The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Discover the best professional documents and content resources in AnyFlip Document Base.
Published by Paydirt Media, 2019-10-17 21:16:37


October 2019 Volume 1. Issue 276 $11.95

Investing in Africa:nvesting in Africa:nvesting in Africa:nvesting in Africa:

How it can be done

Africa Down Under Review 09

Nickel Conference Preview ISSN 1445-3436 343007

771445 9
Page 1 JUNe 2019 aUSTRaLIa’S PaYDIRT



Ta Khoa Project - Nickel, Copper, Cobalt & PGE
Exploring Southeast Asia’s
Premier Nickel Sulfide District

Located 160km west of Hanoi in BC Cobalt (Cobalt - Gold)
Vietnam, existing modern nickel -Gold)
mine built to Australian Standards, Ta Khoa Project
under care and maintenance; (Nickel, Copper, Cobalt & PGE)

Exclusive 150km land package with
Middle Creek (Gold)
over 25 advanced stage massive
sulfide vein (MSV) targets and a
number of large bulk-tonnage Silver Swan South (Gold & Nickel - Cobalt)
disseminated sulfide (DSS) targets;
Internationally-designed 450ktpa
processing plant connected to local
hydro grid power with a fully-
permitted tailings facility and a
modern 250 person camp;

Operated as a modern mechanised
underground nickel mine from 2013
to 2016 and mined 975kt @ 2.4% Ni
& 1.0% Cu for 20.7kt Ni & 10.1kt Cu;

Blackstone is investigating the
potential for downstream processing
to produce a nickel and cobalt
product for the Lithium Ion battery
@blackstone_BSX @blackstoneminerals Blackstone Minerals


Published by 12
Paydirt Media Pty Ltd. Regardless of where the nickel price has been
A.C.N. 063 985 133 in the past decade, St George Mining has been
a committed explorer on both ground it wholly
Head Office: owns and at the Mt Alexander JV with Western
Suite 9, 1297 Hay St, West Perth Areas in Western Australia. Coincidentally,
Western Australia 6005 the day that Paydirt was among a select group
P.O. Box 1589, West Perth of visitors to Mt Alexander, St George was
Western Australia 6872 making another discovery with the maiden hole
Phone: (+61 8) 9321 0355 drilled at Radar revealing significant nickel-
Facsimile: (+61 8) 9321 0426 copper sulphide mineralisation. Dominic Piper
[email protected] reports
Editor: Dominic Piper Juniors in the resources sector have been
starved of capital this year, with expert
Deputy editor: Mark Andrews commentators in the field confirming the 20
Journalist: Michael Washbourne current situation as one of the worst seen in
Photography: Picture This the market. During a panel discussion at Africa
Art director: Nick Brown Down Under, Paydirt editor Dominic Piper
Contributors: Brendan Ryan posed questions about the state of financing
(Johannesburg) generally in the sector and what hope there
Advertising: was for juniors looking to access capital. Mark
Advertising manager: Richa Fuller Andrews reports
Subscriptions: Kate Blanchard
Phone: (+61 8) 9321 0355 26 AFRICA DOWN UNDER
Facsimile: (+61 8) 9321 0426
Pre-press and printing: Some 1,200 people gathered in Australia’s
Vanguard Press, 26 John St, mining capital – Perth – for Africa Down Under,
Northbridge WA 6003 the undisputed cornerstone of Africa Week in
Member of: Australia. Among the many presentations and
expert panel discussions, there was a plethora
of side events and community functions,
including the highly popular Africa Down Under
Cup. Paydirt provides full coverage of Africa 26
Paydirt Media Down Under 2019
Executive chairman: Bill Repard
Finance manager: Giovanny Jefferson
Accounts/administration: 82 AUSTRALIAN NICKEL
Conferences: Melita Fogarty,
Namukale Nakazwe-Msiska, There will be a definite upbeat feel in the air
Christine Oelschlaeger, around the Australian Nickel Conference
Mitchelle Matambo (October 15 at the Pan Pacific Perth) this year
with the base metal’s recent price run giving
the sector a much-needed boost. Geopolitical
October 2019 VOLUME 1. ISSUE 276 $11.95
A new nickel mine on the horizon shifts in Indonesia and Philippines and a
subsequent price rise has added impetus to
the West Australian nickel sector’s recent
Investing in Africa:nvesting in Africa:nvesting in Africa:nvesting in Africa:
recovery. Not only are established producers
such as Independence Group, Western Areas
Australia’s Paydirt October 2019
How it can be done and BHP thriving but a throng of developers
Africa Down Under Review 09
Nickel Conference Preview ISSN 1445-3436 771445 343007 9 and explorers are basking in the limelight.
Cover image: South African Mines Minister Paydirt covers some of the stories shaping
Hon Gwede Mantashe at Africa Down Under the resurgent nickel sector 82
Member of:

Registered by Australia Post PP 643938/0071.
No pages or articles in this publication may be re-
produced in any form without the consent of the
publisher. This includes photographs either taken
by Paydirt Media staff or provided by other parties.

ADU: Plenty of talk

but all of it valuable

As you will see from our extensive for those who have been dominated by a single commodity.
event coverage (starting on page 18), Potential investors need compelling reasons to head to a
last month’s Africa Down Under (ADU) country. There is only so much an African government
was an enormous success with more could justifiably spend on pre-competitive data – none of
than 1,200 delegates in Perth for the them will, or should, be copying WA’s Exploration Incentive
conference. Scheme anytime soon – but whatever they can afford and in
ADU has grown into a multifaceted partnership with surveys from other countries, and with funds
forum down the years but its prime function has remained the same; from international institutions, will be well received
convincing investors, media and shareholders that African projects • Dropping beneficiation requirements. There is still talk of val
can be developed, built and operated successfully and to the benefit ue-addition and beneficiation and in some cases it shows
of all stakeholders. signs of being a success but for the most part African coun-
However, it can still be difficult for an African-focused company to tries don’t have the infrastructure capacity to build downstream
convince investors of the merits of financing a project on the continent. value-addition industries and forcing miners to undertake
Prosecuting any investment case is about stripping away the layers such activity will only send them running for the hills. Better
of preconceived doubt investors may hold. For a gold project in a well- to focus on how new mining projects can help build associated
trodden part of Western Australia, the layers are few and a company service industries
may only have to strip a few layers away (resource, engineering, met-
allurgy) to reveal the investment case. • Policy stability. Mike Christie of First Quantum Minerals Ltd
In Africa, the layers are much denser. As well as resource, engi- went straight to the point when discussing the company’s
neering and metallurgy layers, there are political and infrastructure Zambian experience; three major policy shifts in the last
risks, a community dimension and security concerns. Projects with a decade is no way to attract new investment. Existing operators
non-precious or base metals focus bring further individual risks. have to busily rework their assets to see if further
It can be an unenviable task and no matter how good a project or investment is worthwhile and no new foreign investor is going
the management’s sales pitch, it is impossible for a company to strip to be attracted by highly unstable fiscal environments.
away all these layers alone. To unveil the investment case, African The evidence was at the conference that if countries do adhere
miners need support from government. to international standards and do provide open, clear and transpar-
The problem is, the traditional relationship is one of mistrust. Gov- ent investment climates they can succeed in building their industries
ernments see foreign investors as rapacious, investors see govern- quickly.
ments as corrupt. In this scenario, the idea of partnership is one When I first visited Cote d’Ivoire in 2008 it was on the verge of fall-
where the partners have an arm around each other, reaching into one ing back into civil war. There were few mining operations and despite
another’s back pocket. having 22% of the known Birimian greenstone belt, it was flagging
So, what can African governments, who are often cash-strapped well behind neighbours in the pursuit of gold exploration investment.
and in no position to provide any financial support, do to help a miner When I returned to the country a year ago, I visited one of six operat-
produce a successful investment case? ing gold mines and one of more than a dozen exploration projects.
Speaking at ADU, West Australian Minister for Mines and Energy Neighbouring Burkina Faso is even further ahead. It has grown
Hon Bill Johnston neatly summed it up: its gold sector from nothing to a 13 commercial gold mines in less
“Providing clear and consistent regulatory framework is, in our view, than two decades on the back of sound, stable transparent mining
essential for providing industry with the certainty that’s required to get policies and tax regimes.
long-term investment decisions,” he said. Companies, of course, have their own role to play.
“A comprehensive and transparent mining approvals process Resolute Mining Ltd’s John Welborn was first to offer an olive
that takes into account the impact of the environment, occupational branch at ADU.
health and safety, and the impact on other land users is critical for “Resolute has recognised the difference working in Africa to Aus-
ensuring a sustainable resource industry.” tralia,” Welborn said.
Of those governments present at ADU, there was a consistent un- “In Australia, the relationship with government is distanced and
derstanding of what needed to occur to create such an environment. purely under a tax framework. In Africa it is very different…it is about
While each country has unique circumstances and individual chal- balance and where the benefits of the mine go and need to go.
lenges, there are a number of common levers which can be pulled to “Responsibility is two-way; it needs transparency and faith from
create a climate conducive to resources investment: governments, but companies need to demonstrate that as well. It
is a challenge for all companies; are we there to bring genuine first
• A strong online cadastre system. This not only allows inves world standards or exploit various advantages we can achieve?”
tors to make applications from their own offices but offers a Johnston and Welborn’s comments were a nice summation of
level of transparency old systems cannot match. Investors are what Paydirt has always set out to achieve with ADU; demystify the
more willing to commit to exploration in a country if they know continent for investors and demystify the industry for governments.
the licensing system is fair and transparent
• Better pre-competitive data. This is particularly pertinent to
those countries just starting out on their resources journey or [email protected] @DominicPiper



Reverse Circulation



Water Well

A history built on quality, service

and knowledge are our core values.

We stand by these simple rules when approaching each
and every project for our valued customers.

Mt Magnet Drilling provide high quality and reliable drilling services in Western Australia. Perth
based, and with a wealth of knowledge in exploration drilling, we have drilled in locations across
WA such as the Pilbara, Kimberly, Goldfields, Midwest, Southwest and in the Northern Territory
and South Australia. Our equipment and crews are highly experienced and designed to work
remotely and within mine sites.
Being a longstanding contractor within the drilling industry, MMD is able to offer
safe, knowledgeable, cost-effective and innovative drilling programmes that
exceed our competitors. With a diverse range of experience, you can be
assured your programme needs will be met at every level.

The Mt Magnet Drilling Team shares the same work ethic
at every level. This quality ensures your programme
needs are always met and conducted safely
and productively.

08 9302 2299 - [email protected]


APC delivers DFS

Australian Potash is banking on the
superior capital intensity figures for
ven before the ink had dried on Aus- million capex required to develop Lake
Etralian Potash Ltd’s (APC) Lake Wells Wells. Lake Wells to attract financing for the
SoP DFS, the company had started tight- “For somebody so young, Scott has an potash project. APC recently signed
ening aspects of the project as a final in- incredible track record of being able to an agreement with the Mid West Port
vestment decision looms. raise large amounts of cash for project Authority for the export of SoP and
APC managing director Matt Shackle- developments. Scott and I will endeav- import of MoP through Geraldton port,
ton told Paydirt the “lowest hanging fruit” our to finalise the project development with the company advancing findings
ripe to deliver improvements to the DFS finance. Traditionally, that is going to utilising a road haul solution from Lake
was around bore field design and power. be a 60:40 debt-to-equity finance ratio,” Wells to Geraldton
Due diligence on power options at Shackleton said.
Lake Wells, 160km north-east of Laver- Earlier this year, Shackleton told Pay- Lake Wells are “extremely competitive”.
ton, Western Australia, included energy dirt securing an off-take agreement The DFS highlighted potential for a 30-
generation via solar, wind, hybrid and would be an integral part of the funding year mine life at Lake Wells producing
diesel, with the company arriving at a mix, which may include export credit- 4.5mt of premium high-grade SoP at life
trucked LNG gas-fired power station as sponsored plant procurement. of mine cash costs of $US262/t, placing
the best fit to date. “A lot of the gold mines do that and the project in the first quartile of the SoP
“We probably won’t move away from get a company from China to build the cost curve.
that [LNG]. One piece of our processing components for you and, depending on A pre-tax NPV of $665 million, annual
plant uses about one-third of the pow- how much you spend, you can often get pre-tax free cash flows of $100 million
er that we generate, it is a big piece of financing from the same entity,” he said. and life-of-mine pre-tax free cash flows
equipment, so we are working on how we “Those sorts of things are backed up of $3.1 billion were guided in the Lake
can make it more efficient. Optimisation by the credit export agencies in China. Wells DFS, which also included a pre-
around power consumption, bore field That is a well-worn path and we are on tax IRR of 25% on robust operational
design and marketing, which is going to that path. Offtake will also be part of the and capital efficiencies based on a rate
be around an off-take agreement conver- funding, while a traditional equity and of 150,000 tpa SoP production.
sation, [is in progress],” Shackleton said. debt component, which we will endeav- “We are a small team, but we have our
“There are 78 bores that we will de- our to minimise, will be the blend of fi- skates on, and we will build that team out
velop in the bore field, according to the nancing.” as more and more professionals get in-
DFS, which are spaced at about 800m Players in the fertiliser space were fla- volved to manage the FEED programme
apart. One of the things with a bore field vour of the month in August. Danakali that we are about to go through. We be-
is that the shorter the distance you have Ltd was provided with a $US200 mil- lieve we have a pretty straightforward de-
between the bores, the more of the re- lion senior credit facility with the Africa velopment in the bore field method that
serve ore you can potentially pump out Finance Corporation and African Export we are using to extract the brine. We will
over the same period of time. So that is Import Bank for construction of its Colluli be on the ground starting the preliminary
an opportunity for optimisation in there project, Eritrea, while Salt Lake Potash work for that in part of our development
for us.” Ltd signed two finance facilities worth a [in the first week of September],” Shack-
Shackleton said a bore field at Lake combined $US180 million with private leton said.
Wells would be used to abstract brine, equity group Taurus Funds Management With the FEED programme under way
mitigating the geotechnical challenges for Lake Way, part of the wider Goldfields and financing and offtake discussions
and decline in grade and production over Salt Lakes project, WA. advancing, a final investment decision on
time, evident in trenching systems. APC can capitalise on the current in- Lake Wells may not be far way.
Having completed the DFS, FEED ac- terest in the fertiliser space and Shack- APC is confident of delivering produc-
tivities are under way and Shackleton leton believes the sector-leading capex tion from Lake Wells within 24 months of
and chief financial officer Scott Nicholas and capital intensity ($1,387/t SoP com- a final investment decision.
have embarked on organising the $208 pared to peer average of $2,400/t) at
– Mark Andrews


