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Published by Paydirt Media, 2016-10-13 22:14:20

gmj125-October-December16-web

October – December 2016 VOLUME 1. ISSUE 125
$11.95
Registered by Australia Post PP 643938/00057

Collaboration,
innovation and the
future of exploration

ISSN 1324-4396
04

9 771324 439005



CONTENTS

8 22 32

8 NEWS 32 THE AMERICAS

ASX-listed Resolute Mining Ltd has performed excep- The world’s largest gold producers – Barrick Gold
tionally well on the back of its African assets. Now, Corp and Newmont Mining Corp – have ditched assets
after raising $150 million, the company’s Ravenswood considered non-core to their businesses, including
project in Queensland will receive a cash injection to Australian mines, and have instead chosen to focus on
allow operations to be extended to 2029, producing their cash cows in the Americas. Gold Mining Journal
120,000 ozpa. Meanwhile, funds will also be used for takes a look at how the two companies and others
exploration at Bibiani in Ghana. Michael Washbourne have fared in the Americas over the past 12 months
reports on the direction Resolute is heading

22 COVER 40 REGIONAL ROUNDUP
Since 2000, only two plus-5 moz gold deposits have Stock exchanges over the world have been bereft of
been discovered in Australia – Tropicana and Gruyere. new gold company listings. However, with gold prices
Some in the industry are concerned it may be a while rising and positive sentiment returning to the sector,
yet before another Tier 1 gold deposit is found in there is encouragement for companies to go public
Australia, putting the country at risk of losing its mantle with their vehicles. Mark Andrews spoke to Martin
as the world’s second largest supplier of the precious Horgan, chief executive of Toro Gold, about the private
metal. So what is the secret behind finding the next company’s future plans regarding a possible float
generation of gold mines in Australia? Dominic Piper
spoke to a number of gold industry experts to get a
sense of how innovation will help drive the sector

GOLD MINING JOURNAL (ISSN 1324-4396) Paydirt Media:
Published by Paydirt Media Pty Ltd. A.C.N. 063 985 133 Executive chairman: Bill Repard
Finance manager: Giovanny Jefferson
Head Office: Accounts/administration: Heather Melling
Suite 9, 1297 Hay St, West Perth, Western Australia 6005
P.O. Box 1589, West Perth, Western Australia 6872 Conferences:
Phone: (+61 8) 9321 0355 Facsimile: (+61 8) 9321 0426 Melita Fogarty, Kale Nakazwe, Christine Oelschlaeger
[email protected] www.paydirt.com.au
Pre-press and printing:
Editorial: Vanguard Press 26 John St, Northbridge WA 6003
Editor: Dominic Piper
Deputy editor: Mark Andrews Member of:
Journalists: Michael Washbourne
Art director: Marian Noonan Australia-Africa Minerals & Energy Group
Contributors: Keith Goode, Brendan Ryan (Johannesburg)
Registered by Australia Post PP 643938/0071. No pages or articles in this publication
Advertising: may be reproduced in any form without the consent of the publisher. This includes
Advertising executive: Tony Mwarey photographs either taken by Paydirt Media staff or provided by other parties
Subscriptions: Mitchelle Matambo
Phone: (+61 8) 9321 0355 Facsimile: (+61 8) 9321 0426

EDITORIAL

Partnerships to be embraced

Irecall during a history lesson at pri- stock which can take advantage of strong gold prices almost
mary school during the mid-1980s, immediately. The current market sentiment towards gold stocks
we played a computer game based on has been skewed in the direction of brownfields stories where
a 19th Century gold rush. It was one companies can define a clear pathway to production.

of the text-only affairs which were The likes of Middle Island Resources Ltd, Dacian Gold Ltd,
popular at the time; you may know Genesis Minerals Ltd, Gascoyne Resources Ltd and Echo Re-
the kind: To the west is the door; to sources Ltd have all enjoyed massive growth price appreciation
the east is the street: Press [W] or by going back to brownfields projects in various ways.
[E] to choose.
With a few notable exceptions – Breaker Resources NL raised
You played the role of a newly ar- $12.4 million in September on the back of its new Lake Roe dis-
rived prospector and one of the first covery – investors remain sceptical about more ambitious green-
choices you were given was wheth- fields projects.
er to join the other diggers or head out to a
remote location in the hope of making a new find. This is a challenge for junior explorers hoping to fund green-
I remember the game with great fondness, mainly because in fields exploration but advances in both exploration targeting
a rare moment of risk-taking I was the only person in my class method and technology could provide the answer.
who decided to spend all my money on supplies from the store
and head out bush. I was rewarded with the discovery of a new Just as was the case 150 years ago, there is no point going
gold find and finished the game “rich and successful”. My fellow out to a greenfields prospect unless you have loaded up with
students, either deciding to stick to the known workings or head the best provisions before you head out. Doing so gives a com-
out bush with minimal supplies, all finished bankrupt or with only pany a greater likelihood of success. Once, this may have meant
minor profits. prospectors bringing the latest long tom but as Gold Road ex-
Thirty-odd years on – and despite visiting more than 50 gold ecutive director Justin Osborne says in our cover story, today’s
mines and exploration projects during my time with this publica- “best provisions” include sophisticated technology and software
tion – that computer game was the closest I ever got to being a to capture and analyse data.
gold miner. It is not because the game was so realistic (I can’t
imagine my kids being happy about receiving it as a Christmas In modern exploration, companies can generate much more
present for the Xbox) but because the choice in the game was information than simply the mineral assays which have been
fundamentally the same as that which is at the heart of every pulled through the drill rods, using various down-hole survey-
gold junior explorer today – brownfields versus greenfields ex- ing techniques to increase their understanding of sub-cropping
ploration. mineralisation.
Despite the many changes in the gold industry over the last
100 years the competing strategies have been ever-present and “Our thinking is that the most important asset you have is the
continue to be debated in boardrooms and strategy meetings drill hole so you have to derive as much value as you possibly
throughout West Perth and beyond. can out of each of them,” Osborne says on page 24. “Thinking
The potential reward for those willing to risk a greenfields ap- in that way, an extra $40-50 isn’t all that much and you can start
proach is enormous. The two biggest Australian gold finds of this mapping the geology under cover earlier.”
century – Tropicana and Gruyere – were made in greenfields lo-
cations and both have grown into plus-6 moz deposits. Tropica- However, the application of new technology alone won’t be
na provided its 30% minority JV owner Independence Group Ltd enough to improve the odds of finding new world-class depos-
with the base to morph into a genuine diversified mid-tier miner its and both Osborne and NewGenGold forum convener Keith
while Gruyere’s discovery has led to Gold Road Resources Ltd Yates urge gold explorers to pursue partnerships with research
growing into a plus-$500 million company. organisations in an effort to expand the industry’s knowledge
In Australia, the task of the greenfields explorer is particularly and capabilities.
difficult because it is a mature gold exploration destination. In
order to find greenfields opportunities, explorers must head to The problem for juniors is that research partnerships, mineral
more remote locations or explore at greater depth. systems mapping exercises and the use of new technologies do
This is why so many ASX-listed juniors head to less mature not get shareholders excited. Investors are more interested in
destinations such as Burkina Faso, Cote d’Ivoire or Guyana; when a company is going to announce a resource than an in-
some of the low-hanging fruit of outcropping mineralisation is yet novative research partnership with a university.
to be picked in those locations, unlike in Australia where it was
harvested generations ago. It is a challenging situation but while the industry’s majors
The biggest hurdle for juniors taking on the greenfields chal- continue to show a reluctance to invest in greenfields explora-
lenge is holding investor interest long enough; virgin discover- tion and research organisations such as the CSIRO suffer from
ies are many years in the making and often even longer in their widespread cuts to funding, hardy juniors appear to be the only
development. groups with the will to make Australia’s next Tier 1 discovery.
When investors switch onto gold, as they currently are, they
don’t want to wait five or seven years for a return; they want a [email protected] @DominicPiper

Page 4 GOLD MINING JOURNAL October – December 2016

NEWS

Echo has Julius on track for 2017

Production from the Cash generated from production at Julius will fund Echo’s future exploration programmes
Julius project is
expected to start mid- feasibility study and we have g/t gold for 200,000oz in re- to fund that.”
2017, according to some fabulous high-grade in- sources, but with 1,600sq km Bringing Metaliko’s assets
Echo Resources Ltd tersections and metallurgical of ground locked up between
chief executive Simon results, so I think it is all com- the Jundee and Darlot gold under the Echo umbrella will
Coxhell. ing together pretty nicely,” mines, Coxhell is bullish on mean the latter is a dominant
Coxhell said. Echo’s gold potential in the player in the Central Yandal
Speaking to Gold Mining belt. belt.
Journal in light of his compa- Not only can Echo leverage
ny announcing a merger with from an established process- “Concurrent with putting The Yandal belt is one
Metaliko Resources Ltd, Cox- ing facility, which features a Julius into production, there of Australia’s most prolific
hell said Echo was cashed two-stage crushing circuit, it are quite a lot of targets on gold-bearing regions, with
up to finish a feasibility study also has a camp, airstrip and the Bronzewing side on the resources of 15 moz yielded
upon completion of the deal. a host of other infrastructure south and also within the since the 1990s.
items at its disposal to fast- Echo tenements [100,000oz
“The key is to get the plant track Julius into production. gold], which we floated on, to “We know there is 14 moz
refurbished. We are well un- follow up on. There has been gold to the north of us and to
der way in terms of the min- A scoping study complet- very little work completed on the south there is 5 moz and
ing proposal documentations ed at Julius earlier this year those sources in the last 8-9 we have a big swag of ground
and all of that. We have to put was based on resources of years as the focus has been in between,” Coxhell said.
a fair bit of capital into doing 843,000t @ 2.6 g/t gold for on Julius. We want to trundle
up the Barwidgee Road for 68,7400z from an open pit the rigs up to those and basi- Metaliko shareholders are
transporting ore from Julius source. cally get a bank of advanced on board with Echo’s plans,
to Bronzewing, otherwise we and developing projects,” with the latter’s board unani-
are on track,” Coxhell said. Coxhell said in 12 months’ Coxhell said. mously recommending the
time he hoped to process half off-market takeover in the ab-
“Once we have the feasibil- of the Julius open pit material, “In the last few months we sence of a superior proposal.
ity study completed, we basi- with $30-40 million which can have acquired a bit of ground
cally have a bankable project be applied to regional and in the immediate vicinity. We Post-transaction, it has
and the ability to forward sell near-mine exploration. have probably added 300sq been proposed the current
some of the gold to access km of prospective ground, so Echo board – Barry Bolitho
capital to fund the work that is Initially floating in 2006 we think we understand the (chairman), Coxhell and An-
required to put us in produc- with ex-Newmont Mining best positions to be in and thony McIntosh (non-exec-
tion.” Corp tenements, Echo has we are now in the position of utive director) – be joined
conducted little effort on op- having 1,800-1,900sq km of by Metaliko directors Robin
Coxhell said he expected portunities other than Julius, ground to explore, with Julius Dean and Mark Hanlon.
the feasibility study to be in according to Coxhell.
line with scoping study results – Mark Andrews
which estimated EBITDA of Julius is host to 3mt @ 2.1
$47 million at $1,600/oz gold
price under a toll treatment
agreement.

AISC, also assuming a toll
treating scenario, were esti-
mated at $921/oz, however,
the merger means Echo has
free run at Metaliko’s 2 mtpa
processing facility at Bronze-
wing.

“We have been talking very
seriously [with Metaliko] for
the last six weeks. The syn-
ergies between the two com-
panies have been apparent
for some time. We have a big
tailwind with the current gold
price, we have just completed
a whole lot of drilling at Julius
to move it from scoping into

October – December 2016 GOLD MINING JOURNAL Page 5

NEWS

Didipio continues uninterrupted

OceanaGold Corp all avenues, including work- continue uninterrupted and
is yet to receive ing collaboratively with the
formal notification DENR, to facilitate the imme- OceanaGold is confident pro-
from the Philippines diate resolution of this matter
Government that its to ensure no disruption to our duction guidance of 130,000-
Didipio copper-gold operations and our valued lo-
mine would be close cal workforce,” the company 145,000oz gold and 19,000-
as part of a nation- said in a statement. “We are
wide environmental disappointed with the state- 21,000t copper at AISC of
crackdown. ments made... and will seek
clarification and reconsidera- $300-350/oz will be met in
The Philippines Depart- tion from the DENR to further
ment of Environment and Nat- understand and rectify this 2016.
ural Resources announced matter in short order,” Ocean-
on September 27 that more aGold chief executive Mick “I am highly confident that
than 30 mines and quarries Wilkes said in the statement.
would be suspended due to our Didipio operations will
environmental infringements Wilkes earlier told Reuters
with Didipio among them. that OceanaGold had not continue to operate without
However, OceanaGold said committed environmental
operations at the mine had violations. interruption as the Didipio
continued unhindered.
Shares of the Australia- mine sets the benchmark for
“The company will consider listed miner fell 8.2% on the
news of the suspension or- responsible mining based on
der, prompting the firm to re-
quest a trading halt pending international best practices

Mick Wilkes and serves as the template

for the type of operation

an announcement. President Duterte and his ad-

At the time of print Oceana- ministration are seeking for

Gold informed the market it all mining operations in the

had been in direct contact Philippines as they advance

with DENR secretary Gina a responsible mining sector,”

Lopez and other senior gov- Wilkes said.

ernment officials to gain clar- – Paydirt staff and
ity on the situation at Didipio. Reuters

Operations at Didipio

Page 6 • Aggressive exploration underway in the Tennant Creek Mineral Field,
Northern Territory – one of Australia’s highest grade gold provinces,
fully funded by an up to $25m earn-in and JV with Evolution Mining
• Discovery of high grade gold at the Edna Beryl Project – best drill
intercepts include 5m at 35.6g/t gold, 3m at 36.6g/t gold, 5m at 27g/t
gold, with the mineralisation open in all directions
• Application of new exploration technologies and concepts continues
to unlock a new generation of mineral deposits - that were blind to
previous techniques
• New gold and copper-gold projects in NSW generated from a
strategic alliance with Kenex Limited utilising proprietary predictive
targeting models
• Cash balance of ~$5m

GOLD MINING JOURNAL October – December 2016

Stonewall awarded damages

Stonewall Resourc- Fourie told Gold Min- Stonewall still has a
es Ltd is ready
to put the past 18 ing Journal. large portion of its shares
months behind it and
start producing gold “What emerged af- held by Chinese compa-
in South Africa next
year. ter that was probably nies and despite the saga

The company surprised something worse,” Fou- with Shandong, Fourie
the ASX in 2013 when it an-
nounced Shandong Qixing rie said. “They then said the company would
Iron Tower Co Ltd would ac-
quire it. At that stage Shan- announced that their continue to build on the
dong had raised $300 million
to takeover Stonewall and major shareholder had good relationships it had
other South African assets,
with Stonewall and its minori- sold their stake in the established with Chinese
ty shareholders set to receive
a total of $US141 million cash company to another entities.
upon completion of the share
sale agreement. large Chinese consor- “I am not put off by the

Shandong was after Stone- tium and had received Chinese, but I would obvi-
wall’s TGME and Sabie pro-
jects in Mpumalanga prov- 50% of the payment ously be a lot more cau-
ince where resources are 2.8
moz gold. upfront and the other tious and knowledgeable

