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Published by Paydirt Media, 2016-05-25 03:18:17

pd239 June 16 mag-web_Neat

June 2016 VOLUME 1. ISSUE 239 $11.95


front and back cover
supplied seperately

Striding ahead:

Capital and PYBAR in African tie-up

• SAREIC review • Copper focus • NSW profile
• Spotlight on Europe • International Services Directory

ISSN 1445-3436

9 771445 343007



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PAYDIRT (ISSN 1445-3436) 18 COVER 18
Published by Australian drilling firm Capital Drilling 50
Paydirt Media Pty Ltd. recently announced a new joint marketing 60
A.C.N. 063 985 133 agreement with mining contractor PYBAR
Mining Services. The agreement will see
Head Office: PYBAR take its underground skills to Af-
Suite 9, 1297 Hay St, West Perth rica for the first time. Dominic Piper spoke
Western Australia 6005 with both companies to find out their plans
P.O. Box 1589, West Perth for the partnership and why the time is
Western Australia 6872 right to join forces
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426 24 SAREIC REVIEW
[email protected] The South Australian Resources & Energy Investment Conference was hosted in Ad-
elaide once again in April. Among Paydirt’s
Editorial: extensive coverage of the annual event is
Editor: Dominic Piper a closer look at the findings of the recent
Deputy editor: Mark Andrews Royal Commission into the nuclear fuel
Journalist: Michael Washbourne cycle
Graphics: Marian Noonan
Contributors: 36 COPPER
Keith Goode (Sydney), Brendan Ryan Dr Copper is known as the bellwether
(Johannesburg), Ross Louthean commodity. When copper prices are mov-
ing up, the entire resources sector has
Advertising: reason to be happy. Paydirt looks at the
Advertising manager: Tony Mwarey market fundamentals for the red metal
Subscriptions: Mitchelle Matambo and also at the next generation of Austral-
Phone: (+61 8) 9321 0355 ian companies betting that a rebound is
Facsimile: (+61 8) 9321 0426 imminent

Pre-press and printing: 44 NEW SOUTH WALES
Vanguard Press 26 John St, It may have been the home of Australia’s
Northbridge WA 6003 first gold rush and can still boast some of
Member of: the largest mines in the country but land
access issues and legal confusion means
Paydirt Media New South Wales is far from the top of
Executive chairman: Bill Repard the mining investment ladder. Our feature
Finance manager: Giovanny Jefferson takes in some of these issues while also
Accounts/administration: finding the junior companies which are
Heather Melling making progress in the State
Conferences: Tammy Caldwell,
Melita Fogarty 50 EUROPE
There is a widely-held belief that when it
comes to resources development, Europe
is too hard. Too many people, too many
competing land-users and an unwieldy
bureaucracy are all cited as detrimental.
However, more than 35 ASX-listed compa-
nies are now operating on the continent.
Paydirt examines some of their stories

Cover image: Capital Drilling 60 SERVICES DIRECTORY
managing director Brian Rudd Our annual review of Australian firms
providing services to overseas mining mar-
Member of: kets takes in operators in Europe, Latin
Australia-Africa Minerals & Energy Group America, Africa, Asia and the Pacific

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


ASIC stamps all over
the green shoots

There was great consternation in junior prepared to claim scoping studies as concrete proof.
mining circles last month when ASIC The numbers used in scoping studies can be misleading.

announced it would be clamping down Apart from using inferred resources which cannot be used in

on the disclosure of scoping studies more detailed studies, the commodity prices assumptions are

and other project economics informa- often overly ambitious.

tion in market announcements. A recent scoping study I looked at used a commodity price

ASIC said it would enforce guide- 100% in excess of the current spot price. Even if you could justi-

lines which emphasise that claims fiably claim prices have bottomed out – and who would be brave

about the economics of a project cannot be made unless a com- enough to do that at the moment – there is absolutely no justi-

pany can prove it has funding for the project. fication in claiming they will double in the four years it takes to

ASIC’s announcement came at a bad time for the industry. We build a project.

are just starting to see green shoots appear after a bleak three The use of net present value (NPV) as a headline figure in

years for the junior resources sector and stringently enforcing the scoping study is also superfluous. For a start, NPV is re-
“these guidelines has the potential to stop the growth of these ally only useful for comparative purposes; for instance, if a com-
green shoots before they have pany has two projects at the

become firmly established. We don’t want a regulatory same stage and is deciding
ASIC is aiming to provide which to go ahead with first. In

protection to mum-and-dad regime where only those most cases, a company is only
investors, some of who have companies with genuinely world- considering a single project
been burnt by companies who so there is nothing to rank the

announce attractive headline class assets and strong financial NPV against.
figures for their projects only backing to raise capital. It is a And, many companies are

to fail to ever get them off the dropping the industry-standard

ground. However, in doing so difficult balance but if the regulator 10% discount on the NPV and
it is in danger of crushing the using 8.5% or even 5%, again

entrepreneurial spirit the junior is determined to apply the guidelines misleading investors who may
mining sector was founded on. to the letter, it will stifle the junior be comparing projects.
We don’t want a regulatory
Investors should be pro-

tected but the junior end of the sector to an unbearable extent. regime where only those com-
share market is also based panies with genuinely world-

on the high risk/high reward class assets and strong finan-

investment case. There are surely no punters, no matter how cial backing to raise capital. It is a difficult balance but if the

unsophisticated, who expect every penny dreadful they invest regulator is determined to apply the guidelines to the letter, it will

in to eventually build a “world-class” project. They may as well stifle the junior sector to an unbearable extent.

gamble on one of the 5,000 emails from Nigerian princes with Investors must always be wary and find independent analysis

billions of dollars in a secretive bank being the legitimate one. of project economics where they can – although this in itself

If companies can’t lay out their own economic projections for is becoming increasingly difficult as “paid research” begins to

projects, they have little chance of convincing institutional and dominate coverage – but there is some cursory analysis which

sophisticated investors of the investment case. can be done to give them a good idea of the legitimacy of com-

And, in the case of companies dual-listed on the TSX in Can- pany claims.

ada the regulatory burden will be almost impossible to deal with. The regulator should be concentrating on the information be-

Such companies will be prevented from disclosing economic ing released in economic modelling statements, rather than fo-

modelling on the ASX but legally obliged to report all such infor- cusing on preventing such information being made public.

mation on the TSX; a compliance nightmare in the making. The Association of Mining and Exploration Companies imme-

ASIC is obviously trying to put a stop to some of the outlandish diately ran hard on the issue and Federal Resources Minister

claims companies can make in announcements and there is evi- Josh Frydenberg has already answered its plea to step in, telling
dence that companies are becoming particularly liberal regard- The Australian last month that he would raise the concerns with

ing the economic potential of early-stage projects. ASIC.

When I started as a resources reporter more than a decade The junior mining sector is in a delicate space at the moment

ago, a PFS was the first time you usually saw solid economic and restricting its ability to sell itself may lead to the harsh winter

numbers for a project. During interviews, executives would often continuing for a much longer period than expected.

talk about back-of-an-envelope numbers but were conscious

they couldn’t disclose them due to a lack of confidence in both

the dollar figures and the orebodies they were based on.

