as well as tenements which make up the project, million on our ground.”

why the cored intervals in a different rock adjacent to the former Magellan lead While Riva’s early move on cobalt has

type do not show evidence of contamina- mine. somewhat stalled, King still implored in-

tion when the rocks are at least as hard, if In the meantime, Riva has defined vestors to stick with the company.

not harder than, the rocks below. widespread cobalt anomalism across “We perhaps have taken our share-

The historical holes in question, from the 110sq km ground package from leg- holder base a little bit for granted,” he

a programme completed in the 1980s, acy surface XRF geochemistry and is said. “The cobalt space is new and the

returned hits of 80m @ 0.77% cobalt (in- champing at the bit to punch some new understanding at this stage is still limit-

cluding 10m @ 1.47%) and 30m @ 0.3% holes into the project. ed, so I think we need to make a greater

cobalt. “The one thing the delayed grant of the commitment to them and I believe our

Shareholders reacted angrily to the tenements has done is provide us with shareholder base will only strengthen,

suggestion of contamination at Tabac, time to look around the Yerrida Basin and not weaken, if we can do that.”

with the company’s stock dropping al- time to get on top of the legacy data that – Michael Washbourne
most 50% over the past month to 2.1c/ is out there and review it,” King said.

share at the time of print. “It’s really only strengthened our belief

Riva managing director Jonathan King that there is something going on in this

PAGE 58 APRIL 2017 AUSTRALIA’S PAYDIRT

Browns Range set to launch

Northern Minerals Ltd’s Browns Range could become the first significant producer of dysprosium outside of China
bid to become the lead-
ing dysprosium producer Dysprosium, a heavy rare earth, is a with 49,400kg of dysprosium to be pro-
outside of China is almost critical component of permanent mag- duced from the $30 million facility.
a reality. nets used in large industrial engines and
electric vehicles, with the permanent “As you can imagine, there were a
At the time of print, the magnet industry accounting for almost number of factors globally, specific to
company’s board was ex- 95% of all dysprosium demand. rare earths and the like, that saw our
pected to approve a final market cap impacted quite significantly,”
investment decision for “Where the permanent magnet really Bauk said.
the Browns Ranges rare takes advantage is it’s a lighter weight
earths project, 160km and it’s more efficient,” Bauk said. “As “Our funding position was impacted,
south-east of Halls Creek you can appreciate, all these cars are our cash balance was impacted and we
in Western Australia. looking at lower emissions, underpinning just couldn’t keep that stubborn-mind-
all of these technologies going forward. edness of ‘let’s build a big project and
Board approval will raise $500 million’, so we actually came
see Northern Minerals “As soon as people start seeing con- through a group of people and said we
develop a pilot plant at fidence of this metal being made avail- should look at an alternative way to com-
Browns Range as the first able, then who knows what other ap- mercialise this project.
of a three-stage process to plications we may see utilise more rare
commercialise the project, earths, in particular heavy rare earths “What we’re about to go into production
operating at 10% of full- and dysprosium. with today is actually a direct outcome of
scale production for three years. the difficult times we faced in late 2015
“Plus, speaking to magnet experts, we and 2016. However, we’ve been able
Northern Minerals managing director can afford a higher dysprosium price. It’s to maintain a professional approach to-
George Bauk believes his company is not like the price today is affecting and wards a project that is now at the cusp of
timing its run perfectly. pushing products into alternatives. We being mined, which will be a significant
have a big enough gap there for encour- step change for us.”
“You can never pick the top of the mar- agement of a higher price.”
ket, but I think nothing beats being able Bauk said he was pleased with how his
to demonstrate and prove our project is a Browns Range was one of the pro- company handled a number of redundan-
success technically,” Bauk told Paydirt. jects in the company’s prospectus when cies during that tough period, with sever-
it floated as Northern Uranium in 2006, al former staff members returning to the
“Should there be adjustment to rare albeit not as the flagship asset. A DFS fold as market conditions improved.
earth pricing, which has been talked released in 2015 found the project could
about, then as the fundamental prices support life-of-mine production of 3.13 “That puts us in good stead to retain
change, people will look to who is taking million kg dysprosium for $329 million of people and to attract people,” he said.
best advantage of that price change, by pre-production capital. “Always stick to fundamentals and treat
either being at a stage of putting together people with respect through all times and
your plant or in production.” Northern Minerals had a funding they’ll be with you through the thick and
agreement in place with China’s Jien thin.”
Northern Minerals received a boost in Mining, but that collapsed in late 2015,
the lead-up to the board decision, raising forcing the company to go back to the – Michael Washbourne
$10 million via a placement underwritten drawing board and look at a smaller
by Hong Kong-based AMC Wanhai Se- start-up option.
curities Ltd.
It was ultimately decided a three-stage
The company reported no debt and development pathway, beginning with a
$15 million cash on hand in February, pilot plant, was best for Browns Range,
on top of a $30 million equity financing
deal with Huatai Mining Pty Ltd, of which
$19.5 million has been received to date.

Sinosteel MECC is also deferring 20%
of the EPC contract value for two years,
while a preferred off-take route is close
to being finalised.

“As long as we have funding in place
and the off-take, then should everything
line up and all final costs coming in meet
our expectations and the like, the board
will give this project the green light,” Bauk
said.

“A green light would then mean we can
issue civil mining contracts and we can
issue the green light for Sinosteel to go
ahead with procurement of all the critical
parts of the build of the beneficiation and
hydromet plant.”

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 59

SPECIALTY METALS

Market finds appetite for Arafura

Investor appetite for rare “The next natural break
earths stories is growing, in our process doesn’t oc-

according to Arafura Re- cur until the end of the hy-

sources Ltd managing di- dromet process, so it was

rector Gavin Lockyer. important for us to test the

Lockyer has taken the appetite in the market-

Arafura story on the road place for funding projects

over the last six months, like ours before we actu-

pitching to investors in ally committed to that full

Eastern Australia, Hong programme,” he said.

Kong, Singapore and North “If you start these types

America, in a bid to lift the of hydromet processes

profile of his Northern Terri- and you have to stop them

tory-focused company. halfway, the engineering

“We wanted to see if there data that you get out of it

was interest in the rare is not complete. It’s a bit

earths space – and whether like having a cake half-

there was any specific inter- cooked; you can’t simply

est in Arafura per se – and just take it later on and put

what was pleasing to hear it back in the oven.

was a lot of these guys had “We’re now full steam

made money through the ahead on the hydromet

battery technology space,” Arafura has capitalised on growing interest in rare earths by raising more and we look forward to
Lockyer told Paydirt. than $6 million for work on its Nolans project in the Northern Territory reporting on the progress
of that over the next few
“They have all jumped on

board the lithium-graphite-cobalt stories pany was set to further top up its cash months as those work streams and op-

but, perhaps most importantly, they ac- reserves with an additional $2.5 million erations are completed.”

tually believe the story around the elec- from a share purchase plan to existing If Arafura can build enough momen-

trification of motor vehicle fleets, or just shareholders. tum into the second half, the company is

transportation in general.” With just over $6 million of fresh funds likely to start detailed engineering work,

Rare earths such as neodymium at its disposal, Arafura will look to pro- which will be incorporated into a final fea-

and praseodymium are considered the gress its pilot programmes at Nolans sibility study on Nolans.

“sleepers” of the battery minerals sec- over the next few months. Arafura has previously guided oper-

tor, with both magnet metals playing key “The last couple of years we’ve really ating costs of $12.36/kg and a capex of

roles in functioning motors of many elec- gone back to our flowsheet to see if we $1.19 billion for a 20,000 tpa operation.

tric vehicles. can find efficiencies, both in size and in An environmental impact statement

Arafura is looking to produce both process, and our guys have done a really supplementary report was submitted in

neodymium and praseodymium from its good job of reviewing all of our previous February and Arafura was hopeful of be-

Nolans rare earths project, about 135km research and coming up with a flowsheet ing awarded the required regulatory ap-

north of Alice Springs. which we believe is much more econom- provals by mid-year.

“Fund managers from New York are ic,” Lockyer said. “Having the environmental approval

typically looking at the micro-caps in “It’s now utilising the natural advan- sitting in the background will go a long

Australia right now, which is very encour- tage that we have in our Nolans deposit, way to helping us push ahead with for-

aging, but they’re also looking for that through the fact it’s a phosphate-hosted malising off-take arrangements,” Locky-

next big story and they certainly believe rock and we’re actually now extracting er said.

neodymium is one of those,” Lockyer that value as a by-product. We started Lockyer also intends to keep one ear to

said. beneficiation piloting at the end of last the ground for any chatter coming from

“Without neodymium magnets, electric year and we believe this should be our the motor vehicle manufacturers.

motors aren’t as efficient and therefore last round of pilot programmes.” “We’re very close to the magnet manu-

these battery technologies that are sup- Arafura has called on phosphoric acid facturers because that’s ultimately where

posedly wonderful won’t actually drive consultants Prayon Technologies for our off-take will probably come from,” he

anything that has an inefficient motor.” specialist support during this final phase said. “People’s perception is one thing,

Lockyer and his team were keen to of piloting, which will look to extract phos- but when you’ve got procurement guys

capitalise on renewed interest in the rare phate from the concentrate produced for motor vehicle manufacturers actu-

earths sector, which has tanked since from earlier beneficiation work. ally placing orders for magnet specs you

hitting a peak in 2011, and decided to rat- Beneficiation was achieved for a rela- know it’s starting to become a reality and

tle the tin for the first time since 2010. tively low cost, according to Lockyer, us- not just us spruiking a good story.”

On the back of the road show sea- ing a simple crushing and flotation circuit. – Michael Washbourne
son, Arafura raised $3.6 million via a Lockyer said continuity of testing was

placement to institutional investors in crucial for the long-term success of No-

February. At the time of print, the com- lans.

PAGE 60 APRIL 2017 AUSTRALIA’S PAYDIRT

OPINION

Tin drops off the pace

Industrial metals are buzzing again. the Chinese authorities. It’s taken
The LME index of base metals several weeks for even local pro-

has risen from a trough of 2,049.00 ducers to confirm that the duty

in January 2016 to a current has really gone.

2,859.20. ITRI has in the past suggested

Fears of a global, particularly there might be significant stocks

Chinese, slowdown have been in China, although how signifi-

largely assuaged over the interven- cant is anyone’s guess.

ing year. Attention is once more And it’s not as if Chinese pro-

focusing on supply constraints ducers are immune from the

across the industrial metals spec- ore depletion that has affected

trum. The only readily identifiable reason for tin’s fall in price this just about every other producer
Only one metal has been left be- year is the potential threat of more exports from China around the world.
Two out of the four biggest pro-
hind.

Tin, currently trading at $US19,330/t in exports from Indonesia, the world’s larg- ducers in the country reported lower pro-

London, is down 7.8% since the start of est tin-exporting nation. duction last year, according to ITRI.

January. It is the only LME-traded metal Exports jumped 180% year-on-year to Chinese operators have come to rely

to be in negative territory. 6,964t in January, although that dramatic increasingly on imports of raw material

What little fund money is committed percentage change was down to a low from neighbouring Myanmar to compen-

to one of the LME’s least liquid markets base last year, when Indonesian tin pro- sate for falling domestic mine production.

has flown. The money manager net long duction was hit by the double-whammy Superficially the flow of ore across the

position has halved to a one-year low of of flooding and another turn of the licens- border continues to boom, up 63% last

1,173 contracts since the start of the year. ing screws by the Government. year.

In Shanghai, where the price has ar- Exports over the last three reported But, according to ITRI, analysing Janu-

guably held up better, market open inter- months have been running strongly at ary’s cross-border trade, “the presence

est has slid from over 24,000 lots to just an annualised 71,000t, which seems to of high-grade ore in shipments has re-

13,400 over the same time-frame. reflect a robust production performance portedly been sparce and we have low-

Why has tiny tin fallen so out of favour? by PT Timah, the country’s largest pro- ered our estimate of average tin content

Tin’s relative under-performance has ducer, in the closing months of 2016. to 15% tin”.

coincided with the dissipation of an ag- However, the long-term trend is still Even Myanmar, it seems, is struggling

gressive cash squeeze in London that falling. with grade depletion.

lasted most of the fourth quarter of 2016. Cumulative exports last year were Tin’s usage profile, concentrated as it

The LME’s benchmark cash-to-three- 63,560t, down 9.4% on 2015. It was the is on soldering, is not the most exciting.

months spread spent most of that period fourth consecutive year of decline. ITRI was expecting usage growth of

in backwardation, the cash premium flex- PT Timah is aiming to lift production to just 1% last year, but relative to the new

ing out to $US270/t at one stage in No- 30,000t this year from 24,000t last year found optimism pervading the rest of the

vember. but it will do so in part by buying in more industrials metal pack, tin’s under-perfor-

That spread ended in early March val- ore, potentially translating into lower out- mance so far this year still looks slightly

ued at a contango of $US39/t. put among Indonesia’s independent pro- strange.