Steady state small-scale 50% would be paid at as to how we do business
underground production from
Theta at TGME was on track, a later stage when all in China,” he said.
while Stonewall postponed
development and expansion the due diligence had “Lessons were learned
plans at its other projects to
preserve shareholder value been completed and and you have to know
as the transaction was in play.
that’s when the penny who you are dealing with,
However, 12 months after
its bid for Stonewall and with dropped. What had but that is the same in any
all necessary approvals in
place for the deal to proceed, happened was that they nation.”
Shandong mysteriously with-
drew its offer. Stonewall at- needed the money to Chairman Trevor Fourie and former chief With the tribunal hear-
tributed turning the Chinese settle their shares.” executive Lloyd Birrell set up Stonewall to ing over, Stonewall’s fo-
firm’s withdrawal on gold’s rejuvenate the TGME and Sabie projects in cus is on monetising the
downward plunge Unfortunately, Stone- pre-mined residue (PMR)
below $US1,200/oz. wall had spent its last South Africa’s Mpumalanga province opportunities at the TGME
cent on making this
It was later re-
vealed Shandong transaction work and Shan- lion plus interest at 8% com- and Sabie mines.
had run into trouble
paying back some dong’s decision to pull the pounded quarterly from the Stonewall came across the
other loans and
couldn’t afford to buy plug was totally from leftfield. start of January 2015. PMR opportunities through
Stonewall.
Fourie said the company had Shandong was also or- an exploration programme
Having the share
sale agreement re- no choice but to pursue the dered to pay all of Stonewall’s in 2013 which revealed the
pudiated was the
start of a disastrous matter in court, while watch- legal costs ($1.5 million) plus large volumes of rock stored
period for Stonewall,
chairman Trevor ing its share price tumble those of HKIAC. in mined out stopes, particu-

from above 20c/share at Fourie said Stonewall was larly in the finer fractions, car-

the end of 2014 to 1c/share hoping the damages award ried value.

throughout last year. would be higher. Further investigations

At the time of print, the “Our current market cap revealed that the material

company was trading at 2c/ is $20 million and after pay- hosted significant grade and

share on the back of a Hong ing the litigation funders back the bulk of the gold could be

Kong International Arbitra- their share in excess of $10 concentrated into finer size

tion Centre (HKIAC) decision million will come into the fractions.

confirming Shandong should Stonewall bank account. That A project study found that

pay Stonewall $US12.6 mil- is a 50% uplift from where for an initial capex of $US15.1

we are now which million, a 445,000 tpa project

is great for the new producing 25,000 ozpa over

shareholders, but 10 years could be delivered.

not so great for the Stage one AISC were esti-

old shareholders,” mated at $US57/t, with AISC

he said. for year one of operations

“However, at expected to be $US42/t, with

least there is an op- Stonewall indicating it would

portunity to now get take a period of 9-12 months

back into a position from implementation to pro-

whereby we deliver duction.

this asset and start – Mark Andrews
delivering and cre-

ating shareholder

Stonewall plans to be in production in 2017 value again.”

October – December 2016 GOLD MINING JOURNAL Page 7

NEWS

Rapid raise for Ravenswood

Resolute Mining Resolute hopes to
Ltd had no trou-
ble finding support obtain the necessary
for one of the biggest
capital raisings by an approvals to start
ASX-listed miner this
year. mining the Sarsfield

It took Resolute just 24 open pit in January
hours to pull together a $150
million share placement to 2017 and the Buck
fund development of the Ra-
venswood expansion project Reef West open pit
in Queensland and explora-
tion work at the Bibiani pro- in mid-2018. Mill ca-
ject in Ghana.
pacity will most likely
Under the terms of the
placement, investors sub- be expanded to 5
scribed to 76.5 million new
shares in the company at mtpa during FY2018.
$1.96/share, which was a
10.5% discount to Resolute’s “This is a signifi-
closing price of $2.19 on Sep-
tember 26 and a 4.3% dis- cant improvement
count to the miner’s 30-day
trading VWAP of $2.05. from the last time

Following completion of Resolute looked at
the placement, Resolute
declared its plans for Ra- reopening Sarsfield
venswood, Bibiani and the
Syama underground mine and the associated
in Mali could each be
funded from existing processing capacity
cash balances and op-
erational cash flows. several years ago,”

Resolute managing Ravenswood will be in operation until at least 2029 following a Welborn said during
director John Welborn successful expansion study by Resolute a conference call in
marvelled at the level late September.
of support for his com-
pany, particularly from flexibility to advance new will lift to about 120,000 ozpa “The project is not only
new domestic institu-
tional investors. growth opportunities.” until at least 2029, based on bringing down our AISC over

“Successful comple- Only one week before the increased total reserves of the remaining mine life at Ra-
tion of the institutional
placement has ex- placement was completed, 69.6mt @ 0.8 g/t for 1.8 moz, venswood, but also increas-
panded our register and
provided an opportunity Resolute released the results with life-of-mine AISC of ing production for a very
for new shareholders
to join the company at of a feasibility study on the $1,166/oz. manageable capital invest-
a very exciting period
of our history,” Welborn Ravenswood expansion pro- Start-up capital of $134 mil- ment, with a very high IRR.”
said.
ject, headlined by a 13-year lion is required for pre-strip- Ravenswood, about 100km
“We now have the
balance sheet strength mine life extension. ping and staged expansion south-west of Townsville,
to pursue our develop-
ment plans. Importantly, Production at Ravenswood of the processing plant from has been in production since
we retain the financial
1.5 mtpa to 5 mtpa. An 1987. Resolute took control of

additional $124 million the operation in 2004 when

of project capital will be it acquired Carpentaria Gold

staged over six years to Pty Ltd.

2022. The Mt Wright underground

Resolute said it had mine was commissioned in

already budgeted for 2009 when open-pit mining

the Ravenswood capi- activities at Sarsfield were

tal requirements in its halted. The Nolans process-

FY2017 guidance. Ra- ing plant treated ore from

venswood is to receive both Sarsfield and Mt Wright

$135 million from the at 5 mtpa until 2012 when the

placement, which was facility was reconfigured for

underwritten by UBS underground material only.

Australia. Earlier this year, there were

With underground fears up to 280 people at Ra-

operations on the Mt venswood could lose their

Wright orebody sched- jobs if Resolute was unable

uled to cease in mid- to find a way to replace the

2017, Resolute has be- rapidly depleting ounces and

gun turning first dirt at keep the low-grade operation

the Nolans East open viable. The Queensland Gov-

pit. Processing capacity ernment’s $8.5 million per

will be increased to 2.8 annum royalty payment was

Throughput at the Nolans plant is slated mtpa from early Octo- also in jeopardy.

to hit 5 mtpa during FY2018 ber. Mt Wright churned out

Page 8 GOLD MINING JOURNAL October – December 2016

21,628oz gold for $1,233/ obtaining the required ap- “The average recov-
oz in the June quarter, com- provals, particularly for the
pared to 25,463oz for $1,092/ Sarsfield and Buck Reef ery over the mine life is
oz in the March quarter, but West open pits.
Welborn shrugged off any actually right on 90%
concerns about severely de- “Obviously permitting
clining production over the and environmental approv- and we’ve been quite
remaining nine months of un- als are part of any mining
derground operations. process, whether you’re conservative there –
in Australia, Africa or any
“We haven’t really changed other jurisdiction,” he said. we’re basing that on our
our view on the ounces we’ll “We’ve got a very strong
get out of Mt Wright,” he said. workforce who has been experience with pro-
“We’ve slowed down a bit operating this mine for 10
as we get to the last level of years very successfully, cessing the Sarsfield
the mine, but we’re still confi- with a very strong safety
dent those ounces are there, and environmental record. ore back in the 2004-
they’re just coming a little bit
slower than we had antici- “It’s a very exciting de- 2010 period – but we do
pated. velopment pipeline. We think
the approvals pathway is very believe recoveries are
“We’ve got a very efficient realistic and very achiev-
owner-operator underground able and that’s based on likely to improve due to
mining fleet and through the the very positive interaction
history of this mine they’ve we’ve been having with all the beneficiation and
withstood the challenges re- of the relevant departments
ally well. I think you’ll see in in Queensland, particularly ROM feed that we’re
this [September] quarter, pro- the Office of the Coordinator-
duction has improved.” General, a specific arm of planning,” Welborn said.
Government that Queensland
Welborn, who joined Reso- has put in place to enable John Welborn “There are a num-
lute in May 2015, said he did projects of particular state
not foresee any hurdles in ber of areas where we

significance to get the atten- believe there is scope for

tion they deserve.” improvement in terms of pro-

Welborn maintained there duction and particularly in

was still plenty of upside at terms of unit costs and one of

Ravenswood, including the those is actually beating our

210,000oz of underground expected recoveries of 90%.

potential at Welcome Brec- “It’s part of the transforma-

cia, which was not factored tion of this company to be

into the expansion study. able to generate free cash

And there is scope for fur- flow and reward our share-

ther cost reductions and im- holders.”

provements in gold recover- – Michael Washbourne
ies, Welborn said.

October – December 2016 GOLD MINING JOURNAL Page 9

20 October 2016

Perth, Western Australia

Register now for Australia’s
only nickel event

australiannickelconference.com

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

Image courtesy of Western Areas Ltd

20 October 2016
Pan Pacific PeTrhtuhrsday 20 October 2016
08.00 Arrival tea, coffee and registration
Session One

08.45 Welcome: Bill Repard, Executive Chairman, Australia’s Paydirt (5)

08.50 Opening Address: Hon Sean L’Estrange MLA, Minister for Mines, Petroleum and Small Business (20)

09.10 Dan Lougher, Managing Director, Western Areas Ltd (20)

09.30 John Prineas, Executive Chairman, St George Mining Ltd (20)

09.50 Carey Smith, Senior Analyst, Alto Capital

10.10 Eduard Haegel, Asset President, BHP Billiton Ltd Nickel West

10.30 Questions (5)

10.35 Morning Tea (30)

Session Two

10.55 Dave Coggin, Manager External Affairs, First Quantum Minerals Ltd (20)

11.15 Peter Harold, Managing Director, Panoramic Resources (20)

11.35 Richard Bevan, Managing Director, Cassini Resources Ltd (20)

11.55 Peter Bradford, Managing Director, Independence Group NL (20)

12.15 Questions (5)

12.20 Lunch (60)

Session Three

13.20 Leo Horn, Chief Operating Officer, Impact Minerals Ltd (20)

13.40 Michael Rodriguez, Chief Operating Officer, Poseidon Nickel Ltd (20)

14.00 Mark Wilson, Managing Director, Legend Mining Ltd (20)

14.20 Ian Mulholland, Managing Director, Rox Resources Ltd (20)

14.40 Questions (5)

14.45 Afternoon Tea (30)

Session Four

15.15 Peter Muccilli, Chief Executive Officer, Mincor Resources NL (20)

15.35 Warren Hallam, Executive Director, Metals X Ltd (20)

15.55 Questions (5)

16.00 Closing Panel Discussion (60)

17.00 Closing Drinks * This programme is subject to change without prior notice

Conference Sponsors to date:

australiannickelconference.com

NEWS

Duketon’s golden transition

Duketon Mining Duketon Mining is well represented in the Duketon Greenstone money was keeping a lid on
Ltd’s transition Belt in Western Australia how much it could conjure
into a gold-focused from investors.
company is in full previously identified 1.2km the areas subject to the farm-
flight. Fogarty said the company
long anomaly at Davies in agreement by October next could have raised more than
The company listed in 2014 twice as much as it did, which
on the back of a $7 million Bore, about 5km from Regis year. suggests the market is warm-
IPO, with nickel the metal of ing to Duketon’s gold strat-
choice at the time. Resources Ltd’s Rosemont By progressing to a deci- egy.

Shortly after listing, the mine. sion to mine on one of the Prior to 2016, the com-
Nariz nickel sulphide discov- pany had made one release
ery provided some excite- Regis and Duketon are four tenement areas includ- related to its gold potential,
ment at the Duketon project, but further detailed work has
which hosts resources of working in JV on some ten- ed under the JV agreement, provided a compelling case
71,000t nickel and 144,000oz backing its decision to switch
platinum/palladium. ements in the Duketon belt, Regis will trigger its right to its focus.

Duketon managing direc- with the former committed to a 75% stake in the project, “We have been through an
tor Stuart Fogarty said there evolution and taken Duketon
was inherent value associat- making a decision to mine on while Duketon can elect to through from being a nickel
ed with the company’s nickel focused company to a pre-
resources and while it will contribute its 25% share, dominantly gold focused
slowly work its way through company,” Fogarty said.
the exploration potential, the sell it to Regis or convert
base metals’ prospects will “The net effect of that is
take a back seat for now. to a 2% NSR. exposure on the gold front
on multiple different projects
It is not hard to understand In the meantime, Duke- and prospects for investors.
why Duketon has switched its I think we are quite a unique
focus from nickel to gold in ton can concentrate on beast, we have such a large
the Duketon greenstone belt tenement holding in such a
in Western Australia, consid- drilling numerous pros- prospective belt. Raising $4.9
ering initial results from drill- million has allowed us to be-
ing at Davies Bore. pects it controls 100% of have in a very assertive man-
ner and continue to explore
RC drilling at the Davies in the namesake green- aggressively for the next 6-12
Bore prospect has so far re- months over a multitude of
turned 35m @ 2.3 g/t gold stone belt. different projects and we’re
from 79m, including 9m @ 7.6 adding to that project pipeline
g/t; 2m @ 7.4 g/t from 37m, Money is no problem, as we go as well.”
including 1m @ 14.4 g/t; 5m
@ 1.2 g/t from 67m, including with the company recent- Early stage work at Davies
3m @ 2 g/t and 41m @ 0.5 g/t Bore is an example of the op-
from 197m, including 2m @ ly adding to its existing portunities Duketon has and
2.4 g/t. at the time of print a diamond
$3.5 million cash balance rig was set to drill several
“We are starting to get more holes.
real traction through re- by raising $4.9 million.
sults, which is what you Additionally, RC and air-
want to see; 35m @ 2.3 The only dilemma faced core drilling was also planned
g/t is a real intersection in to target areas north and
the context of that whole Stuart Fogarty by the company in raising south of Davies Bore.
belt. That is a significant
intercept and if we can turn Having locked away almost
that into a resource of some $5 million in the recent rais-
description that will be sig- ing, Duketon has enough
nificant in the context of the funds to continuously drill for
Duketon belt,” Fogarty told the next 6-12 months, making
Gold Mining Journal. sure it can capitalise on the
positivity in the gold sector at
Drilling is targeting the the moment.

