20/2/20 8:16 am April 2020 Volume 1. Issue 281 $11.95
A different perspective on space-based
1 + 1 = 99.9+ %
communications …
Aggregate Availability © 2020 Aurora Australis Network
Diverse Path We cordially invite you to contact us by phone or email so we can learn more about your project and requirements, and to discuss how our small team of the right people can bring a different perspective to your operations! Aurora Australis Network ABN 55 008 922 530 8/95 Canning Highway South Perth, 6151 Western Australia Tel: +61 8 6363 5030 Email: [email protected] Web: aurora.net.au
Min
Min
Mining’s ing’s ing’s
Primary Link through to The within ~3 your network, private vehicle whilst and IOT : Cost effective including systems the appropriate balance size and cost, link C C
Inherently diverse system design; 256kbps Link speeds from greater than 100Mbps; Comms on the Pause (COTP) : ability to “stop and prop”, and gain your network minutes via an auto-acquire antenna Comms on the Move (COTM) : The ability maintain access to even whilst moving on land, sea or air. With systems designed to handle up to 130km/h on land, extending a into a network directly on the move opens up new operational solutions for the continuous str
COVID-19 OVID-19 OVID-19
responseesponseesponse
access to system; to possibilities; Telemetry selecting between
♦ ♦ ♦ ♦ ♦ ♦
make sense to a spare remote sites are on a IP network, we figures reliability jointly the best possible outcome for also provide a communications and technologies, Western in with direct access to both Pacific and Region
A spare. It wouldn’t a 4WD to site without tyre; yet countless operating with just a single satellite link; when it stops, the whole site is affected. With so many core business systems and operational systems relying “always-on” strongly believe in the value of delivering a robust satellite comms architecture overall delivers that approach the mythical 100%. The use of two or more satellite systems, landing at different teleports and using differ
Australia
systems
reliable
deliver
drive
A4 Paydirt Ad.indd 1 l Battery Minerals Review ISSN 1445-3436 343007 771445
that
and
the
Australian Gold Focus
l
Page 1 DeCeMBeR 2019 - JaNUaRY 2020 aUSTRaLIa’S PaYDIRT 9
Exploring South East Asia’s
premier nickel sulfide district
AN ADVANCED NICKEL SULFIDE PROJECT
Ta Khoa Project (Nickel-Coper-Cobalt-PGE), Vietnam
• Ban Phuc Mine operated from 2013 to 2016,
mining 975kt @ 2.4% Ni & 1.0% Cu for 20.7kt Ni &
10.1kt Cu;
• Existing infrastructure built to Australian Standards
includes a modern mechanised underground mine
located within a premier nickel sulfide district;
• Alliance with Korea’s largest electric vehicle
battery cathode producer, Ecopro BM Co Ltd;
• Drilling continues to intersect the new, near
surface King Cobra discovery zone over 200m of
strike length;
• Blackstone is continuing its aggressive drilling
program at Ban Phuc with four drill rigs testing the
disseminated mineralisation;
• EM and IP surveys underway;
• Previously unrecognised PGE grades suggest a
potential by-product credit could significantly
enhance the future economics of the project;
• Blackstone is fully funded to deliver a maiden
resource and a scoping study by mid 2020.
FOLLOW US
@Blackstone_BSX
au.linkedin.com/company/blackstone-minerals
facebook.com/blackstoneminerals
For more information, visit www.blackstoneminerals.com ASX: BSX
BSX Flyer Jan 2020.indd 1 15/01/2020 2:42:23 PM
contents
PAYDIRT (ISSN 1445-3436)
Published by
Exploring South East Asia’s Paydirt Media Pty Ltd. 16 NEWS
A.C.N. 063 985 133
It was a positive last week in March for
premier nickel sulfide district Head Office: Australia nickel players with multiple new
discoveries in Western Australia announced.
Suite 9, 1297 Hay St, West Perth
However, trumping all news was the positive
Western Australia 6005
P.O. Box 1589, West Perth results from Mincor’s nickel operations restart
Western Australia 6872 DFS. A stalwart of WA’s nickel scene before
AN ADVANCED NICKEL SULFIDE PROJECT Phone: (+61 8) 9321 0355 hitting a rough patch, Mincor now appears
set for a new lease of life in Kambalda under
Facsimile: (+61 8) 9321 0426
Ta Khoa Project (Nickel-Coper-Cobalt-PGE), Vietnam [email protected] David Southam. Mark Andrews reports
www.paydirt.com.au
18 COVER
• Ban Phuc Mine operated from 2013 to 2016,
mining 975kt @ 2.4% Ni & 1.0% Cu for 20.7kt Ni & Editorial: There has never been a time quite like
10.1kt Cu; Editor: Dominic Piper what the world is experiencing right now.
Deputy editor: Mark Andrews COVID-19 has turned the world as it was
Journalist: Michael Washbourne known upside down and things may never 16
• Existing infrastructure built to Australian Standards Art director: Nick Brown be the same again. With most of the world
includes a modern mechanised underground mine Contributors: Brendan Ryan shutdown and confined to their homes for an
located within a premier nickel sulfide district; uncertain period of time, Dominic Piper looks
(Johannesburg)
at what impact the coronavirus will have on
• Alliance with Korea’s largest electric vehicle Advertising: the mining sector
battery cathode producer, Ecopro BM Co Ltd; Advertising manager: Richa Fuller
Subscriptions: Kate Blanchard 24 AUSTRALIAN GOLD
Phone: (+61 8) 9321 0355
• Drilling continues to intersect the new, near Facsimile: (+61 8) 9321 0426 It has been hard to ignore the performance
surface King Cobra discovery zone over 200m of of Australia’s gold sector over the past two
strike length; Pre-press and printing: years. From explorers to the heavyweight
Vanguard Press, 26 John St, gold producers, there has been no shortage
• Blackstone is continuing its aggressive drilling Northbridge WA 6003 of good stories to tell and despite the current
market malaise, Paydirt found that activity
Member of:
program at Ban Phuc with four drill rigs testing the continues in the sector, albeit some plans
disseminated mineralisation; have been tempered for the time being
• EM and IP surveys underway; 40 BATTERY MINERALS
Just when it appeared that Western
• Previously unrecognised PGE grades suggest a Paydirt Media Australia’s lithium sector was about to 18
Executive chairman: Bill Repard
potential by-product credit could significantly drop to its knees, Pilbara Minerals and
enhance the future economics of the project; Finance manager: Giovanny Jefferson Altura Mining received much needed
Accounts/administration: financial lifelines. Meanwhile, there is also
Lana Luketic movement in other sections of the battery
• Blackstone is fully funded to deliver a maiden Conferences: Melita Fogarty, minerals sector, particularly nickel
resource and a scoping study by mid 2020. Namukale Nakazwe,
Christine Oelschlaeger,
Mitchelle Matambo 50 AFRICA
One of Australia’s most popular diplomats
20/2/20 8:16 am © 2020 Aurora Australis Network overseas, High Commissioner to Ghana,
VOLUME 1. ISSUE 281 $11.95
April 2020
A different perspective on space-based
1 + 1 = 99.9+ % Aggregate Availability Diverse Path We cordially invite you to contact us by phone or email so we can learn more about your project and requirements, and to discuss how our small team of the right people can bring a different perspective to your operations! Aurora Australis Network ABN 55 008 922 530 8/95 Canning Highway South Perth, 6151 Western Australia Tel: +61 8 6363 5030 Email: [email protected] Web: aurora.net.au Andr
communications …
African region after four years. While parts
Mining’s ing’s ing’s
Min
Min
♦ Inherently diverse system design; Primary Link ♦ Link speeds from 256kbps through to greater than 100Mbps; ♦ Comms on the Pause (COTP) : The ability to “stop and prop”, and gain access to your network within ~3 minutes via an auto-acquire antenna system; ♦ Comms on the Move (COTM) : The ability to maintain access to your network, even whilst moving on land, sea or air. With systems designed to handle up to 130km/h on land, extending a privat
C C
r r
responseesponseesponse
issues, which has been the downside
A spare. It wouldn’t make sense to drive a 4WD to site without a spare tyre; yet countless remote sites are operating with just a single satellite link; when it stops, the whole site is affected. With so many core business systems and operational systems relying on a reliable “always-on” IP network, we strongly believe in the value of delivering a robust satellite comms architecture that delivers overall reliability figures that approach the myth
strategically
systems
A4 Paydirt Ad.indd 1
l Battery Minerals Review
and
l Australian Gold Focus
9 ISSN 1445-3436 771445 343007 positive trends also emerging.
Cover image: Mark Andrews reports
The coronavirus under the microscope
FOLLOW US 24
Member of:
@Blackstone_BSX
au.linkedin.com/company/blackstone-minerals
Registered by Australia Post PP 643938/0071.
facebook.com/blackstoneminerals No pages or articles in this publication may be re-
produced in any form without the consent of the
For more information, visit www.blackstoneminerals.com ASX: BSX publisher. This includes photographs either taken
by Paydirt Media staff or provided by other parties.
BSX Flyer Jan 2020.indd 1 15/01/2020 2:42:23 PM
Industry solidarity in face
of pandemic threat
It was unavoidable that Paydirt, like The economic fallout from the pandemic could be even greater;
the rest of the globe, would switch its the cure being worse than the ailment, as the saying goes.
focus this month from everything and As we all adjust to the grim realities of our current predicament,
anything else to the impacts the coro- we inevitably begin wondering what the world will look like when
navirus is having and will continue to we come out the other side of the COVID-19 tunnel.
have on the resources sector. The positive among us will see it as a chance to reset. Global
Our cover story is split into two con- markets have been smashed, regardless of asset class, but this
siderations – the public health implications of the virus for industry may not be a bad thing for the resources sector, particularly the
and the economic effects it has created. junior sector.
On the public health consequences, we have seen the industry The bull run on global markets of the last seven years largely
adjust quickly. Both West Australian Premier Mark McGowan and passed junior miners and explorers by. Conditions for these com-
Federal Minister for Resources Keith Pitt met with industry leaders panies were as tough at the start of 2020 as they were in 2013.
early in the crisis, cognisant of the importance of mining to state The COVID-19 induced sell-off could bring other asset classes
and country. back to the pack, giving juniors an even start instead of the handi-
There has been no inclination to close operations as restrictions cap they were battling against just a few months ago.
have tightened, with miners promising to adhere to strict guide- There will also be wider economic factors which could prove a
lines around physical distancing, hygiene and people movement. boost to mining. After the GFC, the world’s major economies used
Government was satisfied enough to exempt mining FIFO workers infrastructure spending as a way of fuelling economic activity. It
from the closure of state borders, although even those exemptions sent metals prices skyrocketing. Indeed, the period 2009-2012
will likely change as the situation worsens. was probably the best miners of all sizes experienced as economic
It is understandable why governments are trusting the sector. stimulus coalesced with cheap debt to create a flood of construc-
The remote nature of our mines means there is no other indus- tion projects around the world.
try, apart perhaps from the Defence Forces, which can track the It is widely acknowledged that first China, then the rest of the
movement of employees like the FIFO mining industry. world will spend big on infrastructure to reverse the economic
A mining company can trace a worker from the Uber ride they trends created by the pandemic.
get to the airport, to who they sat next to on the flight up to site, The results for commodity supply and demand may be even
to who they share accommodation with and who else was in the more extreme this time around.
mess with them. When prices spiked following the GFC, it was at the end of
When the inevitable first site-based cases are identified, mining an eight-year commodity super cycle which had encouraged in-
companies have the ability to contract trace and isolate individuals creased exploration activity across the globe.
quickly and thoroughly. This time around, exploration is in the doldrums and discovery
The challenge is that the lockdown will only get tighter in the rates are at decades-long lows.
weeks ahead and the industry will come under more pressure to There is also evidence from China that the recovery can be
ensure it is performing above expectations in regards its public swift. Last month Pilbara Minerals Ltd signed a new lithium offtake
health obligations. agreement with a Chinese group, the most positive sign yet for
It will be about collaboration from here on and it appears we have Australian mining that its largest customer is preparing to ramp up
made a good start in this regard. Both AMMA head of policy Tom industrial activity.
Reid and CMEWA chief executive Paul Everingham described to We will need these positive signs for sustenance in the long
me a level of cooperation between peers previously not witnessed. months ahead and Paydirt will continue to seek them out wherev-
“It is a real test of our members ability to be collaborative,” Ever- er they are. As well as our usual print editions, we will be expanding
ingham told me. “People are sharing best practice on health and our digital offering, including new video interviews to keep readers
safety and protecting the workforce and communities we work in.” up-to-date during this phase of isolation.
Reid shared a similar experience. On the conference front, we are working hard to rearrange the
“The information sharing has been fantastic,” he said. “There calendar to fit all our events in. The Paydirt team will continue to
has been an openness across employers. They understand we work, albeit remotely, during the lockdown to ensure that when re-
are all in this together and the most effective way to combat it is to strictions are relaxed and the market returns, we are in a position to
be collaborative and frequently in communication.” provider miners, explorers, service companies and investors with
This approach will need to continue as restrictions become more forums to discuss the future.
severe. Mining is a vital employer of Australians, even more so Please check out the new video interviews we have been doing
given big employers such as retail, tourism and hospitality are in and if you want to start a conversation with the Paydirt editorial
no position to stay open. The country can’t afford to have another team, please do so through LinkedIn, Twitter, Facebook or Insta-
20,000 unemployed over the next few months. gram.
Mining must keep operating for the good of the country but can
only do so if it remains isolated from the pandemic.
[email protected] @DominicPiper
Page 4 aPRIL 2020 aUSTRaLIa’S PaYDIRT
neWs
Soderstrom’s secrets to success
fter 30 years dedicated to mining, There are varied reasons as to why com- ing] has a great opportunity to create and
Aserving some of the industry’s most panies are reluctant to engage external optimise strategic value of its assets such
well-known outfits, Sten Soderstrom consultants and seek external non-techni- as resources and reserves, processing
hasn’t come across one situation that has cal advice, however, Soderstrom is more knowledge, people, product value realisa-
been unsalvageable. concerned with those chief executives with tion, and seldom gets a second bite of the
It is a fair effort given that Soderstrom an open mind to ideas that will potentially cherry if it gets it wrong. Doing it right from
spent time on projects in Europe, Africa, add genuine project value. the beginning is therefore a key to success;
New Zealand and South East Asia, which First and foremost, establishing trust is I am motivated by seeing others succeed,”
would have presented challenges not nor- key for Soderstrom and he remained firm he said.
mally encountered in Australia. in the view that he wouldn’t enter a working – Mark Andrews
“Sten diligently protected Macraes’ inter- relationship without that being absolute.
ests at all times. I can unreservedly com- Creating a trust bank is done by starting For an expert strategic review of your cur-
mend him as a person of integrity and resil- with a level of empathy, understanding and rent or future projects contact
ient character who has extensive skills and knowledge of the situation with a client be- Sten on 1300 301 035 or visit
knowledge. Having maintained contact with fore the work to betterment begins, accord- www.MiningStrategicValuePartners.com.
him over the years and recently reading his ing to Soderstrom. au/Consult
book, I can highly recommend his services While Soderstrom has his relationship
to CEOs and senior executives in the min- building skills down to a fine art, he is cog-
ing industry,” former Macraes Mining Co nisant of the fact that “soft” skills aren’t mas-
chairman, now Lucapa Diamond Company tered by everyone. Sten Soderstrom
Ltd chairman, Miles Kennedy said of his for- Unlike the manufacturing, retail and ser-
mer colleague. vice industries which are driven by good
With the current global health crisis there people, customer relation skills and entail
is no better time to be promoting or consum- active listening, the mining sector functions
ing a book such as Soderstrom’s – Creating differently.
& Optimising Strategic Asset Value – which “These skill sets are less important in
addresses 10 roadblocks every senior ex- industries such as mining where a much
ecutive must overcome to realise the full greater emphasis is placed on technical
value of their existing assets. “hard” skills,” Soderstrom says on page 54.
Early in the book, Soderstrom points out “This means that mining-related indus-
that more than half of all mining projects tries are more prone to organisational dys-
never get built because the owners come functionality than some other industries.
to realise that a return on investment can’t This can lead to a number of difficulties.
be generated. A lack of open and frank communication
And, of the projects that do get built, in- throughout the organisation is at the top of
vestor hurdles aren’t met, meaning that just that list.”
25% of all projects make the cut. Soderstrom said having poor listeners
“Of those, half run over schedule, mean- and negative responders to advice can be
ing that just 12.5% of all projects actually detrimental to project outcomes and while Sten Soderstrom’s Australian
meet investor hurdle returns and get fin- improvements in such areas can go a long mining industry experience
ished on time,” Soderstrom claims on page way to company success, companies also
16. need to be mindful and provide for unfore- spans more than three decades
Investors have long lamented such a seen events. in roles covering operations,
high failure rate in the mining industry and “I deal in my book fairly extensively with project management, design,
despite the availability of expertise in the risk management, both at the corporate construction and development,
fields Soderstrom and others excel in, and project level. Risk management, of while also serving in positions
money continues to be torched in the sec- course, is about identifying external and in- of managing director, chief
tor and there are probably no better recent ternal possible events; how likely they are to executive, general manager,
examples than some of Western Australia’s occur; what the impact of the event would project manager and business
emerging gold producers. be with or without mitigation; and applying manager levels. Soderstrom has
“Some sectors of the industry will keep a probabilistic monetary outcome; assess- worked in companies, including
making the same mistakes over again as ing if existing mitigation measures are suf- Metso Group, Sedgman Worley
long as the market allows them to. Inves- ficient,” Soderstrom said.
tors need to be more discerning. What I am “There is a natural tendency amongst Parsons, United Minerals,
referring to here is mostly the mid-to-low CEOs of developing resource companies Sundance Resources and
cap end of the market and single project to be positive and optimistic about the pro- Sinosteel and has provided
companies,” Soderstrom told Paydirt. jects they are responsible for. This stems strategic advice and reviews of
“Some analysts argue that the hurdle for simply from the fact that they are motivated projects for Monadelphous and
listing on the ASX should be set higher and to provide shareholders and institutional in- Newcrest Mining Ltd
I agree with them. There are of course com- vestors with a ‘positive spin’ where the com-
panies that have and are likely to provide pany is heading.
shareholder returns that are very attractive.” “A mining company [emerging or produc-
Page 6 aPRIL 2020 aUSTRaLIa’S PaYDIRT
BUsH teLeGRAPH
RSA coal in restructure
espite increasing pressures on industry Eskom-related business. Anglo American too big if it acquired Anglo’s export mines.”