TMT has eyes on the prize

an Prentice’s vision for vanadium hopeful lion ($454 million) is estimated to be paid
ITechnology Metals Australia Ltd (TMT) is back within 3.2 years of first production at
as straightforward as they come. Gabanintha, which will suddenly become
“Given there’s not many other primary the world’s largest primary vanadium pro-
producers in the vanadium space, we need ducer if the forecast annual output 27.9
to be the next primary producer that gets mlb is achieved.
financed and builds a project,” he said. Gabanintha is also expected to be one
“We don’t necessarily see ourselves as of the world’s highest grade vanadium
competing with the incumbent producers, producers with an average feed grade of
but we do see ourselves as capable of plus-1% V2O5 anticipated over the first 12
being the next producer, that’s how we’re years of operations.
looking at it. “It’s really important as a new entrant
“From our perspective, a peer analysis into the market to make sure you’re com-
is more about looking at other companies petitive on that operating cost parameter Gabanintha is set to produce a high purity
that also have projects prospective for de- and that really comes back to the quality of V2O5 product grading at least 99%
velopment. No one else is as far advanced our resource,” Prentice said. “In a gold project you can hedge your
from a study point of view and so that’s “Grade obviously is really important, forward production and everyone knows
why we’re saying we need to be the next but so is your metallurgy. The magnetic you’re guaranteed whatever price, we
producer on that list.” concentrate we produce is very clean; it don’t have that. So, offtakes are our mech-
Prentice – TMT’s managing director – doesn’t have a lot of deleterious elements anism to enable the financiers to have
spoke to Paydirt in light of the company which are reagent-robbing in the roasting comfort around both the volume of product
unveiling a robust DFS which forecast section of your plant. we can sell, but also the pricing structures
lowest quartile cash costs for production “Efficiency through the roasting section around that.”
of vanadium pentoxide (V2O5) from its of the plant is really, really key to delivering TMT will look to progress offtake and
Gabanintha project in Western Australia’s a really high purity final product, and again finance discussions for the rest of the
Murchison region. that goes all the way back to having a re- year and into 2020 with a final investment
Life-of-mine cash costs of $US4.04/lb ally clean ore to start with.” decision targeted for April. In the mean-
headlined a strong set of project econom- Extensive test work has indicated Gab- time, the company will look to finalise its
ics which also included EBITDA of $4.1 bil- anintha will produce a high purity V2O5 environmental approvals and mining lease
lion over the initial 16 years of operations, product grading at least 99% – industry grant, as well as kick off detailed engineer-
pre-tax NPV of $US924 million and IRR benchmark pricing is for 98% – which is ing studies.
of 34%, assuming an average life-of-mine set to attract a handy sales premium. Prentice is confident his company’s
V2O5 pricing of $US10.88/lb. TMT signed a non-binding MoU with cost estimates will closely mirror actual
Pre-production capital of $US318 mil- CNMC Ningxia Orient Group Company numbers because of its collaboration with
Ltd, a subsidiary of China Nonfer- FLSmidth Inc, which built and now main-
rous Metal Mining (Group) Co Ltd, tains many of the kilns used in some of
earlier this year with a view towards the world’s most notable vanadium opera-
establishing a more formal V2O5 tions, including TSX-listed Largo Resourc-
offtake agreement. Prentice said he es Inc in Brazil.
expected interest in his company’s “If your kiln doesn’t work then your whole
product would start to accelerate project economics go out the window,” he
now the DFS findings were public. said.
“For a lot of the parties we’ve en- “We knew we had to deal with a group
gaged with, the last piece for them that has got current hands-on experience
was getting hold of the DFS and in running this part of the circuit, but what
making sure it confirms all the detail that’s meant is we have had a little bit
that we’ve been working on and de- more capital. But, from our point of view,
livering,” Prentice said. we were very comfortable spending a bit
“I think from a project point of more on that because that’s where the real
view, and also from an equity mar- key risk is.”
ket point of view, it’s really about While the Gabanintha orebody hosts
understanding that we do have the some potential base metal credits, TMT
support of the customers and of has not yet determined if their extraction
the offtakers, both on product con- will prove economic. Prentice said it was
sumption but also on supporting something the company may look to build
the financing. Now, whether or not into the circuit once the vanadium opera-
those groups assist with the financ- tion was up and running.
ing or are just key in having them on – Michael Washbourne
board, it means that the financiers
TMT’s Gabanintha project hosts a proven and are a lot more comfortable.
probable reserve of 29.6mt @ 0.88% V2O5



Lindian primed for rare earths stoush

hile advancing an exciting bauxite rences in Guinea. The other – Sangaredi “The great thing about drilling bauxite is
Wplay in Guinea remains top priority – has been mined for close to 30 years. you really are in bauxite from surface, so to
for Lindian Resources Ltd, the company in- Conglomerate bauxite is characterised speak, and for this programme it’s really all
tends to leave no stone unturned in its fight by a very high total alumina grade of 55- about depth,” Green said.
to take control of an equally promising rare 60% and extremely low deleterious ele- “Hopefully that depth will prove up to
earths project in Malawi. ments such as silica and reactive silica. what we believe it will and then all the
Lindian launched legal action against The bauxite profile is also typically at least sampling and assaying and ultimately a
Rift Valley Resource Developments Ltd 30m deep, compared to usual occurrenc- JORC-compliant resource statement will
and geologist Michael Saner last Novem- es of less than 15m below surface. come out of that.
ber over the attempted cancellation of an “If you look at bauxite around the world, “If it has the scale that we believe it has
earn-in agreement for up to 75% of the it’s generally characterised by significantly the potential for, being a conglomerate
Kangankunde rare earths project. higher silicas and reactive silicas, hence bauxite and being of such a high-grade
Kangankunde has been reported as the Guinea bauxite is just so attractive,” Green nature, then we really think the game plan
one of the largest rare earths projects out- said. is much more around which refiner and
side of China. “Refining is a pretty tough business and therefore which producer wants it more.
A directions hearing has been set for you need every edge you can, so if you A product like this, if it proves the way we
November 4-5. Lindian previously ob- can get a slightly better product with lower believe it will with the drilling, will define its
tained an injunction from the High Court silica, that’s going to reduce your costs own market.”
of Malawi preventing Rift Valley or Saner and so forth. Renowned bauxite geologist Mark Gif-
from dealing with the project and/or shares “With China’s continual growth in the ford oversaw the due diligence process
in the Rift Valley vehicle. bauxite/alumina space, that type of prod- with Green, who formally joined Lindian
Both the timing and the administrative uct is only going to become more and in July after a successful stint as general
process for the High Court hearing will more prominent. We’re also seeing a lot manager, project implementation for fel-
be established at next month’s directions more bauxite being traded; it’s going to low ASX-listed bauxite developer Canyon
hearing. seaborne rather than the old vertically inte- Resources Ltd.
From the outset, Lindian has been vocal grated model where the producer typically Despite this being Green’s first foray into
about is strong legal position, something builds refineries on top of the bauxite de- a managing director role, he said the “tim-
new managing director Shannon Green posit. It’s a far more cost-effective model ing was right” and he was “ripe for change”.
said was clear from the moment he joined and China is front and centre of that.” “It was just an opportunity that I couldn’t
the company. Green, who has spent most of the past say no to,” he said. “The stars aligned as
“This is quite obviously a world-class seven years focused on bauxite develop- they often do with these things and, let’s be
rare earths project that unfortunately is in ments in Africa, is confident Lindian share- honest, people don’t knock on your door
litigation with the vendor, but we have a holders will approve the Gaoual acquisi- every day offering you MD roles when you
very strong case and we’re very confident tion, allowing the company to kick off a haven’t been a MD before.
that ultimately we’ll secure the rights to that drilling programme as early as next month. “Often without already having that MD
project,” Green told Paydirt. At the time of print, Lindian was finalising brand it can be a bit hard, but Lindian of-
Green said pursuit of the claim would the permits required to begin drilling which fered me that opportunity and I’m really
not be a “significant drain” on the compa- will target calculation of a resource for re- excited about where this company is head-
ny’s ongoing cash requirements nor was it lease to the market in Q2 2020. ing.”
a distraction to work happening elsewhere Lindian also has bauxite and gold pro-
in the portfolio, specifically the Gaoual jects in Tanzania on its books, with an
bauxite project in Guinea. independent assessment currently being
A shareholder vote is tentatively sched- completed over both assets to determine
uled for this month to approve the acquisi- their next move.
tion of up to 75% of Gaoual, one of only
two known “conglomerate bauxite” occur- – Michael Washbourne

Lindian’s primary focus is the Gaoual
bauxite project in Guinea


1 - 2 April 2020 1 - 2 April 2020

Hilton Adelaide


Sponsorship and exhibition

opportunities now available

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


The long bake warms up

ll eyes were on London for the World “When you see a company like that, ground in the US.
ANuclear Association (WNA) annual which was a producer, now preparing “Scott knows all the guys in the States;
symposium last month as sentiment to- themselves for the market to improve it is that is our key market. With Bacchus list-
wards the uranium sector continued to always a good sign; that’s action. That is ing Yellow Cake the people we saw were
improve. really positive for them to get that money already across it [uranium market] for
Uranium prices remained low and flat – and, as far as we can tell, none of the three years. The speculative guys were
about $US25/lb in late September – how- people we spoke to were involved in that. looking shorter-term, but everybody we
ever there are a few reasons for those There is a pool of capital there waiting spoke to understood the uranium macro
within the sector to be feeling good. to get into the uranium space, that is for which was quite different to previous
Clarity on Section 232 in the US and a sure,” Vimy Resources Ltd managing di- road trips,” Young said.
positive outlook in the WNA’s bi-annual rector Mike Young told Paydirt. Part of the narrative investors are in-
Nuclear Fuel Report has energised the Following the “bullish” WNA sympo- creasingly coming to terms with is the dy-
market. sium and meeting with investors in Lon- namics of uranium contracts, which right
Furthermore, Cameco Corp’s dec- don, on the heels of Bacchus Capital, now are pointing to a big rush of demand
larations that it needs to purchase 12 Young flew to New York where the ura- coming from the US.
mlb uranium in the spot market to com- nium story was also well received. “The US utility coverage as a per-
pensate for some of the supply from its He said the experience of Bacchus, centage of requirements drops off quite
mothballed Macarthur River project adds which listed Yellow Cake plc on AIM last quickly. From 2020 coverage is 83% and
to what Paladin Energy Ltd is describing year after raising $US200 million, to pro- by about 2023 it is 36%, which goes fur-
as a compelling story unfolding in the vide the secret handshakes with the right ther down to 11% in 2025, so you have
uranium sector. type of people in London and New York this massive requirement in the US for
Paladin itself is looking to reboot oper- was beneficial and found that investors uranium,” Young said.
ations at Langer Heinrich, Namibia, from were more in tune with the macro view “They need the right contracts and the
early to mid-2021, depending on funding on uranium these days. way that US contracts work is that they
and uranium prices. Bacchus brought Yellow Cake to the are all long term and due for delivery in
Paladin is working on a rapid restart market to give “investors direct exposure 2-3 years.”
PFS expected to be finished this month, to the anticipated structural improvement Post the North American summer holi-
while a PFS into a processing upgrade in the price of uranium, through the ac- day season, the contracting season has
is expected to be completed in March quisition and storage of physical uranium started and this year the 18-month over-
2020. in specialist facilities around the world” hang of Section 232 is not there.
Langer Heinrich has been on care- and now has about 9 mlb uranium. Young said the US and other countries
and-maintenance since August last year, Vimy also has vice president sales around the world would be busily filling
with Paladin recently completing a $30.2 and marketing Scott Hyman, formerly their open requirements in the next 12-18
million placement to drive a second com- engaged with Dominion Energy and months.
ing at its Namibian asset. Cameco, positioning the company on the While uranium buyers will look to fill