– Mark Andrews

Page 12 GOLD MINING JOURNAL October – December 2016

East Laverton more than
nickel for St George

St George Mining Mt Alexander pro- tor showing us
Ltd has estab- ject in East Laverton,
lished an impressive Western Australia. where to go
following in the share
market on the back of Drilling this year next. There is
a mix of base and pre- has seen St George
cious metals explora- intersect massive potential for a
tion. nickel-copper sul-
phides at three pros- very significant
The number of sharehold- pects at Mt Alexan-
ers on the company’s regis- der and expand the gold deposit
try has increased from 500 Cathedrals nickel-
to 2,200 over the past 18 copper sulphide belt here, it is un-
months and includes the likes to 3.5km of recurrent
of Bell Potter and Argonaut mineralisation. der-explored
Securities.
It was on the back and we are just
New City Investment Man- of the exploration po-
agers, part of the multibillion tential at Mt Alexan- scratching the
dollar, multi-strategy asset der that St George’s
management firm CQS, has $6.47 million private place- surface there.
also paid St George some at- ment in August was heavily
tention, putting $1 million into oversubscribed. “The struc-
the company.
At the moment, the nickel tural features
CQS is no stranger to Aus- plays offer a low risk, high re-
tralian success stories, with ward investment opportunity we are seeing
the London-based investors in St George as it has already
having early success with the proved a high-grade discov- are the clas-
likes of Sirius Resources and ery and is working towards a
Sandfire Resources NL. maiden resource. Gold and nickel exploration is proving to be sic structural

“They think we have po- But, some investors are fruitful for St George in East Laverton features that
tential to replicate that [Sirius also starting to realise St
and Sandfire] and provide George could well have a can produce
multiplier return on their in- significant gold play on its
vestment and in the last capi- hands. pany experience within St a large gold deposit. Our ge-
tal raising Bell Potter [lead
manager] and Argonaut and While the East Laver- George, Prineas said the ologists have all had big com-
RM Corporate Finance [co- ton gold prospects are still
managers] brought in some very early stage and talked team was confident it had a pany experience – Placer
institutions from the east about at the back end of
coast and overseas, so we St George’s presentations, gold project worthy of attract- Dome, BHP Billiton Ltd – they
are attracting some good in- Prineas wouldn’t be surprised
vestment,” St George execu- if the gold assets featured ing interest from major par- can sniff out large scale pro-
tive chairman John Prineas more prominently in the com-
told Gold Mining Journal. pany’s portfolio. ties. jects and they are pretty con-

“Obviously there are a lot of “Our gold is still at an ear- At the time of print, a fol- fident this is turning out that
retail investors there, but the ly stage, we haven’t hit any
professional institutions are high-grade mineralisation low-up drilling programme at way.”
starting to come on board.” but the reward is huge. As
soon as we hit something, Ascalon was completed, with Subject to significant
The major attraction for the reward is significant and
investors keen on St George it would be right up there with assays pending, while the results from Ascalon, St
is the massive nickel-copper the nickel and we just have
sulphide opportunities at the to see how it pans out and initial drilling programme at George hopes to carry out
whether or not it takes over
the nickel,” he said. Bristol was being expanded another round of drilling at

With a wealth of big com- to test for anomalous super- the prospect before the end

gene gold and bedrock ge- of the year.

ology over the magnetic se- Additionally, a deep search

quence. EM survey on the Cathedrals

St George’s drilling pro- nickel belt at Mt Alexander

grammes at Ascalon and was under way at the time of

Bristol were the first ever print.

systematic exploration cam- Despite the ability to raise

paigns to test the targets, cash, the company would still

with results expected in late be cautious with its explora-

October. tion spend, Prineas said.

“We have already estab- “We are certainly cashed

lished a large hydrothermal up to do a solid round of ex-

system [at Ascalon], it has ploration and we will use that

very strong alteration and we money very wisely. I can’t put

think it is an excellent envi- a number on it [exploration

ronment for gold mineralisa- budget], but we certainly have

tion,” Prineas said. enough money to do whatev-

“We just have to wait and er exploration is necessary to

see what the gold assays say, prove up a resource,” he said.

but we’re pretty sure even if – Mark Andrews
there isn’t any high grades

associated with this, there is

certainly going to be a vec-

October – December 2016 GOLD MINING JOURNAL Page 13

NEWS

New Zealand gold in
growth mode

The exploration tion holds the Puhipuhi
tempo in New
Zealand is usu- epithermal gold-silver
ally about a year
behind the up or target near Whangarei
down movement in
Australia, and this in Northland.
was shown at the
annual AusIMM These are both early
New Zealand Min-
ing Conference, quests but they have
this time held in
Wellington at the already begun drilling
capital’s conference
showpiece, the programmes, having to
national Te Papa
museum. cope with the familiar

Delegate numbers were North Island environ-
sadly the lowest for at
least six years at barely mentalists who make
200, in part due to explo-
ration only now regaining alarmist claims about
momentum compared to
Australia where it is the the dangers of mining or
big game in town.
that dangerous business
New Zealand is now down
to one major hard rock miner of drilling holes. Their
in OceanaGold Corp after
that company – whose roots claims and protests may
go back about 26 years to
forerunner Macraes Mining – look like storms in a tea-
bought out the only other ma-
jor gold operation at Waihi on cup in Australia, but they
the North Island from New-
mont Mining Corp. are publicity-savvy and

The move by OceanaGold have a compliant and
into Waihi was transforma-
tional because Newmont in rather lazy media lap-
New Zealand had been navel
gazing in exploration terms in ping up the statements
recent years and was moving
slowly on mine development. and photographs with

In the past three years, rare questions.
OceanaGold has not only be-
come a popular international Perhaps the biggest
favourite through the Didipio
mine in the Philippines that Miners in New Zealand have escaped rises in permit fees for the buzz at the conference
has provided it with enviable
cash costs with copper as a past decade, but that could be about to change with the NZP&M came with two technical

conducting a review of the situation presentations by two of

the country’s luminar-

by-product, but also the cash- land’s gold. ies in geoscience – Profes-

less takeover of the Haile So, who else is in the sor Dave Craw and Dr Doug

gold project and adjoining game? MacKenzie of Otago Univer-

grassroots targets in South There are still the allu- sity.

Carolina, set to become a vial gold miners on the West Their subject matter was

major new producer by early Coast and down into Otago the southern Otago schists

next year. province of the South Island which they consider could

Add to this the fact Ocean- but, with the exception of the contain at least one clone of

aGold in New Zealand large alluvial gold producer the Macraes mining opera-

slashed operating costs, re- Waikaia Gold, the collec- tions in the northern Otago

duced some of its numbers tive output of these miners schists for OceanaGold and

and mothballed the marginal is probably less than 30,000 two preceding companies

Globe-Progress mine at ozpa... well as far as New that has produced almost 4.5

Reefton when the gold price Zealand’s tax department is moz.

crashed about three years aware. The academics are un-

ago. Now, with the help of Two Australian majors, dertaking research work to

a Kiwi dollar being weaker Newcrest Mining Ltd and support new arrival New

against the American Green- Evolution Mining Ltd, have Age Exploration Ltd, which

back, it is undertaking smart beach heads on the North has applied for two explora-

exploration both at Macraes Island. The former is in JV tion permits from New Zea-

and Waihi for positive results. with Laneway Resources Ltd land Petroleum & Minerals

OceanaGold, targeting near Karangahake and New (NZP&M) near Lawrence and

about 408,000oz this calen- Talisman Gold Mines Ltd on Roxburgh which are close to

dar year, is now producing the Rimu target near the old the historic Gabriels Gully

more than 90% of New Zea- Karangahake mines. Evolu- workings – New Zealand’s

Page 14 GOLD MINING JOURNAL October – December 2016

first significant gold outlined not only the Sandfire had joined this,
mine.
company’s success- and was involved with sev-
New Zealand has
a problem in the ful development of the eral innovative moves in-
discovery-to-devel-
opment process. The DeGrussa copper-gold cluding the sealed container
consents system al-
lows companies to project in Western Aus- and rotabox logistics system
pay for permits, only
to be blocked by de- tralia, and the JV it had for transporting concentrate
cisions that can fol-
low years later. As developed, but also the from mine to port.
with many Australian
states, the elephant introduction of mining The company took up what
in the room is land
access. technology and renew- is perhaps Australia’s larg-

This was most able energy for outback est renewable energy pro-
evident on the North
Island where this year Silver Australia. gramme for the mining sector
City Resources Ltd as the
only applicant for advertised Simich told delegates – commissioning a huge so-
permits in the Taupo volcanic
belt three years ago proceed- innovation had been lar power station with 34,080
ed with prospecting, identi-
fied targets and then found a great driver in Aus- panels to provide power for
a Maori body refused them
further access and also re- tralian mining, and the the plant. This multi-million
fused to talk to the company
– after Silver City had prob- country’s $143 billion dollar exercise involved
ably spent several hundred
thousand dollars. Karl Simich minerals sector was a French solar specialist Neoen

One mining identity told leader in transforming and the Juwi group with re-
this writer that one Maori
group will take a view totally Resource and Energy Min- technology. This industry, he newable energy subsidy sup-
opposite to another, and gen-
erally the mine development ister Simon Bridges told del- said, was a prolific inventor port from the Australian Gov-
blockades of any sort are sig-
nificant on the North Island egates a permit fee was pos- and developer of specialised ernment.
but far less so on the South.
sible for miners, with a review technologies – 6,539 Austral- Simich said solar now pro-
The cart-before-the-horse
was shown up last year when by NZP&M as there had not ian mining inventions were vided the bulk of energy at
Trans-Tasman Resources Ltd
was refused a mining consent been a fee rise for more than filed for patent between 1994 this remote location, produc-
for seafloor iron sands by the
Environmental Protection Au- a decade. and 2011. ing 21 GWh per annum and
thority (EPA) after spending
millions on research, devel- Regular presenter at the “The industry has a large giving a diesel substitute sav-
opment and creating spe-
cialist mining equipment. A AusIMM conference, Tony number of innovation partner- ing of 5 million litres annually.
second sovereign risk event
for marine mining develop- Haworth, of Auckland-based ships – with universities, ter- – Ross Louthean, who
ment came from the EPA on Campbell McPherson, said tiary institutions and research attended the AusIMM
Chatham Rock Phosphate’s
mining consents for seafloor gold was being chased the bodies,” he said. Conference in Wellington
phosphate on Chatham Rise
after spending millions with hardest around the world.
specialist partners on devel-
opment. He has renewed interest in The CD-Rom of Paydirt’s 2016
gold, being appointed recent-
One of the opposing par-
ties was the fishing industry ly to the board of New Talis- Africa Down Under Conference
which has unfettered access man Gold Mines which is re- is available
to plundering the Chatham developing the Talisman mine
Rise seabed.
at Karangahake on which he

has an intimate knowledge,

as he was a junior geologist

working in the Hauraki gold-

field when that company was

called Heritage Gold NZ, and

managed by the now retired Perth,Western Australia
Australian geologist Peter At-

kinson.

One of the most energetic

presentations at the Welling-

ton conference came from

Karl Simich, who had just

made a sentimental revisit to

Macraes where, with Miles

Kennedy, he helped launch

Macraes Mining and a start

to mining on the challenging

low-grade Macraes orebod-

ies.

The eye opener for him was CD Rom includes
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was only a mining concept. CD-Rom – $95 (inc.GST)
As managing director of Phone (+61) 8 9321 0355 or email [email protected]

Sandfire Resources NL, he

October – December 2016 GOLD MINING JOURNAL Page 15

NEWS

Drill targets align for Capricorn

Capricorn Metals Drilling also identi- us is the targets that
Ltd continues to fied an area imme-
rapidly advance its diately west of the sit around the edge of
Karlawinda gold pro- proposed open pit
ject in the Pilbara. which has produced the existing resource
“significant” quantities
As Gold Mining Journal of groundwater. The have the potential to
went to print, Capricorn con- borefield is between
firmed its 50,000m resource 2.5km and 4.5km from upgrade fairly quickly,”
drilling programme was more the proposed plant
than 50% complete and the site and will likely help Langworthy said.
DFS remained on track for keep pumping costs to
delivery in mid-2017. a minimum. “With a bit more

The DFS is focused on the Detailed plant engi- drilling, we think we
Bibra deposit where an in- neering work for the
ferred resource of 25.5mt @ DFS will be staged should see some in-
1.1 g/t gold for 914,000oz was and is scheduled to
defined earlier this year. The begin following the clusion of that into the
current drilling programme is completion of crush-
seeking to increase the re- ing and grinding test next resource update.”
source classification as well work.
as expand the size of the de- Langworthy said the
posit. Native Title applica-
tions over the Bibra company had enough
A resource upgrade for mining lease closed
Bibra is slated for mid-No- in September, with the cash in the bank to
vember. Niyayaparli people the
sole claimant group. complete the DFS and
Capricorn technical direc- Capricorn said it had
tor Peter Langworthy said held many “positive discus- other proposed explo-
four RC drill rigs were turning sions” with the local commu-
at Karlawinda in a bid to fast- nity about an access agree- ration work, largely
track the DFS and position ment.
the company towards first thanks to the $12.6
gold production in 2018. Capricorn formed in Febru-
ary following the merger of million raised in late
“We’re a bit over halfway Malagasy Minerals and pri-
through the resource drill-out vate company Greenmount April.
and all of the activities asso- Resources, which acquired
ciated with that like collecting Karlawinda from Independ- “That [capital rais-
metallurgical samples, do- ence Group NL in 2015.
ing geotechnical drilling and ing] was based around
looking for water,” Langwor- Langworthy, who was Mal-
thy said. agasy’s chief of geology, said a budget to get the
shareholders were pleased
“All of that has concluded with Capricorn’s progress DFS done,” Langwor-
successfully and now we’re over such a short period.
just in the final phase. We’re thy said. “We’re also
probably looking to wrap that “We’ve come off a very
up in mid-November.” strong base, but at the same Capricorn is planning a resource upgrade still in the process of
time we’ve been very organ- for Karlawinda in mid-November selling some assets in
Samples for metallurgi- ised and very focused and I Madagascar that are
cal test work have been dis- think that should be sending
patched and results will be a very strong message to as other companies would quite liquid.”
ready from early 2017. It is shareholders about what we
expected these findings will think of the project,” he said. have already had it upgraded. Capricorn’s stock has
build on previous test work
which found the Bibra miner- “The work that Independ- “We know we’ve got a very, jumped 170% since the merg-
alisation was free-milling and ence had done was quite
non-refractory, with average advanced and high quality, very good project sitting there er in February to 13.5c/share
gold recoveries of 91%, in- but I guess their conservative
cluding 25-30% from gravity. nature had [the resource] all and we just want to get on at the time of print, peaking at
classified as inferred, where-
with it and get the DFS away, 18c in early August following

so we can start planning to the release of a positive scop-

bring it into production.” ing study on Karlawinda.

Capricorn has also enjoyed The study found the project,

success with the drill bit away about 65km from Newman,

from the Bibra resource, had favourable geotechnical

identifying six regional tar- conditions that allow for a

gets which Langworthy said steep western wall, consist-

were “only just scratching the ent mineralisation from sur-

surface” of the project’s po- face which can potentially

tential. produce large ounces per

First-pass drilling at the first vertical metre and competi-

of those targets, Portrush, tive capital costs.

confirmed the potential for “We’ve got a long-term pro-

a significant zone of shallow ject here with a long mine life

mineralisation immediately that we think we can extend

west of Bibra, with best hits of from where our vision is at the

11m @ 1 g/t gold from 57m, moment,” Langworthy said.

7m @ 1.4 g/t from 71m, 8m @ “Regardless of what the

1.15 g/t from 28m, 17m @ 1 gold price does, we believe

g/t from 67m and 12m @ 1.02 we’ve got a really robust pro-

g/t from 94m. ject.”