Dover climate change and carbon emis- chief executive Mark Cutifani indicated in
sions, coal remains crucial to the South Afri- February that the group could dispose of Patrice Motsepe’s African Rainbow Min-
can economy where a huge restructuring of its remaining thermal coal mines within five erals (ARM), a group which operates major
the sector is underway. years. collieries in South Africa in partnership with
More than 90% of SA’s electricity is He commented: “What we believe is that Glencore, is also out of the running.
generated by state-owned utility Eskom the South African Government still needs Glencore chief executive Ivan Glasen-
through burning coal, while the Richards thermal coal, but whatever we do needs to berg said in February that the group would
Bay Coal Terminal (RBCT) is one of the be sensitive and we need to make sure they allow its coal reserves to deplete to meet
largest export coal terminals in the world [the assets] are in the right hands.” planned reduction in greenhouse gas emis-
and a huge contributor to the country’s for- But the $64,000 question is: Who is going sions targeted by 2035.
eign exchange earnings. It is particularly to buy those mines? There would appear to ARM chief executive Mike Schmidt add-
of great value when the price of seaborne be a dearth of serious buyers, which makes ed: “Our collieries will be mined down over
traded thermal coal booms, which is not their remaining economic lives. If we were
happening right now. Mark Cutifani to look at Anglo’s collieries then we would
In a nutshell, the major groups which talk to our partner Glencore with whom we
have dominated the coal business for dec- have a collaboration in coal in SA. That dis-
ades – Anglo American plc, Glencore and cussion has not taken place. Given Glen-
South32 Ltd (which took over BHP Ltd’s SA core’s stated position it seems unlikely.”
coal business) – are getting out. That leaves heavyweight Exxaro Re-
All cite market and/or strategic restructur- sources Ltd, which operates the huge
ing and/or environmental concerns as rea- Grootegeluk colliery in the Waterberg sup-
sons for their actions. While those factors plying two of Eskom’s biggest power sta-
have played a role, the real motivation is tions and which, up until a couple of years
that the coal majors are no longer prepared ago, made no secret of its desire to greatly
to put up with the anti-mining industry ideol- expand its coal export business.
ogy of the ANC Government in general and Exxaro has since undergone a radical
being messed around on coal supply con- strategic shift in its business priorities since
tracts by Eskom in particular. new chief executive Mxolisi Mgojo took over
Given the other pressures currently ap- running the group.
plied on the coal industry, the He does not want those Anglo
majors have decided it is sim- American export mines either,
ply not worth it. That requirement is important albeit there is one exception,
They are being replaced “ given SA’s politically charged which is the Anglo American/
by a new generation of Exxaro Mafube colliery JV.
BEE-controlled coal com- situation. What Anglo American Mgojo’s new doctrine is to
panies which are buying up does not want is political comeback speed up the development and
the unwanted coal assets at utilisation of Exxaro’s own high-
knock-down prices with the against its other operations in the value coal assets so as to pull
clear winner being Seriti Re- forward expected revenues
sources run by former Billiton country should the new owner of its while there is still strong demand
executive Mike Teke. former coal mines screw up. for the coal. He does not want to
Teke started off by buying end up with “stranded assets” in
all Anglo American’s Eskom- the form of coal reserves that he
tied collieries bar New Largo in 2017. Seriti Cutifani’s task all the harder given he wants cannot mine and sell because there may be
eventually took New Largo in a separate to put the mines “into the right hands”. no future demand for them.
deal in 2018. That requirement is important given SA’s Exxaro is also getting rid of coal assets
Late last year, Seriti was also designated politically charged situation. What Anglo it deems not to be high-value and therefore
the successful bidder for South32’s South American does not want is political come- non-core. It has given up the prospecting
African Energy Coal (SAEC) division. back against its other operations in the rights to the huge Waterberg North and
That deal should be concluded by the country should the new owner of its former South projects and is about to sell its ECC
middle of the year, subject to a successful coal mines screw up. and Leeupan collieries.
outcome of negotiations between South32 Teke has ruled his group out of the equa- At the same time Exxaro is looking to ex-
and Eskom over the future of the loss-mak- tion. pand into renewable energy in a major way
ing coal supply contract between South32’s “This is not something we are considering having bought out its partner – Tata Power
Wolwekrans Middelburg Colliery (WMC) at this stage. It would be very difficult for us – in subsidiary Cennergi. Mgojo says Cen-
and Eskom’s Duvha power station. That’s because of competition issues,” Teke said. nergi is going to be Exxaro’s stepping-stone
worth a column on its own and I don’t have “Once the acquisition of the South32 into the group’s renewable energy strategy
the space to get into it here. SAEC assets is approved we will be the but he will not provide specifics at this stage.
Next up for sale appears to be the ex- second largest coal exporter from South
port coal mines, which Anglo American re- Africa. Anglo is already the largest coal ex- Brendan Ryan is a Johannesburg-based
tained at the time it decided to sell out of its porter from the country. Seriti would become mining writer
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 7
neWs
Jenn Morris with former Fortescue deputy chair
Sharon Warburton
On the front foot
s the country enters a second month much unchartered territory
Aof social distancing restrictions, many because we don’t know how
Australian businesses are making the ad- long this is going to last for.”
justment to new ways of operating. Morris, who is also cur-
Some may revel in the change and, un- rently a non-executive
derstandably, it may take time for others to director of Fortescue Met-
adapt to reality. als Group Ltd and Sport
“Whilst we are in a crisis, we actually want Australia, said the safety
our workforces to do well, not just delivering and wellbeing of staff was
good work, but ensuring that the blurriness paramount in such times
of lines of work and home, which is here for and workforces needed to
the foreseeable future, so how do we make keep nurturing camarade-
that work for us,” Cannings Purple national rie to help each other cope
director strategy Jenn Morris told Paydirt. with the reality of isolation in
“We keep saying it is not business as usual, stressful times.
but we need to establish that this is business “Internally at Cannings,
as usual and the smart businesses will never we have this incredible
waste a crisis. They will be setting up new workforce and their ability
ways to go forward, so when COVID-19 pass- to engage in anything from
es a lot of opportunities will come from that.” working on WhatsApp and
Morris, a dual Olympic gold medallist setting up virtual drinks on
with the Hockeyroos, has form preparing for a Friday afternoon to using
pressure situations and while no-one could Microsoft Teams to connect
truly be ready for the chaos COVID-19 is all helps,” she said.
causing, she believes the systems at Can- “The level of info that is
nings Purple have made the crash landing coming through and being
a little gentler. supportive of each other in our home offices
“Cannings Purple’s workforce has been through sharing of pictures of kids doing their Useful numbers during
servicing clients and getting work completed schoolwork or colouring in next to mum and a time of crisis
in a virtual way for years now. We are fortu- dad is what it is now about. We’ve been em-
nate we have been set up with the right tools powered and empowered our staff to be on Lifeline Australia
and access to systems, so that is ok,” Morris our Facebook and share and engage with 13 11 14
said. what each other does. Beyond Blue
“Where it gets difficult for companies is “There has been a bit of a blend between 1300 22 4636
where you just have to operate a business. work and life and that is just how it goes at the Kids Helpline
For instance, mining companies can’t work moment. I have a strategic planning work- 1800 55 1800
from home and while a certain amount of shop with a client coming up and we have a
staff work in remote operations centres, virtual whiteboard set up on our screens and Mensline Australia
many don’t and you have to work out a way as much as anything this is a mindset thing. 1300 78 99 78
to keep the lights on and that makes it dif- There is an openness in this new world and Relationships Australia
ficult. Then you have to try and think about the client I am working with [tomorrow] is 1300 364 277
planning ahead; this [coronavirus situation] seeing it as a great opportunity.” Emergency
is not a week or two-week or month-long 000
thing, this is going beyond that. It is very – Mark Andrews
Power for the people public-to-private networks to unlock resources, break bottlenecks
and fix problems so Australian families, businesses and communities
Former Fortescue Metals Group Ltd chief executive Nev Power will are supported through the challenging months ahead.”
chair the National COVID-19 Coordination Commission (NCCC) The NCCC executive board of commissioners – Greg Combet
announced by Prime Minister Scott Morrison on March 25. AM, Jane Halton AO, Paul Little AO, Catherine Tanna and David
The NCCC will coordinate advice to the Australian Government on Thodey AO (deputy chair) – will be joined by the secretaries of the
actions to anticipate and mitigate the economic and social effects of Department of the Prime Minister and Cabinet, Philip Gaetjens and
the global coronavirus pandemic. Home Affairs, Mike Pezzullo.
Power was chosen as chairman for his high-level business expertise The executive board of commissioners will advise the Prime Minister
and strong commitment to social issues. on all non-health aspects of the pandemic response and will work in
“The commission will ensure the Government receives the most tandem with chief medical officer Dr Brendan Murphy, who continues
comprehensive advice to meet the challenges ahead to cushion to lead the Commonwealth’s health response.
the economic impact of the coronavirus and help build a bridge to The NCCC is about mobilising a whole-of-society and whole-
recovery,” as stated in a media release. of-economy to help Australia come through the unprecedented
“This is about working cooperatively across private-to-private and coronavirus health crisis.
Page 8 aPRIL 2020 aUSTRaLIa’S PaYDIRT
oPInIon
Handing WA kids a tech start
he West Australian resources sector is cation levels. Universities currently offer a Hill Holdings Ltd, Woodside Ltd and Yara
Tat the forefront of a digital technology range of courses to students which cover Pilbara. The first agreed priority area for
change as the industry looks increasingly digital technologies including, but not lim- collaboration was employment, education
to automation for safety and efficiency. In ited to, mechatronics, data science, com- and training, with a key focus on develop-
doing so, the skills required of the work- puter engineering and computer science. ing pathways from education and training
force both now and into the future are also While digital technology has a presence into employment.
evolving. As an industry, we need the edu- in the tertiary sector, the digital technolo- CME explored the opportunity for the
cation and training sector to equip today’s gies learning area in schools is relatively Pilbara Collaboration signatories to collab-
children with the digital technology skills new, having only been introduced into the orate and fund the development and im-
required for the future. Australian curriculum as a new subject in plementation of a digital technologies pro-
Resources sector companies are mak- 2015 and becoming mandatory from 2017. gramme with “hands-on” resources sector
ing great advances in the use of digital The subject is expected to be taught in the applications and context, drawing on real
technologies, be it automation of dump classroom for one hour per week. world examples from across the sector.
trucks, drill rigs, autonomous inspection For primary and secondary students, The “Resources Challenges: Automa-
vehicles, sensors to monitor various infra- digital technology is the skill in which they tion” pilot programme was launched in No-
structure workings or environmental fac- use computational thinking and informa- vember 2019 and aims to increase student
tors and the associated data analysis. The tion systems to define, design and imple- awareness and interest in digital technol-
sector requires digital technology skills to ment solutions. It includes areas such as ogy career paths and support teachers to
design and manage complex operational robotics, coding, automation and data sci- successfully deliver real world digital tech-
systems in this higher technology environ- ence. nology content.
ment. The introduction of digital technologies As of the first school term this year,
In 2018, Rio Tinto Ltd launched a part- in school is perhaps the most disruptive every public (24) and catholic (2) primary
nership with the WA Government and curriculum change Australia has seen in school in the Pilbara will have their year 5
South Metropolitan TAFE to pioneer a new many years, especially in primary educa- and 6 students participating in the pilot, as
vocational education and training (VET) tion. Many teachers are unfamiliar with the well as Karratha Senior High School and
curriculum required for the advances in knowledge and skills the digital technolo- the Port Hedland School of the Air.
technology and innovation in the mining gies curriculum entails and face challeng- The pilot “Challenges” will teach Years
sector targeting Cert II and Cert III qualifi- es in understanding and interpreting the 5 and 6 the digital technologies curriculum
curriculum, understand- embedded in a resources sector context.
ing the application of Coding and automation skills will be learnt
digital technologies in the as students navigate “robots” representing
real world and developing autonomous haul trucks, drills, underwater
teaching resources. As vehicles and drones across maps repre-
a result, teachers will re- senting scenarios which are faced by the
quire substantial support WA resources sector. Industry representa-
and professional devel- tives will assist teaching the concepts and
opment in order to teach it share their career journeys through short
confidently and correctly. videos set in the challenges which are
This in turn places stu- available online.
dents at risk of not devel- Upon successful delivery of the pilot,
oping digital technology consideration will be given to expanding
capabilities required for the year 5 and 6 programme across the
future work opportunities state and offering the programme from
and failing to be inspired pre-primary to Year 10.
to choose digital technol- This initiative will add value to the WA
ogy career pathways. Government’s commitment to upskilling
Furthermore, this places teachers through professional develop-
the resources sector at ment, as well as address several recom-
risk of not being able to mendations across a number of pillars in
source an appropriately the Government’s STEM skills strategy.
skilled future workforce. The Digital Technologies Challenge pilot
In late 2017, the Pilbara is a unique example of a government and
Collaboration was devel- industry partnership to raise the STEM as-
oped as part of a coordi- pirations of students who we hope to see
nated initiative by the WA as valued employees in the WA resources
Government, CME and sector in the years to come.
its members BHP Ltd, – Paul Everingham, chief executive,
Chevron Australia, CITIC The Chamber of Minerals and Energy
Pacific Mining Pty Ltd, of Western Australia
Fortescue Metals Group
Paul Everingham Ltd, Rio Tinto Ore, Roy
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 9
neWs IGO has formally committed to a
$15 million earn-in over Encounter’s
Yeneena copper-cobalt project in
WA’s Paterson province
Encounter finds good
company in the Paterson
IGO chief executive Peter Bradford
ncounter Resources Ltd managing with Greatland Gold plc. and Encounter managing director
Edirector Will Robinson believes Aus- St George Mining Ltd is the Pater- Will Robinson
tralia is on the cusp of a decade-long “re- son’s newest tenant, having last month
naissance” in greenfields exploration. launched an airborne magnetic survey
Speaking to Paydirt after IGO Ltd for- over more than 35km for prospective
malised a $15 million agreement to earn strike. tance, albeit acknowledging that not all
up to 70% of Encounter’s Yeneena cop- Encounter had been active at the “big brother-little brother” agreements
per-cobalt project in Western Australia’s Yeenena project for more than a decade stay on course indefinitely.
Paterson province, Robinson described when IGO entered the frame in Novem- “Year 3 of any JV or earn-in can often
2019 as a “massive turning point” for the ber 2018 as a prospective JV partner. be difficult if you haven’t had a lot of suc-
exploration sector, suggesting some of Following a trial period of more than a cess in the first two, so I think it’s impor-
the breakthroughs made in the past year year, the Peter Bradford-led company tant to structure a deal to enable the big
would encourage further discoveries formalised the lucrative partnership early guys to have a look under the bonnet, to
over the next decade. last month. do some of the work, to test some their
“There is just so much going on in the Under the agreement, IGO will sole- concepts, and if they’re comfortable with
technology space and in the data ana- fund $15 million of copper-cobalt ex- what they’re seeing, then they’ve got the
lytics space; the ability to rapidly assess ploration activities over the next seven resources to deploy really quickly,” Rob-
ground for potential is just improving all years to earn up to 70% of the Yeneena inson said.
the time,” he said. project, which covers more than 1,400sq “From all the dealings we’ve had, IGO
“I don’t think there’s any one silver bul- km of tenure. is committed to this opportunity that ex-
let, but it seems that push is starting to “Last year was a really important year ists in the Paterson. We don’t think Nifty
bear fruit. There’s been a series of re- at Yeneena because we applied a suite is the only giant copper deposit of the
ally good discoveries in the last year or of new geophysical and geochemical district. We think there’s a suite of new
so and they’ve continued into this year. technologies and methods for the first deposits to be found along those key
We might be at the start of 5 to 10-year time and that enabled us to really step structures up in this part of the world.”
renaissance of greenfields exploration. back and look at the overall project and Elsewhere in the Paterson, Encoun-
“It feels to me that we might look back the overall basin as a whole,” Robinson ter has started diamond drilling at its
and say this was the start of what was an said. 100%-owned Lamil copper-gold project,
exploration boom, even though we’re not “Coming out of that has been a suite which is co-funded for up to $150,000
seeing it in the marketplace at this point of new targets that we’re going to test under the WA Government Exploration
in time.” this year. If anything, I think it’s probably Incentive Scheme. Lamil was previously
Robinson will be hoping one of those given us a view that the potential there – explored by Newmont Corp in the 1980s.
potential new discoveries is made on scale-wise – is maybe even bigger than Encounter also expects to be kept busy
Encounter’s large ground position in the what we thought before.” across its growing portfolio of gold explo-
Paterson, one of Australia’s hottest ex- Robinson said IGO was attracted to ration projects in the Tanami and West
ploration provinces. the Paterson because of its analogues Arunta (both under JV with Newcrest)
Rio Tinto Ltd sparked the exploration to the Zambian copper belt, where some and in WA’s Eastern Goldfields.
frenzy with its Winu copper-gold discov- of the world’s biggest and highest-grade “In the Northern Territory we’ve also
ery in late 2018. The mining giant is one deposits of the red metal have been done a lot of copper project generation
of the Paterson’s most active players found. that’s resulted in over 6,000sq km being
and recently entered the next phase of Exploration work at Yeneena will put under application for exploration li-
its earn-in to the nearby Citadel copper- resume this month, beginning with fur- cence,” Robinson said.
gold project with Antipa Minerals Ltd. ther geophysical and geochemical pro- “Obviously Australia has been a great
Telfer operator Newcrest Mining Ltd grammes to firm up targets for drilling place for gold in the last 150 years, but I
also continues to report encouraging in the second half of the year. think we’re really only just getting going
drill results from the Haverion gold- Robinson was confident his com- on the copper potential.”
copper project under its JV agreement pany’s JV with IGO would go the dis- – Michael Washbourne
Page 10 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Things hot up in Chile
ot Chili Ltd has navigated choppy wa- ue the trend. uador and spent 10 years with Newmont
Hters before and with an ugly tidal wave At $US2.15/lb copper, there is poten- Corp in the US.
approaching, the company has managed tial for Hot Chili to receive $US400,000- “Garwin says that Cortadera being a
to organise a vest to float with. 500,000 in annual payments through its ‘soft in the middle’ porphyry has character-
Late in March, a non-binding offer from 80% interest in the JV company. istics associated with the best porphyries,
Chilean government agency Empresa Na- Meanwhile, the royalty component of the which exhibit these high-grade centres
cional de Mineria (ENAMI) for the lease offer provides potential payment upside in that can be developed through under-
mining and processing of ore from Produc- light of a higher copper price or higher cop- ground extraction,” Easterday said.
tora was accepted by Hot Chili. per ore grades. Cortadera is growing quickly and some
Despite a decade featuring numerous Productora was the flagship project Hot analysts agree, with Argonaut suggest-
headwinds, Productora is well down the Chili floated on in 2010 and in the coming ing Cortadera could host 370mt of higher
development path, with a 2016 PFS indi- weeks a formalised deal to see it onstream grade mineralised ore at grades of 0.5%
cating $US720 million would be required could be made. copper and 0.2 g/t gold, similar copper but
to build the 11-year project. However, while the immediate future of potentially higher gold grades than Pro-
Total resources at Productora includes Productora plays out, the focus for Hot ductora.
a high-grade component of 236.6mt @ Chili remains the 2019 acquisition – Cor- Hot Chili was drilling at Cortadera last
0.48% copper and 0.1 g/t gold and a lower- tadera. month but has now stopped work in the
grade resource of 218mt @ 0.16% and 0.0 An update on the payment plan for Cor- face of the coronavirus pandemic. Instead,
4g/t. tadera was expected soon, while the mar- the company is turning to economics.
Funding a project of Productora’s size ket continues to digest what exactly Hot “Cortadera is a once in a lifetime discov-
has always proved difficult, therefore Chili has stumbled upon. ery. Now is a good time to get under way
ENAMI’s interest for lease mining and pro- “People know the Hot Chili of old and with resource work and an internal scop-
cessing 120,000 tpa through its Vallenar the Productora story that never really got ing study to see what we are working with
plant, 15km north of Productora, repre- there. Not only are we facing a standalone and work on value-adds for the project this
sents a lifeline. project, but it is twice as big as Produc- year,” Easterday said.
The non-binding offer by ENAMI cov- tora within six months of drilling,” Hot Chili “There are large corporates showing
ers mining of the central lease at Produc- managing director Christian Easterday interest and there are a lot of catalysts to
tora only (a sixteenth of the entire pro- told Paydirt. deliver a project at a low cost.”
ject) for two years, with the JV company “Hot Chili hasn’t seen a coastal porphyry
80%-owned by Hot Chili receiving $US2/t like this and it is quiet hard to find some- – Mark Andrews
ore processed and a 10% royalty for the thing like this. Steve Garwin, our lead tech-
sale value of extracted minerals. nical consultant, is getting us up the curve See Drillbits sponsored by Capital Drilling
Higher-grade ore processed at Produc- with Cortadera.” on pages 54-55 for the latest results from
tora in the past has produced in excess of Garwin was instrumental in the discov- Cortadera
1% copper and ENAMI expects to contin- ery of Solgold plc’s Cascabel project in Ec-
Christian Easterday
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 11
neWs
The start of the future in batteries
ustralia’s track record of making marks a significant step forward in Aus- tour of the facility.
