Once we recovered it, we immediately
started stockpiling the oversize material
and ordered the XRT sorter.”
The same model which recovered the
1,109ct Lesedi La Rona diamond from
Lucara Diamond Inc’s Karowe mine in
Botswana, the XRT sorter allows coarser
material to be processed and sorts via
the identification of Carbon 6 rather than
luminescence, increasing a plant’s ability
to recover large diamonds.
Wetherall said mining would continue
on Block 8 and Block 6 until the end of
the dry season when the oversize stock-
piles would be reprocessed through the
increased screens and XRT sorter.
A new mining fleet has also arrived on
site and will provide greater consistency
in mining, particularly during the wet sea-
son.
“The imperative is to double process-
ing to 40,000 bcm/month, then build a
second plant near E46,” Wetherall said.
“We think the next six months will be
very cash generative for Lulo and there-
fore Lucapa and will allow us to give a
second special distribution under the JV
agreement.”
The steady increase in cash flow over Lulo has consistently produced special large stones over the last 12 months,
the last 18 months has also placed Luca- including this 120ct diamond
pa in a position to begin planning its next
move. Wetherall believes a rare opportu- and investors and because of a lack of wildly on the back of encouraging one-off
nity exists in a diamond space which has understanding there is anxiety about An- exploration results or disappointing valu-
been battered by poor prices for more gola. So, there is some imperative to re- ations.
than three years. duce country risk and institutional inves- Wetherall is desperate for Lucapa to
““There is a good opportunity to pick up tors and funds are looking at companies break away from that pattern.“We’re actually trying to develop a bor-
further assets but the time to act is now,” with more than one asset.”
he said. “If you don’t move ing company. Since the
in the next six months the We’re actually trying to develop a start of 2015, we have
chance will be gone be- made 79 price-sensitive
cause I don’t believe the boring company. Since the start announcements but to
diamond market can get of 2015, we have made 79 price-sensitive get funds on the regis-
much lower than it cur- ter you can’t do that. We
rently is. announcements but to get funds on need normal disclosure
“We can begin looking the register you can’t do that. We need
normal disclosure requirements; we can’t requirements; we can’t
now because the cash
balance and the expected be informing the market every day. be informing the market
future cash flow from Lulo
have the company more every day.”
secure. If we had tried be-
Such consistency
would also put Lucapa
on the radar of diamond’s
fore, we would have left mid-tier miners.
the impression that we didn’t rate Lulo’s Any acquisition is likely to be post- “I think we are vulnerable to M&A now,”
potential which we clearly do.” poned until an AIM listing is finalised. Wetherall said. “Last year, we weren’t
Filling the project pipeline with an as- The move to London is a natural one because we wouldn’t have changed
set which could provide cash flow prior for any diamond hopeful and Wetherall anyone’s dial purely off the alluvials but
to any Lulo kimberlite development is hopes the strong performance from allu- now we are producing cash flow we have
the priority, according to Wetherall and a vial mining and kimberlite exploration in been elevated and as we bring the kim-
move outside of Angola could be on the Angola will provide the company with the berlite results to market others will natu-
cards. consistent news flow it needs to attract rally start looking at us.
“Angola is still one of the most under- more sophisticated investors. “The likes of Gem Diamonds [Ltd], Pe-
explored countries in Africa so it still has Junior diamond development is among tra Diamonds [Ltd] and Lucara Diamonds
opportunities and we have been offered the toughest sectors of the resources in- all have empty pipelines and are not do-
more ground but anything we were of- dustry; particularly when rough diamond ing any meaningful exploration. And, we
fered would have to be of more value prices are as depressed as the current are self-funding so wouldn’t be a cash
than Lulo and that is a big ask. market. That means share prices are drain either.”
“I’ve been listening to shareholders prone to inconsistency, often oscillating – Dominic Piper
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 51
AFRICA DOWN UNDER PREVIEW
Sojitz deal adds to Kibaran’s power
While other graphite Spinks said closure potential of the project.”
and lithium stocks on the deal had taken The company is also close to finalis-
have gone “all-in” on longer than anticipated
the future of lithium- but would eventually ing the debt finance package for Epanko,
ion battery demand, open up the battery which has a $US77.5 million price tag at-
entry into the burgeon- market to Kibaran. tached to it.
ing sector would only
be the cream on top “The Sojitz deal will “We are very confident we are on track
for Kibaran Resources place us in the sup- with the debt financing and it is not de-
Ltd, according to man- ply chain for the bat- pendent on the Sojitz deal,” Spinks said.
aging director Andrew tery market,” he said.
Spinks. “We’ve been promoting The project itself is ready to be built.
the establishment of Spinks said Kibaran would soon begin
Graphite and lithium Epanko on the back of back-end work in preparation of con-
stocks have enjoyed Andrew Spinks the traditional markets struction.
various runs over the before growing pro-
last two years as in- duction on the back of “It will all help fast-track it when every-
vestors warm to the idea of an electric these new markets.” thing is in place,” he said.
vehicle and home battery storage future Graphite marketing is a complex busi-
driven by lithium-ion batteries. But, while ness with customers requiring specific While Kibaran is not reliant on the bat-
such forecasts are becoming more solid products based on grade, flake size and tery market for economic viability, Spinks
by the week, the fact remains that current purity. Spinks said all three off-take part- is a keen observer of the sector and has
demand for graphite comes from more ners – two other agreements have been been encouraged by the recognition it is
traditional sources. signed with ThyssenKrupp and a Euro- beginning to receive.
pean graphite trader – had undertaken
Kibaran, which is ready to start con- extensive metallurgical test work on the “The general investor awareness of
struction on its Epanko graphite project Epanko material. lithium has been good for graphite com-
in Tanzania at any moment, has as- “Sojitz and the others have been do- panies as well because it has brought
suaged the battery revolution in its eco- ing an enormous amount of work on more awareness about electric vehicles,
nomics, choosing instead to focus on the the product and it has not only qualified home batteries, etc,” Spinks said.
traditional markets. to their specifications, it has exceeded
them in most cases,” Spinks said. “But, “I’ve just spent two weeks in Europe
“None of the revenue projections in our we have also had to demonstrate the and there was a strong theme about
BFS is based on sales into the lithium- project is viable long term and the loca- electric vehicles running through my trip,
ion battery market,” Spinks told Paydirt. tion is stable. Each off-take partner has particularly due to recently announced
“The mine is being developed on the done their own due diligence on the pro- plans from the likes of Volkswagen and
back of the long-standing German man- ject, the management, the country, etc.” Daimler.”
ufacturing market. The lithium battery He said Tanzania’s international rep-
market is the cream on the top.” utation had stood both company and Regardless of the level of electric ve-
country in good stead. hicle take-up, it remains doubtful that
Kibaran hopes to scoop that cream “I think Tanzania’s strong mining his- every lithium and graphite project will
through a marketing agreement with tory has proven a major attraction. And become a mine. Spinks said Kibaran
Japanese commodities trader Sojitz the access to infrastructure and power was focused on being at the front of the
Corporation. The two groups signed a in-country has also been important, par- queue of those that will.
MoU over a 30,000 tpa, 10-year exclu- ticularly when considering the value-add
sive off-take agreement earlier this year “There are only going to be a few mines
and Kibaran was awaiting final notice of developed which will service then whole
execution of the deal at the time of print. sector,” he said. “We don’t see everyone
getting into production; it is very difficult
to develop a mine in any commodity.”
– Dominic Piper
PAGE 52 AUGUST 2016 AUSTRALIA’S PAYDIRT
AFRICA DOWN UNDER PREVIEW
Azumah lifts off the canvas
Azumah Resources Ltd either delayed or forced a company, very determined to see the
managing director Ste- project built. We’ve got a lot of support in
phen Stone senses the tide a rethink on develop- Ghana, particularly from the local com-
is turning for West African- munities, and everybody really wants to
focused gold companies. ment. see it up and running.
With the gold price en- However, Stone is “We’re doing whatever we can to make
joying its best run in years, that happen. Timing is everything in this
interest has returned to adamant sentiment has business and we’re certainly getting the
forgotten juniors in West feeling that, after some difficult, chal-
Africa such as Azumah, returned to West African lenging markets the last few years, it’s
Predictive Discovery Ltd, going to happen this time around.”
Apollo Consolidated Ltd gold stocks and backed
and Gryphon Minerals Ltd. It was a busy start to 2016 for Azumah,
his company to join fel- headlined by the discovery of near-sur-
Both Predictive and face mineralisation at the Manwe pros-
Apollo have tasted explo- low ASX-listed company pect in January, including best hits of
ration success in Cote 12m @ 5.28 g/t gold from 49m and 32m
d’Ivoire in recent months and seen their Perseus Mining Ltd and @ 2.18 g/t gold from surface.
respective share prices appreciate as
a result, while Burkina Faso-focused build a new mine in A 677-hole, 2,523m auger drilling pro-
Gryphon is subject to a friendly takeo- gramme completed in May extended the
ver bid by Toronto-based Teranga Gold Ghana. Manwe anomalous zone to 3km. Best re-
Corp. sults from the programme included 730
“I think there’s defi- ppb, 534 ppb and 369 ppb, with many
Azumah began working on the Wa other samples returning gold values at
gold project in Ghana in 2005 and has Stephen Stone nitely a change of for- multiples of background levels.
endured a number of fluctuations in the tunes for us and all of
gold price during that period which have Stone was confident further explora-
the West African gold tion at and around Manwe would yield
explorers, developers and producers,”
Stone told Paydirt.
“We’re definitely back on the radar
again and it’s interesting to see a number
of the North American institutions com-
ing back on to the registers of some com-
panies after perhaps nearly four years
missing in action.
“We’ve always thought this project was
really good and we’ve always been, as
PAGE 54 AUGUST 2016 AUSTRALIA’S PAYDIRT
more high-grade discoveries and add tion producing 90,000 ozpa gold over an
ounces to the existing 2 moz resource initial seven-year mine life.
at Wa, which includes 624,000oz of re- Stone said his company would contin-
serves. ue to pursue further cost reductions in a
“As much as we’re always telling peo- bid to attract project financiers.
ple there’s a lot of opportunity to make “Capital costs are really the barrier to
new discoveries on the property, it’s al- entry for any company, so anything we
ways good when you can actually dem- can do to reduce those is really, really
onstrate it and when it’s come through important,” Stone said.
from good old fashioned, systematic ex- “In terms of operating costs, we’re
ploration,” Stone said. reviewing those right now and we think
“We’re very confident we’ll be finding a there will be some improvements in
lot more new mineralisation through the some areas. Power is what it costs, la-
rest of this year. We’ve got a number of bour is what it costs, but there are always
programmes we’re working up now and opportunities to optimise the amounts
we hope to be getting some aircore and you’re using and where you’re sourcing
RC drilling done in the next few months. it from.”
We’ve got a number of targets on the Stone confirmed his company was in
general Josephine licence that we want negotiations with a handful of potential
to follow up with some drilling.” project partners and said all develop-
Azumah last month raised $4.65 mil- ment options were on the table.
lion – $1.5 million via a placement and “With the improving gold price, the
$3.15 million via a SPP to existing share- Azumah is confident of unearthing more high- project is obviously looking a lot stronger
holders – to fund the proposed work at grade discoveries at its Wa gold project in Ghana than it was and certainly the phone has
Manwe and an initial exploration pro- been ringing more of late,” he said.
gramme at the Julie West project, ac- ing a $28 million saving from switching “There’s more conversations going on
quired from Castle Minerals Ltd earlier to contract mining instead of an owner- around the project with the banks and
this year. operator approach. the private equity groups than there has
The first half also saw the company Establishment capex is currently slat- been the last few years.”
slash $54 million off the proposed capital ed at $142 million (including $13 million – Michael Washbourne
cost to develop its flagship asset, includ- VAT) to develop a 1.2 mtpa CIL opera-
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AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 55
AFRICA DOWN UNDER PREVIEW
Base turns the corner
Base Resources Ltd’s initiation into 450,000-480,000t ilmenite and
production hasn’t been kind.
The company started operations 35,000-40,000t zircon.
at the Kwale mineral sands project
in Kenya in 2013 and ever since then Base appears to be cranking up
the sector has gone backwards.
production at the right time, with
Until now that is.
“This is the first time since 2013 the strongest painting season in
I have been able to talk about the
market moving in the right direc- several years resulting in an im-
tion,” Base managing director Tim
Carstens told media, analysts and proving titanium dioxide pigment
investors during a conference call.
“I’m feeling better about the indica- market.
tors [for mineral sands] and what’s to
come.” “TiO2 price rises continued a lit-
Carsten’s upbeat forecast for the
sector came as Base reported record tle further out at about $100/t from
sales volumes for ilmenite and rutile,
while record or near-record production July 1. We are expecting there will
in all products was achieved in the June
quarter. be further price rises through the
Recovery of zircon for the quarter was
78% (80% in June) which now means next quarter and we have seen vol-
recoveries of all products exceed design
targets. Meanwhile, the mineral sepa- umes pick up substantially in the
TiO2 space as evidenced by our
sales performance,” Carstens said.
The company saw demand for
Tim Carstens its rutile pick up ahead of expecta-
tions, which has allowed it to claw
ration plant (MSP) performed at an in- back most of the tonnes that were sub-
creased rate of 88 tph (89 tph in June) ject to a reduction notice from one of its
for the quarter. key customers earlier in the year.
Assuming the plant performs to expec- Such has been the turnaround in the
tations, Base hopes to exceed FY2016 mineral sands sector additional custom-
production figures this financial year ers have come forward, allowing Base to
and has guided 88,000-95,000t rutile, fully sell its rutile to the end of FY2017.
PAGE 56 AUGUST 2016 AUSTRALIA’S PAYDIRT
“We previously felt prices The company has ex-
would remain flat through to pressed its ambitions to con-
2017 at around the $US675/t duct M&A activity where ap-
mark, but we’re starting to propriate and has evaluated
be a little encouraged that in the order of 40 projects
some price rises are coming around the world in the past
for rutile over the next quar- 18 months.
ter or so,” Carstens said. Carstens said he would be
“The volumes for ilmen- looking to push forward with
ite picked up significantly a sensible transaction in the
through the quarter. We suc- next 12 months or so, as
cessfully pushed through a Base also looks to address it
price rise of $US15/t on all outstanding debt of $US200
of our sales through June/ million.
July/August that came off However, before any deals
a low of $US60-65/t FOB; are contemplated, Base has
$US15/t in that context is internal growth options it can
a substantial price rise. pursue immediately.
We are actually laying the At the time of print, the
ground work for a further company was wrapping up
round of rises towards the a PFS on Kwale Phase Two.
end of this quarter as we The study was conducted to
have volume becoming see how the operating Cen-
available.” tral and South dunes could
The news, however, is not be combined to dramatically
so good on the zircon front. increase the mining rate and
Carstens said zircon con- concentrate production.
tinued to be the “problem Carstens said he hoped to
child” in the portfolio and start a DFS this month and
he was preparing for further have Kwale Phase Two im-
pain in the market. plemented in early 2018.
Despite demand being While undertaking the
strong for Base’s zircon PFS, Base was granted ex-
and the company produc- ploration tenure over an ad-
ing 9,471t zircon in the June ditional 136sq km south of
quarter, the price rebound its 177sq km Special Pros-
expected hasn’t eventu- pecting Licence towards the
ated and is unlikely to any Tanzanian border.
time soon, according to “We flew an airborne geo-
Carstens. physical survey back in 2015
“We saw all the majors and identified some areas
get prices down by over that were pretty interesting
$US100/t late in the March to us at different elevations
quarter which took effect A PFS on Kwale Phase Two was expected to be released in July from our current deposits,
during the June quarter. which weren’t immediately
They made announcements along the not necessarily be a factor in sustaining obvious,” Carstens said.
way that they were going to try and push prices for rutile and ilmenite. “We have done a bit of ‘ground-truth-
prices up again by $US60/t, that seems “Everyone is more or less producing ing’ of those which has confirmed them
to have dissipated and we have seen at [rutile] at capacity anyway,” Carstens as targets and we have been working to
least one major zircon supplier locked said. “In ilmenite, prices are well below get a specific footprint tenure to cover
away at current prices for the next two where they need to be before a lot of that. We are pretty excited about that and
quarters. Given the volume overhang, the production that has fallen out comes looking forward to getting exploration
both in terms of stockpile and latent pro- back. The Vietnamese prices would drilling under way in the next quarter. We
duction capacity, we think zircon is going need to be north of $US125/t before we are in the process of awarding tenders at
to experience a pretty difficult market for see that cut back and we don’t really see the moment.
an extended period, a couple of years that as a risk at this point. “One of the great things about mineral
at least. We would be expecting to see “It is the first time I have been able to sands is that exploration is not that ex-
prices track sideways,” he said. say this, because most people would pensive. You are only drilling down 30-
In response to managing zircon sup- know I am conservative when it comes to 40m with a Landcruiser-mounted rig, so
ply, Iluka Resources Ltd suspended pro- calling the market, but I think I have got it is not really expensive. We would be
duction from its Jacinth Ambrosia mine the requisite level of confidence to say looking to spend around $1.3-1.5 million
in April for a period of 18-24 months. At we have turned the corner here.” throughout the year.”
its peak, Jacinth Ambrosia can produce It is perhaps then, the right time for – Mark Andrews
25-30% of the world’s zircon. Base to be exploring growth options, with
Managing zircon supply will be criti- the existing mine life at Kwale being 10
cal to prices for the product, which will years.
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 57
AFRICA DOWN UNDER PREVIEW
Base Cotton’s On to
something in Kenya
Ahappy coincidence is chang- By 2020, it is hoped that
ing lives around Base Re- 10,000 Kwale farmers will be
sources Ltd’s Kwale mine in engaged in the project, produc-
Kenya. ing enough cotton to make 14
million t-shirts.