We are in a situation now where companies – desperate to

show risk-averse investors they have a project which will not

fall by the wayside like so many others of the last 10 years – are

[email protected] @DominicPiper



Twigger sparks
Latin America Down Under

The four-year “nuclear winter” in the sion (COCHILCO) expects copper Liam Twigger
resources sector is over, according prices to remain stable at $US2.15c/lb
to PCF Capital managing director Liam or $US4,850/t this year, players in the nities on offer are relatively well under-
Twigger. space would be more enthused with its stood.
long-term forecasts.
Chairing the opening session of Latin However, it was evident from two days
America Down Under 2016 in Perth, COCHILCO executive vice president of presentations and discussion at Latin
Twigger was adamant the grim days lin- Sergio Hernández said the commis- America Down Under that economies
gering in the resources sector were num- sion expected average copper prices for previously deemed closed to foreign in-
bered. the next decade to be in the vicinity of vestors offer more opportunities than
$US6,330/t or $US2.87/t. ever for Australian companies to capital-
With interest rates around the world ise on.
being pushed down to record lows and “This situation, of course, is not good
depreciating currencies, Twigger said a in the short term, but in the long term it Most recently, Cuba has shown a will-
return to a focus on value in the market is is very important to have presence. The ingness to engage with the international
going to be seen. importance of the investors in the mind is investment community, while Argentina
very important. The reaction of the mind – which is considered to be “under new
“It is no wonder people are returning is more important than the balance of the management” following the election of
to the gold market and it is great to see,” market because at this moment investors President Maurizio Macri – is looking
he said. “Some people wait for the bell are thinking of investment in different in- at mining as one outlet to jump start its
to ring to tell them that the worst is be- dustries,” Hernández said. economy.
hind us and the market is taking off... if I
had a bell I’d ring it now. The outlook is “The future of investment depends Considering international capital mar-
very positive and over the next two days on the balance of the market in the long kets and the global economy is still re-
[of the Latin America Down Under con- term and a measure of confidence will be covering from the stunning slide of the
ference] we have a fabulous line up of in [investments made for] the long term. last four years, investors are likely to
speakers; we have industry leaders, we It is not a situation of this week or next tread carefully for the time being. How-
have country leaders and we have great week, it is for the long term. The mining ever, if Twigger is on the money, better
senior executives promoting opportuni- sector is a sector that needs investment times in the resources sector could re-
ties and their projects. I’d encourage all in the long term for five, 10 or 15 years.” turn sooner rather than later.
of you to get your business cards out,
your deal-making shoes on and make The commission estimates $US44 bil- – Mark Andrews
the most of this fabulous opportunity and lion will be invested in 23 projects over
I hope we can mark 2016 as being a turn- the next 10 years in Chile alone. For full coverage of Latin America
ing point for the resources sector.” Down Under 2016 get your copy of Pay-
Chile is one country Australian compa- dirt’s July edition, which will also feature
Twigger’s optimism is not born from nies, including those in the METS sector, a preview to Diggers & Dealers
blind hope rather it is a return of positive are well represented in and the opportu-
sentiment in equity markets.

“Compared to what we have seen in
the last four years there is a change of
sentiment. And, as Keynes would say
[there is] a return of animal spirits,” he

Since January, $860 million has been
raised on the ASX for mining and explo-
ration companies, 50% more than this
time last year, while nearly $US3 billion
has been raised in North America for the
mining sector.

Lithium and gold have led the mining
sector’s resurgence, with a rebound in
base metals prices expected to follow in
time, according to Twigger.

A return to better base metals prices
would certainly provide some cheer in
sections of Latin America, particularly in
the likes of Chile, Peru and Mexico which
are among the top 10 producers of cop-
per globally.

While the Chilean Copper Commis-



Botswana eyes new opportunity

This year’s Botswana Resourc- 0.6c on December 31 to as high
es Sector Conference will as 4.9c in March.

highlight the growing emphasis on Under the leadership of found-

the infrastructure solutions need- ing Western Areas Ltd managing

ed to tap into the vast resources director Julian Hanna, MOD has

potential in the landlocked South- continued its exploration suc-

ern African country. cess, reporting hits of 15m @

Widely regarded as the most 1.8% copper, 5m @ 4.8% copper

investment-friendly and stable and 1m @ 994.3 g/t silver in May.

country in Africa, Botswana has Hanna will be speaking on the

been a model for resources devel- main programme, as will Frazer

opment for more than three dec- Tabeart, managing director of

ades but the Government is eager African Energy Resources Ltd,

to wean the country’s economy The Gaborone International Convention Centre will host the which is developing a series of
off its dependence on diamonds. Botswana Resources Sector Conference this month coal-to-power projects designed
However, to do so it must over- to service both the domestic and

come the infrastructure gap that exists in ASX-listed companies have enjoyed export markets.

power, rail and road in the country. The remarkable success in Botswana in the Also returning to the conference is Mt

Botswana Resource Sector Conference last 15 years and a large Australian con- Burgess Mining NL, which in November

– to be held in Gaborone on June 14 tingent will be present at the conference last year finally won its drawn out battle

and 15 – will convene a series of panel once again. to secure prospecting licence renewals

sessions to discuss these challenges as MOD Resources Ltd is likely to be the for its Kihabe base metals project in the

well as looking in more detail at the value main focus of attention this year after a country.

of the diamond industry to Botswana’s string of impressive drilling results at its A detailed programme and registration

economy and how the country can real- Mahumo copper-silver project saw the details can be found at www.capconfer-

ise its wider resources potential. company’s share price catapult from



29-30 May 2013, Sydney

The CD-Rom of Paydirt’s 2016
Latin America Down Under Conference

will be available soon

CD-Rom – $80 (inc. GST)
Phone (+61) 8 9321 0355 or email [email protected]


Budget breathes some life
into exploration

An additional $100 million committed
to Geoscience Australia in the 2016-
17 Federal Budget will be used to deliver

more pre-competitive data on minerals,

groundwater and energy occurrences in

northern and South Australia.

Geoscience Australia estimates up

to 80% of Australia remains under-ex-

plored, particularly in the Northern Ter-

ritory, Queensland, Western Australia,

and South Australia. The new budget in-

jection, to be managed under the Explor-

ing for the Future programme, will see

mapping surveys undertaken throughout

these areas in a bid to fuel private sector

exploration investment.

Graham Short, Association of Mining

and Exploration Companies (AMEC)

national policy manager, said the an- It is estimated that 80% of Australia remains under-explored

nouncement of the $100 million commit-

ment was “excellent news” but urged the due to a lack of infrastructure for instance assist local communities and further the

Federal Government to go even further power, ports, and rails.” mineral potential for the underexplored

in its support for the exploration sector. The South Australia Chamber of Mines region. This region comprises one of the

“Although the news is appreciated by & Energy also welcomed the budget key frontiers under the South Australian

AMEC, they would like to see a long- measures, chief executive Jason Kuchel Government copper strategy and ena-

term rollover with additional annual com- saying the Geoscience Australia boost, bling greater access will assist explora-

mitment to the Exploration Development proposed company tax cut and an in- tion.

Incentive (EDI) in the future, to stimulate crease to regional roads funding were “A failure to include the sealing of the

investment in eligible Australian junior three key measures set to benefit the SA Strzelecki Track however is seen as a

exploration companies,” Short said. resources industry. missed opportunity – not only for the oil

“These strategies are also vitally im- Kuchel said SACOME had lobbied the and gas sector – but also for livestock,

portant in recognising that a number of Federal Government to include SA as tourism and freight between South Aus-

large producing mines are coming to well as northern Australia in its develop- tralia and Queensland.”

an end and not being replaced at a fast ment plans. Law firm Grant Thornton was pleased

enough rate.” “The announcement of further funding to see the budget include support for a

Short also welcomed the enterprise to APY land road upgrades is appreci- junior mining sector that had suffered

tax plan to reduce corporate tax up to ated. Opening access to this region will challenges in its recent history, say-

25% by 2026-27 but disa- ing the additional funding

greed over the timing of the to Geoscience Australia for

plan. mapping activities would be

“[It] is a significant step in welcomed by exploration

the right direction, but needs companies and junior min-

to be implemented sooner to ers.

be a clear incentive for job Minerals Council of

creation and an economic Australia chief executive

boost throughout the nation,” Brendan Pearson said the

he said. proposed company tax cuts

“New mines will generate would be good for all Austral-

a substantial economic and ian households.

social dividend for the nation “Two-thirds of benefits

and local communities from from company tax cuts flow

the creation of new mines through to wage earners and

and subsequent jobs. The consumers,” he said.