Aproducts from its minerals and re- tralia’s aspirations of becoming a major “Out of this pilot facility will come all
sources isn’t as coveted as the actual en- processing, manufacturing and trading this information, which I believe will be a
dowment of commodities that enrich the hub in the battery minerals space. really big enabler for Australia and West-
lands down under. The flagship research project for the ern Australia.”
For that history to change in the bat- FBICRC is the cathode precursor pro- The customer base of BHP’s Nickel West
tery minerals sector, a whole-of-country duction pilot plant, with the stated ob- division has changed thanks to the rapid
approach is being taken to ensure Aus- jectives of the pilot being to establish rise of the battery minerals narrative in the
tralia’s participation right through the technical and processing capabilities to last three years, according to Frampton.
value chain is prominent. manufacture nickel-rich hydroxide pre- “As of today, 75% of the nickel we pro-
“Unfortunately, we do have a history cursors. duce in our refinery is sold to the battery
here in Australia of digging things out Essentially, the purpose is to push materials industries. It has been an enor-
of the ground, putting them on a ship, Australia further into the lithium-ion bat- mous turnaround. I think if we can extend
sending them a long way away and then teries value chain. our thinking and vision of what it could
spending more money to bring them “Out of this pilot plant will come re- mean for the whole supply chain then
back,” Australian Minister for Industry, ally important information; information going further downstream to precursors;
Science and Technology Hon Karen An- like how many people will be needed to there are enormous opportunities for
drews said at the official launch of the run these facilities, what are the tech- Australia,” Frampton said.
Future Battery Industries CRC (FBICRC) nical conditions to operate the facility Australia already produces nine of
last month. and what are some of the capital and the 10 mineral elements needed to pro-
Minister Andrews’ attendance and operating costs,” Gary Frampton, head duce most lithium-ion battery anodes
launch of the FBICRC at CSIRO’s head- of business development and technical and cathodes, while graphite is in abun-
quarters at Curtin University in Perth projects, BHP Nickel West, said during a dance, although not currently mined.
FBICRC chief executive Stedman Ellis
Page 12 aPRIL 2020 aUSTRaLIa’S PaYDIRT
The University of Western Australia and University The Cooperative Research Centre on Transformations
of Queensland have secured almost $30 million in Mining Economies will be recognised as CRC-TiME,
from the Federal Government to support regional with 75 partners including BHP Ltd, Rio Tinto Ltd,
Australian communities facing local mine closures. Deswik, Decipher, the Western Australia, Queensland
and Northern Territory governments, as well as
The funding forms part of a total 10-year investment of researchers from eight universities and the CSIRO.
$135.4 million to support the successful transition of
mining communities to create sustainable community The work done by CRC-TiME is seen as a critical
and development opportunities. part of the mining sector’s responsibilities, given
Australia’s mining boom had contributed greatly to
With several large mines around Australia reaching wealth and living standards in the past decade, but
their end and closing within the next 10 years, as resources are depleted there are an increasing
the project will undertake social, environmental, number of projects approaching closure.
economic and technical research, work directly with
industry and communities and
enable Australia to transition to
a prosperous and sustainable
post-mining future.
Therefore, Australia’s high-quality bat-
tery minerals resource and production
bases gives it a competitive advantage
in an industry potentially worth trillions of
dollars.
Ensuring the opportunity is not lost will
be outfits like the FBICRC Core and its
key participants such as IGO Ltd, BASF,
Minerals Research Institute of WA, Mur-
doch University, University of Western
Australia, Blackstone Minerals Ltd and
Cobalt Blue Holdings Ltd, which share
the same “level of common ambition”.
“There are some unique characteris-
tics in an effort to move downstream in
the battery value chain,” FBICRC chief
executive Stedman Ellis told Paydirt.
“Once you move beyond nickel sul- 99.95% nickel sulphate
phate or lithium hydroxide, the next point
is really producing the chemical mixture dedicated to capital-intensive projects opportunity for us.”
that battery cell makers are looking for. in Australia indicated the drive to deliver There are many elements that need
The precursor chemicals are a mixture of globally significant products in-country to come together for Australia to realise
different chemistries that involve nickel, and the level of comfort such companies where its maximum opportunity is in the
lithium, cobalt and graphite. So, to actu- have with the regulatory frameworks. battery value chain, with the CRC tasked
ally make that step down the value chain Furthermore, the deep and well-estab- with connecting the right dots.
to precursor chemical production you ac- lished trade relationships regionally and Ellis said there were “scene-setting
tually need collaboration to occur across further abroad was also a plus for Aus- projects” carried out by the CRC plus
the industry. tralia. other outfits were being tapped into to
“As a consequence, the existing BHP “We’re aligned with what the end cus- help contextualise everyone’s role.
Nickel sulphate pilot plant is going to be tomers for batteries – car makers – are For instance, a report produced by
repurposed as a cathode precursor pilot asking for with confirmation of responsi- the Perth-US-Asia Study Centre on the
plant for our CRC, which has attracted ble production processes. I think Austral- geopolitics of value chains of the battery
support from a wide number of partici- ia has begun to leverage that competitive industry highlighted the opportunities for
pants from the CRC, ranging from the advantage to grow industries in Australia Australia in terms of partnering with other
very large companies to medium size that can take advantage of the shift that players in the region and elsewhere.
ones to small ones which are involved in is occurring domestically and internation- “That sets the context for international
a diverse range of commodities,” he said. ally,” Ellis said. alliances and partnerships where Aus-
BHP’s nickel sulphate plant and Tian- “Australia may not go head-to-head in tralia can play effectively with other part-
qi/Albermale’s investment in a lithium the mass production of batteries for the ners and where we are stronger in other
hydroxide facility in Western Australia motor vehicle industry, but there are a parts of the value chain,” Ellis said.
helps cast attention on the emerging bat- number of further steps down the value “We have CSIRO doing a piece of work
tery chemicals processing opportunity chain that Australia can take that really called the State of Play, through which
on Australia’s doorstep. build on those competitive advantages, we can then map the capability and as-
Ellis said having blue-chip companies which could create significant economic sets of Australia’s battery industry across
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 13
neWs FBICRC directors Mark Woffenden, Graeme Hunt, Sarah
Ryan, Minister for Industry, Science and Technology, the
Hon Karen Andrews and FBICRC chair Tim Shanahan
Gary Frampton, Head of Business Development
& Technical Projects, BHP Nickel West taking Australian
Minister for Industry, Science and Technology Hon
Karen Andrews through operations at the pilot plant facility
the nation. I think while that piece of work contracting several projects at the mo- with the initial wave of research projects,”
might be finished in early April and will ment, including the cathode precursor Ellis said.
really enforce the value that we’re creat- pilot plant, the official launch by Minister “In addition to the cathode precursor
ing at the raw material, mining and pro- Andrews meant Commonwealth funding pilot plant, there are several other pro-
cessing end all helping point to the scale would be utilised and allowed the FBI- jects we are working on, including the
of the opportunity that exists if we are CRC to move forward to raise funds from National Battery Testing Facility. As we
able to move further downstream.” its participants. complete the contracting for those other
The findings will almost certainly pro- “I guess we are now at the point of re- significant projects, we will be individu-
vide both a baseline for measuring the ally kicking off those research projects. ally announcing them over the next 1-2
impact of the CRC and the projects un- We are a six-year CRC and now that we months, coronavirus permitting.”
dertaken. have unlocked the funding, we will be en- – Mark Andrews
Ellis said that while the FBICRC was deavouring to move as quickly as we can
FBICRC’s cathode precursor pilot plant is a four-BICRC’s cathode precursor pilot plant is a four-
F
y year project estimated to cost $13.2 million ($6.8 ear project estimated to cost $13.2 million ($6.8
mi
million cash/$6.4 million in-kind). An initial funding llion cash/$6.4 million in-kind). An initial funding
o
of $100,000 for a study by QUT/Hatch into the f $100,000 for a study by QUT/Hatch into the
economic feasibility and supply chains for precursor conomic feasibility and supply chains for precursor
e
m
manufacture in WA at industrial scale has been anufacture in WA at industrial scale has been
a approved by the FBICRC board, with a further pproved by the FBICRC board, with a further
$300,000 committed to feasibility stage for a pilot 300,000 committed to feasibility stage for a pilot
$
operation as well as verification of technical and peration as well as verification of technical and
o
p
processing capabilityrocessing capability
Page 14 aPRIL 2020 aUSTRaLIa’S PaYDIRT
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AUSTRALIA’S PAYDIRT APRIL 2020 PAGE 15
neWs
No time like the present
he coronavirus pandemic started to be- A pre-tax NPV of $305 million and 98% ing to grow, but don’t discount the space in
Tcome very real in Australia about the IRR were among other highlights of a DFS between the Long operation, which we pur-
time Paydirt walked into Mincor Resources that included life-of-mine cash costs of chased from IGO [Ltd], and our Durkin de-
NL’s West Perth office in mid-March. $3.36/lb (Cassini averaging $2.71/lb) and posit. There is a 1.1km space underground
The glamour boys of the mining sector – life-of-mine AISC of $4.47/lb (Cassini $3.81/ that we are going to link up with an incline.
Australia’s mid to large cap gold companies lb), using a $10.20/lb nickel price and ex- That is part of our development works to get
– had just started getting smashed by the change rate of 70c. started; not one single drill hole has been
market and can now only wonder when the Mincor’s underground nickel operations put into that area and 1mt nickel has come
point of return will come. DFS has been delivered on time and de- out of that area. They have been long-term
Mincor, like all mining houses, was suffer- spite certainty being a minute-by-minute targets for a very long time, but they have
ing the same fate but as managing director proposition, the funding process with do- been owned by separate companies and
David Southam pointed out, the company’s mestic and international institutions remains now it is owned by one company,” Southam
12-month performance was still in positive in play, with binding credit-approved term said.
territory. sheets expected in the June 2020 quarter. Current drilling at Cassini aims to convert
Furthermore, the company had and still An ore tolling and offtake purchase some inferred material into indicated and
has $52 million cash, is debt free and is agreement in place with BHP Nickel West potentially grow the resource.
owner of an asset like no other in the mar- arranged in 2019, means if a final invest- Cassini is a greenfields discovery and
ket right now. ment decision is made in the September in January an intersection of 17.6m @ 5%
quarter, Mincor nickel outside the resource boundary and
could be back in pro- 115m down-plunge from the previous inter-
duction sometime in cept is believed to be one of the best-ever
the back half of 2021. strikes in Kambalda’s nickel history.
The company Southam said such a result indicated the
has started an early potential for longevity at Cassini.
works programme, “If you go by the history of Kambalda de-
which includes a posits they tend to at least double, triple and
box-cut at Cassini. some of them grow by 20 times – I am not
“There are very saying that Cassini will grow by 20 times
few ways to play – but the example being Otter Juan which
nickel in Australia, started at a 17,000t resource and ended up
nickel sulphides at 317,000t,” he said.
particularly. We are “We’re also drilling what we call Cassini
the only company North less than 500m away from the Cassi-
that’s developing a ni main deposit. We are chasing high MgO
new operation in the flows because we have had intersections in
Kalgoorlie/Kambal- there of economic grade. You can imagine
da region. We have if we can uncover another resource 500m
BHP [Ltd] right on away we can access that straight away
our border, they are from underground because we have sunk
very close to our ten- the infrastructure. I think what the future
ements and we are holds for Cassini is resource extensions,
David Southam close to their infra- especially when we get underground and
structure. BHP has are able to drill.”
That asset – Cassini (1.05mt @ 3.3% expressed an interest in growing, so we are Keeping a close eye on Mincor has been
nickel for 34,300t) – is poised to be the looking at opportunities to partner and grow Andrew Forrest’s Squadron Resources Pty
centerpiece of Mincor’s nickel operations in our business,” Southam told Paydirt. Ltd, which has built its stake to about 13%
Western Australia’s Kambalda district. “I went through the GFC and now after in the company. Squadron, along with IGO
A DFS on Mincor’s restart to nickel op- 5-6 years of very solid growth on the mar- (4.5%), have keen interests in Mincor, how-
erations was released in late March and ket it has taken a global event to pull back a ever, Southam is not focusing on what may
identified the need for $68 million in pre- lot of those gains; good projects with good eventuate consolidation-wise.
production capex for mine development backers will survive these cycles. There “We can’t get distracted on things like
and related infrastructure to reboot an ini- is nothing like Cassini in the market at the that because if you get distracted you are
tial five-year operation producing at a peak moment, nickel sulphide is hard to find, we focusing on the wrong matter. There has
rate of 16,000 tpa nickel-in-concentrate in have a strong balance sheet with over $50 been some activity in the past and we are
FY2023 and FY2024. million in the bank and no debt; we are in a comfortable where we are sitting having
Life-of-mine capex has been estimated very privileged position.” the only greenfields discovery in 20 years in
at $179 million (peak cash requirement of The nickel-envy being created by Mincor Kambalda and some of the best high-grade
$97 million, including working capital) for promises to be sustainable, with the com- intersections that you’d ever come across
an operation currently boasting a global re- pany’s reserves totaling a combined 2.3mt as a geologist,” he said.
source of 2.5mt @ 2.9% nickel for 71,000t @ 2.8% nickel for 65,400t.
nickel-in-ore and 5,000t copper ore. “We are very confident that Cassini is go- – Mark Andrews
Page 16 aPRIL 2020 aUSTRaLIa’S PaYDIRT
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coVeR
Calm in a crisis:
Mining’s care in the community
Page 18 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Strict interstate travel restrictions are being enforced
which could disrupt FIFO workforces Australia-wide
hile Australia’s frontline healthcare industry to the emerging threat of the biggest effort is. That is followed closely
Wprofessionals fight heroically to coronavirus. The pandemic is believed to by the communities we operate in. We
contain the spread of COVID-19, the na- have started in China, Australia’s largest need to ensure we have as little impact
tion’s resources sector has been thrust to commodities export market. as possible on the wider community be-
the forefront of the post-pandemic eco- “In early February, shortly after news cause if we do have an impact on those
nomic recovery effort. of the virus first broke, the West Austral- communities, we may lose the right to
“Thank God for Australian mining, its ian Premier Mark McGowan called a operate.
well-established iron ore and gold min- roundtable with industry to discuss the “Staying in production will be vital to
ers are carrying Australia on their back implications and possible economic im- the State because the gas produced in
through the economic side of this crisis,” pact for WA,” Chamber of Minerals & En- the North West Shelf produces the elec-
PCF Capital managing director Liam ergy WA (CMEWA) chief executive Paul tricity that our hospitals need and the $7
Twigger told Paydirt. Everingham told Paydirt. “Those initial billion of royalties keeps our hospitals
New Federal Resources Minister Keith discussions were about assessing the funded and open.
Pitt convened a virtual industry roundta- disruptions the spread of the virus in Chi- “The Premier and Prime Minister are
ble resources companies and key indus- na would cause to our exports. Actually, cognisant of this and we have been in
try representative groups on March 24 to this has proven not to be the case. China daily contact with them.”
prepare a unified response from the sec- has continued to buy our products; we Before a recovery can be seriously
tor to deal with the COVID-19 outbreak. haven’t lost a single shipment or cargo to countenanced, Australia must overcome
The discussion covered the health and coronavirus.” the clear and present danger of the pub-
safety and ongoing employment of in- Following the spread of COVID-19 lic health threat.
dustry workers as well as how to ensure to Australia, those discussions shifted However, this means the individual
the industry was prepared for the post- to health and safety and risk mitigation companies must ensure they employ
pandemic recovery. around the mining workforce and related stringent public health policies and moni-
Pitt said the resources sector would be communities. toring protocols when on site.
vital to dragging Australia out of the post- “That has been where the focus is; our AMMA head of policy Tom Reid said
coronavirus economic slump. workforce and the communities we oper- mining companies were alert to the un-
“The health of all Australians will al- ate in,” Everingham said. folding health and social changes.
ways be the Government’s priority in The mining and oil and gas sectors “We are producing regular guidance to
dealing with the coronavirus, but we have been deemed essential industries employers which we are updating every
must also plan to ensure a continued during the countrywide lockdown, mean- week because advice from the govern-
strong future for this critically important ing operators and workers will be exempt ment is changing,” Reid told Paydirt.
industry,” Minister Pitt said. from the limits to gatherings and inter- As the industry’s leading employer
“The resources sector has already state travel restrictions. advocacy group, AMMA has been moni-
shown great resilience to be in such “We are working with resources com- toring state and federal government an-
a position of strength as we head into panies to ensure they can get workers nouncements regarding the responsibili-
this current health crisis. It will be key to in and out of regional and remote areas ties of employers and employees about
Australia’s economic recovery once the in accordance with health and safety re- paid and unpaid leave and what exemp-
global COVID-19 pandemic has passed. quirements,” Pitt said. tions the industry can expect from being
“It’s critical that resources operations Everingham said it was up to the indus- classified as “essential”.
continue and new projects commence as try to ensure it kept its end of the bargain. With international and interstate travel
planned wherever possible.” “Keeping the workforce healthy and bans, Reid said the future of mining’s
Ironically, the resources sector was safe is the No.1 issue because we can’t FIFO workforce was still in doubt.
initially thought to be the most vulnerable operate without people; that’s where the “We are working through a whole
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 19
coVeR
range of considerations and there are
so many moving parts,” he said. “We are
looking at the travel bans and how they
apply to FIFO workers. For instance, the
WA industry has a lot of employees who
live or visit South East Asia between
swings and much of Tasmania’s mining
workforce is FIFO from Victoria and New
South Wales.”
Above all, Reid said, miners were fo-
cused on their ability to act to protect
employees in the face of a coronavirus
outbreak among their workforce.
“The priority at the moment and con-
cern from members is what to do in order
that they have the lowest risk possible,”
he said. “It is a question of if you do have
a suspected case in the workforce how
do you manage and deal and what is re-
quired from the company and from gov-
ernment. It is a big concern, especially
as there are so many moving parts with Paul Everingham
regards this industry.”
Despite the concerns, Reid believes “All the energy is going into establishing
all the proper protocols and procedures
the mining industry is well equipped to and implementing, enforcing and carrying Economic
tackle the crisis.