The alignment of Base, farm-
ers in Kwale and the $1.5 billion “It has turned into the perfect
Australian clothing manufac- storm for us because we have
turer Cotton On could have far an insatiable appetite for cot-
reaching positive impacts for ton and to get transparency in
people across Kenya. the supply chain and intimacy of
dealing with a small community
What started as a trial project, in Kenya... is not the opportunity
whereby a handful of Kwale you would usually get,” Cotton
farmers were selected to pro- On group production manager
vide cotton for Cotton On, has Paul Murdoch told Paydirt.
grown exponentially and dou-
bled Kwale farmers’ income to Business for Millennium De-
about $1,500 per annum. velopment (BFD) was the trust-
ed intermediary Base reached
This year, more than 500 out to a couple of years ago to
farmers will be growing sus- BFD chief executive Mark Ingram in Myanmar. BFD has had help it maximise community
tainable cotton and producing a profound impact on community development programmes development opportunities in
210t of cotton – equivalent to in Asia and has expanded into Africa Kwale.
630,000 t-shirts.
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PAGE 58 AUGUST 2016 AUSTRALIA’S PAYDIRT
Base has tapped into There has been a willing-
the former’s model of co- ness from groups to contrib-
operative development of ute financially to the project,
agriculture in developing while grants from DFAT and
economies and married USAID are in the offing.
that up with a large-scale “The recent interest from
global market. the Australian Government
BFD has had outstand- demonstrates the opportu-
ing success in this area in nity this has with inclusive
Asia, particularly in Papua business and setting up the
New Guinea, and Base co-op for the farmers and
was keen to adopt similar ensuring that it is sustain-
practices at Kwale. able and a major break-
“We could run around through in alleviating the
ourselves trying to facilitate poverty cycle,” Murdoch
farming activity in Kenya, said.
but unless you have got Such is the commitment
critical mass and then an from Cotton On, Base and
engine of demand it is a re- BFD to make this project
ally hard road to hoe,” Base work, the Kenyan Govern-
managing director Tim Cotton farming is not the most environmentally-friendly practice ment is chiming in with its
Carstens said. and harvesting crops is monitored closely expertise to see if it can
“Our [Kwale] project is kick-start its cotton industry
in a high rainfall area; a tropical zone Cotton On is working towards sourcing and further enhance other opportunities
and it’s traditionally subsistence farming 100% sustainable cotton by 2025, with in its agriculture sector.
where we are. It is quiet economically de- the Kwale project in Kenya somewhat The Kwale potato project is another
pressed, however, the soils are particu- of a blueprint to roll out in other parts of initiative undergoing field tests, with the
larly suited to a range of crops and cotton Africa. idea being to supply potatoes into region-
is the biggest programme we are running “This project could be a template for al markets for processing.
and we have three or four other alterna- what we could be doing moving forward, Alongside Base, project partners in-
tives as well.” anything is possible, but it is one step at clude Syngenta, DEG, WWF, Kinondo
Although there has been a long history a time,” Murdoch said. Community Bank, Kenya Agricultural
of cotton production in Kwale and an in- Excited by the success of the Kwale & Livestock Organisation and Kwale
herent skillset within the community, the project so far, with over 90,000 farmers County, with the aim to have over 5,000
opportunity has not always been there in Kwale County alone, there is potential farmers selling into regional markets and
for farmers to sustain livelihoods from. to provide a lot more cotton for Cotton On earning $1,500 per annum by 2020.
Therefore, the happy coincidence as and other retailers. “Syngenta is a very capable organisa-
BFD chief executive Mark Ingram de- In some respects, Cotton On has had tion and they are very strong in potato
scribes it, was pressure on Cotton On to be held back from expanding its Ken- and work with some of the largest potato
to source ethical production of cotton yan programme too quickly, despite in- users globally. When having the chance
and Base’s determination to ensure the creasing interest and overwhelming sup- to work with them and Kwale farmers
Kwale community got maximum benefit port from outsiders. and understanding how to grow potatoes
from the mine.
Currently, the cotton harvested in
Kwale is sent to Bangladesh for the man-
ufacture of Cotton On garments and dis-
tributed worldwide.
“We’ve always wanted to do the right
thing, but increasingly the customer is
demanding to know where their gar-
ments are made, right back to the raw
materials; where they are from and were
the farmers compensated correctly,”
Murdoch said.
“We all hear about the treacherous sto-
ries around the cotton industry and that
is one of the reasons why Kenya’s earlier
industry was not successful, because the
pirates got in the middle and effectively
took profits away from the smaller farm-
ers, so naturally no-one wanted to farm
cotton.
“That’s where the beauty of this is, we
have visibility and the direct impact with
the farmer to send it down the supply Drought is an issue worldwide and instilling confidence in farmers that a profitable
chain.” crop can be harvested at season’s end is a challenge
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 59
AFRICA DOWN UNDER PREVIEW
Providing opportunities for everyone in a community, particularly women, optimum training and what level of super-
is critically important vision was necessary,” Cook said.
on Kenya’s south coast then you have grammes and testament to its regime “We often have to remind ourselves
a greater chance of being successful,” has been working alongside the like of that what we are trying to do here is cre-
BFD Kwale project lead John Cook told BHP Billiton Ltd, Exxon Mobil, Nestle and ate the basis for Kwale farmers to man-
Paydirt. Pepsico. age their own farms as little businesses.
It is not our role to manage those busi-
“We have the chance to work with Ken- Leading such high profile companies nesses for those farmers. Our role is to
yan authorities in agriculture and fisher- towards achieving their community de- try and bring those new skills and capaci-
ies to understand what to do with this velopment ambitions, means managing ties and then they don’t have to become
particular crop, taking into account con- community expectations and providing completely dependent on us or Base or
ditions in Kenya, and talking to them is a opportunities for as many people as pos- whoever may be running the programme
very good step.” sible. initially.”
While BFD plays a critical role in forg- Setting clear project objectives and en- These values are in-line with what
ing relationships and steering projects in gaging the right people is critically impor- Base hopes to achieve during its lifetime
the right direction, the not-for-profit outfit tant in ensuring projects are managed in at Kwale.
hopes to lay the foundations for a lega- the right manner and community expec-
cy to be sustained by the communities tations are satisfied accordingly. Currently, mining operations at Kwale
themselves. are expected to only last another 10
“At Kwale it was accepted that it was years.
BFD, which thrives on the inclusive about generating the learnings on how to
business and LINC models (centred on use best farmers, best soils, how to do Carstens hopes the company’s impact
farmers and food companies mutually in the county can be much more long
benefitting from growing their business- lasting.
es together) mantras, hopes it can align
more companies like Cotton On and “One of the critical mantras for us is
Base and play a role in the UN’s vision of that when we leave, all we leave is a
eradicating hunger by 2030. memory of how good it used to be then
we have failed,” he said.
“The same formula is repeatable and
what we are hoping to do is make our IP “That is one of the challenges of a min-
a pretty open source to let the industry ing project; you come in and create this
adopt this learning and look to repeat it,” bowl of economic activity and then you
Ingram said. leave and that’s all that is left is a mem-
ory. For us, the most logical thing to do
“We are not here to do everyone’s pro- was focus on agriculture because our
ject for them. We want to do 4-6 demon- focal point in community engagement is
strations which signals to the market new not CSR, we are more focused on how
ways to operate as a mining company. do we create a community that is a more
We’ve chatted to Newmont [Mining Corp] positive reference for us for wherever we
in Ghana and they have current interest want to go elsewhere in the world. The
to take their programme around local obvious thing for us to focus on is devel-
farmers becoming more productive and oping household incomes.”
supplying to local markets and linkages
which takes their programme to another – Mark Andrews
level.”
BFD certainly has the nous to help
facilitate community development pro-
PAGE 60 AUGUST 2016 AUSTRALIA’S PAYDIRT
AFRICA DOWN UNDER PREVIEW
Tembo digs Strandline’s strategy
Unlike other parts of Africa, Tanzania has a strong base of mining professionals
Strandline Resources Ltd has wel- noted mining country – Tanzania – with buy-in were “perfect” as the company
comed private equity firm Tembo potential money-making projects close to didn’t want to dilute too much at this
Capital onto its register. infrastructure. stage.
The deal was announced in May as The competency of Strandline’s team “Since we floated in October our share
mineral sands and participants in the of geologists, mining engineers and met- price has mostly been trading at 0.5-
sector started to look more appealing to allurgists was also a factor in Tembo’s 0.7c/share, so the placement and rights
investors. cornerstone upfront investment of $2.3 issue were done at good prices,” he said.
million at 0.7c/share (17% premium to the
Tembo’s investment mantra is to focus last closing price before the deal) and “Tembo was favourably impressed by
on junior and mid-tier mining companies support for a fully underwritten pro-rata a lot of things; we are in a mining country,
in developing countries and, in light of renounceable rights issue to raise up to so it is not like Mozambique for instance
the commodities rout and impact on re- $4.3 million at 0.5c/share. Hartleys Ltd where it is really hard to find trained peo-
sources stocks, there has been no short- was mandated to act as underwriter and ple. They really liked Fungoni and could
age of companies offering Tembo a low- lead manager of the rights issue. see money coming out of that very quick-
cost entry to participation. ly; Fungoni has $100 million worth of zir-
Strandline managing director Tom con in it and is 8m deep, which is more
What held Strandline in good stead Eadie told Paydirt the terms of Tembo’s like gardening than mining.”
as a viable option was its presence in a
Along with Tembo’s initial capital injec-
A feasibility study is under way at Fungoni tion, Strandline has access to the private
equity group’s strategic and financing
networks and can access future develop-
ment funding of up to $US15 million over
the medium-to-long term.
Additionally, John Hodder, a principal
at Tembo, joins the board as a non-exec-
utive director which will allow Strandline
to tap into his geology experience.
Bolstering its board and cash position
could spark further interest in the compa-
ny from people who may have previously
considered Strandline a penny dreadful.
“Some of our competitors or people
who have covered our assets are going
to realise now that we aren’t going to fall
over,” Eadie said.
“I know Base [Resources Ltd] is a very
good mining company, but they haven’t
done much in exploration until recently.
PAGE 62 AUGUST 2016 AUSTRALIA’S PAYDIRT
What could be better than merging an al free cash flow of $7.2 million, payback
exploration company like us with a com- could be achieved in two years.
pany that is in production? Rio Tinto [Ltd] In-line with its drilling campaign, Stran-
really does believe that there is potential dline is preparing a 6t bulk sample from
for a Rio Tinto-type world class orebody Fungoni to confirm the type of resource it
in Tanzania, so they are always looking is dealing with.
at us. Iluka [Resources Ltd] didn’t go Considering mineralisation is near sur-
ahead with a planned takeover in Mo- face and Fungoni is less than one hour
zambique and they are on a warpath and from the port at Dar es Salaam, Strand-
have staked some ground in Tanzania. line could push the project into produc-
However, we don’t think they [Iluka] can tion quickly if it wanted.
get much good stuff because we have it A group mining rutile in Sierra Leone
all.” has shown an interest in bringing dredg-
Eadie is happy to talk up Strandline’s ers and water monitors to Fungoni to
potential in Tanzania, particularly now start mining straight away, while Eadie
the founding chairman of the $1.5 bil- was also confident a Chinese group
lion Syrah Resources Ltd can put money would be keen to join a mining scenario
where his mouth is. if Strandline chose to take such a path.
Since October, when Strandline was Eadie was confident mining approvals
floated from the acquisition of Jacana could be granted within a three-month
Resources’ mineral sands projects in timeframe, however, rushing into produc-
Tanzania, it has lacked sufficient funds to tion for the sake of it wasn’t an option.
fully exploit its portfolio in the manner it “Fungoni makes money at today’s pric-
would have liked. The shallow nature of Fungoni makes it a es,” Eadie said. “But, there is no hurry.
Ideally, 20,000-30,000m of drilling near-term mining opportunity for Strandline We would rather make more money at
[better] prices next year. If we rushed it
should have been completed across the
20km Tajiri mineralised corridor, which ics over the area are immediate priorities with someone like the Chinese, we would
comprises Tanga North (30km from for Strandline. probably be making a concentrate that
Base’s Kwale mine in Kenya) and Tanga “We are going to get samples for the would be shipped to China, so you would
South, Eadie said. feasibility study as we want to know more lose out because you are not making zir-
Instead, limited funds meant only about how this stuff is going to be pro- con or rutile... it would be cheap produc-
3,000m over 4-5km of strike has been cessed. We think if we have other little tion for cheap products.
completed. Fungoni orebodies around we will find “We suspect we could do it better, it
Nevertheless, resources of 40mt @ them. Fungoni will not be a big broad, will be more expensive but slower. We
3% THM (7% rutile, 2% leucoxene, 5% extensive exploration programme, it is will get better products and recoveries,
zircon and 70% ilmenite) at Tajiri North more of a resource delineation type of probably in a strengthening price envi-
and 19mt @ 5.1% THM (12% rutile, 6% programme, so we are actually ready to ronment too if we bide out time.”
leucoxene, 6% zircon and 65% ilmenite) mine and get it into the measured cat- Thorough assessment of the best
at Tajiri South have been indicated. egory,” Eadie said. products capable of being extracted from
The company has revealed it is target- Earlier this year, a scoping study on Fungoni will also allow Strandline to de-
ing 100-270mt @ 3-5% THM across the Fungoni highlighted the potential for a termine if there are similar deposits in the
20km corridor, with 4,000-5,000m drill- transportable processing plant to pro- area, which will also change the compa-
ing planned in the near future. duce 20,000 tpa of non-magnetic con- ny’s approach.
“We have got 60mt, but I think we have centrate @ 60% zircon and 10% rutile Like Fungoni, Tajiri could spin money
four times as much as that,” Eadie said plus 25,000 tpa of chloride ilmenite @ in the current price environment, which
about the potential resources at Tajiri. 55-60% titanium dioxide. is about 15-20% below what TZMI would
“It is not only the fact we have money The capital costs estimate was $12.3 consider long-term average prices, ac-
and are therefore now attractive [to in- million and taking into account average cording to Eadie.
vestors and companies]; the fact is we annual revenue of $15.3 million, operat- However, Eadie is confident mineral
will be able to do something. We are go- ing costs of $8.1 million a year and annu- sands prices will rebound and producers
ing to do everything properly, we are will be disciplined with output and
in a good area, we have good people, not flood the market with too much
so I think we will get good results and supply.
that will make everyone take notice.” “The thing which is going to
Results from magnetic surveys push us most of all is that mineral
within Tajiri were expected in August/ sands is no longer a bad word,”
September, while work at Fungoni, Eadie said.
near Dar es Salaam, was in full flight. “Iluka is going stronger, stock-
An indicated resource of 11mt @ piles are drying up, Base has no
3.1% HM and inferred resource of extra material, they are selling
3mt @ 1.7% HM (22% zircon, 4% ru- everything, and prices are starting
tile and 44% ilmenite containing 58% to firm. There is some hope for us
titanium dioxide) has been defined at in the future and I think that is go-
Fungoni. ing to continue as supply starts to
Drilling of the extensions to the dry up.”
Fungoni orebody and flying magnet- There is a high assemblage of zircon and rutile at Fungoni – Mark Andrews
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 63
AFRICA DOWN UNDER PREVIEW
Magnis charges ahead at Nachu
Graphite hopeful Magnis around the project are quite
Resources Ltd continues strong,” Poullas said. “We pro-
to be buoyed by positive test duce a product that is quite
work results from its Nachu unique and that leads to having
project in Tanzania. the highest margins in the mar-
On the back of confirming ketplace and having the high-
the peer-envied project could est basket price.
produce a 99.2% graphite “We’re seeing a lot of interest
concentrate and plus-99.95% coming in from financial insti-
coated spherical graphite with- tutions and potential off-take
out chemical purification, Mag- partners, so it’s a good space
nis announced initial testing of to be in right now and we ex-
a silicon additive to commer- pect that interest to increase as
cial graphite anodes had the Nachu is one of the world’s leading graphite projects, boasting a time goes on.”
potential to deliver significant resource of 174mt @ 5.4% TGC for 9.3mt contained graphite Graphite, like lithium, contin-
improvements in the perfor- ues to benefit from weekly fore-
mances of lithium ion batteries. got a spot price for lithium carbonate, for cast production updates from the likes of
Test work showed a spherical graph- example, and you’ve got companies out- Tesla Motors, Volkswagen and Citroen
ite anode from Nachu coated with 10% side of China, in Australia for instance, with respect to electric and hybrid vehi-
silicon could deliver a first-cycle charge who are mining lithium, who are making cles.
capacity of more than 580 milliamp hours a profit and who have strong balance Countries such as Norway and the
per gram, a 65% improvement on the av- sheets. Netherlands are also looking to head
erage energy density of a current indus- “There’s off-takes coming off every down the electric path, proposing to
try-standard graphite anode. few days for lithium as well, whereas with eradicate sales of all petrol or diesel-
Magnis said the 65% increase in an- graphite…being able to produce a prod- based transport from next decade.
ode capacity translated to an additional uct that fits an end-user’s requirements Magnis has already signed off-take
20-30% mileage for electric vehicles isn’t so simple to produce. agreements with China National Materi-
without any change in battery size. “You need more graphite than you do als Industry Import and Export Corpo-
Other key highlights from the initial lithium when it comes to a lithium ion ration (80,000 tpa over five years) and
testing were first-cycle efficiency above battery, but for the general audience out Sinosteel Liaoning (100,000 tpa over 10
86% and more than 98% capacity reten- there graphite is a more difficult story to years). The company is also locked in
tion after 38 cycles. understand. But once you do understand advanced discussions with potential cus-
Encouraging and ongoing test work re- it, you quickly realise that there’s a lot of tomers from North America, Europe and
sults have helped boost the company’s growth in the space.” other Asian markets.
