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Published by Paydirt Media, 2018-10-15 23:48:02


October – December 2018 Volume 1. Issue 133
Registered by Australia Post PP 643938/00057

Star earns stripes:

Aussie bounces into US


ISSN 1324-4396

9 771324 439005

Published by Paydirt Media Pty Ltd.
A.C.N. 063 985 133 With the fifth anniversary of the company-making acquisition spree it

EDITORIAL embarked upon in late 2013 approaching, Northern Star continued on
its merry way with its first offshore acquisition – Pogo in Alaska – in
Dominic Piper
October. Pogo will elevate Northern Star to Australia’s second largest gold
Deputy editor: producer. Michael Washbourne spoke to executive chairman Bill Beament
Mark Andrews
about the crux of the deal
Michael Washbourne INNOVATION 30

Art director: The push for innovation in the gold sector is gathering pace. In GMJ’s
Nick Brown
annual innovation feature, we take a look at what industry and services
Keith Goode, companies are doing to ensure the future of gold mining remains
Brendan Ryan (Johannesburg)
A dv erti s i n g
Advertising manager: ASIA-PACIFIC 41

Richa Fuller Generally, ASX gold miners and explorers have looked towards Africa
and Latin America in pursuit of offshore opportunities, often overlooking
Subscriptions: destinations closer to home for various reasons. However, GMJ finds out
Mitchelle Matambo in this edition that a select group of Australian companies appear to be
making sound progress in the Asia-Pacific region
Pay dirt M edia
Executive chairman: Cover image: Northern Star executive chairman Bill Beament at the
Bill Repard Jundee underground mine, Western Australia

Finance manager: CONTACT US
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Namukale Nakazwe-Msiska
Christine Oelschlaeger

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by Paydirt Media staff or provided by other parties


Innovation now at
heart of gold

It may have taken longer than in the simpler bulk commodities, but the road to
automation in the gold mining sector is looking increasingly inevitable.

While Rio Tinto Ltd and BHP Ltd have boasted autonomous haulage and mining
systems for a decade, the gold sector has been more conservative in its adoption of
new methods. However, the last 18 months have seen advances as rapid as anything
since the introduction of carbon-in-leach processing developments in the 1980s.

The current innovation push spans the entire gold mining sector, from automation
and electrification underground, to ore sorting and other processing technologies and
major advances in exploration tools and techniques.

The rapid expansion is in keeping with wider society, where the speed of technological
change continues to gather pace. It is now widely accepted that technological advances
across society are accelerating faster than at any other moment in human history, outstripping even the Renaissance and
Industrial Revolution.

Increasingly, the challenge for gold miners will be to stay on top of these advances, allowing them to pursue the technologies
which are most likely to not only deliver immediate advantages but will also prove to have a lasting effect on the industry.

This edition’s cover story highlights the efforts Northern Star Resources Ltd is going in its pursuit of innovative solutions. In
the early days after its acquisition of the former Newmont Mining Corp and Barrick Gold Corp assets, a change to the badge
on the uniform was enough to reinvigorate the operations. Now, however, it needs to find new ways to maintain growth
momentum in these mature mines.

At Jundee, Northern Star is already employing remote bogging from surface, automated jumbo drilling and 3D underground
drone mapping but executive chairman Bill Beament is not about to allow the company to become distracted about the
reasons for innovation.

“We can be as technical and innovative as we want, but unless it does it quicker, faster and cheaper per ounce, then
it doesn’t really mean crap,” Beament says in our cover story. “For us, it has to have an end result that improves our
productivity, improves safety and lowers our unit cost per ounce, otherwise we’re not interested.”

Beament could have also added desirability to those factors, without which companies will find it difficult to implement

Resolute Mining Ltd managing director John Welborn spoke on the subject during Africa Down Under in late August.
Resolute is planning to open Africa’s first purpose-built automated underground mine next year when it begins ramp-up of
the Syama sub-level cave mine in Mali.

The case for automation in Africa is not obvious, given labour is relatively cheap and most governments and communities
are concerned with creating jobs rather than eliminating them.

However, Welborn believes automation will bring only benefits to Syama’s workforce. Resolute is already running a fully-
autonomous bogger using an all-Malian team during development of the Syama underground in what he believes is an
indication of the employment opportunities automation can deliver, particularly in Africa.

“Automation is often viewed at through the lens of a car factory where menial tasks are replaced but in Africa it is about
efficiency, safety and a wonderful workforce benefit,” he said. “Autonomous operations allow us to put technology in place
that means we don’t necessarily need people with three-year university degrees to operate underground. We want to train
Malians to use world-best automated equipment with remote centres.”

It all suggests the gold sector is in the midst of a major renovation. After hardly changing the last 25 years, the next decade
could see the industry transform unrecognisably.

[email protected] @DominicPiper /dominicpiper /PaydirtMediaAustralia

Page 4


Raising allows Breaker rigs
to keep turning

by Dominic Piper

Breaker Resources Those efforts were aided by the resource update released in
NL has raised $10.5 September which saw the global resource almost doubled
million to fund further from the maiden estimate. Sanders believes Bombora can
drilling and a PFS as continue to grow in coming months.
it moves to prove the “The drilling continues to build value in the project,” he said.
viability of its Bombora “We’ve added 500,000oz at $11/oz discovery costs in the
discovery on the Lake last five months and exploration to date has only covered
Roe project in Western 3% of the project area. There is shallow potential along
Australia. strike so we will start looking further afield as well as looking
at the deeper mineralisation.”
Tom Sanders Breaker closed the Breaker will continue to prioritise drilling at Bombora, with the
capital raising on recently launched PFS taking a backseat as the company
October 1, two weeks comes to terms with the overall size of the deposit.
after releasing an
updated resource of The recent update took total resources at Lake
24.6mt @ 1.4 g/t for Roe’s Bombora deposit past the 1 moz mark
1.084 moz gold for
Bombora. “We have deliberately not set a timetable for the PFS,
etc. because the goalposts are still moving on the final pit
The raising paves the way for the start of PFS work designed outlines,” Sanders said. “We keep growing the project and
to assess the potential for an early standalone open pit through that process the timing for feasibility studies and
development at Bombora. further resource updates will become obvious.”
Breaker shares rose more than 3% following completion
Breaker’s discovery of Bombora two years ago catapulted of the capital raising, perhaps indicating the market was
it to market attention but a disappointing maiden resource warming to a story it marked down following release of the
in April this year saw the explorer’s shares severely maiden resource.
downgraded with analysts sceptical the deposit would prove Sanders believes the market’s inconsistent approach to
to be economically robust. the Breaker story showed a lack of knowledge about the
greenfields discovery process.
The updated resource, following 25,500m of infill and “The market was expecting a higher resource number initially
extensional drilling, was the first step in Breaker reinstating but I think the market forgets what a greenfields project looks
Bombora’s reputation as one of WA’s most exciting gold like,” he said. “You start with a blank slate so it takes a long
discoveries and the company, led by executive chairman time to understand what it is you are looking at. We are still
Tom Sanders, moved quickly to take advantage of the recent discovering new lodes in the first 2km of mineralisation 18
share price rebound. months after we started drilling.”

“We needed funds to continue our aggressive drilling
programme,” Sanders told GMJ.

Breaker has had four rigs turning at Lake Roe since making
the Bombora discovery and Sanders said there was still
much work to be done to build the company’s understanding
of the project.

“It is a project that will require drilling for many years so, it
makes more sense to work on an early development scenario
and we are seeing potential for a large, standalone open pit
operation,” he said. “The underground potential is there, it is
just not required to get the open pit into production.”

Page 5


The Shareholders Gold Council will issue analyst reports
and engage with management to improve capital allocation,
compensation and corporate governance in gold companies

Paulson launches alliance
to seek better returns
in gold sector

by John Tilak and Susan Taylor, Reuters Long-time gold bull John Paulson followed through
on a pledge made last year to team up with other
gold investors in an effort to work with management of
companies in the gold sector to improve returns, according
to the group, called the Shareholders Gold Council.

The coalition, launched by Paulson’s US hedge fund
Paulson & Co, will issue analyst reports and engage with
management to improve capital allocation, compensation
and corporate governance in gold companies, the coalition
said in a statement in September.

The initial line-up includes a dozen named investors and
four anonymous members.

The council includes Adrian Day Asset Management,
Apogee Global Advisors, AMG Fondsverwaltung AG,
Delbrook Capital, Equinox Partners LP, Equity Management
Associates, John Hathaway, Kopernik Global Investors,
Livermore Partners, La Mancha and Sun Valley Gold.

Reuters named a number of these investors in a report
earlier this year.

The Shareholders Gold Council will be headed by Christian
Godin, who was recently head of equities and director of
research at Canadian fund manager Montrusco Bolton
Investments Inc.

Paulson & Co called on the world’s top investors in gold
equities to form a coalition in September 2017. Partner
Marcelo Kim attacked the gold mining industry at last year’s
Denver Gold Forum, saying the sector needed to address
high executive pay, cosy board appointments and value-
destroying mergers and acquisitions.

Founded by the billionaire investor in 1994, Paulson & Co
manages about $US8.7 billion.

Page 6


Changes bring challenges

by Brendan Ryan

It’s all change at the top levels of two of the world’s most Feeling seems to be that Barrick is the clear winner here with
important gold producers, Barrick Gold Corp and AngloGold Standard Bank analyst Adrian Hammond describing the deal
Ashanti Ltd and the ramifications could be particularly as “throwing a lifeline to Barrick”.
significant for their respective operations in Tanzania where
both have operations. Bristow has never been one to pull his punches and, over the
years, he has frequently fired off barbs at Barrick, in particular
At the end of August, Srinivasan Venkatakrishnan (Venkat) left for the mess it created in Tanzania with Acacia after venturing
AngloGold Ashanti to become chief executive of major mining onto Randgold’s particular turf – Africa.
group Vedanta Resources plc. He was replaced by Kelvin
Dushnisky – previously president of Barrick and chairman of As to whether this is all going to work out, frankly, who knows?
Acacia Gold plc. But, there are a couple of major areas to watch closely.

Then on September 24 came the unexpected announcement The first is the relationship between Bristow and Thornton.
that Randgold Resources Ltd would merge with Barrick and Right now that is all “sweetness and light” with Bristow telling
Randgold chief executive Mark Bristow would be appointed an investor presentation that there was no “culture clash” and
president and chief executive with a mandate to transform that, “if anything, the one thing that John and I are completely
the much larger gold group through implementation of the aligned on is how to run the company”.
Randgold management style.
That can change. The most recent comparison I can think
Bristow will still report to current Barrick chairman John of is what happened to former Billiton chief executive Brian
Thornton who will become executive chairman of the new Gilbertson after he negotiated the deal to merge with BHP to
Barrick which will be called Barrick Group. create BHP Billiton with himself in the chief executive slot. He
lasted just under a year before falling foul of then chairman
The deal – through which Barrick shareholders will own Don Argus.
66.6% and Randgold shareholders 33.4% of New Barrick –
has plenty of detractors despite its enthusiastic endorsement Thornton’s direct personal involvement in Acacia had a major
by Bristow who reckons the new challenge has “re-energised” impact on its executive ranks after he struck a “framework
him. agreement” with Tanzanian leader John Magufuli apparently
without keeping the Acacia management and board in the
The two groups are hugely different and it seems some loop.
Randgold shareholders feel they are not getting a “fair shake
of the stick” given the situation in which Randgold is vastly Then Acacia chief executive chief executive Brad Gordon
superior to Barrick in terms of financial strength and operating and chief financial officer Andrew Wray resigned shortly
metrics. after the framework agreement was announced and there
is speculation that Dushnisky’s move to AngloGold Ashanti
In its 20-odd years of existence, Randgold has never impaired could also have been influenced by that development.
a single asset, has rarely had net debt and has never issued
shares to buy assets. Currently it is sitting with $US600 million The second area to ponder is the enormity of the task that
cash on hand. Bristow is now shouldering which is to successfully implement
“the Randgold way” into a corporation much larger than the
Barrick shareholders on the other hand have suffered severe one he has been used to running.
dilution of their interests as the group issued shares to make a
series of acquisitions and the share price plunged as a result. That could get ugly depending on how much resistance there
Currently, Barrick sits with around $US4.2 billion in net debt. might be to corporate cultural change from the incumbent
Barrick executives whose abilities Bristow has been slagging
Thornton himself pointed out that Randgold shares had off for the past decade or so.
gained 96% in the last 10 years while the gold mining sector
had dropped 50% on average and, while the gold industry For those of us who watch mining in Africa more closely than
had impaired something like $US75 billion in assets over that in Nevada the most interesting outcome is going to be in
timeframe, Randgold “has not written down a single dime”. Tanzania.

So, you can understand why some Randgold shareholders Can Bristow put his huge experience of operating in Africa to
are muttering about this deal which is being done at a nil good use or will he simply pull the plug there because this is
premium for their stock. The merger is subject to approval by a country that Randgold has avoided going into? I guess we
the shareholders of both companies and is expected to close will see.
in the first quarter of 2019.