“We do have an advantage in that often them out,” Everingham said. “We have
made certain commitments to the State
we know where people are coming from Government, such as increasing swings side-effects
when they arrive on remote sites and we
are very good at monitoring that,” he said. to two weeks to limit unnecessary move-
Everingham agreed. ment within the State.” While the public health
“The resources sector is populated with BHP Ltd has reacted to the crisis with emergency has been
very clever people who are very good at a pledge to employ 1,400 additional staff
mapping pathways to continue us to en- during a time when other industries are paramount, the various social
able production in this distressed envi- forced to lay many workers off. restrictions and lockdowns are
ronment,” he said. “Miners are very good “It was very encouraging to see all
planners and organisers and very good companies participating in the roundtable having a coruscating effect on
at creating big system programmes and committed to a working on a unified in- the global and local economy.
implementing them.” dustry response and some have already
Reid also praised the willingness of set aside funding to take on new workers,”
companies throughout the mining and oil Pitt said following the roundtable. he carnage on markets was obvious,
and gas sectors to share information and While Australian operations have been Twith no sector spared. The ASX200
strategy around coronavirus manage- exempted from restrictions, exploration lost more than 33% of its value inside a
ment. projects and international mines have month after hitting 7160 points on Febru-
“The information sharing has been been severely affected. ary 20.
fantastic. There has been an openness The Northern Territory’s efforts to pre- Given that China was the epicentre of
across employers. They understand we vent the virus spreading through vulner- the outbreak, the resultant lockdown de-
are all in this together and the most effec- able indigenous communities has seen cisively put the brakes on industrial out-
tive way to combat it is to be collaborative exploration in the jurisdiction curtailed put. This led to big commodity price falls
and frequently in communication.” with Newmont Corp the largest explorer with iron ore and the base metals the big-
Companies have been understandably to halt work. gest losers. Gold, so often a safe haven
cautious about releasing exact details of Internationally, companies have react- in such times, was also hammered.
the measures they are taking. However, ed to more stringent government restric- PCF Capital managing director Liam
several industry insiders have revealed tions. In Canada, Kirkland Lake Gold Inc Twigger said the effect was likely com-
to Paydirt practices which include body said it would reduce activity at its newly pounded by global equity markets’ recent
temperature checks before entering acquired Detour Lake gold mine. While performance.
worksites, restrictions, bans on non- the mill would continue to process re- “I think the global equity markets were
essential business travel and visitors to duced feed from the open pit and stock- completely over valued and a major pull
site, cancelling training, conference and piles, most additional work has been sus- back was to be expected anyway,” Twig-
other mass gatherings and more rigorous pended. ger told Paydirt. “The markets had al-
hygiene practices. On social distancing, Major mining countries including South ready built in every bit of upside with the
many companies are changing, stagger- Africa, Peru and Brazil have placed re- earnings multiples and interest rates. It
ing and splitting rosters, work-from-home strictions on the industry with miners fall- only needed one event to deflate every-
arrangements and limits to toolbox talks ing into line. thing, but no one could have contemplat-
and shift handovers. ed it being something like this.”
Page 20 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Governments around smashed and there is little
the world have launched competition,” Twigger said.
stimulus packages to coun- “We’ve got some M&A
ter the economic effects of mandates running now
the pandemic. It was a suc- with cashed up companies
cessful exercise post-GFC looking for deals. Lines of
but Twigger fears there credit are available and
is a lack of unity this time there is willingness. It is a
around. two-tiered structure cur-
“Following the GFC there rently with the producers
was a global effort – led by as the ‘haves’ and those
the US – to get the world’s in exploration or develop-
economy back on its feet,” ment, particularly those
he said. “During the coro- close to development, as
navirus crisis, it seems to the ‘have nots’.”
be every man for himself, Junior explorers are left
led by Donald Trump as witnessed in the “The gold sector is the only sector with with just a few options; hope for a white
reports – denied by the parties involved a liquid market,” he said. “You don’t need knight or go into cash preservation mode.
– that he had offered a German company a counterparty to sell gold, there is no The Association of Mining & Explora-
$US1 billion to buy exclusivity to the vac- restriction on the amount and volume of tion Companies (AMEC) has called on
cine it was working on. There is no co- sales. It is unique like that.” state governments to lessen the impact
ordinated response to this and that will Even in such dark times there are in- by placing a moratorium on tenements
suffocate the rebound.” vestors hunting bargains. The ASX has rents.
The West is looking anxiously at China seen several days of plus-4% rises in “Already some companies have in-
for both public health and economic in- March as the market struggles to makes formed me that without the ability to raise
dicators of what is to come. China is ex- sense of a simultaneous lockdown in funds they will struggle to carry employ-
pected to post a fall of more than 10% in Europe and the US and a loosening of ees and meet overheads through this
GDP figures. However, with restrictions restrictions in China. period,” AMEC chief executive Warren
being lifted, it appears the world’s sec- Wilson said the dramatic swings had Pearce said.
ond largest economy could be recover- investors alert for bargains. Pearce said the pandemic meant eq-
ing. Twigger has doubts whether the “Private equity is going nuts; there are uity markets would be shut to explorers
West can rebound quite so quickly. opportunities everywhere for those PE for at least six months.
“China’s shutdown was brutal and it groups with capacity,” he said. “There “As COVID19 weighs heavily on the
has the capacity to do that but we don’t will be interesting changes to the market. market, we are growing increasingly
have the capability to do that globally so The juniors who have cash will be eager concerned for the future of smaller min-
it becomes a co-existence model, which for M&A with cash and balance sheet eral exploration companies that need to
will suffocate the global economy,” he mergers.” raise funds to survive,” he said. “These
said. PCF Capital is already witnessing this companies are small businesses without
Argonaut Securities analyst James trend. Twigger said companies were al- a source of revenue, that live on capital
Wilson has followed gold equity markets ready engaging his group on corporate raised on the ASX and from private eq-
closely for years. He believes it is one of deals. uity to explore for opportunities.
the few parts of the market capable of “Now is the time to be buying assets. “This moratorium would allow compa-
outperforming in the current climate. Private equity and the banks have been nies to repurpose their expenditure to
sustain internal operations, retain their
employees, and help ride out the COVID
crisis.”
Even gold companies, so far the best
performers among resources stocks, ex-
pect the downturn to be lengthy.
“There will be a point where the gold
price is not a safe haven if we see coro-
navirus and the resultant locking up of
money,” Horizon Gold Ltd managing di-
rector Jon Price said. “People will just sit
on their hands and wait and watch and
that’s not a good thing for the small jun-
ior sector who continually need funds.
Hopefully people realise Australia needs
investment in the smaller end of town.”
One certainty is that the pandemic
and associated economic lockdown will
eventually pass but which companies
will be ready to take advantage? Twigger
and Wilson were both adamant miners,
Liam Twigger
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 21
coVeR
WA Mines and Petroleum Minister Bill Johnston has enabled an exemption from exploration
expenditure to be considered if tenement holders are unable to meet the tenement’s expenditure
requirements as a direct result of COVID-19 or because of restrictions imposed by the State and
Federal governments. This decision will be valid until March 31, 2021, unless rescinded earlier
and gold diggers in particular, would be
among the biggest beneficiaries.
“Recovery is always quicker than an-
ticipated,” Twigger said, striking a hopeful
tone. “In Shanghai and Hong Kong, peo-
ple are back on the streets and industrial Warren Pearce
activity is reported to be returning.
“I think the West’s economy will bounce
back quickly but countries such as Bra-
zil, India and Indonesia could be in for an
awful time. The anxiety is the unknown,
but markets are always looking six
months ahead so when there are signs of
change.”
For Twigger, the mix of economic stim-
ulus and monetary policy will produce fa-
vourable conditions for the mining sector.
“The gold producers will be in a very
strong position, particularly where gov-
ernments are devaluing their currency
and printing money,” he said. “And, in
such circumstances any hard asset will
do well, so expect all commodities to per-
form. This is particularly the case for iron
ore as governments prime their economy
by building infrastructure.”
Wilson sees the established compa-
nies as the primary winners as investors
remain risk-off.
“Single asset companies have risk as
more of an issue because any disruption
can cause severe problems. That is why
there is safety in the multi-asset produc-
ers.
“For explorers, there is still a lot of ap-
peal, but hurdle rates will be bigger so
less greenfields and more advanced stuff.
It is up to explorers to incentivise people
to take the risk.
All of that still seems a long way off.
In the meantime, miners – like everyone
else in Australia and the global commu-
nity – must offer everything they can to
pull the world out of the crisis.
“It’s important at times like this to focus
on keeping people safe and calm,” Ever-
ingham said. “It is not about ‘can we look
good?’ Everyone is anxious about this
and we have to put things in perspective.
There are plenty of people doing it much
tougher than the resources sector. As a
member of the community, you say ‘what
is it we can do to ease the strain?’ The
industry can do that by being as safe as
possible so not to act as a drain on com-
munities or the health system so that the
vulnerable can get the best healthcare
possible.”
– Dominic Piper
Page 22 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Wherever we are...
trend with us
#paydirtmedia #magazines #conferences
Red 5 Ltd managing director Mark Williams with Paydirt Media deputy editor
Mark Andrews at the King of the Hills underground mine, near Leonora.
www.paydirt.com.au
AUstRALIAn GoLD
Richard Hayes
Solid gold bridge between
mine and markets
inding trust and surety in something during a crisis cannot be taken for granted but
Fin these highly unstable times, The Perth Mint is the vehicle people are choosing to
protect their wealth.
rior to the global outbreak of COV- ebrating a register of 1,000 clients in “We are no longer just a place you can
PID-19, gold was trading at unseen 2004. The latest milestone achieved ring up, buy something and we’ll store
levels and there appeared no cap on how by the Mint was in March when, for the it for you; we have an online presence,
high prices would rise. The pandemic has first time, the value of its gold, silver and smart phone apps and a crypto gold of-
seen gold and other precious metals pric- platinum holdings stored for clients was fering as well. Our aim is to make gold
es fall in line with other commodities but $5 billion, totalling 50t of fine gold and as accessible as possible to as many as
many investors are still finding comfort in 1,020t of fine silver. possible in as many locations as possi-
The Perth Mint (the Mint) holding their pre- It is hard for Hayes to tell if these fig- ble,” Hayes said.
cious metal stocks. ures will grow slowly or exponentially The Mint’s marketing campaign and
“There are certainly other offerings given the present global crisis. sustained success of the gold sector pri-
around the place, not only here in Austral- “Our ounce holdings have probably or to the coronavirus spread has added
ia, but overseas as well,” the Mint’s chief grown 20% in the last eight months; that great value to Western Australia’s cof-
executive Richard Hayes told Paydirt. is tripling the value and that is just vol- fers.
“We probably have about 45,000 cus- ume,” Hayes said. Rio Tinto Ltd ($30.7 billion) and BHP
tomers from 120-plus countries who store Over its 120-year history, the Mint has Ltd ($29.6 billion) are widely recognised
metal with us. That says something about evolved from a traditional depository and for their contributions to the State but for
the global reach that we have managed to certificate offerings house to an outfit at least the second year running, the Mint
build up over the last 10-15 years.” with industry leading exchange traded has been WA’s third largest exporter by
Hayes joined the Mint as it was cel- products listed on the ASX and NYSE. value at $16.3 billion.
Page 24 aPRIL 2020 aUSTRaLIa’S PaYDIRT
In addition to its traditional offerings, The Perth Mint has a digital storage
platform, GoldPass trading app and a gold-backed token issued by InfiniGold,
which is listed on KuCoin cryptocurrency exchange
The Perth Mint’s value of gold, silver and
platinum holdings stored on behalf of
clients from around the world topped $5
billion for the first time this year
The Mint is owned by the WA Govern-
ment, which is why Hayes believes it is
one of the safest and most reliable de-
positories in the world.
The Mint refines 90% of Australia’s
gold mined, which equates to about 10%
of global production.
In 2019, the 325t of gold production
in Australia was the highest recorded
amount in a calendar year, according to
Surbiton Associates Pty Ltd.
Australian gold miners really took ad-
vantage of the gold price environment
Solid gold bridge between soaring share prices before landing with
last year to build big cash balances and
a thud in the past month.
John Hathaway, senior portfolio man-
ager at Sprott Asset Management USA
mine and markets Inc, suggested current market conditions
were similar to circumstances that oc-
curred during the GFC.
“Gold and precious metals mining
shares are casualties of panic selling
across all financial markets. The sce-
nario is similar to what happened in 2008
during the GFC. When the general sell-
ing exhausted itself in late 2008, gold
and mining shares delivered superior ab- ties and other derivative products proved pandemic and geopolitical uncertainty in
solute and relative performance for the to be unsound investments resulting in various parts of the world were reasons
following three years. We believe that great personal and sovereign debt. for gold price optimism.
this pattern is likely to repeat following Countries around the world resorted to “The coronavirus has changed the
this sell-off,” Hathaway said in a note on printing money to stimulate economies face of the world. Any hopes of budget
March 18. and create an inflationary environment surpluses across the OECD, any real
“While COVID-19 outbreak is grabbing to counter debt but history suggests the hope of responsible economic stimulus
the headlines, the far bigger story is the strategy backfired. creating sustainable growth and an in-
deflation of financial assets that it has “Most of the personal and sovereign crease in inflation so somehow we can
triggered and the resulting loss of invest- debt issues still remain,” Hayes said. inflate our way out of these problems or
ment confidence. Markets that had been “Over the last 10 years inflation has pay our way out of them has largely now
priced for perfection must now reckon edged its way down to where it is now disappeared,” Hayes said.
with a likely recession, soaring fiscal a relatively small number, interest rates “Economists are talking about 2020
deficits and the very real possibility of a have come way down. Interest rates fell as a year of negative or zero growth and
sustained bear market. during the GFC as central banks and that may well trail into 2021, depending
“Mining company valuations appear governments tried to stimulate econo- on how the coronavirus plays out. That is
extraordinarily cheap.... buying low is mies, but they have fallen further to be at overall positive for the gold industry and
never easy but now is the time to do it.” all-time lows. What that tells you is that there has to be a bias towards an upside
Hayes agrees that the coronavirus there is no immediate relief in sight on in the gold price.”
pandemic has caused similar market re- interest rates recovering any time soon.” – Mark Andrews
actions as the GFC. Hayes said unabated money printing,
At that time, mortgage-backed securi- the unpredictability of the coronavirus
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 25
AUstRALIAn GoLD
McPhillamys gets closer
round at McPhillamys could be bro- money on the promise of replicating Al-
Gken as early as next year, with its de- kane’s success, while the likes of Sky
velopment a potential boon for both Re- Metals Ltd at Cullarin (93m @ 4.2 g/t
gis Resources Ltd and New South Wales. gold from 56m), near Goulburn, has also
As unemployment rises across Austral- sparked interest in the State.
ia as a result of mass industry shutdowns Beyer is of course aware of what’s oc-
stemming from the coronavirus spread, curring in the State, however, he is only
new projects in the mining sector will focused on one thing right now.
help boost job prospects and McPhilla- “There seems to be a fair interest in
mys is almost at the starting gate. this part of the world, but our primary fo-
Various NSW government depart- cus is getting McPhillamys finalised, ap-
ments and key stakeholders are currently proved and under way. It is easy to be
mulling over the development application distracted from the main game, but we
(DA) submitted by Regis for McPhilla- don’t want to be chasing bright shiny ob-
mys. jects,” Beyer said.
At the time of print, there were no red Regis has been one of Australia’s most
flags in government responses to Regis’ Jim Beyer successful mid-tier gold producers for a
DA, with the company taking a measured sustained period of time and with cash
approach to its feedback. nies spending money, employing people and bullion totalling $169 million and no
Regis will provide responses in late and building things. We know there is debt, it is positioned for M&A.
June, at which point the Department of good bureaucratic and political support Beyer was in North America earlier this
Planning will assess, make recommen- for McPhillamys.” year scoping out the region’s gold envi-
dations and then refer to the Independ- There are few development projects as ronment and reported that there were
ent Planning Commission (IPC). advanced as McPhillamys in NSW, which several companies struggling to execute
The IPC will then have 12 weeks to run is experiencing an exploration boom. what were once thought to be good ide-
its process, which will include a public Since Alkane Resources Ltd’s Boda as.
hearing, to make a call on support or oth- discovery, a rash of juniors have raised However, Beyer remains wary of strik-
erwise for McPhillamys. ing any deals given the overall per-
In the meantime, Regis remains formance of gold M&A in the past
tightly connected to the commu- 10 years.
nity through consultations, as it pre- “We are not falling over ourselves
pares to feed DA outcomes straight to do anything, but you have to be
into a DFS. looking around for opportunities as
DFS studies will update the PFS part of your growth,” Beyer said.
which assumes 60mt milled @ 1.05 “In a rising gold price environment
g/t gold over LOM production of there are opportunities for consoli-
1.73 moz at an average 192,000oz dation, with the view of undertaking
for 10 years. M&A to improve your portfolio, but
McPhillamys is currently host you have just got to be careful.
to reserves/resources of 2 moz “You don’t have to go back too
and 2.3 moz respectively, while far to see that a lot of consolidation
32km south-west, Discovery Ridge and M&A that was undertaken was
(10.4mt @ 1.2 g/t for 391,000oz) is closely followed by some signifi-
shaping as a potential open pit sat- cant impairments and write-downs
ellite project. where people overpaid for acquisi-
Regis’ McPhillamys is well-known tions. There is a bit more caution
at political and bureaucratic level in from investors who have long mem-
NSW and Jim Beyer is focussed on ories. You have to be careful of run-
getting the project approved and ning off and doing things that look
demonstrating the company’s good good in the short-term because if
corporate citizenship. the gold price turns then some of
“We want to get people comforta- those investments look ordinary.”
ble that we are good operators and Instead of landing a big fish in the
then options may start to open up, market, Regis is backing its experi-
but right now our focus is on getting ence and knowledge in the Duketon
the basic project approved,” the Re- greenstone belt where its three op-
gis managing director told Paydirt. erations – Garden Well, Rosemont
“Even more so now, it is going and Moolart Well – are forecast to
to be hard to inject money into the produce 340,000-370,000oz gold
economy and how do you do that? Currently mill-constrained at Duketon, Regis is mining higher @ $1,125-1,195/oz in FY2020.
You get projects approved, compa- grade underground ounces to boost annual gold production The three staples have been inte-
Page 26 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Steve Parsons
Regis has 92% of the Duketon greenstone belt to itself
Bellevue funded
gral to Regis’ success as a $2 billion (as we already have, so we are really excited
of February) company. about that. We really need to find some
Building such a foundation won’t be material to put into our resources, but to 2021
wasted by Regis, which now owns al- that doesn’t happen overnight. We have
most all of the Duketon greenstone belt. 5-6 years of mine life and reserves left Bellevue Gold Ltd has moved to
“About six months ago we purchased that are still to play out at Duketon to get consolidated its development
2,000sq km ground covering most of on with it,” Beyer said. aspirations by aiming to raise
the Duketon belt that we didn’t have be- “We’ve got near-mine development $26.5 million.
fore. We used to have 1,000sq km now where we are using underground poten-
we hold 3,000sq km, which represents tial at Duketon to increase our produc- The company has received firm
about 92% of the belt,” Beyer said. tion. Because we are mill-constrained at commitments for a proposed share
“The Duketon greenstone belt hasn’t Duketon at the moment, mining higher placement at 30c – 7.7% discount to the
been thoroughly explored from a gold grade underground ounces is part of our last trading day price of 32c/share – as it
perspective. We have the advantage of strategy to increase annual production. prepares to release a maiden indicated
having mills and infrastructure across We are heading towards a good steady resource estimate this quarter from its
the belt and we have 10 years of geology 10% increase in gold production in the namesake project in Western Australia.
and exploration/geological knowledge next couple of years.”
that we can apply in that geological set- Beyer, the former Mt Gibson Iron Ltd An inferred resource at Bellevue of 6.1mt
ting.” managing director, has been at Regis @ 11.3 g/t gold for 2.2 moz has already
In addition to the new pastures Regis for 18 months now and in that time there excited the market and the company
wishes to exploit on a greenfields budget have been several changes to the board. aims to maintain the momentum it has
three times what it normally is, Beyer is Steve Scudamore, Lynda Burnett and generated in the past 2-3 years.
cognisant of the need to add resources Russel Barwick have all joined the likes
to the inventory. of Fiona Morgan as non-executive direc- Infill drilling that will now take place
“The ground acquired is similar to what tors. is designed to add to the indicated
Meanwhile, Stuart Gula (chief operat- resource and overall inventory through
ing officer) and Jon Latto (chief financial step-out and exploration campaigns at
officer) have started in their roles since the two highly promising conductors at
Beyer’s arrival. the Deacon lode, among other priority
“We have experienced exploration targets.
people, experienced resource account-
ing, commercial and financing people. “To complete a raising such as this
Russel Barwick has huge amount of in any environment is an excellent
operating experience in Australia and achievement but to do it in the current
around the world and has a good M&A market circumstances is exceptional.
background, while Fiona Morgan has Under the current budget, we are funded
an excellent engineering background through to mid calendar year 2021,”
ground,” Beyer said.