share price, jumping more than 300% Nachu’s standing as one of the world’s “We’re in a bit of uncharted territory
over the past year to 96c at the time of leading graphite projects was confirmed here because when it usually comes to
print, having briefly peaked at $1.12 in in April when Magnis announced the off-takes in this sector, they’re usually
early June. results of a robust BFS, headlined by a done with groups who are in production
Magnis and fellow ASX-listed graphite post-tax NPV of $US1.69 billion with IRR and we haven’t seen one of the large
developer Syrah Resources Ltd continue of 98%. players out there sign an off-take yet
to lead the way for graphite hopefuls in The study found the project could sup- with someone in the graphite space who
East Africa, however, some market com- port average production of 220,000 tpa is not in production or pre-production,”
mentators have gone as far to suggest of graphite concentrate over an initial Poullas said.
the bubble may have already burst for 15-year mine life, including 240,000 tpa “Those talks are progressing really
what others consider to still be an emerg- for the first 12 years, based on current well, but it’s difficult to put a timeframe
ing commodity. reserves of 76mt @ 4.8% TGC for 3.7mt as to when we believe those will come
Speaking to Paydirt at his Sydney contained graphite.
through. We’re quite confident they will
office, Magnis chairman Frank Poullas Pre-production capex of $US269 mil- come through; it’s a ‘when’ rather than
shrugged off any such concerns about lion could be paid back within 1.2 years an ‘if’.
graphite’s future and was confident his of first concentrate. Other key economics “The reason the whole battery space is
company had an important role to play from the BFS included a sustaining capi- taking off is because it’s viewed as being
in the sector. tal of $US71 million, operating costs of green, it’s better for the environment and
“It’s interesting to hear people say $US559/t and free cash flow of $US255 so on. So, producing a product which
the bubble has burst when you’ve got million per annum. doesn’t have any chemical purification
ourselves and Syrah trading at close to An operating margin of $US1,791/t in the whole process is obviously a big
52-week highs,” Poullas said. “It doesn’t has been forecast, based on a projected positive for us.”
make a lot of sense and many of the oth- basket price of $US2,350/t, taking into Of its proposed 240,000 tpa pro-
er graphite plays have had good runs as account the high purity and flake size duction, Magnis is anticipating about
well. potential of the proposed Nachu product 141,000 tpa will be directed to the spheri-
“I think it’s easier to understand a lithi- types. cal graphite and lithium ion battery mar-
um story than it is a graphite story. You’ve “Obviously the economic parameters kets, 77,000 tpa will be outsourced to the
PAGE 64 AUGUST 2016 AUSTRALIA’S PAYDIRT
jumbo flake and expandable graphite Partners mining analyst would offer a number of
market and the remaining 22,000 tpa will Len Eldridge as an ex-
flow into the super jumbo flake and aero- ecutive director (com- potential cost savings
space markets. mercial) to help with
those project finance as well as the ability for
Poullas said his company could sign discussions. Eldridge
off-take for super jumbo flake immedi- was previously also some end-users to by-
ately, but the pursuit of much larger con- head of investor rela-
tracts – including a deal which may lead tions for both Equinox pass China.
to project finance – is of greater impor- Minerals and Mount
tance. Gibson Iron Ltd. “Traditionally, all
“When it comes to super jumbo flake, Former Kalgoorlie graphite goes through
we know we could sign off-takes tomor- Super Pit and Olym-
row because it’s a product that’s in de- pic Dam general man- China because of the
mand and there’s a very small amount of ager Cobb Johnstone,
this product that’s mined annually,” Poul- who worked alongside chemical treatment that
las said. Eldridge as chief operating officer for
Equinox, has also joined the company’s needs to take place and
“From an end-user point of view, board as a non-executive director.
there’s literally another end-user knock- China has lax enough
ing on the door every few weeks. The Meanwhile, Magnis has received a LOI
demand’s there and it’s real. from the Tanzania Port Authority for pro- environmental laws to
posed access to 25,000sq m of land next
“The issue is the contracts we would be to the main wharf and berth at Mtwara allow things like hydro-
signing for super jumbo are more niche port, about 200km by road from Nachu.
in size, about 500-1,000 tpa, so while we Frank Poullas fluoric acid to be used
are out there aiming for pre-production Under the terms of the LOI, Magnis has in large quantities up
contracts, which will hopefully lead to until December to finalise its application
project financing as well, we’re obviously and execute a long-term lease agree- there,” Poullas said.
targeting those larger contracts and it’s ment at the port, which has an existing
the larger growth industries that can pro- export capacity of 400,000t but less than “We can bypass that, so if there is an
vide the larger contracts right now.” half is currently being utilised.
end-user, whether they’re in North Amer-
Magnis recently appointed former Poullas said access to the Mtwara port
Macquarie Group and JCP Investment ica or Europe or Japan or Korea, we can
go direct to them and bypass China be-
cause a lot of the downstream facilities
for spherenising and coating of graphite
are available in a lot of these jurisdic-
tions.
“It will come down to off-take at the end
of the day. There’s obviously no guaran-
tees as to when they will come in, but as
we’ve said from day one we’ve tried to
progress the project as quick as possible
and we’ll continue to do so.”
– Michael Washbourne
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 65
AFRICA DOWN UNDER PREVIEW
Lindi Jumbo tops the class
With industry-best metallurgical re- Met testing results also confirmed
sults and robust technical and Lindi Jumbo concentrate returns
financial numbers from a level one in- 75.98% graphite in high value large
tegrated scoping study at Lindi Jumbo, flake (plus 180 microns) distribution
Walkabout Resources Ltd has the impe- at a concentrate grade of 98.34%
tus to accelerate development of its Tan- TGC. Up to 45.2% of the graphite
zanian graphite project. concentrate produced from the out-
At the time of print, Walkabout’s explo- crop test material was classed as
ration team was preparing to start a mod- jumbo (or larger plus 300 microns) at
est RC and diamond drilling programme a grade of 98.48% TGC.
to satisfy a number of objectives, includ- Meanwhile, according to Walka-
ing infill drilling to partially upgrade some bout, the premium super jumbo ra-
resources from inferred to measured and tio (plus 500 microns) is the highest
indicated. in the ASX peer group at 16.5% at
The company also hopes to add to surface and 25.7% for fresh mate-
the inferred resource and beef up the rial with a concentrate purity of up to
amount of graphite available for mining. 97.2% TGC.
In June, the company successfully Furthermore, Walkabout reported
raised $1.29 million from shareholders, concentrate grades of up to 98.85%
sophisticated and professional investors TGC are consistently achieved with-
to fund a 1,500m drilling programme at out any chemicals used.
Lindi Jumbo in south-eastern Tanzania. Mulligan said the Lindi Jumbo ma-
A level one mine design study and in- terial continued to deliver potentially
ferred resource has been completed on highest revenue-per-tonne results
the project, with Walkabout managing di- and confirmed it as the stand out
rector Allan Mulligan confident that con- project in the industry.
struction of the Lindi Jumbo project was The biggest challenge now for
possible in about 12 months. Walkabout will be raising the neces-
“The [DFS] programme is continuous sary development funds off such a
and iterative. We expect to have a work- small market cap, which was $12 mil-
able DFS and mining licence ready by Metallurgical test work on surface outcrop material lion at the time of print.
November this year. This will then drive indicates flake size distribution in jumbo and super Signing an initial MoU for off-take
the next level into construction in mid jumbo at Lindi Jumbo are industry best will no doubt help Walkabout’s am-
2017,” Mulligan told Paydirt.
bitions and with momentum build-
“Because of our approach, our strat- product, we will return among the most ing in the energy and resources sector,
egy and most capital needs, we will be robust margins in the industry, in spite of now could be the time for the company
one of the first producers among the Afri- the general product oversupply which will to strike.
can peer group. Because of our premium occur.” There are a number of graphite hope-
Walkabout’s economic focus is fuls camped in Tanzania and Walka-
on a resource of 11.7mt @ 11.9% bout hopes the superior material at its
TGC, of which a discrete section 70%-owned Lindi Jumbo project will
2.6mt @ 20.6% TGC for 526,500t catch the eye of investors looking at the
is being targeted as the starter pit. East African country for investment.
The potential starter pit is envel- While Mulligan hoped to have an off-
oped by Domain One which boasts take or cornerstone partner on board by
6.9mt @ 8.9% TGC. now, he says the company was striding
Walkabout is conscious of trying along as expected and looked forward to
to build a big project too soon and an enterprising few months ahead.
has instead opted to consider a “As the market has seen, quality off-
low-risk, low-tech, low-capital start take partners have become more scarce
to graphite production by integrat- and discerning,” he said. “We would have
ing a modular processing plant into never have guessed that our ‘small is
its operations. good’ strategy would result in such high
Despite starting on a small- quality, high-grade resource and that the
scale, the resource at Lindi Jumbo resultant product would be so good. This
will ensure Walkabout produces a gives us a range of options we never had
profitable project. before. Progress is good and we will be
Metallurgical test work on sur- one of the first producers [in our peer
face outcrop material indicates group].”
Walkabout was preparing to start a 1,500m drilling flake size distribution in jumbo and – Mark Andrews
programme at the time of print super jumbo are industry leading.
PAGE 66 AUGUST 2016 AUSTRALIA’S PAYDIRT
Graphite junior in thermal
breakthrough
Metallurgical breakthroughs are pro- Cherie Leeden with share price appreciation across the
viding Metals of Africa Ltd with the board. Since the start of the year, lithi-
impetus it needs to establish what could she told Paydirt. Leeden’s comments um-focused companies have performed
be a unique position in the constantly are hardly surprising. ASX-listed lithium strongly, led by the likes of Pilbara Miner-
shifting graphite market. players have enjoyed a remarkable 2016 als Ltd (up 94%), Lithium Australia NL (up
69%) and Neometals Ltd (up 155%).
Investors have struggled to get their
head around graphite over the last three The sharp rises have led to claims of a
years, waxing and waning between en- bubble and as uncertainty of future sup-
thusiasm and suspicion of a commod- ply continued to fuel speculation in lith-
ity both vital to lithium-ion batteries and ium-related stocks, ASX-listed graphite
common enough that any number of players spent most of 2015 and the early
sources could be found. part of 2016 looking on in envy.
ASX graphite stocks have rebounded However, since April investors have
over the last few months as investors begun to return to graphite and Leeden
make the link between graphite, lithium believes a greater understanding of the
and the electric vehicle revolution, but for market is playing its part.
Metals of Africa managing director Che-
rie Leeden, the correlation is still not as “There should be a closer correlation
strong as it should be. between graphite and lithium because
there is actually four times more graph-
“The interest in graphite stocks has ite in a lithium-ion battery than lithium.
definitely picked up but not nearly at It probably comes down to the rela-
the rate of the interest in lithium plays,” tive levels of awareness investors have
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 67
AFRICA DOWN UNDER PREVIEW
about the two commodities,” to quantify exactly where
Leeden said. the graphite is, all the
Metals of Africa saw its way from the mine to the
share price recover from a production of spherical
low of 3.8c/share in August graphite,” she said. “The
2015 to above 6c at the time feedback we are getting
of print and Leeden said the from end-users is that this
renewed enthusiasm had al- is something which is in-
lowed the company to lock in creasingly important be-
a $4 million capital raising to cause currently all graph-
fund development plans for ite must go through China
its Montepuez and Balama at some stage of the pro-
Central graphite projects cess and the spherical
in Cabo Delgado province, graphite plants there are
northern Mozambique. environmentally very
Cabo Delgado is also challenging. As legislation
host to Syrah Resources is passed in the US and
Ltd’s under-construction the EU, these industries –
Balama graphite project. which are still heavily sub-
Syrah’s market cap has risen sidised by clean energy
to $1.5 billion on the back grants – will need to prove
of enthusiasm for Balama their credentials.”
and while Metals of Africa’s Further test work re-
two resources – 61.6mt @ sults released in July
10.3% TGC at Montepuez showed the company’s
and 16.3mt @ 10.4% TGC flake graphite was likely
at Balama Central – is less superior to much of the
than Syrah’s 81.4mt @ 16% highest quality synthetic
TGC resource at Balama but graphite currently used
not enough to justify the near in the lithium-ion battery
100 times difference in mar- process.
ket capitalisation between It has been generally
the two companies. accepted that spherical
“I think we are still extreme- graphite plants need fine,
ly undervalued in comparison rather than flake, graphite
to other companies in the re- for the production of an-
gion,” Leeden said. ode material but Leeden
In a sector without a report- said the recent test results
ed spot price and no trade- proved flake graphite was
able market, graphite devel- also adaptable.
opers are reliant on securing “It may actually be a
off-take to give ballast to their misconception in the mar-
development proposals and ket that anode producers
Leeden recognises the steps only want fine graphite,”
Metals of Africa must take to Recent test work has proven Metals of Africa’s Balama Central graphite is she said. “Our test works
achieve investor support. amenable to non-chemical spherical graphite production suggests all flake sizes fit,
it doesn’t matter. If that is
“Once we have the off-take
locked away and the DFS done I am cer- “This is significant because it means the case, it means we could supply one
tain we will see a rerating,” she said. we can achieve spherical graphite – off-take partner with all our mine produc-
The company has identified the key to which is suitable for use in lithium-ion tion.”
securing off-take as being proof of Mon- batteries – without using any of the nasty Before such a stage could be reached,
tepuez and Balama Central’s attractive- stuff. In some parts of the United States, Metals of Africa must prove the robust-
ness to lithium-ion battery makers. it is very difficult to obtain licences for ness of the two mining projects. With a
In June, the company announced met- sourcing, transporting and disposing of new drilling programme started, Leeden
allurgical test work had shown plus-99% chemicals like hydrochloric acid. Taking remains confident a DFS will be complet-
purity concentrate – ideal for the produc- the chemical component out of the pro- ed before the end of 2016.
tion of spherical graphite, the key prod- cessing means we can decide where to “We started that drilling in July with the
uct for battery production – could be pro- locate the spherical graphite plant purely objective of improving the confidence in
duced from a thermal flotation process on economic grounds,” she said. the resources at Montepuez and giving
which did not require the use of chemi- Leeden said the establishment of a us hydrological and geotechnical infor-
cals such as hydrochloric acid. spherical graphite plant in the US would mation for the DFS,” she said.
Metals of Africa is investigating devel- allow lithium-ion battery users to satisfy – Dominic Piper
opment of a spherical graphite plant in the clean energy imperatives they are in-
the US and Leeden said the metallurgi- creasingly obliged to fulfil.
cal breakthrough could make that project “It would allow us to be one of the
more feasible. very few graphite producers to be able
PAGE 68 AUGUST 2016 AUSTRALIA’S PAYDIRT
SAVE THE DATE
GRAPHITEAUSTRALIAN
23 March 2017 - Novotel Perth Langley
www.australiangraphiteconference.com
To present, exhibit or attend as a delegate please contact Melita Fogarty
on (+61) 8 9321 0355 or email [email protected]
AFRICA DOWN UNDER PREVIEW
Graphex continues rapid rise
By the time Africa Down Under the project,” he said. “Fortunately, the
rolls into Perth early next month, Chinese also view it in a similar way.
Graphex Mining Ltd could have They would like to be in a JV with us,
signed its first binding off-take agree- leveraging our significant Tanzanian
ment and taken giant strides towards in-country experience as well as ex-
securing vital project funding. ploration and mining expertise, to
Graphex hosted two representa- work together in jointly developing the
tives from China Gold Group In- Chilalo project.”
vestment Co Ltd and two from CN Once off-take and project finance
Docking Joint Investment and Devel- is locked away, Graphex will push the
opment Co Ltd, a subsidiary of China button on a feasibility study, which will
National Building Material Group take about six months to complete,
Corp (CNBM), at its Chilalo graphite followed by early construction works.
project in Tanzania in late June. Graphex is also likely to be award-
Both companies signed MoUs for ed a mining licence for Chilalo, 13km
potential off-take with the graphite west of Magnis Resources Ltd’s Na-
hopeful in June 2015. The recent site chu project in south-east Tanzania,
visit is understood to be the final step within the next few months.
in their due diligence process before A PFS completed last November
committing to binding off-take. found the project could support pro-
Four representatives from Suzhou duction of nearly 70,000 tpa over a
Design & Research Institute for the Graphex managing director Phil Hoskins (centre) with 10-year mine life, generating life-of-
Non-Metallic Minerals Industry – an members of the visiting Chinese delegation at Chilalo mine revenue of $US838 million and
independent testing authority en-
average annual EBITDA of $US47
gaged by China Gold and CNBM to spective, the site visit was fantastic. They million.
assist with the due diligence – also joined liked what they saw – from inspecting the Pre-production capex is estimated
the touring party, led by Graphex manag- graphite in the trenches and looking at at $US74 million and payback within 19
ing director Phil Hoskins. the core – and they were pleased with months. Other key financials from the
A 500kg sample of Chilalo ore was the quality of the existing infrastructure PFS include operating costs of $US490/t
taken by Suzhou for confirmatory testing and the chosen logistics route. and a pre-tax NPV of $US200 million
to verify previous metallurgical analysis “We were able to get them into all the with IRR of 20%.
conducted by China Gold and CNBM. key government agencies and stake- Graphex was formally spun out of IMX
Results were pending at the time of print. holders’ doors in Tanzania and they have Resources (now Indiana Resources Ltd)
Hoskins was due to meet with the walked away feeling quite confident that on June 14 and debuted on the ASX with
heads of both companies in China at the we’re more than capable of delivering the an opening day trade of 36.5c/share after
end of July. Prior to his departure, he told project.” raising $7 million via an IPO.
Paydirt he was confident of finalising for- Hoskins said the binding agreements At the time of print, Graphex was trad-
mal off-take arrangements. would likely include off-take at market ing at 52.5c/share, having peaked at 65c/
“Every engagement I’ve had with these prices and terms for project development share during its first six weeks on the
guys has left me more confident than the finance. bourse, which did not come as a surprise
previous meeting that a deal will eventu- “I’ve always wanted, as a condition of to Hoskins and his team.
ally take place,” Hoskins said. our off-taker, for them to invest alongside “We’ve always thought we had a high
“From our perspective and their per- us to demonstrate their commitment to quality graphite project and it was pleas-
ing to see investors agree,” Hoskins said.