Page 10 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

Vimy plans to follow up on a recently Mike Young
identified massively wide shear zone
at the Alligator River project, NT

their carts more aggres- no doubt about it. I don’t think there will
sively in the near future, be a massive run that is going to cause
Young said it was unlike- a whole flutter of share buying like we
ly that companies would saw in 2011, but it will be sustainable and
experience share price long-term and it will get guys investing in
surges this time around. production,” Young said.
“Utilities are going to Frustrations with spot price drivers
basically walk up the aside, Young is preparing for an important
cost curve, the early re- 2020 for Vimy.
quests for proposals will Young said the emphasis would be on
get filled by the cheapest writing contracts later this year or in early
producers and once that 2020, which will then lead to project fund-
fills up then it starts com- ing and ultimately project development.
ing up the cost curve and Vimy has completed a DFS on the Mulga
uranium will get more ex- Rock project in Western Australia, which is Uranium prices are low and flat,
pensive and more expen- awaiting secondary permits, licences and but there is optimism brewing
sive,” Young said. approvals and could potentially be mine-
“There will be anoma- ready next year. within the sector. Late last month,
lies in there, there will be Meanwhile, the company is contemplat- the House of Representatives
people who will take a ing another round of drilling at Alligator Standing Committee on
cut and take a loss later. River, Northern Territory, either before the Industry, Innovation, Science
There will be market- wet season starts this month or next year. and Resources held a public
based contracts hoping “Our strategy is to basically keep the roundtable into the nuclear
the spot price goes up. utilities fully informed to what we are doing
There is a real danger and when we expect to be in production. industry in Australia. Committee
in that because the spot We need to wait for them to meet our con- chair Barnaby Joyce said he
price in uranium has always spiked, but tract price and they will, you just look at the would like to get an overview of
never sustainably stayed high. The rea- cost curve and if they don’t the whole world the whole nuclear industry.
son for that is this is a contract market is going to run out of uranium,” Young said. “The Committee is receiving
and 90% of the utilities are buying on “Everyone is waiting for the market to
contract and the spot market is a shad- move, there are some really good targets briefings on a broad range of
owy, manipulated arbitrage market.” up there [Alligator River] and the drilling issues and due to the high level of
Generally, uranium spot prices are we did recently found this massively wide public interest in nuclear power
lower than contract prices, with spot trad- shear zone that we need to follow up so we decided to make this briefing
ers running point in the hope of buying are looking at that. The main thing will be open to the public,” Joyce said.
product low and selling it into contracts working on contracts and releasing news “We want to hear from a broad
at a higher price. flow on the macro side of things from the
Buying in the spot market has dried industry as well, like getting stuff out on the range of voices about nuclear
up and Young isn’t backing any dramatic Nuclear Fuel Report. power and see what part it has to
boom in uranium spot prices. “Uranium is a long industry and an in- play in Australia’s energy future.
“Previously, we had a couple of ramps dustry that takes its time, but it is a bit like There is a broadening view that
where the spot price shot up and then a snowball that rolls down a mountain; it zero emissions base-load power
you saw a lot of contracting happen. This gathers pace and gathers size and that’s
time I think what is going to happen is a going to happen, you don’t get a sugar hit can be delivered by nuclear
slow march and the spot price is going in the uranium industry,” he said. energy.”
to follow the contract price up. There is – Mark Andrews
always a [difference] between spot and
contract prices and that is how traders
make their money,” Young said.
“As you start to see contracts being is-
sued contract prices will climb the cost
curve and the spot price will go with it.
There might be slight fluctuations and lit-
tle mini runs, but I personally don’t think
there will be.”
Young said it was a double-edged
sword that the contract market was im-
proving albeit at a slow pace.
“The spot price, even though it is an
arbitrage market, is manipulated; there is

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 11


Timing, both good and bad, plays a
major role in the exploration game.
When a handful of visitors (including
Paydirt) stepped off a charter flight onto
St George Mining Ltd’s Mt Alexander
nickel project in late August, it timed
in with first core being pulled from
the maiden hole drilled at the Radar
prospect. The visit wasn’t about Radar
when first arranged but moments
after managing director John Prineas
and exploration manager Dave O’Neill
stepped off the 10-seater Cessna,
it became apparent the hole would
dominate the day’s discussion.

XRF testing of the maiden drill hole at
the Radar prospect returned values of
up to 6% nickel and 1.9% copper

Page 12 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

Radar goes off for St George

etails of the hole (still to be assayed) Investors appear to now be turning to
Dwere announced to the market the the next generation of nickel develop-
following day with 7.5m of nickel-copper ments. The problem is, after years of
sulphide mineralisation, including 2.6m poor fundamentals, there are few options
of massive sulphides, identified starting available.
40m below surface. Appreciation quickly “We are unique in the nickel space,”
followed and by September 9, just 10 Prineas told Paydirt after the company
days after the core was recovered, St received a speeding ticket from the ASX
George shares had hit 24.5c, their high- over its price rise. “There are a few nickel
est levels since December 2017. explorers around but none of them are
If timing played its part on making the near the point we are where we could
trip worthwhile, the wider ramifications very quickly move into resource defini-
for the Mt Alexander project (a 75/25 JV tion and then development.”
with Western Areas Ltd) and St George The recent price spike may have been
are also benefitting from timing. fuelled by the Radar announcement but
St George has been a diligent nickel St George has been an overnight suc-
explorer for nearly a decade but its ef- cess years in the making.
forts have often been thwarted by a The company took on Mt Alexander
depressed nickel market or inadequate from BHP Ltd in late 2015. BHP had
funding for juniors. When the nickel price identified the Cathedrals nickel-copper The maiden drill hole at Radar intersected
was up, St George was struggling for sulphide prospect but had spent little 7.5m of nickel-copper mineralisation,
funds, when the company eventually had time testing the rest of the interpreted including 2.6m of massive sulphides
cash market interest in nickel was on the 16km-long belt.
wane. St George’s initial work was designed incentive to rush into resource definition
This time, however, commodity and to confirm the Cathedrals mineralisation. and development,” Prineas admitted.
equity markets could be in concert for Massive sulphides were intercepted 30m Instead, the company continued with
the foreseeable future. from surface with a best hit of 7.5m @ its patient approach, undertaking down-
Nickel is enjoying its best run in years 3.9% nickel and 1.7% copper including hole EM around the three identified pros-
thanks to the momentum building in the 3.15m @ 6.4% nickel and 2.4% copper. pects and fixed loop EM on an area to
EV space and supply concerns stem- That early success was followed by step- the east of the known mineralised zone.
ming from Indonesia. Established miners out drilling to the east at the untested, “Our initial exploration focused on the
such as Independence Group Ltd and outcropping prospects at Investigators outcropping areas in that central 5km of
Western Areas enjoyed strong support and Stricklands. the belt because either side of that had
in August and early September as inves- Prineas said the company had been sand cover,” Prineas said. “We under-
tors piled in on the back of a 50% nickel very deliberate in its approach to Mt Al- took powerful SAMSON fixed loop EM
price spike since the beginning of July. exander. and found a couple of weak anomalies
“BHP had only drilled 200m of the Ca- but decided the SAMSON wasn’t enough
thedrals prospect so there has been a lot with the cover so went back with moving
for us to do,” Prineas said. “We had to loop EM which allows you to see more
test Stricklands and Investigators early under the cover.”
as they were outcropping. It has been a Radar lit up in the moving loop EM and
methodical and meticulous programme St George quickly decided to test the
as it is a highly unusual system; striking prospect with a diamond hole. The re-
east-west whereas the ultramafics in WA sult, as witnessed by Paydirt on August
all strike north-south. So, it has not been 28, was 7.5m of massive, blebby and ma-
easy to drill out quickly and we have had trix sulphides from 44m below surface.
to work out the geological genesis of the Handheld XRF readings returned values
mineralisation.” of up to 6% nickel and 1.9% copper in the
Further success was generated from massive sulphides.
drilling at Stricklands (17.45m @ 3% While highly encouraging in its own
nickel and 1.3% copper, including 5.3m right, the Radar discovery points to the
@ 4.4% nickel and 1.5% copper) and wider potential of the eastern end of the
Investigators (8.49m @ 5.8% nickel and Cathedrals belt.
2.6% copper, including 6.39m @ 6.5% “The hole at Radar has returned 7.5m
nickel and 2.8% copper) but with nickel of nickel-copper sulphide mineralisation,
languishing, market interest failed to ma- including 2.6m of massive sulphides.
terialise. At 40m below surface, that is definitely
“We could have gone faster if we had economic,” Prineas said. “But, it has also
more money and the incentive was there established another 1km strike length
St George managing director John but the nickel price has not been great on the belt. So, not only is it a new pros-
Prineas proudly displays core from the over the last few years so there was no pect which will mean more tonnes in a
exceptional first diamond hole at Radar

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 13


The Mt Alexander project, on the Agnew-Wiluna belt, remains
one of the Eastern Goldfields lesser known nickel regions

resource but it also extends the strike
Dave O’Neill, Charles Wilkinson, Prineas (all St George) and length, pointing to a mineral system that
Argonaut Securities analyst Matthew Keane look over freshly is longer and which should have depth
recovered core from the Radar drilling extensions as well that we haven’t even
tested yet.”
While the DDH1 drill rig was due to
move onto the down-hole EM targets at
Investigators and Stricklands, St George
is already planning its next activity at and
around Radar.
“We are now doing down-hole EM and
will hopefully find more mineralisation
along strike,” Prineas said. “The next step
will be RC or possibly more diamond drill-
ing. We would like to get more diamond
core for orientation work, etc. to see how
it all hangs together. We may have to drill
some holes specifically for down-hole
EM but we will also drill standard step-
out holes as well.”
The drill rig is already stepping out to
the east with another moving loop EM
target, Bullet, expected to have been
drilled at the beginning of September.
Now that mineralisation has been estab-
lished to the east, the exploration team
is keen to extend the programme further
“To the east we also have Fishhook,
which is another fantastic anomaly,”
Prineas said. “It is the best geochem
anomaly we have and with the moving
loop EM results emerging from it now,
you couldn’t ask for a better target.”
To the west of Investigators, the com-
pany is also eager to test the Mt Ida fault
“It is a deep crustal fault that many be-
lieve could be the source of the minerali-
sation. We are doing moving loop EM on
that now but it is still early days,” Prineas
The recent string of exploration and
market successes has given St George
both impetus and confidence and Prineas

Page 14 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

now on so we can lift the pace.
“In the next few months we expect to
make announcements on the initiating of
scoping studies and other studies.
“We have also got the incentive of the
nickel price to push us along.”
The gathering momentum is also be-
ginning to be felt on St George’s share
register with a number of institutional in-
vestors beginning to show interest.
“I think they are coming on board due
to the excitement about the nickel price
and the project itself,” Prineas said.
The company also has the backing of
JV partner Western Areas which is free-
carried for its 25% interest until a deci-
“We talk to Western Areas regularly,” Hands on: The St George exploration team
Prineas said. “They are happy with the was keen to get to grips with the core
work being done – most of the St George from Radar
exploration team are ex-Western Areas “There is $3.5 million in the bank which
Radar was one of the first targets tested – and they are certainly watching us a lot is enough to fund this drilling programme
in a programme which will cover new more closely now.” but with the share price the way it is,
prospects and down-hole EM conductors The growing recognition about nickel’s there is sure to be something happening
associated with known mineralisation on role in the impending EV revolution has in the next few months,” he said.
the Cathedrals belt numerous miners, traders and end-users “As we haven’t had a resource out the
brushing up on the sector’s junior explor- share price has been a bit up and down
ers and St George has already fielded but as we develop, I think it will show
is now bullish on the company’s forward- inquiries from such groups. stability. The Top 20 shareholders have
looking plans. “We have had interest from overseas been very stable and loyal. They appreci-
“Our patience has been justified and groups wanting to talk about the role ate the quality is there and that it would
we keep finding more mineralisation they can play in developing the project,” only be a matter of time before the value
which will ultimately result in a bigger Prineas said. is created. They know there will be a
resource and bigger project,” he said. For now, he is happy to fund Mt Alex- mine here, it just depends what size and
“We still don’t understand it 100% but we ander through traditional routes, a strat- scale.”
have got a much better idea so we can egy made simpler by the recent share
begin to go harder and I have a feeling price climb. – Dominic Piper
funding will be less of the problem from