Page 7


Barrick eyes China money
to lower Africa risk


Barrick Gold Corp will seek Chinese investments in some with Shandong’s near-$US1 billion investment in Barrick’s
of its African mines to offset higher risk stemming from Argentine mine in 2017.
its planned $US6.5 billion all-stock acquisition of Africa-
focused miner Randgold Resources Ltd, people familiar with “It’s been a goal of ours to build a distinctive and preferred
Barrick’s thinking said. relationship with China,” Thornton said.
Toronto-based Barrick will also lean on Randgold chief
executive Mark Bristow’s expertise in dealing with governments Barrick unit Acacia Mining plc had been discussing an asset-
in challenging jurisdictions to navigate the Africa continent level JV with Chinese miners, but two of the people said those
risk, the people said, addressing a concern of some Barrick talks have been put on hold. The potential Chinese partners
shareholders. are waiting for a tax issue with the Tanzanian Government to
The sources asked for anonymity because they were not be resolved, one of the sources said.
authorised to publicly discuss the matter involving the world’s
biggest gold miner. Thornton and Bristow first explored a partnership three years
Barrick’s African expansion is a departure from its recent ago and renewed discussions this year, which was how the
strategy of focusing on relatively safe regions like the US. Randgold deal came together, the people added.
Africa will represent about 30% of Barrick’s net asset value
after the deal closes, up from some 15%, Desjardins Securities The two men hit it off. Frustrated with the mining industry’s poor
estimates. performance, they share a philosophy that mining companies
Chinese involvement in Africa will likely include minority stakes should be run with a disciplined focus on financials.
or JVs in mines, the people familiar with Barrick’s thinking told
Reuters. Bristow has said the calibre of mines offsets issues about
China’s Zijin Mining Group and Shandong Gold said in location.
September that the deal provided additional opportunities to
expand their partnerships with Barrick in Africa. “I’ve always said asset quality overrides jurisdiction,” Bristow
“The question for Barrick is: How do you balance the risk profile said on a conference call with analysts following the deal.
with the growth profile?” Livermore Partners managing director
David Neuhauser said. “Barrick’s potential partnerships with Some shareholders are betting that China, with its large African
the Chinese could de-risk its African exposure.” investments, would find it easier to deal with governments in
Barrick’s executive chairman John Thornton, a former the mineral-rich continent than Barrick would.
Goldman Sachs banker, has been building relationships with
Chinese miners as part of a plan to reduce exposure to risky “If you are a Canadian company operating in Africa, you don’t
jurisdictions. That work has intensified in recent years, notably have a tonne of political pull,” Purpose Investments portfolio
manager Greg Taylor said.
Barrick’s potential partnerships with the
Chinese could de-risk its African exposure Meanwhile, Randgold has run into opposition for the deal in
DRC where state miner Sokimo – which owns a 10% stake
in the Kibali mine JV with Randgold and AngloGold Ashanti
Ltd – has vowed to “assert its rights” regarding the takeover.

Congolese Mines Minister Martin Kabwelulu said the
shareholder change would need to be approved by the
government in accordance with Congo’s new mining code.

The ministry’s statement backs the position taken earlier in the
day by AngloGold Ashanti owns the other 45% stake in the
project, one of Africa’s biggest gold mines.

Sokimo said the transaction represented an effort by the
foreign companies “to impose themselves, without any prior
discussion, in the countries from which the resources that
make up their wealth are extracted”.

Randgold said that the takeover would not introduce a new
partner in the Kibali project, as suggested by Sokimo.

“There are no provisions in the joint venture agreement and the
related documentation which give Sokimo any rights resulting
from the proposed merger,” Randgold said.

Page 8

Randgold sets M&A
wheel spinning

by Dominic Piper

Barrick Gold Corp caught most of the gold sector off guard capitalisation that investors are interested in.
last month when it announced a merger with African-
focused miner Randgold Resources Ltd. “The optimists are saying that this Randgold thing will attract
people back to investing in gold companies, but simply putting
Barrick will acquire Randgold in an all-scrip deal worth $US6.5 Randgold and Barrick together doesn’t change the operating
billion. parameters of any of the mines they currently mine. Randgold
is running as well as they could be, Barrick might be a little
The merged New Barrick Group will be the world’s largest better but whether there is some remarkable change, that is
gold miner, boasting a market cap of $US19.4 billion, annual not going to happen overnight.”
production of 6.64 moz gold and a portfolio which includes half
of the world’s 10 lowest cost gold mines. London-based Panmure Gordon analyst Kieron Hodgson was
just as scathing in his note.
A multibillion dollar merger between two top 10 companies
would usually be the culmination of a period of M&A activity “The proposed merger, instead of being on based on merit,
but the recent Barrick/Randgold marriage is more likely to be strength and strategic integration, is more akin to the proverbial
just the start for the gold sector. two drunks supporting each other at closing time,” Hodgson
said. “Given Barrick have managed to reduce production
News of the deal immediately sparked rumours that Newmont from 8 mozpa to 5.3 mozpa and have lost the confidence of
Mining Corp would be enticed back to the negotiating table many shareholders, not least those of Acacia, the prospect
with Barrick. The two North American gold giants walked away of owning an over-leveraged, value-destructive investment, at
from merger talks in 2014 but rumours have persisted that they this time, looks unappealing.”
would welcome a revisit.
The fallout from Barrick’s move will go well beyond the setting
Newmont chief executive Gary Goldberg seemed to scorch of corporate precedents. Randgold managing director Mark
those rumours in Denver, saying “we have looked in the past Bristow is set to be installed as chief executive and Barrick
and haven’t seen anything, and I don’t see anything changing”. is gambling on his ability to transfer the celebrated Randgold
culture to its corporate identity.
Newmont, Gold Fields Ltd, AngloGold Ashanti Ltd, Sibanye
Stillwater Ltd and IAMGOLD Corp all moved into positive BMO senior precious metals analyst Andrew Kaip believes
territory on the news as investors envisaged further activity. Barrick shareholders should welcome the change.

MineLife analyst Gavin Wendt told GMJ the merger was a sign “In our view, Barrick shareholders will benefit from Bristow
of growing momentum of corporate activity in the gold sector. leading the next stage of transformation for Barrick …
[but] the ability to extract more costs out of Barrick, or deal
“From an industry perspective, gold production is becoming synergies, are less apparent,” Kaip said. “We do expect some
an increasingly costly business for many of the world’s biggest opportunities to emerge in Africa as there is sufficient overlap,
producers, faced with rising costs, tight margins and declining but Barrick has been trimming costs through the Americas
reserves, so corporate activity is probably a means of survival since 2013.”
for these companies,” Wendt said.
Bristow’s arrival would suggest a major portfolio review is
North America’s investment community shares similar views. imminent and Australia’s cashed-up mid-tier gold miners could
RBC analysts said the Randgold acquisition could be the first be set to take advantage if assets drop out of the combined
in a new round of corporate manoeuvers. “It could spur a pick- group.
up in M&A, which in our view could result in a turnaround in
mining equity performance,” analysts said. “Aussie gold producers have benefitted enormously over
recent years from strong operating margins at domestic mines
However, not everyone shares the positive sentiment, Noah’s where mine lives have been extended, operating costs have
Rule’s Sean Russo told GMJ said the merger was the result of been slashed leading to lower-than-average operating costs,
poor performance, not opportunity, in the gold sector. combined with a high Aussie dollar gold price,” Wendt said. “As
a result, Aussie gold producers are in a cashed-up state, ready
“Someone in Denver said this was fantastic, which made to deploy these funds either domestically or internationally,
me laugh, because the article was saying that this merger to acquire quality assets. Market circumstances have really
will attract investors back to the sector. But, if investors were played into their hands.”
attracted to the sector, Barrick and Randgold wouldn’t have
to merge,” Russo said. “The idea that you put together two
companies and everybody goes ‘oh yeah’ [but] it’s not market

Page 9


Ausmex watches Newcrest
go on

by Mark Andrews

For a junior battling away with a market cap of $5 million, “No-one has ever walked over Golden Mile and at Comstock we
having Newcrest Mining Ltd drill a target within your area of have got wide intersections 6-9m from surface running 20-30
interest is as good a win as any. g/t gold in some instances,” Morgan said.

That is the situation Ausmex Mining Group Ltd is lapping up at its The drilling conducted is aimed at pulling together an updated
Mt Freda Complex gold project, 39km south-east of Cloncurry, resource estimate across a combined 1,500m strike length from
Queensland. four closely spaced parallel gold zones within Golden Mile.

Newcrest restarted drilling at the potential Tier 1 Canteen IOCG Golden Mile is subject to an 80:20 JV with the former
target, 800m south of Mt Freda, in late September. CopperChem entity Round Oak Minerals Pty Ltd.

Ausmex managing director Matt Morgan told GMJ the Round Oak’s 20% participation gives it first right to treat ore from
significance of Newcrest’s latest campaign was that the Canteen Golden Mile 35km away at its 600,000 tpa CIP Great Australian
anomaly extends into Ausmex’s Mt Freda controlled leases. Mine processing facilities.

“It is quite unusual to have a big international mining house Morgan said the region was bereft of oxide material for Round
drilling this IOCG target for us. They started drilling in April and Oak to treat at its plant, while there were other options Ausmex
came across our ground to do so and now are back with phase could potentially consider.
two. I’m surprised they haven’t released any data yet, but I’d
expect they’d have to at some point, which will be a big moment “We sold 1,000t of material at 1 g/t and they have been hauling
for us,” Morgan said. it to their plant and have built a freeway to take that oxide ore
for processing. They will need ore and there is no other oxide
Ausmex can start to rally some momentum now with an updated material within trucking distance of Cloncurry; no-one has any
resource estimate from the Golden Mile project, within the Mt ore to meet the capacity,” Morgan said.
Freda complex, imminent.
“We have a mining licence and a nice little open cut [at Mt Freda]
“Mt Freda could be in production in March 2019, there has been which we will keep drilling to get a decent resource. We are in
a delay in getting the resource upgrade out from 2004 JORC to a good position with all of this around us and we have enough
2012 JORC and we hope to have that in 2-3 weeks,” Morgan said. money to keep drilling through to the end of the year. We think we
have a 1 moz target sitting there, so we are in a pretty position
Hitting production in the near term and banking cash flow initially and any approach for us has to be on commercial terms.
from the historic Comstock mine at Golden Mile is the strategy
Ausmex has been pursuing and is within sight of achieving. “We still have kilometres and kilometres of drilling to do, but we
are in a good position with our neighbours having plants and
RC drilling results announced in mid-September from Comstock needing oxide material to feed them. Malachite [Resources Ltd]
confirmed the extension of the known gold zone 25m further also has a plant with nearby capacity, so we can see a cheap
north along a potential 600m strike. way to production and that has been the strategy all along;
short-term cash flow and keep drilling for the big one,” he said.
Highlights from Comstock included 7m @ 7.6 g/t gold (8-15m),
including 3m @ 12 g/t (12-15m); and 9m @ 2.4 g/t (9-18m),
including 4m @ 4.5 g/t (14-18m).

Perth,Western Australia The CD-Rom of Paydirt’s 2018
Africa Down Under Conference

is available

CD Rom includes

• Over 50 presentations • Conference media coverage
• Australia’s Paydirt preview and review reports • Conference Sponsors

CD-Rom – $95 (inc.GST)
Phone (+61) 8 9321 0355 or email [email protected]

Page 10

Page 11


Lucrative gold nugget discoveries in WA has seen a spike in prospecting

Detecting a gold bonanza
in WA

by Mark Andrews

On the back of massive 93kg and 63kg gold specimens shelf at Prospector’s Pick in Bunbury.
found at RNC Corp’s Beta Hunt mine, near Kambalda,
Western Australia, a win for the little guys was also recorded “Things like this generates lots of interest, but it doesn’t
with a retiree pulling a 3.23kg nugget from the State’s translate into sales. A lot of people go straight to the internet
northern goldfields. and buy from there. One of the benefits of coming to us
is simply the face-to-face contact. These machines can
Rob Anderson, owner of Prospectors Pick about two hours cost upwards of the $10,000 mark, so you have to have
south of Perth, said the good looking nugget would have the confidence firstly to go in and buy one. The seasoned
fetched a premium at The Perth Mint. campaigners usually go straight to the internet, but others
need reassurance and just general training tips before going
“Straight’d be looking at $145,000 because The out.” Anderson said.
Perth Mint takes a percentage off for purity and that sort of
stuff, but a nugget of that size they will actual give you a Anderson remains unperturbed by the influx of interest not
premium,” Anderson told GMJ. directly hitting Prospector’s Pick bottom line, as he has other
lines of business to complement the business he started
“The premium wouldn’t be a huge amount – 2-5% over the from his hobby of prospecting.
daily gold price – because it is a nice piece of gold. But, a
collector in the US for argument sake will probably give you He said that he was pleased to see that the recent discoveries
$220,000 for it because of its uniqueness. Believe it or not, had spiked interest in prospecting across all ages.
people find these big bits of gold and really don’t know what
to do with them and think they might get caught for doing “It’s a mix of people, it is not predominantly one or the other
something wrong, so they bust them up for sale which is a which is good. A lot of younger people are getting into it
shame.” and it is refreshing to see people getting out into the bush,”
Anderson said.
The nugget, found by the anonymous prospector was named
Duck’s Foot, has created some excitement among wannabe And, in WA prospecting circles, there appears no other more
prospectors in WA. qualified to learn from than Anderson who claims one of his
best finds 10 years ago was a 72oz nugget in the Leinster
While the recent discoveries have been a boon for those area.
involved, MineLab metal detectors are hardly flying off the

Page 12

Nexus links up Walbrook

by Michael Washbourne

Nexus Minerals Ltd has quadrupled its prospective ground Andy Tudor
holding around the Walbrook project in the Eastern
Goldfields. initial 18 holes drilled into the original Walbrook project area.