“Maybe some people are surprised, but if
you look at peer comparisons it makes a
lot of sense as to where we are, particu-
larly how close we are to some meaning-
ful milestones coming up.
“If you look at graphite projects at a
similar stage of development, we remain
undervalued compared to those, so I
think there’s much more room for us to
run.”
Chilalo’s flagship deposit, Shimba,
boasts a resource of 25.1mt @ 6% TGC
for 1.5mt contained graphite, includ-
ing a high-grade resource of 9.2mt @
10.7% TGC for 984,000t, of which 62%
is classed as indicated. Shimba also
The Mtwara port, about 220km from Chilalo, was a key stop for Graphex’s project partners has reserves of 4.7mt @ 11% TGC for
PAGE 70 AUGUST 2016 AUSTRALIA’S PAYDIRT
516,000t which supports 7.5 years of the A Suzhou representative inspects some “Since we released the ‘world-class’
assumed 10-year mine life. Chilalo graphite expandable graphite results in 2015,
we’ve known that’s the target market
Unlike many of its peers, particularly in However, recent independent test work for us and it’s where we are clearly the
East Africa, Graphex has focused on the by Wuhan Technology Institute in China market leader,” Hoskins said. “Having
expandable graphite market. Eighty per- has pointed to the potential for battery- said that, we are cognisant of the fact
cent of expandable graphite is produced grade spherical graphite to be produced that markets like lithium ion batteries are
in China and is used to produce graph- at Chilalo under certain conditions. growing very quickly and these chemical
ite foil/paper, seals, gaskets and flame- purification results taking us to ‘battery
retardant building materials. Standard chemical leaching was re- grade’ demonstrate that we will be able
cently applied to a core sample from to access those markets as well. How-
CNBM is the dominant company in the Chilalo grading 96% TGC and produced ever, we’re not detracting from our clear
building materials industry in China and an improved grade of 99.3% TGC. Wu- focus and comparative advantage in the
has turned to Chilalo as a possible sup- han reported other process enhance- expandable graphite market.”
plier of expandable graphite following a ments would “highly likely” see the grade
recent crackdown on building regulations exceed the critical 99.95% TGC purity Securing binding off-take and project
which now mandate the use of flame- level required for producing the anode finance within two years of first drill hole
retardant materials. material typically used in lithium ion bat- at Chilalo will be a milestone the Graphex
teries for electric vehicles and energy management team will certainly cherish
China Gold controls the country’s gold storage. for some time. Previously, as IMX, the
industry and is a major player in the cop- company was focused on nickel explora-
per, silver and molybdenum markets tion in Tanzania and iron ore production
and, in partnership with CNBM, wants to in South Australia.
make an imprint in graphite.
“[The outcome of these next few
“The use of expandable graphite, in months] will send a very strong signal to
particular in flame-retardant building ma- the market that our project is high qual-
terials, I believe, is going to rival spheri- ity and that our off-take partners are real
cal graphite for lithium ion batteries,” and that Chilalo is going to be one of
Hoskins said. the next generation of graphite mines,”
Hoskins said.
“Expandable graphite-based flame
retardants are the highest quality on the – Michael Washbourne
market and this is why groups like CNBM
have a strategic interest in a project like
ours.”
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 71
AFRICA DOWN UNDER PREVIEW
Bass grooves to Graphmada
tune in Madagascar
Bass Metals Ltd has found a way to get Bass is the only ASX-listed company producing graphite at the moment
ahead in the graphite race; buy a pro-
ducing asset. tion of 2,500t of graphite concentrate for To lock down the first tranche, a fully
three consecutive months before De- underwritten $7 million capital raising,
At the time of print, the company was in cember 31 2018 will deliver StratMin $5 which includes firm commitments from
the process of acquiring the Graphmada million worth of Bass shares. institutional investors for $1.95 million,
large flake graphite mine in Madagascar.
Assuming the transaction progresses
accordingly, in Q3 Bass will become the
only graphite producer on the ASX.
Bass already owns 6.25% of Graph-
mada after purchasing it from StratMin
Global Resources plc for $1 million in
December. To complete full ownership, a
further $1.5 million, the issue of $750,000
ordinary shares at 1c/share and a 2.5%
net royalty (payments not to exceed $5
million) is due to StratMin.
Furthermore, when Bass achieves
three consecutive months of 1,250t of
graphite concentrate on or before De-
cember 31 2017, StratMin is entitled to
$3 million of Bass shares, while produc-
PAGE 72 AUGUST 2016 AUSTRALIA’S PAYDIRT
was being undertaken by Bass. “The good thing about Graphmada
Bizzell Capital Partners Pty Ltd and
is that it can trade through the cycles
Patersons Securities Ltd were joint
lead managers of the capital raising. and lower prices,” McManus said.
“We have had a huge amount of “We feel we not only have the first
interest outside our shareholder base
to place additional funds in the com- production for an ASX-listed compa-
pany, but we are not going to take
money because it is there. We are ny, but also sustainable trade through
going to take the money that we need
to improve the production and get the the production cycle. We have a lot of
results and best returns for our share-
holders,” Bass chief executive Tim upside too.”
McManus told Paydirt.
AIM-listed StratMin has not con-
Upon taking control of Graphmada,
which will come with a 40-year min- ducted extensive drilling programmes
ing permit attached, Bass will start
improving existing production and ex- across the tenement package, which
pansion studies.
McManus is keen to get stuck into.
Operating at the current capacity
of 6,000 tpa, Graphmada is making Graphmada has only been as-
small margins.
sessed at the top 5-10m, with indica-
Hampered by a lack of capital, pre-
vious owner Stratmin couldn’t make tions that the graphite grade increas-
the necessary investments to ensure
maximum value was being extracted es at depth and all mineralisation is
from the current facilities.
open along strike and at depth.
McManus said this was the oppor-
tunity he saw when assessing the Graph- Current mining is taking place
mada acquisition and while the graphite
sector is still in the limelight, it appears at the Loharano deposit where to-
Bass has struck at the right time.
tal resources are 5.7mt @ 4.1% for
The company will look to increase pro-
duction (1,400t produced in 2015), purity 235,000t contained graphite.
and tonnes through the plant to capitalise
on the current demand for graphite. Meanwhile, trial mining and devel-
“Also, we’ll be looking at further re- opment is under way at Mahefedok,
source and reserve definition and look-
ing at installing the next plant which will with the other known deposits at
be 12,000 tpa [capacity],” McManus said.
Graphmada, Mahela and Ambato-
“That will take us to 18,000 tpa and
from there we will assess the market and fafana, yet to be developed.
react accordingly to the supply and de-
mand situation. I think that is the right ap- Production from Graphmada was 1,400t in 2015 McManus said the company was
proach, particularly from a shareholders’
risk perspective. Our investment will be also looking at adding a number of op-
all low capital, we’re talking about a total
investment of under $10 million over the $US1,000-2,000/t and its medium/fine portunities to its asset base and explor-
longer term, which is not much compared
to the $200-300 million others are talking flake less than 180 microns selling for ing potential partnerships.
about.”
$US400-700/t. “We still have all that opportunity in
Last year, about 1,500t (37% fine to
medium grade and 63% large to jumbo “Certainly, I think we will be the pre- front of us and we are going to start a
flake) of Graphmada product was sold
into markets in the US, Europe and India. ferred large flake producer,” McManus drilling programme very soon to expand
Product from Graphmada, 110km by said. our resources and reserves,” McManus
sealed highway to Madagascar’s main
export port, Tamatave, is high purity, “We have got a very unique product said.
large flake crystalline graphite which is
suited for manufacturing lithium-ion bat- and it is interesting to watch people talk “From that perspective we will be in a
teries.
about the lithium-ion battery market. To very similar place to other graphite de-
The mine will continue to deliver 94%
TGC to customers in the US, Europe be a sustainable business you have to hit velopers, but we’ll have a higher purity,
and India, with its large/jumbo flake
greater than 180 microns at an average all the different types of uses for graphite higher large flake and we will be pretty
size distribution of 97% forecast to fetch
and all the different market sectors.” much the only company in the region. For
McManus believes that the high purity, instance, if you look at Tanzania, a lot of
large flake graphite produced in Mada- those guys are going to have to do deals
gascar will be the base blend sourced to share infrastructure and the like.”
by battery manufacturers, while the pre- There has been little fanfare about
mium grade product will be looked at for what Bass has been able to do and it
uses in the space and nuclear technol- might yet be another 12 months before
ogy sectors. the former Tasmanian-focused entity is
“Because you are starting with such fully appreciated in the market.
a large flake, Madagascan graphite has By that time, Bass would have hoped
the ability to be used in multiple sectors. to have divested its Tasmanian assets.
Whereas if you are starting with a small “We are in the process and are in dis-
flake and you are mining, processing, cussions about divesting those assets,”
bagging and shipping it, that entire sup- McManus said.
ply chain means that the graphite gets “Everybody understands that we are
finer and finer,” McManus said. in a transitional period and this time next
McManus said Madagascar produced year we will be looking at a solid produc-
a benchmark graphite product that could ing, cash generating company which is
be tailored to suit customer needs. looking to expand its revenue base.”
Asbury Graphite Mills Inc in the US – Mark Andrews
has been taking graphite from the coun-
try for over 100 years, and with cheap
supply coming out of Brazil to the detri-
ment of producers in the market, there is
an opportunity for Bass to establish its
footprint in Madagascar and the global
graphite market.
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 73
AFRICA DOWN UNDER PREVIEW
Sovereign fast-tracks Duwi PFS
New Sovereign Metals Ltd managing Sovereign hopes to complete a PFS on its Duwi graphite project before the end of 2016
director Julian Stephens is on a mis-
sion to fast-track the Duwi graphite pro- capex of $54.6 million and operating Having spent the best part of a decade
ject in Malawi. costs of $US610/t. working on various projects in Malawi,
Stephens continues to be excited about
Stephens led a team which made mul- Stephens said his company was evalu- the prospectivity in East Africa, particu-
tiple graphite discoveries last decade ating a lower tonnage start-up scenario larly in the emerging graphite space.
and was instrumental in the backdoor then ramping up to 110,000 tpa for the
listing of those projects, including Duwi, PFS, which he hoped would be complet- “Graphite is obviously having some
into Sovereign in August 2012. ed before the end of the year. time in the sun on the back of the inter-
est in the lithium ion battery technology,”
The experienced geologist continued Duwi boasts a total resource of 85.9mt Stephens said.
his involvement with the project as a @ 7.1% TGC for 6.13mt contained graph-
technical consultant before joining the ite, including an indicated resource of “Graphite had its first recent run on a
company’s board as a non-executive di- 17.3mt @ 8.1% TGC for 1.4mt contained shortage in the expandable market, but
rector earlier this year. graphite, based on a 7% cut-off grade. it’s having another run in the market now
because people have realised you need
Stephens was appointed managing “The project’s already well advanced a substantial amount of graphite to pro-
director of Sovereign in late June and because we’ve done quite a lot of drilling duce these types of batteries.”
wasted no time settling into his new role, and the vast majority of the mineralisa-
announcing a $4 million placement at tion that will go into the PFS is already in Malawi may not be known as a mining
7.5c/share to fast-track a PFS on Duwi. the indicated category,” Stephens said. jurisdiction, but there is little standing in
the way of Sovereign’s development am-
“Part of that study will be further test “Our metallurgical test work is essen- bitions for Duwi, including an ongoing re-
work on upstream products, including tially very close to PFS level so we only view of the country’s mining act.
spherical graphite for supply into the lith- need to do a little bit more there.”
ium ion battery market, continued devel- Duwi, 15km from the country’s capital,
opment work on our expandable graphite Previous test work on Duwi jumbo flake Lilongwe, is surrounded by key project
products and also advancing our existing concentrate grading 98.7% demonstrat- infrastructure, including within 10km of
partnership with Volinco,” Stephens told ed expansion ratios of 345 ml/g (2.9 g/l), an operational railway, 3km of a major
Paydirt. exceeding the typical expansion ratios of power line and 30km of an international
other marketed jumbo flake products. airport.
“We’ll shortly be undertaking a dia-
mond drilling programme in order to Duwi is capable of producing multiple “Malawi is not a traditional mining des-
provide samples to produce additional graphite products tination, so you don’t get too many of
graphite concentrates for assessment by the bigger miners operating there, how-
Volinco and other potential off-take cus- ever, this has provided opportunities for
tomers.” smaller companies such as Sovereign,”
Stephens said.
Sovereign was expected to appoint
study consultants at the time of print. “The government agencies, in par-
ticular the Department of Mines, are ex-
Stephens will also spend time over tremely helpful and supportive, so it’s a
the next six months negotiating off-take good spot to be in Africa and we’re really
deals with potential European, Korean, happy to be working in that jurisdiction.”
Japanese and North American custom-
ers. – Michael Washbourne
Sovereign entered into a strategic off-
take and development funding partner-
ship with Volinco (China Volant Industry
Co Ltd) last October, just one month af-
ter releasing a robust scoping study on
Duwi.
Using a base-case processing rate
of 1.5 mtpa, the study found the project
could support production of 110,000 tpa
of graphite concentrates over a minimum
20-year mine life for an initial capex of
$US112.4 million.
Other key financials from the study
were operating costs of $US498/t, con-
tingency of $26.1 million, owner’s costs
of $7.9 million and a payback period of
19 months.
A lower tonnage processing scenario
of 550,000 tpa was also assessed as
part of the scoping study and supported
production of 42,000 tpa for an initial
PAGE 74 AUGUST 2016 AUSTRALIA’S PAYDIRT
Birimian first member of West
Africa’s lithium club
Birimian Ltd’s exploration of the Bou- “The Bougouni acquisition leveraged All the intersections came from within
gouni lithium project in Mali is a dem- off the company’s strong project genera- 80m of surface and the company has
onstration of both the country’s extensive tion capability in Mali,” Joyce told Pay- been buoyed by both the depth and
prospectivity and the ASX-listed junior’s dirt. “Birimian has been exploring in Mali breadth of mineralisation at Goulamina
ability to tap into it, according to manag- for a long time and we were aware of the as they indicated the potential for low
ing director Kevin Joyce. potential for lithium but only more recent- waste and stripping ratios during mining.
ly did we begin actively investigating the
Birimian acquired Bougouni, in south- acquisition of lithium assets.” Joyce said the grades at Goulamina
ern Mali, in March and immediately compared favourably with emerging lithi-
tapped into investor sentiment for the bat- First results from drilling on the Gou- um plays around the world.
tery material, raising $3million through a lamina prospect came back in July indi-
rights issue. cating high-grade potential. Intersections “Our stated exploration target at Bou-
in the first 14 holes of the 42-hole pro- gouni is 15-18mt @ 1.8-2.2%. Realising
Drilling started almost immediately fol- gramme included; 40m @ 1.84% Li2O, this target would place Bougouni in a
lowing the acquisition, with a 5,000m RC 23m @ 1.96%, 42m @ 1.65%, 50m @ higher-grade category when compared
and diamond programme. The company 1.62% and 52m @ 1.7%. to Australian projects,” he said.
has enjoyed strong market support on
the back of the acquisition, improving its “Substantial, very high-grade zones of There has been a burst of lithium ex-
share price from a 12-month low of 4c to plus-2% within the broader mineralised ploration activity across the globe in the
as high as 42c in June. pegmatite are particularly encouraging last 12 months as companies look to take
and could potentially increase the overall advantage of the growing lithium-ion bat-
Joyce said the decision to pursue Ma- grade of the deposit when further defined tery market. Birimian is one of more than
li’s lithium prospects showed the com- with additional drilling,” the company re- 60 ASX-listed companies now exploring
pany’s knowledge of the West Africa ported. for lithium and even the most bullish of
country. forecasts do not anticipate that many
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AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 75
AFRICA DOWN UNDER PREVIEW
new mines being developed. this project ticks the box on the
Joyce, however, is con- processing side of things.”
fident Mali’s robust mining The success of the early
code and investment envi- drilling suggests Birimian will
ronment will allow Birimian to focus on Bougouni for the fore-
keep towards the front of the seeable future but Joyce said
lithium pack. he was determined it wouldn’t
“We like to think we will lev- completely detract from the ex-
erage off our experience in plorer’s gold work.
Mali to move things quickly,” “We firmly believe our gold
he said. “We also have a sig- projects, particularly the Mas-
nificant advantage at Bou- sigui gold project, have sig-
gouni with a large amount of nificant value and outstanding
good quality processing test potential for a large gold dis-
work already completed by a covery,” he said. “We continue
World Bank-funded initiative. to seek a processing solution
Mali has an excellent track for the gold deposits we have
record for facilitating and per- found at Massigui. The gold is
mitting mine developments, The Goulamina pegmatite outcrop on Birimian’s Bougouni lithium still a big part of our story.”
so we are confident this can project in Mali. Birimian plans to release a maiden resource before Joyce has been exploring
happen relatively quickly too.”
the end of the year West Africa for more than 15
Joyce pointed to the rapid years and remains convinced
permitting of the Fekola gold project as he said. “The processing test work al- the region will offer more opportunities.
an example of how quickly Malian mining ready done has confirmed the viability of “We believe there are many and varied
projects could be developed. the pegmatite at Goulamina to produce resource opportunities in West Africa.
Birimian plans to release a maiden re- a high-quality chemical-grade lithium The Birimian Terrane is still very much
source and complete a scoping study by concentrate. Test results show good unexplored for a range of commodities.”
the end of 2016 and Joyce said metallur- spodumene recoveries [84.7%] and – Dominic Piper
gical test work to support the study had high-mass yield to produce a high-qual-
already begun. ity, chemical-grade [6.7%] spodumene
“Metallurgical work is very important,” concentrate. So, we are very confident
PAGE 76 AUGUST 2016 AUSTRALIA’S PAYDIRT
AFRICA DOWN UNDER PREVIEW
De-risked and ready to Etango
Bannerman Resources Ltd chief ex-
ecutive Brandon Munro has declared
the heap leach demonstration plant at his
company’s Etango uranium project in Na-
mibia a resounding success.