Bellevue managing director Steve
– Mark Andrews Parsons said.
Lynda Burnett is among a number of new
additions to the Regis board
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 27
AUstRALIAn GoLD
Horizon bright for Boorara
orizon Minerals Ltd is pushing ahead payment. some assets they had. It was just a prag-
Hwith plans to pour first gold from its “First ore treatment remains on sched- matic, nil-cash asset swap and there
Boorara project in the September quarter ule for the September quarter, so we aim could be more of that.”
after raising $6 million last month to begin to be mining [this] quarter, building up Price said his company had moved
Stage 1 mine development. our ore stockpile and obviously feeding on from the disappointment of failing to
In what proved to be a timely raising that into the Lakewood mill which is very acquire the Coolgardie gold project from
amid increasingly volatile market condi- close to us, to our west,” Price said. Focus Minerals Ltd last year, although he
tions, Horizon managed to pull together “The mining side of it lasts about six would not rule out Horizon making anoth-
a funding package comprised of a $2 mil- months and the milling side of it about er play for those coveted assets.
lion placement and a $4 million working eight months. Then we’re looking for- “It was a disappointing, long and
capital facility from German investment ward to having another solid $6 million drawn-out process, but we did our best
company Sparta AG. in the bank on top of our existing cash and we’ve moved on now,” he said. “We
Funds will be used to start key mining reserves [$2.2 million]. always had a Plan B and Plan C. We liked
activities at Boorara – only 10km east of “More importantly for us, it de-risks the the assets and still do and what might
Kalgoorlie-Boulder – this quarter, as well larger scale project and we’ll continue to come in the future we don’t know, but for
as underpin ongoing exploration work at work on the feasibility this year. We hope now we’ve got a lot on our plates to get
promising regional prospects such as to have that study completed by Decem- some value back for shareholders.”
Rose Hill. ber.” Price said he hoped market support
Horizon managing director Jon Price Horizon is expected to award key min- would continue for the junior sector dur-
said the raising was necessary to protect ing and haulage contracts this month, ing these challenging times created by
shareholders, given the company’s pro- with statutory approvals to follow later in the coronavirus pandemic.
duction strategy involves toll treatment the quarter. “You’ve got a really high gold price for
via the nearby Lakewood mill. While the start of mining at Boorara is the actual producers to be selling their
“Because we’re toll milling through a likely to attract the most attention and ex- gold into, but you’ve still got a really dif-
third-party mill, we needed to make sure citement outside of the company, Price ficult junior resources sector that contin-
we’ve got a sufficient cash buffer as we and his team are champing at the bit to ues to need the equity market,” he said.
work through the commencement of min- continue exploration across Horizon’s “We would hope that investors in Aus-
ing through to first gold production and wider portfolio in WA’s Eastern Gold- tralia and around the world start to have
revenue,” Price told Paydirt. fields. a look down the curve a little bit and look
“As always, we’ve made sure to mini- A recent review of historic data helped for value in the emerging mid-tiers and
mise dilution to shareholders. We raised confirm a resource of 1.2mt @ 2.49 g/t the juniors that are moving into produc-
the minimum we need to raise in equity gold for 95,000oz to a depth of 300m at tion.
in a tough market climate. The team did the Rose Hill prospect, acquired late last
a fantastic job and we’re very grateful for year as part of a strategic swap of ground – Michael Washbourne
some very supportive shareholders and with Northern Star Resources Ltd.
our new strategic financier. “We’ve known all those guys for 20-
“The last time we raised money in the odd years,” Price said. “They wanted
market was back in 2016 and that was to some assets that we had, we wanted Stage 1 mining of Horizon’s Boorara gold
get the Teal gold mine capi- project will begin this quarter
talised and under way. That
was a success and we’re
looking to do the same here
with Boorara.”
Stage 1 mining at Boorara
will see 159,000t extracted
from an open-pit mine design
at a fully diluted grade of 1.86
g/t gold over six months.
Assuming a 91.5% metal-
lurgical recovery from pro-
cessing via the Lakewood
mill – 7km west of Boorara
– some 8,700oz will be re-
covered for an estimated C1
cost of $1,570/oz and AISC
of $1,680/oz.
Stage 1 is forecast to gen-
erate $5.4 million in free cash
flow, based on a $2,400/oz
gold price, after all costs in-
cluding debt and interest re-
Page 28 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Chalice goes diamond at Karri
With working capital and liquid investments totalling about $30 ith working capital and liquid investments totalling about $30 ith working capital and liquid investments totalling about $30
W W
million, Chalice is well placed to conduct an 11-hole (4,000m) illion, Chalice is well placed to conduct an 11-hole (4,000m) illion, Chalice is well placed to conduct an 11-hole (4,000m)
m m
drilling programme at Karri. A second diamond rig was due to rilling programme at Karri. A second diamond rig was due to rilling programme at Karri. A second diamond rig was due to
d d
arr
arr
arrive at Karri in mid-March ive at Karri in mid-March ive at Karri in mid-March
ictoria’s nascent gold scene has been ject to date. tion in recent times, however, Kendall
Vspurred by the performance of Fos- “The next milestone for us will be get- firmly believes greenfields pastures are
terville but while the Kirkland Lake Gold ting a good handle on the geology so we the places to be.
Ltd mine has been the catalyst for inter- can target much more efficiently in the He said a lack of investment in explo-
est, the expectation it has needs some next round of drilling. The diamond drill- ration was partly to blame for the lack of
tempering in the Canadian market. ing we’re doing is to establish the struc- Tier 1 discoveries being made but noted
“It is because of Fosterville that the tural setting for us to work out where we that the situation was starting to change.
Victorian sector is on the scene, it is are in the system and the next [drilling] “I think we will start seeing things hap-
where companies want to be seen and will be about trying to nail something pen now. You will make incremental
the Canadians certainly pay a lot of at- down, assuming we find something,” gains [in brownfields exploration], but it is
tention to Victoria. But the Canadians Kendall said. rare for a junior to get a company-maker
don’t yet quite understand the signifi- Having been involved in the discovery in brownfields. The chances of making a
cance of the geochem thing that we are of Tropicana – the AngloGold Ashanti big discovery definitely still lie in green-
doing,” Chalice Gold Mines Ltd general Ltd/IGO Ltd JV mine on the cusp of pro- fields,” Kendall said.
manager, corporate development Bruce ducing its 3 millionth ounce of gold – Ken- Cracking the code in Victoria’s green-
Kendall told Paydirt. dall has already lived every “geologist’s fields was thought to be “considered an
“When I sit down and talk to people, dream”, however, he is keen to repeat the almost impossible task” given the depth
they understand it, but generally talk- trick with Chalice in Victoria. of cover to be negated.
ing to people in the public I don’t think “People are willing to go into places However, Kendall said that Chalice
they quite get the concept. That is one that are unknown and that was the big had demonstrated geochem sampling,
of the downsides as they expect you to step for us to go out to Tropicana and drill drilling into bedrock and conventional
keep getting the results that Kirkland get. it. Everyone said that we were wasting exploration techniques were effective at
But, without Kirkland there I don’t think our time, but to find something big you Pyramid Hill.
they’d be paying any attention at all [to have to go somewhere new and that is “There is supergene gold for example,
Victoria].” pretty well what we see at Pyramid Hill; so you can see the halos and we are
Having Kirkland as a benchmark has that is a new frontier even though it is using that to hone in on targets very ef-
lifted expectations of companies explor- only 20km or so from Bendigo,” Kendall fectively. That is outlining the anomalies
ing in the State. Chalice itself is trying to said. we are seeing and reported to date like
get a handle on the geology at its Pyra- “Being undercover it is essentially a at Karri, which is a 4.5km-long geochem
mid Hill gold project in Bendigo. new frontier. We are seeing the same anomaly that is looking very interesting,”
The Karri gold trend at Pyramid Hill is thing in the Paterson Province at Winu Kendall said.
the focus of exploration for Chalice, with and Havieron where companies are re- Fellow ASX explorer Catalyst Metals
a third drill rig to arrive on site at the time ally starting to commit to things that were Ltd is dealing with similar terrain to Chal-
of print. too difficult in the past. I think we will ice, with the two outfits combining in a 2D
Two diamond holes have been com- start seeing some new discoveries come seismic programme recently.
pleted on the 4km-long Karri trend so far through, Tropicana was one of those and “We don’t have results from that yet,
with a new high-grade gold zone recently Gruyere was the same thing. People but it will be very interesting to see how
revealed by Chalice. weren’t that interested in the Yamarna that goes and I guess generally we will
Re-split and fire assaying of a stand- terrain and it took those guys to go out be monitoring what other companies
out 4m @ 3.97 g/t gold hit from aircore and have a punt, they got rewarded just have done in exploration also to see if we
drilling at Karri returned 1m @ 15.85 g/t as we were rewarded at Tropicana.” can learn anything from them as well,”
within 2m @ 11.54 g/t within 30m @ 1.12 Brownfields exploration stories on the Kendall said.
g/t, which is the best intercept at the pro- ASX have captured the market’s atten-
– Mark Andrews
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 29
AUstRALIAn GoLD
Moho prepares to mine
ith the market increasingly volatile metallurgical test work and drilling also has some great potential for the compa-
Wfor juniors, Moho Resources Ltd is planned for this quarter. ny,” Winter said.
preparing to transition towards self-fund- “I’m reasonably confident that we’ll “There’s still a lot of work to do in that
ed exploration by the end of the year. come out with a pretty positive scoping area in terms of further mapping and
Over the next nine months, Moho in- study and JORC resource at the conclu- ground work, drilling and so on, but we
tends to put its East Sampson Dam gold sion of all this work,” Moho managing think it’s a very nice project that could
project – 50km north of Kalgoorlie – into director Shane Sadleir said. generate some cash flow for us down
production. Cash flow from processing “We’re just so fortunate that we’re in the track.”
via a third-party mill will then be pushed this position where we’re close to all this Moho also received another timely
back into exploration of the company’s fantastic infrastructure. Even Blind Fred- funding boost in late February with the
other assets in Western Australia and die can see this is where we should be Queensland Government, via its Collab-
Queensland. focusing.” orative Exploration Incentive, awarding a
“If we can get East Sampson Dam into Moho has shortlisted a handful of $112,000 grant for future exploration at
production before the end of the year, nearby plants for potential third-party Empress Springs, about 25km south of
we can start to bring in cash flow for the processing, but will wait until after the Croydon.
company and then push those funds scoping study is finalised before advanc- Work at Empress Springs – a former
back into our exploration efforts, which ing negotiations to the next stage. IGO Ltd project – is currently on hold due
is obviously going to be of real benefit Last month the company also com- to heavy rainfall in the area and Moho’s
to Burracoppin and Empress Springs,” pleted its first aircore programme over Perth-based team being unable to fly to
Moho commercial director Ralph Winter Burracoppin project, about 22km west north-west Queensland due to coronavi-
told Paydirt. of Ramelius Resources Ltd’s Edna May rus-induced domestic travel restrictions.
“We still very much believe in all of our operation in WA’s Wheatbelt region. Re- However, Moho hopes to be back on
projects, but I suppose we’ve shifted our sults from the 37-hole campaign are ex- the ground as soon as possible to con-
focus slightly to be a company that can pected at the end of this month. tinue exploring what Sadleir refers to as
fund itself and not have to rely on the While Burracoppin is not as advanced an “obvious Tier 1 exploration project”.
market too much. as East Sampson Dam, Moho is con- “It’s got smoke everywhere, but you’ve
“Given that we already had a granted fident the project can one day follow a got 30-50m of cover over the top,” Sad-
mining lease [at East Sampson Dam] similar path to production. leir said.
and we already had some fantastic gold “Burracoppin is a bit of an interesting “We’ve done a lot of drilling and we’ve
results on that tenement, it was pretty one for us, as it’s always sort of been in picked up some extra ground. We were
much a no-brainer for us with the gold the background a little bit, but it definitely hoping to get on to this new ground on
price where it is. And it’s grown the north-west side, but we’ll
from when we started this pro- probably have to put that back
cess a little while back now.” until later this year. It’s one of
East Sampson Dam – part the big things that’s come out
of Moho’s broader Silver Swan of the work we’ve been doing
North gold-nickel project – was with Jon Hronksy, who is a big
identified as the first cab off the supporter of this project.”
production rank given it sits on While gold is the prime focus
a granted mining lease. for Moho, the company has re-
Up to 11 gold processing tained a watching brief on op-
plants are within a 100km ra- portunities in the nickel space
dius of the project. despite exploration at Silver
Moho received a $1.28 mil- Swan North so far failing to re-
lion R&D government rebate turn the desired results.
in late February from explo- Western Areas Ltd founder
ration across its portfolio in and nickel bull Terry Streeter
FY2019. The company plans is non-executive chairman of
to use some of those funds to Moho.
build on the recent drilling suc- “We’re still hoping to find
cess at East Sampson Dam, some nickel mineralisation in
including hits of 15m @ 4.71 that general area...but at this
g/t gold from 88m (including stage, even though it’s in a
3m @ 15.18 g/t from 100m), great position close to a pro-
5m @ 4.71 g/t gold from 19m duction plant, the nickel price
(including 3m @ 3.37 g/t from is not going anywhere and our
19m and 1m @ 24.3 g/t from main focus is on gold,” Sadleir
25m) and 2m @ 17.7 g/t gold said.
from 72m.
Internal mining studies are – Michael Washbourne
now under way, with further
Moho is aiming to become a self-funded explorer
Page 30 aPRIL 2020 aUSTRaLIa’S PaYDIRT
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QUeensLAnD
Queensland
powers up the curve
ueensland Minister for State Development and Natural Resources and Mines Anthony
Q Lynham says the LNP outfit under Campbell Newman left the state lagging on a number
of fronts, including implementing a renewable energy strategy. However, as the sunshine state
prepares for polling day in October, Lynham boastfully told Paydirt that Queensland was now
trumping most of Australia in the adoption of renewable energy means.
used to be so proud that every month patch clean energy into the grid in any prices. We are not going to hook off sup-
I households in Queensland installed 100 conditions. The lithium-ion battery will be ply because the more supply we have
batteries; well that is now 300 batteries capable of powering 57,000 homes. the lower the electricity prices are go-
every month and rising. I was equally as While Vena plans to deliver 1,000MW ing to be. The more power we can ex-
proud that every 15 minutes a new so- of solar energy in Queensland alone, the port interstate means that we can earn
lar roof was installed on a Queensland 100MW lithium-ion battery feeds into more income from other states which
home; that is now down to every nine and out of the National Energy Market have power deficiencies and that income
minutes,” Lynham said. and stores up to 150MW hours of energy. goes directly into lowering Queensland
“We have hit over 20% renewable en- Queensland already has three large- families’ power bills.”
ergy usage in Queensland and we are scale batteries operating, while $5 bil- Construction of Adani’s Carmichael
well on our way to 50%. Unlike other lion has been invested and 5,000 jobs coal mine in the North Galilee Basin
states, we came in after the Newman created during construction of projects started in June 2019 and in the first
Government which was anti-renewable that now sees the State equipped with stage of the open cut thermal operation,
energy. We had virtually nothing built 5,500MW of renewable generation ca- 10 mtpa coal is expected.
and were well behind the other states. pacity. Lynham said the Government had
Now, we have more than caught up and, Meanwhile, Lynham said Queensland lived up to its promise of not providing
in fact, leading some of the other states had some of the youngest coal-fired gen- Adani with any assistance or subsidies
in renewable energy. That is because erators in the country and that the State in developing its mine and infrastructure.
we have a steady hand, we have a reli- was far from phasing out the coal sector. While the development of a multi-
able supply and also the lowest energy “Absolutely, coal has a future in the billion dollar coal project indicates how
prices.” State and our government is commit- rich Queensland is in that sector, Lyn-
The near-term renewable energy tar- ted to making sure that there is a steady ham feared what impact the coronavirus
get is 50% in Queensland by 2030. transition. You have to have that transi- would have.
Construction of one of Australia’s larg- tion and we are taking the Queensland “Global oil prices are falling; our gas
est batteries is expected to start in July population and workers on this journey price is linked to the oil price so that will
(and take one year to complete), near with us,” Lynham said. suffer. It also means that there is a gen-
Wandoan, south-west Queensland. “There is nothing [to phase out coal] eral slowdown in the Chinese economy,”
AGL Energy and Vena Energy Aus- planned before 2030, we’ve got the 10 Lynham said.
tralia have proposed to build the 100MW youngest coal-fired generators in the “Traditionally, when China has eco-
battery on the Western Downs, which country and bringing supply onto the nomic frustrations, such as when they
will have the capacity to store and dis- market brings downward pressure on had tariff wars with the US, China be-
Page 32 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Queensland “ We have hit over 20% renewable energy
usage in Queensland and we are well on
our way to 50%. Unlike other states, we came in
after the Newman Government which was anti-
renewable energy. We had virtually nothing built
and were well behind the other states. Now, we
have more than caught up and, in fact, leading
some of the other states in renewable energy.
Anthony Lynham
comes more insular and tends to mine Prior to the coronavirus health crisis,
more of its own product rather than im- there was a 27% uptick in exploration ac-
porting. I am expecting a ramping up tivity in Queensland.
of Chinese coal production, which will “We need to get explorers on the
again put pressure on our coal pricing.” ground and give them incentives to find
Therefore, Lynham urged the Aus- the minerals of the future. Now is the
tralian Government to do all it could to time to stimulate exploration, so resourc-
help prop up industry during challenging es jobs are secure. Put people on the
times. ground now and given them jobs through
“It should consider the resources sec- stimulus for exploration. When the coro-
tor and it should make sure that the re- navirus impact is over, we’ll have discov-
sources sector is included in any stimu- eries and then we will further increase ahead of us producing cobalt are in very
lus package,” Lynham said. the prosperity of the resources sector politically unstable areas. We are the
He added that one of the quickest ways and the nation,” Lynham said. most secure supplier of cobalt in the
for the Federal Government to stimulate “Our government has provided incen- world and I only see us growing, but we
the resources sector was to throw unre- tives and they are discovering the miner- need exploration to find those new sup-
served support behind the exploration als of the future. We are the world’s fifth plies of cobalt.”
sector. largest producer of cobalt. The places – Mark Andrews
Queensland is one of the world’s top producers of cobalt
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 33
QUeensLAnD
Century claws
back into top 10
he New Century Resources Ltd man- fleet as part of
Tagement team is determined not to let the ramp-up to 12
anything destroy their long-held vision of mtpa.
re-establishing the historic Century mine Walta believes
as a top 10 global zinc producer. his company now
Despite the zinc price continuing to fall has a good handle
amid the coronavirus pandemic, Century on how to run the
remains on track to hit its targeted run operation after a
rate of 12 mpta before the end of the fi- challenging start
nancial year. to life as a zinc
Barring any unexpected operational producer.
setbacks, New Century intends to de- “We’ve obvious-
clare commercial production when the ly got a lot more
clock ticks over into FY2021. experience in op-
“It’s really what the team set out to erating the plant The upgraded rougher circuit which is the centrepiece of the
achieve when we started this process,” and in hydraulic refurbished Century processing plant. Throughput will be
New Century managing director Patrick mining, there’s no progressively ramped up from 9 mtpa to 12 mtpa over the next
Walta told Paydirt. two ways about it,” three months
“The tailings dam is the initial starter he said.
operation, we have a whole suite of in- “What we haven’t
situ resources and a big exploration pro- done to date, or perhaps the opportunity time to stabilise, we’ll slow it down.”
gramme planned for the next few years, we haven’t had to date, is stability. Every Walta also insisted there was no more
but ultimately it was about restarting and three months or so, we’ve been bringing capital to be spent on refurbishing the
re-establishing Century as a top 10 zinc on a new piece of kit in this plant and it’s Century plant and the company’s atten-
producer and we’re sort of knocking on just created a wave of instability as you tion was turning to getting the most value
the door of that, which is really exciting. recommission it and rebalance the plant. out of its product.