LME headline stocks have rebuilt from ducers. There are still structural supply prob-

under 3,000t in November to a current Tin producers body ITRI said it expects lems in this market. Six out of 10 of the

5,415t. Open tonnage, which is the metal “officially reported Indonesian refined world’s largest tin producers saw output

available for contract settlement, has re- shipments this year to remain broadly drop last year, according to ITRI.

covered from a desperately low 1,125t to level with 2016”, albeit with “significant Most established producers are strug-

4,065t. uncertainty” around that forecast. gling to maintain, let alone increase, pro-

But this recovery in stocks liquidity Set against the longer-term down- duction.

is highly relative. Two years ago LME trends in both LME stocks and Indone- Myanmar has provided a lifeline to

stocks totalled over 10,000t. sian shipments, tin’s fall from grace looks China’s producers but it too is showing

Moreover, after peaking at 5,995t in anomalous. signs of the falling mine grades that are

mid-February, the headline figure is fall- There is one other key factor to con- the root of challenged supply.

ing again. sider, however. With LME stocks still historically low

The LME contract remains a very tight China is the world’s largest producer, and once again sliding, the only readily

space. One entity controls 30-40% of but it has historically not exported much identifiable reason for tin’s fall in price

available tonnage and another 40-50%, metal because of a 10% export duty that this year is the potential threat of more

according to the exchange’s latest domi- has been in place since 2008. exports from China.

nant positions report. That duty has been dropped this year, That country’s trade figures are going

It’s a moot point as to how long the opening up the potential for greater arbi- to warrant close scrutiny over the coming

easier tone in time-spreads is going to trage flow of tin out of the country. weeks and months.

last. There were no exports of refined tin at – Andy Home, Reuters
This relative rebuild in LME stocks has all in January but that’s probably down to

taken place against a backdrop of higher the lack of any official announcement by

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 61

SPECIALTY METALS

Archer looking for cobalt bullseye

Ketchowla is near the historical copper-producing town of Burra

The approvals process can often be English said Archer’s shift was more than at Ketchowla, following a rock chip sam-
an arduous, drawn out affair for min- just an opportunistic dash. pling campaign which produced values
ing companies but Archer Exploration Ltd up to 0.68% cobalt and more than 50%
has found a way to kill time while wait- “We actually first discovered man- manganese.
ing to get its Campoona graphite project ganese and cobalt at Ketchowla in
through the system; find a second project 2009/2010 but it was the same time as At Polinga, on the Eyre Peninsula,
in a hot commodity. the Eyre Peninsula graphite and magne- Archer has begun assaying historical drill
site was discovered and we didn’t follow holes not previously tested for cobalt.
Archer continues to work diligently on up. With the price rises we thought there
Campoona – on South Australia’s Eyre would be some interest and so raised “We’ve gone back to the old areas that
Peninsula – but with its mining licence $1.89 million.” hadn’t been assayed for cobalt and had
application being considered by South some good results,” English said.
Australia’s Department of State Develop- By the time Archer raised $1.89 mil-
ment, the company chose to expand its lion, it had beefed up its cobalt portfolio Re-assaying of holes drilled by Monax
exploration portfolio. to also include the Polinga project in SA Mining Ltd in 2008 has so far returned
and ground around Broken Hill in New hits of 6m @ 0.15% cobalt and 3m @
“We lodged a mining licence applica- South Wales. 0.11% cobalt from hole PRC0024 and 5m
tion for the graphite project last year and @ 0.095% cobalt from hole PRCOO3.
while we are awaiting that – usually a 6-8 Archer began drilling last month at
month process – we looked at the man- Ketchowla, near the historical copper- Across the border in NSW, Archer has
ganese and cobalt assets we had and producing town of Burra. Mineralisation tied up ground along strike from the suc-
decided we should return to them,” Arch- covers an area of 75km by 4.5km and cessful cobalt discoveries of Broken Hill
er chairman Greg English told Paydirt. although previous exploration focused Prospecting Ltd and Cobalt Blue Ltd.
on base metals, an intercept of 11m @
Both commodities have enjoyed re- 0.11% cobalt and 12% manganese has “The ground is only 20km from Broken
newed interest in the last 12 months but been reported. There are nine prospects Hill,” English said. “You would imagine
there is nothing left to drill or mine around
Archer began drilling at Ketchowla in March Broken Hill but we are looking for cobalt
associated with pyrite and geologists
have told me they used to ignore the
pyrite because there was no lead-zinc-
silver in it. It means we have so much
drilling potential to reassess and we can
do it cheaply.”

The attention being paid to cobalt
may leave investors wondering whether
Archer had lost interest in Campoona
and graphite but English said the project
continued to move forward.

“The landowners have been very good
and although the approvals process has
been dragged out longer than we thought
we have received consistent responses
from government.”

– Dominic Piper

PAGE 62 APRIL 2017 AUSTRALIA’S PAYDIRT

SAVE THE DATE

17 October 2017
Pan Pacific Perth

australiannickelconference.com

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

Image courtesy of Western Areas Ltd

QUEENSLAND

Carmichael not over
the touch line yet

The $16.5 billion Carmichael coal mine and rail project in Queens- Former Federal Greens leader Bob
land looks set to be built after the State and Federal Govern- Brown is behind the Stop Adani cam-
ments again showed its commitment to the project last month. paign launched on March 22, with 13
environmental groups forming the Stop
Queensland Premier Annastacia An integrated rail system will deliver Adani Alliance.
Palaszczuk led a delegation of over 30 coal to two terminals at Abbott Point port,
officials to visit the Adani Group’s Mun- near Bowen, which will be shipped to In- The alliance is reportedly representa-
dra port and power plant in India last dia for power generation. tive of 1.5 million Australians and comes
month. on the back of new polling which sug-
The project will be worth $22 billion in gests three-quarters of Australians
The visit to India comes after the State taxes and royalties to the State over the would prefer Adani to fund its own mine,
Government issued the final environ- first 30 years, while it is estimated that rather than tap into $1 billion worth of tax-
mental authority to Adani last year, which 10,000 direct and indirect jobs will be payers’ money.
the latter is confident of fulfilling. generated in Queensland.
The poll Brown pointed to also sug-
Adani is confident the “mine will not Mining support services in the Mack- gests the majority of Australians want
pose an unacceptable risk to the environ- ay-Bowen region are set to benefit from Adani to invest in solar power, not a new
ment” and indicated to the Indian press Adani’s investment, with Rockhampton coal mine, and that Carmichael should
that construction of Carmichael could and Townsville identified as potential not go ahead because of the environ-
start as soon as August. FIFO hubs. mental threat it poses to the Great Bar-
rier Reef.
Adani entered the Galilee Basin in While there is overwhelming support
2010 and has faced stiff opposition from for the mine at Federal, State and coun- Speaking on Fran Kelly’s breakfast
environmental groups for its proposal to cil level, and with most court procedures programme on ABC Radio National last
build the 60-year Carmichael coal mine, completed, environmentalists have not month, Brown said temperatures along
which is poised to be Australia’s largest given up hope of shutting down plans to the Queensland coast were killing coral,
thermal coal mine. build the mine. with the worst coral bleaching in history
on the northern part of the Great Barrier

PAGE 64 APRIL 2017 AUSTRALIA’S PAYDIRT

Reef experienced recently. “This hasn’t even got funding,” Brown to $18.4 billion, largely on the back of
“There’s coal-fostered killing tempera- said when asked about what can be higher prices.
done now to stop the Carmichael mine
tures on the [Great] Barrier Reef right from going ahead. Meanwhile, Australian metallurgical
now and it is absurd, it is dangerous, it is coal volumes for FY2017 are forecast
rash and it is fighting future generations “Australians are opposed to it, every- to increase 1.6% to 191mt, with export
and 70,000 jobs on the Great Barrier where I go people want to take action values to double to $40 billion, with in-
Reef... should we even be contemplating against this mine and that action will cul- creased demand from China and India
this mega coal mine, which most Austral- minate at the ballot box in the next Fed- driving the surge.
ians oppose?,” Brown said. eral election and State election. People
are on the move like I have never seen “Were Australia to stop exporting coal
“The idea of giving the Adani coal mine since the Franklin campaign. This is a tomorrow, not only would billions of dol-
this billion dollar loan, we know from the huge environmental issue, it is of global lars of export revenue be lost, not only
opinion polls it is opposed by a great ma- significance and Australians don’t want it would thousands of jobs be lost but there
jority of Australians. Mr Adani wants to and politicians who don’t take notice of would be no benefit to the global climate
run this mine, and by the way, siphon off that do so at their own peril.” whatsoever,” Prime Minister Malcolm
profits of it to a tax haven in the Cayman Turnbull said during Question Time on
Islands. Let him do it, let the politicians For the time being, it appears the Aus- March 21.
responsible for it do it, but let’s not prop tralian Government remains committed
that up with public money as it is intend- to the coal industry, with ABARE fore- “If our coal exports stopped, it would
ed by the Government of Mr Turnbull and casts indicating increased export vol- be simply sourced from other countries.
the Queensland Government.” umes of both metallurgical coal and ther- The reality is that the Australian coal in-
mal coal, mainly from New South Wales dustry produces coal of a cleaner qual-
Brown likens the Stop Adani campaign and Queensland. ity, of a higher quality than many of its
to the Franklin River dam campaign run competitors.”
in the 1970-80s to stop a dam being built According to ABARE’s forecast, 208mt
on the Gordon River in Tasmania to gen- of thermal coal will be exported with – Mark Andrews
erate hydroelectric. earnings to increase by 25% in FY2017

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 65

QUEENSLAND

Ravenswood revival continues

Resolute Mining Ltd has received an- Resolute is aiming to keep Ravenswood in operation until at least 2029
other regulatory boost to its rejuvena-
tion plans for the Ravenswood gold mine. environmental approvals,” Welborn said. looking to aid project development.
“It has been mined previously, there’s “What I like about the prescribed pro-
Queensland’s Department of Environ-
ment and Heritage Protection has signed a small underground mine there, but the ject legislation is it allows smaller com-
off on the restart of mining at the historic scale of our open-pit operations will be panies who are driving projects deemed
Sarsfield open pit, as Resolute’s expan- new. We expect to receive those approv- of state significance to effectively have a
sion programme at Ravenswood gathers als around the middle of next year.” partner in achieving those permits and
pace. regulatory hurdles,” he said.
Resolute’s expansion plans for Raven-
Resolute has already restarted open swood also include boosting the mill ca- “Now that’s not a ‘get out of jail free
pit mining at Nolans East following an pacity from 2.8 mtpa to 5 mtpa in FY2018, card’. Nothing about our environmental
earlier set of approvals, with Raven- as well as the potential implementation of approval at Sarsfield or the approvals
swood granted prescribed project status some new beneficiation technologies. we still need for Buckreef West allow
by Queensland authorities in December. you to get around any of those regula-
Welborn said certainty around the fu- tory hurdles. What it does allow you to do
Environmental approval for Sarsfield ture of operations at Ravenswood, which is make sure there are no unnecessary
came six months after the company con- was unclear this time last year with the delays and that you’re having the con-
firmed it planned to extend operations last ore from the Mt Wright underground versations and feedback as early as you
at the mine until at least 2029, with pro- being mined, had greatly boosted com- possibly can.”
duction set to increase beyond 120,000 munity morale.
ozpa, based on existing reserves of Meanwhile, Resolute reported a first-
69.6mt @ 0.8 g/t gold for 1.8 moz. “Ravenswood is a very small, historic half net profit of $64 million from sales
town and next year will actually be the revenue of $168 million from Raven-
Resolute managing director John Wel- 150th anniversary of the first discovery swood and the Syama gold mine in Mali.
born was on site when his company re- of gold there,” he said.
ceived the good news. Net cash and bullion flows from opera-
“We’ve always had a really happy tions is up 21% to $85 million (unaudited)
“This milestone around achieving en- and well motivated workforce at Raven- on the comparative period, with gold pro-
vironmental approval is really important swood, but the biggest turnaround has duction also up 11% and tracking ahead
and very significant for Resolute, par- been the enthusiasm and the optimism of the full-year guidance of 300,000oz.
ticularly when you consider we’ve been of the pub owners and small business
working on this since 2011,” Welborn told people in and around the town, and even AISC of $999/oz is also tracking ahead
Paydirt. in a broader sense, in Townsville.” of the $1,280/oz previously guided.

“I’m really proud of the fact we have Queensland’s resources sector often Resolute’s overall cash, bullion and
transformed the company around our attracts plenty of criticism due to the listed investments was $283 million at
ability to work with the Queensland Gov- number of regulatory hurdles that com- the end of December, following a suc-
ernment and part of that has been the panies must overcome to be approved to cessful institutional placement of $150
support we’ve received through access either explore or mine in the State. million for future project growth.
to the prescribed project status.”
However, Welborn believes those neg- – Michael Washbourne
Newly appointed approvals manager ative perceptions are changing for the
Brendan Dillon, Ravenswood general better, citing the prescribed project legis-
manager Joel Ray, chief operating officer lation as a good example of government
Peter Beilby and general manager pro-
ject delivery Paul Henharen were singled
out by Welborn for their efforts in gaining
the required approvals for Sarsfield.

Mining at Nolans East, an extension of
the historic Nolans pit, began earlier this
year as Resolute started winding down
underground activities at Ravenswood,
including closure of Mt Wright.

Initial work at Sarsfield, which hosts
1.2 moz reserves and 2.6 moz resourc-
es, will include draining water from the pit
and extracting any tailings before atten-
tion turns to the cutback.

Buckreef West, a new deposit hosting
500,000oz of reserves, is the third cab
off the rank in the Ravenswood expan-
sion plan. Underground mining has been
completed in the area previously.