Other targets were being – Michael Washbourne
drill-tested at the time of print.

“What this has confirmed to

Page 16 GOLD MINING JOURNAL October – December 2016

SAVE THE DATE

GRAPHITEAUSTRALIAN

23 March 2017 - Novotel Perth Langley

www.australiangraphiteconference.com

To present, exhibit or attend as a delegate please contact Namukale Nakazwe-Msiska
on (+61) 8 9321 0355 or email [email protected]

NEWS

Egan Street heads to
high-grade gold

Doray Miner- tana tried mixing hand, Egan Street has been
als Ltd has
proved high-grade fresh underground able to piece together a
orebodies can be
found, developed ore with material from larger resource than the one
and mined in the
Murchison and surface which was Mentana walked away from.
now the newest
gold player on oxidised. The result The 624,000t @ 11.3g/t for
the block – Egan
Street Resources was poor recoveries 226,000oz gold (indicated
Ltd – is looking to
follow suit. and a short existence 318,000k @ 11.7 g/t gold and

The 226,000oz @ 11.3 g/t for Mentana at Roth- inferred 306,000t @ 11 g/t at
gold Rothsay project is some
500km from Doray’s suite of say. a 5 g/t cut-off) resource cov-
deposits in the Murchison,
however, Egan Street non- Widdup said CIP ers a strike of 1km.
executive director Hedley
Widdup said the projects processing and un- “That is the well under-
shared the same geological
domain. derstanding of geolo- stood part of the mineralisa-

“They are still finding things gy in the deposit had tion and there is about 12km
in that part of the world and
looking at the geology I am Production from Rothsay could start in 2018 come a long way in of strike which is geologically
confident we will find more
things. I think if you commit- 25 years, which Egan identical. There are a couple
ted the same efforts to some
of the other patches of ground potentially by Q4 next year, is Street hopes to use to its ad- of areas of historic workings
which have high-grade indi-
cations on them, I think there the company’s priority. vantage. along strike, so we know it is
is a lot of unfinished business
in that part of the world,” Wid- Then, of course, Rothsay “When they were mining mineralised in various posi-
dup told Gold Mining Jour-
nal. would become subject to fresh rock they were getting tions but it has just not been

“There are parts of West- funding, an exercise Widdup about 150,000 tpa out of the explored,” Widdup said.
ern Australia which are bet-
ter explored than others and anticipates to be straightfor- mine and they were getting Widdup said had Roth-
I judge the Murchison as one
of the more underexplored ward. 90-94% recoveries, which is say been near Kalgoorlie it
parts.”
“The world can change quite acceptable and a good would have been drilled and
For now, Egan Street won’t
be spending a great deal of though,” he said. “The pro- result,” Widdup said. probably mined extensively.
time on exploration as there
is enough to worry about with cess to get into production in “Mentana didn’t persevere Instead, there is potential to
regards near-term produc-
tion. early 2018 would mean a lot with it, the broader picture develop a large-scale project

Executing a scoping study of things would need to go from Mentana dictated that in time but he warned bigger
on the existing Rothsay re-
sources and following up with right. Rehabing the decline the mine needed to close but was not always better.
a completed feasibility study,
and getting a plant on site not because it was a project “I don’t think scale is some-

could be reasonably rapid, which was going to be no thing we need to be chasing

but it would just mean that good.” in the immediate term here,”

everything would need to be Extensive mine mapping Widdup said.

concertinaed together nicely; and drilling information left “We can be quite profit-

2018 is a target, but I’m hesi- behind by Mentana has given able on a small scale too,

tant to talk about a specific Egan Street, which was Au- so I’d personally rather be

time in 2018 at this stage.” ricup Resources prior to the here for 20 years mining

Discovered in the late name change upon listing, a small scale by which I mean

1800s, mining at Rothsay good base to work from. still very much the size of a

has been episodic, with Men- From the information at listed company. I’d be much

tana Minerals NL last more comfortable do-

mining it for about ing that in a smaller

two years in the late mill than struggling to

1980s/early 1990s. mine twice as much

The downfall for dirt on the surface.

Mentana was trying to That is the mistake a

match a small under- lot of companies have

ground operation with made in the past. De-

a comparatively large posits can be good lit-

processing plant, tle mines or they can

which meant the plant be crappy big mines.”

was batch-fed rather – Mark Andrews
than continuously

filled. Mining at Rothsay last took place in the

Meanwhile, Men- late 1980s/early 1990s

Page 18 GOLD MINING JOURNAL October – December 2016

Easy street for Egan

Egan Street Re- the skeletons and some of self a little bit more in order
sources Ltd was those are not too bad and
one company at the some of those are painful to make sure that you get
IPO starting line in to deal with.”
2015 which never got the listing.”
away. As the market started to
open up earlier this year Its short history suggests
The company wasn’t in a and with Egan Street al-
rush to list but given that the ready well prepared for an that Egan Street has got it
fund raising would have sped IPO, the process of raising
things up at the Rothsay gold money was a relatively sim- right so far, now it is in the
project in Western Australia’s ple one for the company.
Murchison region and taken hands of management to
the company forward; an IPO Egan Street eventually
was the best option, accord- made its way on to the ASX deliver the Rothsay gold
ing to non-executive director on September 13 this year,
Hedley Widdup. having raised a total of $6 project in a timely fashion.
million, most of which –
“That [listing] was going to $5.4 million – was under- Rothsay – a high-grade
be the step which would pro- written and netted via a
vide enough finance to put a rights issue. gold project in an underex-
decent drilling programme
etc. in place, so achieving a “From memory, we had plored region of WA – has
listing was going to be a sem- in excess of $16 million of
inal moment,” Widdup said. demand for the underwrit- large-scale project poten-
ing and that ended up get-
However, with investor ting shoehorned in to about tial, however, early indica-
minds almost completely 40% of what was available.
closed to the idea of resourc- There was a fair bit of inter- tions are that Egan Street
es IPOs at the time – there est in that and when it came
were just four new listings on to establishing spread we would be happy generating
the ASX in 2015 – the com- had a little placement to do
pany instead chose to pursue and we were able to control good margins over a long
a reverse takeover (RTO) but who was applying for that just
couldn’t find an appropriate by providing it to people who period of time from a small-
vehicle. had shown an interest and we
knew who was going to hold er mine.
Widdup said there wasn’t the stock,” Widdup said.
anything appealing in the While managing direc-
RTO space and believes The experience of listing
many shell companies will re- Egan Street has given Wid- tor Marc Ducler, a metal-
main that way. dup the impression that in-
vestors are more open-mind- Hedley Widdup lurgist, has big company
“I suspect they have either ed about having a “crack” at
never wanted to deal or failed doing deals now and expects experience with the likes
to deal in anything that has to see more IPOs closed
been brought to them and this year compared with 12 velopment and exploration of Gold Fields Australia Ltd,
are probably going to remain months ago.
a shell judging by behaviours plans. BHP Billiton Ltd, Fortescue
and assessing opportunities Australian gold companies
for themselves,” he said. are in vogue and likely to at- “Investors are happy to Metals Group Ltd and Roy
tract plenty of interest, par-
“There has been very little ticularly as investors warm to take that risk. This time last Hill and has valuable opera-
new blood coming into the punting on stocks again.
mining space for some time, year that [taking risk] would tional experience in senior
there have been a few re- Thanks to the likes of
verse takeover transactions Northern Star Resources Ltd, have been completely out of roles, he remains untested as
which have brought new pro- Evolution Mining Ltd, Sara-
jects to the market but after cen Mineral Holdings Ltd and [investors’] minds, let alone a prominent figure in a listed
a period of time people have Regis Resources Ltd positive
become aware that when you sentiment in the Australian being in the mining space and company.
get into a shell, you inherit all gold space has returned and
opened the door for juniors not producing anything,” Wid- Chief operating officer
to raise cash to execute de-
dup said. Lindsay Franker, who is a

“That turn in sentiment mining engineer, also boasts

has made it possible to IPO credentials with big hitters

again.” such as Newcrest Mining Ltd

While investors appear to and Newmont Mining Corp,

be willing to back junior out- however, is relatively inexpe-

fits and start-ups again, Wid- rienced at running a junior

dup said pricing structures, listed company.

particularly for IPOs, needed Nevertheless, the pair has

to be set accordingly. a following and captured the

“If the market was to pull attention of investors.

away [now] – and we are “They have lots of people

early in the cycle so it is en- in their networks, but you

tirely possible – you need to couldn’t say that they have

make sure that you are priced successfully developed a

at a level where it is going to mine in their history, so they

clear, otherwise you have in- are untested. But, we were

vested somewhere between able to share some networks

$250-500,000 preparing a with them and at the end of

company for listing for nought the day they had to put their

if you can’t get it done once foot forward and explain the

your prospectus is lodged,” strategy and do the work

Widdup said. and they have executed in

“You might as well give spades,” Widdup said.

people a pleasant investing – Mark Andrews
experience and dilute your-

October – December 2016 GOLD MINING JOURNAL Page 19

NEWS

Big gold miners see muted
M&A as bullion’s rise limits

The world’s TOP 10 GOLD MINERS EXPLORATION BUDGET – PCT OF TOTAL likely to resist calls to
biggest gold grow through deals and
miners will stay 60% instead employ “self-
shy of big acquisi- help” strategies to curb
tions, according Grassroots Minesite falling production, BMO
Capital Markets analyst
50

to top executives 40 Andrew Kaip said in a
who noted a 30 September 18 note.
jump in the price
That includes ex-
panding existing opera-

of bullion had tions and, for the lucky

made potential 20 few who have them,
purchases pricey, developing robust, new
and memories of 10 projects into mines.
failed deals linger.
0 N/A Big miners will con-
The need for finan- 2010 2011 2012 2013 2014 2015 2016 tinue to try to sell small-
er, non-core operations
to cut high debt levels,

cial discipline was the WORLD GOLD PRODUCTION – YEAR-ON-YEAR PCT CHANGE according to Michelle

dominant theme at the 10% Grant, BC mining and

Denver Gold Forum in metals transaction ad-

September. 5 visory service leader
Executives met as for EY.

the spot gold price 0 The trend could gen-
surged by 30% in the erate a few large trans-

first seven months of -5 actions before the end
the year to as high as of 2016, including Bar-

$US1,374/oz. It has -10 rick’s sale of its 50%
since slid to $US1,326/ 2010 2011 2012 2013 2014 2015 2016 stake in the Superpit in

oz, still up 25%. Sources: SNL Metals and Mining Thomson Reuters Kalgoorlie, which some
Had the industry ex- analysts expect to fetch
“S. Culp, 13/09/2016 $US1 billion.
perienced lower gold Folks who may have been knock-
prices for longer this ing on our door have gone the other The industry’s cau-
year, there would likely direction now that prices have come up. tion is unlikely to last,
have been more mergers based on miners’ actions
and acquisitions, accord- in previous commodity
ing to Gary Goldberg, chief upturns industry veteran

executive of Newmont and chairman of McEwen

Mining Corp, the biggest from the $US37 billion worth “That was a failed experi- Mining Inc, Rob McEwen,

gold miner by market value. in 2010. ment,” Barrick Gold Corp said.

“Folks who may have been “We look; we will continue president Kelvin Dushnisky He said miners would even-

knocking on our door have to look, but most importantly said, repeating the Canadian tually return to a mindset that

gone the other direction now we will stay disciplined,” Kin- miner’s mantra of “value over they must expand to appeal

that prices have come up,” ross Gold Inc chief executive volume”. to the broader market.

he said in an interview at the Paul Rollinson said. Executives did acknowl- “It happens every time but

event in Colorado Springs. Memories of a disastrous edge growth would be a chal- it’s probably four to five years

Globally, gold miners have six-year acquisition spree lenge without acquisitions. away,” McEwen said.

completed acquisitions worth as miners chased new gold Global gold mine production – Nicole Mordant,
just $US4.6 billion this year reserves between 2006 and is expected to fall nearly 9% Reuters
in 142 deals, according to 2011 are still fresh for both between 2015, its peak year,

Thomson Reuters data. That executives and investors. and 2018 to 102.4 moz, ac-

is down 23% on the $US6 Many of those overpriced cording to Thomson Reuters

billion worth of deals in the deals ended in multibillion- GFMS.

same period last year and far dollar write-downs. For now, the industry is

Page 20 GOLD MINING JOURNAL October – December 2016

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COVER

New-gen gold mines
dependent on
innovation

Page 22 GOLD MINING JOURNAL October – December 2016

The last decade has Gold Road’s Gruyere discovery – in the unheralded Yamarna belt – is evidence of what can be
been a vintage achieved through the application of innovative methodology and technology
age for Australia’s
gold sector. From have fallen, could it be that Osborne told Gold Mining An industry only exploring
stagnation at the turn Australia had lost its ability to Journal. within the shadow of the head
of the century, Aus- find gold? frame will struggle to replace
tralian gold production With the gold price again existing reserves and with
had rebounded, re- As executive director of in the ascendancy, major the majors intent on enacting
covering from a low of Gold Road Resources Ltd, gold miners have increased brownfields strategies, green-
7.76 moz in 2008/09 Justin Osborne led the com- their exploration budgets for fields exploration is left in the
to 9.4 moz in 2015/16, pany’s Gruyere deposit in the 2016 and 2017 but Osborne hands of juniors who are of-
placing the country unheralded Yamarna belt of is sceptical about what the ten living a hand-to-mouth
second in global sup- Western Australia from prom- majors are applying these existence. For Osborne, this
ply of the precious ising discovery to multimil- budgets to. scenario is not conducive to
metal. lion ounce development in the kind of big budget, long-
just four years. He believes “The disturbing thing is term visions needed to make
However, while gold pro- the quality of exploration in the amount of money going Tier 1 discoveries.
duction is at record levels, Australia is currently high but into brownfields exploration,”
the rate of new discoveries is is concerned with where the he said. “Gold Fields [Ltd] is “It is definitely harder for
struggling to keep pace. money is being spent. saying it is spending $US100 the juniors to convince inves-
million a year on exploration tors to fund greenfields explo-
Since 2000, just two plus- “We shouldn’t be despond- but it is all around the mine ration,” he said. “Right now,
5 moz discoveries have been ent about the quality of the and Nick Holland even said with the little bit of joy we are
made in Australia – Tropica- work that is going on but we at Denver Gold that the com- having in the market, Gold
na and Gruyere – the lowest should be concerned about pany didn’t need greenfields Road can attract significant
rate in a generation. Those the level of exploration.” exploration.” funding but for other juniors it
figures come despite re- remains difficult.
cord exploration expenditure Global gold exploration expenditure increased from $US1.2 billion
throughout gold’s bull run in 2002 to $US10 billion in 2014 “The problem for greenfield
of 2005-2011. According to explorers is the cyclical na-
Richard Schodde of MinEx ture of the sector. You could
Consulting, global gold ex- have the best exploration pro-
ploration expenditure rose gramme in place but some in-
from $US1.2 billion in 2002 vestors will still jump out; their
to $US10 billion in 2014. The investment horizons do not fit
rate of discovery would be with the long-term nature of
expected to increase under greenfields exploration suc-
such circumstances, instead cess.”
the number of greenfield
discoveries in Australia has Gold Road’s discovery of
fallen. A number of industry Gruyere was undoubtedly a
experts worry that unless the greenfields success story.
trend is reversed, Australia is Located on the most easterly
in danger of losing its ranking greenstone belt of the Yilgarn
as the world’s second largest
gold producer.