Government should also take – Brendon Shilling
into consideration to unlock-

ing resource projects are in The Federal Government committed $100 million to Geoscience

situations of being ‘stranded’ Australia in May’s Budget



Dakota’s eurovision to
start in the Pilbara
“This is the early days of lithium and
With many ASX juniors “expanding the penetration of electric vehicles,
their interests” into lithium, market especially in the European market, is set to
observers have been left to ponder just
which companies are the real deal. increase rapidly, exponentially potentially,

Having more than doubled its share
price since the start of the year, Pilbara
Minerals Ltd’s credentials at the 80.2mt

@ 1.26% lithium Pilgangoora lithium-tan- and the amount of lithium
talum deposit are all but confirmed. that is required to

Pilbara Minerals continues to enjoy

exploration success and has upped its fuel that growth is
exploration target at Pilgangoora to 130- exponential also. That
150mt @ 1.2-1.5% lithium and 175-225
ppm tantalum. is definitely not
a bubble to my
Pilgangoora is shaping as a glob- mind at all.

ally significant project which will be de-
veloped by a board led by former Atlas
Iron Ltd chief Ken Brinsden, who knows

a thing or two about operating in the re-


Furthermore, the company has had no

issues raising large amounts of capital

and remains cashed up to pursue its am-

bitions on the back of a share price which

has gone from 30c/share at the start of

2016 to more than 80c/share at the time

of print.

Pilbara Minerals has well and truly dis-

tinguished itself from the swathe of new

entrants into the lithium field.

At this stage, Dakota Minerals Ltd ap-

pears to have similar foundations in place

to achieve some of the success Pilbara

Minerals’ has had in the region. Dakota managing director David Frances finds himself vested in the lithium sector

“There are a few ways you can elevate

yourself from the pack, there is always in when they did as Dakota – trading at fine more pegmatites and plans to deploy

the micro caps and the next level of play- 22c/share in early May after starting the the money raised to complete more RC

ers and there are a few ways we can do year at 5.8c/share – followed up with the and diamond drilling over the next three

it; either by having better management release of the highest grade lithium re- months.

than the rest, having a strategy that is sults from its Lynas Find project. Should Dakota continue to deliver

more clear and concise and the other At the time of print, results from a high grades of lithium from Lynas Find,

one is have more money than the rest. I 26-hole drilling campaign continued to Frances said economic studies based on

think we have all three of them,” Dakota stream in, with the latest and highest a 5-10mt resource is feasible.

managing director David Frances told grade at Lynas Find being 21m @ 2.64% Therefore, metallurgical test work will

Paydirt. lithium. Other significant results included also be carried out to ensure resources

Having locked in $12.3 million in early 26m @ 1.96% lithium and 26m @ 2.08%. are compiled to a level of satisfaction

May via a placement to institutional and With only half of the holes drilled ana- now being asked by ASIC.

sophisticated investors of 61.6 million lysed, the average grade intersected is While Altura, Pilbara Minerals and now

shares at 20c/share, Dakota is cashing 1.78% lithium at Lynas Find, which is part Dakota are starting to demonstrate po-

in on positive sentiment in the lithium of the Pilgangoora area hosting Pilbara tentially viable projects in Pilgangoora, it

market. Minerals and Altura Mining Ltd (35.7mt is unlikely that three separate operations

The raising was heavily oversub- @ 1.05% lithium). will emerge in the area. Whether or not,

scribed at the issue price which was at Essentially, all three companies are on and how, consolidation in the area might

an 8.1% premium to the last closing price, the same deposit, with Dakota boasting progress is not yet known, but Frances

3.5% premium to the five-day VWAP and the highest grade thus far. is certain the high-grade Lynas Find pro-

17.4% premium to the 10-day VWAP. Dakota will continue with a series of ject is shaping as a good starter for Da-

Investors would have been happy to tip mapping and sampling activities to de- kota’s broader ambitions.


“The main play is the Pilbara assets Average lithium grades from latest drilling at Lynas Find is 1.78%
and we will be putting more resources
into that…to make sure that is driven as growth is exponential also. That is defi- Battery grade lithium alone has been
hard and as fast as it can be to whatever nitely not a bubble to my mind at all.” forecast to grow by 10-15% or 200,000-
destination that is [commercialisation or 250,000 tpa between 2015 and 2025.
standalone production]. Concurrent with The window of opportunity for lithium
that we are looking at other assets glob- hopefuls is now and over the next five “Different global locations have dif-
ally, specifically in hard rock and other years there will be many players to miss ferent investment strategies and time-
styles of lithium mineralisation,” Frances out on producing lithium from hard rock frames. I think that in the lithium hard
said. sources. rock scene if you are not in production
within two to five years with solid long
Frances, who conjured the highest With an ounce of luck Dakota won’t be term off-takes – for the bigger projects
capital raising and IPO in the world in one of the lithium “has beens”.
2010 by taking DRC-copper focused I’m talking about – then
Mawson West Ltd to the TSX with a mar- you are not going to get
ket capitalisation of $250 million, sees there, you will miss the
Dakota’s future beyond the borders of boat,” Frances said.
Western Australia and opportunities
across all lithium types (brines, clays, “There will always
hard rock) will be assessed in the Ameri- be room for small high-
cas, Asia and Europe. grade, low impurity, bou-
tique lithium hard rock
The electric vehicle evolution has Eu- stories for the ceramics
rope desperate for reliable supply in the industries, but if you are a
region, rather than depending on China, big player and you haven’t
which is a gap Dakota envisions filling. got your deals done in five
years you will miss out
Helping the company’s cause will be because I think the tech-
the expertise of technical director Franc- nologies in brines plays
es Wedin, who was part of the previous will over-take [hard rock]
team working on Lynas Find and has a and they will be the big-
PhD on the Tethyan Belt in Europe. ger Tier One assets that
will be producing lithium
“He believes that we have a bit of an for the battery market go-
edge on where we might be able to look ing forward.”
for these [lithium] things,” Frances said.
– Mark Andrews
Building a significant lithium company
is not what Frances expected to be do- Lynas Find is essentially part of the Pilgangoora deposit which
ing three years ago, but after moving on hosts three companies
from Mawson West, then testing the wa-
ters in the Fraser Range with Windward
Resources Ltd, he is convinced he is in
the right space despite conjecture about
whether or not lithium is just another re-
sources bubble.

“I don’t think anybody
did, except for the Green-
bushes guys,” Frances
said about being a lithium

“The demand for lithium
is different to all the his-
torical demands of most
other metals. This is tech-
nology where things that
are driving it are unstop-
pable; its global change,
its environmental change,
it is an unstoppable force
just like the early days of
copper and nickel.

“This is the early days
of lithium and the pen-
etration of electric ve-
hicles, especially in the
European market, is set
to increase rapidly, ex-
ponentially potentially,
and the amount of lithium
that is required to fuel that