“We’re being very consultative and
careful in our approach there because
this has a longer-lead time in terms of

PAGE 66 APRIL 2017 AUSTRALIA’S PAYDIRT

Klein spruiks his best deal yet

Evolution Mining Ltd ex- the half, behind only Cowal
ecutive chairman Jake ($97.1 million) and Mungari

Klein believes the acquisition ($42.7 million).

of an economic interest in Er- “Mt Carlton is proving to be

nest Henry could prove to be one of the lowest cost gold

his company’s greatest ever mines in Australia, it really

deal. has exceeded expectations

Having already landed the with respect to its cash flow

Cowal gold mine in 2015, generation and cost base,”

Evolution surprised the mar- Klein said.

ket last year by entering into “Rawdon and Cracow are

an agreement with Glencore just reliable workhorses. One

for 100% of future gold out- of the most intriguing things

put at the Queensland op- about Mt Rawdon is it doesn’t

eration, as well as 30% of Ernest Henry delivered Evolution $24.6 million from the first two months have huge exploration poten-
copper and silver production of production under the new ownership structure with Glencore tial, but five years on it pretty

from an agreed life-of-mine much has the same reserve

area. half, including only two months contribu- base as it did five years ago. We’ve al-

Glencore remains the operator of the tion from Ernest Henry. The company ways said its mine life is 8-10 years and

mine, about 35km north-east of Clon- produced 803,476oz at $1,041/oz AISC we’ve been fortunate to be able to say

curry. in FY2016. that for the last five years.”

Evolution forked out $880 million for “We think Ernest Henry is one of the Queensland’s gold potential is rarely

the economic interest in Ernest Henry best-run operations in Australia,” Klein spoken about despite the likes of Evolu-

and must also contribute 30% towards said. tion and fellow ASX-listed producer Res-

future production costs. “I was fortunate enough to be in Zurich olute Mining Ltd running key operations

Some sections of the market queried a couple of weeks ago [late February] in the State, but Klein said his company

why Evolution – Australia’s second larg- and met with Glencore at their corporate was happy to take advantage of a juris-

est gold producer – would part with such offices. They see this as a deal they’re diction others are avoiding.

a large sum for a non-controlling stake in happy to have done. And of course we’re “It probably does get less profile than

an asset, but Klein said those concerns happy with it, so that’s the best possible coal, but I think it’s a state that shouldn’t

were immediately withdrawn once the outcome for a deal.” be underestimated in terms of its gold

economics were explained. Ernest Henry has effectively replaced potential,” Klein said.

“If we had owned Ernest Henry through the ounces lost in Evolution’s portfolio “We obviously like operating in

the whole of FY2016 on a pro forma ba- from the sale of Pajingo to Minjar Gold Queensland and it is prospective for

sis, we would have generated $145 mil- Pty Ltd in August. Pajingo was one of gold. And we’ve got a good relationship

lion cash flow,” Klein told Paydirt. four Queensland assets in the original with [the regulators].”

“Copper prices are higher [today] than company prospectus. Evolution’s success in its early days

FY2016, it has a defined 11-year reserve The remaining three – Cracow, Mt in Queensland provided the founda-

life and is very low capital intensity be- Rawdon and Mt Carlton – continue to tions for its pursuit of Cowal (New South

cause it’s sub-level cave mining. So, deliver on yearly expectations and each Wales) and Mungari (Western Australia)

$145 million, maybe more, for the next contributed towards Evolution’s record in 2015, with the reliable performances

11 years, plus upside potential below the first-half profit of $136.3 million. of Mt Carlton, Mt Rawdon, Cracow and

existing reserves, seems like a very good Mt Carlton, the only new gold mine to Pajingo during the preceding four years

deal to me. be built in Queensland in the last two proved a fillip for the acquisitions.

“I’m hopeful this will be our best deal decades, contributed $39.1 million for “The cornerstone of our whole strat-

to date, certainly early indica- egy has always been about

tions are just that.” building a business that can

During January and Feb- prosper through the cycle and

ruary, Evolution’s economic take advantage of troughs in

interest delivered 13,112oz the cycle where we can make

of payable gold at a negative acquisitions and buy things

AISC of $378/oz, while cash counter-cyclically,” Klein said.

received from production in “We obviously implemented

November and December was that during our early days in

$24.6 million. Queensland and now we en-

Evolution is on track to meet joy the benefits when the gold

its group production guidance price is up.”

of 800,000-860,000oz at – Michael Washbourne
$900-960/oz for FY2017, hav-

ing churned out 423,120oz at

$978/oz AISC during the first Evolution paid $880 million for an economic interest in Ernest Henry

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 67

QUEENSLAND

Altona’s long wait almost over

Altona Mining Ltd is on the cusp of fi- Altona has almost closed a transaction with a Chinese investment partner to
nally closing a deal to fund develop- fund development of the Cloncurry copper-gold project in Queensland
ment of its Cloncurry copper-gold project
in north-west Queensland. a feasibility study update and refresh- much underappreciated and under the
ing some of the pricings and so forth,” radar,” he said. “It was nice to see Gold
“We’re right at the very end of this pro- Cowden said. “The numbers which will Fields [Ltd] and Gold Road [Resources
cess,” Altona managing director Alistair be refreshed are very attractive. We’re Ltd] more or less copy the same struc-
Cowden told Paydirt. “It’s been a long talking about cash costs of $US1.65/lb ture [for Gruyere].”
journey. Hopefully the transaction closes and all-in costs of about $US1.95/lb.
before the end of July.” Under the terms of the JV, at least 50%
“Once the JV starts, we envisage of surplus cash must be returned to Al-
Altona struck an agreement with Si- something like six months of project opti- tona shareholders, who received a 15c/
chuan Railway Investment Group (SRIG) misation feed and review. We’re looking share dividend following the company’s
in June 2015 to finance construction of at an 18-month build, so first production sale of its Finnish assets in 2014.
Cloncurry through its Hong Kong subsid- would be in late 2019.”
iary China Sichuan International Invest- Once Roseby Copper is up and run-
ment Ltd (CSII). Investors have typically been sceptical ning, Altona plans to spend more time
of Chinese investment in Australian pro- exploring the 2,500sq km of regional
It has been slow going since then, with jects, but Cowden is adamant this deal tenure it holds around Cloncurry after in-
SRIG completing extensive due diligence ensures Cloncurry will not only get off the tersecting “some interesting hits” from a
on the project, including diamond drilling, ground, but become a successful mining recent drilling programme.
metallurgical testing and financial and le- operation.
gal evaluations. Cloncurry hosts a global of resource
“I would suggest that if one looked of 290mt @ 0.58% copper and 0.05
However, Altona recently confirmed closely at the history of failures and rip- g/t gold for 1.67t of contained copper
SRIG had satisfied all Chinese approvals offs in the Australian mining sector, you and 400,000oz gold. This estimate in-
and was only awaiting a green light from would struggle to find an equivalent with cludes the updated Bedford resource of
Australia’s Foreign Investment Review a Chinese investment,” Cowden said. 4.8mt @ 0.8% copper and 0.21 g/t gold
Board before officially closing the com- for 38,000t of contained copper and
plicated deal. “There’s a long list of Australian pro- 32,000oz gold.
jects which have stuffed up and gone on
CSII will contribute $US213.5 million to to cost a lot more money – look at Gin- “There are no resources on most of
claim a 66% stake in the incorporated JV, dalbie [Metals Ltd] and Sinosteel – and that ground, but I don’t think it will stay
to be known as Roseby Copper Pty Ltd, in these cases the Chinese have put in that way once we hit it fairly hard over the
with Altona chipping in $US25 million to more money. Find me an Australian bank next year or so,” Cowden said.
retain a 34% interest in the project. that would happily do that.”
Copper demand is also expected to
Roseby Copper’s cash reserves will Cowden said his chief financial officer rise in the next few years due to a lack of
exceed the $294 million (including $18 Eric Hughes had compared the econom- large, new copper mines in the pipeline,
million contingency) of capital estimated ics of the Chinese deal versus more tra- with Cowden boldly declaring his compa-
to build Cloncurry. ditional project financing options, such ny was in an “exquisite position” ahead of
as raising equity and hedging copper first production in 2019.
“The end result here is that Altona production, and found Altona’s return per
will own 34% of a company which owns share would be three times greater by – Michael Washbourne
100% of a project which currently has a partnering with SRIG.
NPV of $349 million, and has $US235
million cash with no debt and no hedg- “It’s a big deal and one I think is very
ing,” Cowden said.

“You do the mathematics and it’s easily
more than double our share price [15c/
share at the time of print].”

Altona has not been sitting idle waiting
for the transaction to be completed, with
the Perth-based company remaining ac-
tive at the project, including making a dis-
covery under the proposed tailings dam
site.

As a result, the company sought fresh
environmental approvals to move the
tailings dam site and incorporate the new
find into an updated DFS, which was on-
going at the time of print.

Altona updated the original DFS in ear-
ly 2014, confirming the project could sup-
port a 7 mtpa open-pit mine and flotation
operation producing 39,000 tpa copper
and 7,000 ozpa gold.

“We’re consolidating all prior work into

PAGE 68 APRIL 2017 AUSTRALIA’S PAYDIRT

Bull run at Century

Economic rehabilitation activities around the evaporation dam and tailings storage facility is a priority for Century Bull

The next chapter of the famed Century eyeing off existing infrastructure at the end of 2017,” Walta said.
zinc mine in Queensland will rest in mine, including a 7 mtpa plant, mobile “While our core focus will be on work-

the hands of Century Bull Pty Ltd and At- fleet, drill rigs, laboratory, 700-man camp ing towards the commencement of eco-

tila Resources Ltd. and 304km slurry pipeline, plus port fa- nomic rehabilitation of the evaporation

Century Bull, a 100% subsidiary of cilities at Karumba and a 5,000t tranship- dam and tailings storage facility, we

Century Mine Rehabilitation Project ment vessel. are certainly open to the prospect of

Pty Ltd (CRMP), recently completed an The Century tailings deposit contain- toll treating arrangements with indus-

agreement with MMG Ltd to acquire all ing 71mt @ 2.73% zinc for 1.94mt of try peers with assets in the region. We

Century mine assets and associated in- contained zinc was also left behind by would welcome any expressions of inter-

frastructure. MMG, which could prove to be profitable est in this regard.”

Under the agreement, MMG will con- considering current zinc spot prices of At peak production, Century Bull ex-

tribute $34.5 million in cash towards fu- $2,850/t. pects to employ about 50 people around

ture rehabilitation and care-and-mainte- Century Bull managing director Patrick the operation, which in its heyday had

nance facilities, while a special purpose Walta told Paydirt the next 3-6 months about 900 employees and in 2014 pro-

trust of $12.1 million will be established would see the company focused on de- duced 465,696t zinc in concentrate and

to cater for community and stakeholder veloping feasibility studies on the po- 64,426t lead in concentrate before op-

needs. tential to start evaporation dam water erations started to wind down in 2015.

MMG will continue to provide bank treatment for the extraction of dissolved While there is economic potential in

guarantees of $193.7 million to meet the mineral, and treatment of the tailings the tailings material, over 40 significant

Century mine financial assurance bond, storage. vein-breccia lode targets have been

lodged with the Queensland Govern- “We hope to be able to commence the identified over the 783sq km land pack-

ment, for up to 10 years. treatment of the evaporation dam by the age to investigate.

Meanwhile, Attila and Cen- There is also phosphate

tury Bull have a binding earn- potential across the site

in agreement whereby the which will come in for atten-

former will acquire 70% of tion at a later date.

the issued capital in CMRP “Our immediate focus will

in consideration for 30 million be on commencing eco-

Attila options, a royalty and nomic rehabilitation activities

sole-funding, project-based around the evaporation dam

expenditure of $10 million and tailings storage facility,

over an initial three-year pe- but our longer-term plans def-

riod. initely include utilising the on-

Attila also has an option to lease and potentially some

acquire the remaining 30% of other near-lease phosphate

CMRP, all of which remains deposits to support other

subject to shareholder and onsite rehabilitation works,

regulatory approvals. such as the existing waste

Century has been on care- rock dumps,” Walta said.

and-maintenance since early Century Bull managing director Patrick Walta executing the agreement – Mark Andrews

2016, with many companies to acquire the Century mine from MMG chief executive Jerry Jiao

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 69

QUEENSLAND

Aeon turns to Walford’s
cobalt potential

An upcoming drilling tion by 2019 but we do
programme on Aeon
Metals Ltd’s Walford want to find a way of un-
Creek project is likely to
further confirm the com- locking that cobalt first,”
pany’s assertion that it
should be considered a he said.
copper-cobalt rather than
lead-zinc-silver asset. Roasting appears to be

Walford Creek – 100km Aeon’s preferred option
north-west of the Cen-
tury mine in north-east for treating the pyrite-as-
Queensland – was dis-
covered by WMC in the sociated cobalt.
mid-1980s but explora-
tion since 2010 has been “It depends on grade
largely focused on the
higher grade copper re- but roasting is usually the
sources on the tenement.
most effective way,” Col-
Aeon picked up the pro-
ject in 2014 from the re- lins said. “That process is
ceivers of Nathan Tinkler-
owned Aston Metals and ongoing.”
while it has investigated
the wider potential of the Aeon will also continue
73.3mt resource, its work
has increasingly focused to investigate ways of
on the high-grade Vardy
zone where it has identi- realising value from the
fied a resource of 6.6mt @
1.25% copper and 0.16% wider, lower grade cobalt
cobalt.
resource – 59,900t @
In February, the compa-
ny released a preliminary 0.081% cobalt.
economic assessment
(PEA) for the Vardy zone, “We will do work on the
indicating a price tag of
$97 million could deliver larger cobalt resource in
life-of-mine net cash flow
of $84 million at operating parallel with the BFS to
costs of $97/t run-of-mine production.
see whether we can get
Aeon managing director Hamish Col-
lins told Paydirt the new drilling pro- it into an economic situa-
gramme would further define the high-
grade Vardy resource. tion,” Collins said, admit-

“We changed the focus in the PEA to- ting investor interest in
wards Vardy and we will now advance
that through a BFS over the next 12 the battery mineral had
months,” Collins said. “The next stage
will be a drilling programme designed to piqued Aeon’s enthusi-
both chase extensions of the high-grade
deposit and provide infill data for the asm.
BFS.”
“There is definitely a
Collins said the recent increase in co-
balt prices had provided Aeon with fur- lot more interest in the
ther incentive to pursue the high-grade
resource. company because of the

cobalt and the bench-

marking we have done

shows we’re in the game

size-wise and by stage of

development.”