St George is beginning to reap
the benefits of its methodical,
meticulous approach to
exploration at Mt Alexander

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 15

Perth, Western Australia 9
November 12-13 PROGRAMME

Conference programme
Monday 11 November 4.45pm Côte A new gold mine hopeful—Abujar in Côte SPONSORS AND SUPPORTERS TO DATE:
d’Ivoire d’Ivoire
3.00pm Registration open Mark Strizek* and Caigen Wang
Tietto Minerals Ltd
5.00pm Welcome reception
Exhibition Area, Pan Pacific, Perth
5.30pm Pre-dinner Drinks
Tuesday 12 November 7.00pm Dinner sponsored by Newcrest Mining Limited,
Golden Ballroom, Pan Pacific, Perth
08.00am Registration open
Wednesday 13 November
09.00am Welcome and opening
Keith Yates and Bill Repard
08:00am Registration open
Session One Session Five
09.15am China Keynote Address: The gold deposits of China 08.30am Russia Keynote Address: The largest gold deposits
with particular emphasis on the world-class in Northeast Asia: the histories of discovery
gold provinces of Jiadong (E China) and and exploration. A look from Russia
Golden Triangle (SW China) Professor Nikolay Goryachev
Adjunct Professor Franco Pirajno North East Interdisciplinary Scientific Research
Centre for Exploration Targeting, University of Institute, Magadan, Russia
Western Australia
09.15am Canada The Back River project: Emergence of a new
10.00am Cambodia Exploration and definition of the Okvau gold multi-million ounce BIF-hosted gold district
deposit, Cambodia in Kitikmeot Region of Nunavut, Canada
Keith King*, Morgan Hart and Kevin Morgan James Maxwell*, Angus Campbell, Stacie Jones,
Emerald Resources NL
Nicole Lasanen and Carl Gutsche
10.45am Morning Tea sponsored by First Quantum Sabina Gold & Silver Corp.
Minerals Ltd.
10.00am Morning Tea
Session Two Session Six
11.15am Australia Fosterville: A discovery story of perseverance 10.30am Romania Geology and discovery history of Bolcana Exhibitors:
Braden Verity*, Troy Fuller, Simon Hitchman, gold-copper porphyry deposit, Romania
Wessley Edgar, Ashley Jackson, Nathanael Pittaway Tim Baker*, Paul Ivascanu, Zolt Kulcsar, Reka Denes,
Kirkland Lake Gold Ltd.
Calin Tamas and Peter Lewis
12.00pm Australia The Bellevue gold deposit: Re-emergence of Eldorado Gold Corporation
a historic high grade gold field through the 11.15am Mongolia The gold rich porphyries of the Kharmagtai
application of modern exploration techniques
Sam Brooks*, Marcus Harden, Chris Piggott District, Mongolia: A case study in
and Leah Moore exploration under cover
Bellevue Gold Limited Andrew Stewart* and Mathew Brown
Xanadu Mines Ltd
12:45pm Lunch sponsored by Northern Star Resources
Limited 12.00pm Lunch
Session Seven
Session Three
1.00pm Australia The Bombora gold deposit: Part of a new Archean
1.45pm Mali Tabakoroni: Discovery of a high-grade growth
opportunity in the Syama Belt, Mali gold camp concealed by transported cover,
Bruce Mowat*, Aaron McLeod and Robina Sharpe 100km east of Kalgoorlie, Western Australia
Resolute Mining Limited Michael Outhwaite*, Tom Sanders and Alastair Barker
Breaker Resources NL
2.30pm Côte Emerging Discovery
d’Ivoire 1.45pm Australia The Karlawinda gold project: Discovery and
Hunting high-grade gold deposits at Napié, evaluation of the Bibra deposit
Côte d’Ivoire Michael Martin
Ann Ledwidge Capricorn Metals Ltd
Mako Gold Limited
2.30pm Afternoon Tea
3.00pm Australia Emerging Discovery
Revealing Rebecca: A new Eastern Goldfields Session Eight
discovery takes shape
Nick Castleden 3.00pm Long term trends in gold discovery SPONSORSHIP AND EXHIBITION OPPORTUNITIES STILL AVAILABLE
Apollo Consolidated Limited Richard Schodde
MinEx Consulting Pty Ltd
3.30pm Afternoon Tea 3.45pm Forum
Session Four What is the future for greenfields gold
exploration—both here and abroad?
4.00pm Papua Discovery of high grade gold-copper
New mineralisation at Kora North: The game Is its discovery rate and return on
Guinea changer at Kainantu mine, Papua New Guinea expenditure on an inevitable slide? Interested in sponsoring or exhibiting?
Chris Muller*, Andrew Kohler, Marcus Mapen, 4.45pm Closing drinks sponsored by OceanaGold
Trotsky Benjamin, Douglas Kirwin (Advisor) Corporation Contact Mitchelle Matambo on (+61) 8 9321 0355
K92 Mining Inc. Lobby Lounge, Pan Pacific, Perth or email [email protected]
This programme is subject to change without prior notice *Presenter
Page 16 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

The world’s pre-eminent

gold exploration event


Jointly organised by:

Keith Yates & Associates Pty Ltd

Proceedings Dinner Closing Drinks Café Gold Nugget
Sponsor: Sponsor: Sponsor: Sponsor: Sponsor:

Presenter Gift Lunch Morning Tea Wine Destination
Sponsor: Sponsor: Sponsor: Sponsor: Sponsors:



Interested in sponsoring or exhibiting? REGISTER
Contact Mitchelle Matambo on (+61) 8 9321 0355

or email [email protected] aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 17




In the latest of our series of retrospectives to celebrate Paydirt’s 25th anniversary this year, we
dip into the October back issues to take a look at Australia’s burgeoning diamond exploration
scene, a Friedland visit to the Australian Nickel Conference and Andrew Forrest starting his
post-Anaconda life at new vehicle Fortescue Metals Group Ltd

1995 1996

The first-ever October edition of A year later, Friedland wasn’t travelling
Paydirt heralded the impending arrival so well, or likely at all, as Paydirt
of Robert Friedland for the inaugural reported the US Government had frozen
Australian Nickel Conference, to be $US150 million of his assets following
held in Kalgoorlie on December 4-5. the sale of Diamond Fields to Inco for
Friedland as chairman of Ivanhoe $US3.14 billion. The US Government
Capital and a major shareholder in was insisting Friedland use his proceeds
Diamond Fields Resources, whose to clean up a Colorado mine disaster
recent Voisey Bay nickel-copper-cobalt he was implicated in. On the domestic
project was stacking up as “among the scene, West Australian Premier
lowest cost producers in the world”. Richard Court opened the Goldfields
Elsewhere, Paydirt looked at the potential impact of the proposed gas pipeline. Court said the $450 million project would help end the
CRA-RTZ merger, Nick Giorgetta was hoping to apply his Midas boom-bust economic cycle by allowing large-scale projects to take
touch once again to the Dalgaranga project, near Mt Magnet, and advantage of 60% lower energy costs. The year also saw Paydirt
nickel was being touted as a potential company-builder for WMC host its annual Diamond Conference. The sector was buoyant in
thanks to the start of operations at Mt Keith. the mid-90s with 22 pages dedicated to an event which featured 23
company presentations.


The diamond theme continued in 1998 with Kimberley Diamond Company completing the company-making acquisition of the Ellendale
diamond field in WA. Meanwhile, Paydirt was looking forward to a new era of laterite developments with site visits to the Cawse and Bulong
projects in WA. In his Editor’s Note, Ross Louthean demanded a dedicated Resources Minister from the new Howard Government.


Four years on and the Paydirt editorial team was still unhappy with the Federal Government’s approach to
the sector. The October edition featured a provocative cover story from Mark Fraser asking why the two major
parties were heading to an election without resources policies. Michael Minosora had submitted a paper to the
Commonwealth arguing for the introduction of a flow-through share scheme to boost exploration. Columnist
Observer suggested Federal Government ambivalence was as dangerous to the sector as the recent 9/11
attacks. On the company front, Paydirt turned its attention to “Diamond” Joe Gutnik and his diamond
exploration push in both Australia and Canada and in the preview to the Australian Nickel Conference, we
asked just how far Russian giant Norilsk Nickel might go to secure more production (clue: As far as WA), future
Norilsk target LionOre had managing director Mark Ashley boasting of three major projects on the books and
Adrian Griffin was also featured, talking up the potential to use atmospheric pressure leaching at Preston
Resources’ Bulong project.

Page 18 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT


Despite including the annual preview to the Australian Nickel Conference, the month’s cover story was focused
on the failed son of the nickel sector, Andrew Forrest. “Twiggy” was in the formative stages of resurrecting his
reputation after the troubles of Anaconda Nickel and had alighted in the Pilbara with the idea of creating a “third
force” in iron ore. “Forrest insists a third railway is not just breaking the stranglehold of the big two but rather
opening up the Pilbara at a time when iron ore demand is set to surge – with China’s growing prosperity a driver,”
we reported. The edition also carried a preview to the inaugural Africa Down Under (ADU) conference in Perth.
A modest affair of less than 100 delegates, the event featured the likes of Bill Turner (Anvil Mining), Hamish
Bohannan (Gallery Gold) and Craig Williams (Equinox). Sixteen years later, more than 1,200 delegates attended
the 2019 edition to listen to more than 30 company and a dozen ministerial presentations.

2005 2007

By 2005, ADU was up and running, with Paydirt dedicating 26 In those heady days of the mid-2000s, every commodity got its
pages to the event. That year’s closing panel session included many own mini-boom times and none more so than uranium. By 2007, the
of Australia’s early-movers on the continent with RSG Global’s Rick sector was running hot with exploration occurring around the world.
Yeates chairing a debate which included John Borshoff (Paladin En- We headed to Namibia where not only was Rio Tinto Ltd still produc-
ergy Ltd), Mike Holman (Anglo American plc), Mark Ashley (LionOre), ing at its 30-year old Rossing mine and Paladin Energy Ltd starting
Craig Williams, Alex Burns (Sphere Investments) and the late Craig operations at Langer Heinrich but ASX-listed upstarts Bannerman
Oliver (Nkwe Platinum). The topics would become familiar ones Resources Ltd and Extract were looking for the next major yellow-
down the years of the conference; how to access finance, skills and cake discovery. Extract succeeded, making the Rossing South dis-
infrastructure on the continent. The cover story was a local affair with covery not long after Paydirt’s visit. The junior was eventually subject
Derek Fisher explaining how his Moly Mines group would develop to an all-out bidding war that delivered a healthy return for any inves-
the Spinifex Ridge moly project in WA. In his editorial, Barry Avery tor wise enough to act on the Paydirt story at the time.
dismissed any suggestion the boom was coming to an end, rightly
predicting it would have several years to run yet.

2009 2012

ADU has dominated the October edition of Paydirt for more than It was going to take something big to
a decade and the magazine has charted the growing interest from knock ADU off the October cover and in
Australian and African governments in the conference. In 2005, 2012 it arrived when Mark Bennett (a for-
then High Commissioner to South Africa Phillip Green said it was mer ADU regular during his time with Li-
a rarity for Australian heads of mission to meet up at an event such onOre) delivered it with the discovery of
as ADU and admitted even he was surprised at the level of engage- the Nova-Bollinger nickel deposit in the
ment on the continent. By 2009, Foreign Affairs Minister Stephen Fraser Range, WA. The Nova discovery
Smith, speaking at the conference, said: “The Australian Govern- hole had only been drilled three months
ment is deeply committed to strengthening Australia’s engagement previously but Bennett’s Sirius Resourc-
with Africa. In the past, Australia has not given Africa the priority it es’ was already flying on the ASX. Since
requires and deserves. The Australian Government is determined drilling at Nova began, the Sirius share
to change that.” price had shifted from 5c to $1.55 and continued to climb before In-
dependence Group NL eventually bought company and project in a
$1.7 billion cash and scrip deal.

2014 2016

It was back to ADU in 2013, 2014 and 2015 with high profile This was the year that October Pay-
speakers such as the African Development Bank’s Sheila Khama dirt’s two great loves – Africa and nickel
featuring heavily. In 2014, the traditional discussions about com- – conspired to feature in the same sto-
munity development, infrastructure and sustainability were joined ry after Hugh Morgan astonished the
in the ADU programme by a frightening new development gripping ADU audience with his Comet Minerals’
parts of West Africa; Ebola. A special session was convened featur- “nickel balls” discovery in Nigeria. Three
ing Public Health England chief and renowned Ebola expert David years on from the unearthing of the geo-
Heymann. The session attempted to contextualise the Ebola crisis logical oddity, Comet is still building its
and quantify how mining companies should respond and what they understanding of the occurrence and
could do to protect their workforces and assist their host commu- how it may be developed.
nities. The conclusion drawn was that companies should work in
networks to promote good practice and keep each other informed
about public health concerns around their projects. It was a col-
legiate approach that is now being replicated with regards security
in West Africa.