According to Bannerman, the latest
test work completed early last month
confirmed the solvent extraction design
parameters in the Etango DFS were not
only robust but held potential for further
cost improvements.
Other key highlights from this fourth
phase of test work since the demonstra-
tion plant was turned on in April 2015
were no observable build-up of deleteri-
ous elements and fast and efficient sol-
vent extraction.
Speaking to Paydirt before flying to
Bannerman continues to be buoyed by the ongoing success of its heap
Namibia to oversee the next phase of the
programme, Munro said the technical leach demonstration plant at Etango
de-risking of the heap leaching process Bannerman is looking to handle, but seamless. The challenge for Munro, who
for Etango was now complete. Munro said all the results to date sup- based himself in Windhoek while running
“While this result wasn’t unexpected, ported this method of extraction. Kunene, is to now successfully market
it’s been particularly satisfying and excit- “We are by no means trailblazers here, the project to prospective financiers.
ing to see how much scope we’ve got for there are other uranium mines around “Most of my focus [since returning] has
improving a number of the DFS param- the world that heap leach, in particular, been understanding in greater depth the
eters, in particular the much lower acid BHP [Billiton Ltd] regard heap leaching uranium market dynamics and position-
consumption, the faster than expected as an appropriate flowsheet at Olympic ing the company to be able to finance
leaching times and a recovery level of Dam,” Munro said. the right contracts – and finance quickly
93% which sits substantially above the “This just further underscores that – when we see the inevitable recovery,”
assumptions in the DFS,” Munro said. we’re dealing with a proven technology Munro said.
“What we’ve got here is a technically and we’re blessed with an orebody that “The project is ready to go. We have a
simple project that on the one hand is re- not only leaches very quickly but doesn’t DFS that has been optimised, we have
garded as low grade, even by Namibian have any of the acid-consuming carbon- a demonstration plant that’s been proven
standards, but then when you take into ates that have challenged, for example, and an environmental and social clear-
account all of the technical parameters, the Rossing mine for the last 40 years.” ance in place. The obvious missing in-
from a low stripping ratio and very con- Munro returned to Bannerman in gredient, as we stand today with uranium
sistent mineralogy to a simple, uncom- March, following Kunene’s reverse takeo- prices at a 10-year low, is we require a
plicated mining method with outstanding ver by a technology company, to replace recovery before we can finance con-
heap leaching dynamics, you realise this the long-serving and popular Len Jubber struction of the project.”
is a robust project that doesn’t have any in the top executive role. Last year’s optimised DFS found the
showstoppers.” Jubber had been with the company project could support production of 7.2
Munro said the fifth phase of since 2008 and received wide- mlbpa over an initial 15.7 years of open-
the programme would assess spread praise for his role in pit mine life for operating costs of $US38/
coarser grind sizes, from 8mm overseeing development of lb, down 17% on the 2012 estimate.
to 12mm, as well as different the heap leach demonstration Other revised financials on Etango in-
reagents. Conventional crush- plant as well as the 2012 DFS cluded a pre-production capex of $793
ing methods will also be tested and last year’s optimisation million (down 9%), a NPV of $US419
for potential flowsheet optimi- study. million (up 20%) and IRR of 15% (up
sation. Namibian-born Jubber also 9%), with peak annual free cash flow of
Bannerman completed its orchestrated several telling $US392 million.
first heap leach column test corporate deals, culminat- Uranium has been in a prolonged re-
work in 2010, when Munro ing in Bannerman clearing all cession since the Fukushima disaster
was the company’s in-coun- outstanding debts earlier this more than five years ago, but Munro
try general manager before year after acquiring 100% of senses that is about to change as mis-
leaving the following year to Brandon Munro Etango. conceptions about the sector come to a
co-found Namibian copper ex- Munro, whose background is head.
plorer Kunene Resources Ltd. in corporate law, said because One of those, he says, is the belief Chi-
Acid heap leaching is somewhat un- his predecessor had left the company in na has adequate stockpiles of uranium to
common when it comes to uranium pro- such a sound technical and financial po- fuel its long-term nuclear ambitions.
cessing, particularly for the big volumes sition the executive handover had been “I think we’re only just starting to see
PAGE 78 AUGUST 2016 AUSTRALIA’S PAYDIRT
the beginning of China’s nuclear supportive of uranium mining, it’s
ambitions and the stated num- been a large producer of uranium
bers, even at the top end, such as for more than 35 years, there’s a
150GW by 2030, will prove to be number of mines in operation and
conservative,” Munro said. construction, there are no signifi-
“When you look at the energy cant social impediments or envi-
production from that stated ob- ronmental impediments to uranium
jective, that will still only be less mining and it’s well regarded by
than 5% of China’s energy needs fuel buyers all over the world.
by 2030, and that’s in the context “One thing I’ve gained a great-
where they’ve committed, genu- er appreciation of in the last few
inely in my opinion, to a 20% clean months is the extent of the inertia
energy production. So, with most of that characterises uranium min-
their hydro-resources tapped out Uranium extraction within 30 seconds of phase contact ing. When you look at how much
and renewable energy only able to time was a highlight of the latest heap leach test work production that came on in the pe-
be scaled to a certain extent, it’s riod from 2005 to 2007, you realise
hard to imagine how China will be able to “If anything, we’ll see in the lead-up to it does take a significant period of time
achieve that objective without a dramatic that shortfall the panic buying and other to bring a uranium project through from
upscale in their nuclear book.” motivations that are typically reflective of exploration to scoping study to PFS and
Munro refuses to buy into the views a high level of concern from utilities as to DFS, so that gives us a huge advantage
of some commentators who believe the whether they’re going to be able to put when we start to see the supply deficits
holders of those uranium stockpiles will uranium into their reactors.” bite, because even a $US100/lb ura-
be motivated to push the material back Having spent most of his professional nium price can’t force a project through
into the market as a secondary sale. career focused on mining projects in Na- environmental approvals, and the most
“Those stockpiles are held for strate- mibia, Munro has never been more con- outstanding dynamics in the world can’t
gic reasons and there’s a widely antici- fident Bannerman is at the front of the circumvent doing feasibility studies that
pated supply-demand gap coming up in pack to take advantage of a recovery in simply take time.”
the next few years in uranium, so to think the uranium space. – Michael Washbourne
anything substantial is going to be sold “In my view Namibia is the single-most
when there’s a shortage coming up de- attractive uranium production destination
fies logic,” he said. in the world,” Munro said. “It’s heavily
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 79
AFRICA DOWN UNDER PREVIEW
Genmin steels for resource
in Gabon
Public, unlisted entity Genmin Ltd min is not banking on iron ore prices
is currently shaping Gabon’s first exceeding $US100/t to make a profit.
JORC standard iron ore resource. Rather, the company’s longer term
The Belinga iron ore project, in the view is for iron ore prices to range be-
West African country’s north, is well- tween $US60-70/t.
known in the iron ore industry but not “If you can deliver profitably against
compliant with Australian or Canadian that price, then you will be fine,” Ariti
standards. Genmin chairman Joe Ariti said.
said a drilling programme at Baniaka, Often, companies with bulk com-
the company’s flagship asset, had modity assets, particularly in Africa,
been completed and a consultant en- struggle to access appropriate infra-
gaged to do resource modelling. structure to get material to market.
“We believe that we have done This is not the case for Genmin.
enough shallow drilling into the detri- The company has somewhat of a
tal to estimate a JORC resource. We southern hub of iron ore projects in
want to base a scoping study around Gabon whereby separate rail gauges
that JORC resource to look at a start- connect the projects to Pointe Noir in
er operation of a couple million tonnes Republic of Congo, while stage one of
per annum,” he said. the Owendo port (about 650km from
“We have finished the drilling, we Franceville), Gabon, is on track for de-
are currently verifying the database livery in Q3 2016.
and we are about to engage a con- All this bodes well for Genmin,
sultant to do the resource work for which on setting up in August 2012,
us. Over the last two years we have went about putting together a 4,000sq
done studies on the rail, port, power, km package – Baniaka, Baniaka West,
metallurgy, so we are really only short Bakoumba, Minvoul and Mafoungui in
of a resource to enable us to put that Gabon – sufficient to support 50 years
[scoping] study together over the next Genmin is compiling Gabon’s first ever JORC- of iron ore operations.
three months.” compliant iron ore resource Baniaka is primed to be the first pro-
Being unlisted – and therefore shel- ducing asset, while Bakoumba, 30km
tered from the need to raise its share where we can produce a quality product west of Baniaka, is forecast to follow.
price – and with no plans to compete with and also potentially deliver into places At the time of print, Ariti was on his way
the likes of Rio Tinto Ltd and BHP Billi- such as Nigeria. Nigeria has an elec- to Gabon to oversee the start of a three-
ton Ltd on the seaborne market, Genmin tric arc steel industry and with it being month field programme at Bakoumba
sees no rush in bringing Baniaka product dependent on scrap which is becoming where ground magnetic data collection
to market. more and more difficult to source, we see and geological mapping is planned.
The company is planning to deliver 62- a window opening up where we can feed “That work is a precursor to planning a
65% low deleterious, direct shipping iron those producers of long steel products drilling programme for 2017. We will also
ore to the European market, while there for the construction industry,” Ariti said. do mapping programmes later in the year
also appears to be opportunities opening Before Baniaka product becomes at Minvoul and Mafoungui. Those pro-
up for markets within Africa. available for consumption, more supply grammes will only be two or three weeks
“We are aiming to deliver into Europe will need to be stripped from the market. in duration and those projects are a few
Ariti said marginal production in years behind Bakoumba and probably
the market had been “a little stickier three years behind Baniaka,” Ariti said.
than we thought it was going to be”, Minvoul, about 200km from Sundance
meaning there was room for further Resources Ltd’s Mbalam-Nabeba pro-
reductions. ject, is starting to look very encouraging
“For us, waiting a bit extra doesn’t for the company and could potentially be-
change the quality of the assets that come subject to a lengthier exploration
we have put together,” he said. programme, depending on results, next
At the earliest, a 2 mtpa starter year, Ariti said.
operation from Baniaka, south-east With a total of $17.8 million invested by
Gabon, could come to fruition by major shareholder Tembo Capital and
2019/2020. $US3.5 million in cash, Genmin is well
Whether or not that coincides funded to carry out its activities to the
High-grade iron ore from Baniaka will hold the with the next iron ore boom or not end of 2017.
project in good stead remains to be seen, however, Gen- – Mark Andrews
PAGE 80 AUGUST 2016 AUSTRALIA’S PAYDIRT
Bridge2Aid Australia:
A new venture
Acharity originally founded 12 years abandoned to agony for In May this year, Hap-
ago is setting up a new Australian
venture and is looking to the country’s months and years. They piness spent three hours
mining sector for assistance.
face life-threatening infec- travelling to a Bridge2Aid
Bridge2Aid has provided access to
safe emergency dental treatment for tions and pain that is so training site, where she
more than 4 million people in East Africa
since 2004. The charity has achieved severe that they cannot knew she would receive
this by training existing rural health
workers using volunteers from the den- work, go to school or feed free treatment. After exam-
tal community. Now, through the newly
launched Bridge2Aid Australia, it is hop- their families. Bridge2Aid’s ination she was diagnosed
ing to harness the power of fundraisers
and volunteers in Australia. unique solution is provid- with an externally drain-
The Australian arm of the UK-based ing intensive practical train- ing abscess. Her tooth
charity is being led by Kibaran Resourc-
es Ltd executive director Grant Pierce ing to existing rural health abscess had perforated
and Euroz executive director corporate
finance Nick McGlew. workers in emergency den- the jaw bone and started
Pierce said it was a “fantastic oppor- tal skills. The training is de- Happiness had her tooth draining into the surround-
tunity” for Australian organisations to get livered by expert volunteer abscess treated at a visit ing tissues creating a facial
involved in helping some of the poorest teams. swelling. Her face ached
communities in the world. to a Bridge2Aid clinic and the pain from the tooth
Companies such as A-
“In addition to getting millions out of
pain, your involvement will entitle you to dec, African Underground was unbearable.
share your philanthropic work with your
customers,” Pierce said. Mining Services, ECG Engineering, So, the Bridge2Aid trainees drained
Good health is vital for all communi- Henry Schein Halas, Dr Jeremy Keating the abscess, extracted the tooth and her
ties, particularly in East Africa where the
ability to work and go to school is crucial Dental Practice, Kibaran and Roadbend problem was cured. The trainees also
for survival. When communities suffer
in pain with treatable conditions due to Motors have donated seed capital to gave Happiness oral health education to
lack of primary healthcare, it’s a big is-
sue. Bridge2Aid Australia will expand the found Bridge2Aid Australia. reduce the risk of problems in the future
work of Bridge2Aid and free more com-
munities from chronic pain by teaching A story about Happiness and she can now teach her son how to
vital new skills.
Two years ago, 18-year old Happi- take care of his teeth and gums as he
A staggering 70% of the world has no
access to any form of safe treatment for ness started suffering with toothache. grows up.
oral diseases and infections. People are
After four awful months she spent all of These trainees are now teaching moth-
the money she had getting to the district ers, fathers, sons and daughters about
hospital. It was an extremely long jour- how to care for their teeth and gums as
ney and she said that the trip combined part of their daily work. As well as learn-
with the treatment was a “terrible cost”. ing new skills to get people safely out of
She soon began to suffer more intense pain immediately – they are also prevent-
pain and as she had no money left, Hap- ing pain in the future.
piness tried to treat herself using local Join Bridge2Aid Australia to help oth-
medicine. This proved unsuccessful.
ers like Happiness and their commu-
Happiness struggled with performing nities. To find out more about how you
even basic tasks for her little son such as can become involved in supporting the
washing him and his clothes and taking work of Bridge2Aid Australia today con-
him to post-natal clinic. As she is a single tact Grant Pierce at grant.pierce99@
mother she was fortunate her mum was bridge2aid.com.au or +255(0)688116435
willing to spare time to help cook, clean or Nick McGlew at nick.mcglew@
and look after the child. bridge2aid.com.au or +61(0)422279131
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 81
AFRICA DOWN UNDER PREVIEW
Acacia to make call on Sarama JV
The South Houndé JV is With South Houndé, Bondi
headed for a defining mo- and Karankasso, Sarama
ment. has about 3.2 moz gold tied
By the end of the year, up in the southern part of the
Acacia Mining plc needs to Houndé belt.
decide if it will continue to At South Houndé and
earn into the Burkina Faso Bondi in particular, Sarama
project, which is held by is considering project devel-
Sarama Resources Ltd. opment scenarios, includ-
Acacia spent $US3.5 mil- ing a 120,000 ozpa CIL or a
lion on 45,000m of drilling in smaller heap leach project.
2015 and is committed to the Dinning was confident that
same budget for 34,000m once a project was in play,
this year, aimed at upgrad- more resources would be
ing the size and grade of the unlocked.
2.1 moz inferred resource at “Depending on Acacia’s
South Houndé and testing decision, I think we can
regional targets. Sarama is well established in the southern Houndé area of Burkina Faso move into a scoping study
By the end of the year, next year and move through
Acacia will be halfway through its $US14 junior to come out last year and say we the numbers of it all by the middle of the
million earn-in agreement at South are going to do a scoping study on a pro- year, we think that will be good timing.
Houndé where it can take a 70% stake in ject which might need ‘X’ amount of dol- Then we will need to raise money and do
the project by fulfilling its full commitment lars. I think if the market keeps tracking the drill off and move into feasibility stage
by 2018. where it is and looking at companies be- by the end of next year,” Dinning said.
“It is not a small step,” Sarama chief ing taken over in Burkina Faso, I think it Dinning also flagged the potential to
executive Andrew Dinning told Paydirt. would be quite good.” further consolidate Sarama’s dominant
“They have to make the call on whether Central to Acacia’s decision on South land position in the southern Houndé
they go to that $US7 million because Houndé will be whether it fits the compa- belt.
their spend rates are quite high. It is not ny’s project models of being able to pro- He said the acquisition of Bondi was
doing any feasibility work or anything, it duce 200,000 ozpa gold over 10 years. the first step in consolidation in the area
is purely exploration. By then the project Nevertheless, the area under JV with and hoped to be able to capitalise on
would have $US20 million spent on it in Acacia plus the recent addition of Bondi, any opportunities to build a critical mass
the ground, it will have a lot of work done about 40km north of South Houndé, al- which would underpin production.
on it and it will be in a position to make a ready boasts project scale potential, ac- “There will definitely be a project in the
call on long-term plans.” cording to Dinning. area, it is just a matter of what configura-
Whichever way Acacia decides to Bondi was acquired in May, adding tion it takes considering there are a num-
move at South Houndé, Sarama appears a further measured and indicated re- ber of parties with interests in the area,”
to be ideally situated in the context of the source of 186,000oz gold @ 4.2 g/t to the Dinning said.
deal which was signed in late 2014. 700,000oz @ 2.3 g/t Sarama has already With interests in three projects in the
Cash has been poured into South defined under the JV with Savary Gold area, Dinning says Sarama is in the
Houndé at the right time, from Sarama’s Corp at Karankasso in the south Houndé driver’s seat to have a major say on pro-
perspective, and if Acacia chose to belt. duction scenarios in the area, which may
leave, given the current market also depend on Acacia’s pres-
conditions, Sarama is much bet- ence in the belt.
ter placed to forge ahead with While Acacia’s decision is
the project. pending, Sarama has enjoyed
“In the context of the current the recent progress made at
gold market and where it has South Houndé without having to
moved so far this year, if it keeps write a cheque.
going up that way then I think it To keep it moving in Burkina
will be good timing for us,” Din- Faso, where it also has 376sq
ning said about the possibility of km of ground on the Banfora
Acacia exiting the earn-in. greenstone belt, 80km west of
“If they decide to sit, then we South Houndé, a private place-
will roll into a scoping study and ment to raise $C2.35 million was
get some definition into the pro- locked away by Sarama in June,
ject which we can then get into which will tide the company over
the market and see where it is for a while, Dinning said.
going. You didn’t want to be do- Acacia has provided cash for South Houndé over – Mark Andrews
ing this this time last year, it was
a pretty unfavourable time as a the past two years
PAGE 82 AUGUST 2016 AUSTRALIA’S PAYDIRT
Woodside settles on Senegal
Woodside Petroleum Ltd is boosting Peter Coleman the petroleum giant’s growth strategy.
its presence in Senegal, having en- “We are taking advantage of our bal-
tered into a binding purchase and sale global deep water oil discoveries since
agreement with ConocoPhillips to acquire 2014 and Woodside estimates it contains ance sheet to acquire a world-class as-
its interests in the West African country. 560 MMbbl of recoverable oil, based on set that fits well with our capabilities,
a 2C confidence level. offers significant future upside in explo-
Under the terms of the agreement ration and line-of-sight to near-term oil
announced last month, Woodside will Woodside chief executive Peter Cole- production,” Coleman said.
acquire 100% of the shares in Conoco- man said the acquisition was in line with
Phillips Senegal BV, which holds a 35% “It builds on our agreement to acquire
working interest in a production sharing a 65% interest in the AGC Profond explo-
contract with the Senegalese Govern- ration block located to the south in the
ment, covering three offshore explora- Senegal-Guinea Bissau joint develop-
tion blocks. ment zone and extend our regional focus
in West Africa.