Arguably the most active explorer in the district around High-grade hits from the programme included 3m @ 19.36
Saracen Mineral Holdings Ltd’s Carosue Dam operation, g/t gold (including 2m @ 27.18 g/t) and 4m @ 12.86 g/t gold
Nexus recently struck a deal with Newmont Mining Corp to (within 8m @ 6.51 g/t).
acquire 190sq km of largely underexplored ground adjacent
to its existing Walbrook tenements. Tudor, who first expressed interest in the Walbrook
tenements four years ago, said his company was benefitting
Nexus picked up the tenements for a total consideration of from the unusually shallow cover in the district.
$13,100 plus a 2% NSR on all mineral products extracted
from the ground, about 35km north of Carosue Dam. “Normally we’re complaining about 30-40m of cover, but here
you don’t have that because a lot of the rocks are outcrop or
The acquisition boosts the company’s landholding at sub-crop, so you can get a really good look at the underlying
Walbrook from 60sq km to 250sq km. rocks which is pretty rare for this part of the world,” he said.

Nexus managing director Andy Tudor said discussions with “We have proof of concept of how we’ve gone about our
Newmont were instigated by a small patch of ground held by exploration. Now it’s a matter of doing some more detailed
the major but contained within the junior’s exploration zone. work along that full corridor, which is where we’re at right
now, to highlight and work out some more drill targets based
“They saw we were actively exploring around their small on what we’ve done in that initial drill programme.”
tenement block, so we spoke with them about doing a deal
on the tenement packages to pull the whole lot together Geophysics, including a detailed IP programme over three
and now we’ve ended up with nearly 250sq km of the same key areas of interest, is planned before year’s end in a bid to
geological terrain that underlies all of the resource ounces in identify new drill targets for early 2019.
the district,” Tudor told GMJ.
Exploration at Pinnacles remains ongoing, although Tudor
“We now have a contiguous package which is very important. acknowledged future work on the project may be beyond the
There’s obviously a couple of pods of mineralisation which scope of a junior such as Nexus.
are Saracen resource ounces, but we own the balance of the
ground. And a lot of that ground, surprisingly, it’s had almost “There’s still a couple of areas which need to be addressed
no exploration on it. We’ve got ground that’s within a 2km and fully assessed before we move on from the region,”
strike of a 1 moz resource, yet it’s had no drilling done on it.” Tudor said.

Access to the Newmont ground continues a positive year for “Pinnacles continues to have all the attributes and show
Nexus, which began 2018 with the acquisition of Walbrook all of the signs of hosting significant deposits, however,
from Saracen for 14.9 million shares. Saracen also agreed sometimes these projects need more than what a junior can
to purchase 3.8 million Nexus shares at 8.4c/share for a 6% provide to perhaps find the full positivity of an area – and I
holding in Tudor’s company. think that’s perhaps where Pinnacles is at.”

Nexus and Saracen continue to collaborate on a portion of
the Pinnacles project, less than 5km south of Carosue Dam.

“Whilst we obviously purchased the Walbrook tenements
outright off them for their participation in the company, that’s
where they saw the upside rather than at a project level,”
Tudor said.

“We continue to work together. We have regular unofficial
meetings and discussions with their exploration team about
how they’re going and what they’re doing. They’re obviously
having great success where they are in their corridor of
riches and we certainly want to follow that up in the Walbrook
area where we see potential for a similar kind of corridor.”

Nexus reported intersecting mineralisation in each of the

Page 13

Page 14


Gold deals heating up

by Mark Andrews

Bellevue Gold executive director Steve Parsons at the Bellevue gold project

While there are mixed feelings about the most significant @ 4.8 g/t for 61,000oz gold.
piece of gold M&A for a very long time – the combination
of Barrick Gold Corp and Randgold Resources Ltd – there are Underground mining at Edna May is expected to start in early
some cheering on what is happening on the Australian dance 2019, with the company seeing it as a commitment to growth
floor. in and around the mine, which it hopes to convince others in
the market of.
“I do think here in Australia, the bid by Regis [Resources
Ltd] for Capricorn [Metals Ltd] makes perfect sense because At the time of print, Explaurum was preparing a target statement
I think the challenges of getting a mine up as a single asset outlining its reasons for the rejection of Ramelius’ offer, with
entity is always going to be difficult,” Noah’s Rule principal and Explaurum shareholders expected to receive a letter in the mail
managing director Sean Russo told GMJ. in the middle of October.

“Also, Explaurum [Ltd] trying to develop a standalone versus Meanwhile, the Regis/Capricorn transaction has been shelved
Ramelius [Resources Ltd] buying them makes sense.” in light of the latter’s largest shareholder – Hawke’s Point
(18.9%) – not supporting the proposal.
Ramelius is looking to consolidate around its Edna May
operation, which is 140km from Explaurum’s flagship Tampia Regis’ offer of 11.4c/share was a significant premium to
deposit. Capricorn’s closing price on September 21 with the acquisition
valuing Capricorn at a market capitalisation of about $85 million.
Explaurum explicitly recommended its shareholders take no
action regards Ramelius’ pitch, with the former citing uncertainty The jewel Regis was chasing is the 97,000 ozpa Karlawinda
around future plans at Edna May. gold project, WA, which was primed for an initial 8.5 year mine
life. Capital costs are estimated at $132 million and post-tax
Ramelius has somewhat cleared the air by proposing to NPV of $166 million.
acquire the 2mt @ 2.3 g/t for 151,000oz Marda gold project,
190km north-east of Edna May, for $13 million. The intention is In light of Regis’ withdrawn proposal, Capricorn executive
to treat Marda ore at Edna May where Ramelius has committed chairman Heath Hellewell told GMJ that good projects would
to underground production from the current reserve of 398,000t still be supported.

“The banks are still there and they are supporting good

Page 15


Noah’s Rule principal and managing
director Sean Russo says it is now
easier for mining companies to access

debt funding than ever before.

“What I am seeing is that it is easier to get debt and to my mind this is
one of the most interesting things happening at the moment. It’s probably
never been easier to get debt in my 35 years working in the industry, in
terms of how many people are out there in the business of lending money to

mining companies.

“Funds and banks and people like that, they will run the ruler over it and
there’s lots of them but the economics of it – the rising costs and other
things – it is no easier to repay debt today than it ever was. Building a mine,

making it work and paying the debt has always been difficult.

“There is lots of debt available but equity is hard to come by. Gold Fields
[Ltd] managing director Nick Holland has talked about the fact that so
much of their register is held by ETFs you can’t do a placement to them.
He is saying that hedging will come back in because people will have to take

more debt and they are going to have to manage their balance sheet.
So, the big guys are talking about hedging again because they can’t rely

on investors to put money into equity.

Regis announced it had withdrawn an offer for Capricorn Metals in October
Page 16

A resource of about 1 moz gold is predicted for Bellevue

projects, so there is no problem with that. While on the debt the Tribune and Viago Lodes at the Bellevue gold project.
side nothing much has changed, it just feels like that there is
not that longer term support from the equity investors that there Step-out diamond drill results included 10.1m @ 29 g/t gold
was perhaps in the past. It is difficult for a one-asset, smaller from 188m, including 7m @ 37.9 g/t; 3.35m @ 37.4 g/t from
company trying to get something up and running without this 562.4m, including 0.5m @ 159 g/t; 2.8m @ 19 g/t from 571.6m
longer term support, so partnering up with a bigger company or and 1.5m @ 23.9 g/t from 566.3m.
folding into a bigger company at the right price at the right time
can make sense for all shareholders,” Hellewell said. The results were timely given the attention Bellevue received in
“It’s about growth for the miners, they have to keep growing to North America recently, according to executive director Steve
stay relevant for their shareholders. If they can’t see that growth Parsons.
inwards they tend to look outwards and certainly the juniors,
explorers and development stage companies aren’t seeing “Beaver Creek was a real standout conference with a huge
the love from the market that the producers have been. That turn-out of global fund managers, bankers and large gold
means they are relatively cheap at the moment, so it makes companies hunting the next projects and companies. Bellevue
sense for a producer looking to add to their growth story to look had an incredible 40 meetings in two and a half days. I had the
at some of the cheaper developers and explorers.” last presentation spot on the final day of the conference – on a
While there is some heat in theAustralian M&Aspace, Cannacord Saturday – and I had a full house for the presentation,” Parsons
Genuity Inc mining analyst Tim McCormack said there was a told GMJ.
lack of domestic opportunities with scale and quality.
“We expect Australian producers to continue looking offshore “In general the Aussie gold space is where investors are
for cheaper assets,” McCormack said. wanting to be and even TSX companies are considering
“With Northern Star [Resources Ltd] putting its foot on Echo moving down to the ASX. The mood at the Denver Gold Show
[Resources Ltd] last year, and Regis recently bidding for was certainly abuzz with mergers/take-overs. Obviously the
Capricorn, the top of our list in terms of potential takeover Randgold/Barrick merger is massive and everyone thinks it’s a
targets in Australia is Bellevue Gold [Ltd]. Bellevue’s current good thing for the gold industry. There a several rumours that
resource of 500,000oz @ 8.2 g/t gold is set to grow markedly, there may be an even bigger merger shortly.”
with three diamond rigs aggressively drilling out the Tribune and
Viago lodes. We expect the resource to grow to about 1 moz by Growth is certainly on the agenda and the likes of Northern
early 2019, and with the project located in close vicinity to Gold Star has shown some adventure by swooping on the 4.1 moz
Fields [Ltd], Northern Star, Saracen [Minerals Holdings Ltd] and underground Pogo gold mine in Alaska for $US260 million.
St Barbara [Ltd], the high-grade project has to be attractive to
all the nearby operations. Northern Star’s ascension to the second largest gold producer
“For argument sake, let’s say only 50% of about 1 moz resource on the ASX was completed with the Pogo buy in October, which
was mined at conservative margins of $500/oz, for a company Russo saw as a good fit for the company.
with existing mill capacity this represents about $250 million of
cash flow. Considering Bellevue’s market capitalisation of $75 “We have been in a down trend now for six years in the gold
million, it’s not hard to see its appeal.” price and people are going back to saying that you have to
At the time of print, Bellevue Gold was continuing to deliver be bigger now. It’s more so the Americans saying that, not the
high-grade gold results from broad-spaced diamond drilling at Australians,” Russo said.

Ramelius is looking to consolidate its position around “Australian gold producers are making money, so I don’t think
the Edna May gold mine in WA’s Wheatbelt you are going to see so much big M&A in Australia because in
Australian dollar terms Northern Star and Evolution [Mining Ltd]
and the likes are making lots of money; it is the people exposed
to the US dollar gold price who may need to move.

“[Gold] prices are as low today in US dollar terms as they were
at the depths of 2013. In Aussie dollar gold terms, the price is
as good today as before when they collapsed in 2013. So for
us we have gone through the dip and are on the way back up,
it’s different in Australia which has given Northern Star a great
opportunity to buy something like Pogo. That would seem to
me to be a good fit for a good underground specialist to pick up
and potentially other underground mines over time.”

Page 17


Perth Mint app offers
investors the Midas touch

Retail investors can now buy, store and sell gold via a new The Perth Mint has launched a new smartphone app for
smartphone app launched by The Perth Mint in early investors to buy, sell and store their gold
ounces for physical gold or cash at any time.
Unveiled during the opening day of the Precious Metals
Investment Symposium 2018, the GoldPass app also allows Hayes said gold was a tangible and trusted store of wealth
investors to instantaneously transfer gold to other approved with a long and strong history.
“We are making this traditional asset more accessible, trades
All GoldPass digital certificates are backed by physical gold immediate and revolutionising how customers transact in real
from The Perth Mint and are stored in its network of central
bank grade vaults, with the weight and purity of every ounce time with other GoldPass app users,”
guaranteed by the Government of Western Australia. Richard Hayes he said

Powered by InfiniGold, the secure technology platform “This is a significant leap forward in
offers investors the flexibility and convenience of being able gold exchanges globally.”
to manage their wealth at any time, something which The
Perth Mint has become renowned for, according to its chief InfiniGold chief executive Andreas
executive Richard Hayes. Ruf said the innovative technology
was specifically tailored to digitise
“With the uncertainty and speculative nature of gold to satisfy the demands of
cryptocurrencies with no asset backing their value, investors investors.
are always keen to discover innovative and credible vehicles
through which to safely protect the worth of their portfolios,” “We’re delighted The Perth Mint
Hayes said. chose InfiniGold technology to
power GoldPass and equally excited
“With many commentators suggesting that digital gold to be able to give investors a simple,
products are expanding the market seamless and secure way to add
for gold investment, there is a gold to their asset portfolios,” Ruf
distinct rise in the demand for trusted said.
modern and contemporary means of
exchange.” GoldPass is available for free
download for Android and iPhones
GoldPass digital certificates offer on GooglePlay and the App Store.
an alternative to cryptocurrency
investments and will pave the way
for gold to be used as an easy and
convenient store of wealth.

For investors, their GoldPass digital
certificates will display their gold
balances in ounces, which are visible
in the app’s interface, along with
any cash holding in the same way
that balances are seen on an online
banking system.