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 19


Juniors lacking

the spring

Page 20 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

As they gathered in the hometown of Australia’s
rampant gold sector for Africa Down Under, Africa’s

miners, developers and explorers asked the obvious
question; ‘When will it be our turn?’

The answer may be starting to materialise and once
again it is coming from Perth. In August, ASX-listed
Resolute Mining Ltd acquired London-listed Toro Gold

and its Mako gold mine in Senegal in a friendly takeover.
The deal represents the most significant Australian-led
transaction ever witnessed in West Africa and has left

industry watchers anticipating the next move.

t is not often that two of Australia’s most sat around the discussion table wanting
Iprominent players in the West African to exit and we pitched ideas to the share-
gold space go toe-to-toe in an open fo- holders.”
rum. Connelly – who has been involved in
While it was no boxing match, there several West African gold mergers with
was a sense that Resolute Mining Ltd public companies – said his preference
managing director John Welborn used was always to operate through a fully
the finance panel discussion at Africa public company “because it is a lot easier
Down Under to feel out former Toro non- to transact”.
executive chairman Mark Connelly. “In a public company sense, you put
Having spent $US305 million in August together ideas, you put it to the share-
to acquire Toro, primarily for the Mako holders and they have the vote, they own
gold mine in Senegal, Welborn was keen the business. From my own perspective,
to know whether more vehicles would be it will be a lot harder to do it again [pri-
choosing to house and develop assets vately], but it may happen.”
in the ilk of Mako in the private domain. Since the GFC, investors have been
Toro effectively went from inception to on edge as global markets have swung
discovery and all the way up the devel- wildly.
opment curve as an unlisted entity, even- In recent months, US-China relations,
tually bringing Mako into production in Brexit and instability in Hong Kong have
2018. done little to put investors’ minds at ease.
Given the state of capital markets, Such volatility was driving companies
could the private equity-driven model to keep their concerns in private hands
successfully executed by Toro be a solu- for longer, according to Charlie Walker,
tion to the current financing conundrum head of equity primary markets, London
facing miners? Stock Exchange.
“I think Toro represents one of the “If you go back 10 years, the amount of
unique examples of a private company private money going around [grew] year
staying private as long as it did,” Con- after year and in the first half of this year
nelly said. “We tried to list Toro twice. it is at another record high. Increasingly,
We were up against a falling gold price the conversation we are having is; do you
on one occasion which dampened the in- list the business or do you stay private?”
terest of our private equity partners and Walker said.
Toro shareholders at the time. The sec- “You see the amount of companies
ond time was we just could not get the staying private for longer, this is across
investor interest. But, it had supportive all sectors, but there is still a reality that
shareholders. at some point private markets can’t de-
“The origins of Toro were completely liver what public markets can. I certainly
different in a lot of respects – one family think that is being flushed out.”
funded the original concept of Toro from A piece of work recently completed
day one. I don’t think it is a model that will indicated that since 2017 the amount of
be replicated multiple times. There may LSE stock being used to fund acquisi-
be one or two opportunities, but let me tions around the world was on the rise.
tell you that many times as a board we “That goes to show how active the

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 21


that may have struggled “ For juniors, IPOs are pretty much looking to float, the news

off the table. In saying that, there is
LSE is now becoming
opportunity for the market and it is kind of
and a lot of companies
services sector.
Connelly, who is non-
to access public mar- ironic, there is money out there to invest in was brighter for the mining
kets directly are going equities, but not at the junior end. executive chairman of
through other routes. It multidisciplinary engineer-
is definitely a trend and ing outfit Primero Group
at some point going public is the natural ing raised in equity markets typically be- Ltd, said taking the company to the ASX last
progression for them,” Walker said. ing done by mid- to large-tier companies. year “was the best thing we ever did”.
The LSE has experienced an influx of Large deals are getting done, small deals Being open to public funding immedi-
interest in dual listings with a handful of are struggling,” Walker said. ately provided Primero with balance sheet
ASX companies landing there. Seven Traditionally, the ASX and TSX bourses strength and access to pools of capital es-
Toronto-listed companies followed suit have cajoled the mining crowd, particular- sential to capitalise on the opportunities
in the last 18 months to tap into $US300 ly at the junior end, which is lacking gusto needed to grow the business, Connelly said.
billion worth of funds under mandate in at the moment.
the UK. Alongside Walk-
In terms of Africa specifically, the LSE er and Connelly,
is endowed with 114 companies with in- the expert financ-
terests on the continent. ing panel unani-
“They are worth about $US204 billion, mously agreed the
making the LSE the second largest Af- current climate is
rican exchange in the world, and when among the worst
you are meeting with investors you hope- ever experienced
fully don’t have to convince them about by junior mining
Africa. You are talking about the asset stocks.
and what you are trying to achieve and If IPO activity is
not about the geopolitics of the country in a good gauge of
which you are operating. It is those mes- the temperature
sages that seem to be a draw to being in the sector, the
listed there,” Walker said. mercury suggests
“Some 23% of the combined market a massive cold
cap of every listed mining company glob- front is sweeping
ally is on the LSE. ASX is second and over the junior min-
has about 50% less, so it is a hugely ing landscape.
knowledgeable community of investors.” In 2018, more
Australian companies to have sought than $US400 mil-
an additional listing on the LSE include lion was raised globally for IPOs pointing Sherif Andrawes
Resolute, Mod Resources Ltd, Danakali towards an exploration renaissance but
Ltd and Lucapa Diamond Company Ltd. so far this year a mere $US10 million has
Each has opted for a dual listing in the been tipped into new offerings. Primero’s success is enticing others in
UK to broaden their optionality to capital. “We do a lot of junior IPOs... and there the sector to consider public listings, giv-
“You are still seeing plenty of money be- are none in the pipeline whatsoever ing Andrawes and team much welcomed
right now,” BDO activity.
Australia Global “There are half a dozen companies
Natural Resources that are coming to market in the next 6-9
leader Sherif An- months looking at raising $25 million to
drawes said. $100 million. That side of the market is
“For juniors, quite strong. Once they are listed and
IPOs are pretty have a profile, they are then able to grow
much off the ta- quite strong,” Andrawes said.
ble. In saying that, With METS companies flourishing and
there is opportu- mid-cap and large companies enjoying
nity for the mar- the benefits of strong commodity prices,
ket and it is kind junior resources companies are left be-
of ironic, there is moaning their status as the odd one out.
money out there to Debt is still readily available for develop-
invest in equities, ment projects but filling the equity compo-
but not at the jun- nent of project finance has proven more
ior end.” difficult. While they wait for the tide to turn
Interestingly, on equity markets, juniors are becoming
while the cup- increasingly creative in finding ways to re-
board is bare of main viable, including striking deals with
mining companies royalty and streaming companies.
Roddy Barclay

Page 22 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

John Welborn
“ You see the amount of companies

staying private for longer, this is across
all sectors, but there is still a reality that at
some point private markets can’t deliver what
public markets can.

Mark Connelly

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 23


“ They are worth about $US204

billion, making the LSE the
second largest African exchange in
the world, and when you are meeting
with investors you hopefully don’t
Charlie Walker
have to convince them about Africa.

“There is going to be a lot more business the US, Twigger said. latory barrier. If you look at the investors
being done in the streaming space because “For instance, a security transfer agent that can invest in those [digital] platforms it
they are used to competing with equity but we have engaged with has 65,000 com- is still dwarfed by the public equity markets
there is no equity, so there is a reasonable panies behind them and they have set up at the moment. But, it is something that we
business case for it,” PCF Capital Group an alternative trading system which covers keep a pretty close eye on. Blockchain is
managing director Liam Twigger said. eight jurisdictions. They have a number of something that we have got investments in
“The equity performance has been so major growth dealers getting onto the net- the space, but time will tell as we work out
extremely poor so the streamers are com- work. These are popping up everywhere what the use is,” Walker said.
ing in, picking the more advanced projects and there are eight alternative trading sys-
at a very low equity value and they are tems trying to take down the NASDAQ,” – Mark Andrews
punting themselves up the capital curve. Twigger said.
Instead of being the shareholder who is the “I think a lot of the retail investors are go-
last one that gets paid, they are working in ing to end up on the systems, which you
at the top.” can only access via a global dealer. It costs
In the absence of brokering a deal with a nothing to trade a share and I think there There is going
big brother or courting a high net worth in- is a moment coming for the ASX, TSX and “ to be a lot more
dividual with skin in the game, Twigger said the other exchanges. Not all of them will get
juniors were in a tough spot and warned up, but if you look at what they are doing business being done
that the advent of digital securities – ETFs and some of the animosity and angst with
and the like – would continue to decimate compliance on the exchanges there seems in the streaming space
active fund managers across all sectors. to be a real push and they may operate an because they are used
Twigger said that there were trillions of alternative cheque book to being on a pub-
dollars piling into passive index-tracking lic market, not a private market; it is fasci- to competing with
ETFs and alternative trading systems, nating.” equity but there is no
which were disrupting capital flow into tradi- The impact of digital securities platforms
tional exchanges highlighted by the fact that are being monitored closely by the LSE, equity, so there is a
there is half the number of companies listed where the amount of money raised in the reasonable business
on the NYSE than a decade ago. first half of the year was up 35% but the
Last year was the first time ever that more number of deals down 35%. case for it.
money was raised privately than publicly in “The challenge you still have is the regu-

A p
A panel of experts on mine finance told anel of experts on mine finance told
delegates at Africa Down Under that elegates at Africa Down Under that
t the time is ripe for companies with the he time is ripe for companies with the
capacity to swoop on undervalued juniors pacity to swoop on undervalued juniors

Page 24 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

The post-GFC pull back from emerging

markets in favour of tested jurisdictions such

as Australia and Canada has led to heavy

discounts being applied to projects and

companies in Africa.

owever, the discrepancy between “On our strategy of investing in jun-
Hvaluations presents an opportunity iors, we are looking at future orebodies
for those willing to make brave decisions. where we can develop mines,” the Reso-
“The valuation gap is getting so big lute managing director said. “We are not
now that it will draw the money back into equity investors; we are not a fund man-
some of the better opportunities in Afri- ager. CEOs are always in the position
ca; that is the opportunity at the moment, to believe that the equity markets are ir-
given the overvaluation of the big end of rational because if they had half a brain
town,” PCF Capital Group managing di- they would be valuing your stocks at a
rector Liam Twigger said. higher level. It is unusual to admit that
“Generally speaking, the self-aware- the market might be rational, with minor
ness required by the chief executive to price variation.
recognise he is overvalued and he should “At the moment we are operating
be placing or raising money or making gold mines, we are mining gold to cre-
acquisitions is not consistent with being ate value. Gold is hard to find, it is two
CEO, but those who are smart enough parts per billion of the earths’ crust, so
are taking the opportunity. Juniors have backing good exploration teams on good
never been cheaper and the bigger end ground and funding them and support-
has never been more expensive, so the ing them so they can find us an orebody Liam Twigger
smart money is where the juniors should that we can develop is what it is about, it
be looking to hoover up stories that we’re is not about the equity value and we are Despite a flat junior market, the ASX
pitching [at Africa Down Under] and it is not there to market them, the strategy is remains a go-to exchange for mining
also about getting the big guys to recog- slightly different.”
nise that they are trading at massive pre- Roddy Barclay of Africa Practice be-
miums and they should use it.” lieves similar dynamics have played out
Noted African gold dealmaker Mark in the oil and gas sector in recent years,
Connelly encouraged more Australian with M&A now back on the cards.
companies with the capacity to transact He said companies who have suc-
to do so now. ceeded during the recent round of cost-
“I think the discounts are in there, but cutting and innovation-fuelled efficiency
that will change because of the quality of drives were now in stronger positions
the assets and the opportunity to make financially and beginning to flex their
good money on companies working the muscles.
African continent,” Connelly said. “For companies at the lower end it has
“There are companies that have pub- been very challenging,” Barclay said.
licly stated they do not want to go off- “With the oil price where it is, the super
shore and want to stay local. That is a majors have been more active in the
reality, but I think for me, there is plenty frontiers and those companies that have
of opportunity and upside in Africa. Is maintained the cash flow and cut costs
there a willingness from Australians to are certainly looking more active on the
do more transactions? I think they should M&A front.
and I think there is a lot of value in their “One of the big differences [compared
currency and their paper. If they were to the mining sector] is probably on the
deal-savvy they would be out there try- government side of things. The high pro-
ing to do more. If I was CEO I would be file oil price slump across the board has
out there with paper trying to do more. really kind of held back the regulators
We are now seeing good quality assets when there were some revisions to some
out there and it is fundamentally the role fiscal terms being considered in a num-
of the company, the board, the CEO [to ber of key markets. In mining, across the
seek those out].” more diversified mineral group we have
John Welborn has not only demon- seen some of those reforms pushed
strated an appetite to go down the M&A through and again that creates a more
path, but to also enter partnerships with challenging environment for the com-
companies on the rung below Resolute merciality of some of the products being
Mining Ltd. looked at.”