Crushing the concrete block

On May 6, I, along with Chris Sabin of of the various state chambers, such as Fiona said she noticed there still ap-
the Sydney Mining Club, attended the Queensland Resources Council and peared to be about the same number
what I thought was a Wimnet launch at NSW’s Mineral Council. of women in senior mining industry po-
EY’s offices in Sydney. sitions as when she left Delta Gold 20
Amogn the attendees were Fiona years ago and why was that?
Our attendance came about after I sat (WIMnet NSW’s mentoring sub-com-
next to former Delta Gold chief financial mittee chair), Deirdre Tindale (WIMnet As Fiona said: “For many women it is
officer Fiona Robertson at a Sydney Min- NSW’s chair, who is also manager cor- not a case of trying to break through the
ing Club lunch the day before. porate affairs and government relations glass ceiling to advance their career, it is
for BHP Billiton Coal NSW) and Ali more a case of how to get past the ‘con-
From the information Fiona sent me, Burston (WIMnet NSW’s mentoring pro- crete block’ and that is why it is so critical
the launch could broadly be described gramme director from Metisphere an or- in the programme to pair mentees with
as a women-in-mining organisation that ganisational psychology service, based mentors who have significant experience
involved mentors and mentees, and in Perth). in the same field.”
seemed to be mostly supported by the
mining industry with gold, silver and The national entity, WIMnet under- As such, Fiona mentors people in fi-
bronze sponsors. takes policy and advocacy initiatives, nance.
with the various state entities primarily
Chris and I caught the same bus to the involved with running networking, pro- WIMnet NSW’s mentoring programme
city, and were slightly late to the launch fessional development and mentoring was the second programme launch of 37
and found a gathering of mostly women programmes. WIMnet’s overall goal is to mentees. In 2015, there were 23 appli-
of various ages as shown in the picture. assist with the attraction and retention of cants for the 20 available positions. The
women in the resources industry. mentees are women with 3-20 years’ ex-
Senior managers and spokespeople perience and of the 2016 intake, about
from gold sponsors such as Orica and The launch I attended was in fact WIM- one-third are engineers, with the remain-
Coal & Allied gave addresses. net NSW’s mentoring programme which der covering geology, accounting, envi-
is an initiative of WIMnet (WIMnet NSW ronment, logistics, organisational devel-
The Coal & Allied speaker talked about being NSW’s women in mining network). opment and processing.
his company, the Rio Tinto Ltd connec- The mentoring programme aims to ad-
tion, how many people they have, how vance the careers of women in the min- There are 28 female and nine male
many tonnes they produce, the equip- ing industry. mentors in the 2016 NSW programme
ment of draglines and trucks, and the (drawn from a larger pool of mentors),
importance of safety, stressing that he typically with 5-15 years’ managerial or
hoped his four mentees took away the senior management experience who are
importance of safety in the coming pro- paired with mentees according to similar
gramme. disciplines.

Chris said to me: “Do you think they The mentors have no connection with
are all PhD students or students at vari- the employer or place of work of the men-
ous NSW colleges?” I didn’t know. tee, meaning mentees receive compre-
hensive training and ongoing educational
“They have to be students, metallurgy, correspondence, with the development
geology, mining, but they are too far away of career goals and support from an ex-
for me to read the name tags,” Chris re- perienced, friendly professional in their
plied and when two or three of the men- industry.
tees received scholarships that settled it
– they had to be students or something. There are currently 11 sponsors to the
programme in NSW; Orica and Coal &
How wrong we both were. Allied as gold sponsors, Downer EDI,
WIMnet is the Women in Mining net-
work which was founded in 2000 and
has around 4,000 members. And, WIM-
net (which costs nothing to join) is sup-
ported by AusIMM and the members


Glencore, ANZ, Weir Miner- sometimes happens) where

als, Corrs Chambers West- it is outside of the mentor’s

garth and Port Waratah Coal knowledge or experience, then

Services as silver sponsors the mentor can receive sug-

and Energetics, EY and Mc- gestions from Ali on how to

Cullough Robertson as bronze handle the issue.

sponsors. The sponsors obvi- The mid-way session is cen-

ously provide finance to the tred on networking from a prac-

programme, and in NSW each tical perspective for mentors

mentee contributes $1,000 to and mentees. It can be seen

the programme. A scholarship that both mentors and mentees

means a mentee receives a benefit from the programme.

“freebie” or their $1,000 back, Ali also covers WIMWA’s and

i.e. free participation in the pro- WIMARQ’s mentoring pro-

gramme. grammes, but not those of the

The WIMnet mentoring pro- other WIMnets (NT and SA).

gramme actually started in As Fiona commented, WIM-

WA, where it is run by WIMWA net NSW is gradually growing

( and has and becoming recognised.

been operating for five years and has successful mentoring partnerships, and Who knows? In the future a similar or-

had more 300 successful mentees. WIM- then the mentors and mentees meet for ganisation could exist for males, after all

WA now has two programmes per year the launch in the late afternoon/evening. “concrete block” issues are not gender

with 40-50 mentees per programme. In The mentors and mentees then typically specific (or apply only to the mining in-

“Queensland, it is delivered by WIMARQ meet every three weeks over the five- dustry) as I am sure many could concur.
(, and month period, up to seven times in all, to Ausgold Ltd geology manager, Mela-

has been operational for nie Sutterby – one of three

about three years with 60 For many women it is not a case female presenters at the
successful mentees so far, RIU Sydney Round-up

and its 2016 programme of trying to break through the began her speech by first
for 35 mentees starts in glass ceiling to advance their career, thanking a member of the
July 2016. audience (Andrew Tunks)

Queensland was initially it is more a case of how to get past for mentoring her. Mela-
supported by the State the ‘concrete block’ and that is why nie stated that without that
Government, but since the mentoring experience she

change in leadership it is it is so critical in the programme to would not be in the position
now – like other states – pair mentees with mentors who have she was today.
supported by the industry.
WIMnet NSW, and its

There is also a WIMnet NT significant experience in the same field. sister organisations, are
and WIMnet SA, which like clearly proving to be very

WIMnet NSW, operates valuable in developing the

under the auspices of the AusIMM (aus- discuss progress. Meetings are typically careers of women in all aspects of the face-to-face, or by Skype or telephone. mining industry.

WIMnet NSW’s ( Ali maintains periodic, ongoing con- Keith Goode is managing director of Ea-

wimnetnsw) mentoring programme, like tact with the mentors and mentees dur- gle Research Advisory Pty Ltd

the other state organisations, includes ing the programme to provide additional

three networking sessions per year; the guidance. Should an issue occur (which

launch (May 6), mid-way (August 11) and

celebration (October 20) in 2016.

For NSW, the programme is held over

a five-month period from May to October.

At the first meeting, Ali Burston gives

a three-hour training session to the men-

tees on the structure of the programme,

identifying issues and enabling the men-

tees to intermingle as a group followed by

lunch. The mentees are given the name

of their mentor and suggested to Google

them so that they know the background

of their mentors before meeting them.

In the afternoon Ali (an organisational

psychologist) gives a two-hour workshop

session to the mentors who are told what

the mentees have been given, such

that the onus is really on the mentee to

drive the programme arrangements. Ali

advises the mentors on how to conduct



Golden chance for OreCorp

The mining cycle descent has meant OreCorp has observed sulphides from early drilling at the Akjoujt South
projects which looked good at boom copper-nickel project in Mauritania
time prices have either been shelved or
remain idle, as many companies fight for through to at least the completion of a set on this project with over 237,000m of
survival. drilling done in the resource area alone.
DFS. It is quite phenomenal, we may have to
OreCorp Ltd was one company that do some drilling as well for project fi-
thought this may present an opportunity A maiden resource estimate, complet- nance, to get a bit more in the measured
to snaffle a decent project at a good price category, but I think that would probably
in quick time. ed by CSA Global, of 21.3mt @ 4.1 g/t be few and far between. There is a lot
of potential there for a lot more gold; it
OreCorp has landed its project of gold for 2.78 moz was released in March. is just a question of when we would like
choice – Nyangza in Tanzania – however to drill it.”
managing director Matthew Yates ex- With cash in hand, OreCorp can ac-
plained to Paydirt the process was more Nestled in the Lake Victoria Goldfield,
trying than expected. celerate scoping study work and with the Nyanzaga is surrounded by multimillion
ounce mines – Bulyanhulu (17.3 moz),
“I think the past three or four years wet season winding down there will also Buzwagi (3.1 moz) and Golden Pride to
have tested the faith of everybody; this is the south and Geita (21.3 moz) to the
the third bust I have been involved in and be a push on the exploration front. west.
it is the time you question why you are
there because it is so difficult and then Yates said there was plenty of scope to Therefore, there is good reason to be-
you get that break you have been work- lieve OreCorp can expand its resource
ing so hard to get,” Yates said. increase resources at Nyanzaga, but in base and there is no doubt in Yates’ mind
that not only Tanzania, but Africa in gen-
“We weren’t interested in banging in line with its strategy of becoming a near- eral, is starting to look attractive once
any old project. It had to be something again.
that had a good chance of becoming a term gold producer the immediate focus
mine. A lot of people relented and I think He said as the gold price moved up
one of the hardest things we faced as a is on “locking down the nuts and bolts of ($US1,263/oz at the time of print) some
group was that all the money spent in the of the African gold projects that were on
boom meant we would be able to pick up a scoping study, then the nose of investors at $US1,000-1,100/
a good project really easily. It ended up oz were starting to look attractive again
being extremely difficult and thankfully PFS and DFS”. and the appetite for risk was starting to
we had a good treasury and a fantastic increase.
supportive board and a good supportive Therefore, time and
shareholder base that let us carry on. “I think it is coming back,” Yates said
money will be spent about the attractiveness of investing in
“We have delivered the right outcome, Africa.
but like everybody there were times on geotechnical, hy-
where it did test our faith. We got there “When the markets turn in a negative
in the end and this is exactly where we drology and metal- fashion everybody packs up and goes
wanted to be and ex- home. Also, having things like Ebola
actly the position we lurgy work, as there is doesn’t help, it puts people off and gives
wanted to be in; a them another reason in a negative mar-
great project, a good already enough gold ket not to go there. Some of those issues
country and a great
group of people work- in the ground to get
ing together with a
good treasury.” started and deliver