Walford Creek is the most northern of Aeon’s large base metals Aeon’s greatest un-
assets in the Mt Isa region known could be the
Queensland approvals

“It is a large cobalt value which we process. The State has come in for criti-

are looking to unlock and there is defi- cism from miners and developers in re-

nitely a renewed focus on the cobalt,” he cent years but Collins remains confident

said. “This is the largest cobalt sulphide the process will run smoothly.

resource in Australia by a factor of two “The timeframe is a bit of an unknown

and we believe it to be also the most ad- but we have done our baseline studies so

vanced.” we don’t believe there will be any prob-

Cobalt has come under the spotlight in lems,” Collins said. “To be fair, the Gov-

the last six months due to its use in lith- ernment has been very proactive and it

ium-ion batteries. Supplies of the metal wants projects to go ahead.

are largely restricted to by-product cred- – Dominic Piper
its in copper and nickel laterite mines

with economic extraction proving an im-

pediment to further development.

Collins believes Aeon will be able to

find an effective processing flow sheet.

“We plan to have the project in produc-

PAGE 70 APRIL 2017 AUSTRALIA’S PAYDIRT

Red River flows into production

The completion of a $30 million Red River made the final acquisition payment to Kagara for Thalanga late last year upon
placement late last year has completing a $30 million placement. For a pre-production cost of $17.2 million, Thalanga
Red River Resources Ltd on track
to produce zinc from its Thalanga will be brought back online by the end of the year
project in 2017.
“From a supply and demand point and 440sq km in the Mt Windsor volcan-
“The capital raising was the trig- of view, consumption is still strong. We ics which hasn’t seen any base metals
ger to restart Thalanga and we have seen stockpiles coming down and exploration for 20 years. We have over
have been working hard on it since. demand for zinc is pretty robust as it also 100 targets to drill and we have only
We have a mining contractor and is for lead for that matter. It is going to done work on 15-20% of our ground.”
key management on board and take a lot more than just Thalanga to
the refurbishment of the plant has make any dent into the supply/demand Palacian is not looking too far ahead at
started,” Red River managing di- fundamentals.” Thalanga, especially as there are some
rector Mel Palancian told Paydirt. hard yards to complete before bringing
Red River knows its place in the mar- the 650,000 tpa plant back into produc-
Progress towards production – ket for now but with a large land package tion.
expected in the second half – has currently underexplored in the Mt Wind-
gone according to plan, with PY- sor volcanics, there is scope for further The company has yet to complete any
BAR Mining Services engaged to discoveries to be made. off-take agreements, with Palacian mind-
conduct underground mining. ful of striking a deal which best suits the
An IP survey between Liontown and company and its shareholders.
Underground activities were Waterloo was being conducted at the
scheduled to begin at the end of time of print, and with similar types of “It has been a work in progress for a
March, with most of the site man- programmes across its tenements deliv- while, there is a lot of demand for zinc
agement team to call Charters ering more targets for Red River to chase and copper concentrates and really from
Towers, 60km from Thalanga in up, Palancian expects no different this our point of view we want to get the best
Central Queensland, home. time around. deal for our shareholders,” Palacian said.

“We planned for that but actu- So far, assays from diamond drilling “We have a shortlist [of off-takers] and
ally making it happen is another have returned intersections including we are working directly with those short-
thing. It is a great outcome, par- 6.1m @ 24.4% zinc equivalent (0.7% listed people to see what the best terms
ticularly for the residents, it is important copper, 7% lead, 14.1% zinc, 1 g/t gold are for everyone. We have interest from
living in the community and being part of and 51 g/t silver) from 486.8m to 493m traders, smelters and the like globally,
the community. There haven’t been any and 18.1m @ 11.5% zinc equivalent not just Australia. We could sign a deal
major issues so far and we are pedalling (0.3% copper, 3.1% lead, 6.8% zinc, 0.6 today but we want to make sure we are
as fast as we can towards production,” g/t gold and 21 g/t silver) from 486.9m to engaging a credible partner and the right
Palancian said. 505m at Liontown East. partner for Red River.”

As the mining sector faces a rosier out- Palancian said Liontown East was – Mark Andrews
look than in previous years, Red River the perfect example of the potential at
has been able to capitalise on the high Thalanga.
calibre of talent available in the market
and access to contractors before the “That was our 12th exploration hole,”
mining game heats up again. he said. “We have three drill rigs on site

Personnel-wise, Red River has hit a
sweet spot and the case appears to be
similar in the zinc, copper and lead sec-
tors.

Output from Thalanga over the cur-
rent five-year mine life is 21,400 tpa zinc,
3,600 tpa copper, 5,000 tpa lead and
370,000oz silver from the West 45, Far
West and Waterloo deposits.

Based on current production rates,
Red River won’t impact the global sup-
ply/demand dynamics significantly in the
aforementioned base metals sectors,
however, its significance on the ASX
won’t be missed.

“We are significant because we are
new and on the ASX there is no compa-
ny solely focused on producing zinc, so
we really want to be the go-to zinc stock
on the ASX and hopefully we can get
Thalanga into production later this year,”
Palancian said.

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 71

QUEENSLAND

Gregory welcomes rocky task

Taking the reins of troubled cop- forms. It’s really about making sure
per miner CuDeco Ltd is a chal-
lenge Mark Gregory is embracing we’ve got a motivated, experienced
with open arms.
management team with the right
Gregory was appointed chief ex-
ecutive in late February shortly after skillsets who are working together in
the company’s Rocklands opera-
tions, 17km west of Cloncurry, were an aligned manner to achieve com-
suspended for failing a safety audit.
mon objectives.”
Queensland’s Department of Nat-
ural Resources and Mines (DNRM) Prior to suspending operations,
found CuDeco’s safety and health
management system “did not sup- DNRM health and safety inspectors
port current activities, personnel
and processes associated with the ruled CuDeco had not “sufficiently
site”.
nor comprehensively” reviewed the
It resulted in a number of casual-
ties at the company, with managing risks associated with its activities at
director Dianmin Chen, chairman
Noel White and operations manag- Rocklands.
er Mark Roberts all resigning from
their posts. Gregory joined the company a

CuDeco’s share price also took week after operations were sus-
a hit, sliding from 52c at the start
of the year to 29c when operations pended, something he believed
were suspended. At the time of
print, it had stabilised at 36c/share. would prove to be beneficial for the

Gregory is the former chief execu- long-term futures of both CuDeco
tive of Queensland-based construc-
tion firm Waltz Group, which helped build and Rocklands.
the processing plant at Rocklands, along
with Sinosteel Corp. “I wouldn’t say it was a wake-up

Former managing director Peter call, but it provided greater mo-
Hutchison has also returned to CuDeco
as interim chairman to help restore sta- mentum to us as an organisation in
bility to the operations, which were offi-
cially opened in October after many false terms of ensuring that we invested
starts.
the time and resources required to
Gregory said the company’s troubled
history had no bearing on his decision to have a safety system that is industry
step into the hot seat.
best practice,” he said.
“I’ve come in with my eyes wide open,”
Gregory told Paydirt. “At the end of the day, safety is

“It’s been a rocky road for all sorts of simply about keeping our workforce
reasons, but I actually prefer coming into
an organisation that has some challeng- Operations have resumed at Rocklands safe and free of harm. We are ab-
es, so long as I’m confident the potential
can be realised. solutely committed to making sure

“I enjoy the challenge of trying to turn following a positive review from DNRM. we have the systems, the people and the
companies around and structure them in
such a way so they can achieve their po- CuDeco’s new management team, culture in place to underpin that.
tential. The fact it was challenging – and
very challenging – was actually appeal- which includes new chief operating of- “I think anything that can provide a
ing to me, rather than just coming into
a mature organisation that was already ficer Jiang Gongyang and acting general greater focus to the cause of having
successful and profitable. I want to make
a difference here.” manager Joe Skrypniuk, are hopeful the a safer workforce can only be a good

Operations restarted in mid-March, Rocklands plant can hit nameplate ca- thing.”
with the new contract mining fleet from
Andy’s Earthmovers (Asia Pacific) Pty pacity by the end of the month. An improving copper price is another
Ltd mobilising on site at the time of print,
“Any business is about the people and benefit a relatively new producer in Cu-

the processes, so for me it’s having align- Deco is looking to take advantage of,

ment from the shareholders, through to with Gregory and his team also consid-

the board, through to the senior manage- ering the cobalt options at Rocklands.

ment team,” Gregory said. “We do have some cobalt develop-

“There’s no dramatic changes or re- ments in our orebody and we have a

pyrite circuit which hasn’t been commis-

sioned or activated yet,” Gregory said.

“Exploiting the cobalt deposits we have

will be something we’ll actively monitor

and perhaps pursue when all the planets

align.”

While achieving nameplate capacity at

Rocklands is his immediate goal, Greg-

ory is also looking forward to the day he

can reward some of the company’s long-

term shareholders.

“If we execute well, we will create value

and wealth for shareholders,” he said. “In

my mind, we’re at a phase in our journey

where the fundamentals are in place for

us to take the company forward in a re-

ally positive manner.”

New CuDeco chief executive Mark Gregory – Michael Washbourne
with interim chairman Peter Hutchison

PAGE 72 APRIL 2017 AUSTRALIA’S PAYDIRT

Metal Bank waits on
Cyclone Debbie

As Queensland braced been looked at. That is what
for Cyclone Debbie we have done at Triumph and

– the biggest since Yasi we’re about to show we can

in 2011 – attention was apply that same strategy at

turned to battening down Eidsvold,” Shreck said.

the hatches rather than “We have completed a

churning drill rigs in parts of small IP survey over Eidsvold

north-east Queensland. and we plan to do drilling there

“We are just about to in the next three months. The

commence drilling – as aim there is to de-risk it and

soon as this cyclone disap- show the market and inves-

pears – we have a drill rig tors that you can explore suc-

on site but we won’t turn it cessfully under cover using

over until the cyclone dis- these techniques. Hopefully,

appears,” Metal Bank Ltd the results from drilling can

managing director Tony demonstrate that and the

Shreck told Paydirt last aim is to go and attract a JV

month. partner, as Eidsvold is a large

At the time of print, there project. Triumph is our focus

was still high caution, with and I do think we will be able

torrential rain, high winds to attract a major or mid-tier

and thunderstorms bat- Metal Bank has prospective gold projects in a region of Queensland into that Eidsvold project.”
tering Queensland’s north where 18 moz of gold has been established With Metal Bank’s major
coast, including Glad- shareholders being former

stone, just north of Metal Bank’s Triumph moz), Mt Rawdon (2 moz) and Gympie (5 mining executives, the company is well

gold project. moz) are in close vicinity to Metal Bank’s connected in the resources sector.

“We have a fair bit of drilling planned Eidsvold project. This also bodes well for any potential

there, we have just completed an IP geo- “When we picked up these projects opportunities that may arise for Metal

physics survey which is really going to six years ago, our strategy was to pick Bank to expand its portfolio in the gold

open up the whole project,” Shreck said. up historical projects that haven’t really and copper space globally.

“About 95% of the whole project is un- “We come across a lot of good op-

der shallow cover and the geophysics portunities, we love our own projects

just strips all that cover away and we see but you’re also after something that you

straight through it. We have finished the could leverage off, something that is un-

survey and we have a whole lot of new loved and overlooked,” Shreck said.

data and targets to work with for the next “Our speciality is often picking up op-

3-6 months, which will be quite exciting.” portunities that people sometimes don’t

The company has 3,000m of RC and appreciate and we can see value in

diamond drilling planned targeting New them. Our major shareholders are ex-

Constitution (10m @ 26.9 g/t gold, 165 Citadel executives and they are based all

g/t silver and 6% zinc from 51m, includ- around the world and quite active in the

ing 7m @ 36.3 g/t gold, 220 g/t silver and resource sector, so we actually see quite

7.9% zinc from 51m), Bald Hill (15m @ a few opportunities that pass through our

10.3 g/t gold, 76 g/t silver, 0.5% copper desk. We would certainly look at oppor-

from 9m, including 4m @ 34.2 g/t gold, tunities where we can add value. We’re

220 g/t silver and 1.4% copper from 14m) not looking to risk the whole company;

and Handbrake Hill. we are not into high-risk, high-reward.