The proposed takeover is priced at
$US350 million, plus a completion ad- “We look forward to working with the
justment fee of about $US80 million, and Government of Senegal and JV par-
includes the option for Woodside to op- ticipants Cairn Energy plc, FAR Ltd and
erate the future development of any re- Petrosen, the Senegal National Oil Com-
source. pany, to progress the commercial devel-
opment of SNE and any future discover-
Of particular interest to Woodside is ies.
the Rufisque offshore, Sangomar off-
shore and Sangomar Deep offshore ex- “Woodside will bring to the JV exper-
ploration blocks. tise in deep water drilling, development
and operation of sub-sea infrastructure
The production sharing contract in- and floating production storage and of-
cludes the SNE and FAN deep water oil floading vessels.”
discoveries. SNE is one of the largest
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 83
AFRICA DOWN UNDER PREVIEW
Turner acknowledged in mining
Many in African mining cir- “...the quality of the resources in the
cles would be familiar Copperbelt and the meaningful connection
with the work of Bill Turner and we had been able to establish with local
would recognise the valuable communities encouraged us to stay the course.
contribution he has made to less than $1 million into the Democratic ing to a requisition order issued by the
the sector and international Republic of Congo (DRC) (or Zaire as it Governor of Katanga to provide vehicles
relations; now the Australian was called at the time) in 1995. to the DRC military in 2004 (under the
Government has recognised force of law), in order for the military to
his efforts. Turner has certainly come through the suppress a rebel action. The approach
“school of hard knocks” and can recount by the military was later shown to have
It is fitting, now that Turner numerous situations where he and his been unnecessarily heavy handed, for
has taken a step back from the comrades were stuck in very challenging which they were prosecuted.
various roles he has fulfilled situations, including a chopper crash in
in mining, that Paydirt can 2004. “Having weathered a military coup, a
reflect on the achievements three-year civil war, the assassination
made by one of Australia’s There was also the awful, unfounded of the President and a terrible military
mining pioneers on the Afri- accusations against Anvil for respond- incident, there were many times when
can continent. we felt; this is simply too much,” Turner
commented. “However, the quality of
Knowing Turner, such adu- the resources in the Copperbelt and the
lation would be dismissed, meaningful connection we had been able
as the man himself credits to establish with local communities en-
his successes to the people couraged us to stay the course.”
around him, particularly his wife Wendy.
One regret Turner had, however, was
“Having a wife and family who have that during those challenging years, when
provided enduring support, particularly progress was slow, he did not spend
during the difficult years, has been most more time learning French. After all, he
important. That support provided me had studied French for four years at high
with the home-based enabling environ- school and had a reasonably good ba-
ment to keep on going when the going sic understanding of the language. For a
got tough,” Turner said. company operating in the DRC and listed
in Canada, that would have been helpful.
Turner was speaking to Paydirt in light
of his most recent accolade; a spot on Instead, it was the rocks which brought
the Queen’s Birthday Honours list for him to the Central African country. An
2016. The 68-year-old was named as interest in basic sciences during high
an Officer of the Order of Australia in school led Turner to geology at university
the General Division, which recognises and it was there that his passion for min-
people for “distinguished service of a ing started.
high degree to Australia or to humanity
at large”.
Few could argue the impact Turner has
had in nurturing relationships between
Australia and Africa in a mining context,
with combined social and economic de-
velopment at the heart of his motives.
In true Turner style, he is quick to play
down his efforts and replies humbly
when congratulated on being honoured
by the Queen.
“It is a nice thank you for what I have
been able to do, but it really reflects the
efforts of other people that I have been
involved with,” he said.
Of course, Turner’s achievements
were not realised single-handedly, how-
ever, few people have gone to the lengths
he has in order for people to thrive inside
and outside the mine gate.
Travelling to a remote African explo-
ration site today can be an overwhelm-
ing experience but is relatively simple in
comparison to when Turner first took An-
vil Mining (formerly KKR Resources) with
PAGE 84 AUGUST 2016 AUSTRALIA’S PAYDIRT
It was a passion which took him across acquisition of Anvil for $US1.3 billion in operating centre.
the world; his 41-year career in explora- 2012 to mark a handsome corporate win “It was then that I felt that we had not
tion and mining saw him experience con- for the shareholders of the latter, howev-
ditions and lifestyles in the UK, Iran, Ka- er, what gave Turner his greatest sense only achieved a certain level of technical
zakhstan, Indonesia and Australia. of accomplishment in the DRC was what success, but that we had also been able,
Anvil had been able to achieve for the through appropriate capacity-building
So, when he came across an old Con- Congolese people. work, to incorporate DRC nationals into
golese prospect – Dikulushi – with 7% the business activity, in a very meaning-
copper and 6.5 oz/t of silver outcropping, “The most satisfying moment of my ful way. Rob Barron was the training of-
the geologist in Turner knew this was an career was the day
opportunity not to be missed. in mid-2011 when
we invited the Gov-
The remote project was eventually ernor of Katanga
brought into production for just $US6.2 and the President of
million. Gecamines to visit
the nearly-complet-
“[It was] the defining moment in my ca- ed Kinsevere SX-
reer, an open pit mine with a HMS pro- EW copper plant;
cessing plant, producing a concentrate a US$400 million
grading 37.5% copper and 900 g/t silver project designed
in a very remote part of the DRC for just to produce 60,000
$US6.2 million,” Turner said. tpa of cathode cop-
per,” Turner ex-
“That’s when we knew we were on the plained. “When we
way to becoming a meaningful mining all stepped into the
company.” control room at this
almost-completed
Dikulushi’s development was led by modern facility,
New Zealand mining engineer Mike there were two DRC
O’Sullivan, for whom Turner retains “the nationals sitting at
greatest respect”. Indeed, the two are the computers, flip-
still connected in the minerals game with ping from one fancy
a private start-up company in New Zea- piping/instrument
land developing a technology for remov- chart and flow dia-
ing silica from geothermal waters to pro- gram to another, as
duce colloidal silica and to optimise the if they had been do-
power generating capacity of geothermal ing so all their lives.
power stations. They went on to ex-
plain in great detail
Turner, O’Sullivan and Independence how this modern,
Group NL chief executive Peter Bradford world-class plant
(previous managing director of Anvil) worked and how
are all involved in this technology de- they were going to
velopment and believe it can be applied control it from this
around the world.
Over the past two-and-a-half years,
successful pilot plant testing has been
conducted at two geothermal sites in
New Zealand, while a new pilot plant is
currently being constructed in Japan.
Operating in Japan and New Zealand
doesn’t offer the same challenges as the
first time the three executives teamed up
in the DRC.
Amid the turmoil of Laurent Kabila’s
ascent to the presidency over Mobutu
Sese Seko, feint-hearted investors de-
parted the country, however the thought
of fleeing with the others was not consid-
ered an option for Turner and his team.
It was during the subsequent tumultu-
ous period that Turner established valu-
able political capital by, as he explained,
“doing things for employees, people and
the community, when you really don’t
have to. Then, when you really need
some support, it will probably be there
and for the right reasons.”
It is hard to argue with Turner’s philo-
sophical approach, particularly when it
comes to mining in Africa.
MMG Ltd eventually completed the
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 85
AFRICA DOWN UNDER PREVIEW
ficer who had largely been responsible fully, listening properly, and un- to that often hard-won success,” Turner
for this positive outcome.” derstanding the human condition says.
in impoverished communities,
Such feats are examples of why Turner rather than being big-hearted and “Furthermore, in impoverished coun-
was the ideal man to be a founding di- over-generous with handouts, tries, economic success has occurred
rector (along with Bill Repard and Rick that in time, simply prove to be in and around newly-developed mining
Yeates) of the Australia-Africa Minerals unsustainable. operations, with generally limited geo-
and Energy Group, the peak industry graphic spread. Because of the lack of
body led by Trish O’Reilly, representing “One must have a capacity to financial capacity of host governments
Australian companies engaged in the de- feel the dirt through the holes in in impoverished countries, the resource
velopment of Africa’s resources industry. the shoes of those in the commu- industry is often looked on as a substi-
nities we are dealing with.” tute for government, with the inevitable
It is through AAMEG that Turner has expectation that what the Government
been able to transfer his knowledge of Above all, Turner urges compa- cannot provide, the resource companies
the sector and his experience to other nies to show tenacity and not give will. Managing this kind of expectation
aspiring men and women wishing to up when the going gets tough, can be very challenging for resource
make a difference in Africa. because there will be many companies.
times, particularly in Africa, when
And for those aspirants, Turner has disappointments will threaten to “Furthermore, handouts inevitably cre-
some worldly advice. discourage people from pursuing ate a sense of dependency, unless of
their ambitions. course they are in response to an emer-
“Be connected with others who have gency situation or natural disaster. The
worked in Africa before you, and also “A well thought-out strategy, best thing we can do for impoverished
with those who are currently working tenacity, persistence and mean- communities is to build the capacity of
there. Africa has political, social and cul- ingful engagement do have their their people to stand on their own feet so
tural issues that will be unfamiliar and rewards,” he said. that they can do the things they should
there is no sense in repeating the be able to do for themselves, and want to
mistakes of those who have gone Coming from Turner, whose 41- do for themselves. That way, local com-
before you,” Turner told Paydirt. year career in exploration and mining munities also become more useful to
saw him experience conditions and life- industry. It’s about shared benefits and
“These political, social and cultur- styles in the UK, Iran, Kazakhstan, Indo- shared values; doing things for commu-
al issues sit well above competition nesia and of course Australia, it is timely nities that are also of benefit to industry.
and the more Australian resource advice for African-focused companies That makes this activity sustainable.
companies collaborate, the better trying not only to navigate low commod-
the Australian industry as a whole ity prices, but also continued political un- “Combining social development, ca-
will be positioned to deal with them. certainty in some jurisdictions. pacity building and business activity can
The Australian brand has a good Turner believes the headwinds for min- build sustainable communities. This is
reputation in Africa and we should ing in Africa are probably stronger now best achieved through collaboration be-
all be working to enhance this for than when he first went to Africa with tween mining companies, development
our mutual benefit. expectations much raised since the mid- NGOs, bi-lateral and multi-lateral organi-
1990s. sations, other relevant institutions and
Turner added, “You don’t get a In the mid-1990s, not many people felt academia, all pulling in the same direc-
second chance to make a good first that success was possible, particularly in tion,” Turner said.
impression. The approach used countries recently emerging from long-
when first engaging with local com- running conflicts. Turner remains an influential figure,
munities is of utmost importance. “With success comes the inevitable and will be for a long time yet, in strength-
And in the beginning, it is much feeling of ‘I want some of that too’, not- ening Australia-Africa ties for the better-
more about engaging meaning- withstanding that the person, govern- ment of people across both borders.
ment official or company expressing this
feeling may not have been a contributor However, after more than four decades
experiencing the highs and lows of the
mining game and taking each
challenge and achievement in his
stride, the next chapter for Turner
and his family is under way.
A proud owner of a traditional
British sports car, Morgans, Turner
is enjoying leisurely trips away with
wife Wendy in his beloved vehicle,
while embracing the joys of grand-
parent-hood also.
The adventurous spirit in Turner
has seen him travel to Cuba, Ecua-
dor and Peru most recently, how-
ever, the bucket list is far from com-
plete, with a walk across England
(just south of Hadrian’s Wall) and
visits to the Arctic, Greenland and
Iceland (again) in the pipeline.
– Mark Andrews
PAGE 86 AUGUST 2016 AUSTRALIA’S PAYDIRT
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Predicting discovery success
in Cote d’Ivoire
Predictive Discovery Ltd managing di- “There’s a lot of action 32m @ 1.9 g/t gold.
rector Paul Roberts has multiple rea-
sons to be excited about his company’s in this belt, so we think Bobosso was exten-
chances of a major gold find in Cote
d’Ivoire. there’s plenty more sively drilled by Equi-
Encouraging exploration results from news to come,” Roberts gold and Lihir Gold
three of the company’s projects in the
country have triggered a 350% lift in Pre- said. “There’s certainly in the late 1990s and
dictive’s share price and offered a glim-
mer of hope for other West African gold some indications here early 2000s, but Rob-
juniors.
at Boundiali – and it’s erts is convinced there
Those results include the first assays
from the recent 3,000m RC drilling pro- no more than that at is plenty more gold to
gramme at the Boundiali project, includ-
ing intercepts of 28m @ 4 g/t gold from this stage – but this is be found. If so, it could
3m (including 1m @ 49.7 g/t) and 14m @
5.5 g/t gold (including 1m @ 31.6 g/t) at definitely an interesting be a potential source
the Nyangboue prospect.
place to have a good of cash flow for Predic-
Other leading intercepts from the first
eight holes drilled by Predictive’s JV part- look at.” tive.
ner Toro Gold Ltd were 20m @ 2 g/t gold
from surface and 6m @ 3.3 g/t gold from Predictive’s Kokoum- “We see the oppor-
47m. Visible gold was also panned from
the drill chips. bo project has also re- tunity for early produc-
Roberts, an exploration geologist turned some impressive tion from colluvial gold
who was instrumental in the discovery
of the Henty gold deposit in Tasmania, drilling results in recent and we are currently
described the initial drilling results at
Nyangboue as “out of the box”. times, including a best doing metallurgical test
“The first results at this Nyangboue tar- intercept of 7.5m @ 16 work on samples which
get are absolutely greenfields, as green-
fields as you’re ever going to get,” Rob- g/t gold from surface we’ve taken to see if
erts told Paydirt.
(including 1.5m @ 74.2 we can get good gold
“There’s no people there, there’s no g/t from 6m) from the Predictive and Toro Gold are jointly recovery out this mate-
artisanal miners there, nobody knew the first hole drilled from the exploring multiple projects in Cote rial,” Roberts said.
gold was there. It’s what exploration ge- most recent 1,600m RC
ologists hope for, this type of greenfields d’Ivoire, including Boundiali “There’s also a large
play. The scale of it we don’t know yet,
we’re waiting for more drill results, but campaign. alteration gold mineral-
those first results were excellent.
Other promising hits from Kokoumbo ised system sitting underneath there and
“I think other industry players who are
watching us have realised, particularly include 4.5m @ 3.4 g/t gold from surface what we need to do is a diamond drilling
in February when we put out some infill
results, this is a very good soil anomaly and 1.5m @ 14.9 g/t gold from 87m. The programme to delineate it, and we would
that we’re chasing at Boundiali.”
mineralised zone is reportedly open to hope to do one either with Predictive
According to Predictive, the initial hits
at Nyangboue appear to be from sepa- both the east and south. funds or with JV funds sometime in the
rate but adjacent mineralised zones on
one drill cross section across a 2km-long “There’s a long history of artisanal min- next 12 months.”
strong and coherent gold-in-soil anoma-
ly. ing here, which is in complete contrast to Despite being one of the first compa-
Boundiali is believed to be part of a Boundiali, but there’s still a couple of big nies to be granted exploration permits in
two-pronged greenstone belt which also
hosts the Syama and Sissingue mines anomalies there which we’re pretty ex- Cote d’Ivoire under the revised mines ad-
to the north in Mali and the Banfora and
Tongon deposits to the north-east in cited about,” Roberts said. ministration in 2013, Predictive was un-
Burkina Faso.