“I am concerned about the
rate of discovery here in Aus-
tralia,” highly regarded gold
explorationist and NewGen-
Gold convener Keith Yates
told Gold Mining Journal.
“We don’t seem to be pulling
the plus-5 moz discoveries
out as regularly as we used to
and if we are to maintain our
position in global gold pro-
duction it is a situation which
must change.”

So, if budgets have in-
creased but discovery rates

October – December 2016 GOLD MINING JOURNAL Page 23

COVER

have seen developed in re- core orientation tool can pro-
vide vital information at an
cent years has given the in- early stage of the exploration
process.
dustry a big boost.”
“Structural geology is in-
Gold Road has shown a credibly important in gold
deposits because so many
willingness to engage with of them are structurally con-
trolled. This device increases
technology providers in re- the speed of structural log-
ging of diamond core tenfold.
cent years and Osborne is
“It also allows geologists to
excited by the opportunity be- visualise the results straight
onto a screen and upload to
ing afforded by such break- the cloud and mix with other
data. We think it will encour-
throughs. age people to want to acquire
more drill core to get struc-
“Innovation is not about be- tural information as soon as
possible.”
ing inventive, it is about using
Reflex has also developed
the tools which are available,” down-hole gamma logging
and gyro-based surveying
Osborne said. “And there are equipment which can be op-
erated by the driller. Lawie
some very smart people do- said other driller-operated
geophysical tools would fol-
ing really clever work with low as the company looked to
further speed up the explora-
new technology.” tion process.

For the junior sector, recent “Most companies today
would have to get service
technological innovations are providers to produce that
data,” he said. “Reflex has
allowing smaller companies the ability to make that driller-
operated. It makes it cheaper
to conduct work which was and means you are able to
get the information at the rig;
previously unaffordable and there is no reason to not know
where the hole is going and
gather and interpret enor- you shouldn’t have to wait a
few shifts to find out it is off
mous amounts of data in course. The geologists can
get the information straight
more effective ways. away and remedy any mis-
takes. It is efficient and trans-
Reflex Instruments chief lates into cost savings for the
explorer.”
geoscientist, Dr Dave Lawie,
Gold Road has been an
told Gold Mining Journal early adopter of such technol-
ogy and for Osborne it is a
his company’s latest techno- question of productivity.

logical breakthroughs were “Some companies think at
$49/hole, a down-hole geo-
designed to speed up the physical survey isn’t cheap
and you’d have to be pretty
drilling-sampling-analysing ballsy to use it. But, our think-
ing is that the most important
process. asset you have is the drill
hole so you have to derive
“In exploration, particularly as much value as you possi-
bly can out of each of them.
at the junior end, the key is to Thinking in that way, an extra

A greater understanding about exploring under cover is keep everything happening
required as well as new drilling technology in a short timeframe to en-

sure the budget is managed,”

Block, Gruyere was Gold Deeper holes require both Lawie said. “Our products are

Road’s reward for five years greater planning and bigger designed to enable collection

of persistent grassroots ex- budgets. For that, the junior of data you don’t typically get

ploration sector is looking to both re- or which costs a lot of money.

“We made the Gruyere dis- search institutions and tech- We want people to acquire as

covery thanks to the bravery nology providers to open new much information as they can

of the board and exploration opportunities. while the drilling is happening

team. We had $2 million in Yates identified develop- or immediately afterwards.”

the bank at the time but those ments in data capture, man- Building full understanding

two discovery holes were agement and analysis as the of the structural controls on

drilled after 18 months of tar- most important innovation the mineralisation is not always

geting work.” exploration sector has wit- a priority for junior explorers

The mature nature of the nessed in recent years. who are often just hoping to

Australian exploration land- “There has been massive produce an intercept which

scape is also a challenge for innovation in computing and will give their share price

junior explorers. “the ability to massage big some bounce, but Lawie be-
“Our terrain is no longer vir- lieves Reflex’s IQ LOGGER
datasets. The software we
ginal and we are being forced Innovation is not about being
to look for deposits which inventive, it is about using the
are more difficult to find,” tools which are available. And there
Yates said. “We will have to are some very smart people doing re-
drill deeper and be more ad- ally clever work with new technology.
venturous. The near-surface
deposits are few and far be-
tween now.”

Page 24 GOLD MINING JOURNAL October – December 2016

Keith Yates

$40-50 isn’t all that much and more successful, cheaper With most of Australia’s low-hanging fruit already discovered, many
you can start mapping the ge- and safer ways to drill, ana- junior explorers are heading to less mature jurisdictions in Africa
ology under cover earlier.” lyse and target deep mineral
deposits. I could bring those relation- Osborne said. “It is forcing
Scepticism about the qual- ships and that attitude to CSIRO down a path where
ity of the data being produced The Federal Government Gold Road.” KPIs are measured by the
from such instruments may provided $US145 million for money programmes bring in
have prevented more wide- the research project with the The DET CRC is the coun- from collaborators and when
spread use in the junior ex- likes of BHP Billiton Ltd, Vale try’s leading exploration re- the industry doesn’t have
ploration sector but Osborne SA and Barrick Gold Corp search centre although Os- money, especially at the jun-
is adamant new tools are en- among its principle sponsors. borne questioned whether its ior and explorer end, there
couraging further innovation scope was wide enough. is a disconnect. The CSIRO
among his exploration team. “I would say we are prob- has fantastic ideas and con-
ably at the forefront of drilling “DET CRC has morphed cepts but is lacking funding.”
“If you train people prop- technologies and other tech- from being a huge pro-
erly and give them access to nologies. I think Australia is gramme about exploring Osborne pointed to the
smart people and allow them right up there in leading the undercover into developing Pathways To High-Grade
to use the data, you will get world in mining technolo- drilling technology rather Ore: 3D Gradient Mapping Of
outcomes,” he said. “We are gies,” Robbie Rowe, DET than learning about the ge- Mineral Systems programme
using multi-element geo- CRC Manager Research In- ology under cover. The real- being led by Dr John Walshe
chemistry; using it system- tegration, told Gold Mining time geochemical analysis and Dr Adam Bath of the
atically and with the help of Journal. tool they are developing may CSIRO’s Mineral Resources
some really smart guys such help juniors one day but more Flagship as an example of
as Scott Halley. By doing that Technology is not the only needs to be done on the geol- research which could be ap-
we are routinely getting qual- driver of exploration. Austral- ogy under cover.” plied directly into exploration
ity data and it is now devel- ia’s universities and research work.
oping into a key tool to map institutions are leaders in ge- Osborne urged more junior
geology when we are doing ological research. Osborne explorers to engage with a “It is a great example of
our regional air core drilling urged explorers of all sizes research community which is what can be achieved but it
programmes.” to engage further with such currently under funding pres- needs to be expanded and
institutions. sure. commercialised. We are too
The prevalence of such reliant on one guy in a lab
tools appears set to increase. “At Gold Road we have “A critical thing is having working on it,” he said.
tried a lot of things,” Osborne the mechanisms in place so
Drilling technology break- said. “I am lucky in that I the industry can work with Yates said there had been a
throughs are a key focus of came from a culture at Gold researchers and the govern- lack of new exploration meth-
the Deep Exploration Tech- Fields where we had lots of ment cuts to research fund- ods in recent years and urged
nologies CRC. Based in Ad- exploration funding and we ing, particularly the CSIRO, further collaboration between
elaide, the DET CRC was es- pushed the partnerships with isn’t helping in this regard,”
tablished in 2010 to develop research organisations and

October – December 2016 GOLD MINING JOURNAL Page 25

COVER

Despite an increase in exploration budgets, Australia’s gas sector, we don’t collabo- Justin Osborne
discovery rate continues to fall rate with each other enough.
People seem to think they Bristow outlined the Rand-
industry and researchers. which prevents a consistent have their own IP and ideas gold approach to exploration.
“We are not seeing a great major discoveries? and that creates a competi-
tive advantage; it is a crock “We do fundamental re-
deal of new methods,” Yates Speaking at last year’s of shit. Unless you are doing search and have multiple pro-
said. “But collaboration is vi- NewGenGold forum, North- specific first-pass targeting grammes with universities,”
tal for the industry. I think the ern Star Resources Ltd ex- on ground you haven’t yet Bristow said. “We pay people
big companies recognise this ploration manager Jamie secured, there is no competi- to think because we believe
but the juniors find it a little Rogers said research into tion. the only way to create value is
more difficult to justify spend- the orogenic-style deposits to find and build world-class
ing money on research when which dominate Australia’s “If we can help someone assets ourselves.”
shareholders want to see gold sector was lagging be- else out there we will. As an
drilling results.” hind work in other styles. industry we need to find ways Gold Road is a long way
to work together more. We from emulating Randgold’s
Osborne believes compa- “We are really crap at are all doing the same thing multi-mine strategy but Os-
nies need individuals who will knowing where we are verti- and if we did have more syn- borne insists a similar cul-
drive such collaboration. cally in the system; the por- ergy, there would be greater ture is already in place at the
phyry guys and epithermal chances of success.” ASX-listed junior.
“It is about having people guys know exactly where they
who can converse between are by just looking. We have Collaboration would only “We see it as hugely im-
industry and the research- no idea whether we are 1km come if companies adopt a portant to have smart people.
ers,” he said. “Every explora- above the system, 2km above culture of innovation, a grow- Companies need to focus on
tion company should identify the system or whether we are ing necessity for all gold com- employing smart people and
someone in the organisation 10m above the system. I think panies according to Osborne, allowing them freedom to be
who can do that job; some- understanding this will be one who pointed to Randgold Re- creative. Companies too of-
one who knows how to apply of the big ways forward and if sources Ltd as an example ten suppress creativity with
the science and also has the we can crack that we will go of what could be achieved all the control systems they
experience of exploration.” some way to finding things in through commitment to ex- place on employees.
mature belts,” Rogers said. ploration excellence. The
Without the majors of yes- London-listed miner has ris- “During the transition from
teryear driving exploration in- Osborne said the best way en from a market cap of less pure explorer to developer
novation through large teams to overcome such hurdles than $US500 million a dec- and miner, Gold Road has
and big budgets, has Austral- was to engage more with ade ago to more than $US7 been very focused on the en-
ia’s gold sector lost its explo- peers. billion today through a strat- gine room – the exploration
ration lustre? egy of exploration and early- and project teams – being
“Compared to the oil and stage acquisitions. allowed to do what they are
Is there something cultural supposed to do and not being
“The company has a weighed down by excessive
unique boss [chief executive things that don’t add value.”
Mark Bristow] who keeps it
very focused and it has stuck It is a bold and admirable
to a strategy focused on ex- outlook from the executive
cellence in operation and al- director of a company not
lowing the team to do good yet in production but given its
exploration,” Osborne said. success in finding and grow-
ing Gruyere, the Gold Road
Speaking at the Denver blueprint could be one gold
Gold Forum in September, explorers of the future follow
closely.

– Dominic Piper

Page 26 GOLD MINING JOURNAL October – December 2016

Case histories of discovery

The world’s pre-eminent
gold exploration event

Pan Pacific Perth 7
November 14-15

Pan Pacific Perth 7
November 14-15

Jointly organised by:

Keith Yates & Associates Pty Ltd

www.newgengold.com

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

EXPLORATION INNOVATION

Game-changing rig on the way

The Coiled Tube A field trial utilising world-first technologies was completed in South Australia earlier this year,
(CT) drilling rig including the drilling of 14 holes for 8km over a nine month period
is set to be a game-
changing piece of earlier this year in South opment. It also identified the Rowe said having a num-
equipment, according Australia’s northern Eyre integrated nature of these ber of miners and explorers
to DET CRC manager Peninsula under the Mineral technologies when they are working together on practical
of research integration Systems Drilling Programme all being used together. solutions and technologies
Robbie Rowe. (MSDP), which included par- was helping improve explo-
ticipation from the Geological “In the future they are go- ration performance and Aus-
“The CT rig is a little bit fur- Survey of SA, Minotaur Ex- ing to be used together, so tralia was taking the lead in
ther away, but that is a true ploration Ltd, Kingston Re- the key takeaway from the this area.
game-changing piece of tech- sources Ltd, Boart Longyear, programme was the acceler-
nology that is going to make Imdex, Globaltech, Olympus, ated development of the tech- He said the SA Govern-
drilling faster and cheaper Epslog, Bureau Veritas, while nologies and to see them all ment and Australian Govern-
through cover,” Rowe said. researchers from CSIRO, working together. The tech- ment deserved credit for not
University of Adelaide and nologies mentioned are be- only their financial assistance
“I think the near-surface, Curtin University were also ing developed to be commer- in research and development
outcropping search base is involved. cialised and I can see them in programmes but assisting in
becoming mature. There are commercial use within a few the trial of new technologies.
still deposits to be found, but I “From a technology per- years.”
think everybody realises that spective, it was not complete- “The DET CRC is a col-
it is becoming mature and ly unique but a really amazing Combining all of the tech- laborative organisation look-
everybody knows the big de- opportunity to test a number nologies, DET CRC hopes ing into new technologies.
posits are going to be found of different technologies – real-time information can Its principle sponsors at the
undercover. These new tech- DET CRC technologies – in a be delivered on site and de- moment are overseas major
nologies will try and open up real world greenfields explo- cisions made in real time, diversified mining companies
that undercover search base ration environment together,” therefore accelerating the like BHP Billiton, Vale and
and I think the CT drill rig is Rowe said. exploration process in a cost Barrick,” Rowe said.
definitely where the next gen- effective manner.
eration of big mines are going “A lot of the time these “I think having the major in-
to be found in Australia.” technologies are tested in the DET CRC’s ambitions are ternational mining companies
lab or in isolation in a test fa- what the global exploration sponsoring technology fo-
The CT rig is being de- cility, but the MSDP allowed a sector is calling for and there cused research here in Aus-
signed to operate without number of these technologies has been no shortage of sup- tralia probably says we are at
drill rods, with drilling costs to be tested at the same time port from blue chip, multina- the forefront of drilling tech-
estimated at around $50/m to on the same rig in a real world tional mining companies such nologies and I think Australia
a depth of 500m in the plan- environment. The ability to do as BHP Billiton Ltd, Vale SA is right up there in leading the
ning. that really did accelerate a and Barrick Gold Corp in as- world in mining technologies.”
lot of the technology devel- sisting the organisation with
It is hoped the CT rig can its endeavours. – Mark Andrews
be trialled in the field later this
year, however, it will still be a
while before companies can
plan greenfields exploration
programmes around utilising
the rig as challenges, such as
producing a quality sample of
the drilled information, need
to be ironed out.

In the meantime, DET CRC
has been working on projects
which are closer to com-
mercialisation, including the
Wireless Sub, DET CRC fluid
management system, Auto-
Sonde and AutoShuttle and
Lab-at-Rig innovations.