Having raised $16.2 a scaleable project,
million at 27c/share
via a heavily oversub- Yates said.
scribed institutional
placement last month, OreCorp hopes to
the company is well
positioned to fast- Matthew Yates have a scoping study
track development completed by the end
and exploration activities at the Nyan-
zaga gold project in Tanzania. of this year and DFS

OreCorp can earn up to 51% of Nyan- finished two years later.
zaga after entering a JV agreement for
$1 million with Acacia Mining plc late last “I think as time goes on, probably post-
DFS, people would start to look at us to
OreCorp will manage Nyanzaga, in
the Lake Victoria Goldfields of Tanzania, expand that [resource] and we’ll also look

at satellites that sit within the mining li-

cence,” Yates said.

“Most of the drilling has already been

done and there is a phenomenal data


are starting to be removed and Africa is that by raising $16.2 million via a place-
starting to be attractive again. There are
very few places on earth with the oppor- ment.”
tunity to find big elephant-scale projects
and Africa as a continent, certainly in my OreCorp has committed about $3 mil-
career, has been one place to go.”
lion in JV obligations already, and post
Yates said he was looking forward to
a strong renaissance in the African gold placement costs it should have about
sector in the years ahead and was grate-
ful to be rooming with Acacia at Nyan- $18 million in the bank.
While Nyanzaga takes up near-term
OreCorp farmed into the project when
gold was about $US1,080/oz and Yates attention, OreCorp’s stable also com-
doubted whether many other juniors
would have had the capacity to approach prises the Akjoujt South copper-nickel
an organisation such as Acacia.
project in Mauritania.
“I think [we signed the deal] when gold
was right at the bottom of the cycle and Drilling started at Akjoujt South in
it is something that I don’t think any old
junior would have been able to do, and March, with OreCorp announcing sul-
without being arrogant about it, it was
because as a group we are quite excep- phides had been observed from the first
tional,” Yates said.
three holes drilled.
“We have a lot of depth of experience
at board level [including Craig Williams Yates said drilling was taking a while
as non-executive chairman] and that was
a big decision on behalf of Acacia as to finish and hoped to have results out in
well, they weren’t going to pass it on to
a fly-by-night mining company or a sau- the next few months.
sage factory out of West Perth.
“We have hit something there,” he said.
“The project also needed someone
“We are clearly in a system; it is just a

question of what it is. We will get the as-

says for that and like a lot of these base

metals systems it takes a bit of time to

Nyanzaga is in a prolific gold producing get out, so we are looking at some other
region of Tanzania geophysical techniques and obviously
more drilling.”

that was credible and it also needed Should OreCorp be able to deliver

someone who was going to be able to some good results, further share price

raise funds to do it because there is a appreciation may result, with OreCorp

quite a spend on this JV and we need- more than doubling its share price this

ed to show capacity that we could raise year to over 30c/share at the time of print.

money. I think we clearly demonstrated – Mark Andrews

Case histories of discovery CONFERENCE

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Creating sustainable cost savings

Energy and resources companies glob- Overall approach
ally are relentlessly cutting costs in
the face of dramatic falls in commodity

prices. All aspects of costs are under

scrutiny, from the efficiency of physical

operations through to business support

processes. The most easily achievable Setup Deep-dive Roadmap
cost savings have been made driving and early and granular and savings
further sustainable savings now requires insights
insights identified

more innovative approaches.

Data analytics is one of the leading- • Gather, review and input • Run detailed analytic tests • Run detailed analytic tests to
edge tools to inform businesses of pro- data from various systems to identify exceptions and identify exceptions and non-
cess improvements that can identify and into the analytics engine non-compliance compliance
drive sustainable cost savings. It can
apply across the entire spectrum of busi- • Review and configure • Validate findings against • Validate findings against
ness operations, from physical opera- standard process terms in baseline business baseline business
tions through to business support pro- analytics engine operations operations
• Conduct initial analysis to • Derive granular insights • Derive granular insights
derive high-level insights. and areas of primary and areas of primary

Frequently companies tackle costs in View on the approximate optimisation optimisation
business support processes by simply scale of the cost reduc-
cutting headcount. tions that are possible Validation of the value of a Prioritised roadmap of
portion of these opportunities validated savings
However, headcount reductions, espe- opportunities
cially in corporate areas are often in re-

sponse to generalised reviews based on

benchmarks and a belief that headcount

reductions will force cost savings. tackle the same workload without suffi- a sample of transactions.

But are these cost cuts sustainable? cient resources. From a whole population, data ana-

Experience has shown that simply The key to creating sustainable cost lytics can identify anomalies. These

cutting heads, but not re-designing pro- savings is to re-design processes with anomalies can then be investigated in

cesses, does not result in sustainable the philosophical approach of “what must order to identify opportunities for pro-

cost savings. The outcome can be that go right” and “what can we stop doing” cess change, cost savings, and improve-

control gaps appear, risk increases, and rather than “what can go wrong” and ments.
ultimately staff and contractors are re- “what must we do to prevent it”. Case study: Examples of applica-
employed to plug the holes.
Data analytics has proven to be a pow- tions
The slash-and-burn approach results erful tool to identify “what must go right” Employee costs – payroll leakage

in temporary reductions in costs. How- and “what can we stop doing” in order to analysis

ever, cultural engagement surveys then help design more efficient processes and Using data analytics we draw informa-

report drops in employee engagement, support sustainable cost savings. One of tion from human resource systems, pay-

falls in performance and declining mo- the most important benefits is the ability roll and timesheets which we then ana-

rale as the remaining staff attempt to to look at a whole population, instead of lyse against seven key themes:

Against these themes we look for

cost leakage and subsequent op-

portunities for cost reduction from

Business anomalies against workplace agree-

ments, leave entitlements, hourly

rates, step-up rates, allowances,

Operations Business overtime, superannuation and
Services timesheet hours.

Allowance peer group profiling can

Business Business Business Payroll Procure Fixed Tax Working be another powerful tool to identify
Unit Unit Unit to pay Assets Capital employees or groups or sites with
Management significant allowance outliers or dis-

crepancies compared to other sites,

benchmarks or expectations.

Experience suggests expected

Cost Savings • Redesign Operations • Redesign Processes cost savings of 1-2% of payroll spend
Opportunities • Automation • Use data Analytics for wages and casual workers.

Procurement and payables analyt-

We use data from vendor master

files and transactional data including


purchase orders, invoices, pay-

ments and credit notes. Using the

data we build spend profiles, iden-

tifying which vendors are used,

the spread and stratification of

vendors, commercial terms, pay-

ment terms, and payment timing.