Investors can also buy unallocated
gold from The Perth Mint as well as
redeem their digital certificates or

Page 18

Sorting and trading to
deliver Sandstone revival

by Dominic Piper

Middle Island Resources Ltd managing director Rick An exploration target at Two Mile Hill tonalite deeps
Yeates is hoping the recent uptick in corporate activity is 24-34mt @ 1.1-1.4 g/t for 0.9-1.5 moz gold
will allow his company the opportunity to deal its way into a
production scenario. “The overall objective is to get the project back in production
as quickly as we can,” Yeates said. “To achieve that we need
Middle Island has been working on ways of restarting the mill to either enhance the front-end of the production schedule or
at its Sandstone project in Western Australia since acquiring extend the mine life; that is where Two Mile Hill tonalite deeps
the ground two years ago. Its two-pronged strategy has seen comes in. It has the potential to extend mine life by 12-15 years.”
it pursue exploration opportunities but also enter discussions
with the owners of a number of stranded assets in the In August, Middle Island released a series of intercepts from
Sandstone district. drilling on the Two Mile Hill tonalite deeps target where an
exploration target of 24-34mt @ 1.1-1.4 g/t for 0.9-1.5 moz gold
Yeates believes the current junior market malaise could play has been identified. Drilling has consistently returned wide
into Middle Island’s hands. hits, including 508.3m @ 1.38 g/t, 372.7m @ 1.52 g/t, 230.4m
@ 1.62 g/t, 353.3m @ 1.04 g/t, 156.3m @ 1.14 g/t and 100m
“We have been trying to deal for a long time without getting @ 2.02 g/t.
much traction,” he told GMJ. “However, the gold sector has
been a bit flat at the junior end of town and the market has Yeates said the results would be used to build a maiden
been catatonic, making it impossible to raise capital without resource for the prospect.
diluting shareholders. We have seen M&A from top to bottom
of late as everyone is coming to the same conclusion. An underground mining concept study will also be updated
with Yeates saying block or sub-level caving was the preferred
“Around Sandstone there is also an opportunity to consolidate method but open stoping would also be considered.
a number of stranded third-party deposits at either the asset
or corporate level. We are in discussions with three parties, all The economics of block and sub-level caving could also be
of whom are on-board with our strategy and two of which are enhanced by the introduction of ore sorting into the process.
more advanced. There is opportunity for a standalone owner,
potentially us, to consolidate the entire district around a central “Ore sorting is a lot more prevalent than most people realise,”
processing hub at Sandstone.” Yeates said. “It is widespread in the industry but often the ore
sorter companies work with larger miners under CAs so they
Completing one deal could lead directly to recommissioning of can’t discuss details.”
the Sandstone plant and ultimately deliver further opportunity.
The company’s first ore sorting trial saw up to 93% of gold
“Any of those deals can trigger an early commissioning reporting to 36% of mass, presenting significant increases in
decision and then once we have cash flow we can test the mill feed grade with commensurate reduction in mill throughput.
multitude of exploration targets we have on our own ground,”
Yeates said. “It could also put us in a different investment class “Ore sorting is not going to kick-start the project because it is
and give us the ability to raise money at a higher market cap less amenable to the open pit material but it will be applicable
and once we recommission the project, it will also make us to the Two Mile Hill tonalite mineralisation,” Yeates said.
more attractive to third parties and we will be in a far better
position with our balance sheet to enact further deals.”

While corporate transactions remain a focus, the company
is also intent on finding its own sufficient resources. A 2017
feasibility study found Middle Island would need additional
ounces if Sandstone was to be economic. Exploration is
geared around this aim with a dual focus on shallow ounces
and larger tonnages.

Page 19


A good time to spin
for Norwest

by Mark Andrews

Australian Mines Ltd’s emergence in the technology Norwest has allocated $3.5 million to drilling at its
metals space at its flagship Sconi cobalt-nickel- West Australian gold and copper projects
scandium project in Queensland means its budding gold
and copper prospects in Western Australia will be given an the previous explorers, so they are very open, juicy targets
opportunity to fly under the Norwest Minerals Ltd banner. waiting for a RC rig to get out there as soon as we get
listed. All the clearances are in place and these RAB hits
Having secured a cornerstone investment of $4 million, were averaging 4m @ 2.5 g/t gold. Obviously the idea is
Norwest was chasing the balance of its $6.6 million IPO at to get some good positive news flow going from our first
the time of print. Australian Mines will have about a 28% programme,” Schaus said.
shareholding in Norwest.
Following on from work at Warriedar, Schaus is keen to get
“We believe it is the right time which is why we are out there stuck into Marymia where the Dixon prospect is the main
doing it. We got our prospectus through ASIC no problems priority.
and we are halfway there just in a couple of days. You throw
in a Grand Final and a few other holidays and I think it is a Earlier this year, soil sampling at the Marymia JV with Riedel
pretty good start for Norwest Minerals considering everyone Resources Ltd indicated the potential for DeGrussa-style
is getting back to their desks now,” Norwest chief executive VMS mineralisation at the project.
Charles Schaus told GMJ.
Furthermore, drilling nearby by Lodestar Minerals Ltd has
“Talking to the brokers they are getting excited about the identified several large bedrock gold targets on the back of
story, I think with gold and copper, particularly copper which I 4m @ 74 g/t gold from 140m down-hole, 9m @ 3.4 g/t from
think is going to have the next big run in resources. We have 44m down-hole and 28m @ 1.8 g/t from 32m down-hole.
four different projects to chase copper and gold I think we will
attract the attention of people keen in those spaces.” Norwest has planned for an initial 3,500m RC and/or aircore
drilling in its two-year budget.
Norwest was on track to start trading on the ASX in late
October at which point walk-up drill targets at Warriedar and “We will give that a drill but at the same time we have the Bali
Marymia would be the priority. project which is an 8km shear and that entire shear is loaded
with copper. It is a good target but very rough terrain, so our
“Basically we have some very good targets at our Warriedar first job is to get up there and do some photographic work
project, near Mt Magnet, there are some very good RAB on that so we can really plan our drilling,” Schaus said about
holes to follow up on. These holes had been missed by Bali, which is 75km west of Paraburdoo.

“There has never been any decent geophysics done on it,
no ground work geophysics which will show us where the
sulphide bodies are in more detail.”

Page 20


23 October 2018

Perth,Western Australia

Image courtesy of Western Areas Ltd


Conference Sponsors

Opportunities to present, exhibit or attend still available, don’t miss out.
Contact Christine Oelschlaeger (+61) 8 9321 0355 [email protected]
Page 21


Shooting for the stars

by Michael Washbourne

Approaching the fifth anniversary of the company-making acquisition
spree that catapulted Northern Star Resources Ltd to the attention of
global investors, executive chairman Bill Beament was asked to consider

another landmark purchase.

For company founder Beament, it presented a strange Investment Management (UK) Ltd, which already has a
case of déjà vu as he sat down to read through pages of substantial shareholding in Northern Star.
documentation relating to Sumitomo Metal Mining Co Ltd’s
4.1 moz Pogo gold mine in Alaska, US. Following the transaction, Northern Star’s guidance for
FY2019 will be lifted to 850,000-900,000oz at an AISC of
“I got to page three of this 30-page IM and 10 minutes later I $1,050-$1,150/oz ($US787-862/oz), positioning the company
was in my business development manager’s office going, ‘oh as the second largest gold producer on the ASX.
my god, this is the Jundee playbook all over again’,” Beament
recalls. Beament says the Pogo acquisition was six months in the
making after Sumitomo directly approached his company to
Northern Star forked out $US260 million (about $347 million) make a bid for the mine.
for a mine which has produced 3.8 moz at an average head
grade of 13.6 g/t over the past 12 years. In 2017, Pogo churned “From the time you get the cold call and come through to
out 271,273oz at a head grade of 10.8 g/t for $US882/oz, executing, six months can go pretty quick,” Beament tells
making it the eighth largest gold mine in the US. GMJ. “It was a good pat on the back for the company and its
reputation because when they screened companies globally
The acquisition, which was completed on October 1, is being on all the criteria to approach the right ones to put their hat in
funded from the company’s existing cash reserves and a the ring for the acquisition, we came top of that screen.”
recent $175 million oversubscribed placement to institutional
investors, including funds associated with BlackRock Northern Star’s due diligence on Pogo was completed by the
same team that oversaw the process to acquire Jundee from

Page 22

Newmont Mining Corp in early “We were very quickly convinced
2014. In fact, Beament can see on paper it was great and as soon
more than one parallel between as we went to site and checked out the
the impending new addition and

the Wiluna-based operation Alaskan jurisdiction, it was a no brainer.
which has delivered strong

returns for the company over the

past four years. and that was part of the huge appeal to us. This has been

“I’ll be pretty honest, it is actually a better one of the eight largest gold mines in North America for 12

asset than Jundee because we think it’s years, it’s running beautifully. It’s a great operation, a great

got better grade and it’s got a fraction of team, a great orebody, and it’s making great cash flows, so

the drill metres to get an ounce of gold,” it’s not broken.

he says. “Can we invest in the people, invest in the exploration

“It’s an extraordinary asset; its history, geology and bring in some expertise? Absolutely, and that’s

its production profile, its simplicity, its what we plan to do. We don’t plan to export a whole heap of

location – it ticks all the boxes. It’s just a expats over there. We’ll sprinkle in some quality people who

beautiful orebody. We were very quickly know the lay of the land, know the game plan and know how

convinced on paper it was great and as we operate.”

soon as we went to site and checked Northern Star’s share price burst through $9 for the first time

out the Alaskan jurisdiction, it was a no- in September, peaking at $9.25/share while Beament and

brainer. We all know these things can other members of the company’s executive were doing the

look great on paper, but until you get rounds at the annual Denver Gold Forum.

to site, meet the management, meet It comes after the company announced a record net profit
the team, see the operations, see the of $194.1 million for FY2018 (excluding asset sales) despite
orebody in the flesh, see it all work, you investing $110 million in production growth activities at
can never be too sure how fantastic an Jundee and its Kalgoorlie operations.
asset is.”
Combined EBITDA for the two mining camps was up 15%
Hosted on the acclaimed Tintina to $486 million, allowing the company to issue a final 5c
mineral belt, Pogo marks Northern Star’s first venture dividend, lifting the full-year payout to shareholders to 9.5c/
outside Australia, albeit within the company’s guidelines of share.
only taking on Tier 1 assets in Tier 1 jurisdictions.
Other key highlights from Northern Star’s FY2018 report
Speaking to GMJ before jetting to the US for his first site visit included revenue of $964 million from the sale of 570,110oz
since announcing the acquisition, Beament says there is no at an average price of $1,704/oz and record mine operating
shortage of interested people eager to take a look at the cash flow of $463.7 million.
company’s “shiny new toy”.
Northern Star also reported a 27% return on equity and 25%
“I’ve got that many people hitting me up on LinkedIn and return on invested capital for the financial year, an industry-
Facebook and email and texts who want to go there, and this leading position which Beament says he is committed to
is everyone outside of my mining people,” he says. maintaining.

“I can’t emphasise enough that we’ve got a great team there “We beat our high 20s/low 30s regime, which is an

3D seismic data led to the
discovery of Zodiac

Page 23


Page 24

extraordinary result considering how much spend,” Beament says.

cash sits on our balance sheet,” he says. “We got that defeated, and guess what;

“It was a big year of investment when you we’ve said what we were going to do and

look at what we spent on exploration, what that money they would have taken off us is

we spent on capital to grow our production, getting re-invested back into the industry.

on M&A, yet we still grew our cash balance You’re seeing that through everyone’s

quite substantially and paid out $60-odd record spend moving forward. It’s a great

million worth of dividends. It was a very, win-win for the State.

very good year for the company.” “When you look at the bulk of the

With the “heavy lifting” at Jundee and exploration spend in WA, I think [the gold

Kalgoorlie now complete, Northern Star sector] is 70-80% of the total exploration

has guided at least 600,000 ozpa for its Bill Beament spend and I think across the country we’re
two West Australian operations for FY2019 about 70%. This sector drives all the drill

and beyond. rigs, the jobs in the assay labs, all that sort

Northern Star is also tipping $60 million into exploration of stuff. Without the gold industry, our services sector would
across its portfolio, having built up a healthy package of be a fraction of the size of what it is now and there would be
resources (15.9 moz) and reserves (4 moz) during the past a lot of jobs lost.”

five years. Northern Star is not just committed to success on its own

Beament is not shy about his reasons for committing what ground. Holding strategic interests in Venturex Resources

will be a record amount to exploration and discovery. Ltd and Echo Resources Ltd, among others, the company

“When you see the geology that we’re seeing across our has been and continues to be one of the biggest supporters
company – and obviously we see that a long way ahead of of the junior exploration sector.

the market – when you look at the targets and the extensions “We’ll pick and choose our battles of where we invest…but

“– down-dip, along plunge and in and out of the page – it’s a it’s a difficult market out there for the junior guys,” Beament
says. “Everyone can raise $5-6 million through Hartleys,

Argonaut, Euroz, etc. but when they’ve got to try

This is exactly what I was telling and go from that exploration stage to development
and production, that leg of the market is really

politicians last year about a royalty absent. In the US and Canada, it’s well and truly
increase, that it just comes straight off absent, non-existent and here it is very, very similar
to be quite honest.
our exploration spend.
“Some of the smaller sub-$50 million market cap

companies are struggling to get that next lick of

capital for the next stage. So, I think the bigger guys

bit of a no-brainer to allocate capital,” he says. Northern Star has budgeted a record
$60 million for exploration in FY2019
“When you’re adding ounces like we are, and I think we’ve
probably, in the last three or four years, been adding ounces
for about $30/oz, and you look at returns of around $500-
600/oz, for $30/oz that return on invested capital is simply
stunning for our shareholders.”