“It’s quite a small area that we’ve drilled able to get serious about exploration in
so far, so we’re only at the beginning of a the country until Toro came to the party
story here at Kokoumbo. We really don’t with a funding solution 18 months ago.
know where it’s going to end. We really Prior to that, Predictive’s focus was in
like this anomaly and we’re keen to see Burkina Faso, specifically the Bongou
some more drilling done here by the JV. project where a resource of 1.13mt @
There’s certainly more potential.” 3.75 g/t gold for 136,000oz (based on a 2
The Predictive-Toro JV covers six g/t cut-off) was defined in late 2014.
granted permits and two permit appli- Activity at Bongou has been minimal
cations in Cote d’Ivoire, including the since a drilling campaign wrapped in July
Boundiali and Kokoumbo projects. Toro 2015, but Roberts said his company was
currently holds 49% of Predictive’s Cote seeking a partner for the project, with the
d’Ivoire subsidiary and can earn another aim of completing a scoping study in the
14% by spending $2.5 million. Predic- near-term.
tive has previously flagged its intention “Bongou would make a terrific starter
to contribute to ongoing exploration ex- pit,” Roberts said. “We need to do a rea-
penditure when Toro achieves 65% eq- sonable amount of work to get there and
uity. that’s why we think bringing in a partner,
Predictive has been sole-funding ex- particularly a partner with mining exper-
ploration Bobosso – a former Newcrest tise, would be a good idea, so that’s what
Mining Ltd project – which hosts a 7sq we’re pursuing.”
km soil anomaly averaging 0.4 g/t gold. – Michael Washbourne
Historic hits include 5m @ 21 g/t gold and
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 89
AFRICA DOWN UNDER PREVIEW
Vital gets moving in Burkina Faso
As the West African gold sec- companies such as Vital to be
tor starts to warm up again, producing eye catching drill re-
Vital Metals Ltd is doing its best sults.
to be the explorer of choice for In addition to Tanlouka, to the
investors. north of Kollo, Vital is also in
Since 2014, the Watershed close proximity to Balogo which
tungsten project in Queensland was bought from Golden Rim
has been ready to go and Vital Resources Ltd by Turkish com-
has been focused on bringing pany MNG for $US8 million.
that on stream, however, poor Meanwhile, to the south in Gha-
commodity prices across the na, Cardinal Resources Ltd is go-
board have stymied that devel- ing gang-busters at the Namdini
opment and held the company project at Bolgatanga.
back from realising the promise “We see the potential to add
at the Kollo gold project in Burki- significant value for our share-
na Faso. holders with this drilling cam-
While tungsten prices aren’t paign and you have got MNG
demanding Watershed be Positive sentiment in the gold market means companies are now at Youga [purchased for $US25
built right now, the gold price – more likely to be rewarded by investors for decent drill results million] over to the east, which
$US1,332/oz at the time of print we’re pretty close to. So, by do-
– has certainly encouraged movement to talk to,” Strizek said. ing some value-add you can start to see
in the sector and Vital has not ignored “People have seen what is happening some pathways to market and ultimately
these signals. in West Africa and there is a real appe- you have to do the drilling and testing
When managing director Mark Strizek tite. People have been looking at our drill and who knows what comes out; some-
spoke to Paydirt last month, a round of results and know there is a programme thing might end up standing alone on its
RC (2,000m) and diamond drilling was pending, so I guess everyone wants to own two feet,” Strizek said.
set to start. get in on the action.” “There is a fantastic window that is
The aim of the planned 20-hole RC Despite the commodity downturn, Vital opening and I think that is the key; min-
programme is to test infill and exten- was one of the companies to have main- ing moves in cycles and potentially we
sional targets around existing high-grade tained its ground holdings in Burkina are one of the ones moving at the front in
intercepts, including 5m @ 60.36 g/t gold Faso during a lean time for explorers, terms of where we are, as we are follow-
from 75m, 18m @ 2.95 g/t from 37m, 4 and now the tide appears to be rising ing not too far behind people like West
@ 18.7 g/t from 76m and 15m @ 17.78 again, Strizek believes the company is African and similar companies. It is excit-
g/t from 105m. well placed for the up cycle. ing times for us.”
Gold mineralisation reportedly extends He said there were an estimated 300 In the current market, investors are
variably over a strike of 4km, with recent tenements that had been dropped in more likely to reward companies for drill
auger drilling indicating there is potential Burkina Faso in the last couple of years, results and Vital is eager to know more
to extend strike to at least 6km. meaning there was a lot of potential in the about what it has at Kollo.
Strizek said that as work was complet- country for Vital and others to consider. Gold is definitely the focus for Vital at
ed at Kollo, it was becoming more appar- With the likes of fellow ASX-listed ex- Kollo, however, a kicker for investors to
ent that the company potentially had a plorer West African Resources Ltd set- consider is the zinc potential.
big system on its hands. ting the region alight – that company is It is very early days on the zinc side of
And the company’s message is not be- bullish it can have a 145,000 ozpa CIL things, but with the skill set and knowl-
ing lost in the market. project permitted at Tanlouka by the end edge base garnered from bringing the
“I’ve never had a fuller table of brokers of the year – it is an opportune time for Watershed tungsten project to develop-
ment stage, Strizek said there were in-
house capabilities to leverage from at
Kollo.
“We have to extract value for share-
holders [where we can] and as we see
zinc starting to run hot we look at Perkoa,
which is in country and is running, and
there may be potential for some sort on
pre-concentration [of zinc] on site and
road training the high-grade concentrate
to those guys. Definitely it is high-level
stuff, but something that could be done,”
he said.
– Mark Andrews
Vital hopes to be as active as the artisanal workers at Kollo
PAGE 88 AUGUST 2016 AUSTRALIA’S PAYDIRT
AFRICA DOWN UNDER PREVIEW
Avenira secures first off-take
With first production fast ap- in the bank, ensuring the com-
proaching, Avenira Ltd has pany will be funded up until the
secured its first major off-take start of production.
contracts for the Baobab rock The strong cash position is a
phosphate project in Senegal. result of a vital capital injection
Avenira confirmed last month from one of Avenira’s project
it has signed rock phosphate partners, prominent West Afri-
supply agreements with to inter- can agribusiness Groupe Mim-
national fertiliser companies for ran, earlier this year.
240,000-360,000 tpa off-take “There’s plenty of cash in the
under a three-year term, which company, so we’re not short,”
can be extended at the option of Lawrenson said. “This wasn’t
both parties. done on a ‘just in time’ funding
Product will be delivered from basis and we deliberately didn’t
Dakar port, with off-take pricing do that because we were min-
to be based on the global mar- ing for the first time.
ket pricing for equivalent rock “For us, having some capac-
phosphate product and set for First production at Baobab is set to begin later this year ity from a funding point of view
semi-annual periods. we do see as essential, not a
It is expected Avenira will announce cence, Avenira is focused on a 5sq km luxury, but it does give us some flexibil-
further off-take contracts before produc- permitted area of the project, contain- ity.”
tion at Baobab begins later this year. ing 12.6mt @ 21% P2O5 of indicated While gold and lithium stocks have
Avenira managing director Cliff Law- resources and 16mt @ 20% P205 of in- taken massive strides in the first half of
renson said securing first off-take vindi- ferred resources. 2016, rock phosphate prices have held
cated his company’s decision to acquire Lawrenson said his company, previ- firm at $US115/t for the past six months,
the project 15 months ago. ously focused on the Wonarah phos- bucking the trend of many other com-
“Getting people to commit to buy our phate project in the Northern Territory, modities, including potash.
product is pivotal in any resource-type had embraced the transition from ex- “The long-term fundamentals for nutri-
play and so we’ve spent a lot of time with plorer to developer to now impending ents, particularly phosphate, have never
our potential off-take partners,” Lawren- producer. changed,” Lawrenson said. “The bottom
son told Paydirt.
“We think it’s wonderful and we urge, line is people have to eat and in order to
“We’ve announced MoUs along the especially third party people, to look feed the world we have to provide nutri-
way, we’ve taken them along and we feel carefully at what we’ve done and how ents.
we will be welcomed into the industry be- we’ve deliberately gone about what we’re “There are three primary nutrients –
cause we’ve earned our space. We’re not doing and how we’ve contentiously de- phosphate, potash, nitrogen – and while
a big producer – 500,000 tpa to start with risked this project,” he said. you might not see spectacular move-
– so we’ll earn our place in the market “The capital intensity of this project, ments like in lithium, phosphate will be,
and we’ll grow from that level.” in the phosphate space, is extremely in our view, a steady performer with ex-
Mining and construction activities have low. There’s no other project going into tremely strong fundamentals beneath it.
been ongoing at Baobab, 145km from production with anywhere near this low “The world continues to grow, con-
Dakar port, since March. capital intensity as this one and that’s be- sumption patterns are changing and peo-
Under the conditions of its mining li- cause of the nature of the orebody and ple are demanding more and more nutri-
the beneficiation pro- ents. The only way you can do that is to
cess we’ve selected. provide nutrients and we are fortunate to
“We realise going be part of that story.”
into production comes Meanwhile, Avenira has added UK-
with its own risks, but based mining executive Christopher
in our recruiting we’ve Pointon, a former geologist with Rio Tinto
been very contentious Ltd and BHP Billiton Ltd, to its board as
about hiring both con- an independent non-executive director.
struction people and “Chris is a very strong mining execu-
operating people in tive who has an impeccable track record
Senegal, so we don’t in the space,” Lawrenson said.
see there being a big “We do think the UK will become an
change. In fact, it will important market for shareowners, but
be gradual change how that plays out we’ll wait and see.”
rather than a step – Michael Washbourne
change.”
Avenira, formerly
known as Minemakers,
Mining has been ongoing at Baobab since March has almost $25 million
PAGE 90 AUGUST 2016 AUSTRALIA’S PAYDIRT
COMING IN THE
DECEMBER EDITION OF
OUR OFFICIAL FULL
INDABA PREVIEW
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AFRICA DOWN UNDER PREVIEW
Sundance looks for con note
breakthrough
Abalance sheet restructure will see a reduction in capex of
provide Sundance Resourc- perhaps 20-30%.”
es Ltd with the platform it needs Investor sentiment is also
to get its Mbalam-Nabeba iron showing signs of shifting. Af-
ore project back in front of finan- ter a dire three-year period
ciers and investors. for iron ore spot prices, many
Sundance announced on June analysts are calling a bottom
6 that advisory firm RFC Ambrian to the market and Casello is
would assist the company in as- prepared to take heart from
sessing its capital restructuring any sign of optimism, no mat-
options with the embattled iron ter how small.
ore developer facing $US93.5 “Twelve months ago iron ore
million of convertible note dead- was at $US70/t but there was
lines by September 23, 2017. no enthusiasm for the project
RFC Ambrian has brought in because – even though it was
former Glencore head of iron ore profitable at those levels –
assets, Mark Eames, to lead the Mbalam-Nabeba is considered to be in the top tier of iron ore everyone expected the price
advisory process. projects to be developed when the iron ore market turns to fall further. But now, the
Sundance managing director market appears to have found
Giulio Casello told Paydirt that Eames’ is also trying to redraw plans for Mbalam- the bottom and even though it may take
experience would prove invaluable to the Nabeba’s development. The project – a few more years before the uplift, it is a
company. which straddles the Cameroon-Republic different sentiment looking up rather than
“Mark has done work on every iron ore of Congo border – was hailed as one of heading down towards $US70/t.”
development project in the world and he a new generation of African high-grade He said such a climate meant investors
believes Mbalam-Nabeba is in the top iron ore projects at the turn of the decade were more willing to consider an iron ore
tier to be developed when the iron ore but like peers in Sierra Leone and Guin- project which is not set to come online
market turns,” Casello said. “In order ea, its development plans were wrecked until 2021 at the earliest.
to achieve that, Sundance needs to be by climbing capex requirements and a Having spent most of its funding hunt in
prepared to bring the project on as and cascading iron ore spot price. China, Casello believes Sundance may
when the opportunity arises. The com- Sundance reduced its own capex find other alternatives this time around.
pany has to structure its capital to ensure requirements last year by offloading “There is historical baggage in China
its survival over the next one, two, three responsibility for the $US3.5 billion re- because of the Hanlong saga [which saw
years or until the project is ready to go.” quired for 510km of rail plus port facili- the Chinese group back out of an acqui-
The company raised $4.3 million ties to the Cameroon Government. The sition deal in 2013] and we are starting
through an entitlement offer in March Government will ultimately own 98% of to look at alternatives other than China
which is enough to secure its short-term the 35 mtpa port and rail infrastructure, for funding. The sentiment for alternative
financial future but a balance sheet re- leaving Sundance with a 2% stake. sources is still very tough but it is chang-
structuring is essential if survival is to be However, with iron ore prices remain- ing.”
ensured. ing in the doldrums, neither party has One option could be the increasingly
Casello said Sundance and RFC Am- found the requisite appetite in debt or common equity participation of service
brian had started preliminary discussions equity markets to fund the big-ticket de- providers desperate for new work.
with the convertible note holders and all velopment. “All service providers are looking at
expressed their desire to “do something”. Opportunity is beginning to re-emerge such deals because equity plays are be-
“Actual terms may vary between in- according to Casello. He said a reduction coming more attractive for service pro-
dividual note holders but in input costs and a slightly viders as they begin to declare the bot-
there is a consistent view brighter outlook for iron ore tom of the market,” Casello said.
that to get their money back meant Sundance and RFC The company will also have to ensure
Sundance needs to be Ambrian were confident both host governments remain behind its
prosperous,” Casello said. capex figures for Mbalam- plans. Casello said he was comfortable
“But Sundance sharehold- Nabeba could be reduced. with the relationships.
ers have to win as well.” “We are relooking at “Both governments have been out-
He said the capital re- our capital and internal standing and very supportive of us and
structuring planning would structures,” he said. “The the project,” he said. “I was in both coun-
continue and was hopeful evidence is there that the tries in June and they still really want this
of an outcome before the construction should be project developed.”
end of 2016. cheaper. Mark Eames is – Dominic Piper
Meanwhile, the company Giulio Casello very confident we should
PAGE 92 AUGUST 2016 AUSTRALIA’S PAYDIRT
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AFRICA DOWN UNDER PREVIEW
West Wits formulates first
mining plan
West Wits Mining Ltd believes an up- Illegal mining is rife on West Wits’ Soweto Cluster project but the company believes its
coming small mining programme impending short mining campaign can deliver environmental and social benefits to the
could provide a model for future exploita-
tion of resources across its Soweto Clus- Soweto community
ter project in South Africa.
The payable rate per tonne is based on defined resource areas within the Sowe-
West Wits announced in June it the equivalent of 0.6 g/t gold. to Cluster project.
reached agreement with the South Afri-
can Department of Mineral Resources to “This would equate to around $US25/t The area, on the edge of Soweto town-
undertake a short mining campaign on taken at $US1,300/oz gold,” Quinert ship, Johannesburg, is wracked with
the Sol Plaatjies project within the Sowe- said. “Our consultants are currently ana- environmental legacy issues from more
to Cluster prospecting right. lysing, in conjunction with the contrac- than a century of gold mining and the
tors, proposals for expanding the project community is also experiencing tension
The campaign will see West Wits mine even further as the data is indicating wid- from the arrival of illegal miners, or zama
1,500m of exposed Kimberley Reef out- er sections of the reef are worth taking. zamas, who are keen to get their own
crop to a depth of 30m before sending As such there is scope for a significant hands on the remnant ore.
the mined ore to a nearby processing
facility. expansion of the Sol Plaatjes has been chosen for the
Sol Plaatjies project first trial project because of the extensive
West Wits executive chairman Michael over that outlined presence of zama zamas and Quinert
Quinert told Paydirt the company ex- above.” has previously heralded the Government
pected to start mining by the middle of and community support the company’s
this month. Following mining plans have garnered.
of the reef, the com-
“In anticipation of starting, the contrac- pany will progres- “There is a big illegal mining presence
tors have on their own initiative and with sively rehabilitate in the area and the DMR has identified it
their own funds already started signifi- the area to allow the as a problem and it is a good target for us
cant preparatory works at the site includ- landowner to start so it suits everyone to start there,” Quin-
ing pre-stripping,” Quinert said. development of an ert told Paydirt earlier this year.
affordable housing
Under the agreement, the contractor project which will He said by focusing on the most easily
will pay West Wits for each tonne of ore incorporate open winnable, near-surface resources, West
removed after recovery of mining, pro- parkland over the Wits could develop a low capex opera-
cessing and general costs. mined-out areas. tion.
“As such, the more they take, the more If the project “The first targets we are looking for are
they pay. The first stage plan from the proves successful, those where mineralisation is outcrop-
main contractor provides for the remov- West Wits thinks the ping at surface, many of which are run-
al of around 130,000t over 12 months same model could ning at 4 g/t gold. They provide an ob-
and indications are that at least another Michael Quinert be applied to other vious opportunity for simple, clean slot
50,000 further tonnes are available in the mining where you can take a 15-20m
second stage.”
PAGE 94 AUGUST 2016 AUSTRALIA’S PAYDIRT
shelf out to expose the reef, mine it and
then rehabilitate by backfill.
“You could contract out most of the
work and there are plants all around us
through which we could toll-treat. That
means we are not spending the capital
and we can generate cash flow, allow-
ing us to avoid going back to the market
but still keep going until we develop a full
mine plan for the entire lease.”
Quinert said the signing of the agree-
ment with the landowner and the DMR in
June demonstrated “the growing spirit of
co-operation” between the various par-
ties.
“The company is confident Sol
Plaatjies will provide a pilot project mod-
el for several similar opportunities across
the Soweto Cluster area where Witwa-
tersrand reef are still in situ,” he said.
West Wits has undertaken trenching
and sampling across Sol Plaatjies and
other targets across its Soweto Cluster
lease which was among the most pro-
lific gold-producing areas of the Witwa-
tersrand Basin in the 1980s.
Quinert said the results of the explora-
tion work would be collated ahead of the
finalisation of the project plan-of-works.
Cash flow from Sol Plaatjies will allow
West Wits to pursue its greater develop-
ment goals with geological consultants
Shango Solutions having already un-
dertaken a detailed review of the entire
tenement package, including extensive
historical maps and data.
“Targets have been prioritised for dis-
creet exploration work to fill in the gaps
and accelerate the resource generation
process,” Quinert said. “Sol Plaatjies West Wits plans to exploit the remnant near-surface resources across the old Rand
is the catalyst for the realisation of our and DRD leases on the Witwatersrand Basin
broader plans at Soweto. The progres-
sion of these plans should provide a decades but many have failed to find an estimates and their opportunities to be
steady flow of updates over the course of economic path to development. developed in the current environment,”
the next 12 months.” West Wits’ strategy is to focus on shal- Quinert said.