Experience shows key tactical

opportunities include: Pay rates Allowances Leave accruals
• Acceleration of delayed input

tax (GST) claims

• Identifying unclaimed diesel

fuel tax credits

• Vendor payment terms and

payment timing analysis

• Supplier overpayments

• Duplicate payments

• Supplier rationalisation and


In the longer term, strategic

opportunities can also be found. Superannuation Overtime Time capture Control weakness

Leading-edge practices include

strategic sourcing partnerships

with key suppliers, virtual and

shared warehouses, JVs and joint devel- • Ensuring sufficient levels of critical • Correct and accelerate sub-optimal

opment projects to help drive innovation. spares to minimise disruption to opera- tax depreciation schedules
Warehouse inventory optimisation tions • Develop a single “source of truth”

Warehouse inventory management • Limiting unexpected inventory obso- from multiple asset registers

serves to provide the right materials and lescence write-downs • Simplify complex registers
supplies, in the right quantities and at the Fixed assets Our experience has shown the signifi-

right locations, to meet the supply and Energy and resources companies cance of data analytics as a value-add-

demand of spare parts and materials to generally run large fleets of mobile ing tool across the energy and resources

efficiently maintain the plant and equip- equipment; operate complex plants and industry. Applying advanced data analyt-

ment of the business. infrastructure; and manage long-lived ics techniques to whole populations, and

However, the significant volume of assets. Often the assets are refurbished, using cross functional thinking along with

inventory data and the complexity of repaired, and partly rebuilt, which results process improvement methodologies

the analysis required to optimise inven- in complex fixed asset register recording. can provide tangible examples of genu-

tory levels in alignment with maintenance Adding to the complexity are the varying ine cost savings and will drive the next

needs can create opportunities for im- rules around tax depreciation and asset level of sustainable process changes

provements. useful lives. and cost savings.

Common issues can include: Detailed data analytics of fixed asset

• Inconsistent definition and applica- registers can identify the following op-

tion of inventory criticality ratings result- portunities:

ing in higher than necessary safety stock • Orphaned assets and depreciation

and replenishment levels irregularities

• Poor master data management re-

sults in inventory with no criticality rat-

ings assigned and incorrectly catego-

rised inventory

• Inventory management operating

in isolation of procurement and mainte-

nance planning and activities, resulting

in unexpected and adverse impacts on

inventory holdings and long-term costs

• Lack of appropriate inventory KPIs

to drive desired inventory management


Organisations looking to reduce op-

erational costs and improve process ef-

ficiency realise the significant benefits

that optimisation of their inventory can

potentially deliver, including:

• Reducing inventory carrying costs

and releasing working capital ‘locked up’ Based in Perth, Michael Barrett is the How Boon Tay is also based in Perth

in slow moving or excessive inventory Deloitte National Risk Advisory leader and leads the Risk Analytics team in

• Controlling inventory growth for Energy & Resources. Western Australia.



Peak time for magnet metals

Peak Resources Ltd managing director Peak’s Ngualla project boasts the world’s largest undeveloped resource
Darren Townsend has sent a timely of neodymium and praseodymium
reminder to lithium-crazed investors not
to forget about the importance of rare saw Peak raise $7 million via a place- preliminary project finance discussions
earth magnet metals to the electric and ment and rights issue, with Appian pro- will also keep the company busy for the
hybrid vehicle industries. viding a backstop loan of up to $6 million rest of 2016.
to cover any shortfall.
Lithium-focused companies have en- Peak teased the market in late March
joyed a stellar run on the various stock A further $3.1 million from Stage 2 of with some initial reductions to the capex
markets in recent months, particularly the original funding package is also due and opex estimates for the project, down
in the wake of Tesla Motors releasing before the end of June, pending final 10% and 18% respectively on the 2014
strong initial pre-sale figures for its Mod- regulatory approvals in Tanzania, giving PFS findings.
el 3 electric car in early April. Peak a total of $10.1 million for BFS work.
The capital cost was reduced by
While rare earth magnets neodymium Under the terms of the restructured $US37 million to $US330 million, includ-
and praseodymium are not key compo- agreement, Stage 3 funding is no longer ing a 25% contingency, while operating
nents of Tesla vehicles, both are critical required and Peak will therefore retain costs were slashed by $US21 million per
to the production of several lesser-known 75% of the project, having been slated to annum to $US97 million per annum.
electric vehicles, as well as some green drop its stake to 62.5%.
energy applications. “We’ve really focused on getting
“This substantially de-risks that we our operating cost as low as we can,”
Neodymium and praseodymium make don’t have a further milestone to com- Townsend said. “You’ve got to have a de-
up 79% of the current market for rare plete now, so we can just get on with the fendable operating cost position, particu-
earths, up from 68% only two years ago BFS programme and not worry about larly when you get at these low points in
and just 47% in 2011 at the height of the whether we will or won’t meet mile- the pricing cycle.
rare earths boom. stones,” Townsend said.
“We still continue to have that really big
Demand for electric vehicles and wind “Obviously we’ve got a bit more of the advantage of being able to reject cerium.
turbines over the next decade have ex- project to play with and that may come in It’s a loss-making rare earth and it’s good
perts forecasting a 10-15% compound handy with some other strategic financ- to be able to reject it.”
annual growth for both metals. ing as we move forward. There’s nothing
in the wind there yet, it’s just a case of Ngualla’s estimated mine life was also
Peak’s Ngualla project in Tanzania having the structure ready to be able to optimised to 31 years in the PFS update,
boasts the world’s largest undeveloped support that. despite the mining inventory accounting
resource of neodymium and praseodymi- for just 22% of the global resource.
um (214mt @ 2.15% REO for 4.62mt), but “Historically we were comfortable to go
Townsend says the market is yet to re- down to that 62.5% level and if a transac- Townsend expects investors to soon
alise the link between these metals and tion made sense to do so again we would realise the link between magnet metals
their application in the cars of the future. certainly look at that, but we also love the and the electric vehicle industry, which
asset and we are happy at 75%, so it’s he said would lead to a long-awaited re-
“Everybody’s on about lithium and the really just going to come down to the best covery for rare earths in general.
lithium ion batteries, but people haven’t financial value for our investors.”
connected the dots that these two rare “You’ve got a situation at the moment
earth magnets are used in these electric Peak has one remaining acid leach with prices the way they are at six-or-sev-
technologies,” Townsend told Paydirt. pilot plant at ANSTO left to complete en-year lows, where at least 90% of the
before it can lock down the metallurgi- rare earths industry is losing money at
“To give you an example, a standard cal criteria for engineers to finalise their these pricing structures,” Townsend said.
automobile has about 1kg of these high- designs for the BFS.
powered rare earth magnets, so 1kg per “That won’t last because people are
car, whereas electric and hybrid vehicles Engineering work at the proposed not going to continue to operate if they’re
have between 2-10kg per car. If you start locations for the beneficiation plant in losing money.”
looking at the math of the penetration Tanzania and a refinery in the European
of electric vehicles into the market, this Union remains ongoing. Permitting and – Michael Washbourne
is going to drive this rare earth industry
hugely over the next couple of years.

“People are still thinking about the rare
earth market from five years ago – ce-
rium and lanthanum and catalysts and
polishing powders – but the world’s com-
pletely changed since then and unfortu-
nately no one has really worked out this
connection yet.”

Peak recently restructured its funding
agreement with major shareholder Appi-
an Natural Resources Fund that ensures
the company has enough cash to com-
plete the Ngualla BFS, due in early 2017.