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 25


Numbers point to Australia’s

African opportunity

Amid a world of shifting allegiances and alliances, the relationship between Australia
and the African continent appears to be on course to grow in the next decade
judging by the response of speakers and delegates at Africa Down Under.

ore than 1,200 attendees were pre- clarified, his State’s position on the edge Much of the strength of this relation-
Msent in Perth for the four-day event of the Indian Ocean made it Australia’s ship comes from WA’s resources sector
which in recent years has found itself “gateway to Africa”. engagement with the continent. Aus-
the cornerstone of the growing Austral- “This is an important conference and tralian Federal Defence Minister Linda
ia-Africa Week festival of business and I believe it is crucial that it is held, right Reynolds pointed to one in 20 ASX-listed
community events. here in Perth, because WA is Australia’s companies having investments in Africa
The size of the conference and of gateway to Africa,” McGowan said dur- as evidence of the depth of the mining
Western Australia’s engagement with ing his opening remarks. “Not simply be- industry’s involvement in the sector. She
Africa may come as a surprise to many cause of geographical proximity, here on admitted that prior to her first visit to the
Australians on the east coast of the coun- the west coast but through our already continent, even she as a WA Senator
try. Even Canberra has an all-consuming developed relationship. Western Austral- hadn’t fathomed the extent of the rela-
focus on relations with China and the ia has a stronger relationship with Africa tionship.
US but as WA Premier Mark McGowan than the east coast.” “I am slightly embarrassed to say that

Page 26 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

prior to representing the Australian Gov- mineral and petroleum resources as well ships on the continent if it acted quickly.
ernment at Mining Indaba in 2017 – I as the transfer of services and technolo- He pointed out that by 2035, young
knew very little about our close mining gies and for similar exchanges to take people in Africa will outnumber young
and economic ties that exist between us place in the fields of agriculture, agribusi- people in the rest of the world. By 2050,
all,” Reynolds said. “I found it somewhat ness, and education and training.” a quarter of people on Earth will be Af-
ironic that I had to go to Cape Town to Both McGowan and Reynolds pointed rica.
meet half of West Perth but I am so glad to Africa’s growing place on the global Welborn said such compelling num-
I did.” economic stage as providing opportunity bers created commercial opportunities
Reynolds was following in the foot- for engagement to grow further. but Australian investors would have to
steps of former WA Premier Colin Bar- “Four of the fastest growing econo- change their attitudes.
nett who visited Mining Indaba in 2015, mies in the world last year were in Af- “Australia representatives in Africa
signing a MoU with Comesa during his rica,” Reynolds said. “Population growth recognise the opportunity, we have to
trip. His successor McGowan asked Min- is projected to grow from 1.2 billion to 2.4 make sure we get recognition at home
ister for Minerals & Energy Bill Johnston billion by 2050, offering a massive demo- as well,” he said. “A lot of Australian
to extend the MoU at this year’s Mining graphic dividend. economists are not focused on what is
Indaba. McGowan said the understand- “Millions of Africans every year are going to happen in Africa. It is much like
ing cemented the relationship between moving into the middle class, many ea- Australia’s lack of attention to Asia in the
WA and Africa, which had seen the state ger for the goods and services that we 70s and 80s.”
regulator help counterparts on the conti- can provide generating great two-way – Dominic Piper
nent build capacity. economic opportunities.”
“I believe it’s an important agreement,” Resolute Mining Ltd managing direc-
McGowan said. “It provides a framework tor John Welborn said Australia had the
of cooperation for capacity building in opportunity to build long-lasting relation-

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 27


SA relations on improve but

investment still low

he relationship between South Africa’s overall tone of the speech was in keeping 2018.
Tgovernment and mining sector is show- with the conciliatory nature of discussions. Mantashe pointed to Orion Minerals Ltd
ing signs of recovery from the deep mistrust His 15 months as Minister have seen and its Prieska copper-zinc project – an op-
which engulfed the final days of Jacob Zu- Mantashe rewrite and gazette the new eration which was granted its mining right
ma’s presidency. Mining Charter, send the Minerals and Pe- on the eve of the conference – as evidence
Whether that can now be converted into troleum Resources Development Amend- South Africa could still produce new devel-
sector growth is another question entirely. ment Act back to Parliament for further opments.
The contrast in mood is increasing by the debate and close a number of regional “Base metals are the newly revived com-
day, with this year’s Africa Down Under the regulatory offices suspected of widespread modities in the South African mining space
clearest evidence yet that government and corruption. and present huge opportunities for growth.
industry are closing in on a common agen- Mantashe said the moves were part of Copper mining has been revived by Orion’s
da. Minister for Mineral Resources and En- a deliberate strategy to produce a stable Prieska copper-zinc project in the Northern
ergy Gwede Mantashe made his second investment framework for international in- Cape Province and projections are that the
appearance at the conference this year, vestors. R4 billion project will be paid back in less
12 months on from being parachuted in by “We have taken decisive action to cre- than three years.
President Cyril Ramaphosa to tidy up the ate policy and regulatory certainty in the “The revival of mining of copper and
mess his predecessor Mosebenzi Zwane mining and upstream petroleum indus- nickel in some parts of the country pro-
had left of both the ministry and the sector. tries,” he said. “The gazetting of the Mining vides a good replacement pipeline for the
While Mantashe’s address was mocked Charter… [was undertaken] with the aim depleting minerals which have been mined
in the South African media for its reference of achieving growth, competitiveness and for over 130 years in the country. They are
to imaginary “battery mineral” hazenile, the transformation of the mining industry.” also an indication that mining is indeed a
The policy, he said, was working with sunrise industry in South Africa and that
$US3.2 billion injected into the South Afri- the gold decline should not be interpreted
can mining sector in 2018 with a further 60 to mean the death of the entire mining sec-
projects worth a combined $US7.8 billion in tor in South Africa.”
the development pipeline. Mining is a major Speaking at an investor luncheon follow-
focus of the Government’s drive to attract ing his presentation, Mantashe said the
$US100 billion of investment over the next Government would continue courting inter-
five years. national investors.
Independent evidence suggests the “We are seeing new projects but need
message is starting to permeate with in- to make more progress on certainty and
vestors. At the beginning of the year, South stability to attract investors,” he said. “We
Africa improved its position in the Fraser will be travelling to London, to Canada and
Institute’s Annual Survey of Mining Com- here to Australia to talk with all investors.”
panies, lifting its ranking on the Investment Orion is one of just a handful of juniors
Attractiveness Index from 48th out of 91 active in South Africa, a situation which is
Gwede Mantashe jurisdictions in 2017 to 43rd out of 83 for in stark contrast to countries such as Aus-

The annual South African investment luncheon during Africa Down
Under was well attended with the upbeat atmosphere representing
the new dynamics at play between government and industry

Page 28 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

tralia and Canada and even other African a vibrant junior sector could contribute at
jurisdictions such as Burkina Faso, Mali least 230,000 jobs to the national economy.
and Cote d’Ivoire. Despite the conviviality, investment
Mantashe’s department is intent on low- growth in the South African mining sec-
ering the barriers to entry for junior explor- tor still remains in negative territory. It was
ers with the new Mining Charter set to re- telling that during his presentation the next
move some BEE burdens and the DMRE day Nick Holland – chief executive of South
and Department of Trade and Industry African-born Gold Fields Ltd – failed to
working on funding programmes for junior mention the company’s one remaining as-
exploration. set in its homeland.
Mantashe said the Government’s aim Gold Fields’ is not alone in distancing Roger Baxter
was to lift exploration spend from its cur- itself from the country it built itself in but
rent low levels. South Africa’s problems extend well be-
“We aim to increase our share of the yond the migration of the old guard. on the world stage.
global exploration expenditure from the A continued lack of exploration spending “What is needed is a four-step approach
current 1% to over 5% in the medium term,” and an almost total absence of develop- to getting South Africa back,” Baxter said.
he said. “To expedite exploration activi- ment projects belie a sector which, despite “Step 1 involves governance – including
ties, we are, through the Council of Geo- several domestic pleadings to the contrary, developing a social pact, cracking down
sciences undertaking a 10-year intensive has taken on the look of a sunset industry. on corruption and re-establishing trust with
mapping programme which will produce Baxter, a long-time sceptic of the Gov- the international investment community.
detailed geological maps on a scale of ernment’s ability to reverse the exploration “Step 2 is about creating a stable, pre-
1:50,000.” and investment trend, said he held hope dictable and competitive policy, regulatory
The Minerals Council of South Africa is for the sector’s future. He said dialogue be- and operating environment that encour-
also throwing more resources at the junior tween government, industry and communi- ages long-term investment in mining while
sector and has signed a MoU with DMRE ty was better than it had been for more than Step 3 is facilitating growth through im-
on collaboration in the junior area. a decade and he welcomed Mantashe’s proved infrastructure and a strategy for an
Council chief executive Roger Baxter willingness to speak and listen to the sec- exploration boom.
said it was imperative that the regulatory tor’s leading chief executives. However, “Step 4 would see national strategies de-
environment encouraged the junior mining he warned considerably more work was veloped for each economy.”
sector. Minerals Council research showed needed to make South Africa competitive
– Dominic Piper

Progressive SA

y his own admission, things did not imposed Reviewed Mining Charter, the In August, the company was awarded
Blook good for Errol Smart and Orion proposed section 49 rights moratorium, a mining right at Prieska, while at the
Minerals Ltd in South Africa two years the non-resolution of the charter owner- time of print another significant milestone
ago. ship issues, imposition of inappropriate was achieved with the completion of its
“It looked grim two years ago, but a section 54 safety stoppages, for exam- BEE restructure.
new Minister shows that you can work ple, have created a major crisis for the “This comes hard on the heels of the
with the DMR. There are lots of arm sector,” Minerals Council of South Africa grant of the Mining Right and shows
wrestles, but it is progressive,” Smart, that we are continuing to tick all of the
Orion’s managing director, said. key boxes required to move the Prieska
“Three years ago we had the idea to project forward as rapidly as possible.
prove that SA could host some great The structure now in place means that
base metals which could be developed all of our key BEE partners are now fully
by the mid-2020s...a lot has happened in aligned with international investors as
three years.” Orion shareholders, while also comply-
Orion’s journey at the Prieska copper- ing with the objectives of Mining Charter
zinc project in SA’s Northern Cape was 3,” Smart said.
just starting to take off when then Min- “Our original BEE shareholders in Repli
ister of Mines Mosebenzi Zwane started are exchanging their shares at the asset
what became a very public stoush with level for Orion shares. At the same time,
industry over a proposed new Mining we welcome the inclusion of top-class
Charter. BEE partners Safika, KNI and Black Star
The situation came to a head at Af- who, through Prieska Resources, will
rica Down Under 2017, with the Miner- Errol Smart fund their proportionate share of Prieska
als Council of South Africa accusing development costs through their 20%
the Government of not consulting in- chief executive Roger Baxter said at Af- shareholding at the asset level.”
dustry on changes to mining law. “The rica Down Under that year. The BEE partners were already Orion
industry does not believe that the ap- The relationship between industry and shareholders after participating in a $4
proach adopted by the DMR is serving government has vastly improved since million share placement at $0.04/share
the national interest of the country and then and Orion is a poster child for min- earlier this year.
the negative impacts of the unilaterally ing in SA.
– Mark Andrews