Other priority targets have been identi- We’re more low-risk, high-reward end of

fied and will also receive some attention things.”

over the next six months. – Mark Andrews
Metal Bank believes there is multi-

million ounce potential at Triumph near

surface and given 18 moz gold has been

established in the well-known producing

region.

Mt Morgan (8 moz gold, 400,000t cop-

per) is south of Triumph, while Cracow (3 Tony Shreck

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 73

REGIONAL ROUNDUP AFRICA

Africa welcomes
WA mining fraternity

Western Australia’s mining expertise DFAT and the WADMP are looking to continue their successful mining
and regulatory frameworks are con- workshops series in Africa
sidered world’s best and there has been
no shortage of African countries wanting sessions were highly interactive to reflect out 2016, the Department of Mines and
to tap into these valuable resources. the desires of the host African ministries. Petroleum is continuing to liaise with the
various [Australian] high commissions
The WA Government’s Department of The participating ministries found par- and embassies in Africa.”
Mines and Petroleum has been particu- ticular value in the flexibility the DMP and
larly active across the continent and in DFAT brought to the meetings, whereby Australian Ambassador to Ethiopia
recent times its capacity building work- the interests and policy priorities of each Mark Sawers initiated the capacity build-
shops in countries such as Kenya, Ethio- country were addressed accordingly. ing workshop idea in Ethiopia two years
pia, Zambia, Zimbabwe and Nigeria have ago and said now was the time to con-
been highly successful. “We were able to range between solidate Australia’s presence in Africa
spending the workshop time describing before the space is filled by rival coun-
“The leadership from the Department policy development principles used by tries, such as Canada.
of Foreign Affairs and Trade, through DMP to provide step-by-step demonstra-
various high commissions and embas- tions on how decision-making processes Canada has committed $C25 million
sies in Africa, was central to the success were applied,” Gorey said. over five years to similar programmes,
of the workshops. The leadership en- while the Australian model is running on
sured that the topics, focus and discus- With such high interest in the work- the “smell of an oily rag”.
sion of the workshops was targeted to shops, DMP and DFAT hope to continue
the issues of interest to the host African the programmes and expand the reach Nevertheless, Australia has received
countries,” WA Department of Mines and to other countries in Africa. great praise and recognition for its efforts
Petroleum acting deputy director general in running its capacity building work-
Phil Gorey told Paydirt. Emerging areas of interest to be ad- shops, however, there is scope for better
dressed in the future include orderly collaboration from Australia’s mining fra-
Two separate series of workshops access to lands, taxation and royalty ternity and government departments to
were held in November and March, with policies, transparent and timing of deci- co-ordinate an approach to help develop
the aim being to engage the various sion-making and public reporting prac- Africans build their mining sectors.
ministries, agencies and industry par- tices.
ticipants in conversations on how to build “We need to be visible in the region
capacity within their respective mining The preferred and most practical way and demonstrate our capabilities. So
sectors. to conduct these workshops is in-coun- far in Ethiopia we have received good
try, so that as many sector participants, attention and our profile in Ethiopia is
General governance, guarantee of including senior African government of- excellent,” Sawers told Paydirt in Perth
tenure, managing compliance and en- ficials, can attend. recently.
vironmental issues, handling artisanal
miners, how to promote and regulate “As one of the leading mineral and en- “The Canadians are playing catch up
industry within a single department and ergy resources jurisdictions in the world, in some respects but we have the oppor-
nurturing the royalty system were topics we anticipate that overseas government tunity to establish a permanent footing in
and areas workshop participants wanted officials will continue to approach the this space and if we don’t others will.”
addressed. Department of Mines and Petroleum to
learn from our experiences,” Gorey said. Sawers said the commercial opportu-
“The Western Australian approach nities for Australian businesses, outside
was not to dictate policy, but instead to “This is particularly the case for many of the mining sector as well, could be
share how the Western Australian Gov- of the 54 African nations that are looking born from such initiatives and called on
ernment regulates the resources sector,” to further develop their resource indus- the public and private sectors to work to-
Gorey said. tries. During 2016 we were able to visit gether to bring them to fruition.
five of these countries. Given the level
“The resources industry is a major sec- of success of the workshops through- – Mark Andrews
tor in the Western Australian economy
and other countries are often keen to un-
derstand how this was achieved.”

Gorey said WA’s comprehensive and
modern expertise in regulating respon-
sible resource development, plus the
lessons the State had learned from its
120-year rich mining history, meant the
department’s experiences were most
welcomed in Africa.

High-ranking African government of-
ficials attended the recent workshops,
with the DMP and DFAT ensuring the

PAGE 74 APRIL 2017 AUSTRALIA’S PAYDIRT

15 YEARS OF ADU

6 - 8 September 2017

Perth, Australia

Sponsors include:

africadownunderconference.com

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

REGIONAL ROUNDUP

Orion attracts a crowd

Confirmation of the world-class poten- Orion chairman Denis Waddell and managing director Errol Smart impressed investors
tial inherent in Orion Gold NL’s port- on a site visit to Prieska in February. The company has since completed the
folio came last month, with private equity acquisitions of the Prieska and Marydale projects in South Africa
firm Tembo Capital and miner Independ-
ence Group NL showing varied interest in the time of print) are currently trading at Independence will acquire 70% equity
the company’s assets. attractive prices, with positive forecasts in Orion’s 100%-owned tenements, 60%
for the short-to-medium term. in the Creasy JV tenements and 65% eq-
Orion is fully focused on its flagship uity in the Geological Resources JV tene-
Prieska zinc-copper mine in South Af- “The quicker you bring it into produc- ment for $700,000 cash and a placement
rica, 400km north of Cape Town, and is tion, the lower the risk profile. They like in Orion of $1.3 million at 2.4c/share.
keen to break ground at the brownfields this asset because it can advance quick-
project within two years. ly,” Smart said about Tembo’s rationale Orion is free-carried to completion of a
for backing Prieska. PFS on any of the tenements.
That is in a perfect world where feasi-
bility studies are completed, permitting is Smart said the feeling from Tembo Smart said the fact Independence was
ticked off and financing approved. was that they were keen to back similar willing to take shares was recognition for
projects which were considered “world- the assets Orion has.
Tembo Capital has shown a willing- class” and weren’t afraid of stepping into
ness to see these goals achieved at developing countries provided the oppor- “Our remaining interest in the Fraser
Prieska by proposing to take a 19.9% tunity demanded attention. Range is actually very significant. If we
cornerstone investment in Orion. discover another Nova-Bollinger on any
“On site [at Prieska] Tembo saw a one of those projects over there, our re-
Tembo has initially agreed to put $3 technical team that is very strong and maining interest is probably worth mul-
million into Orion through a convertible has done a lot of good work in the back- tiples on our current market cap [$14.8
note issue at 2.6c/share to sophisticated ground. They saw a completely under- million at the time of print],” Smart said.
and professional investors to raise up to valued opportunity in the market that
$8 million, which will help fund acquisi- can climb up the value chain very, very “One thing that I am absolutely certain
tion costs of Prieska and the Marydale quickly. It is a key investment opportunity of is that there is more than one Nova-
gold-copper project also in South Africa. to come in low and it can appreciate very Bollinger. I know that junior companies
quickly,” Smart said. like us have to stick our hand very deep
Meanwhile, subject to satisfactory due into our pocket. There are very few retail
diligence being completed and share- With the emphasis on Prieska, where a investors that will support a company to
holder approval, Tembo has agreed to maiden resource is expected in the next keep exploring until they work through a
acquire up to 19.9% of Orion shares few months and a PFS on a potential process of discovering it. We had more
through a placement to raise $4.7 million open-pit and underground operation to than 20 high priority targets, each one of
at 2.4c/share. be delivered in the next 12 months, Orion those targets costs you about $1 million
hasn’t been able to pay as much atten- to test, that is not junior mining world.”
Orion hopes to convene a shareholder tion to the other assets in its portfolio.
meeting to seek approval on or before – Mark Andrews
April 30. The company has a highly prospec-
tive land package in Western Australia’s
Orion managing director Errol Smart Fraser Range in which Independence
told Paydirt that Tembo’s geologists and has taken an interest.
engineers spent an intense few days on
site going through all data and left with a
level of comfort to recommend investing
in Prieska.

“The discussion with Tembo has been
about them getting behind us and really
driving the project as fast as possible
through feasibility studies and construc-
tion,” Smart said.

“Something that has struck them and
what sets the project aside is the timeline
that you can potentially bring this project
on-line. It can be brought back on-line
a lot faster than similar scale projects
around the world in the base metals mar-
ket.”

When Prieska first operated in the
1970s it was billed as the biggest mecha-
nised mining operation in the Southern
Hemisphere and went on to produce
430,000t copper at an average grade of
1.42% and 1mt zinc at an average 4.2%
grading.

Both copper ($US2.67/lb) and zinc
(80c/lb in March 2016 to $US1.27/lb at

PAGE 76 APRIL 2017 AUSTRALIA’S PAYDIRT

AFRICA

MOD finds hidden depths at T3

MOD Resources Ltd’s evalu- carry the company through the
ation of its Kalahari copper feasibility process for T3.

project in Botswana continues “The raising should see us

to expand following the discov- through to decision-to-mine

ery of two new zones of min- at T3 and allow for a doubling

eralisation below the current of exploration efforts region-

resource. ally for the next 12 months,” he

In February, MOD announced said. “Of course, if there is an-

hole MO-G-65D had hit 75m of other discovery we would have

mineralisation below the exist- to review that.”

ing T3 resource on the Kalahari The chances of further dis-

copper belt in Botswana. Sub- coveries along the belt appear

sequent assays from the hole to be strong. The discovery and

returned a result of 72.6m @ rapid delineation of the T3 de-

1.5% copper and 27 g/t silver, posit has led to a rerating of the

heralding a new discovery at T3 Kalahari copper belt.

which itself was only found 12 “There has been negligible

months previously. exploration of the belt because

MOD immediately turned four this area had been written off

drill rigs towards the deeper as being too deep but T3 has

Zone 2 discovery and in late blown that myth up,” Hanna

March announced mineralisa- said.

tion had been interpreted over a The expanded exploration

700m strike with both vein and programme will see MOD move

disseminated mineralisation beyond the T3 open pit onto

intersected. The deepest hole, testing of numerous IP and

MO-G-71D, hit 50m of dissemi- structural targets along the belt.

nated mineralisation. Assay re- “We will start applying the

sults are expected this month. T3 model elsewhere along the

Three further holes inter- belt,” Hanna said. “It seems a

sected a third mineralised zone logical time to get that under

200m below Zone 2 with widths way. We are still trying to under-

of 25-34m. MOD’s exploration stand the wider potential of this

team believes the zone could belt. We have a big landholding

occur on the same contact MOD managing director Julian Hanna (right) discusses progress and it needs an increase in the
which hosts the large structur- at the company’s T3 project in Botswana with exploration rate of exploration.”
ally-related depostis in the east- manager Jacques Janse van Rensburg The raising – at 6.2c/share
ern part of the Kalahari copper – saw the company welcome

belt, including Cupric Canyon’s Zone 5, “And, we don’t think that’s it for T3. It a number of new institutional investors

Zeta and Mango deposits and MOD’s has undergone rapid growth in a short onto the register. Hanna said it boded

own T1 deposit. timeframe and it takes time to sort out the well for T3’s development.

MOD managing director Julian Hanna geology and the geometry.” “I think the placement reflected the ma-

told Paydirt the recent discoveries could Hanna has been particularly encour- turing of the company as it evolves from

change the shape of T3 considerably. aged by the widths intercepted in Zone an explorer into a producer,” he said.

“The new Zone 2 discovery is under- 2 and Zone 3. The Kalahari copper belt “We crossed the $100 million market

neath the current pit design and, depend- is traditionally associated with narrow, cap mark recently and that has attracted

ent on assay results and the resource we vein-hosted deposits. institutional investors and they can see

can pull together from them, it could add “This is indicating something different,” the development potential of T3 and the

a new dimension,” Hanna said. he said. “The deeper mineralisation is wider potential of the belt.

MOD completed a scoping study on more of a disseminated style.” “We know T3 is being watched by oth-

the 28.36mt @ 1.24% copper and 1.7 g/t The interpretation of Zone 3 adds fur- ers. Copper is back on everyone’s watch

silver resource at T3 in November 2016. ther intrigue. list and the impression I am getting from

A PFS was subsequently launched but “We think we may have hit the footwall brokers and analysts is that they are

the discovery of Zone 2 and Zone 3 could contact in Zone 3 and every that has looking for copper stories globally and

change the parameters of that study. been identified in this area it has con- they are not finding them so the attrac-

“We had scoped out the open pit down tained copper so it opens up the bigger tion of a sediment-hosted copper belt in a

to 200m but with Zone 2 coming in un- picture potential for this area.” friendly jurisdiction works in our favour.”

derneath we will scope out the potential MOD was quick to take advantage of – Dominic Piper
to push the pit to 300m,” Hanna said. investor interest in the new discovery,

“The PFS is already under way so we raising $14.6 million via a placement in

need to see if we can incorporate Zone 2. mid-March. Hanna said the funds would

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 77

REGIONAL ROUNDUP LATIN AMERICA

Lithium Australia turns
rigs in Mexico

One of the ASX’s most active juniors
was preparing to drill in Mexico’s lith-
ium clay-rich Sonora county last month.

Lithium Australia NL has significant in-

terests in most of the major lithium hubs

around the world, as it looks to lock down

feed for its trademarked Sileach plants.