The revised financing arrangements


20 October 2016

Perth, Western Australia

Register now for Australia’s
only nickel event

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

Image courtesy of Western Areas Ltd


New agreement paves
way for African growth

The resources downturn has cut a swathe through all facets of the underground mining contracts in Africa.
Australian mining industry over the last four years but nowhere Africa’s mining and exploration sectors
has the damage been greater than in the mining services sector.
Mining contractors and other service companies bore the brunt of have suffered more than most from the
the industry’s cost savings measures, seeing margins reduced as effects of the downturn with exploration
miners battled to keep operations on track. Meanwhile, the explora- drying up and new capital developments
tion sector ground to an almost complete halt, leaving drillers with stalled.
equipment parked up across the globe.
Australian mining contractor peers
It has been a downturn that cost thou- Given the state of the sector, it came such as Byrnecut and Barminco (through
sands of jobs as contractors and drillers as somewhat of a surprise when drill- its African Underground Mining Services
adjusted to the post-boom investment ing services company Capital Drilling JV with Ausdrill Ltd) were able to build
environment and many companies have Ltd and underground mining specialist strong market share during the African
been focused merely on survival rather PYBAR Mining Services Ltd announced gold boom of the last decade, so why
than growth. they would co-market their services for does PYBAR see opportunity now when
things are at their lowest ebb?

“We are taking a long-term view,” PY-
BAR chief operating officer Brendan
Rouse said. “We have been looking at
Africa for a while but there had been


“We were of the view that we wanted
to get in early, ahead of the curve,
so that we were not desperately chasing
jobs when the market did turn. We want
to take our time, get the lay of the land
and find out who the players are and
where the opportunities are.

enough opportunities in Australia so ents a fully integrated ness processes – flexible, agile and fo-
there was no need to pursue it. But, as drilling service,” Rudd cused on excellent performance delivery
opportunities in Australia became more told Paydirt. “We start- for clients,” Rudd said. “Additionally, our
limited and PYBAR matured enough as ed underground drill- companies have similar cultures, we are
a company to starting looking overseas, ing operations in 2011 both very focused on delivery excellence
we did so. and identified expan- and finding the right solution for our cli-
sion into underground ents.”
“We were of the view that we wanted mining as our next op-
to get in early, ahead of the curve, so that portunity. However, we Noort said the cultural fit was vital to
we were not desperately chasing jobs also recognised we PYBAR as it entered a new geographic
when the market did turn. We want to would need a quality region.
take our time, get the lay of the land and partner with expertise
find out who the players are and where in this area to do so. “This partnership is about trust. Capital
the opportunities are. If it takes us 12 We have always had Drilling fitted in with PYBAR as a trusted
months to find an opportunity, that is fine. the view that our com- partner and the cultural alignment is a
We will do things in a calculated manner.” pany can deliver or- very strong aspect of this deal. We have
ganic growth.” a similar internal culture and it is about
General manager David Noort said shared values above all else,” he said.
while there was little in the way of new The two companies
project development in Africa, there were had ample options for Africa still presents security challeng-
opportunities for mining contractors with partnerships but Rudd es to even an experienced operator such
strong underground mining skills. and Rouse both em- as Capital and Rouse said the cultural fit
phasised the cultural fit was even more important in this regard.
“Obviously exploration in Africa has made the agreement the most sensible.
tailed off dramatically in the last two or “There are some places where Capital
three years which slows the pipeline of “PYBAR not only has the experience has made the conscious decision not to
projects but there is still opportunity,” in underground mining, it is also similarly work so we will be looking at opportuni-
Noort said. “Each country has a slightly aligned in its decision making and busi- ties for similar reasons. This is where
different approach in their mining meth- the cultural alignment is so important
ods; South Africans, Australians and Brian Rudd because you might not evaluate an op-
North Americans are all different but we portunity on the same basis otherwise.”
think the Australian expertise and tech-
nology is most appropriate for African Rudd believes the combination of PY-
greenstone deposits. One of the charac- BAR’s underground mining skills with
teristics of Australian mechanised mining Capital’s African know-how will deliver a
is the ability to take open pit operations unique combination.
on the tabular orebodies of the green-
stone belts and take them underground.
As these kinds of open pits go deeper,
the strip ratio makes it more economic to
convert to underground. We see similar
opportunity in the greenstone belt opera-
tions in Africa where deposits are very
similar to Australia.

“So, while the exploration has stopped,
the open pits are getting deeper and so,
instead of relying on a pipeline of explo-
ration projects being proved up, we are
looking at opportunities in those opera-
tions transforming from open pits to un-

For Capital managing director Brian
Rudd, the co-marketing agreement was
part of the company’s natural expansion.

“A key part of Capital’s growth strategy
is to expand our offer to provide our cli-



“ PYBAR’s move into international markets started earlier this year when it won a contract at OceanaGold
Corp’s Didipio mine in the Philippines
Africa is in our company’s DNA – Capital has cultural requirements of the region
been successfully operating throughout the into our operations,” he said. “By
being sensitive to local cultural and
region for 11 years. We understand how to manage religious needs, and adapting our
operations accordingly, for example

the cultural diversity, varying government legislative changing shift start times, or weekly
requirements and logistical challenges presented in days off, we have maintained a con-
sistent, performance oriented work-

this market to get quality outcomes for our clients. force. Our National Employee Devel-
opment Plan, which actively employs

nationals across our operations,

“Africa is in our company’s DNA – further contributes to our improved

Capital has been successfully operating cultural understanding and continuity of

throughout the region for 11 years. We employees on our projects.

understand how to manage the cultural “Capital’s operations [are established]

diversity, varying government legislative independently of our client’s, engag-

requirements and logistical challenges ing with local government departments,

presented in this market to get quality customs and labour agencies directly to

outcomes for our clients.” correctly register the company and pro-

Managing the political demands can vide a seamless project start up. From

be as taxing as juggling security and our client’s perspective, we avoid legacy

health issues. There is a general push issues associated with poor execution

from governments throughout Africa to during this phase, which often results in

ensure mining projects support the local higher costs and other complications at

economy with some countries such as a later time.”

Ghana, South Africa and Zambia setting Rouse said PYBAR would leverage off

local content requirements for procure- Capital’s enviable reputation in Africa.

ment and employment. Rudd said Capi- “And they in turn can leverage off our

tal’s project management approach gave underground mining expertise,” Rouse

it a natural advantage in building strong said. “If we can say to clients we trust

ties with local communities. each other, they can put two and two

“Our company has also been particu- together and realise we can deliver full,

larly successful at integrating the varying Brendan Rouse safe underground mining solutions for


PYBAR has a whole-of-mine contract for the Vivien gold mine in Western Australia

them; particularly in this difficult market.” their expertise in underground mining is difficult to manage. Capital’s existing re-
On the issue of local content, Rouse extensive.” lationships and significant experience in
the region will assist in minimising the
said it was a question of PYBAR adapt- The combination of these strengths usual challenges of entering this market.”
ing to specific conditions. and experience will enable us to provide
the African market with a professional, PYBAR has already expanded into the
“If that’s what clients want – and we are efficient and safe underground mining Philippines through a contract at Ocean-
being asked for it – then we will deliver on service – delivering quality core sam- aGold Ltd’s Didipio gold-copper mine
local labour and local procurement with ples, not just drilling programmes.” and Rouse said while geographic expan-
benefits for the local economy. Some sion would continue the company would
companies are tackling it in different For PYBAR, the move from a devel- not over-commit itself.
ways either through more manual mining oped, mature mining sector such as
or through automation which assists the Australia into new “The logical ar-
training load. We will have to look at each jurisdictions at vari- eas to expand into
project and come up with solutions to fit. ous stages of devel- are South-East Asia
Capital has been doing it for 15 years opment is the most and Papua New
with local content strategies in place and obvious challenge. Guinea because
we will work closely with them on any so- Rudd said Capi- of the locality and
lution.” tal would use its the lack of competi-
15 years of African tion in those areas
Rudd said since Capital expanded into drilling experience and we are already
production and underground drilling from to support its new doing raise-boring
2008, a number of clients had expressed partner. at Didipio,” Rouse
an interest in securing full underground said.
mining services through the company. “The African and
Australian markets “But, there has to
“We discussed the possibility with sev- are significantly dif- be a logical reason
eral of our clients – who have potential ferent. Australian- for looking at specif-
underground operations – and they were focused companies ic areas. We are not
very supportive. PYBAR offered the often find the wide adopting a scatter-
quality partner we were looking for to ex- range of cultures gun approach and
pand our services into this market. and logistical chal- will focus on stra-
lenges of operating tegic areas and re-
“They are leaders in underground min- in the African region David Noort gions where we can
ing services and are now the third larg-
est supplier in the Australian market;



Capital’s capabilities grew with the expansion of Africa’s mining sector in the last decade. It added production
drilling capacity in 2008 and now offers underground drilling services

find a strong local partner, as we have in model. The recent downturn has placed tivity.