A trial of all these world-first
technologies was completed

Page 28 GOLD MINING JOURNAL October – December 2016

New trend for old ground

Base metals spe- a lot of overlap between the it was important for junior ex-
cialist Encounter
Resources Ltd will two,” Robinson told Gold plorers such as Encounter to
tread a familiar yet in-
novative path towards Mining Journal. remain innovative.
exploration of its new
gold projects. “Our team of Peter [Be- “I think you’ve always got

Encounter is ramping up wick], Jon [Hronsky] and the to be trialling new technolo-
plans for the Telfer West and
Dora gold projects in West- rest of the guys have exten- gies to try and reduce that
ern Australia’s Paterson prov-
ince, having made a number sive experience in both base cost of exploring,” he said.
of copper and zinc discover-
ies at its nearby Yeneena metals and gold. I don’t think “Some technologies are still
project.
this is necessarily a switch in their infancies, like the
With gold stocks rising and
historical data proving better away from base metals, passive seismic surveys we
than first thought, Encounter
decided now was a good time but a more exciting addition did at Millennium recently
to apply modern techniques
to ground sporadically ex- to the portfolio in a place to map the depth of cover,
plored 30 years ago.
where we can leverage off which look to have worked
Encounter picked up Tel-
fer West, 25km north-west our operational synergies in pretty successfully. That’s
of Newcrest Mining Ltd’s Tel-
fer gold-copper operation, in this part of the world, target- important from our model-
2014 and has spent the last
two years reviewing historical ing a different commodity.” ling perspective and apply-
results. Limited shallow drill-
ing struck gold mineralisation Most of the major explo- Encounter senior exploration geologist ing it to our other geophysi-
over a 4km trend during the ration work at Telfer West Kristian Hendricksen with exploration cal datasets to enable us to
last on-ground exploration occurred between 1986 director Peter Bewick at Telfer West remove some of the interfer-
programme in 1993.
and 1989 under a JV be- ence from cover.
Exploration rights to Dora,
40km south-east of Telfer, tween Western Mining, BHP technologies and best prac- “For us it’s a constant
were granted in December
2015. In June, Encounter re- and Newmont Mining Corp. tice. learning process. It’s unlikely
ceived a $150,000 EIS grant
from the WA Government for Deeper mineralisation which “The advances in IP over to be one silver bullet tech-
future drilling at Dora.
led to the underground de- the last 30 years with regards nology which leads to that
A heritage survey will be
completed over Telfer West in velopment at Telfer was dis- to depth penetration, the sort discovery. It’s going to be a
early October, followed by IP
and a drilling programme in covered subsequently in the of equipment that is used and suite of different technologies
early November.
1990s. the ability to reduce noise to applied sensibly.”
Encounter managing di-
rector Will Robinson is not “Exploration seemed to identify targets using IP in Meanwhile, Encounter is
expecting any change in the
way his company goes about terminate at a time where it this type of rock unit are pret- searching for a new partner
its business despite the shift
in focus from base metals to hadn’t really fully tested the ty well understood,” he said. for its Lookout Rocks copper
gold.
target,” Robinson said. “A lot of the better gold min- project after Chilean major
“As far as taking a mineral
systems approach to target- “I think at the time the pre- eralisation at Telfer is closely Antofagasta plc withdrew
ing and exploring for base
metals or gold, largely there’s vious explorers probably de- associated spatially with the from an agreement to earn up

termined they were too low in development of pyrite and to 70% interest.

the stratigraphy before they chalcopyrite and in this en- “It was disappointing to

found a lot of the stockwork vironment we think IP could see Antofagasta leave when

mineralisation at Telfer. Now work conceptually very well. they did, but it’s created a re-

we’re looking at the same “It is something that has ally good opportunity for us

geological unit they’re min- a pretty clear path forward. in that they’ve spent a large

ing at Telfer underground, al- We’ve got a gold system that part of the early stage, high

beit closer to surface at Telfer has been drilled very spar- risk capital and got it through

West.” ingly and it’s mineralised over to the discovery of copper

Encounter has established at least 4km – if not more – so sulphides up to 1% copper

a reputation as one of the we’re going to run this geo- in the first diamond drill pro-

leading junior explorers on physical tool over it initially, gramme,” Robinson said.

the ASX because of its ability test to see whether we’re get- “We’ve got it back 100%,

to use modern technologies ting into the more sulphidic but we’ll be seeking a new

and innovative techniques to parts of the system and, if partner to advance that pro-

identify new targets, including that’s successful, we could ject next year and we’re confi-

those which led to the discov- run IP on a much more de- dent there will be a number of

eries of the BM1-BM7 copper tailed basis.” parties that will be interested

and Millennium zinc projects Robinson, who has served in pursuing it given the oppor-

at Yeneena. as president of the Associa- tunity that’s available and the

Robinson said his compa- tion of Mining and Explora- path forward from here being

ny’s approach to exploration tion Companies (AMEC) for relatively clear.”

of the Paterson was “hardly the past eight years and is – Michael Washbourne
rocket science”, but rather also an executive member of

simple application of modern the UNCOVER initiative, said

October – December 2016 GOLD MINING JOURNAL Page 29

EXPLORATION INNOVATION

McKay goes hands-free

The LF350 diamond drill rig with the rod presenter behind it. The control panel is removed from the rig allowing operators to work
8m away from the rig, well away from the mast, sloop and motor. This removes the driller from any potential hazards as opposed to
conventional rigs where the control panel is mounted on the rig. A tilting function of the head allows the rods to be picked up from the

presenter totally hands-free

Depressed condi- free operating solutions for path to move into the sphere establish McKay’s reputation
tions in the re- drill rigs. of major clients. To win those as an important service pro-
sources sector have contracts the rigs have to be vider to Western Australia’s
not slowed Perth- “The types of drill rigs we at a certain standard,” McKay iron ore majors, however, with
based drilling outfit have invested in have been said. the rebound in the gold price
McKay Drilling. hands-free, offering a safe there has been a notable shift
background for our opera- Tailoring rig specifications in demand from players in the
Instead, the company has tors. We have gone down this to suit its clientele has helped precious metal field.
used the time to stay true to
its motto of “setting the stand- Mark McKay “We are tendering on a lot
ard” by investing in R&D and more jobs in the Goldfields
introducing new tools to its or with gold companies. We
trade. have always had three or four
rigs working in gold but we
“For us, innovation is very have seen that increase of
important, it gives us the late,” McKay said.
market edge and advantage
over our market competitors,” “I’m hoping next year there
McKay Drilling managing di- will be stronger demand for
rector Mark McKay told Gold machines and I think there
Mining Journal. will be opportunities. Obvi-
ously, there have been new
Safety is the core focus for floats coming to the market
McKay when it comes to in- so there will be juniors out
novation. It has specifically there spending money which
worked hard to deliver hands- is a good opportunity for us,”
McKay said.

Page 30 GOLD MINING JOURNAL October – December 2016

The tilt action of the head and the rod presenter extending out to The magnetic robotic arm on the rod presenter moving the tube
present to the drill head – totally hands-free. The drill head is oper- from the rod presenter and moving it across to the breakout
ated by the driller standing at the control panel, while the present-
bench, eliminating the need for the tube to be manually trans-
er is operated by the driller’s assistant remotely. All are well clear ferred by hand from rod bench to breakout racks. The controls
of any hazards. The rig’s guarding is still to Australian standards for the presenter are wireless so the drillers assistant can move

to position themselves where they are in clear line of site for
each particular task

Whatever opportunities are very safe rig to operate,” Mc- these surface rigs set up. It is Meanwhile, McKay has

on the horizon, McKay is de- Kay said. a huge step in the drilling in- flirted with opportunities over-

termined to be at the head of At the same time the LF350 dustry,” McKay said. seas, entering the Brazilian

the queue offering services. was added to the fleet, Mc- Last year, McKay further market through a drilling con-

As the company cele- Kay partnered with Schramm bolstered its drilling capacity tract with Beadell Resources

brated its 25th anniversary to introduce the industry’s with two hydro rigs, bringing Ltd.

last year, it became the first first T685i rig to its RC divi- its expansion expenditure Having added experience

driller in Australia to roll out sion. in the 12 months to October in another jurisdiction and

Boart Longyear’s state-of- The T685i incorporates a 2015 to $21 million. grown substantially in recent

the-art LF350 hands-free drill remote control panel which In all, the company has times despite poor market

rig which is complete with allows the driller to operate added eight rigs to its fleet in conditions, the company has

hands-free rod handling. from a distance of up to 8m. the past three years, with its forged ahead of its competi-

A key feature of the LF350 “I think we are the only stable boasting 20 rigs with tors in “leaps and bounds”

is its capacity to operate with company at the moment with one new unit in build phase. and will continue to do so

automated drilling at through its commit-

shift changes plus a ment to innovation.

retraction system that “A very strong fo-

removes all hydrau- cus of ours is to come

lic cylinders from the up with new systems,

mast assembly. new tooling and other

“The LF350’s are things to improve our

the coring rigs which equipment,” he said.

are totally hands-free “We have just gone

right down to pulling through an expan-

the core and the tube sion phase over the

and breaking the tube past two to three

down to remove the years so we are sort

core. We have got rid of consolidating at

of the breakout tongs, the moment and bed-

so we are getting rid ding in all our sys-

of all that manual han- tems and manage-

dling for the offsiders ment team. But, if the

and drillers. We have market demands it,

also developed a drill yes we would look at

breakout so we can expanding further.”

break down the bar- Drillers assistant placing the tube into the breakout bench with the rod presenter – Mark Andrews
rels without using any using the remote controls. The break out bench then clamps on the tube and breaks

hydraulic tongs or it down into its components allowing for the core to be pumped from the tube, elimi-

anything. They are a nating the need for the use of tube spanners and manual handling of the tube

October – December 2016 GOLD MINING JOURNAL Page 31

THE AMERICAS

Americas deliver
for big boys

A sustained period of low gold prices from 2013 to 2015 forced industry participants to re-think their strat-
egies to remain viable. The world’s largest gold miners – Barrick Gold Corp and Newmont Mining Corp –
were not immune to gold’s downfall and part of their solutions to the situation has been to sell assets and
streamline their businesses. The result has seen both companies divest projects in the Asia Pacific region,
with their energy and capital reinvested back into core projects in the Americas. While Barrick and Newmont
have balance sheets to grow organically, M&A activity is also an option and with gold prices bouncing back
to over $US1,300/oz, junior explorers are active once again and may well grab the attention of the big boys
who are looking to expand their presence in the Americas.

Crippled by a falling gold mont Mining Corp at the Su- pens, terrific, if not we are said. “We are pleased with
price and rising debt, per Pit in Kalgoorlie. happy to keep the asset in the the progress we have made
Barrick Gold Corp has car- portfolio as well.” in terms of debt reduction, but
ried out an extensive review Barrick president Kelvin we are not stopping there, we
of its business and now ap- Dushnisky said the process At the start of the year, are pleased but not satisfied
pears to have a firmer grip on of selling its part in KCGM making an asset sale would and we need to continue to
its own destiny. was under way and interest to have been essential for Bar- do more.”
date was strong, however, im- rick to reach its target of re-
Rising gold prices and of- proved sentiment in the gold paying $US2 billion back in The company is being
floading assets have cer- price and Barrick’s stronger debt in 2016, but circum- well served by Cortez and
tainly helped Barrick quell its balance sheet meant it was stances have changed and Turquoise Ridge in North
debt concerns, with a mere not under pressure to sell out the company had already set- America, with Cortez ex-
$US150 million due before of the Super Pit. tled $US1.25 billion of debt at pected to produce above
2018 and about $US5 billion the time of print. guidance and at lower costs
of the outstanding $US9 bil- “There is potential for that – 980,000oz-1.05 moz gold
lion debt not maturing until to proceed and potentially we In July, the company an- at AISC of $US520-550/oz
after 2032. could have a sale by the end nounced it had a consolidat- – while the situation is simi-
of this year,” Dushnisky said ed cash balance of $US2.4 lar at Turquoise Ridge where
The company’s near-term at the Denver Gold Forum. billion and was in a more ag- 240,000-260,000oz at AISC
target is to reduce debt to gressive position now than 12 of $US640-700/oz is expect-
below $US5 billion and a key “However, we have also months ago. ed this year. Total group pro-
plank behind that ambition been very clear, as we were duction for 2016 is estimated
may well be divesting more last year with the asset sales, “Last year and the year be- to be 5.5 moz gold at AISC of
assets, namely its 50% stake everything has its time and fore was all about restructur- $US750-790/oz.
in KCGM, the JV with New- only if we feel we are getting ing and getting stability back
full value for it. If that hap- in the business,” Dushnisky

Page 32 GOLD MINING JOURNAL October – December 2016

Barrick has turned its back on non-core assets to focus on projects in the Americas

While Cortez and Tur- Barrick is fielding interest from buyers for its 50% stake in the Super Pit
quoise Ridge are exceeding
expectations, the impact of project which straddles Ar- advancing nicely for Barrick. Cisco, a worldwide technol-
the suspension of activities at gentina and Chile. “We are very excited about ogy leader, to drive its digital
Veladero, Argentina, are still reinvention of mining.
being assessed by Barrick. Dushnisky said Bee’s ap- both of those opportunities,
pointment did not mean Bar- importantly, they were gen- Cisco will help Barrick digit-
Operations at Veladero rick would set out to build erated through our explora- ise every aspect of the opera-
were suspended in mid-Sep- the project right away, rather tion pipeline so there were no tion at Cortez to deliver bet-
tember after ice fell on a pipe the potential to build Pascua acquisition costs,” Dushnisky ter, faster and safer practices.
carrying process solution in Lama sequentially in stages said.
the leach pad area. Some would be assessed. “We are building on our
material left the leach pad He said the company would Cortez experience, Cisco will
area, forcing the company “It is early days there and continue to add more ounces help us to embed the digital
into remedial works to fix the we don’t want to get ahead of to its portfolio through near- platform at our other opera-
problem and operations re- ourselves,” Dushnisky said. mine exploration, while en- tions, in time, as well as at
sumed on October 4. tering JVs and investing in head office,” Dushnisky said.
The company has other smaller companies was also
Meanwhile, elsewhere in projects ahead of Pascua on the agenda. – Mark Andrews
Argentina, Barrick has shown Lama in the development
renewed interest in develop- curve, with the 10 moz Gold In the meantime, Barrick
ing Pascua Lama, Argentina, Rush project in Nevada and is also embracing the digital
with the re-appointment of Alturas (5.6 moz gold), Chile, revolution and will work with
George Bee as senior presi-
dent of Lama and Frontera
district development.