The company is dedicated to devel-

oping disruptive lithium extraction tech-

nologies and has established strategic

alliances with a number of companies

potentially capable of providing material

for Lithium Australia’s processing tech-

nologies.

Lithium Australia’s Mexican JV with

Canadian outfit Alix Resources Corp at

Agua Fria, within the Electra project, is

on a potentially large lithium clay occur-

rence, according to managing director

Adrian Griffin.

Griffin has good reason to be bullish

on the prospects at Agua Fria, with AIM

and TSXV-listed Bacanora Minerals Ltd

demonstrating the potential for large-

scale lithium clay deposits in the region. Lithium Australia has struck strategic partnerships with a host of
A PFS completed on the Sonora lithi- lithium-focused companies around the world

um project in 2016, in the north-east of

Sonora state, indicated the potential for there will be significant upside in oper- substantial,” Griffin said.

Bacanora to produce 35,000 tpa lithium ating costs for Lithium Australia to con- While field work in Mexico takes place,

carbonate and 50,000 tpa SOP from a NI sider. there is no shortage of corporate activ-

43-101 compliant indicated resource of Encouraged by promising signs early ity keeping Lithium Australia busy at the

4.5mt (lithium carbonate equivalent) and at Agua Fria, Lithium Australia upped its moment.

2.7mt inferred. interest in the JV with Alix to 49% ahead An end to the takeover of Lepidico Ltd

Bacanora is working towards having a of the drilling campaign, which was – a lithium company with projects in Aus-

feasibility study finished on Sonora in the scheduled to start at the time of print. tralia, Canada, Brazil and Argentina and

second half of the year, while “At the Sonora project, Ba- developer of the L-Max technology – was

it is in advanced discussions canora has established what yet to happen at the time of print, while its

with potential off-takers. people today are calling the subsidiary BlackEarth Minerals NL was

Lithium Australia will no world’s largest lithium clay preparing to list on the ASX.

doubt take a keen interest in deposit. We have something The BlackEarth IPO is set to launch

outcomes on both fronts, as in the same geological se- later this quarter.

it starts a 3,000m drilling pro- quence, we actually have BlackEarth plans to float on the back

gramme covering a 5km strike that northern extension and of Capricorn Metals Ltd’s Madagascan

length at Agua Fria. southern extensions a little graphite projects, which are close to the

Analysis of samples taken bit further south. It is not at advanced stage Molo graphite project

from shallow trenching ahead quite the same stratigraphic owned by Canada’s Energizer Resourc-

of drilling to determine min- Adrian Griffin level but something in the es Inc.
eralogy, lithium distribution, same sequence which looks Earlier this year, MetalsTech Ltd listed

lithium grade, scope for ben- very similar to Bacanora’s de- on the ASX after signing a strategic part-

eficiation and by-product potential has posit,” Griffin told Paydirt. nership with Lithium Australia in October,

been undertaken. The strike length at Sonora is over whereby an agreement for the use and

Indications are the lithium minerals ac- 7km and several hundred metres down application the proprietary Sileach and

count for less than 50% by weight of the dip, with each lithium clay unit generally LieNA lithium extraction technologies, as

typical mineralised zone, which suggests 10-50m thick. well as pipeline technologies applicable

potential for beneficiation and production “We have about 5km of strike at Agua to the processing of lithium from spo-

of higher grade concentrates. Fria and it is exposed over a width of dumene concentrate, has been made.

If this is the case prior to processing, about 800m and the thickness is quite – Mark Andrews

PAGE 78 APRIL 2017 AUSTRALIA’S PAYDIRT

LATIN REGISTER NOW

AMERICA

17-18 May 2017

Perth,Western Australia

Presenters to date:

KEYNOTE ADDRESS: HE Sir Peter Cosgrove AK, MC, Governor General, Commonwealth of Australia
HE Aurora Williams, Minister for Mining, Republic of Chile

HE César Navarro Miranda, Minister for Mining and Metallurgy, Plurinational State of Bolivia
Hon Raphael Trotman, Minister for Natural Resources, Co-operative Republic of Guyana

HE Jorge Arreaza, Minister for Development of Ecological Mining, Bolivarian Republic of Venezuela
Minister TBA, Argentine Republic

David Gonzalez, Vice President of Promotion, National Mining Agency of Colombia
Walter Spurrier, Economist/Columnist/Advisor, Spurrier Group, El Comercio, El Universo & Guayaquil Chamber of Commerce

Chris Gale, Managing Director, Latin Resources Limited
Christian Easterday, Managing Director, Hot Chili Limited

Tony Rovira, Managing Director, Azure Minerals Limited
Paul Stephen, Managing Director, Crusader Resources Limited
Travis Schwertfeger, Managing Director, Alicanto Minerals Limited

Jaime Alvarez, Regional Manager - The Americas, Globe 24-7
Tristan Pascall (TBC), General Manager - Minera Panama, First Quantum Minerals Limited

Nick Mather, Chief Executive Officer, SolGold plc
Boyd White, Energy Advisor, Dark Horse Resources
Sustainability in Mining Discussion: Panellists from UWA, MMG Limited, Department of Industry (Resources) and CSIRO

Conference sponsors &
supporters to date:

www.latinamericadownunder.com

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

REGIONAL ROUNDUP

First gold for Haile

Paydirt has long prided itself on delivering our readers the best OceanaGold Corp has been able to
and most unique resources stories from around the world set aside some of its Philippines travails
and we will continue that commitment in 2017. Already this year, after achieving first gold production from
our editorial team has visited mines, development and exploration its newly commissioned Haile gold mine
projects in Western Australia, South Africa, Namibia and Tanzania in the US at the start of the year.
as it strives to cover Australian-owned interests across the globe as
the resources sector continues to rebound. While the company’s Didipio copper-
Next month will feature our first ever in-country focus on Guyana, gold operation continues to be tarnished
South America, where editor Dominic Piper visited Alicanto Miner- by political turmoil in the Philippines,
als Ltd’s Arakaka gold project. And, later in the year, we will bring Haile, in South Carolina, has quickly hit
you an exclusive feature on OceanaGold Corp’s new Haile mine in its straps.
South Carolina, US.
OceanaGold secured Haile as the cor-
nerstone of its $C856 million acquisition
of Romarco Minerals Inc in August 2015.
Capex was $US380 million for which at
full production is expected to produce
150-170,000 ozpa at AISC of $US500-
550/oz.

PAGE 80 APRIL 2017 AUSTRALIA’S PAYDIRT

AMERICAS

Speaking during the company’s quar- Guyana Geology and Mines Commission geologist Ladonna Fredericks working on Ali-
terly results presentation in late Febru- canto Minerals’ Arakaka gold project in the country’s north-west. With two new mines
ary, OceanaGold chief executive Mick
Wilkes said commissioning at Haile was built in the last two years and growing interest from the world’s largest gold miners,
going according to plan. Guyana is poised to be an exploration hotspot in the coming decade

“We are advancing Haile into commer- and expect that to continue into the sul- ranks will boost OceanaGold’s produc-
cial production following first gold poured phides.” tion further after the company recorded
on January 20,” Wilkes said. 437,146oz gold and 21,413t copper pro-
When Paydirt visited Haile in March, duction for 2016.
Mining at Haile has started in the Main further progress had been made with
Zone pit with the reconciliation already mining in Main Zone pit having reached The company achieved record full-
high during the first months of operation. the sulphide material. The 2.5 mtpa CIL year revenue of $US628.6 million and
processing plant was performing well net profit of $US136.5 million on the back
“We have had a positive reconciliation with recoveries of 83% exceeding expec- of AISC of $US708/oz.
with the amount of oxide and transitional tations.
ore from the orebody which was a nice Look out for more on Haile and Ocean-
surprise,” Wilkes said. “We’ve also seen OceanaGold expects to declare com- aGold’s bid for gold mid-tier status in the
positive results from the leaching kinet- mercial production during the current July edition of Paydirt
ics on the oxide and transitional material quarter.

Haile’s arrival into the operating

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 81

REGIONAL ROUNDUP

Mongolia welcomes explorers

Mineral-rich Mongolia plans to dou- Rio Tinto Ltd’s massive Oyu Tolgoi
ble the amount of land available
for exploration in an effort to tap into copper-gold mine. Rio Tinto decided in
the mining industry’s appetite for new
resources and help shore up its financ- June to go ahead with a $US5.3 billion
es following an IMF-led bailout.
expansion, which will take 5-7 years.
Mongolia will increase the land
available to exploration to 20.9% of The mine will eventually be respon-
the country from 9.6% currently, with
changes expected as early as late sible for around 30% of the economy,
March, Minister of Mining and Heavy
Industry Dashdorj Tsedev said. Rio Tinto said, but direct benefits for

Miners say Mongolia ranks as one of Mongolia will be delayed. According
the best prospects in the world for new
copper reserves, as the best quality to a 2009 agreement, investors must
orebodies in many other parts of the
world have been depleted and electric recoup their original investment costs
vehicles raise the possibility of a surge
in demand. before Mongolia can collect dividends

The expansion reflects improved ge- for its 34% shareholding in the mine.
ological surveys, and the land open for
exploration could increase as further Mongolia’s economy grew at a dou-
improvements are made, the Minister
said at PDAC in Toronto. ble-digit annual rate over 2011-2013

“A big amount of land will be up for as foreign investors rushed in to take
exploration and license,” Tsedev said,
speaking through a translator, adding advantage of its vast untapped mineral
that ecologically sensitive areas are
excluded. deposits, but it has been hit hard by

The landlocked country is home to an economic crisis since 2016 due to

government overspending and declin-

ing revenues from commodity exports.

Slowing demand for coal and cop-

per, Mongolia’s chief exports, and a

plunge in foreign investment have left

the world’s most sparsely populated

sovereign country with soaring debts

and a rapidly declining currency, forc-

ing government to hike interest rates

and slash spending.

Mongolia plans to double the amount of land – Susan Taylor, Reuters
available for exploration

$US1 billion Iranian mine deal done

Iran has signed a $US1 billion deal with Iran has struggled to lure foreign inves- On top of the targeted 800,000 tpa zinc
private investors to develop Mehdiabad, tors since it signed a deal in 2015 with concentrate, Mehdiabad is also expected
one of the world’s largest zinc mines, six world powers to curb its nuclear pro- to produce 80,000 tpa of lead and silver
which it expects to go on stream in the gramme in return for the lifting of interna- concentrate, IMIDRO said.
next four years and produce 800,000 tpa tional sanctions against it.
zinc concentrate. The Mehdiabad project has been un-
As recently as January, the US voted der consideration since the 1990s but
The state-owned Iranian Mines and to extend its sanctions against Tehran, has faced multiple delays.
Mining Industries Development and the latest of several such post-nuclear
Renovation Organisation (IMIDRO) said deal moves that have deterred western Investors are being tempted by the
in March it signed the deal with a con- banks from financing trade or investment mineral riches of Iran, which has opened
sortium of six private companies, led by in Iran. for business after the lifting of sanctions
Iran’s Mobin Mining and Construction as part of a nuclear deal.
Company. “[Mehdiabad] is only significant if they
get it off the ground. Usually they need The country has 68 different miner-
According to media reports, Meh- foreign help and even then, to get an idea als with reserves totalling 43bt worth an
diabad has zinc ore grades of between of what this means you need an idea of estimated $US700 billion, according to
2-4%, meaning 800,000 tpa zinc con- what the metal content in that concen- IMIDRO.
centrate would add between 16,000- trate is,” Citi analyst David Wilson said.
32,000t of refined zinc to the 13.7 mtpa It has 7,000 mines, of which about 70%
global market. Mehdiabad, a zinc, lead and silver are operational, while the mining sector
deposit, has 154mt of proven reserves, employs more than 620,000 people.
IMIDRO, a state-owned mines and according to IMIDRO, which expects the
metals holding company, said Mobin reserves to reach up to 700 moz once – Maytaal Angel, Reuters
was talking to international mining firms exploration is completed.
in Switzerland and Spain about JVs to
develop the Mehdiabad mine, located in The private consortium will run the
Iran’s Yazd Province. mine for 25 years, though their contract
could be extended.

PAGE 82 APRIL 2017 AUSTRALIA’S PAYDIRT

ASIA

Xanadu prepares the drill bit

Mongolia’s move to
open more land to
resource exploration is

having an immediate

impact, according to

Xanadu Mines Ltd chief

executive Andrew Stew-

art.

“There is a huge push

going on, we are see-

ing a number of mid-

tiers back looking for

ground,” Stewart told

Paydirt.

“Mongolia has suf-

fered from [poor] inves-

tor sentiment for a while;

for me it is hard to see

why that’s necessarily

as harsh as it has been.

A decade ago having Drilling at various porphyry deposits across the world. Recent drilling by Xanadu at Altan Tolgoi,
a strategic position in Kharmagtai, has intersected 646m @ 0.51% copper, 0.87g/t gold (1.06% copper equivalent) from 16m,
Mongolia was a neces- including 64m @ 1.06% copper and 3.15 g/t gold (3.08% copper equivalent) from 18m at hole KHDDH394,
sity for most major cop-
per companies following while 385m @ 0.52% copper and 0.6 g/t gold (0.9% copper equivalent) from hole KHDDH394A

Oyu Tolgoi.”

The stoush between the Mongolian North American institutions keen to get of interest from investors.