Northern Star is not alone in budgeting significant cash
reserves for exploration by Australian gold producers. Gold
Fields Ltd continues to set the pace with an $85 million
exploration budget for FY2019, followed by the likes of
Saracen Mineral Holdings Ltd ($60 million) and Evolution
Mining Ltd ($55 million).

It is hard to recall a time when the Australian gold community
was pushing more money back into the ground, perhaps not
coincidentally, only 12 months after the WA gold industry
rallied and defeated a proposed royalty increase by the
Labor State Government.

“This is exactly what I was telling politicians last year about a
royalty increase, that it just comes straight off our exploration

Page 25


An automated jumbo driller in action at Jundee

in the industry have a part to play. St Barbara [Ltd] has been Jundee is a prime example of Northern Star’s approach to
doing it, Saracen has got a couple of positions as well and innovation. During a site visit to the operation in August,
Westgold [Resources Ltd] has just done it with Musgrave guests were exposed to remote bogging from surface,
Minerals [Ltd]. These smaller guys need that big brother on automated jumbo drilling and 3D underground drone
the register because the institutions in that sized market cap mapping, all of which have generated significant cost
are just not there, and the mums and dads are not going to savings.
fund these things into development or production because
the financial capacity is just not there.” Northern Star was also responsible for the industry’s first
Innovation is another area Northern Star has been widely test of 4G communications underground at its Kalgoorlie
applauded for embracing, proving an early adopter while the operations last year.
rest of the industry was still warming to new technologies
and practices such as automation. Beament and other members of Northern Star’s senior
management, including Stuart Tonkin (chief executive),
Northern Star’s success has been attributed to Darren Stralow (general manager operations) and Luke
having cohesive teams across all operations
“What we brought into that
industry in our previous
lives is stuff that gets done every
day of the week across most mines
here in Australia and internationally

as well.

Page 26

Creagh (general manager business development), previously “We stopped using that 12-13 years ago, before this mine
worked for leading underground mining contractor Barminco would have started in 2006. Pretty much the whole of the
Holdings Pty Ltd where innovation was highly encouraged. Australian industry is using tele-remotes now, whether it’s
direct operator tele-remotes or semi-autonomous – which is
“What we brought into that industry in our previous lives is what we’re using across all our sites – and remoting from the
stuff that gets done every day of the week across most mines surface during shift changes.”
here in Australia and internationally as well, so we had an
innovative culture prior to Northern Star and it’s been pretty While innovation in the mining industry is no longer the dirty
easy to bring that in and bring some of those technologies word it once was, Beament warns against implementing
and improvements into this business, especially when you supposed smart technologies without proof-of-concept or
own the mines and you’re not the contractor, it’s much, much the ability to meet key criteria.
easier to implement,” Beament says.
“We can be as technical and innovative as we want, but
“We are one of a handful of companies that are at the unless it does it quicker, faster and cheaper per ounce, then
forefront of a lot of this stuff and we’ve been that way for a it doesn’t really mean crap,” he says. “For us, it has to have
number of years. We look at some of our peers, in particular an end result that improves our productivity, improves safety
offshore, they’re only just now implementing technologies and lowers our unit cost per ounce, otherwise we’re not
into their mines that we were doing 5-7 years ago. So, while interested.”
people overseas were talking about it, we were actually
doing it.” Jundee is tipped to crack the 300,000oz mark in FY2019,
even without the Ramone discovery being included into the
Investors can expect Northern Star to introduce automation production schedule. However, initial mining of the deposit
to Pogo at the first available opportunity, with Beament is slated for the final quarter, with first ore to be processed
admitting to being taken aback by some of the outdated in early FY2020.
practices he witnessed during the due diligence.
Northern Star’s 12 moz Kalgoorlie camp – comprising the
“It’s probably the most Australianised underground mine East Kundana JV, Kanowna Belle and the recently acquired
we’ve seen in North America to date, it’s a fantastic South Kalgoorlie operations – could potentially nudge
operation, but they’re still using line-of-sight remotes for 350,000oz in FY2019, Beament believes.
stope bogging,” Beament explains.
Paulsens – the company’s first acquisition in 2010 – was
“We run with the bulls at
Northern Star and so
we’re always busy looking ahead
and looking at how we can grow

the business, but we do need
to reflect and celebrate success

and what’s been achieved.

An upgrade of the Jundee plant was a key
investment for Northern Star during FY2018

Page 27


paused late last year and operations will remain on hold emphasise that enough. I probably picture it to being like the
for the foreseeable future while new ore sources are West Coast Eagles [AFL team]. It is just absolutely peaking
progressively established. with the quality of talent, the people we’ve brought in, the
training we’ve done, the promotion within.
Beament says 3D seismic data from Curtin University- “You can only do what we’ve done because people are
backed HiSeis is driving the company’s confidence in re- engaged, they’re enthused and they want to grow the
opening Paulsens at a later date. Seismic was integral in the company. It’s been an extraordinary ride so far, but we’re not
recent discovery of the Zodiac system at Jundee. stopping here. We’ll continue to grow this business. We think
the platform we’ve built can grow to another level.”
“We’re a huge advocate of that technology and so is the gold
sector across Australia,” Beament says. “We just finished a Drones are now being
3D seismic cube at Paulsens, we’ve just got the first-pass used to help map
data back, and while I can’t say too much, it’s going to be underground stopes
a very valuable tool for us to target areas on that system,
which has yielded 1 moz at 7.5 g/t.”

Northern Star also received a boost in September when
Tanami Gold NL exercised a first put option to sell a 15%
undivided interest in the Tanami gold project for $20 million
cash, providing a pathway for the former to hold 75% of
the Northern Territory asset upon achieving commercial

“When you look at that [ownership structure] versus 60%,
it has more appeal for us to start motivating capital in the
coming years,” Beament says.

“We haven’t stopped idle there. We’ve been doing a lot of
baseload data with geophysics, geochem, gravity surveys,
flying areomags, building those layers back up. We also
drilled under the mill and our partner put out some very nice
results underneath the mill, which is quite interesting, and
poses an interesting discussion down the track.”

Beament can hardly believe that almost five years have
passed since his company
climbed to the top of the
Australian mid-tier gold sector
through acquisition of a series of
unloved assets from Newmont
and Barrick Gold Corp.

While there are no plans to
celebrate the anniversary,
Beament acknowledges there
must come a time when his
dedicated team can take a step
back and properly enjoy the
fruits of their labour.

“We run with the bulls at Northern
Star and so we’re always busy
looking ahead and looking at
how we can grow the business,
but we do need to reflect and
celebrate success and what’s
been achieved,” he says.

“The team we’ve got is
unbelievable and I can’t

Page 28

Automation has led to increased drill
metres and reduced drill-hole deviations
in the Jundee underground

Northern Star geology manager Francois Smit
Page 29

aims to cut
The new MinEx CRC has been created to deliver
cheaper, faster and more efficient drilling technologies through
and systems to aid exploration in Australia the cover

by Dominic Piper

Anew mining-focused co-operative research centre, the largest
in the world, could eventually give explorers the tools needed
to deliver in Australia’s most underexplored regions.
Set to begin work from January, the $218 million MinEx CRC is
focused on developing new drilling technologies and building
Australia’s pre-competitive geological database to assist explorers
in finding a new generation of ore deposits.
MinEx will have three core programmes focused on improving
drilling technologies, increasing the amount and quality of data
collected from drilling and a national drilling initiative to map
regional geology and architecture in 3D.
MinEx chief executive Andrew Bailey said research in all three
areas could lead to major advances in Australian exploration
“The primary aim of the CRC is to increase discoveries and
therefore increase mining in Australia. To get there we need more
exploration and that means looking under cover. It is the surveys’
task to stimulate that exploration,” Bailey told GMJ.
The confluence for all three programmes is making exploration
faster, cheaper and more efficient, allowing explorers to test more
difficult environments.
“The efficiency of drilling drives costs, if the process is faster, it will
be cheaper,” Bailey said.
Cost becomes particularly important as companies take on deeper
“Almost all drilling in Australia to date has been in outcrop but more
than 70% of Australia lies under some sort of cover. The only way
to find deposits under cover is through drilling,” Bailey said.
Although a completely new CRC, MinEx will take some inspiration
from the recently closed Deep Exploration Technologies (DET)
CRC. The DET focused on drilling technology, leading to the
development of the coiled tubing drill rig and lab-at-rig assaying.
The coiled tubing rig was recently commercialised by Imdex but
MinEx will continue to refine the technology in order to improve its
effectiveness and efficiency.
Curtin University is a participant in both CRC’s. Curtin Professor
Brian Evans told GMJ the MinEx programme would carry on

Page 30

where the DET programme left off. MinEx projects will include refinement of the coiled
tubing drill rig now being commercialised by Imdex
“Before the DET CRC, Curtin Drilling Group spent six months
reviewing exploration costs and identified coiled tubing as the in a region to map the regional geology and architecture and
way to go [for cheaper, more efficient drilling],” Evans told GMJ. define the potential for mineral systems in 3D.
“It has low OHS issues, doesn’t require stacking and uses less
water. By the end of the DET CRC we knew precisely what “Up until the 1960s, the surveys did a lot of work mapping
needed to be delivered.” the country, for the three decades after that they did a lot of
geophysical work and the third phase is drilling, particularly
Coiled tubing drilling currently has a depth capacity of 500m. under areas of cover, in order to generate the pre-competitive
MinEx’s programme will focus on extending its reach to 1,000m. data needed to turn around the decline in exploration spending
in Australia,” he said. “To do that we need to use better, cheaper
“The aim is to double it as well as making it steerable,” Bailey and more efficient methods of exploration, like the coiled tubing
said. “We will then develop the ability to drill multiple deviated drilling technology.”
holes from a single pad, giving it a lower surface footprint.”
The NDI programme will also include a project to design a web
As well as finding more efficient ways of drilling holes, MinEx will platform to optimise drilling decisions and targeting.
also focus on deriving more value from each hole drilled.
MinEx is co-funded by the federal CRC programme, industry
“It is not just drilling technology we are looking at but the assaying, and the participating geological surveys. Miners such as Anglo
geophysics, seismic and processing of a lot of existing data to American plc, Barrick Gold Corp, BHP Ltd and South32 Ltd
better target areas,” Bailey said. “Eventually, we will be able to are participants, along with major service companies such as
drill faster and get better data.” Epiroc, Sandvik and Imdex.

The data-for-drilling programme will include projects on “We have got a good spread of industry participants from major
developing real-time down-hole assaying technology, domestic and overseas miners to good local METS companies
petrophysical logging while drilling and greater application of as well as the likes of Sandvik,” Bailey said. “We could, though,
seismic methods during the drilling process. have more participants and opportunities for others to join and
participate remain.”
Evans said the Curtin Drilling Group had continued to work in
this area between the two CRC’s. Evans said it was exciting to be a part of a CRC which involved
genuine partnerships between researchers and industry.
“By developing the materials used in the coiled tubing drill
rigs you could also build the tube out of “We are very optimistic and have an industry science panel
composites and embed electronics in them made up of drillers and miners,” he said.
so you can do real-time down-hole logging “Miners are not exactly known for being shy
and assaying,” he said. “The more we worked so you know where you stand with them and
on it, the more we realised the opportunity to what they want but they’ll also listen to you.”
develop all these technologies. MinEx can
develop advances on existing technology The 10-year programme may not deliver
and new technology.” immediate benefits to the industry but
Bailey believes that ultimately it will cement
The National Drilling Initiative (NDI) will Australia’s position as one of the world’s
provide the ideal environment for trialling of preeminent exploration jurisdictions.
these new drilling technologies, including
coiled tubing drilling. “We are not going to be manufacturing
widgets to improve rigs in the next six
“The geological surveys had the money to months, this is a long-term programme,” he
drill but needed the technology and we had said. “Australia is at the forefront of mineral
the opposite,” Evans said. exploration because of this CRC model we
have, which enjoys bipartisan support. The
Bailey sees the NDI as a natural progression industry is certainly supporting it, miners
for Australia’s geological surveys. The and METS manufacturers are supporting it
programme’s vision is to drill multiple holes and it’s going to get better.”

Page 31


Testing new

by Michael Washbourne

As new technologies and innovative practices are Projects coordinator/chemist Michelle Rankine
progressively introduced to the industry, the challenge tests a sample at an Intertek lab
for many miners, explorers and services providers is how to
balance that against tried and tested methods. along with an increased level of requests for mineralogical
analysis such as XRD [x-ray powder diffraction],” Fowler said.
Leading minerals analytical group Intertek is one company
which has been prepared to embrace both. New innovations “Large multi-element analytical suites are now a standard
such as ultra-low level pathfinders, backed by inductively request, especially for exploration where geologists are
coupled plasma mass spectrometry (ICP-MS), which can interested in tracking alterations and mineralogy changes.”
help explorers identify subtle anomalies, continue to generate
plenty of interest from the group’s broad list of clients. Intertek has a dedicated team reporting at board level working
on innovations across all divisions of the group, including
Intertek senior vice-president of minerals John Fowler said minerals.
while innovation added an exciting new dimension to the
analytics industry, he urged caution against moving too far One project recently commissioned is focused on big data
away from conventional testing and its proven track record. analytics to see if any potential value can be added from the
huge datasets retained by Intertek from its client samples.
“I think one of the biggest challenges is that we sometimes get
swept up with new and exciting technology and as analytical “In our minerals business we have several ongoing projects
specialists we have to remember to work with our clients to which have run for several years where we are working to
ensure that we and they are not ignoring the basics,” Fowler provide better, cheaper, faster solutions for clients in chemistry,
told GMJ. automation and IT,” Fowler said.