Bee previously served the
company for 16 years before
pursuing other opportunities,
however, he is back to as-
sess starter opportunities for
the 15.4 moz Pascua Lama

October – December 2016 GOLD MINING JOURNAL Page 33

THE AMERICAS

Newmont delivers in the Americas

The fruits of New- With many of its expansion projects and new mines under control in the Americas, Newmont
mont Mining will make a decision on Subika underground, Ghana, soon
Corp’s divestment
strategy are starting to 20%, or about $US150 mil- mont expects to see first pro- which were inherited on ac-
be seen. lion, lower than initially esti- duction from Long Canyon, quisition. However, Goldberg
mated. which was 90% in October, said the company was on
Depressed gold prices a by the end of the year. track to deliver the improve-
few years ago saw the sec- Goldberg said being one ments it said it would.
ond largest gold producer in of the only gold producers to “Both of the new mines we
the world make the decision have invested in projects dur- are building will pour first gold Continuing with expan-
to split with some of its as- ing a low price environment this year,” Goldberg said. sions at Cripple Creek & Vic-
sets. had been beneficial for New- tor, Tanami and Northwest
mont. Output from Long Can- Exodus, plus the addition of
The projects considered yon is estimated at 100,000- Merian and Long Canyon,
non-core to the company in- Despite parting with some 150,000 ozpa gold at AISC will deliver 1 moz at AISC of
cluded Jundee, Waihi, Midas, assets and the likes of Merian of $US500-600/oz from a about $US700/oz in the next
Penmont and Batu Hijau, and Long Canyon in Nevada capital outlay of $US250-300 1-2 years for Newmont.
which collectively accounted under construction, Newmont million.
for 630,000 ozpa gold pro- still managed to produce as Therefore, the company is
duction at AISC of $US800- many ounces last year than it Long Canyon, Merian and looking at its next round of
900/oz. did in four years ago. Cripple Creek & Victor, Colo- investment decisions, with
rado, have been the focus of the Ahafo mill expansion and
“When Batu Hijau closes “We produced the same development for Newmont Subika underground expan-
we would have created $U2.8 amount of gold in 2015 as in since it started selling pro- sion programmes under con-
billion in non-core asset 2012, but we did it with 27% jects in 2013. sideration.
sales,” Newmont president fewer people,” Goldberg said.
Gary Goldberg told delegates The new mines in Suri- Goldberg said the com-
at the Denver Gold Forum. AISC have also come down name, Nevada and Colorado pany expects to make a deci-
since 2012 from $US1,177/oz have replaced the assets sold sion on these projects by the
“With the sale of Batu Hijau, to $US898/oz, with year-to- by Newmont in recent times. end of the year.
which is expected to close in date costs of $US852/oz.
the coming weeks, we would Long Canyon, Cripple On the exploration front,
have significantly streamlined Goldberg said the compa- Creek & Victor and Meri- Goldberg said a modest
our portfolio to focus on as- ny’s mantra was “discipline” an will combine for about increase in the budget for
sets to best match our ca- in all facets of the company’s 800,000 ozpa production at greenfields exploration was
pabilities in terms of creating business, which will soon fea- below $US700/oz for more also being considered.
value and managing risks.” ture another new mine and than 10 years.
three incremental expansions – Mark Andrews
Instead of sitting on its come to the fore. Newmont is still encounter-
cash, the company has rein- ing throughput issues at the
vested a large chunk of mon- In addition to Merian, New- Cripple Creek & Victor mill,
ey in projects in the Americas,
with the first of these projects
coming on-line in October.

Commercial gold produc-
tion at Merian, in north-east
Suriname, was achieved
on October 1 as Newmont
looks to produce 400,000-
500,000 ozpa gold at AISC
of $US650-750/oz for the first
five years.

With reserves of 5.1 moz
and exploration success, in-
cluding the Sabajo discovery,
Merian – one of the lowest
cost assets in Newmont’s
portfolio – has an expected
mine life of 13 years.

Capital costs of $US575-
625 million at Merian were

Page 34 GOLD MINING JOURNAL October – December 2016

LATINSAVE THE DATE

AMERICA

17-18 May 2017

Perth,Western Australia

www.latinamericadownunder.com

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

THE AMERICAS

Kingsgate to take on Thai fight

Kingsgate Consoli-
dated Ltd’s Nueva
Esperanza gold-silver
project is in danger of
being left behind as
the company faces a
fight for its very exist-
ence after becoming
the subject of an un-
solicited takeover offer
from a Thai firm.

Kingsgate has elevated The Kingsgate board is facing a battle to keep control of both its Chatree mine and the company itself
Nueva Esperanza – in cen-
tral Chile – to flagship status evated levels of heavy miner- environmental and health im- local people – could not be
this year, having completed a als in blood samples of local pacts came from the Akara deemed responsible for the
PFS in April. However, when residents. gold mine, [we made this elevated levels of arsenic
Thai company Northern Gulf decision] for the benefit of and manganese in both blood
Petroleum Pte Ltd launched a In a statement, the min- society and to solve conflict samples and crops from the
4.2c/share offer for 50.1% of istry said: “[Kingsgate’s between people.” area.
the issued shares in the ASX- 48%-owned] Akara [Re-
listed miner, it failed to men- sources] has to shut down Kingsgate has frequently Without the metallurgi-
tion the project. the mine and rehabilitate the produced test results which it cal licence, Kingsgate will
area. Even though there is says prove the mine – which be forced to close the mine,
Northern Gulf is controlled no clear conclusion that the employs more than 1,000 possibly forcing it to book an
by Chatchai Yenbamroong, a
Thai businessman who pre-
viously advised Kingsgate
on government negotiations
over its Chatree gold mine in
Thailand.

The Northern Gulf offer
came four months after the
company placed itself in a
voluntary trading halt follow-
ing the Thai Government’s
revocation of the metallurgi-
cal licence for Chatree, locat-
ed in the centre of the South
East Asian nation.

Kingsgate said in its June
quarterly statement that it
had received notification on
May 10 that the Thai Minis-
ter for Industry had decided,
following a Cabinet meeting,
that the licence – integral to
the continued operation of
the mine – would be extend-
ed only until the end of 2016,
rather than for a further three-
to-five year period as was ex-
pected.

The decision was the cul-
mination of years of protests
from local residents about el-

Page 36 GOLD MINING JOURNAL October – December 2016

$US175 mil-

lion impair-

ment charge

for the asset.

It is the latest in a

long line of regulatory and

licensing problems Kings-

gate has faced in Thailand.

The company has op-

erated the mine – 600km

north of Bangkok – since

2001 but ran into trouble in

2007 when it failed to obtain

approvals for the Chatree

North extension project.

Northern Gulf’s Bidder’s

Statement suggested Yen-

bamroong was in a better

position to negotiate with the

Thai Government over the

future of Chatree given he

had acted as adviser to both

the company and Thai Prime

Minister Chavalt Yongchaly-

udh.

“Kingsgate has proven it-

self unable to manage the

situation in Thailand. Some

board members have been

openly critical of the Thai

Government and by its own Ross Smyth-Kirk (right) on site at Nueva Esperanza, Chile

admission, Kingsgate’s busi-

ness and reputation in Thai- and... the potential upside” of in April. The study indicated

land is now ‘irrevocably dam- the company’s future. a capex of $US206 million

aged’,” Yenbamroong said in Kingsgate’s Nueva Esperanza Of greatest concern to could deliver a 91,000 ozpa
the bidder’s statement. project is in one of Chile’s Kingsgate was the lack of ref- gold equivalent project with
most prolific mineral belts erence in the bidder’s state- a NPV of $US168 million
“I will leverage my experi- ment to Nueva Esperanza, (using a 5% discount) and
ence and understanding of

Thailand to seek a positive that the bidder is seeking to having promoted the devel- an IRR of 25% (both based

outcome,” Yenbamroong acquire 50.1% of your shares, opment project to the most on $US1,200/oz gold and

added, pointing to his role in so that it can secure control important in the portfolio fol- $US19/oz silver prices).

negotiating the EIA and for- of Kingsgate at minimal cost.” lowing the regulatory prob- The company is now push-

Northern Gulf’s argument lems at Chatree and the sale ing ahead with a full feasibility
“estry approval for Chatree study, with a decision on de-
North. velopment expected before
the end of 2017.
Kingsgate’s target The bidder has neither the experi-
ence nor the credentials needed to Smyth-Kirk said North-
statement is due for re- realise the significant potential of Kings- ern Gulf’s lack of reference
to Nueva Esperanza high-
lease in October, but in a

letter urging them to take

no action on the offer,

Kingsgate chairman Ross gate’s flagship asset; the wholly-owned lighted the inadequacies of
Smyth-Kirk left share- Nueva Esperanza gold-silver project its bid.
holders with little doubt
over the board’s feelings in Chile. In fact, the bidder’s statement “The bidder has neither
on the fairness of the of- barely gives any attention to this asset. the experience nor the cre-
fer. dentials needed to realise
the significant potential of

“The offer is opportun- Kingsgate’s flagship asset;

istic as it has been made the wholly-owned Nueva

while Kingsgate shares are was that the 4.3c/share of- of both the Challenger gold Esperanza gold-silver project

in voluntary suspension,” fer – Kingsgate’s shares were mine in South Australia and in Chile. In fact, the bidder’s

Smyth-Kirk said in the let- trading at 41c/share prior to the Bowdens silver project in statement barely gives any

ter, issued on September its voluntary suspension – New South Wales. attention to this asset.”

28. “The offer is only a pro- would allow Kingsgate share- Kingsgate completed a

portional offer. This means holders to “share the risk PFS on Nueva Esperanza

October – December 2016 GOLD MINING JOURNAL Page 37

THE AMERICAS

Cleveland holding all the aces

The tables appear Cleveland has intersected mineralisation across six regional prospects at Premier
to have turned
in Cleveland Mining land was helping Platinum “This structure allows the ally relying on other people –
Company Ltd’s favour place the 29.3 million shares company to go and negoti- JV partners, debt providers,
after a restructure of it holds in the company into ate quite hard,” Mendelawitz importation agents and so
its outstanding se- the pockets of supportive said. on – but the reality is noth-
cured debt. shareholders and preferred ing has ever happened in the
new strategic investors. Pro- “We’ve got a number of times we expected or were
Having been scheduled to ceeds from the sale of these parties interested. It’s just a told would happen.
pay back $US13.9 million in shares will form part of the matter of turning that interest
debt by September 19 or face $US4 million first repayment into commitment.” “It’s really taken us a year
the risk of being placed into due later this quarter. to do all this, but we see that
administration, Cleveland has Mendelawitz said his com- we’re near the end of that
come up with a company- Cleveland will then is- pany was considering a num- now and it’s just a matter of
saving strategy. sue about 90 million shares ber of other financing options finalising the refinancing and
(equivalent of $US4.75 mil- which can be staged to help moving the project forward
The Brazil-focused miner lion) to Platinum, leaving a reduce its total debt expo- without this stuff hanging over
now looks to be holding all trail debt of $US9.5 million sure, including the previously our head.”
the aces after striking a new which will be payable as announced MoU for a $US25
deal with besieged hedge subordinated debt within a million gold note with an un- Cleveland has slowed
fund manager Platinum Part- 12-month period. named, US-based mining- down mining operations at
ners LLC. focused fund. Premier while it concentrates
Shares issued to Platinum on restructuring its financing
Under the restructured fi- will be held in escrow, with Cleveland will also look to agreements, but Mendelawitz
nancing agreement, Cleve- Cleveland acting as exclusive move towards 100% owner- said investors can expect
land will not have to fork out agent for these shares for up ship of the Premier gold mine, continued news flow from the
any cash until December 20, to 12 months, subject to 50% central Brazil, with the com- drill bit.
giving it another three months being placed within the first pany moving to purchase JV
to clean up its balance sheet. six months. Any proceeds re- partner Edifica Participações The Perth-based company
ceived from the sale of these Ltda’s 50% interest. has been drilling across six
“It’s really been the noose shares will be applied to re- different regional prospects
around our neck for a long duce the balance of the trail “We believe the balance and has reportedly inter-
time because people were debt. of power has now shifted to- sected mineralisation in each
very concerned the company wards us,” Mendelawitz said. one, including Lavra, Premier
would go under if we didn’t
make our payments,” Cleve- “We’ve progressed from re-
land managing director David
Mendelawitz told Gold Min-
ing Journal.

“We’ve done a deal where
we are now paying back a
smaller amount of money
than previously envisaged,
over a much longer period
of time and with significantly
more flexibility.”

Cleveland’s successful
negotiations with Platinum
came just three months af-
ter the FBI raided the hedge
fund manager’s New York
headquarters and charged
long-time Platinum associate
Murray Huberfeld with bribing
a union official.

Liquidators were formally
appointed to Platinum by a
Cayman Islands court in late
August.

At the time of print, Cleve-

Page 38 GOLD MINING JOURNAL October – December 2016

East and Vanuza. zilian real, was helping
Best intercepts from
to spruik interest in his
Lavra, about 10km from
the process plant, were company and he expects
1m @ 19.5 g/t gold
from surface, 1m @ 48 investment in the pre-
g/t from surface, 4m @
13.65 g/t from 36m (in- cious metal to remain
cluding 1m @ 46.5 g/t
from 39m) and 1m @ strong for some time.
20.85 g/t from 19m.
“There’s lots of theo-
About 2,000t of mate-
rial was excavated from ries around gold – I have
Lavra in late August and
delivered to the process my own – I believe the
plant for bulk sampling.
Results were pending at gold price will substan-
the time of print.
tially increase – or at
Mendelawitz believed
his company’s story was least should substantially
finally moving from “com-
plicated” to “simple” after an increase – because of
arduous few years also im-
pacted by processing prob- what’s happening in Chi-
lems at the Premier mine.
na,” he said.
“It’s been very hard to have
a discussion and not talking “There’s a very large
history and making this thing
seem really complicated, but possibility the Chinese
now we’re getting to the point
are going to try and back

their currency with some

Cleveland is moving towards 100% ownership of the Premier gold mine form of link to gold and I

think from what I’ve seen

where it’s actually on the around those. It doesn’t need on a world scale it makes

verge of being really easy,” much funding and it doesn’t sense for that to occur in the

he said. need much time. It’s just a next 24 months, which will

“We have mineralisation in matter of making sure there’s put quite significant pressure

six different areas, we have enough funds in the busi- on the gold supply if they do

all the licences and we have ness.” it well – and they’ve got a his-

all the gear as well. It just Mendelawitz said senti- tory of doing it well.”

needs some refinement on ment towards gold, coupled – Michael Washbourne
all fronts, but not a lot of work with the depreciating Bra-

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October – December 2016 GOLD MINING JOURNAL Page 39

REGIONAL ROUNDUP

Toro Gold looks to market

Post-Christmas is looking to join the party
gold punters will and has secured the financial
have another emerg- backing to get Mako off the
ing West African gold ground.
hopeful to consider
when Toro Gold Ltd A $US100 million loan
hits the market. facility provided by Taurus
Fund an equity placement of
However, just which ex- $US77 million has Toro fully
funded to first production and
change the company choos- it has locked in Lycopodium
Ltd to build the 1.8 mtpa CIL
es to list on remains unknown processing plant and other
facilities for $68.5 million.
for now.
Meanwhile, Ausdrill Ltd’s
“We are assessing our cor- African division – African Min-
ing Services – has been con-
porate options at this time tracted to conduct a full suite
of open pit mining services
and an IPO on a recognised at Mako, which is expected
to generate revenue of $300
exchange would likely be set Mako will be Senegal’s second operating commercial gold million over 75 months.
for the first quarter of 2017 mine when production starts in 2018
assuming market conditions Construction of Mako is
expected to start shortly, and
remain favourable,” Toro of print and sparking some awarded a mining conces- while Toro has mining in its
sights, Horgan is confident
chief executive Martin Hor- excitement on the ASX. sion for Mako for an initial 15 resources and reserves can
gan told Gold Mining Jour- The likes of Egan Street years. be extended within the min-
nal in Perth recently. ing concession plus within a
Resources Ltd and Berkut According to the DFS, 1 25km radius of the project.