“As we utilise the additional 35% ca- Maximising recoveries and maximising However, what has proved difficult for
pacity that we’ve added to the plant, we production from flotation operations is all the company is selling concentrate into
should be able to progress further into about stability. a zinc market which, at the time of print,
the top 10 over the next 6-12 months. “It’s good that we’ve learnt so much had slumped to four-year lows and was
We’re certainly a significant scale opera- along the journey, but it’s really only from also being further whacked by additional
tion in the scheme of things for the zinc now and over the next couple of months treatment charges.
industry.” as we get to 12 mtpa that we can enjoy a “Those treatment charges are current-
Walta’s optimism stems from a pro- stable flow rate, with no new pieces of kit ly at about 15-year highs, so when you
longed commissioning period at Century coming on and a team that is just purely combine the two together, the return to
– 250km north-west of Mt Isa – which focused on that fine-tune button, so to the miner is probably the worst it’s been
culminated in late February with the ini- speak.” since well before the GFC,” Walta said.
tiation of slurry commissioning of the up- Overall unit costs are also expected “Since we started operations, treat-
graded rougher circuit, allowing the full to reduce as metal production increases ment charges have gone from about
capacity of the entire processing plant against the 70% fixed cost base on site. $US40/t to over $US300/t, so that’s ab-
to be incorporated into operations for the Walta did not rule out hitting the de- solutely brutal as an additional cost to us.
first time since the mine was re-opened sired 12 mtpa run rate ahead of schedule However, there was a recent report put
in mid-2018. if operations warranted a faster ramp-up, out by Macquarie Research that shows
Throughput will be progressively in- however, he insisted the company would treatment charges have dropped from
creased from 9 mtpa to 12 mtpa over the not be taking any risks along the way. $SU310/t to $US280/t over the last cou-
next three months. “If it was unencumbered, we’d feed the ple of weeks, which is a really important
In what may prove to be the most im- plant tomorrow with 12 mtpa, but what sign.
portant modification to the process plant, we don’t want is to unnecessarily upset “The treatment charges moving is the
the upgraded rougher circuit is set to the operations now by just having a mas- real sign the zinc market and base met-
induce further increases to overall zinc sive increase in throughput,” he said, als in general might be starting to turn,
metal production, with the additional “It’s really a measured and managed and we’ll obviously look to take advan-
volumetric capacity allowing both higher approach so that by the time we get to tage of that with a fully ramped up opera-
throughput rates and improved recover- June 30, we’re exiting the financial year tion at Century.”
ies. at that run rate. If we find we’re achiev- – Michael Washbourne
A fourth and final mining cannon will ing it easily, we’ll obviously speed up that
also be added to the hydraulic mining process. Conversely, if we need more
Page 34 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Virus spikes return
of confidence
ueensland’s State of the Sector re- royalty taxes and a clear framework for ince of Queensland was seeing heathy
Qport indicated that mining chief exec- environmental assessments and approv- interest from companies looking for the
utives on the sunshine coast were gear- als,” Macfarlane said. ingredients – copper, gold and zinc – in-
ing up to bolster their workforces. With a state election scheduled for tegral to the new technology future.
In the Queensland Resources Coun- October, Macfarlane said he would be Teck Resources Ltd was one major
cil (QRC) CEO Sentiment Survey, more pushing the importance of a long-term boosting its capacity in the zinc space
than half of QRC member chief execu- plan to attract new resources invest- after it was granted 100sq km of ground
tives were expecting to employ more ments across a range of commodities to near Cloncurry to explore.
people, with 20% on track to increase the Government, opposition and cross- It is still hoped that when the economy
their workforce by more than a quarter. bench. and mining industry find their feet again,
The report was done when the corona- Up until the impact of the coronavirus Teck’s presence will provide a “huge shot
virus pandemic was concentrated in Chi- started to be realised in Australia, there in the arm for the local economy” in Clon-
na and according to Westpac’s February was a renewed confidence in Queens- curry.
Labour Force data, employment across land’s resources sector, which was trans- The return to more certain days will no
Australia outperformed expectations. lating into an increase in exploration. doubt see companies in Queensland and
However, Westpac forecasts that the Coal exploration was of course high in across the world maintain their commit-
unemployment rate in Q2 to reach 11.1%; the State, however, the North West prov- ments to new technologies and a diverse
a situation Australia has not faced energy mix to help contribute to a
since the 1990s. lower carbon world.
QRC chief executive Ian Mac- Macfarlane was pleased to relay
farlane acknowledged that circum- that 40% of resources chief execu-
stances had drastically changed and tives surveyed last year across all
vowed to continue working with all commodity sectors in the State re-
levels of government to ensure that ported they were currently investing
safety for staff, communities and the in R&D of low emission technologies
State was the priority. ranging from carbon capture to en-
Like in Western Australia, mining ergy efficient projects.
was declared an essential activity in The survey revealed that 53% of
Queensland with protocols to be im- chief executives were planning to
plemented by the State Government spend more on reducing emissions
around safe FIFO operations. and 20% had budgeted to substan-
While there is cooperation at all tially increase their spending in the
levels to ensure Queensland’s re- area.
sources sector is in the best position “Energy efficiency, sometimes
possible once the coronavirus is con- called the fifth fuel, is the cheapest
tained, the QRC hopes that the future and cleanest energy of them all,”
of the sector runs under better policy Macfarlane said.
conditions. “When asked about renewables,
“In the past 12 months there have 90% [of the survey respondents] view
been several examples that have the energy source as an opportunity,
raised industry concern about policy but are equally concerned that with-
out careful planning, intermittent gen-
and consultation on significant issues Ian Macfarlane eration can risk energy security and
consultation in important issues, such as “ Small increases to reliable access to low-cost energy and it
that could affect investment and jobs,”
affordability.
Macfarlane told Paydirt.
“Queensland’s economy was built on
Macfarlane used the proposed expan-
sion to the area of land locked up from
remains a vital ingredient for the success
gas development in western Queensland
energy costs have
of the resources sector. Small increases
under the Pristine Rivers policy; a 25%
a large impact on trade
hike in the gas royalty rate; and lack of
trade exposed industries and lowers our
international investment profile. Queens-
methane regulations and cultural herit- exposed industries and to energy costs have a large impact on
age, as matters to be addressed. lowers our international land’s energy mix must be affordable, re-
“It is essential that Queensland has investment profile. liable and help lower emissions.”
policies that provide clear, consistent – Mark Andrews
and transparent regulations and time- Queensland’s energy mix
frames for project applications and as- must be affordable, reliable
sessments. It is equally as important to
have a stable and transparent system for and help lower emissions.
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 35
QUeensLAnD
Red River eyes gold strategy
Red River plans to fill the Thalanga plant
with ore from the Liontown East discovery
Q ueensland-based producer Red ontown, we quickly knew we were going to start early works, probably next year,”
River Resources Ltd continues to
Palancian said. “Given the drilling re-
to be mining it, so you can’t walk away
get new tunes out of old assets with two from it and test other targets, especially sults, there is a strong rationale for fast-
growth opportunities in its sights for 2020. as it is still open. It then becomes about tracking Liontown’s development as our
Red River has been operating the how you balance that [resource develop- next priority. Prioritising the development
Thalanga base metals complex since ment versus target generation] but it is a of Liontown will allow us to increase pro-
switching the mothballed plant back in good problem to have.” duction of copper and gold at Thalanga.”
December 2017, but the company’s strat- Palancian said there had been a de- The reasons for adding Liontown to the
egy has been about far more than simply liberate effort to focus on Liontown this Thalanga mix are compelling. As well as
returning to historical orebodies. Mining year given the size of the system and the the high-grade nature of the system, it
is currently focused on the recently de- high-grade gold present within it. will also fill a gap in the processing plant.
veloped Far West underground orebody On March 11, the company released “The current plan is for 400,000 tpa
and in March the company produced an an updated resource for Liontown which from the Far West underground, so if
updated resource for its Liontown East resulted in increases in tonnages (36%), we get 300,000 tpa from Liontown, it will
deposit, it’s first self-generated discovery 109% contained copper (109%), con- have a big effect on the cash costs, with-
on the belt. tained zinc (53%), contained lead (34%) out ruining the mine life, because there is
Meanwhile, the company is also plan- and a 125% increase in contained gold. currently excess capacity.”
ning a restart of the Hillgrove gold-anti- The global resource at Liontown and Liontown’s ability to further fill that ex-
mony mine in New South Wales. Liontown East now stands at 4.1mt @ cess capacity could be revealed in com-
Red River managing director Mel 0.6% copper, 1.9% lead, 5.9% zinc, 1.1 ing quarters with Palancian confident ex-
Palancian told Paydirt that despite g/t gold and 29 g/t silver (12.7% zinc ploration success will continue.
Thalanga and Hillgrove’s long histories, equivalent). “It is a 4mt system which is still open.
the company’s strategy expanded far be- “It has always been the largest min- When you look at the history of our drill-
yond reworking old deposits. eralised system on our ground. And, al- ing; very rarely have we drilled a duster
“We spend about $2-4 million a year though the original grade was a bit lower, in the last five years. We’ve got enough
on exploration, but in reality that still isn’t after we discovered Liontown East we ground and believe we have the best part
enough as this belt is still very prospec- discovered more high-grade material, of the belt. We will keep peppering away
tive,” Palancian said. “We have generat- so we took it more seriously. It will result and extending mine life and I’m confident
ed hundreds of targets, but we just can’t in more tonnes and more metal, but we we can keep doing that.
drill them all.” have also identified areas of higher gold “We have an internal process with
The Liontown East discovery highlight- and copper grades, so we do deliberately identifying targets, but it isn’t anything
ed the difficulty Red River faced in cov- chase that.” revolutionary. Seven out of 10 are pro-
ering all targets, according to Palancian. The plan now is to push Liontown to- ducing ore grade intercepts; it doesn’t
“The problem is when we hit something, wards development in 2021. matter why as long as they keep deliver-
we can’t leave it, so we end up spending “This year the focus is really on permit- ing.”
6-12 months drilling it,” he said. “With Li- ting and mining studies and getting ready Delivery is also a keyword at the
Page 36 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Thalanga plant but things there haven’t started in January. By March 16, shares gold for the Bakers Creek stockpile,
run as smoothly. had fallen to 5c amid the coronavirus- handing it the opportunity to build a rapid
The December quarter saw production related sell-off. redevelopment case for Hillgrove.
shortfalls at the Far West underground “It is frustrating at times [to see the “For the first 12 months, we will be dig-
ramp-up but Palancian is confident the share price fall], but ultimately if we keep ging stockpiles and putting that through
troubles are behind Red River. delivering, we will see that value be- the plant,” Palancian said. “It is a quick,
Thalanga produced 3,781 dry metric ing realised in the share price. It is just cheap restart and hopefully we can be
tonne (DMT) of zinc concentrate, 876 a matter of time,” Palancian said. “The ready to go by October. In the next four
DMT lead concentrate and 1,560 DMT news out of the company is positive, so weeks we will put out a straightforward
copper concentrate in the December the rest will follow. In fact, the growth part restart plan, based around making gold
quarter, with Red River citing ramp-up of the business is the best it’s ever been.” doré through a concentrate.
delays in mining operations at the Far That growth story includes the Hill- “From there we have got an existing
West underground mine as the reason grove project in New South Wales. resource and stopes which are ready to
for missing 30-40,000 tpm production Acquired in August 2019 for $4 mil- be mined. Then, we have lots of targets
forecasts. lion in shares, Hillgrove already boasts a which remain undrilled and extensional
Palancian said the company was work- 250,000 tpa plant, surface infrastructure, targets from the existing orebody.”
ing with contractor Pybar to overcome underground development and mining The recent Australian gold price surge
the production shortfalls. fleet as well as a 2.8mt @ 5.1 g/t gold and has undoubtedly piqued Red River’s in-
“There were hiccups in the last quar- 1.7% antimony 2012 JORC-compliant re- terest in Hillgrove and Palancian is eager
ter, but we are seeing improvements this source (with a further 3.93mt @ 4.7 g/t to ensure the company doesn’t miss its
quarter,” he said. “There were produc- gold and 1.3% antimony in 2004 JORC- opportunity.
tivity issues in October and November compliant resources). “Our focus is on gold, previous compa-
which delayed ramp-up of Far West. I’m Palancian said since “getting the keys” nies’ focused on antimony, but Hillgrove
still not completely happy, but that is my to Hillgrove, the company had found fur- has always been successful when it is
nature, and this quarter has been better ther opportunities to improve Hillgrove’s focused on gold,” he said.
than last.” economics. “There won’t be a full feasibility study;
In February, Red River announced “There were a few things we have a that would cost more than the restart. We
record monthly copper concentrate pro- hunch on but didn’t have the info,” he are aiming for a very simple, gravity gold
duction of 860t and monthly increases in said. “Since we moved in, we have been scenario.”
zinc and lead production. Total monthly focused on the Bakers Creek stockpile. – Dominic Piper
ore mined at Far West was 26,322t in We have done some met testwork and it
January, up from 22,756t in December looks like having a lot of free gold at good
and 11,000t in October. grades.”
The improved January figures failed On February 28, the company pro-
to find a receptive market audience with duced a maiden inferred re- Underground mining rates at
Red River shares continuing a drift which source of 225,000t @ 2.5 g/t Thalanga have rebounded after a
poor December quarter
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 37
QUeensLAnD
Diatreme on the
front-foot with
Galatar
ver the past 12 months, Diatreme Re-
Osources Ltd has quietly progressed
the Galalar silica sands project in North Diatreme recently announced a 26%
Queensland from promising supporting EIS which Diatreme hopes will streamline uplift in the resource at Galalar,
asset to rapidly emerging development regulatory approvals for both state and about 200km north of Cairns
opportunity. federal requirements.
While the Brisbane-based company re- “Our focus has always been front-foot billing at Diatreme while the search contin-
mains confident of finding a JV partner to rather than back-foot in terms of moving ues for a JV partner for Cyclone.
facilitate development of the $130 million through the regulatory process,” McIntyre “We still remain very positive on bringing
Cyclone zircon project in Western Aus- said. in a suitable major partner to help us with
tralia’s Eucla Basin, Galalar is mounting “We acknowledge that we will have to do that,” McIntyre said.
a strong case to assume flagship status Commonwealth as well as state approvals “It’s no secret that we have a number of
within the portfolio. because we’re in quite a sensitive area of major Chinese SOEs involved in that pro-
Diatreme recently expanded the re- North Queensland. So, this voluntary pro- cess and they were shut down effectively
source at Galalar – 200km north of Cairns cess effectively allows us to do both [state in January and February due to the current
– by 26% to 38mt of plus-99% silicon di- and federal approvals] concurrently, rather health scare, but we’re now starting to re-
oxide. It preceded the company lodging than the more passive lodgement, letting engage actively there.”
applications for a mining lease and under- the agencies set the EIS terms and waiting McIntyre said some of the stimulus
taking a voluntary EIS in a bid to fast-track for the process to slowly move forward. packages being mooted by the Chinese
project development. “By going through a voluntary process Government to help revive the country’s
In a further boost for Diatreme, the re- and by already undertaking significant en- economy post the coronavirus were very
source remains open both to the north and vironmental studies, we think we can re- encouraging for both the heavy mineral
the east, suggesting Galalar could be a main on the front-foot and positively direct and silica sand industries.
long-term supplier of premium silica sand the approval process.” Forecasters had already indicated the
to key Asian markets. Permitting is expected to take at least global silica sands market will edge past
Diatreme chief executive Neil McIntyre a year, by which time Diatreme is likely to $US10 billion in annual revenues by 2022,
acknowledged that while his company have completed a DFS. while the solar photovoltaic glass market
could continue to expand the resource at An initial scoping study last year found could reach $US48 billion by 2025, a sub-
Galalar, now was the time to advance per- just $24.4 million was needed to build a stantial jump from its $US3.3 billion valua-
mitting and finalise its assessment of the “low cost and premium quality” silica op- tion only four years ago.
project economics. eration at Galalar. Key metrics reported in “From our discussions over on the Chi-
“We’re not resource-constrained at all; in that study were a pre-tax NPV of $231 mil- nese side, that market has been increas-
fact, we’ve identified exploration targets of lion, an IRR of 150% and payback within ing by over 30% year-on-year,” McIntyre
over 1bt to the north-west of the resource eight months. said. “And where they’ve traditionally been
and within our tenement area of similar Annual operating costs are estimated sourcing some of that silica product from is
characteristics,” McIntyre told Paydirt. at $43.5 million, based on the trucking of being shut down, particularly in places like
“Our focus is producing a very high spec, product 63km for transhipment. Vietnam, Cambodia and Malaysia and oth-
high quality product to meet the demands Galalar has in some ways assumed top er places where supply might have come
of the photovoltaic sector in China for from illegal river sand.
manufacturing purposes. So, we’re spend- “Along with the extra demand, I think
ing a lot of time looking at the exact nature the market is becoming more discerning
of the resource and how we can maximise as well. If you’re undertaking a green solar
recovery of that high spec product.” project, you want to know that all aspects
McIntyre expects the company will con- of your supply chain have been green-
vert a sizeable proportion of the Galalar re- sourced, or sourced from sustainable min-
source to mineable reserves over the next ing methods, and that’s exactly what Aus-
12 months, underpinning the first few years tralian projects like Diatreme’s can offer.”
of silica sands production. A key aspect of Diatreme last year signed MoUs with
that process will be identifying parts of the two private Chinese groups and also land-
resource with lower iron content. ed a new cornerstone investor, Ilwella Pty
A mining lease application was lodged Ltd – representing Flannery Family Office,
in December for an area encompassing from a $3.6 million placement.
523ha. This was followed in February by – Michael Washbourne
an application to undertake a voluntary
Neil McIntyre
Page 38 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Queensland researchers Extra precautions have been asked
for workers in camps and those on
may hold key to COVID-19 the move, whether FIFO or drive-In,
drive-out (DIDO).
In camps:
• infection control in kitchens and food
preparation areas
• suitable accommodation for self-quarantine
• maintaining social distancing in camps,
including for recreational activities,
including outdoor sport
• limiting movement of workers from camps
and into the broader community
• no more ‘hot bedding’ to limit contact
between employees
• cleaning each room thoroughly between
uses, including changing and washing linen.
On transport:
• avoiding close contact during transport,
including reducing the numbers of people
travelling on buses and aircraft.