Government and Rio Tinto Ltd over taxes on the register. In the event Xanadu lands a big fish in

and cost overruns at the $US5.3 billion Xanadu has spent ample time defin- Mongolia, there is no doubt what Stewart

Oyu Tolgoi copper-gold project, South- ing drill targets and has dispelled per- would like to see happen.

ern Gobi, wrecked investor sentiment to- ceptions that cover at Kharmagtai is too “To me the distinguisher is that when

wards the country for some time. thick. I look at the ASX, there are a couple of

The Government and Rio Tinto have Bedrock drilling has identified copper good gold companies and a couple of

resolved their issues and Oyu Tolgoi is and gold mineralisation under shallow good copper companies focused on

on track to become the world’s biggest cover, 20-50m thick, not up to 100m as smaller, mid-scale projects that maybe

underground mine in three years. thought by explorers unable to crack can be transitioned into development,”

“Despite the growing pains, the Gov- Kharmagtai in the past. Stewart said.

ernment sees the importance of foreign Xanadu now has seven first order drill “However, they are not satisfying what

investment and is putting in a big effort. targets to systematically test this year. BHP [Billiton Ltd], Rio Tinto, Anglo Amer-

One of the key things is starting to open “Anything you drill is open pittable,” ican [plc], Newcrest [Mining Ltd] are look-

up the licences and that is what big com- Stewart said about the depth of cover. ing for and that is where we are trying to

panies want to see, they want to see “Mineralisation is over 25sq km and we fit into the niche.”

companies putting together big tracks of were looking at using trace element geo- Stewart said Xanadu was not a mining

land,” Stewart said. chemistry to help us vector into that next house and the core was in exploration

“I doubt that you could do that in the porphyry copper deposit, but many of the and generating projects that would at-

Philippines, Indonesia or Papua New holes came up with copper-gold miner- tract a premium from the majors.

Guinea at the moment. For me, Mongolia alisation and mineralisation at surface. It He said there was no point in adding

is the best place to explore because it is has been quite an easy task pulling out marginal tonnes as majors were flush

the only place where people are building those targets and going straight after the with that and were instead in need of Tier

Tier One assets or have built Tier One copper and gold, so there is not too much One deposits.

assets in the last few decades.” rocket science involved.” “We’re looking for globally significant

While mid-tiers and juniors alike start Stewart said the hard work had been copper and gold deposits that will attract

scrambling for ground in Mongolia again, done in identifying the drill targets and mid-tier and major companies. Our mod-

Xanadu waits ahead of the pack with the company was well funded with $8 el is to take them through to a resource

large scale copper-gold potential already million to pursue them and advance ex- and an earn-out JV type arrangement

in its keep at Sharchuluut, Uul Oyut Ul- ploration at Oyut Ulaan in the next 12 because copper mines are big capex

aan and Kharmagtai. months. items,” Stewart said.

Kharmagtai is the copper-gold por- Now that it looks like Mongolia is more – Mark Andrews
phyry opportunity on which Xanadu has receptive to miners and explorers, and

largely built its $120 million market cap, being in a position to drill, Xanadu can

and is generating growing interest from expect to keep on fielding “bucket loads”

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 83

REGIONAL ROUNDUP

Areva’s nuclear parts substandard

Creusot Forge, a supplier of nuclear “For Flamanville 3, the equipment was
plants around the world owned by at its limit, there was no margin for error,”

France’s Areva, is under investigation for Catteau said.

making substandard parts and falsifying Flamanville’s future is now uncertain.

documents. The ASN will rule by the summer wheth-

Now, France’s nuclear regulator says er the new reactor can go into operation

machinery at the plant, which was shut by 2018, despite those weak spots. A red

for commercial production last year, is light would lead to years of further delays

not up to the job. for Areva and its customer EDF.

In an interview, Remy Catteau, the Creusot Forge, owned by Areva, is under Regulators from the US, Britain, China

head of nuclear equipment at the ASN investigation for making substandard and other countries are also looking into

(Nuclear Safety Authority), said that parts for nuclear plants quality and manufacturing issues at the

an inspection of the plant late last year Creusot Forge foundry in eastern France

showed that it did not have the right placed before Creusot Forge could reo- after Areva unearthed the false manu-

equipment to produce the parts for the pen. facturing documentation from the 1965-

nuclear reactors. A spokesman for Areva declined to 2013 period.

“Creusot Forge is at the limit of its tech- comment on the foundry’s equipment. He “One of the ways to resolve problems

nical capacity. The tools at its disposal said the plant still has a future as Areva was to hide things, and that was the

are not adequate to manufacture such would invest $US8.5 million to guarantee wrong way,” Catteau said.

huge components. In such a situation, the quality of components. He said Areva The letter sent to Areva in late January

errors are made,” Catteau told Reuters aimed to restart commercial activities at demanded answers to questions over

by telephone. Creusot Forge by the summer. quality control, staffing levels, manage-

“The inspection brought to light the ASN wrote to Areva in January with a ment oversight and training and compli-

fact that the safety culture in the plant is list of questions about quality and safe- ance with International Atomic Energy

not sufficient to produce nuclear compo- ty at the plant but did not focus on the Agency (IAEA) standards.

nents.” equipment. ASN has said Areva must an- Catteau noted that Areva had a plan to

The disclosure adds to the problems of swer them by the end of March. It is not overhaul its operations.

Areva, once the world’s biggest nuclear clear what criteria ASN will use for decid- “But there is still a lot to do before

company, which owns Creusot Forge. ing if the plant can be reopened or how Creusot Forge will be at the right level,”

Areva shut the factory after it found the response to the questions is linked to he said.

“that manufacturing documents at the the potential reopening. The ASN has long warned that the

plant may have been falsi- financial difficulties of

fied over some 40 years and Creusot Forge is at the limit of France’s nuclear industry
parts made by the foundry pose a safety risk, and Cat-

did not meet specifications. its technical capacity. The tools teau said this could also part-
Authorities around the at its disposal are not adequate to ly explain Creusot’s quality
breakdowns.
world have checked the

nuclear reactors using the manufacture such huge components. Areva is being restructured
parts. Two reactors in France and recapitalised with help
In such a situation, errors are made. from the French state after
– Fessenheim 2 and Grave-

lines 5 – were shut after the years of losses wiped out its

checks due to safety con- equity. It lost $US702 million

cerns. The plant makes steam generators last year, €2.04 billion in 2015 and €4.83

The investigation by the regulator is and other components for current-gener- billion in 2014.

ongoing but Areva hopes to restart pro- ation nuclear plants but was also tasked Critics of France’s nuclear energy es-

duction at the factory this summer, if with making large parts for a new gen- tablishment say the problems at Creusot

ASN allows it. eration of European Pressurized Reac- Forge prove that oversight of the whole

Creusot Forge is one of the world’s few tors (EPR). Britain has approved EDF’s industry, including the ASN, needs an

foundries able to make the huge steel project to build two EPRs in Hinkley Point overhaul.

components that form the heart of nucle- and Creusot Forge is expected to make World Nuclear Industry Status Report

ar reactors and is a key part in the French some of its parts. author Mycle Schneider said France’s

nuclear industry’s supply chain. Precision is critical when making parts parliament should task independent ex-

Areva clients, which include France’s such as containment vessels, which are perts with an inquiry, but he does not see

EDF and utilities across the world, could huge steel cylinders that house the reac- the political will for that.

take their business elsewhere if the plant tor core and control rods. “The entire chain of responsibility has

stays shut. Areva could also subcontract Creusot Forge made the vessel lid and failed, from Areva to its client EDF and

its foundry work to other nuclear special- bottom for the Flamanville 3 EPR reac- the ASN. I don’t see an initiative yet that

ists such as Japan Steel Works and Mit- tor under construction in western France. addresses the entire scope of the prob-

subishi Heavy Industries. But at the end of 2014, Areva discovered lem,” Schneider said.

Catteau did not say whether ASN be- excessive carbon concentrations in those – Geert De Clercq, Reuters
lieved the machinery needed to be re- components, which weaken the steel.

PAGE 84 APRIL 2017 AUSTRALIA’S PAYDIRT

EUROPE

Juniors put France on the map

France is hardly a jurisdiction Australian Is France rising as a popular destination for ASX explorers?
resource players have rushed to.
However, recent activity in France in- leac zinc project. France, through its 100%-owned sub-
volving a couple of ASX juniors may do To do so, the company will raise an ad- sidiary in country.
something for mining investors looking to
expand their portfolios beyond traditional ditional $1.4 million through a SPP and Montezuma was granted an explora-
horizons. from the exercise of options held by di- tion permit which covers 260sq km in
rectors. the gold mining centre of south Limoges
Variscan Mines Ltd has led the charge where open-pit grades of 7-9 g/t gold and
in the junior space at the St Pierre gold “We have drilling planned for both pro- 12-16 g/t gold from underground have
and Merleac zinc projects, while on the jects and that drilling should take place been mined.
corporate side, a new JV with Apollo over the next 6-8 weeks maximum, so
Minerals Ltd garnered some attention in the capital raising will go into that. The Jones said there was great potential in
the market. Couflens JV with Apollo means that Vari- France and results produced from Vari-
scan is fully funded to the point of DFS or scan, Montezuma and Apollo would help
Apollo has acquired Ariege Tungstene €25 million spent. It is a really good deal attract more attention from investors.
SAS, the company formerly in JV with for us and allows us to focus 100% on
Variscan over the Couflens exploration our own properties and Apollo can make “Perhaps being in France has meant
licence in the Pyrenees region, southern hay at Salau,” Jones said. that we have been a little bit less recog-
France. nised because we have first-mover sta-
Apollo intends to undertake a review tus,” Jones said about Variscan.
Despite Variscan’s share price remain- of all historic data, mine sampling and
ing stagnant at the time the deal was drilling as it works towards defining a “Having Apollo and Montezuma pick
announced, Apollo’s stock shot to a five- resource at Salau, while an assessment up licences in France and having ASX-
year high of 26c/share. of the underground development and listed entities in support of us and travel-
infrastructure will also be carried out to ling with us in this long journey is going to
“The reaction has been very positive determine what is required for mine re- be seen as a positive. It will probably re-
for Apollo but not so much for Variscan activation. sult in a recognition of what we are doing
at this stage,” Variscan managing direc- up there as well, particularly when Apollo
tor Greg Jones told Paydirt. Meanwhile, surface exploration on the starts producing exploration results as
broader licence area will be conducted will Montezuma at its gold properties.
“I think there is a little bit of disconnect to identify any other potential tungsten-
between the stories of the two compa- copper-gold opportunities. “There are a couple of companies
nies or the appreciation of the stories by also currently looking and one which
the market. I’d anticipate that those two The reaction from the market to Apol- has some applications in progress. It is
valuations will close at some point. lo’s involvement in Couflens suggests certain that France is becoming a more
the company and country are on the ra- attractive destination for explorers,” he
“Like ourselves, it is a big move for dar. This could bode well for first movers said.
them going from Australia to France but in France such as Variscan and Monte-
they recognise the value of the project zuma Mining Company Ltd, which start- – Mark Andrews
and the likelihood it could be a mine of ed its foray into the country in January.
the future, it really is a nice project.”
Montezuma picked up the Bonneval
The 42sq km Couflens licence is gold project, Limousin, south-central
around the historic Salau tungsten mine,
which was the world’s highest grade
tungsten mine – 930,000t @ 1.5% tung-
sten (2.48% in the latter years) for 11,500t
in concentrate – prior to closure in 1986.

Variscan believes there is potential for
Salau to be bought back on line quick-
ly, with the latest drilling before mine
closure confirming the continuation of
mineralisation below the existing under-
ground development.

More work needs to be done to confirm
JORC-compliant resources, which is top
priority for the Apollo/Variscan JV.

Under the JV, Apollo can earn an
80% interest in Couflens with Variscan
free-carried (20%) until completion of a
DFS or expenditure totalling $35 million,
whichever is fulfilled first.

Apollo’s commitment to Couflens,
which boasts other tungsten-copper-
gold targets outside of Salau, means
Variscan can continue focusing on its St
Pierre gold project in Brittany and Mer-

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 85

SIGNED, SEALED AND DELIVERED

GME appoints adviser
for NiWest

Somers & Partners will provide corpo-
rate advisory services GME Resources
Ltd’s wholly owned NiWest cobalt pro-
ject.

Somers & Partners will examine and
assist with funding arrangements, devel-
opment of strategic options and allianc-
es, market research and general corpo-
rate advice in a bid to maximise the value
of the project.

NiWest, in the North Eastern Gold-
fields of Western Australia, hosts one of
Australia’s largest underdeveloped nickel
and cobalt resources.