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 29


Misreporting a set-up for

nationalistic grab: Holland

ick Holland used the Af- in the coming five years,”
Nrica Down Under stage to Holland said. “Grades are
launch a scathing attack on gold declining and orebodies are
industry reporting standards but becoming more complicat-
the real target for his message ed, which will increase costs
was sat in the audience. of mining. And, all this on the
Gold Fields Ltd chief execu- back of assets that probably
tive Holland told delegates that haven’t had enough spent on
inconsistent reporting of all-in them already.”
sustaining cash costs was giv- Exploration, Holland said,
ing stakeholders a false impres- was vital to reversing the
sion of how well the industry trend. With global reserves
was performing, internal analy- falling at an alarming rate in
sis from Gold Fields suggested. the last decade – average
“By our analysis more and reserve life of the industry
more costs are pushed into has dropped from more than
growth and non-sustaining 25 years to less than 15
costs, we believe $US1 billion years – the gold sector has
in the top 25 gold companies a job on its hands just finding
is misreported,” Holland said. replacement gold.
“When we compare reported Nick Holland with WA Minister for Mines Bill Johnston and Paydirt “It is no mean feat to keep
all-in sustaining costs with free chairman Bill Repard at the Africa Down Under Ministerial Dinner at the 100 mozpa production
cash flow, it shows there is a rate,” Holland said. “To do
$US200/oz difference between that, you need to target 200-
what is reported and what is real.” troduced the all-in sustaining cost (AISC) 300 mozpa in exploration because a lot of
Holland said the misleading reporting reporting standard in 2013. Under the new what you find won’t be mined.”
was “shrouding problems with an industry standard, companies completed a turna- However, the cost-cutting mantra of the
that has been undercapitalised down the round, slashing costs between 2013 and last five years has meant little exploration
years” and he doesn’t believe it is even to 2017 but Holland believes it has come at has been undertaken. Gold Fields cur-
the benefit of the companies themselves. a price. rently spends $US50 million on explora-
“The smart money will figure it out, but “Any capital expenditure that could ma- tion, a rarity among its peers according to
the industry is probably giving the wrong terially increase production could be clas- Holland.
impression to other stakeholders,” he said. sified as non-sustaining capital. As a con- “Gold Fields has invested when oth-
“It is suggesting we are making more mon- sequence, we saw costs begin to decline ers haven’t,” he said. “We have built one
ey than we actually are and therefore we over the next 4-5 years. Only in the course mine here in Western Australia [Gruyere]
begin to fuel resource nationalism.” of ‘17 and ‘18 did we see costs begin to rise and have another in development in Chile
Holland’s point was clearly directed again. Was the cost-cutting real? Or, was [Salares Norte]. We believe our capital re-
to the dozen African delegations watch- there a whole bunch of costs that were quirements are now about to come down
ing his presentation as well as others deferred on development, stripping, etc. when others will have to catch up.
of gold-producing nations not in attend- that are going to come back to haunt the “We spend 25-35% of our exploration
ance. Gold’s recent record run has led a industry?” budget in WA. We have been able to main-
number of jurisdictions (both in Africa and Analysis bears out Holland’s point with a tain production and increase reserves,
elsewhere) to revisit their royalty and tax sample group of 25 companies showing a from three years at the start to six years
regimes but Holland believes misreport- combined $US920 million was incorrectly at a discovery cost of less than $US100/
ing costs could lead governments to target excluded from AISC numbers. oz at a time when companies are buying
what are actually artificially inflated profit “It appears the industry is quite keen to ounces at three or four times that amount.”
margins in the sector. show good AISC so keeps deferring capi- Holland pointed to the discovery of the
Instead, he said, current cost reporting tal into [total] all-in costs, but only six of 2 moz gold Invincible orebody at St Ives
was hiding the gold industry’s wider prob- those 25 companies report all-in costs,” as evidence of the value exploration can
lems with growth, calling the misreporting he said. “It means a lot more money is be- generate.
“a symptom of a growing risk to the sus- ing pushed into growth and non-sustaining “This is real value creation and is what
tainability of the industry”. costs but is not being reported.” the industry should be doing,” he said. “Al-
After gold’s price plunge and investor The result is an industry set up for short- though it might be slower in its evolution,
sell-off in 2012, the industry’s majors were term success but lacking longer term sus- exploration will create more value and it
left with a restructuring job to win back tainability. will be sustainable.”
market support. To provide more clarity “Metals Focus is projecting a big in- – Dominic Piper
for investors, the World Gold Council in- crease in volumes mined at lower grades

Page 30 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT


First nel and nickel via Enterprise, is the single
biggest investment made in Zambia since
the Kariba Dam 50 years ago.
A total of 223,000t copper was pro-
Quantum’s duced from Sentinel in 2018.
As the build up at Sentinel continues,
First Quantum is weighing up its options
at Kansanshi.
tax checks gins to a point where there are really no
“If you start squeezing those profit mar-

Mike Christie high investor returns then actually you
stop the capital inflow and that is for many
ambia is not as far offside with its min- if they wanted big money investments to of the mining companies in Zambia. That
Zing sector as Tanzania, however, First be made in their respective countries. either means they pull the pin on explor-
Quantum Minerals Ltd exploration director First Quantum has been a long-time ing and developing their ore,” Christie
Mike Christie expressed some concern as copper producer in Zambia, with Kansan- said.
to which way the country was heading. shi in operation for the past 12 years. “We have some decisions to make
A new royalty regime, plus a number Having started as a high-grade, high- about whether we should expand and
of taxes and levies were implemented by margin mine, the reality is that at some go to the next phase on Kansanshi; it’s
the Government in January this year; the point the grade at Kansanshi will dip and hundreds of millions of dollars in invest-
third round of changes in 10 years. First Quantum will be faced with investing ment to try and continue our production
“Having been through a number of more to secure the mine’s future. at those levels as we go into deeper and
these changes before, we are continuing “With Kansanshi; it has been a very lower grade areas of that mine.
to have constructive discussions with the high-margin mine but it is getting lower so “In order to double the size of the flo-
Zambian Government on what is a sus- we are talking about mining 0.6% copper tation plant for the sulphide deposits at
tainable tax regime for the future,” Chris- instead of 1.2% copper, so the margin is depth we need a return on our investment
tie said. [going to be] much, much lower. There and if you change the royalty regimes
“It is not Tanzania; Tanzania has really are other mines in Zambia which are low- to the point where that return isn’t there,
killed the golden goose... Zambia is not er grade, Sentinel is 0.5%, so they have to then we’ll basically keep running that
in that position, but certainly the goose is be built on an enormous scale to get the mine down over time. It has a long life, but
being strangled.” economies of scale.” as the grade gets lower you produce less
Christie urged African governments to The $2 billion Trident project, whereby and less copper.”
provide stability in policy and regulations copper can be processed through Senti-
– Mark Andrews

Cardinal shapes up at Namdini

ardinal Resources Ltd will look to junior in the current environment. “We’ve drilled 7 moz gold where there
Cdefy the odds in Ghana once again in Cardinal managing director Archie Ko- was meant to be none and we’ve done it
the next three years. imtsidis told delegates at Africa Down in five years,” Koimtsidis said.
The company has already made one of Under the company plans to be pouring “According to the text books, gold
the best greenfields gold discoveries in a gold from Namdini in the second half of shouldn’t be here, but we found it; here
region of Ghana thought to be bereft of 2022, while regional exploration played it is.”
gold and now it is shaping up to develop out in the background. Cardinal’s PFS was based on a 9.5
a gold mine from scratch; a rarity for a In the last nine months, North Ameri- mtpa project producing 907,000oz @
can interest in Cardinal has reached 1.31 g/t from the 2.5-year long starter pit
40% of the registry, while the company operation.
recently appointed former Barrick Gold Post the initial start-up phase, Namdini
Corp chief operating officer Dave An- is primed to last for 14 years producing
thony in the same capacity at Namdini, 294,000 ozpa @ 1.14 g/t gold at AISC of
north-east Ghana. $US769/oz, with estimated development
Anthony has more than 30 years’ in- costs of $US414 million.
dustry experience and has designed, A pre-tax cash flow of $US1.4 billion,
constructed, optimised and operated 12 post-tax NPV (5% discount) of $US586
mines, half of which were with Barrick, million and post-tax IRR of 38% were
including four in Africa. other highlights of the Namdini PFS,
The appointment of Anthony is yet which took in the old ore reserve of 4.76
another indication of Cardinal’s commit- moz gold from 129.6mt @ 1.14 g/t (0.5
ment to build Namdini and his immediate g/t cut-off).
task is to work with Lycopodium Ltd on Ore reserves at Namdini alone now to-
the process flowsheet for Namdini, as tal 5.1 moz gold.
part of the feasibility study Cardinal ex- – Mark Andrews
pects to release this quarter.
Archie Koimtsidis

Page 32 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT



From greenfields exploration to mine site requirements, we have one
of the largest diversified fleets in Africa.

Mauritania Mali
Burkina Faso Operational bases across Africa
Guinea Nigeria Ethiopia
Cote d’Ivoire Ghana
DRC* We can mobilise quickly from our extensive
*Democratic Republic Tanzania
of the Congo
network of offices located throughout Africa.

Contact us to discuss how our knowledge and
experience can help your project. | [email protected]


Australia’s role in Africa underplayed

Australia Africa Mining and Energy Group
he Australian Government’s approach to rican security matters build upon the many chief executive William Witham convened a
Tits involvement in Africa is often knocked outreach programmes, including dealing with discussion on security in Africa. Panellists
for being lightweight, unfairly so, according to kidnap and ransom situations, rolled out over included Resolute Mining Ltd managing
Australia-Africa Minerals and Energy Group the years. director John Welborn, Australian Strategic
chief executive William Witham. “We are doing a lot, but ultimately it is cru- Policy Institute (ASPI) head of international
“I was surprised to learn about the things cial that companies manage risk as we are programme Lisa Sharland, Mali Ministry
that the [Australian Government] does, I think doing what we can do. We are committed to of Mines and Petroleum technical advisor
sometimes we criticise the Australian Gov- working with all countries globally on the se- Lassana Guindo and Australian Department
ernment for maybe not being involved in Afri- curity situation.” of Foreign Affairs Deputy Secretary
ca, but if you listen, there are a lot of ways that Sheehan thoroughly emphasised the need International Security, Humanitarian and
we are involved and we are being proactive,” for Australians travelling anywhere in the Consular Group, Tony Sheehan
Witham said. world to seek travel advice (Smartraveller –
Witham convened a panel discussion on and be aware of any ernment can’t do it alone. There is real oppor-
security at Africa Down Under, in which Aus- potential risks in any given jurisdiction. tunity for the private sector to lead the way for
tralian Department of Foreign Affairs Deputy Meanwhile, Australian Strategic Policy some of those activities because they are not
Secretary International Security, Humani- Institute (ASPI) head of international pro- immune from these security threats.”
tarian and Consular Group, Tony Sheehan gramme Lisa Sharland called for greater col- Given Resolute Mining Ltd’s diverse Afri-
headlined. laboration between government and private can portfolio, managing director John Wel-
Sheehan – most recently a Common- sector, particularly in the mining sector, to ne- born has his eyes wide open to the potential
wealth Counter-Terrorism Coordinator – pro- gate security challenges. risks his company faces.
vided delegates with an overview of the hand She also said it was important to define “Mining companies are used to operating
Australia plays in security issues in Africa and what the different types of security threats in risky environments, underground mines for
around the world. were, with cyber, climate, banditry and ter- example, and recognise the risks,” Welborn
Australia is set to take the reins from Swit- rorist attacks all needing to be addressed ac- said.
zerland on the Voluntary Principles on Secu- cordingly. “I think the security environment needs to
rity of Human Rights next year, and it is also “We need to have an inherent understand- be seen by miners in the same way and that
looking to repeat the highly successful West ing of what the drivers are, not only of con- then allows you to focus the amount of atten-
Africa Mining Security Conference in 2020. flict, but also what the drivers of peace are. tion it requires. Whether you are operating
The Government sponsored the inaugural We are in a space where we are quite good or not, you need to understand the environ-
West Africa Mining Security Conference in at identifying what the threats are; we know ment.”
Accra, Ghana, in June. The event attracted much less about building sustainable peace,” Resolute’s major mine Syama is in Mali,
a crowd of 200 people representing 78 com- Sharland said. one of the countries in Africa most threatened
panies. “We have got good examples, but unfor- by terrorist groups.
“We have to be very careful of what we tunately we have some examples around The security situation in Mali has severely
do but I think the feedback is that we should the globe at the moment of what were once deteriorated since 2012, with international
plan to do something again in 2020. What peaceful nations now trekking backwards. I peacekeeping forces continuing efforts to re-
that looks like has to be driven by the feed- think understanding how we are actually do- pel attacks from terrorist outfits, namely jihad-
back from this [first event] but I think we have ing that and working with local communities ists, from the Sahel.
a very good idea of what seems to attract high to build those things is really critical.” Mali Ministry of Mines and Petroleum tech-
interest. We will be looking to do something ASPI’s current work in Africa is focused on nical advisor Lassana Guindo said more help
again and we will be talking further with a lot practical and tangible ways for mining com- from other governments to assist with secu-
of our key contributors for what that looks like,” panies to communicate exactly how they are rity would be welcomed.
Sheehan said. engaging across the sector. “From 2012, Mali has suffered the worst
Following the West Africa Mining Secu- “It is not just a case of good practice. Mining crisis of its existence because of actual jihad-
rity Conference, Australia threw its support companies aren’t really exacerbating what is ist groups. From 2013, Mali is still recovering
behind the Kofi Annan International Peace- really going on and I think as the baseline we from its worst crises,” Guindo said.
keeping Training Centre and played host to need to ensure that is taking place and then “Everybody knows that mining activities
two Regional Inter-Agency Counter-Terrorism take a look at the potential of what many are very risky and risk assessment is the key
workshops, which aim to improve coordina- are already doing in terms of engaging and point for any investor looking at Mali.”
tion and cooperation among regional police, positively contributing to the security environ-
military and intelligence services. ment,” Sharland said. – Mark Andrews
Australia’s most recent involvement in Af- “There is real potential here, and the Gov-