Headquartered in Guern- Minerals Ltd have already moz gold @ 2.25 g/t over In addition to the explora-
tion prospects in Senegal,
sey in the English Channel, benefitted from positive sen- eight years will be extracted Toro is looking to expand its
horizons in the West African
Toro also has a strong Aus- timent on the ASX, with both from open-pit operations at gold space.

tralian flavour to its board companies successfully list- Mako, with 137,000 ozpa Horgan said the high level
of support received from the
with the likes of Mark Connel- ing in September. at AISC of below $US750/ Senegalese Government
was similar to what was being
ly (non-executive chairman) While Toro is yet to commit oz scheduled for the first six experienced in Cote d’Ivoire
and Toro was compelled to
and experienced Australian to an exchange, there is no years of operations. pursue more ground in the
country.
mine developer Martin Reed doubt it has plenty in the off- Mako is in the Kedougou
Last year, Toro entered a
as a non-executive director. ing for investors. The compa- region of Eastern Senegal JV agreement with ASX-list-
ed Predictive Discovery Ltd
Whichever exchange Toro ny has been ploughing away and now that a mining con- over four exploration permits
and the success to date has
decides on, it appears to be at the Mako project, Senegal, cession has been awarded, whet Toro’s appetite for more
action in Cote d’Ivoire.
the right time to be listing, with to the point of being develop- Toro can start building the
“Cote d’Ivoire has been
gold highly desirable, thanks ment-ready. country’s second commercial great and the Government
there is very supportive,
to prices for the precious met- Mako, a 2011 greenfields gold mine. so we are looking for more
ground in the Cote d’Ivoire,”
al having steadily increased discovery, was a feature story The 200,000 ozpa Saboda- Horgan said.

from about $US1,100/oz in at the highly acclaimed New- la gold mine, also in eastern – Mark Andrews

January to $US1,315/oz at GenGold Conference in 2015 Senegal, run by Canadian

the time of print. and is scheduled to produce company Teranga Gold Corp

Australian dollar gold pric- first gold in Q1 2018, Horgan is the only other commercial

es have fared even better, said. gold mine in the country.

trading $1,718/oz at the time In July, the company was Toro would do well to match

Teranga’s feats at Sabodala,

with the latter forecast-

ing base case production

of 200,000 ozpa until 2024

from reserves of 2.6 moz and

measured and indicated re-

sources of 4.4 moz gold.

While Teranga – which

has received court approval

for its takeover of ASX-listed

Gryphon Minerals Ltd – has

pioneered modern day gold
Toro Gold is on the hunt for more projects in Cote d’Ivoire operations in Senegal, Toro

Page 40 GOLD MINING JOURNAL October – December 2016

2016

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REGIONAL ROUNDUP

Randgold doubles down in
elephant country

Cote d’Ivoire re- been explored. There is not Mark Bristow up of supply from satellite
mains the most even a published geological pits.
likely destination for map of the country,” Bristow Our geologists have named
further investment said. them as different prospects Bristow admitted Kibali had
from Randgold Re- but they are part of one con- experienced a “tough” first
sources Ltd, with Randgold’s most recent tinuous belt,” Bristow said. six months as the JV juggled
managing director exploration work has focused with the complexity of multi-
Mark Bristow say- on the Boundiali project, Bristow has been highly ple ore types.
ing “everything is where the company has now critical of the gold sector’s
pointing” to the West defined 15km of continuous reliance on M&A to create “In Q1 we had to test the sul-
African country. mineralisation. growth and his address at phide circuit and it highlighted
the Denver Gold Forum gave some gaps in the flow-sheet
Randgold is committing “This forms the basis of further insight into why his and even our operations
more than $US40 million to my positive view for Boundi- company would continue to and management,” he said.
exploration across Africa this ali,” Bristow said. “If you look explore for rather than buy “Like many of these chal-
calendar year as the compa- back at the evolution of the gold ounces. lenges, 80% of the problems
ny strives to fulfil its ambition Lulo structure, it delivered 40 shouldn’t have happened but
of building three new mines in moz gold. If we’d just followed “The only way to create val- we have addressed them now
the next five years. that structure we would’ve ue is to find and build world- and Kibali is back up at above
found every deposit – other class assets ourselves,” he design throughput.”
Bristow told the Denver than Sadiola – but we never said.
Gold Forum in September focused on it. So, we have The company expected to
that Cote d’Ivoire would be taken that thinking and ap- The latest one to be com- hit 156-158,000oz production
the main beneficiary of those plied it to Boundiali and we missioned is the 600,000 for the September quarter
funds. will come out with an aggres- ozpa Kibali JV with Anglo- and 190,000oz for the De-
sive exploration programme Gold Ashanti Ltd in north- cember quarter thanks to im-
“We are very focused on for next year.” east DRC. Kibali was built provements in grade profile.
Cote d’Ivoire because we’re ahead of schedule and below
not financially exposed there,” Recent work has been fo- budget and – despite some Bristow railed against any
Bristow said of a country in cused on the Kassere and hiccups in the March and suggestion that Randgold’s
which the company’s Tongon Fonondara prospects which June quarters – is set to hit ability to consistently beat
gold mine produced a profit of both have mineralised strike its 600,000 ozpa guidance guidance and development
$US75.4 million in 2015. lengths in excess of 1.2km. for 2016. timetables was part of the
company’s strategy.
“We have paid back the “At the Fonondara pros- That ramp-up was curtailed
capital [on Tongon] and we pect, we have identified somewhat in the March and “We don’t, as is sometimes
are making money there so it 1.5km of mineralisation but June quarters (production suggested, under-promise
is the best destination for us it is not necessarily the best for the six months to June 30 and over-deliver. When we
and ticks all our risk boxes.” prospect in that extension. was down 12% year-on-year) have a stumble such as this
as the JV adjusted to the end it shows in performance. But
Tongon was built during of the KCD open pit and build we are dedicated to fixing it,”
a period of civil war in Cote he said.
d’Ivoire, but with President
Alassane Ouattara having Bristow added that Rand-
won a second term in 2015 gold’s relative success ver-
the country is now relatively sus peers was not down to
stable. project execution, but its abil-
ity to grow without tapping
Bristow said both its politi- shareholders for support.
cal risk profile and geological
potential made Cote d’Ivoire “Our premium is not the ex-
Randgold’s most desirable ecution of developments but
investment jurisdiction. the fundamental profitabil-
ity,” he said. “We are one of
“It is our only A-grade risk the few gold companies that
country in Africa. And, it has doesn’t impair, we have got
[most of] the Birimian se- no debt, we are building cash
quence and has never really every week and we could
deliver another $2 billion de-
velopment without looking to
shareholders or funders. So,

Page 42 GOLD MINING JOURNAL October – December 2016

we have unlimited upside for Despite some hiccups, Kibali will reach its 2016 production guidance of 600,000oz
shareholders and that is the
old gold premium.” At the same time, we want to won’t have any exposure in rienced political turmoil.
invest in the future so rather the DRC.” “All three countries keep
Away from Cote d’Ivoire, than buy anything explora-
Randgold continues to ex- tion is the logical approach. If It is this risk balance which the geopolitical risk balanced.
pand its footprint in the DRC. we find another Kibali in the Bristow believes keeps Rand- Mali has the biggest value to
The company has three ex- next 18 months, by the time gold secure despite having us but we still have a lot of
ploration JVs with TSX-listed it comes to production we operations in three countries debt attached to it,” he said.
juniors in the north-east of which have all recently expe-
the country and Bristow said – Dominic Piper
the region continued to excite
the exploration team.

“The greenstone belts in
DRC are each very different;
some are prospective for gold
while others are sterile. The
Moku JV has very interesting
geology,” he said. “It is similar
in style to Kibali and we have
confirmed alteration and min-
eralisation there.”

Kibali’s capex is still to be
fully repaid, but Bristow said
the timing of any new discov-
ery would fit in with current
plans.

“In the DRC, right now we
are very exposed financially
because we have just peaked
in the capital spend for Kibali.

October – December 2016 GOLD MINING JOURNAL Page 43

REGIONAL ROUNDUP

Southern Gold surprises
in South Korea

Southern Gold tenement system is
Ltd’s acquisition
of tenements in South structured and a be-
Korea may have taken
a few people by sur- lief internally that it
prise, but it certainly
wasn’t a leftfield move is a resources-poor
by the company.
nation, is perhaps
Southern Gold managing
director Simon Mitchell for- reason why much of
merly held the same position
at unlisted Asiatic Gold – the the country remains
vehicle holding the portfo-
lio of tenements now in the under-explored.
hands of Southern Gold.
The tenure system
Mitchell is therefore aware
of the potential within the is conducive to small-
suite of assets acquired, with
three projects identified as scale exploration and
having near-term production
capacity. operations which is

In total, the company has why majors have not
44 granted tenements across
17 projects, with Taechang, shown an interest in
Gubong and Kochang best
placed to be restarted within the past.
two-three years.
Southern Gold,
“We may surprise a few
people with how quickly we one of the largest
will get into production. I
heard a comment from some- foreign landholders
one that it would take us at
least five years to get into pro- in the country, hopes
duction, I am aiming for two-
three years,” Mitchell said. its exploration efforts

The three front running Tailings at Gubong are believed to be running in the vicinity of 2 g/t gold will go some way to
projects for Southern Gold
have a history of mining and changing attitudes
in some cases established in-
frastructure to leverage from. asset to be rejuvenated. is great, but it also means about the prospectivity and

At Taechang, the under- “Historically, we think they that you have to do it the KO- attractiveness of operating in
ground mine can be ac-
cessed and Mitchell believes only got about 70% recovery RES way. In some ways they South Korea.
there is potential for the old
mine to be opened up and [at Gubong]. We think that the have their own processes “The fundamental invest-
reactivated in a short time-
frame. Gubong – the largest tails might be going a cou- which we would probably do ment thesis is that it is a diffi-
project – has a large tailings
facility which would only re- ple grams per tonne which is things a little differently and cult jurisdiction to get into be-
quire establishment of a small
reprocessing facility for the not unlike processing some- more quickly, but when they cause of the tenure system,”

thing in Kalgoorlie, but it is are paying most of the bills I Mitchell said. “The geology is

the waste from the historical am happy with that,” Mitchell first-class; there is huge po-

mine. That is a real possibil- said. tential to find stuff there. But

ity and the third [near-term] Kochang, like many of the for a variety of social reasons,

opportunity for us – where projects in Southern Gold’s not geological ones, it hasn’t

we are actually active drilling- South Korean portfolio, has seen that attention. From a

wise and where we think we lacked modern exploration geological basis, Koreans

might be able to move rela- and the company’s 2016 re- learn at school that they are

tively quickly – is at Kochang,” connaissance programme a resource-poor country

Mitchell said. has revealed mines, adits and they have to import re-

Surface samples from and mineralisation previously sources and manufacture it to

Kochang of 13.9 g/t gold and unknown. the world. The people them-

52.5 g/t silver are indicative of “To this day, we are going selves don’t believe that they

mineralised intercepts from into areas for the first time have anything, but the reality

previous drilling such as 2.5m and finding what looks like is that they haven’t had any

@ 17.4 g/t from 63m and 2.4m ore grade type material on exploration in the country for

@ 1,763 g/t silver from 97.6m. surface. We are uncovering 30-40 years, so it is a bit of

Kochang is subject to KO- stuff for the first time and that a time capsule but the geolo-

RES funding, with assays is really exciting for geologists gists love it; they are like kids

from the current drill pro- to be operating in an environ- in a candy shop.”

gramme expected at the time ment like that because there – Mark Andrews
of print. aren’t too many jurisdictions

“The drilling is being funded worldwide where you can do

by KORES to the tune of 70% that,” Mitchell said.

of direct drilling costs. That The way South Korea’s

Page 44 GOLD MINING JOURNAL October – December 2016

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TRIPLE BOTTOM LINE

Rare coin found in Jerusalem

The University of On the reverse of the coin clude the well-preserved
North Carolina in
Charlotte, USA, has is a depiction of an oak rooms of a very large
discovered a rare coin
bearing the image of wreath containing the let- mansion, a Jewish ritual
the Roman Emperor
Nero. ters “EX S C”, with the pool (mikveh) and a bath-

“The coin is exceptional surrounding inscription room, both with their ceil-
because this is the first time
that a coin of this kind has “PONTIF MAX TR P III”. ings intact,” Gibson said.
turned up in Jerusalem in a
scientific dig. Coins of this Importantly, these inscrip- The image of Nero
type are usually only found
in private collections where tions help determine the is significant in that it
we don’t have clear evidence
as to place of origin,” Shimon date when the coin was shows the presence of
Gibson, co-director of the ex-
cavation and a visiting profes- struck as 56/57 AD. Iden- the Roman occupation
sor at UNC Charlotte, said.
tification of the coin was and provides a clear, late
The gold coin (aureus) dis-
plays the bare-headed por- made by historian and date for the occupation
trait of the young Nero as numismatist David Jacob- UNC Charlotte’s team conducted archaeo- of the residences. There
Caesar. The lettering around logical excavations on Mount Zion in Jerusa-
the edge of the coin reads son, from London. lem and discovered a rare gold coin bearing is no historical evidence
“NERO CAESAR AVG IMP”. The coin dates to a lit- that Nero ever visited Je-
the image of the Roman Emperor Nero. rusalem.
tle more than a decade SOURCE: Shimon Gibson

before the destruction of Tabor, UNC Charlotte

Jerusalem by the Romans in it may have come from one of professor of religious studies,

70 AD and was found in rub- their stores of wealth. pointed out the coin is dated

ble material outside the ruins It is believed the coin possi- “to the same year of St Paul’s

of the first century Jewish vil- bly came from one of the rich last visit to Jerusalem, which

las the team has been exca- 2,000-year old Jewish dwell- resulted in his arrest (on the

vating. ings, according to Gibson. charge of taking Gentiles into

The team has hypothesized “These belonged to the the Temple) and incarcera-

the large houses may have priestly and aristocratic tion in Caesarea”.

belonged to wealthy mem- quarter located in the Upper

bers of the priestly caste, and City of Jerusalem. Finds in-

INDEX

AngloGold 42 Edifica 38 Laneway 14 Randgold 26, 42-43
Antofagasta 29 Egan Street 18, 19, 40 Regis 12, 19
Encounter Resolute 8-9
Evolution 29 McEwen 20
Barrick 20, 25, 28, 32-33 14, 19 Metaliko 5
Middle Island 4
Beadell 31 Minotaur Sandfire 13, 15
28 Saracen 19
Berkut 40 Fortescue 19 Shandong 7
Silver City 15
BHP Billiton 13, 19, 25, 28 Southern Gold 20
St George 13
Breaker 4 Gascoyne 4 New Age 14 Stonewall 7
Genesis 4
Gold Fields 19, 23, 25 New Talisman 14-15
Gold Road 4, 23-26
Capricorn 16 Gryphon 40 Newcrest 14, 19, 29
Chatham Rock 15
Cleveland 38-39 Newmont 5, 14, 19, 20,

29, 32, 34

Northern Gulf 36-37 Teranga 40
Toro Gold 40
Dacian 4 Independence 4, 16 Northern Star 19, 26 Trans-Tasman 15
Doray 18
Duketon 12 Kingsgate 36-37 OceanaGold 6, 14
Kingston 28
Kinross 20 Vale 25, 28

Echo 4, 5 Predictive 40

Page 46 GOLD MINING JOURNAL October – December 2016




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