BGC’s contracting tenure in South Australia will continue for at least another five years Doors open for
Macmahon in Indonesia
BGC gets gets five more “BGC Contracting’s breadth and verti-
at Iron Knob cal integration of services has enabled Macmahon Holdings Ltd has signed a
us to improve efficiencies on the project, non-binding HOA with Amman Mineral
BGC Contracting Pty Ltd’s current min- which has resulted in lower cash costs Nusa Tenggara.
ing contract, due to be completed at the for Arrium and the administrators,” Hey-
end of this year, has been extended for len said. Under the HOA, Amman will become
another five years by the administrators a significant shareholder in Macmahon,
of Arrium Mining Ltd. Hampton catches gold which will be awarded a life-of-mine con-
haulage contract tract to provide earthmoving and mining
BGC will continue its operations at the services at Amman’s Batu Hijau copper
Iron Knob and South Middleback Rang- Empire Resources Ltd has awarded and gold project in Indonesia.
es projects in South Australia until 2022. a haulage contract to Kalgoorlie-based
Hampton Transport Services. The HOA also outlines the terms un-
Under the contract, BGC will provide der which Macmahon would acquire cer-
a full range of mining services, including The contract will see Hampton respon- tain assets of Amman, including existing
drilling, blasting, loading, hauling, dump- sible for carting ore from Empire’s new equipment at Batu Hijau, such as loading
ing and train load-out. Penny’s Find gold mine to the Lakewood equipment, trucks, ancillary and support
mill. assets and usable inventory.
BGC chief executive Greg Heylen said
it had been a challenging time for the Lakewood is 63km away by road from Macmahon’s preliminary estimates
mining sector as it dealt with the decline Penny’s Find, east of Kalgoorlie. value Amman’s assets at $US150 mil-
in the commodities markets. lion.

Macmahon chief executive Michael

Kalgoorlie-based Hampton Transport Services will haul ore from Penny’s Find

PAGE 86 APRIL 2017 AUSTRALIA’S PAYDIRT

Finnegan said the transaction repre-
sented an exciting opportunity to work
on a world-class mine with significant
expansion potential.

New software spies
metal content

Gekko Systems Pty Ltd and Rock-

well Automation Inc have entered into

a MoU to develop software that will

assist the mining industry.

The software will benefit miners by

allowing them to assess the metal

content in various stages of ore pro-

cessing plants, as well as increase

the capacity to audit and improve op-

erating performance.

Rockwell and Gekko have worked

in collaboration for 15 years. GR Engineering is the frontrunner to build a 2.5 mtpa CIL plant at

Manaseer poised for GR grabs more WA Dacian Gold’s Mt Morgans project
growth in Jordan gold developments
GR has been working with Gascoyne
Manaseer Group has awarded Worley- GR Engineering Services Ltd has in- on the project since 2012.
Parsons Ltd a contract to provide project creased its presence in the West Aus-
management consulting services for its tralian gold scene, by entering into con- The company is also the frontrunner to
potash and phosphate fertiliser complex ditional LOIs with Gascoyne Resources build a 2.5 mtpa CIL treatment facility at
in Jordan. Ltd and Dacian Gold Ltd. Dacian’s Mt Morgans gold project. Under
the LOI signed with Dacian, GR is the
WorleyParsons will supervise the se- The Perth-based engineering firm is in preferred contractor for a tailings storage
lection and delivery of engineering, as line to build the 2.5 mtpa treatment facil- facility, raw water supply infrastructure,
well as the procurement and construc- ity and additional infrastructure for Gas- workshops and offices, a main admin-
tion services over a three-year period. istration complex and a new section of
haul road.

WorleyParsons chief executive An- coyne’s Dalgaranga gold project. GR Ausdrill lands multiple
drew Wood said the company was look- and Gascoyne are targeting entry into a contract extensions
ing forward to the successful delivery final contract in the near future, with the
and completion of the project. project scheduled to begin in Q2 of 2018.

Ausdrill Ltd has renewed its contracts

with two long-standing clients in Kalgoor-

lie Consolidated Gold Mines Pty Ltd

(KCGM) and Gold Fields Ltd.

KCGM awarded a contract renewal,

worth $143 million, to Ausdrill for drill,

blast and grade control services for an-

other five years at the Super Pit.

Gold Fields extended its partnership

with Ausdrill for exploration drilling ser-

vices at the St Ives and Granny Smith

gold mines for another three years. The

extension is valued at $60 million.

Ausdrill managing director Ron Sayers

said the company was delighted to build

on existing relationships with its Gold-

fields clients.

Meanwhile, Ausdrill subsidiary BTP

Equipment has secured a two-year ex-

tension, worth $70 million, on its contract

with Peabody Energy Australia.

The contract will allow BTP to continue

to rent mining and ancillary equipment to

Peabody’s mines in key coal precincts

Ausdrill has extended its long-standing contract for drill and blast such as the Hunter Valley and Bowen
services at the Super Pit Basin.

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 87

COMINGS AND GOINGS

Peter Cash as a non-executive director Ram Venkat has been ap- and company secretary. Lim
and Peter Sullivan has been pointed a non-executive is a chartered accountant who
Peter Cash has been ap- appointed chairman. director of Metminco Ltd. recently worked with Flinders
pointed chief executive Venkat, a seasoned capi- Resources Ltd on the Wetar
of Millennium Minerals Ltd. Doray Minerals Ltd chief tal markets executive, is the copper project in Indonesia.
Cash served as Millennium’s operating officer Peter nominee of Metminco’s major
general manager for the past Bamford has retired after five shareholder, Redfield Asset Terry Topping is now the
two years and has been in- years with the company. His Management Pty Ltd. executive chairman of
strumental in the company’s successor is Rod Jacobs, a Kairos Metals Ltd. Topping
turnaround at the Nullagine mining engineer with 25 years Hedley Widdup was managing director of
gold mine. of operational and manage- Taipan Resources when it
ment experience. Hedley Widdup has re- discovered the high-grade
Avenira Ltd has appointed placed Mike Brook as a Paulsens gold deposit.
Louis Calvarin as man- Northern Minerals Ltd has director of Kasbah Resources
aging director. Calvarin has streamlined its board Ltd. Widdup is a geologist To mark its 15th anniver-
more than 15 years of experi- from seven to five following who has worked on several sary, stockbroking firm
ence in the phosphate indus- the resignations of Conglin mine sites, including Mt Keith, Argonaut Ltd has promoted
try and has been part of the Yue and Kevin Schultz, with Olympic Dam, Mt Isa and St Glen Colgan to the managing
chemical manufacturing sec- both stepping down to focus Ives. director’s chair. Colgan joined
tor for three decades. He was on other business interests. Argonaut as an executive di-
previously senior vice-presi- Current non-executive direc- Gus Simpson has stepped rector 10 years ago. Charles
dent at Innophos and director tor Colin McCavana has been down as chief executive Fear will step back from his
of manufacturing at Rhodia appointed non-executive of US uranium producer Pen- executive duties, but remain
Specialty Phosphates. chairman. insula Energy Ltd. Replacing chairman and a member of
Simpson will be experienced the corporate finance team.
James McKay and Michael Stuart Fogarty uranium mining executive
Langford have replaced Wayne Heili. After careful Rio Tinto Ltd chairman Jan
Winton Willesee and Hugh Buxton Resources Ltd has consideration, the board de- du Plessis will retire later
Bresser as directors of Birim- appointed Stuart Foga- cided Heili’s skill set was bet- this year to join the board of
ian Ltd. rty as an independent non- ter aligned with the direction BT Group plc. His successor
executive director. Fogarty Peninsula is heading. is expected to be announced
Rebecca McGrath will suc- has more than 20 years of before the end of 2017.
ceed Neil Hamilton as exploration experience, and Helix Resources Ltd has
chairman of Oz Minerals Ltd is Duketon Mining Ltd’s man- appointed chartered ac- Capricorn Metals Ltd has
following its AGM on May 24. aging director. countant Gary Lethridge as restructured its board,
Tonianne Dwyer and Peter a non-executive director. Le- appointing Heath Hellewell
Tomsett have also joined the Matthew Greentree will thridge was most recently as executive chairman. Peter
board as non-executive direc- become chief executive managing director of Talis- Thompson and Peter Lang-
tors. of Ausgold Ltd on April 10. man Mining Ltd for seven worthy have stepped down
Greentree was recently prin- years. from the board to take on ex-
Champion Iron Ltd has ap- ciple consultant and geology ecutive roles within the com-
pointed David Cataford group manager for SRK Con- John de Vries is Black Rock pany.
as its chief operating officer. sulting. Mining Ltd’s new chief op-
Cataford has been vice presi- erating officer and is tasked Heath Hellewell
dent of Champion since 2014 Ivo Polovineo has joined with the advancement of the
and will fill the vacancy cre- Moly Mines Ltd as an inde- Mehenge graphite mine in Kalium Lakes Ltd has ap-
ated by Alexander Horvath’s pendent non-executive direc- Tanzania. De Vries was pre- pointed Rudolph van
retirement. tor. Polovineo has 30 years of viously manager of strategic Niekerk as its chief develop-
experience in management mine planning for BHP Billiton ment officer. Van Niekerk will
GME Resources Ltd has roles in the resources sec- Ltd. focus on the development of
restructured its board fol- tor, including seven years as the Beyondie potash project,
lowing the resignation of long- company secretary of Sino Stonewall Resources Ltd near Newman.
serving director Michael Per- Gold Mining. has named Chin Haw Lim
rott. Peter Huston has joined as its chief financial officer

PAGE 88 APRIL 2017 AUSTRALIA’S PAYDIRT

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LEFTFIELD

Virtual reality hits the mining game

Training new show them. Whereas what the task entails and make any com-
workers for if you do it in a virtual ments.”

on-site jobs is world you can do it in Bester said using his software made
training better, quicker and more cost ef-
hard and expen- Perth before getting to fective.

sive, but a Perth- site,” Bester said. As the mining and oil and gas sec-
tors in Australia adapt their businesses
based computing “At the moment we to lower price environments, Bester said
more companies were using his compa-
company, Sen- are using gaming tech- ny’s services.

tient Computing, nology to create inter- “We have gotten bigger because of the
downturn, because people have to do
believes the so- active virtual worlds, to things more efficiently,” Bester said.

lution lies in the be able to get people “In a weird way innovation and technol-
ogy is only utilised when there is an ab-
virtual world. Virtual training is a cost efficient tool that to understand where solute need, people don’t do it because
they want to they do it because they have
Sentient man- should be used more in the mining indus- things are and what the to.”

aging director try, according to Sentient Computing hazards are in a virtual Sentient Computing is currently work-
ing with oil and gas and mining compa-
Doug Bester said world before they go nies such as Woodside Petroleum Ltd,
INPEX and South32 Ltd.
virtual training was arguably more effi- and perform the task in the actual world.
– Jonathon Daly
cient and cost effective than convention- “So we are having a lot of success

al training methods. in shut downs. So we can weave in the

“Quite often when you have got a shut- customers project files, and then you

down the guys need to actually see what click on a task, so for an example ‘erect

they are doing, so you have to get them a scaffolding around the boiler’, and we

to site, which is expensive, and you have can animate exactly what that looks like.

got to house them and then you have to So people can quote on the job before

use your guys to take them around and they even go to site, they can see exactly



INDEX

Adani 64-65 Coal of Africa 12 Kidman 18 Pioneer 8
Aeon 70 Cobalt Blue 56, 62
Aeris 17 Cougar 29, 51 Lanka Graphite 53 Red River 71
Alicanto Crusader Latin Resources 8 Renascor 50
Alix 80-81 CuDeco 8 Lepidico Resolute 66, 67
Almonty 78 72 Lincoln 8, 78 Rio Tinto 16, 82, 83, 88
Altona Lithium Australia 29, 38-39 Riva 58
Amman 54-55 Dacian 87 Lonmin Rosslyn Hill 58
Anglo American 68 DMO Metals 51 8, 78
Anson 86 Doray 88 Magnis 7 Sabre 57
Antofagasta Manaseer Sibanye 7
Apollo Minerals 7, 83 Empire 86 Margosa 21, 41 Sheffield 5
Arafura 46 Energizer 78 Maricana 87 SolGold
Archer 16 European Metals 12 Metal Bank 53 Sovereign 12
Ardea 85 Evolution 67 Metals X 12 Stillwater 29, 52
Arrium 60 MetalsTech 73 Stonewall
Attila 62 Finders 88 Millennium 11 Syrah 7
Aura First Graphite 53 Minjar 78 88
Ausgold 11, 57 Metminco 88 Talga 21, 35
Australian Mines 86 Gascoyne 87 Mobin 67 Talisman
Avenira 69 Gindalbie 68 MOD 88 Tethyan 28, 32-34
12 Glencore 7, 18, 67 Moly Mines 82 TNG 88
88 GME 86, 88 Monax 77 Todd River 16
56 Gold Fields 7, 68, 87 Montezuma 88 Triton
88 Gold Road 68 MZI 62 10-11
Graphex 21, 29 85 Variscan 11
Baconora 78 Nano Graphene 44 Volt 48
Barrick 7 Helix 88 Newcrest Voyageur
Base Heron 11, 57 Northam 44 85
Bass 12 Hexagon 29, 47, 88 Northern Minerals 83 Walkabout 29, 44-45
Battery Minerals 88 Horizon Western Areas
Berkeley Energia 28-29, 36-37 11 OceanaGold 7 Westgold 46
BHP Billiton 12 Orion Gold 59, 88 Wolf
Birimian 16, 83, 88 Iluka 5 Oz 20-27, 29
Black Rock 88 Implats 7 80-81 Xanadu 18
BlackEarth 88 Independence 76 Panoramic 76 11
Bora Bora 78 Parkway 88 Zimplats
Broken Hill 53 Peabody 12, 54-55
Buxton 62 Pilbara Minerals 11
88 8 83
87
Capricorn 78, 88 Kalium Lakes 88 8 7
Century Bull 69 Kasbah 88
Champion Iron 88 Kairos 88
Kibaran 21, 28-29, 42-43

PAGE 90 APRIL 2017 AUSTRALIA’S PAYDIRT



paydirt

front and back cover
supplied seperately