Queensland Premier • thorough cleans between passenger loads
Annastacia Palaszczuk getting off, and those getting on
• temperature testing at airports for
passengers boarding aircraft
ueensland is largely funding a $17 mil- While clinical use of the vaccine is a • people with symptoms not travelling, and
Qlion package for a world-leading vac- longer-term fix, people are being urged to immediately isolate, and seek medical
cine for coronavirus to be developed in the to continue to take steps like thoroughly advice
State. washing their hands, staying 1.5m away • reducing FIFO and DIDO during the COVID-19
“We will provide funding through our Ad- from others and staying home and isolat- to minimise the mass movement of people
vance Queensland strategy to fast-track ed if they’re sick to nullify the coronavirus
a vaccine for this virus,” Queensland Pre- spreading even further.
mier Annastacia Palaszczuk said. Specific to mining, companies are being “The results show COVID-19 has not
The funding package enables the Uni- asked to step up their coronavirus protec- significantly impacted jobs in our sector
versity of Queensland (UQ) and research tions for fly-in fly-out (FIFO) workers, staff in Queensland at this stage with a simi-
partners the Doherty Institute and CSIRO in mining camps and remote and regional lar survey taken in the December quarter
to undertake clinical trials to test the safety resource communities. reporting that 15% of companies were
and efficacy of the vaccine candidate. All Australian state, territory and national expecting to decrease their workforce, a
Queensland Minister of Innovation Hon resources ministers have agreed that the difference of 6% from this survey. Every
Kate Jones hoped the end result would resources sector was essential to main- company is working hard to make working
be large-scale manufacture of a potential taining a strong national economy. arrangements more flexible with 95% of
vaccine. “However, public safety is our number companies offering either additional sick
“This vaccine could save millions of one priority and we need everyone in the leave or access to future balances to sup-
lives,” Jones said. community, in business and in industry to port their workers through COVID-19. Pay-
“The research UQ is doing now is put- play their part,” Queensland Minister for roll tax relief announced by the State Gov-
ting Queensland on the map. If we can be Natural Resources Hon Anthony Lynham ernment was well received by companies
part of the solution, this research will help said. with over a quarter reporting it had helped
Queensland tap into a multi-trillion-dollar Australia’s Chief Health Officer Brendan to maintain jobs.”
industry.” Murphy has asked resources companies Meanwhile, the Association of Mining
Queensland’s Government has contrib- to follow the public health protocols so that and Exploration Companies has told its
uted $10 million on top of the Federal Gov- workers and communities are safe. members that it is highly likely that further
ernment’s $3 million and $3.5 million from Encouragingly for Queensland, mining interstate restrictions will be introduced by
the Paul Ramsay Foundation for research companies in the State are still anticipating the West Australian Government, there-
that could reduce by six months the time- growth in their workforces in the coming fore removing the interstate FIFO exemp-
line for an effective coronavirus vaccine, months, according to a survey run by the tion for travel into WA.
which would otherwise take 12-18 months Queensland Resources Council (QRC). The restrictions would mean that all in-
at best. “The survey found that 58% of compa- terstate employees will need to undertake
“If they can achieve this, it could mean nies were maintaining or planning to grow 14 days quarantine in WA before being al-
there will be a vaccine available for emer- current workforce numbers over the next lowed to go to their place of work. Queens-
gency use among healthcare workers and three months and only 21% or one in five land-based people make-up a significant
vulnerable populations in early 2021,” she expected a decrease,” QRC chief execu- portion of FIFO workers into WA.
said. tive Ian Macfarlane said. - Dominic Piper
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 39
BAtteRY MIneRALs
Lithium’s lack of spark leaves
juniors struggling
ust as the West Australian lithium sec- vehicle battery manufacturer,” Brinsden Such is the company’s renewed
Jtor seemed on its last, short legs, two said. “This will allow us to capture value confidence, it is pushing ahead with
of its most prominent members were from the future growth in the electric ve- development work on its Stage 2 ex-
thrown financial lifelines in March. hicle market while also supporting Yibin pansion which will see capacity lifted
Pilbara Minerals Ltd and neighbour Tianyi’s growth ambitions to become one from 2 mtpa to 5 mtpa.
Altura Mining Ltd have been the stand- of the biggest lithium chemical suppliers While a few of the darkest clouds
ard-bearers for all the excitement and in China.” have lifted from above Altura and Pil-
disappointment WA’s lithium sector has Pilgangoora has been running under bara, there is still plenty of pain in the
produced over the last three years. Both capacity since mid-2019 as Pilbara ad- WA lithium sector.
companies shot from insignificance to justs its output to softening demand for The transfer of all issued capital in
world-leading developers and then pro- spodumene concentrate from China. Alita Resources Ltd to Liatam Mining
ducers as the EV narrative and battery While the company said there had been was the latest blow.
minerals thematic took hold in 2016- some disruption within the China supply Alita announced on March 9 that
2017. However, when their operations chain as a result of the COVID-19 pan- the Supreme Court of Western Aus-
struggled and lithium concentrate prices demic, “the ability to secure sales, credit, tralia had granted transfer of Alita
stubbornly refused to follow the expected and shipping has continued to function shares to Liatam under a deed of
narrative, they found themselves in deep within China”. company arrangement organised by
trouble. Further positive news came from Pil- administrator KordaMentha who had
Despite the global gloom around the gangoora’s concentrator which has failed previously deemed the company’s
coronavirus pandemic, March brought to achieve forecast recoveries. The plant collapse inevitable if the deal was not
good news to both companies. First Altu- achieved average lithia recovery of 72% taken.
ra announced it had completed a $US305 in the current batch processing cam- Liatam’s offer allows larger share-
million refinancing (see page 46) then on paign with several days hitting 74-75%. holder Galaxy Resources Ltd to
March 25, Pilbara announced a new five- Design estimates were for 72-78% lithia secure its $47.8 million investment
year offtake agreement with Yibin Tianyi recovery. but will mean creditors and smaller
for 75,000 tpa of high-quality spodumene “The ability of the processing plant to shareholders missing out.
concentrate from its Pilgangoora project. deliver these improved lithia recovery Alita (formerly Alliance Mineral As-
The contract with Yibin Tianyi – a key results consistently reflects the optimi- sets Ltd) had run hard at its Bald Hill
supplier of lithium chemicals to Pilbara’s sation and improvement works com- lithium-tantalum project 50km north of
largest shareholder and major EV manu- pleted by the company over the past 12 Kambalda, moving in 16 months from
facturer CATL – accounts for more than a months,” Brinsden said. “The achieve- first drilling to commercial production in
third of Pilgangoora’s annual production. ment of these strong and competitive July 2018.
Pilbara managing director Ken Brins- lithia recovery results, even in a moder- Twelve months later, the company was
den said the offtake was part of the com- ated production environment, provides in trading suspension with the flood of
pany’ plans to diversify Pilgangoora’s confidence that the processing plant will new spodumene concentrate production
customer base. be able to achieve both design lithia re- and the slow growth of lithium conver-
“Our new partnership will further in- covery and full production capacity once sion capacity blamed for customer indif-
tegrate Pilbara Minerals within the sup- steady-state operations are under way ference.
ply chain of the world’s largest electric on a continuous basis.”
Page 40 aPRIL 2020 aUSTRaLIa’S PaYDIRT
An industry curtailed
he failure of the lithium market to ignite in 2019 had a devastating impact across the
T burgeoning lithium sector. While the juniors have been hit hardest, the established
players have also been forced to tighten the belts in the face of a flooded marketplace.
Mineral Resources Ltd Talison Lithium Ltd Under the new strategy, Sal de Vida
In November, MinRes reduced its lithium The Albemarle Corp/Tianqi Lithium Corp will be built over 2-3 stages to “smooth
exposure by handing over 60% of its JV remains Australia’s premier lithium capex and reduce project risk”. The
Wodgina project to US lithium giant producer through its Greenbushes mine plan is to simplify the flowsheet and split
Albemarle Inc in a $US820 million deal. in WA’s south-west. production into two modules, with pro-
MinRes also receives a 40% interest in A recent expansion to 1.34 mtpa will duction from Stage 1 expected to start in
Albemarle’s Kemerton lithium hydroxide make it the cornerstone of the Kemerton 2022. Stage 2 would follow 6-12 months
converstion plant project. hydroxide plant. later with the purification facility now
The new JV immediately placed Wod- held back until state 1 is up and running.
gina on care-and-maintenance, cit- Galaxy Resources Ltd The company is also hunting for a pro-
ing “challenging global lithium market An Australian lithium upstart from a time ject partner for the development.
conditions and to preserve the value of when a global EV demand was fantasy, At its existing Mt Cattlin mine, the strat-
the world-class Wodgina spodumene Galaxy has ridden the waves of the egy is to focus on quality over quantity
orebody”. lithium tide. after a planned summer hiatus. Front-
This leaves Mt Marion – the company’s The company restructured its strategy in end ore sorters have been commis-
50/50 JV with Gangfeng Lithium – where 2019, choosing to focus on accelerated sioned to upgrade low-grade stockpiled
an expansion from 200,000 tpa lithium development of its Sal de Vida brines ores, allowing Galaxy to slow mining
concentrate to 450,000 tpa is under way. project in Argentina. and processing while still meeting 2020
contractual obligations.
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 41
BAtteRY MIneRALs
St George is beginning to reap
the benefits of its methodical,
meticulous approach to
exploration at Mt Alexander
St George to drill through the pain
hareholders of St George Mining Ltd from surface,” Prineas said.
Swant executive chairman John Prineas A high-grade, low capex start to mining
to provide with general market clarity in operations at Stricklands is the plan for Mt
these most uncertain of times. Alexander where Cathedrals, Radar and
For those that know Prineas, if he did Investigators are discoveries held in the St
have the answers he would oblige and tell George/Western Areas JV.
all. Extensional drilling at the Investigators
“We can’t answer those questions unfor- prospect – which has already confirmed
tunately,” Prineas told Paydirt. continuation of high-grade mineralisation
What Prineas can do though is continue across 1.5km – will also feature as part of
to emphasise the quality shaping up at Mt the 12,000m programme at Mt Alexander,
Alexander, which has drawn interest from 120km south-south-west of the Agnew-
none-other than Western Areas Ltd since Wiluna belt.
taking on the project from BHP Ltd in 2015. Meanwhile, the company has just set
“We’ll stick to our knitting,” Prineas said. foot in the Paterson Province for the first
“We have high-grade nickel sulphide in the time.
ground, we have to prove up an operation An airborne magnetic survey covering
out there, but the material we have can John Prineas 35km of strike of prospective stratigra-
certainly be monetised.” phy at St George’s Paterson project was
St George has been an exploration stal- The resource drill-out will focus on the launched in February.
wart in rough markets before and will forge shallow, high-grade mineralisation at St George’s Paterson project is in the
ahead during the current market malaise. Stricklands, with RC and diamond cam- same regional location as Rio Tinto Ltd’s
“We’re lucky enough to have cash in the paigns also targeting multiple EM and geo- Winu and Newcrest Mining Ltd’s copper-
bank, so we don’t have to go out and raise logical targets for nickel-copper sulphides. gold Telfer mine.
in this market. We may need to be a little Prineas is confident there is potential for It is early days for St George in the Pat-
bit more cautious with it just in case the greenfields discoveries at West End and erson, however, it is starting with some
coronavirus drags out a little too much,” Fish Hook based on compelling EM sur- positive signs.
Prineas said. vey results. With depth and cover issues to deal
With over $4 million (as at December “In a difficult market, a discovery will with, the company stated: “Preliminary in-
31) cash, St George was gearing up for be most welcomed. The activity [by other terpretation of [WA] Government regional
phase one of the 2020 drilling programme companies] in and around us recognises magnetic data suggests that the depth of
to start. the fact that we have high-grade miner- cover at St George’s project is much less
“Resource definition drilling will start to- alisation in nickel-copper-cobalt-PGEs, than other exploration projects in the re-
wards the end of March and we’re aiming including platinum and rhodium which gion, potentially allowing for expedited and
for a resource from the shallow deposits are trading higher these days and we can lower-cost exploration drilling.”
in Q3, maybe a little earlier,” Prineas said. commercialise this deposit starting at 30m – Mark Andrews
Page 42 aPRIL 2020 aUSTRaLIa’S PaYDIRT
Blackstone isolates
from general market
f there was a list of upbeat mining exec- the nickel sulphide front at Ta Khoa
Iutives going around right now, it would and while the commodity has been
be small given the state of global affairs talked about as a key part of the EV
but despite a share price smashing and story, prices have yet to reflect grow-
nickel’s doldrums Blackstone Minerals ing demand and/or the importance of
Ltd managing director Scott Williamson the metal.
would likely make it on the list. Williamson remains unfazed with
Company-wise there is good reason the dynamics playing out in the nickel
for Williamson’s positive outlook, as the sector for the time being.
last 12 months has seen significant pro- “We have to try and think a bit fur-
gress at the Ta Khoa nickel sulphide pro- ther than the current market. I think
ject, 160km west of Hanoi, Vietnam. the good thing about this is that on Scott Williamson
During this period, Blackstone not only the other side of it we will go into a prop-
acquired Ta Khoa, but raised the pro- er bull market for a change and it will be “Korea is our funding source, so we
ject’s potential to a level not seen in its back on,” he said. don’t have to worry so much about the
recent history. “The EV story isn’t a short-term story, it conventional capital markets; we have
Initially attracted to a mine which pro- is a 2023 story. The reason why the nick- someone much bigger ready to help us,
duced 20,700t nickel and 10,100t cop- el price was running last time was due we’re lucky there,” Williamson said.
per between 2013-2016, Blackstone to the supply constrain out of Indonesia. “We are focusing on that and trying to
has quickly revealed potential value in The demand for EVs doesn’t kick in until get some deals done there. As soon as
palladium-platinum-gold-rhodium-cobalt another 2-3 years which is when we will we get funding out of Korea then there
as by-products, while also making the be mining. For us we are not too worried will be no stopping us because the mar-
high-grade disseminated nickel sulphide about the short-term price because we ket will realise we don’t have to worry
King Cobra discovery (39m @ 1.1% nick- know that in 2-3 years’ time it will be in about fluctuations in share prices.”
el and 28m @ 1.2% nickel latest results). the order of $US20,000/t or more.” A discovery in the ilk of King Cobra –
At the time of print, Blackstone report- Williamson is confident that the nickel Blackstone rose from 12c/share when
ed that drilling was continuing to inter- price will rise above current levels in due King Cobra was announced in Decem-
sect the King Cobra zone over a 200m course, however, if it doesn’t and there ber up to as high as 22c/share on the
strike length, with the discovery remain- is a lag in EV demand, Blackstone can back of follow-up intersections of 60m @
ing open down-dip and long strike to the absorb some of the downside. 1.3% nickel in January – would move the
north-west and south-east. “Palladium and rhodium prices are Blackstone dial in the short term, how-
“The King Cobra discovery brought up [currently] going very well. In a way we ever, there are pending major milestones
the entire grade from surface early on in are sort of hedged if the EV take-up is looming on the horizon.
the mine life. We were expecting to drill slower than expected because we have “Our maiden resource in late Q2 and
something that was going to be 0.5% the palladium-platinum-rhodium that go scoping study in late Q3 is really when
nickel and we’re getting 1% nickel from into an internal combustion engine as a the market will wake up and realise that
surface. You can imagine what that does catalytic converter,” he said. our nickel mine works in any nickel price
to the NPV; doubling the grade so you The clear focus for Blackstone is re- environment because we have nickel
are getting twice as much metal through booting a nickel sulphide project to sup- sulphides, which works in any price en-
early in the mine life,” Williamson said. ply Asia’s growing lithium-ion battery vironment whereas laterites require at
There is clear cause for enthusiasm on industry with Korea’s largest EV battery least $US20,000/t,” Williamson said.
cathode producer “At the moment the market doesn’t
showing interest. quite understand what we have got be-
In December, cause we haven’t put any numbers out.
an alliance be- We have drill hits and will do a block
tween Blackstone model for people to understand what
and Korea’s Eco- the resource looks like and the econom-
pro CM Co. Ltd ics behind it. It will take another three
was struck via a months or so. At that point, that is when
non-binding MoU the market wakes up. If I was putting that
for the potential news into the market now, I wouldn’t be
partnership to very impressed, but I think in 3-6 months
develop a down- we should be in a better market and I’d
stream process- be happy putting that news out then.”
ing facility in as-
sociation with Ta – Mark Andrews
A maiden resource from Tao Khao is expected in Q2. There is existing
infrastructure at Ta Khoa for Blackstone to leverage future operations from Khoa.
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 43
BAtteRY MIneRALs
Andrew Radonjic
Critical venture for minerals in Tasmania
ne remedy for a crook market is explo- ments continuing. ket would have settled down by then, too.
Oration success. A ROM pad, site offices and onsite haul- In the meantime, Venture shareholders
Venture Minerals Ltd received a small age roads are all ready to go at Riley, while could potentially be exposed to more of the
dose of appreciation in February month discussions with shipping brokers are on- story unfolding at Golden Grove North.
when it released information on a new VMS going. “We got a very good reaction to the soil
target discovered at the Golden Grove Stability in the iron ore price would help anomaly at Golden Grove North and a lot
North project, 370km north-north-east of Venture reach a decision-to-mine once the of people that worked on the project are in-
Perth. way is cleared by the relevant government trigued by it once again, which is a techni-
A 2km-long VMS target displaying highly departments in Tasmania. cal tick on what we are doing out there. But
anomalous copper in-soils similar to the ge- “We can’t be certain on the timing of that we need to deliver some tangible results
ochemical footprint at Gossan Hill, the larg- in dealing with government departments; that the market and shareholders can latch
est deposit at EMR Capital’s Golden Grove they are very risk averse. The company onto,” Radonjic said.
mine, was confirmed by Venture at Golden monitors that and obviously we’d have run- Given the hype around Stavely Miner-
Grove North. ning costs regardless. That is why we are als Ltd’s success in Victoria and the sup-
Surface rock chip samples of up to 23.8% looking at the exploration portfolio to see if port shown for Cobre Ltd’s IPO on the
copper, 7.8 g/t gold, 35 g/t silver and 1.2% we have anything else to go on with,” Ven- back of Perrinvale, north west of Menzies
zinc plus the presence of copper sulphides ture managing director Andrew Radonjic and Kalgoorlie (5m @ 9.8% copper, 3.2 g/t
at surface was reported by Venture. told Paydirt. gold, 34 g/t silver, 3.1% zinc, including 3m
Despite the well-known history of the “Golden Grove North was acquired in @ 12.6% copper, 4.7 g/t gold, 43.7 g/t sil-
Golden Grove mine, which EMR bought for October 2018 and we’ve only just put some- ver, 3.6% zinc at Schwabe) it is apt timing
$US210 million three years ago, VMS-style thing out to the market and it is a case of for Venture to be showcasing its own VMS-
exploration at Golden Grove North has not going through, reviewing all the old data, style potential at Golden Grove North and
been undertaken for the past 25 years. soil anomalies and following them up to see Thor (South West project).
Venture acquired Golden Grove North in if there is anything interesting there. That “We’ve got onto something at Thor which
2018, but its priority has been on getting the can take time before you can develop drill needs much more exploration, but we have
Riley DSO hematite iron ore project in Tas- targets, which is all low cost. We will get had some early success. At Golden Grove
mania off the ground. Riley into a position where it is ready and North we’re along strike from a world-class
Riley is being primed as the cash-cow to if the iron ore price sees some stability, per- asset which is still delivering, and we are
enable Venture to exploit and extract great- haps we can get a few shipments out. As pretty excited by that area. The next steps
er value from the suite of assets it has in its has happened in the past when there have we are considering logically is EM – gener-
portfolio. been shocks in the market, the rebound ate a bullseye target that we can test and
Riley remains shovel-ready, with Venture can be good.” build a new discovery from. If you look at
recently completing additional road survey- Radonjic wants to provide clarity on Riley Stavely, Sandfire [Resources NL] – people
ing as required by authorities in Tasmania on the north-west coast of Tasmania in the forget DeGrussa is a VMS – and Cobre, it
and negotiations on port access agree- next couple of months and hopes the mar- is not a bad time to make a copper-gold dis-
Page 44 aPRIL 2020 aUSTRaLIa’S PaYDIRT
covery,” Radonjic said. may come to the point where we
“A discovery generally results in a strong need to drill test it. It is a very large
share price, which the likes of Stavely and anomaly so hopefully it will have
DeGrey [Mining Ltd] have shown and if you 1-2% nickel, but if it is 73% sul-
have a gloomy market, discoveries always phide it will be pretty exciting.”
tend to get an overaction in the positive.” Radonjic is not banking on the
Making headway into a new discovery nickel potential just yet, with the
would offset the waiting game for Venture much more mature Mt Lindsay
in Tasmania where it is receiving some sup- tin-tungsten project better placed
port on the exploration front. for near-term development.