Page 34 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

10% off the Early Bird Rate
exclusively for Paydirt


Australia’s role in Africa underplayed 3 - 6 February 2020 | Cape Town, South Africa

Where investments are made

and game-changing deals are done

6000+ 94 900+

Senior Attendees Countries Represented Mining Executives

950+ 600+ 280+

Government Global Investors Executives from Junior
Representatives Mining Companies

Register Now at

Have a bigger presence at Africa’s largest mining
investment and premier deal-making event

Want to increase your brand exposure? Start the conversation today with Fred Noce:
[email protected]



‘Turbocharge’ African engagement:


ustralia must increase its links to Africa with other nations with shared values. As greatest cost of this insecurity – as well
Aand the Indian Ocean Rim as it adjusts Indian Ocean rim nations, we clearly have as the personnel and operations of mining
to the rapidly changing world around it, shared strategic interests with African na- companies,” she said.
according to Federal Minister for Defence tions – a desire for peace and prosperity “It is essential that new Australian com-
Linda Reynolds. which requires mutual sovereign respect panies to the region understand the secu-
Speaking at Africa Down Under, Reyn- and adherence to international laws.” rity environment where they work. We are
olds said Australia needed to “turbo- Reynolds acknowledged that West Aus- working closely with partner governments,
charge” its commercial, social and stra- tralian mining companies had led the way other diplomatic missions, and local and
tegic links with Africa at a time when the in Africa and called on the sector to con- international experts to provide the best,
rules-based order is “becoming increas- tinue its engagement with the continent. and most up-to-date, information possi-
ingly tested”. “I am proud that Australian companies ble.”
“The world, including our shared neigh- contribute to African economies, and com- As well as providing security support
bourhood, is going through a period of sig- munities, in positive and sustainable ways,” to African governments, Australia is also
nificant geopolitical change, which is caus- she said. “Western Australia is quietly but playing a role in negotiations over the
persistently leading the proposed African Free Trade Agreement.
way. Sub-Saharan Af- Covering 55 members of the Africa Union,
rica has the highest con- the agreement would create the world’s
centration of Australian largest free trade area, accounting for
resources projects in the more than 1.2 billion people and a com-
world – it is estimated bined GDP of $US3.4 trillion.
at around one-third of “The Economic Commission for Africa
the total number outside estimates that establishing this free trade
Australia – and one in 20 area could boost intra-African trade by
ASX-listed companies over 50% by eliminating import duties,
has an investment in Af- and double this amount if non-tariff barri- BUILDING A
rica.” ers are also lowered,” Reynolds said. “We
Reynolds said by want to make sure we play our part to see
supporting sustain- this succeed. This is why the Australian
able development goals, Government is working to provide training UNIQUE MINERAL
Australian mining com- opportunities for the negotiators as they
panies were important continue to settle details.”
ambassadors for “Brand She said Australia was also working with
Australia”. African jurisdictions to make the most of
“Australian companies their mineral wealth by striking a balance SANDS COMPANY
are not just corporate between foreign investment and national
entities – they are na- interest.
tional diplomats,” she “We are a nation that prospers because
said. “The performance of its endowment of natural resources, and
of Australian companies that’s what we want for others – a pathway
in Africa sets us apart, to economic and social growth. We know
and our engagement is from our own experience that developing a
mutually beneficial for resources sector is not just about finance,
the countries and com- technical skills and workforce.
munities in which they “It is also about getting the regulatory
operate.” frameworks right – frameworks that sup-
Australian Defence Minister Linda Reynolds tries her hand at
remote truck driving at the Resolute Mining booth As a former Army Re- port a sustainable industry, that encourage
serve officer, Reynolds the development of clean technologies,
has always shown a and frameworks that ensure respect for
keen awareness about the sovereignty of the nation.
ing significant anxiety,” Reynolds said. security issues and she used Africa Down “Strong national frameworks and trans-
“Australia is increasingly looking to tradi- Under to remind Australian miners to be parent legal and financial regulations en-
tional liberal democratic friends and allies vigilant when operating on the continent. sure that, as a sovereign nation, Australia
to work together in new ways. In Africa, this “There are many complex issues at play has been able to benefit from foreign in-
has traditionally been with fellow members here that pose great challenges for gov- vestment but also protect our national in-
of the Commonwealth. Increasingly, how- ernments in the [West African] region and terests.”
ever, Australia, like other democracies, is we recognise the efforts they are making – Dominic Piper
looking to developing new relationships to protect their citizens – who bear the
+61 8 9413 7400 [email protected] @baseresources Base Resources ASX and AIM (BSE)
Page 36 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT



+61 8 9413 7400 [email protected] @baseresources Base Resources ASX and AIM (BSE)


Africa’s time has arrived: PwC

frica’s time is now – according to Australia-Africa practice, is to stimulate tive tax rate,” Marion said.
APwC corporate tax partner Ollie Mar- and encourage that discussion to further “Clearly it’s important to make sure
ion – but questions still remain over how encourage investment into Africa.” that not only do you need to think about
to maximise its investment potential. In the latest instalment of its annual the in-country tax implications, but also
Despite foreign direct investment slid- publication on the African tax landscape, what it means from a cross-border per-
ing 13% globally last year, Africa was PwC studied the impacts of investing in spective.”
a standout performer with 11% growth the continent from abroad, once again Marion added that collaboration was
achieved over the past 12 months. Asia using its theoretical gold mine as a focal the best option for all concerned parties
(4%) was the only other region to record point for its investigation. if they wanted to achieve optimal finan-
an increase. Common tax challenges such as cial benefits.
“The African opportunity is here and change of control, residency, registration “Certainty in terms of tax, legal and
now; the only question that remains is duties, VAT refunds and repatriation of other matters like socio-economic stabil-
how can we maximise its potential,” Mar- profits were all taken into consideration. ity and access to infrastructure, will help
ion said. The study found a $100 profit from Africa attract its fair share of global capi-
“In our mind, we think the answer lies the African-based theoretical gold mine tal,” he said.
in a wide spectrum of stakeholders, most would attract an effective tax rate of 70% “Whilst you might think miners and
notably the African governments, but after $30 is paid directly to the local gov- governments are on different sides of the
also with those who are looking to invest ernment, a $14 withholding tax is also fence, essentially by working together
in Africa. incurred and Australian investors have they can actually create better economic
“We often see that tax – legal and oth- forked out $26 of income tax. prosperity for the continent.”
er regulatory matters – has a really im- “From the $100 profit in Africa, $30
portant role in this discussion and we feel ends up in the hands of the ultimate – Michael Washbourne
our role at PwC, particularly as part of our shareholder, so essentially a 70% effec-

Resolute recognised

esolute Mining Ltd emerged as the ma- Syrah Resources Ltd was recognised Resources Ltd and Volt Resources Ltd
Rjor winner from the inaugural Australia- as the winner of the “Best Innovation in were the category’s other finalists.
Africa Minerals & Energy Group (AAMEG) Corporate Social Development” for its The awards judging panel was com-
Africa Awards. Balama professional training centre in prised of AAMEG chief executive William
Presented at the close of the first day of Cabo Delgado, Mozambique. Witham, PwC Australia-Africa practice
Africa Down Under, Resolute walked away Tanzanian-focused juniors Strandline leader Ben Gargett, The African Dream
with the “Best Work- Foundation found-
force and Industry er Fadzai Matam-
Development Ini- banadzo and
tiative” award for its The University of
Malian talent devel- Western Australia
opment programme regional develop-
in the country’s ment co-director
south. Fiona Haslem-Mc-
Mineral sands Kenzie.
producer Base Re- Lifetime AAMEG
sources Ltd was memberships were
highly commended also awarded to
in the same cat- inaugural chief
egory for it efforts in executive Trish
developing Kenya’s O’Reilly, founder
mining workforce and current board
through its Kwale member Bill Turn-
operation. er, corporate social
Other finalists responsibility advi-
were Austral African sor Robin Budden
Survey Group, Capi- and Paydirt Media
tal Drilling, Minopex, Pty Ltd execu-
DRA and Globe UWA’s Fiona Haslem-McKenzie, Base Resources managing director Tim Carstens, tive chairman Bill
24-7 Recruitment & Resolute Mining managing director John Welborn, AAMEG chief William Witham, Syrah Repard.
HR Consulting. Resources chief people officer Jordan Morrissey, The Africa Dream Foundation’s Fadzai
Matambanadzo and PwC Australia-Africa practice leader Ben Gargett

Page 38 OCTOBeR 2019 aUSTRaLIa’S PaYDIRT

Resolute points to

two-way relations

esolute Mining Ltd managing director ways paid tax and royalties but have not
RJohn Welborn has reminded both gov- always delivered to investors.”
ernments and investors that government- Resolute’s strategy for changing this is
business relations on the continent are to adopt advanced mining methods to im-
very different to those in his homeland. prove productivity, efficiency and safety.
Speaking during the opening session At Syama, the company is rolling out the
of Africa Down Under, Welborn said world’s first fully automated underground
Resolute understood the need to work in gold mine. Welborn said the move had
partnership with host governments but in- finally unlocked Syama’s latent potential
sisted the relationship had to be mutually to the benefit of both company and stake-
beneficial. holders.
“Resolute has recognised the differ- “There has been a commitment by the
ence working in Africa to Australia,” Wel- board to preserve and create value at Sy-
born said during a session in which he ama through innovation and the introduc- John Welborn
shared the stage with both West Austral- tion of technology. Everything we are do-
ian Premier Mark McGowan and Malian ing is about mining better, more efficient, the discussion is set to intensify in com-
Minister of Mines and Petroleum Lelenta safer and better and crating more value ing decades. Welborn pointed out that by
Hawa Baba Ba. for those in our ecosystem,” he said. “Sy- 2035, young people in Africa will outnum-
“In Australia, the relationship with gov- ama is a Tier 1 global gold mine. It was ber young people in the rest of the world.
ernment is distanced and purely under a discovered by BHP Ltd and owned by By 2050, a quarter of people on Earth will
tax framework. In Africa it is very differ- Randgold [without fulfilling its potential]. be Africa.
ent; Mali owns 20% of Syama [Resolute’s We are very proud of our investment in He said such compelling numbers cre-
gold mine in the country] so we need to the mine; we brought it back on line in ated commercial opportunities but Aus-
behave differently. It is about balance and 2009 and it is now on the cusp of fulfilling tralian investors would have to change
where the benefits of the mine go and that potential.” their attitudes.
need to go. In partnership with Sandvik and By- – Dominic Piper
“Responsibility is two-way; it needs rnecut Resolute
transparency and faith from governments has built an un-
but companies need to demonstrate that derground mine
as well. It is a challenge for all companies; where ore is never
are we there to bring genuine first world handled manu-
standards or exploit various advantages ally between the
we can achieve?” face and the plant.
Resolute has operated in Africa for Welborn said the
more than 23 years across four jurisdic- innovation would
tions in West and East Africa. Senegal is bring productiv- Fast tracking
its latest point of entry after the company ity and efficiency
paid $US308 million for Toro Gold and gains but also development of the

its Mako gold operation in the country. pave the way for Lindi Jumbo Project
Welborn said the company was looking dramatic change to take advantage of
to the continent to push group production to Syama employ- forecast market
towards 750,000 ozpa (currently 400,000 ees.
ozpa) but needed support to achieve its “Technology is conditions for quality
ambitions. enabling changes Flake Graphite deposits.
“We have gone to Senegal because in the workforce,”
the Government had demonstrated its he said. “We have Walkabout is also
mining framework,” he said. “We have in- a talent develop-
vested in Syama because we have long- ment programme exploring for Lithium

term faith in the Malian mining regime. through which we in Namibia, Gold and
The ability to invest further is going to be are creating path- Base Metals in

predicated on transparency we can bring ways for Malians Northern Ireland and
and that our partners can bring.” to take charge of
West Africa’s gold sector has thrived the mine.” Scotland.
over the last 15 years but Welborn reiter- Employment op-
ated the need for investors to benefit as portunities are al-
well as host governments and communi- ways contentious
ties. issues in mining
“We must do better at creating value development and
because returns to shareholders haven’t demographic pro- CAPITALISING ON RESOURCE OPPORTUNITIES
been consistent,” he said. “We have al- jections suggest

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 39

Click to View FlipBook Version
Previous Book
Álgebra Trilce
Next Book