West Wits has several similar histori- low remnant resources which will require “This is an exciting time for West Wits
cal mining areas on the Soweto Cluster little capital for development. as we progress towards the completion
project and will likely move onto multiple In June, the company released updat- of mining studies on several of our prior-
targets once Sol Plaatjies has proven the ed resources for the Marquis and Radi- ity projects.”
model. ant projects, adding 114,000oz gold to Exploration has been recently focused
““We will probably look for the flexibility the global resource at Soweto which now on the 11 Shaft target on the Rand leas-
of five or six targets,” Quinert said. es. The Bird Reef package was
“If we can keep that many faces These leases could previously mined in this area via
open, using manual mining at shal- open pits on both sides and from
low depths feeding one central mill, turn into a 100,000 underground on the 7 Level. Drill-
then you are de-risking by diversify- ozpa producer over 10 years. ing in April revealed extensive un-
ing the resource. mined reef on the ground with 13 of
“These leases could turn into a 14 holes drilled returning reef inter-
100,000 ozpa producer over 10 sections, Quinert saying the results
years,” Quinert said. “But for that to hap- stands at 12.3mt @ 3.36 g/t for 1.33 moz vindicated West Wits’ strategy.
pen West Wits will have to gear up which gold, including 884,800oz in measured – Dominic Piper
would require significant re-skilling and and indicated categories.
restructuring of the company.” “The continued growth of the resource
The remnant resources across the base on the Soweto project validates the
Witwatersrand have proven enticing to a company’s strategy of detailed investi-
number of junior miners over the last two gation of historic and previous resource
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 95
REGIONAL ROUNDUP LATIN AMERICA
Debutant powers into Chile
Less than a month after be- public float accordingly.
coming the ASX’s newest “We positioned ourselves
resources entry, Lithium Pow- as a pure-play lithium explorer
er International Ltd (LPI) has which is diversified between
added another project to its both hard rock lithium in Aus-
portfolio. tralia and the lithium brines in
LPI has entered into a bind- South America to give inves-
ing and exclusive agreement tors exposure to both types of
with Minera Salar Blanco to deposits,” he said.
co-develop the Maricunga “I believe our structure, our
lithium brine project in north- strategy, our team and also
ern Chile. the capital and the support
With an initial measured re- we had behind the company
source of 574,064t lithium car- is very strong all the way
bonate and an expected mine through, so we never ques-
life of more than 20 years, tioned not doing a clean IPO.
Maricunga is regarded as the The company was very well
leading undeveloped lithium supported financially, very
brine project in Chile and New ASX listing Lithium Power International has entered into a well supported from a tech-
shares a number of similarities JV over the Maricunga lithium brine project in Chile nical point of view and had
to SQM’s Atacama deposit. a very well supported asset
LPI listed on the ASX on June 24 with of current issued capital) and a seat on base to get it through that IPO in June.”
lithium projects in Western Australia and its board. Despite LPI gaining access to a lead-
Argentina, however, the company devel- LPI will also provide Minera Salar Blan- ing South American lithium project, Hol-
oped strong ties with Chile in the lead-up co with a $US2 million secured loan to land insisted there would be no change
to its IPO and could not turn down the op- fund initial exploration activities, includ- to the company’s plans for its two Aus-
portunity to develop an asset in a country ing 16 diamond holes to be drilled in Sep- tralian assets at Pilgangoora and Green-
chief executive Martin Holland described tember, during the due diligence period. bushes.
as “the home of lithium”. Holland said the upcoming explora- Stuart Peterson, who previously
“We looked for the closest to produc- tion programme, which will also include worked for Mineral Resources Ltd on the
tion, highest-grade lithium deposit in drilling of two pumping wells, was aimed Mt Marion lithium project, recently joined
South America and we got around to at expanding the resource, which also LPI as the company’s Australian-based
identifying the Maricunga project,” Hol- contains more than 15mt of high-grade exploration manager. Murray Brooker, a
land told Paydirt.
potash. technical consultant for ASX-listed Ar-
“There’s talk about this being very stra- “Lithium is classified as a strategic gentine lithium producer Orocobre Ltd,
tegic not only to Chile itself, but also the mineral in Chile and if the tenements will oversee the South American pro-
world and we believe this project will be were granted after 1979 you need to get grammes.
able to supply to all the major companies a special licence from the Government,” “We’re not slowing down at all when
as the demand for lithium grows. Holland said. it comes to the Australian tenure,” Hol-
“We’ve done some further independ- “Fortunately, a number of tenements land said. “We acquired all our WA as-
ent research reports on this project and on this portfolio were granted under sets prior to the recent lithium boom and
they classified it as the fourth best pro- the 1932 code – the old code – so we hence we’ve gained quite a bit of acre-
ject in the world when it comes to lithium. have the ability to exploit lithium from the age around good projects before the
They also believe with further capital, ground, which was another milestone for boom actually kicked in. We still believe
and as we move closer to production, it us.” that LPI represents a compelling growth
will become the second best deposit in LPI is just the second new resources story that can now be examined clearly
the world outside of Atacama.” entry on the ASX this year after IMX Re- by the market.
Under the terms of the proposed JV, sources (now Indiana Resources Ltd) “We want to be viewed as a pure-play,
LPI will fund exploration and develop- spinout Graphex Mining Ltd. The lithium diversified lithium explorer and devel-
ment costs over the next 2.5 years, when hopeful raised $8 million via an IPO oper. Our strategy all along was not to
a DFS is slated for completion, to earn and debuted with an opening day trade change from a gold or a copper company
50% interest in the project. of 27.5c/share before surging to 47.5c/ and try and reinvent ourselves.
LPI will hold 50% voting rights from the share at the time of print. “We are a new entry to the market,
start of the JV, with contracts set to be Lithium has been the hottest commod- but there’s been a lot of homework, a lot
finalised during October, subject to the ity of 2016, with many cash-strapped jun- of research and a lot of overall analysis
company completing satisfactory due iors exploring existing projects or picking that’s gone into getting to this point and
diligence. up new ground prospective for the metal I hope in time the market will appreciate
Concurrently, Minera Salar Blanco will during the first half. that and see the value in Lithium Power.”
sell the options over the San Francisco, Holland said his company first looked – Michael Washbourne
Salamina and Despreciada tenements at lithium when the price was $US4,000/t
for 16 million ordinary LPI shares (14.3% more than two years ago and prepared a
PAGE 96 AUGUST 2016 AUSTRALIA’S PAYDIRT
LATINSAVE THE DATE
AMERICA
17-18 May 2017
Perth,Western Australia
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
Kingsrose raises cash
for Talang Santo
Having secured commitments to raise moz silver. However, the immediate fo-
$8.5 million, Kingsrose Mining Ltd cus will be to nail work at the 5 Level.
can start to realise the real potential of
the Talang Santo mine at the Way Linggo “Talang Santo is an outstanding ore-
project in Indonesia. body which can support substantial low
cost production thanks to its high-grades
The two tranche share placement was and access to existing infrastructure, in-
done at 12c/share to existing institutional cluding a fully owned plant,” Kingsrose
and sophisticated investors. chairman John Morris said.
Funds raised will be used for ongoing “The 5 Level haulage shaft holds the
mine development at Talang Santo, in- key to unlocking this value. The combina-
cluding completing the 5 Level haulage tion of the access is this shaft will provide
shaft and establishment of capital infra- the prospect of introducing more efficient
structure. mining methods following the reviews
now under way will maximise our ability
The 5 Level is a key to development at to extract the true value of the project.”
Talang Santo as it will provide access to
the higher grade areas of the orebody, For the year to June 30 2016, pro-
while also providing a platform for under- duction from Way Linggo was below
ground drilling. guidance. A total of 18,641oz gold was
produced, outside the 19,500-21,500oz
Through underground drilling, King- guided.
srose aims to increase the inferred re-
source of 739,000t @ 5.2 g/t gold at the Lower than expected production was
5 Level at Talang Santo, while the funds due to challenges presented by the flow
raised will also allow the company to con- of water into the mine.
duct exploration activities at Way Linggo.
Consultants Mining Plus has been ap-
Reconnaissance work has revealed pointed to review practices at the mine,
three new targets for Kingsrose to fol- with Kingsrose to provide guidance on
low up at Way Linggo, where current re- FY2017 production and costs when the
sources are 1.4mt @ 8 g/t gold and 22 Kingsrose has raised $8.5 million to unlock the review is complete.
g/t silver for 360,000oz gold and 1.01 value of the Talang Santo mine in Indonesia
Philippines stops nickel ore to China
The Philippine Mining Minister has suspended the retrieval of the stockpile who began a six-year term on June 30,
asked Nickel Asia Corp, which is in the interest of keeping that island safe, has warned he could cancel mining pro-
partly owned by Japan’s Sumitomo Metal to address the ecological balance of the jects causing environmental harm, sug-
Mining Co Ltd, to stop shipping nickel ore island,” she said. gesting a tough regulatory road ahead
to China, citing environmental concerns for Philippine miners. Local nickel ore
at the company’s mine on an island along There was no immediate response producers are the biggest suppliers to
the country’s eastern central edge. from Nickel Asia to a Reuters’ request for China.
comment. Lopez said she had recently
The move follows a government audit met with Nickel Asia President Gerard Nickel Asia has four operating mines in
of Nickel Asia’s operations on Manicani Brimo to relay her concern about Mani- the Philippines.
Island, where the country’s top nickel cani’s people and environment.
producer has stockpiled an estimated On July 18 it reported an 11.8% drop in
1.4mt of ore from a closed mine. Lopez said Nickel Asia had already ore shipments in the first half of the year,
shipped about 400,000t of nickel ore in after the monsoon and large sea swells
The audit found that Nickel Asia was batches from Manicani to China. delayed exports.
taking out too much soil in its Manicani
hauling operations and shipping it to Chi- “That’s enough. That’s already a lot of Lopez, a committed environmentalist,
na along with the ore, Environment and money,” she said. has ordered a one-month audit from July
Natural Resources Secretary Regina 8 of all Philippines mines to determine
Lopez told reporters after speaking at a Lopez’ move on Nickel Asia follows whether the industry is hurting the South-
business forum. the suspension of three other Philippine East Asian nation.
nickel miners during July, in a crackdown
“It’s going to disturb the ecology of the that has sent nickel prices to their highest – Reuters
place. What we have done is we have in nearly 10 months over the past week.
Philippine President Rodrigo Duterte,
PAGE 98 AUGUST 2016 AUSTRALIA’S PAYDIRT
ASIA
Bigger Wetar for Finders
With commissioning of its new 25,000
tpa SXEW plant on Indonesia’s
Wetar Island in hand, Finders Resources
Ltd can start to look to the future.
For some years, the company has
been producing and exporting copper
cathode from a small 3,000 tpa SXEW
plant at Wetar and with its latest addition,
Finders has capacity to increase produc-
tion through its new plant and start plan-
ning its next steps.
“Now that we have got the plant up and
running we will be making money and
starting to pay off some debt,” Finders
managing director Barry Cahill told Pay-
dirt.
“We’ll also start looking at our project With the addition of a new 25,000 tpa SXEW plant, production capacity at
development options, so over the next the Wetar copper project is 28,000 tpa
6-12 months we will be releasing some
information on where we are going as we lies and the other four haven’t been ful- tion levels up [from 200 tpm to 500 tpm]
try to increase our production profile and ly tested. Where the Lerokis pit is, that and all things being equal we will get into
take the next step.” anomaly looks like it still might be open a sweet spot in price.”
Concurrent with focusing on commis- in one direction. As well as that, there Finders is somewhat protected from
sioning of the new plant, Finders has are the southern tenements where there any volatility in the copper price, with life-
been undertaking a review of its data have been some good cooper grade in- of-mine C1 cash costs of $US1-1.05/lb
base and plugging gaps where informa- tersections from drilling by previous ex- copper targeted, which puts it within the
tion has been missing. plorers looking for gold. We have some cash cost space Sandfire Resources NL
Cahill said it had taken some time to good copper hits to follow up there, so f is operating in at DeGrussa.
recompile the data base, however, up- the longer term future is all looking pretty Furthermore, the company has an at-
grading it bodes well for Finders in the good.” tractive hedge book in place until March
long run. Although Finders would like to see 2019.
Finders has a number of tenements at some more upside in the copper price “Over 40,000t copper is hedged at over
its 72%-owned Wetar project, giving it – $US4,936/t in mid-July – the immedi- $US5,900/t, so our hedge book looks like
ample opportunity to unearth resources ate outlook for the company is also pretty it has a bit of value in it, so we can start
to give the project a pillar beyond the good. paying down our debt,” Cahill said.
current 10.5-year mine life based on re- Despite mixed messages about which In order to take overall production ca-
serves of 8.9mt at 2.45% copper. way the copper market is headed, Cahill pacity to 28,000 tpa at Wetar by building
“One of the opportunities to follow up is of the view that long-term there ap- the 25,000 tpa SXEW plant, Finders has
is Meron. It basically needs some drilling pears to be a supply deficit. drawn down $US125 million of a $US162
to get it to resource status, but there is “We are pretty happy with the position million senior loan facility, while $US45
definitely some copper grade anomalism we are in,” he said. “We have just started million of equity and debt funding at the
there and there are quite a few others a new plant and we will get our produc- project level has been provided by Posco
around,” Cahill said. Daewoo.
Meron is about 1km According to the
from the leach pads at BFS, the project expan-
Wetar, with exploration sion was estimated to
to date intersecting 37m cost $US132.4 million
@ 1.14% copper, 0.49 (excluding contingen-
g/t gold and 15 g/t sil- cies) and at copper
ver. Step-out drilling is prices of $US6,000/t
planned at Meron where and C1 cash costs of
a 5-10mt exploration $US0.88c/lb, capital
target has been set. payback was projected
Further afield, Ler- to take 18 months, as-
okis is also shaping as suming a production
a highly prospective tar- rate of at least 1,500
get for Finders. tpm is achieved.
“At Lerokis, where – Mark Andrews
our next pit is going to
be, the Lerokis pit area Finders is somewhat of a poster child for mining in Indonesia, with the highest
is one of five anoma- grade copper cathode possible produced at Wetar Island
AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 99
REGIONAL ROUNDUP
Top 10 potential at Salamanca
Work on one of the largest uranium Salamanca is primed to be one of the lowest cost uranium mines in the world
projects in the world is under way
in Spain. contract prices. Assuming the most re- discoveries through exploration and con-
cent UxC forward curve for uranium verting some of the 29.6 mlb inferred re-
In July, Berkeley Energia Ltd had prices remains sustainable, Berkeley has source into the mine plan to ensure pro-
it confirmed that initial infrastructure estimated average annual net profit after duction of over 4 mlbpa is sustained on
works had started at the Salamanca tax of $US116 million. an ongoing basis.
project – anticipated to come online in
2018 – after an independent study con- The upfront capital cost to build the Currently, Salamanca is host to meas-
firmed the assets credentials. project has been estimated at $US95.7 ured and indicated resources of 59.8 mlb
million, with operations at Salamanca which supports 14 years of operations.
“The Salamanca project is capa- expected to create 450 direct jobs and
ble of generating strong, sustainable 2,000 indirect jobs.
cash flow through the low point in the
uranium price cycle. We have com- While development works begin,
menced initial infrastructure works and Berkeley will also look to making new
are aiming to establish the operation
as one of the world’s top 10 producers,
reliably supplying long-term customers
from the heart of the European Union,”
Berkeley managing director Paul Ather-
ley said in a statement.
Atherley expects uranium prices to
remain soft for the next 18 months,
however, from 2018 onwards, US utili-
ties looking to re-contract will coincide
with Chinese reactor demand which
could be the trigger for higher uranium
prices.
Salamanca could be well placed to ca-
ter for that demand and Berkeley in prime
position to generate significant profits
from its uranium business.
A DFS has been based on a 10-year
mine life for production of 4.4 mlbpa ura-
nium at a total cash cost of $US15.06/
lb, which compares against current spot
prices of $US26/lb and $US41/lb term
India gets German potash on the cheap
German potash miner K+S will ship not been officially announced. can buy more from Belarus, ICL and
potash to India at the same decade- The price is a third lower than last year. K+S,” a senior official with a state-run In-
low price that other sellers to the country dian fertiliser company said.
have agreed to, three industry sources Belarusian Potash Company (BPC) and
said in July, at a time when global supply Israel Chemicals (ICL) have agreed to IPL declined to comment on any pot-
of the crop nutrient is exceeding demand. supply potash at the same rate to India, ash contract, while K+S was not immedi-
one of the world’s top buyers of the ma- ately available for the comment.
K+S’s decision could pressure other terial.
key producers such as Russia’s Ural- In mid-July, BPC signed an overdue
kali and North American trading group Uralkali, the world’s biggest potash deal with a consortium of Chinese firms
Canpotex Ltd, owned by Potash Corp of producer, has said the price agreed by to sell potash at $US219/t for 2016, a
Saskatchewan, Mosaic Co and Agrium BPC was too low and it was not yet ready 30% drop from last year.
Inc, to consider offering potash at similar to sign a potash supply contract with In-
prices. dia. Due to weak global demand, fertilizer
miner Mosaic Co has idled production at
Indian Potash Ltd (IPL), one of the But Indian officials said they could not its Colonsay, Saskatchewan potash mine
country’s biggest fertiliser importers, will accept a price above $US227/t since in western Canada for the rest of 2016.
buy 125,000t of potash at $US227/t on a the country has already bought around
cost and freight (CFR) basis with a credit 1.5mt at the price. Prices were as high as – Rajendra Jadhav, Reuters
period of 180 days, the officials said, who $US490/t three years ago.
declined to be named as the contract has
“There is no question of raising prices.
If other suppliers don’t agree, then we
PAGE 100 AUGUST 2016 AUSTRALIA’S PAYDIRT
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