The company has secured co-funding for Some $35 million has been
up to $202,000 from the Tasmania Govern- spent on Mt Lindsay with a fea-
ment to drill test priority EM targets at the Mt sibility study produced, however, A quick start to production and cash flow
Lindsay tin-tungsten project. financing has stood in the way of from Riley could help unlock some of
A Renison-style tin target along strike project development. the potential within Venture’s portfolio
from Renison Bell was identified by Ven- Love affairs with tin and tung-
ture, while a strong EM anomaly within ul- sten have traditionally been brief, making looking at doing something higher-grade,
tramafics suggesting nickel sulphide poten- it hard for Mt Lindsay to initially catch the smaller tonnes, less capex [down below
market’s eye and then con- $50 million] then Riley is an option to sup-
solidate interest. plying some of that capital. Now, this is an-
With some 80,000t tin other [potential] avenue available to us and
metal, Mt Lindsay is widely we need to check all these things and not
considered one of the larg- just stick with one strategy, so we have the
est undeveloped tin projects best chance of success.”
in the world, while 3.2 mtu Radonjic said he was encouraged by the
tungsten contained makes it stance taken by the Department of Defence
a significant asset. concerning critical minerals in Australia.
Cash flow from Riley has “We welcome the strategy by the Gov-
always been one part of ernment to help fund critical minerals pro-
Venture’s funding plan for jects, which struggle for financing and quite
Mt Lindsay and still remains often companies have to go and get Chi-
in play, however, other op- nese companies involved, especially in the
tions are surfacing. rare earths sector,” he said.
The Australian Govern- “The Government is perhaps concerned
ment’s Critical Minerals at how the market has been potentially ma-
Venture has secured a co-funding for up to $202,000 Facilitation Office (CMFO) nipulated by the Chinese getting projects
from the Tasmania Government to drill test priority opened in January to help and then sitting on them, essentially land
EM targets at the Mt Lindsay tin-tungsten project facilitate growth in the coun- banking them, not developing them and
try’s critical minerals sector manipulating the free market. The Defence
tial was also spotted. and projects like Mt Lindsay will come un- Minister [Linda Reynolds] spoke at a confer-
“It is an opportunity which, if there is some der the Government’s microscope. ence late last year in Perth and it opened
very high-grade nickel sulphide – 73% Radonjic said initial discussions with the my eyes to that. For tungsten 85% of the
nickel – you don’t need a lot of it to have a CMFO had started and he was enthusiastic product is from China and 50% of tin comes
deposit and if it is sulphide then that puts about the potential availability of financing from China. Obviously, a lot of that [produc-
you in a good position. There is not another opportunities from outlets such as Northern tion/consumption] is on the back of the EV
deposit like it, this nickel sulphide has only Australia Infrastructure Facility and export narrative. The critical minerals strategy was
been identified in Tasmania,” Radonjic said. finance agencies. certainly something that was gaining mo-
“You don’t need a lot of it for a deposit and “I’d image there might be a chance to get mentum and I’d like to see that come back
if you can get 100mt @ 1% nickel then it some reasonably priced finance for critical more in the headlines once the virus situa-
is not a bad thing, but we have to do some minerals projects like Mt Lindsay,” he said. tion is stabilised.”
more work on it. It is an ultramafic, there is “Tasmania is probably ranked No.1 in – Mark Andrews
nickel in it, there is an EM anomaly and it terms of these types of projects. If we are
The conference proceedings of the 2019
Australian Nickel Conference
is available
$60 (inc.GST)
6 October 2020
Perth, Western Australia Phone (+61) 8 9321 0355 or email [email protected]
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 45
BAtteRY MIneRALs
Altura rises above lithium malaise
Altura has reported three consecutive
ltura Mining Ltd managing director reducing output and we were somewhat quarters of commercial production from
AJames Brown hopes to spend more swimming upstream amongst those to try its namesake lithium mine in the Pilbara
time on corporate development and opera- and demonstrate that the neighbourhood
tional matters after securing the lithium pro- problems are more company-specific than
ducer’s long-term future via a $305 million industry-specific.” tion for the December quarter and opened
financing package. As part of the refinancing, Altura also the new year by shipping a record concen-
Brown and executive director Paul Man- negotiated to have its February 2020 inter- trate cargo of 24,500 wet metric tonnes to
tell were instrumental in negotiating new est repayment deferred for 12 months. The China.
agreements with Altura’s current lenders, company can also repay the major loan at “We’ve had 19 cargos delivered to date,
led by Magy LLC – an investment entity of its discretion without penalty at any time be- all with very limited variations amongst the
private funds managed by Castlelake LP, fore August 2023. grade, and the deleterious elements are
Carval, Nomura and Clearwater Capital – to With Altura’s future seemingly secure relatively low and controlled, so obviously
extend the maturity of the existing $US161 for at least the next 3.5 years, Brown can we have the ability to replicate the cargos,”
million ($244 million) loan facility out to Au- now dedicate more time to assisting with Brown said.
gust 2023. operational improvements at the company’s “The fact of the matter is it is a very im-
Institutional and sophisticated investors namesake lithium mine in the Pilbara, as mature market that we’re into and I think
sweetened the deal with an additional $11.2 well as undertaking more intimate dealings we’re going to take some hits. We can’t
million equity raising. with its customer base in China, where prac- control that, but we can certainly control our
US-based institutional investment group tical. costs and we’ve been fortunate to be able to
LDA Capital has also committed to provid- “There’s that little bit more time now to court material to all of our offtake partners
ing $50 million of standby equity to be drawn be spent more on development and opera- over a period of time. I think some people
at Altura’s discretion anytime over the next tional matters than we have had previously,” probably said when we signed a lot of these
three years. Brown said. agreements it looked a bit cumbersome
Speaking to Paydirt last month, Brown “I think operationally we’ve got a great and it would’ve been nice to have one big
was clearly relieved to have finalised the team in there. They know what to do and name, but I think having the ability to mix
company’s refinancing strategy amid trou- they don’t necessarily need myself to tell and match a little bit with our customers has
bled times in the lithium sector and prior to them what to do. But, certainly from a part- played positively into our hands.
the looming threat of the coronavirus. nership perspective I will try to spend a sig- “I think the market will remain pretty stat-
“It’s taken a fair bit of bandwidth out of the nificant amount of time in China working ic…I think the theory is – and not that I’m a
management team, mainly Paul Mantell and with our partners and working with our GM lithium guru – from an overall industry per-
myself and some of the others, knowing that marketing [Alex Cheeseman] to ensure we spective, we need everyone’s operations to
these loan notes were due in August and keep the cargos going and understanding continue and thrive to a certain extent so we
obviously having that maturity date looming, what their business needs are. can have available feedstock to people as
we had to do something,” Brown said. “We have seen some changes in the mar- and when required. I think the trick to getting
“Initially when we started looking at fund- ket with material that was expected to be in market penetration of EVs is getting a se-
ing facilities, we only had one quarter of the market now withdrawn, so it will be in- cure supply chain; that should be everyone’s
commercial production and it was sug- teresting to see how the landscape evolves goal at the moment.”
gested that we push that out to at least two over the next 6-12 months through to 2021 While business visits to China may be
quarters, which got us to the end of Sep- as to what the market is going to look like.” on hold for now due to the various country
tember, which meant all the paperwork that While results from the March quarter lockdowns amid the coronavirus pandemic,
goes with that was pushing us towards the were pending at the time of print, Brown is Brown remains in regular contact with Altu-
back end of the year to try and get some- confident there is plenty of “blue sky oppor- ra’s customers and cargos are still able to be
thing done. tunity” on the horizon for Altura after three shipped and unloaded without hinderance.
“Obviously what you saw during that pe- consecutive quarters of commercial pro- – Michael Washbourne
riod of time was [other lithium] operations duction.
going into care-and-maintenance, closing, Altura finished 2019 with record produc-
Page 46 aPRIL 2020 aUSTRaLIa’S PaYDIRT
EcoGraf manufactures vital
funding support
ustralia’s embattled manufacturing sec- to leverage off the minerals we have now to “Australia is obviously endowed with a
Ator received a timely boost last month get manufacturing back into Australia. massive amount of other battery and critical
with two ASX-listed graphite hopefuls offered “This in-principle funding support indi- minerals, so we could see the Government
in-principle debt funding support from the cates the Government is serious about val- wanting to invest and support battery miner-
Federal Government. ue-adding battery minerals in Australia and al value-adding. And we could see financing
Export Finance Australia – the official ex- I think it’s well recognised now that we have support potentially.
port credit agency of the Australian Govern- an opportunity over the next few years to es- “We were also evaluating some Asian
ment – issued letters of support to EcoGraf tablish these supply chains. If we don’t, we’re locations for the plant, but some of those
Ltd and Renascor Resources Ltd for poten- going to miss out on enormous value-adding locations we were looking at were actually
tial debt financing support for their respective opportunities for our critical and battery-re- considered as a supply chain risk.
downstream projects in Western Australia lated minerals.” “Given that a lot of the battery minerals are
and South Australia. As part of the next phase of due diligence, now coming out of WA, it’s not that obscure
Both offers remain subject to further due both EcoGraf and Renascor will have to se- to think that we could locate and develop a
diligence. cure binding offtake deals for their respec- business around value-adding graphite in
EcoGraf is proposing to build a $72 mil- tive graphite products, continue to advance WA.”
lion battery graphite purification plant in Kwi- pre-development activities such as EPC Spinks also welcomed news of the peace
nana and has already prepared a detailed contracts and identify appropriate sites for deal between the Tanzanian Government
financial model that incorporates a potential their downstream facilities. and Barrick Gold Corp following a three-
$US35 million debt funding package. Spinks said his company was engaged year standoff which curtailed the progress of
Renascor’s EFA support covers both the with several interested parties on the offtake a number of other companies based in the
Siviour graphite concentrate project and the side of the equation and was also close to East African country.
associated downstream spherical graphite finalising terms for an EPC contract with GR “The year really couldn’t have started bet-
facility. Engineering Services Ltd over the proposed ter for us,” he said. “We got into 2020 and
With Holden recently exiting Australia’s 20,000 tpa battery-grade graphite plant. we just had a series of breakthrough news
car industry and the full impact of the coro- A 6.7ha industrial site in Kwinana has and milestone announcements, particularly
navirus pandemic yet to play out, demand for been earmarked for the plant and EcoGraf with Barrick and Tanzania resolving to settle
opportunities in the country’s manufacturing continues to work with state government their dispute, and that inspired KfW to look at
sector are likely to remain high for some con- agency Development WA to secure that de- moving forward with the debt financing.
siderable time. sired plot of land. “We think the process will take a little bit
EcoGraf managing director Andrew It has been a positive six months for Eco- more time to finalise [due to the coronavirus],
Spinks said Australia needed to find a way to Graf after undergoing a rebranding strategy but we’re confident we’ve got the support of
restore its manufacturing capabilities. focused more on the downstream side of the KfW to take this financing through.”
“I think this predicament we’re in now with business, which Spinks said was a natural Spinks added that he does not expect
the coronavirus demonstrates that if we progression from the company’s ongoing the travel restrictions imposed by Australian
don’t have our own manufacturing and we work at the Epanko graphite project in Tan- state and federal governments to combat
close our borders, it makes things a little bit zania. the global coronavirus pandemic will hinder
tough,” Spinks told Paydirt. “We just saw huge support from the state his company’s ability to secure debt financ-
“We’ve lost a lot of our manufacturing ca- and federal governments for battery manu- ing for the Kwinana facility.
pability and we need to get it back. We need facturing in Australia,” Spinks said.
– Michael Washbourne
EcoGraf is proposing to build a
20,000 tpa battery graphite purification
plant in Kwinana, Western Australia
aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 47
ReGIonAL RoUnDUP
I think Angola showed
Minbos back and tolerance with the lack
quite a lot of patience
in vogue in “ogress that was made
of pr
on the project. It would have
Angola been a very difficult decision
for the Government to go
ahead with us.
Lindsay Reed
aving spent more than $20 million on the hance its credentials for when concessional began in April 2016, but Reed said the com-
HCabinda phosphate project over almost a rights were once again open for tender. pany would now be approaching project de-
decade before reluctantly walking away, Min- This included a series of greenhouse trials velopment from a slightly different angle.
bos Resources Ltd was the odds-on favourite – in conjunction with experts from the Interna- “We’re still going to try and move as rapidly
to reclaim the concession when the Angolan tional Fertiliser Development Centre – to de- as we can to production,” he said.
Ministry of Mineral Resources and Petroleum velop a desirable fertiliser product for Angolan “The resource was put together around an
announced the coveted licence was open agriculture and the broader Congo Basin. export project, but the requirements for a re-
for tender. One of the key findings of that work was source for an export project are a lot more de-
Minbos chief executive Lindsay Reed was that the Cabinda project was capable of sup- manding because you have to have a much
not so confident, however. plying all of Angola’s phosphate nutrient re- better understanding of the deleterious ele-
Speaking candidly to Paydirt last month quirements. ments – aluminum, iron, cadmium and others
after Minbos emerged successful from the “At one stage during the last decade, An- – that are in the phosphate rock.
tender, Reed revealed there were times gola was importing almost 90% of its food, “For this product, they’re largely immate-
during the bidding process where he felt his which given that it’s probably got some of the rial. The cadmium was always very low any-
company’s past history with the project was more fertile and more amenable land for ag- way and the presence of aluminum and iron
anything but an advantage. riculture, was not something that they were makes very little difference. So, it will be a
“While we weren’t the manager, we were happy about,” Reed said. lot easier to take the deposit through the re-
part of a JV which became dysfunctional and “This was partly caused by the oil boom source and reserve categories and move it
wasn’t able to progress the project,” Reed which made everything in Angola very, very forward.
said. expensive and made it difficult for local pro- “If you look at the rate at which they [An-
“I think Angola showed quite a lot of pa- ducers to compete. Now that their currency gola] are currently consuming phosphate
tience and tolerance with the lack of progress is a lot weaker and oil prices are a lot lower, I nutrients, if all of that came from this current
that was made on the project. It would have think it’s probably going to be easier for local deposit, it would still be a very small mining
been a very difficult decision for the Govern- producers, not just in agriculture but in a lot operation.”
ment to go ahead with us. of areas, to compete with imported products. With its long-term future seemingly locked
“While I thought we had a very, very good “We noted that, but I guess we also fell into in Angola, Minbos must now decide whether
proposal, I also understood that we were part it by luck given the fact we found this way of to continue exploring for rare earths in Mad-
of a history that wasn’t very good, so it wasn’t making a phosphate product that appears agascar where efforts to date have returned
a certain thing at all and I think Angola is to very suited to the majority of their agricultural mixed results.
be commended for putting it out to tender and applications.” Reed said a report compiled by CSA
the way it went about this whole process.” Minbos will spend the next few months de- Global Pty Ltd on all work completed over
Following a prolonged but ultimately un- vising new work programmes for the project, the Ambato rare earths project to date was
successful attempt to merge with its then-JV including timetables, scope, offtake, approv- “not as positive as we hoped, but probably
partner Petril Phosphates Ltd, the Minbos als and funding arrangements. A fresh mining as positive as we expected”.
board made the painstaking decision to walk investment contract with the Angolan Gov- “We’re talking with the JV partner there
away from what Reed described as “the most ernment will also be negotiated. and we’re looking at our options,” he said.
interesting project of my career” in late 2017. A resource of 27mt @ 17.7% P2O5 has “The board of Minbos will need to consider
However, Reed and his team never gave been defined for the main Cacata deposit, the way it views Madagascar in view of the
up hope of one day winning back the licence including a “scrub and screen” measured and certainty of now having a project in Angola.”
in its entirety and quietly began chipping away indicated resource of 13.1mt @ 26% P2O5. – Michael Washbourne
on a number of off-site programmes to en- BFS work for an export-based operation
Page 48 aPRIL 2020 aUSTRaLIa’S PaYDIRT
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Archie Koimtsidis Chris Evans Mike Christie Craig Mackay Peter Ledwidge
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ReGIonAL RoUnDUP
B
Bringing ringing
W
West Africa est Africa
togetherogether
t
popular member of Australia’s diplo- The security situation in Burkina Faso between the mining contingents operat-
A matic corps in West Africa is prepar- received global attention late last year ing in West Africa, Barnes and Askew
ing to depart the region in worrying times. after a convoy carrying Canadian mining spearheaded the Australian High Com-
Reflecting on his tenure as Australian company SEMAFO Inc employees from mission’s inaugural WAMS conference
High Commissioner to Ghana, Andrew Ouagadougou to the Bongou gold mine last year, with the 2020 iteration meant to
Barnes (pictured) said the security situa- (eastern Burkina Faso) was attacked by look at building on more practical meas-
tion in parts of West Africa, particularly in terrorists. ures that industry can cooperate on in
Burkina Faso, was a low point. Terrorists have exerted their influence, regards to security measures.
Since 2016, Barnes has been based in mainly jihadists spreading down from Feedback from the first WAMS event –
Accra with his remit in West Africa tak- southern Mali into northern Burkina Faso attended by some 200 people represent-
ing in not only Ghana, but Cote d’Ivoire, and now into the latter’s south-east, for ing 80 companies – indicated the broad
Liberia, Sierra Leone, Guinea, Senegal, the past two years forcing an active re- strategic information provided – some-
Mali, Burkina Faso and Togo. sponse from the Australian Government thing not always accessible – and the
“Certainly, the deteriorating situation given the wealth of interests of Austral- political underpinning of security in vari-
in Burkina has been very disappointing ian companies in different parts of West ous countries was a hit with conference
and extremely regrettable and damag- Africa. participants.
ing for Burkina Faso, it’s people and the Initiatives such as the Australian Min- “We really tried to provide the strategic
Government there,” Barnes told Paydirt ing Network (AMN) WhatsApp group information needed to make the big in-
recently. were created by deputy high commis- vestment decisions,” Askew said.
“There was an intended coup in Burki- sioner, Ghana, Glen Askew, to serve as “We need to provide a greater level of
na Faso at the end of 2015, but that was a platform of information sharing for peo- political content for investment decision-
resisted. A reasonable democratic gov- ple to be aware of events and situations makers. As I have stressed in the past,
ernment is in place and travelling in the unfolding. the conference is not just about the se-
right direction, by no means perfect, but The AMN WhatsApp group was cre- curity operators, it is about joining those
was making gains. So, this really dramat- ated with terrorist attacks in mind, how- security operators within companies with
ic and devastating series of attacks in the ever, at the time of print, it was proving an the senior management, so they are both
north and other ones around the country invaluable tool to inform members of the on the same page.”
have really destabilised confidence of evolving coronavirus pandemic and the While WAMS has been sidelined for
foreign investors. Above all, 500,000- limitations/restrictions in the West Africa 2020, security issues remain but the
800,000 internally displaced people from region, while keeping users up to date band of West African miners and ex-
the north of Burkina are now in Ouaga- with the Australian Government’s Smart- plorers now have an open line of com-
dougou and elsewhere. raveller advice. munications established that should be
“It is a huge challenge for the people It is due to the spread of COVID-19 utilised to maximum capacity.
to cope with, so that is probably the main that this year’s West Africa Mining Secu- “The deterioration in Burkina and Mali
disappointment and downside to what I rity Conference (WAMS), scheduled for has a silver lining in that since Andrew
have seen in the region in the last four early May in Accra, was cancelled. and I have been here there has been
years,” Barnes said. To deepen the level of engagement an increase in the sense of community
Page 50 aPRIL 2020 aUSTRaLIa’S PaYDIRT
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