“The important thing is and always has been the sampling. “Technology is moving quickly and there are so many exciting
So, with our impressive and ever-improving handheld XRFs, innovations that we have to be selective and choose which
we must remember that we are still looking at a roughly 5mm ones we want to run with.”
spot on the surface, with penetration measured in microns, of
whatever we are pointing it at. Fowler highlighted the reaction cell ICP-MS as one of the key
breakthroughs for the analytical industry in the gold space in
“Another challenge is many of the new technologies rely on recent times because of its ability to improve the quality of data
predictive modelling in their application, it’s not a standalone by removing interferences.
accurate quantitative analysis. Understanding the limitations
of techniques is vital in selecting fit-for-purpose methods.” “In the field the evolution of the handheld XRFs, not so much
for gold itself but for associated mineralisation, these are a
Despite the resources industry moving through various peaks fantastic tool as geologists no longer need to lick the core and
and troughs, one thing remains a constant for Intertek – clients count the sparkly bits,” he said.
always want better, faster and cheaper ways to get their
desired results. As is proving to be the case for many others in the industry, the
introduction of automation to Intertek’s minerals division has
According to Fowler, who has been an Intertek employee for Fowler excited about the benefits it could deliver for clients.
34 years, when times are tough clients will first seek to review
potential gold mineralisation within their samples before other “We are very passionate about automation, we have several
elements. exciting new robotic projects in the pipeline,” Fowler said.

Fowler said if funding is available, clients will often then request “The use of automation reduces our overall health and safety
information on potential indicators of mineralisation relating to exposure, gives us a reproducible high quality product with
associated elements, mobile metal ions and biogeochemistry. perfect trackability and elimination of human error.

“What we are now seeing [from clients] is a greater acceptance “We are now just scratching the surface of big data analytics.
of technologies that give us fast, indicative analysis such as We have had huge success with this in the oil and gas industry
pXRF and FTIR [fourier-transform infrared spectroscopy], and we are excited about the possibilities of this for the mining
while traditional assays are processing through the laboratory, industry.”

Page 32

Collaboration leads to
productivity gains

by Dominic Piper

Evolution Mining Ltd and “It has allowed us to get
Northern Star Resources information from the mines and

Ltd achieved rapid success by tailor our product to the client’s

changing the organisational needs and then develop our

culture at operations acquired technology around that,” he said.

from larger overseas players but “And, at the end of the process,

the two miners are now turning we have gained two clients who

to innovation to drive further saw value in the product.”

productivity and performance Evolution has seen 62.6% less average dilution at Cracow McCracken said the introduction
gains. since introducing Minnovare’s production optimiser system of new technology always
relied on communication and
Both Evolution and Northern engagement with operators,
Star have been willing adopters

of technology in recent years, a process which was heavily

reflecting a wider industry embrace of new systems and influenced by company culture.

methods to capitalise on recent achievements. “The challenge is always around change,” he said. “Historically,

“It is great for us that a lot of gold mining companies are people have been burnt by METS companies who come

beginning to accept the need to innovate to remain competitive promising the world with their new technologies but then they

and we are seeing that translate into action on the ground,” find they don’t live up to expectations.

Minnovare managing director Callum McCracken told GMJ. “Often, this is because they haven’t been implemented

Minnovare has been collaborating with Evolution and Northern properly. It is important that you engage stakeholders and

Star to refine and enhance its production optimiser technology. explain what you are trying to achieve and how it will impact

The system combines hardware and software to improve their jobs so when companies are encouraging their people

drilling efficiency and productivity in underground mines. Its to improve and give them autonomy, that job is much easier.”

patented Opti-Box technology calculates optimum boom McCracken remains conscious of developing technology
dip and dump angles independent of on-board inclinometer which answers clients’ problems.
systems, reducing blast-hole deviation.
“Too many companies develop projects within a R&D
At Evolution’s Cracow mine in Queensland, application of the environment and fail to engage with customers, but why would
production optimiser process resulted in a 160% increase in you not engage? Collaboration between METS companies
the number of holes drilled within the tolerated deviation. As themselves is similar. Often, new products don’t link to other
a result, stopes drilled using the new technology recorded processes so the client doesn’t see true value. We collaborate
62.6% less average dilution. Extrapolated across the full with drill-and-blast software providers so that engineers don’t
financial year, the reduction in dilution would lead to $8.2 have to change how they design the drill plan. Companies
million of additional ore recovered and $4.5 million less spent which listen and collaborate with clients will be the ones who
on wasted cost of haulage and processing, resulting in a 22% are successful,” he said.
increase in return per tonne of ore.
McCracken believes the importance of collaboration will
At Northern Star’s Jundee mine, the introduction of the continue to grow as miners push towards embracing full
production optimiser had led to increased drill rates and automation.
improved stope recovery.
“The industry is trying to work towards automation but to do
“They quickly saw the benefits and now want to implement it that you need collaboration,” he said. “It is a huge step to get
across all their operations,” McCracken said. to full automation and you can’t get there overnight. It needs to

Miners’ willingness to enter collaboration agreements had be a collaborative and staged approach.”

proven beneficial to his company’s ongoing refinement efforts,

according to McCracken.

Page 33


Bolstering gold detection

by Dominic Piper

Anew portable analysis process could be a “game changer” accordingly. In remote locations, that is going to be particularly
for explorers doing early-stage work in remote locations, useful.”
according to the geoscientist charged with bringing it to market.
Portable ppb won the global commercialisation rights through
Developed by CSIRO, the detectORE technology can a tender process and is now undertaking further testing ahead
accurately identify gold of less than 10 ppb [compared to the of a mid-2020 full commercialisation date.
current 2 ppm] using a portable XRF machine in the field,
potentially slashing the time it takes to receive sampling results “We now need to complete the research side and
which could lead to much shorter discovery timetables. then step up the development side,” Bolster said.

“I immediately saw it as the holy grail for explorers,” Simon The company has already tested 139 certified
Bolster told GMJ. Bolster is managing director of Portable ppb, reference materials using detectORE, covering a
the sole company working with CSIRO to further develop this range of gold levels. Bolster said the results were
technology and take it to a global exploration market. highly encouraging while a field trial ran by CSIRO
had shown good correlation to assay results.
The technology itself sees samples (streams, soils, trenching,
etc.) placed in a bottle which contains a “widget”. The bottle “There are a number of known unknowns we are
is filled with water and left for 24 hours. The widget is then still working on,” Bolster said. “Can we reduce the
removed and analysed using a standard portable XRF time in the bottle from 24 hours? What is the lowest
machine. The results are then sent to a cloud server where detection limit? And, what are the best portable XRF
detectORE’s patented software analyses it and returns results machines to use?”
almost immediately.
The company is also planning to test the system on
“So, the smarts are both in the hardware and the software,” a variety of regolith terrain types globally as well as
Bolster said. different sample media.

A geoscientist with more than 30 years’ experience in the “We have identified Central Africa, West Africa,
exploration industry, including as a long-serving consulting the Guiana Shield, the Andean cordillera, Nevada
geoscientist with Newmont Mining Corp, Bolster sees and the Canadian Tundra as our global trial areas,”
detectORE as potentially invaluable, particularly for juniors Bolster said.
working in remote locations.
“We’ve only done test work in WA so far but my experience
“Time is money in exploration and if this can speed up the with Newmont tells me that people don’t believe it’ll work in
exploration process you can save on general and admin costs. their environment until you show them, even if it is in the same
But, it is about much more as well. It will give explorers the regolith,” Bolster said. “So, we will set up test work around the
ability to do adaptive sampling and make decisions on the fly globe.”
in the field without waiting months for results.
Bolster has recently been on a world tour promoting the
“While I was working with Gryphon [Minerals] in Burkina Faso, technology among gold companies. He said the response
we had, at one point, a backlog of more than 200,000 samples had been very positive and was confident Portable ppb’s
waiting to be assayed. We would’ve loved this but instead we sponsorship target of $1 million would be met.
had to hire a charter plane and fly them out.”
“The sponsorship scheme is about getting companies involved
Cost improvements are one advantage of the detectORE that share our vision of how this could change the future of
process but even more invaluable in earlier stages of the industry,” he said. “We have only one of our five gold
exploration is the ability to change tack depending on what the sponsorship opportunities left, four of the silver opportunities
results are showing. and three of the bronze opportunities. There is only a limited
number and once they are filled, that’s it.
“In many cases in remote locations, exploration becomes
like a game of Battleships in which you are firing off pot shots “Everyone understands it is R&D and that we will be sharing
in the hope of finding something; there isn’t the time to wait information among the sponsors and talk through the best
months for assay results before planning your next move. With ways to apply it before it goes out to the wider market.”
detectORE, you can be stream sampling one day, receive
and analyse the results the next and adapt your programme Among the companies to sign up to sponsorship already are
Gold Road Resources Ltd, Bellevue Gold Ltd, Kirkland Lake

Page 34

“In many cases in remote
locations, exploration becomes
like a game of Battleships in which
you are firing off pot shots in the hope

of finding something; there isn’t the
time to wait months for assay results

before planning your next move.

Portable ppb is developing
the detectORE gold field

analysis technology. Material
samples are collected (left)
and placed into detectORE
bottles with “widgets”

loaded in the field for on-site
concentration. Results are
available within 24 hours

Gold Inc and Newcrest Mining Ltd. “I feel all my skills are coming together for this project. I’ve
worked on gold exploration projects throughout the world so I
For Bolster, the emergence of detectORE is the stuff of know the various challenges different regions present. I think
exploration dreams. that allows me to relate to the explorers we are talking to and
helps in structuring win-win relationships with them.”
“During a Newmont brainstorming session many years ago I
suggested my dream tool would be a low-level gold portable Bolster is joined in the company by Peter Williams, a founding
XRF which was instantly dismissed as too ambitious. Years director of Intierra and HiSeis as well as Independence Group
later during a conversation in the early hours of the morning at Ltd and Dr. Mel Lintern, the inventor of detectORE, who left
PDAC, I was told about the CSIRO’s work on this and thought CSIRO to join Portable ppb.
it could be a real game changer for the industry. I followed up
with CSIRO and it eventually led us here.

YTGOOEUDTRASY Past and present Conference Proceedings

7 and CD-Roms are available for sale
For details or to download an order form visit

Phone (+61) 8 9321 0355 or email [email protected]

Jointly organised by:

Keith Yates & Associates Pty Ltd

Page 35


New process
eliminates cyanide

by Dominic Piper

Page 36

CSIRO research Dr Paul Breuer with a gold ingot, produced via the “The threshold of CIL plants,
cyanide-free process developed by CSIRO and Eco Minerals Research when taking into account
all the regulatory and compliance
Developers of a new cyanide-free processing technique requirements, is basically $30
believe it could deliver economic, regulatory and marketing million. We saw opportunity to offer
benefits to gold miners. a solution with lower barriers to entry

Developed by the CSIRO through its “going for gold” research for smaller miners who are currently
programme, the process uses thiosulfate as an alternative considering gravity-only circuits.
leaching reagent to cyanide. First gold was produced using the
process in August, from a demonstration plant built in the West have our eyes on the Victorian goldfields because cyanide
Australian town of Menzies by CSIRO and project partner Eco use is quite controversial there. We are highly advanced in
Minerals Research. discussions with companies in Victoria about using it on some
of the high-grade tailings there.
The CSIRO research team behind the innovation has already
had commercial success with another tailored cyanide-free “We also see opportunity in places likes South Africa where the
gold solution developed with Barrick Gold Corp specifically for social issue of cyanide is problematic.”
its Goldstrike mine in Nevada where it has been used for nearly
four years to maintain production rates. Breuer reiterated that the JV’s target market was smaller
miners rather than big multimillion ounce operations.
Dr Paul Breuer – who has been working on the process for a
decade – believes that while it will not directly replace carbon- “There has been plenty of interest from the industry but it
in-leach (CIL) processing for major operations, the thiosulphate is a matter of couching it into the right categories for the
flowsheet could prove attractive to smaller miners. opportunities,” he said. “This process will not be competing for
large-tonnage, low-grade projects but the smaller miners are
“Big projects have long mine lives where you can write capital keen to see how they can better utilise gold deposits without
off against the deposit but for smaller projects this isn’t always using gravity or expensive toll-treatment options. We offer a
possible,” Breuer told GMJ. “The threshold of CIL plants, process through which they can do this.”
when taking into account all the regulatory and compliance
requirements, is basically $30 million. We saw opportunity to Breuer said gold recovery rates would be very similar with
offer a solution with lower barriers to entry for smaller miners the alternative reagent. However, higher concentrations were
who are currently considering gravity-only circuits.” needed than with cyanidation, meaning that initiatives such as
dry tails stacking and nano-filtration were required to recover
Eco Minerals Research director Paul Hanna said his company and recycle the reagent and minimise water use to make the
had been searching for alternatives to cyanide use for some process economic.
The smaller capex and lower regulatory burden could also
“As we became involved in the gold business we began looking allow the process to become mobile.
at technology as a driver of the next stage of the industry,”
Hanna told GMJ. “The existing processing technology felt a “We are looking at the economics now,” Hanna said. “We want
bit antiquated and as we researched things we began to see a reasonable capex and the ability to get in, mine and process
cyanide would get harder and harder to use because of the smaller deposits over, say, three years and then move the plant
environmental issues associated with it. onto something else.”

“I came across Dr Breuer’s name during my research so I called There is growing community opposition to the use of cyanide
him one Saturday morning. He said: ‘let’s catch up’ and within in gold processing and Breuer expects the trend to continue,
three weeks we had signed a collaboration agreement with making the thiosulfate flowsheet even more desirable.
CSIRO that uses Menzies as the first site. It was ideal because
we already had approvals and the right plant and equipment “There are plenty of opportunities around and we are confident
in place.” it can be applied to bigger projects where cyanide can’t be
used, particularly for reasons of social licence.”
Hanna said the partnership – which only began in November
2017 – was already fielding inquiries from miners interested in Hanna is also keen to investigate the marketing potential of the
using the process. new flowsheet.

“Now that we have that proof-of-concept, we are looking at the “There is no question the use of cyanide is becoming more
next stage of scaling up Menzies,” Hanna said. “Menzies is problematic and is already banned in a number of places,” he
now really becoming a research hub for the industry and we said. “We have already struck a partnership with a jeweller in
are looking at other types of innovation as well, including the Perth who is using the gold and marketing it as ‘eco-friendly’
use of renewables. gold and then charging a premium for it.”

“Interest is coming from all over Australia and overseas. We

Page 37


Up and away with SAM

by Mark Andrews

Back in the 1990s, Malcolm Cattach was ahead “We have had to prove that the technique
of the curve in pioneering the sub-audio could work and then develop all the accessory

magnetics (SAM) geophysical technique. instrumentations like transmitters and then the

Now, as chief executive and chief geophysicist helicopter platforms, different acquisition system
of Gap Geophysics Australia Pty Ltd, Cattach is and GPS synchronisations. It has been a long
taking SAM to another level and incorporating process to get to where we are today, but what we
drone technology. have is a pretty amazing technology.”

“The next innovation along is working on a drone Brisbane-based Gap Geophysics provides

system and we are actually flying our first tele- more than just SAM to the mining industry, with

SAM drone survey in a few weeks,” Cattach told Malcolm Cattach Gap GeoPak (geophysical transmitters), Gap
GMJ in late September. GeoSafe (health and safety), Gap EOD (explosive

“One of the limitations with the drone at the ordnance) and Gap GeoTek (customised
moment is the requirement for the line of sight and you can’t be geophysical engineering) rounding out its expertise.

doing particularly long lines. With heli-SAM we might have lines Recently, the company joined forces with an outfit related to its

5km-long compared with a UAV [unmanned aerial vehicle] you Canadian partner and introduced a new survey technology –

are probably limited to about 1km at the moment. That might DIAS32 3DIP system – which Cattach believes will be a real

change with [UAV] regulations, but at the moment there are still winner for industry.

restrictions.” “We have coupled their receiver technology with our transmitter

Cattach said it was a matter of scale as to which platform technology developed here in Australia and the combination
companies chose to execute SAM surveying, with high- of high-powered transmitters and the 3DIP system is quite a
resolution, high-quality data coming from slow and expensive winner, I think,” he said.

boots on the ground. “We actually have two 3DIP systems working concurrently at the

“That means people are still potentially walking 20km a day moment in Australia and it has proven to be fairly popular and
surveying,” he said. I think that is going to be a fairly major advance [in exploration
“With a UAV you might get 50-60km per day over a small
area and with a helicopter you can potentially get 150-200km The DIAS 3DIP technology provides a quality of data for IP and
surveying done a day, so it is a function of scale as to which resistivity that has been designed for the acquisition of real-time
way you go.” geophysical data in true 3D.

Cattach said Gap Geophysics’ crews were being kept busy by The system uses electrodes and recording nodes operating
the likes of Northern Star Resources Ltd in Western Australia, via a wireless network that can measure the earth’s response
while Pilbara conglomerate hopeful Artemis Resources Ltd was to electrical currents injected into the ground via geophysical
also filling the company’s order book. transmitters.

“The really key thing about SAM for gold exploration is that The large number of nodes needed for set-up means the system
this is an extremely efficient, very high-resolution technique for is expensive compared to conventional surveys, however,
structural mapping. It is extremely sensitive to mapping the likes the upside is in managing difficult terrain and returning more
of shear zones and often detects shear-hosted gold deposits, accurate results.

which is a big target for a lot of gold explorers,” Cattach said. SAMSON

SAM stemmed from the development of rapid sampling geophysical
magnetometer technologies and applications at the Geophysical surveying
Research Institute (GRI) at the University of New England, New techniques – such
South Wales. as this one being
used in the Atacama

SAM was the subject of a PhD completed by Cattach, with Desert, Chile, are
the ever-evolving technology widely used around the world by highly popular

companies searching for an array of commodities.

“It has kind of been a lifetime thing for me as it has been 25
years since I started working on it,” Cattach said.

Page 38

EM the

by Mark Andrews

Equipment and technology developed by Perth-based ElectroMagnetic
Imaging Technology was instrumental in the Nova nickel discovery (left)

Gold exploration is a tough business, but since 1994 gold plays. Australia does very well in metal detecting services,
ElectroMagnetic Imaging Technology Pty Ltd (EMIT) like MineLab, and it is good to see people developing new
has helped industry with the difficult assignment of where to technology in Australia. They are like our brothers, they are one
plot the next drill hole. of the few companies in Australia, along with Gap Geophysics,
which are also high-tech geophysics equipment manufacturers;
“The best contribution that we can make to exploration value it is a bit of a small brotherhood there.”
is by creating instrumentation and software that delivers better
quality data, so there is a better foundation of where to drill While EMIT’s equipment is used every day in the field and very
next. For us, it is all about increasing the quality of data,” EMIT commonly referred to in ASX announcements by companies
founder and director Andrew Duncan told GMJ. rolling out their exploration programmes, it is rare that Duncan
and his team at EMIT get the deserved plaudits for their
“There is constant research and development effort going on contribution to exploration.
which increases the quality of data, but we are also introducing
new instruments which make contributions in a few different Nevertheless, Duncan does get some satisfaction from seeing
areas.” EMIT’s innovations and technologies involved in the discovery
process, with the Nova nickel sulphide mine one such highlight.
Many in the industry believe the development of high
performance EM technology has been one of the major “The drill holes there were targeted on EM data collected
geophysical innovations in recent times, with EMIT regarded as with our equipment by Sirius. They contracted a geophysics
the world’s best in manufacturing such tools. service provider that was using our equipment. They came
up with a moving loop EM data set which was collected with
As part of its exploration services, Gap Geophysics operates our equipment and the drill holes were targeted using our
EMIT surface and down-hole EM systems in combination with interpretation software. That is something we had a direct
its own transmitter technology and has reported great success. connection in which was company changing for Sirius,” he said.

Meanwhile, Duncan said the completely portable EM systems “In Australia, people who are reporting on these types of
carried on back packs which can do high-resolution detailed electrical geophysical surveys are quite often using equipment
electrical conductivity mapping is just one example of the we have made or they have been using our technology in one
innovative ideas brought to the table by EMIT. form or another, especially down-hole EM. We are pretty much
the only Australian manufacturer, especially in base metals
“That is designed to be used at the surface or along a decline exploration but any exploration where explorers are trying to
in a mine, for example. Once again it is all about mapping of map some kind of electrical conductivity variations.
the electrical properties of rocks and with different systems you
can do it at different scales and they are really just giant metal “You get those in the gold exploration sector because of
detectors,” Duncan said. the associations of gold with massive sulphides and other
conductive minerals, so there is a nice tie in amongst all these
“You can do it at scales of hundreds of metres or scales of less base and precious metals programmes.”
than 1m. We tend to do measurements at much larger scales
and we might be looking down 1km for a big conductive target,
but the short detailed stuff from surface is pretty important in

Page 39


flying high

Medusa is confident of producing almost
100,000oz from its Co-O gold mine in FY2019

by Michael Washbourne

Operations at Medusa Mining Ltd’s Co-O mine in the Philippines have turned the corner,
according to chairman Andrew Teo, and now attention is shifting towards reducing costs

so the company can turn a profit in the near future.

Medusa has guided 90,000-100,000oz at $US1,050- The E15 service shaft is shaping as the most critical piece of
1,150/oz AISC for FY2019 with the upcoming E15 infrastructure in Medusa’s bid to become a profitable miner. As
service shaft to provide an economic benefit to the long- it stands, the existing L8 shaft is the only option to transport
standing yet sometimes challenging operation. people, materials, ore and waste.

It comes after Medusa reported production of 95,705oz gold Due for practical completion in October, E15 will service all
at an average recovered grade of 6.33 g/t for $US1,083/oz levels to L10, two levels deeper than what L8 currently can,
AISC in FY2018, up from the 80,743oz churned at 5.33 g/t for and will be primarily responsible for transporting people and
$US1,374/oz during FY2017. materials, freeing up the existing shaft exclusively for ore and
However, despite the positive uplift in production, Medusa still
reported a statutory after-tax loss of $US55.6 million, which Teo acknowledged delivery of E15 had blown out by “about
includes non-cash asset impairment losses of $US81.1 million. a year”, but he remains adamant the capital invested and the
expected benefits were worth the long wait.
Speaking to GMJ after unveiling Medusa’s plans for FY2019,
Teo declared operations at Co-O were back on track and “We do rely a lot on expats and locals to go over there, expats
reducing costs was firmly on the company’s agenda for the in particular, because to do a 500m shaft, the way we’re
coming year. doing it, we’re relying purely on South African and Australian
technology,” Teo said.
“The gist of the matter there is we need to address the costs,
our AISC, so we certainly are looking at that,” Teo said. “My view is we have to make sure that safety, safety, safety is
paramount. We’re not going to do a Mickey Mouse shaft. It’s
“It’s always a common theme for all miners, whether in Australia got to be state of the art with South African material, technology
or overseas, just to address the cost issue. We’ve certainly got and everything else, with Australian design and Australian
no control of the gold price, unfortunately, so really the only input too, in the structure.”
matter we’ve got to address is the cost issue.
Teo said while Australian and South African materials and
“We certainly have turned the corner. The market is very quick expertise were largely used to build the E15 shaft, Filipino
to judge and very slow to forgive, if I can use that cliché, but labour was responsible for putting it all together. This is
like all things you have to go with the ups and downs because consistent with the company’s policy of working with the locals
that’s what it’s all about.” who “the ownership ultimately rests with”.

Page 40

It is one of the reasons why in- Genuity analyst Patrick Chang joining the company as its new
country manager and executive corporate development manager.
director Raul Villanueva was
promoted to such a senior position Teo, who has temporarily taken on the chief executive duties
within the company and a large following Timler’s departure, implored the market to recognise
portion of the Co-O workforce are the long-term potential of the Co-O mine.
from local villages.
“Ten years we’ve been there and long may it continue, but like
“We take pride in saying we all things you need to prove it up to show it’s there,” he said. “It
are managing [our Philippines always has and always will be a long-term mine, and that’s the
relations] very well,” Teo said. reason why we’re looking around the surrounding area which
is not far away from the Co-O mine, just to make sure.”
“The big issue from my perspective
is respecting the rule of law over Medusa plans to tip more funds into exploration in FY2019,
there and understanding there’s with potential depth extensions at Co-O to be tested below
so many stakeholders involved. the L10 level, along with high-priority targets on the 410sq km
We are the largest employer for tenement package such as Royal Crown Vein and Durian.
that area. We’re not a chip and a
putt away, as they say in golfing Both exploration pursuits are considered central to the
terms. Surrounding our mine site company’s long-term plans to increase feed to its underutilised
are little towns where the multiplier mill.
from employment, I’m told, is eight
times. So, for every one employee “The mine doesn’t provide enough feed to keep it going 100%
we have, we support eight people in the surrounding areas. of the time, so anything we find within our tenements actually
becomes very meaningful for our production costs going
“We support more than 10,000 students by sponsoring forward,” Chang said.
schools and so forth. We even have a school named after our
mine over there. All these things help, not because we want While many Australian gold producers have achieved success
to do it, because it helps the people…it’s their land that we’re in recent times from hedging production, Medusa appears
working on, so we have to be mindful of that.” unlikely to join the party any time soon despite Teo not ruling
it out.
FY2019 is set to mark the beginning of a new era for Medusa.
At the end of the last financial year, long-serving managing “It doesn’t mean we won’t look at it one day, but really the only
director Boyd Timler retired from his post and the search time you’re hedging is if you have to borrow money and the
continues for his replacement. bank insists on it as part of the terms,” Teo said.

Other key management changes included general manager, “We’re not in that position so we don’t look at it for that reason.
engineering, David McGowan being promoted to chief And the success of the group in terms of un-hedging is good.
operating officer and former Argonaut Ltd and Canaccord It reads well in the scheme of gold miners around the place. So
we’ll stick to the knitting we know.”

The E15 service shaft will be a critical
piece of infrastructure for the company’s

operations in the Philippines

Page 41



13-14 March 2019 – Perth, Western Australia

graphite tin cobalt

manganese vanadium
rare earths

To present, exhibit or attend as a delegate please contact
Namukale Nakazwe-Msiska on (+61) 8P9ag3e2412 0355 or email [email protected]


K92 spells out
Kainantu future

by Dominic Piper

Having picked up the project from one gold
major’s discarded pile, K92 Mining Inc is well on

the way to turning its Kainantu mine in Papua
New Guinea into a Tier 1 attraction once again.

TSX-listed K92 was established in 2015 to acquire Kainantu Barrick may have been underwhelmed by the vein-hosted
from Barrick Gold Corp, which had closed the mine down gold-copper mineralisation at Kainantu but K92 has found
just 12 months after buying it from Highlands Pacific Ltd in considerable encouragement since taking it on.
The company reopened the mine at the end of 2017, declaring
Barrick had abandoned its search for a Tier 1 discovery but commercial production in January this year. It is set to produce
according to K92 chief executive John Lewins, it may have 42-46,000oz gold equivalent this year but thanks to recent
been too early. exploration and development success, that figure could
increase to as much as 70,000oz in 2019.
“Barrick didn’t buy it for the mine – it is not a company which
is interested in 50,000 ozpa – but the exploration potential,” “The mine was originally focused on the Irumafinda which is
Lewins said. “The ground has 12 identified porphyry targets on comprised of a series of relatively narrow high-grade veins,”
it, three of which we are actively working on.” Lewins said. “Highlands Pacific intended to mine a head grade

Page 43


next year that is set to increase to 60-70,000oz
without any plant expansion,” Lewins said.

A resource update for Kora North (currently
320,000oz @ 14.5 g/t gold equivalent measured
and indicated and 571,000oz @ 15.2 g/t gold
equivalent inferred) is due in October with an
updated PEA to follow before the end of the year.

“The updated resource will be the basis for the
updated PEA which will focus on an expansion
of the plant to 400,000 tpa,” Lewins said. “At that
expanded size, we are looking at 130-140,000
ozpa at less than $US600/oz cash costs and
less than $US800/oz all-in costs.”

K92’s growth plans do not stop there. Lewins

said the exploration success had the company

eyeing off a 5 moz @ 10 g/t gold equivalent

Mining at Kainantu has recently target.
opened up the Kora North orebody
“We’ve already taken it from less than 2 moz
to beyond 3 moz at a discovery cost of $US1/

oz,” he said. “The intention is to complete a PFS

of around 20 g/t gold equivalent but only ever achieved 8 g/t. on the next stage of expansion. We think we can get to 1 mtpa

It is quite a complex orebody with up to eight veins with low- [which would involve an entirely new plant] for 300,000 ozpa

grade mineralisation around it. The high-grade is only in one or gold equivalent production. Kora on its own is capable of being

two veins and it jumps between the veins, making it very hard to a 300,000 ozpa operation and that is without touching anything

model and mine.” else.”

K92’s strategy from the start was to focus development on the A high-grade 300,000 ozpa producer could prove attractive to
Kora deposit (4.42mt @ 7.1 g/t gold and 2.2% copper for 1.65 a number of the cashed-up Australian gold producers currently
moz gold equivalent) but finance obligations stalled that intention looking for new opportunities but add in Kainantu’s porphyry
in the beginning. potential and it begins looking like a potential Tier 1 asset again.

“Kora is more attractive for running a mine but we had to restart “We’ve had a number of approaches about the porphyries
at Irumafinda because we had a gold loan to repay.” from mid-tiers and majors and we are currently in discussions
to JV it,” Lewins said. “Porphyries are stunningly expensive to
K92 instead concentrated on expanding the Kora mineralisation explore and while we have done some initial drilling we should
further towards Irumafinda 1,000m away. be progressing them a lot faster than we are.”

“Our interpretation was that Kora extended much closer to
Irumafinda than previously thought and when we drilled, the
discovery hole hit 5.4m @ 11.68 g/t gold and 1.33% copper
between Kora and Irumafinda,” Lewins said. “It was a long way
down dip and along strike but is exactly where we projected it
to be.”

The company has since moved quickly at Kora. It defined
resources at the Kore North deposit last year, taking a 4,000t
bulk sample from the K2 vein which produced recoveries of
92% gold and 92% copper when processed through Kainantu’s
200,000 tpa plant.

Following the metallurgical confirmation, K92 began development
of the K1 and K2 veins.

Mining is now taking place on both the K1 and K2 veins using cut- Head grades from Kora North
and-fill stope methods. In the June quarter, the blended material averaged more than 20 g/t gold
from the developments delivered an average head grade of 20.4
g/t gold and 0.36% copper to the plant. equivalent in the June quarter

The grades coming from Kora North are already having a
material effect in overall production.

“This year we will produce 42-46,000oz gold equivalent but

Page 44


4 - 6 September 2019

Perth,Western Australia

Interested in presenting or sponsoring? Contact Namukale Nakazwe-Msiska
[email protected]

Interested in exhibiting? Contact Christine Oelschlaeger
c[email protected] For all queries phone +61 (0)8 9321 0355


Employees, communities
get free stake under new

SA charter

by Patricia Aruo, Reuters

South Africa has unveiled a new regulatory charter for Gwede Mantashe
its mining industry, a crucial step to attracting further
investment to a sector laid low by depressed prices, soaring data compiled by Anglo American Platinum.
costs and murky policy.
The Minerals Council South Africa, which represents most of
It is part of an affirmative action drive to reverse black the country’s mining companies, said it would comment later
people’s exclusion from the mainstream economy under after it had studied the document.
apartheid and pointedly targets the mining industry, which
accounts for about 8% of the country’s GDP now, but laid the Among the controversial provisions in previous drafts that
foundations for Africa’s most industrialised economy. were dropped was one that would have required companies
to pay 1% of earnings before interest, depreciation and
Presented by SA Minister for Mineral Resources Gwede amortisation to employees and communities if no dividends
Mantashe, the third version of the charter requires miners to were paid for six years.
provide their local communities and employees with a free
10% stake, a policy some companies may be pressed to At the board level and among top management, the
bear but which unions say is needed to secure social peace. charter requires 50% black representation and 20% female
“Regulatory and policy uncertainty is removed. We have a
duty now to mobilise investment into mining,” Mantsahe, a
gruff former trade unionist and senior member of the ruling
African National Congress (ANC), told a media briefing.

The charter raises the level of black ownership as expected
to 30% from 26% for new mining rights, while companies
that have met the 26% threshold do not have to increase it.

“An existing mining right holder who achieved a minimum of
26%...shall be recognised as compliant for the duration of a
mining right,” the new charter states.

For new mining rights there are breakdowns on how the
stakes should be divided, with 20% for black business
interests and 5% each for communities and employees.

“The community/employee stake is a 10% investment in
peace and stability. Current levels of mine community unrest
and high number of industrial action creates a high level
of instability,” Gideon du Plessis, the head of the Solidarity
trade union which represents skilled workers, told Reuters.

Mining operations in the world’s top platinum producer which
also exports gold, coal, diamonds and iron ore are flashpoints
of social and labour unrest amid perceptions that the wealth
flowing from the shafts does not benefit local communities.

For example, between the start of 2016 and April 2018, the
eastern limb of the platinum belt was hit by over 400 incidents
of social unrest impacting mining operations, according to

Page 46


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Beadell returns to the
table with Great Panther

by Mark Andrews

For the second time in 2018, Australia’s Beadell Resources Tucano plant upgrade and other initiatives can happen,
Ltd is subject to a merger with a company which would while diversifying Beadell’s geographical footprint.”
give it exposure to North American capital markets.
That was one of the motivations driving the deal for Beadell Subject to 75% approval from Beadell shareholders and
and Golden Harp Resources Inc to combine under the other relevant approvals being ticked off, the merger under a
Americano Mining Inc banner proposed in March. scheme implementation deed is scheduled to be completed
The Beadell/Golden Harp merger was shelved in June and in January 2019. At the time the deal was announced the
Beadell’s ambitions for a TSX listing scrapped also. offer gave Beadell an implied value of 8.6c/share based on
However, in what appeared to be a rush of M&A activity Great Panther’s closing prices on the NYSE on September
involving Australian companies in September, Beadell was 21.
back in the frame for a friendly merger with TSX and NYSE-
listed Great Panther Silver Mines Ltd. Great Panther’s management team, led by president James
It is often suggested companies with assets in Latin America Bannantine, will take charge of the combined entity with
are better suited to exchanges in North America and the Adshead-Bell joining the group as a director.
nature of this deal will not only broaden Beadell’s exposure
to such markets, but also Great Panther’s portfolio of assets On a pro-forma basis the Great Panther/Beadell combination
in Mexico and Peru. will boast a market cap of $US258 million, an enterprise
Beadell’s flagship is the 1.47 moz gold @ 1.83 g/t of open value of $US269 million, cash and short-term investments of
pit and underground reserves at the Tucano mine in Brazil. $US74 million and Beadell’s debt of $US85 million.
“Beadell shareholders will retain meaningful exposure to
Tucano and our expectations of what Tucano can deliver “The enhanced balance sheet of the combined companies
under a stronger balance sheet by a 38% pro-forma allows us to accelerate the Tucano optimisation and plant
ownership in the new company,” Beadell chief executive improvements,” Bannantine said.
Nicole Adshead-Bell said on a conference call.
“The combined balance sheets mean that accelerating the Bannantine is an experienced campaigner in the Brazilian
mining scene and will look forward to some consistency of
The Tucano plant upgrade in Brazil is nearing completion production from Tucano upon the completion of the plant

The Tucano ball mill has been completed while an additional
CIL tank was on track to be finished in late October which
was to be followed by the addition of a pre-leach thickener
and oxygen plant in early November.

Prior to the plant upgrade, a maximum 30% sulphide feed
from the mine plan was possible with the alterations now
allowing for sulphide blend flexibility of up to 80%.

Meanwhile, gold recoveries are estimated to increase from
88% to 93%, essentially allowing for the focus of mining to
be on grade rather than ore type.

Gold production guidance from Tucano in 2018 is 130,000oz
gold, with Beadell’s contribution to gold production in 2019
forecast to be 163,000oz. Great Panther is expected to
produce 4 moz of silver equivalent in 2018 from its two silver
mines in Mexico.

Group production could be significantly enhanced in the
near term, with a decision on the restart of operations at the
140,000oz gold and 4.8 moz silver (measured and indicated)
Coricancha mine in Peru expected to be made in early 2019.

Page 48



15-16 May 2019

Perth,Western Australia

The premier forum for Australian-Latin American relations

“Paydirt continues to do an amazing “The meeting room worked
job in creating the platform for these really well and it was great to
continents/regions, where they are able to get meet the delegations from slightly less
some credible exposure in our marketplace. well known countries. Our meetings
“These conferences really do make a with the Vice Ministers/Directors were
difference.” – Intertek definitely productive.” – FQM

I had the opportunity to hold important meetings with representatives of diverse
mining companies from Australia and Latin America... It was extremely beneficial
to listen to the successful experiences of representatives of mining companies in
several Latin American countries.” – Embassy of Ecuador


Contact Mel Fogarty on +61 (0) 8 9321 0355 or +61 (0) 420 495 163
or email melitPaag@e


Barminco has signed a five-year contract extension at Sunrise Dam to strengthen the company’s presence on
the Frankfurt exchange.
AT SUNRISE DAM DGWA will support the Artemis
management team in expanding the
Barminco Holdings Pty Ltd has won a five-year contract profile of the company’s base, battery
extension at AngloGold Ashanti Ltd’s Sunrise Dam operation, and precious metal assets through the
valued at approximately $700 million based on the current European investment networks.
mining schedule.
If the contract runs to its estimated duration, Barminco will Based in Frankfurt, DGWA consults to
chalk up 20 consecutive years of association with Sunrise various companies, investors, institutions
Dam, having been present at the mine since the beginning of and federal organisations on implementing
underground operations in 2003 when the first portal was cut. the best investment strategies.
Plans are now in place to increase annual production well
beyond the current rate of 3 mtpa. “DGWA is pleased to be working with
“We are very pleased to extend our relationship and continue the Artemis team as they expand their
work to achieve our shared vision with AngloGold to further presence in the European market,” DGWA
increase annual production using our latest equipment and chief executive Stefan Muller said
cutting-edge technologies,” Barminco chief executive Paul
Muller said. “Base, battery and precious metals are
well understood here and Carlow Castle
Artemis links with DGWA to expand will be of particular interest to European retail, institutional and
European network strategic investors, as many are seeking greater exposure to
battery metal opportunities outside of Africa. Germany is one
Artemis Resources Ltd has hired the services of Germany- of the world’s largest producers of premium automobiles and
based boutique investment and financial consulting firm its manufacturers are at the forefront of the electric vehicle and
Deutsche Gesellschaft für Wertpapieranalyse GmbH (DGWA) hybrid revolution.”

Total adds up for lubricant specialists
at Lihir

Total Lubricants has been awarded a four-year contract with
Newcrest Mining Ltd’s Lihir gold mine in Papua New-Guinea.

During the term of the contract, Total will supply 14 million litres
of lubricants to Lihir – the sixth largest gold mine in the world
with production of more than 900,000 ozpa gold.

Total will offer premium lubricants and greases, as well as
personalised services linked to the bulk facilities, the onsite
management of lubricants and the oil analysis management.

“This contract with one of the largest gold mines in PNG helps
to reaffirm Total’s position as the leading lubricant supplier
to the mining industry in PNG,” Total PNG general manager
Andrew Morton said.

“It is also recognition for the team’s work and their mind-set to


Nucleus Mining Logistics

Providing turn-key logistics and supply chain solutions into Africa

Page 50

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