Africa with Capital.” the mining contractor space on its head “That is vital because it lowers your unit

Noort recognised the need to consider and Rouse said the sector had changed costs. We’ve been focused on increasing

each African project and country indi- dramatically over the last decade. productivity – either through technologi-

vidually. “It is a different industry; a lot more cal advances or staff reductions – for a

“Each country in Africa has peculiari- dynamic because clients expect lower long time now and it is an ongoing part of

ties, it is not one homogenous mass, and costs and contractors have to go out the business.”

some of those peculiarities attract addi- and find them because the demands be- The need to be more flexible has al-

tional costs; whether it is infrastructure ing made are greater than the traditional lowed smaller contractors to win more

challenges or legal structures that im- margins.” market share, according to Rouse.

“pact,” Noort said. “It is about being able For PYBAR, maintaining those mar- “Some of the larger contractors – cer-

to deliver cost-effective mechanised min- gins is a question of increased produc- tainly the listed ones – have lost a lot of

ing. You have to look their share of work and

at each country and Our company is certainly embracing the scene is now domi-
each situation indi- nated by the unlisted

vidually. Some chal- these changes, particularly in the way companies. They have
lenges can be man- we collect and use data from our drilling more flexibility and are
aged, some can’t.” under less pressure

Neither assump- activities to improve our productivity, enhance from boards and share-
tions can be made safety on site and reduce our operating costs. holders.”
about the operating
Drillers have also


Capital started in Africa more than a decade ago, servicing an emerging
exploration sector on the continent

had to adapt their business and work Ltd, KBL Mining Ltd and A1 Consolidated equipment, we are using existing re-
practices to maintain market share and Gold Ltd and in March struck a joint de- sources.”
Rudd said technological innovation had velopment and profit-sharing agreement
been key to Capital’s ongoing success. with Exterre Resources Ltd over the Sec- Despite the new agreement and the
ond Fortune gold mine in Western Aus- greenshoots appearing across the sec-
In exploration, it is increasingly about tralia. tor, both Rudd and Rouse remain cau-
the speed with which data can be deliv- tious about the next 12 months.
ered. Rouse said the equity position strat-
egy could continue if market conditions “We have seen a small up-take of
“As with most industries, technology allowed. juniors entering the market in recent
is playing an important role in changing months, together with an increase in cap-
how business is conducted in Africa,” “The high gold price and a lack of ac- ital raising for exploration,” Rudd said. “I
Rudd said. “Our company is certainly cessible capital have created this oppor- am cautiously optimistic we have seen
embracing these changes, particularly in tunity for us,” Rouse said. “If the capital the worst of the downturn, however I also
the way we collect and use data from our was around companies would raise the believe that a full recovery is still some
drilling activities to improve our produc- money themselves and wouldn’t need us. time away.”
tivity, enhance safety on site and reduce
our operating costs.” “However, if it means an opportunity Rouse said the mining contractor mar-
being created which may not get ahead ket had been slashed in half over the
PYBAR has also adapted its business because the client can’t raise the cash, course of the downturn.
model to suit the prevailing market con- then we will certainly look at it. If we can
ditions. The last 18 months have seen it defer upfront costs by taking it as equity, “The industry is currently hanging on
take equity positions in a series of junior we can realise that money later. thanks to a strong gold price and until
company clients including Aurelia Metals other commodities show stable recover-
“And clients have more confidence if ies and capital is freed up, I can’t see that
you are aligned with them; sharing the changing,” he said.
risk and the upside. Aurelia was slightly
different as we were able to overachieve “As a business, we’ll be back up to our
and open up more stopes because we traditional revenue levels by the end of
were above the mining schedule. So, we this year. The downturn has dragged on
deferred payment on the extension de- for more than 18 months now – much
velopment costs and we already had the longer than during the 2008-09 GFC.”
resources on-site and convert that equity
down the track.” The worst of mining’s nuclear winter
may be over then and if Capital and PY-
Rouse said each equity deal was sub- BAR’s strategy goes to plan, they will be
ject to rigorous due diligence and never the first to emerge in the African spring
involved projects in which PYBAR’s risk sunshine.
exposure was heightened.
– Dominic Piper
“You have to take into account that
these are not bigger projects where
we are spending money on new capital



Good time to
smarten Act

Paydirt editor Dominic Piper convened the closing panel session at the South Australia Resources and Energy Investment Conference
(SAREIC) in April. Finlaysons partner George McKenzie, Havilah Resources managing director Chris Giles and Investigator Resources

managing director John Anderson voiced their opinions on SA’s regulatory processes which have become overly complex

Mining lawyer George McKenzie has suggested the time State and less so to Native Title,” McKen-
for a review of South Australia’s Mining Act is now. zie said.

“Relative to the general amendment to venor and had the task of probing the “I think the farming communities and
the Mining Act it may well be a good time panel members about the state of the some of the lock-the-gate initiatives and
to amend the Mining Act when the indus- resources sector and solutions behind movements are proving to be far more
try is in a downturn,” Finlaysons partner improving mining and exploration in SA. difficult, and that difficulty is, I think, ex-
McKenzie said. acerbated by the inadequacies of the
It was clear, certainly from industry’s Mining Act.”
“It’s not that much different to explor- perspective, areas that needed to be ad-
ing now to make discoveries which are dressed in the Mining Act were issues A particular point of contention for Mc-
going to be able to be productive in the related to land access and use. Kenzie is the way in which companies
next boom. It probably makes sense to contesting land use with owners need to
have a Mining Act that meets the needs Despite great efforts from the Depart- approach the Environment and Resourc-
of the modern world before we make the ment of State Development in educat- es Development Court for a court order
next boom and for us to look at that in the ing and sharing information with farming for an exemption to undertake activities
current cycle.” communities on mining and exploration on the land.
processes McKenzie believes the actual
McKenzie was participating in the clos- Mining Act is inadequate in these areas. McKenzie said this was an incongru-
ing panel session at the South Australia ous process for companies, especially
Resources Energy and Investment Con- In regards to Native Title, McKenzie as they strived for community accept-
ference at Adelaide’s Hilton Hotel and said there was now a clearer pathway ance and a social licence to operate.
was joined by Havilah Resources Ltd in place for mining companies to negoti-
managing director Chris Giles and Inves- ate access than was the case 5-10 years “To have to take a land owner, if they
tigator Resources Ltd managing director ago. are unable to reach an agreement, to
John Anderson. court to endeavour to seek to lift the ex-
“The challenge regards access to land emption in many respects, to my mind, is
Paydirt editor Dominic Piper was con- is much more prominent in relation to a contradictory requirement,” McKenzie
farming and cultivated land areas of the said.

“As a result, I think there is some need


for amendment in that regard.” “Our approach of doing a lot of early coal-fired power to SA was coming at a
Working to enhance the Mining Act scout drilling means we’ve needed to high cost.
have areas cleared. We have been suc-
could be a fillip for greater interest in the cessful in that area, it is onerous and with “We’d be very interested to know what
State’s mining sector which has become the downturn there is less of us out there the power costs will be at Paris,” Ander-
mired in higher costs. exploring and we have had to bear the son said.
cost of supporting the heritage survey. It
Giles, who recently announced Hav- is a very onerous cost and if you want to “It’s not that easy, but energy would
ilah had processed first gold ore from go in and look at a concept and drill one be the first consideration for a company
its Portia project, said getting drilling ap- hole to test a concept it is going to cost coming into the State with regard to set-
provals was becoming increasingly diffi- you $50,000, which is what you probably ting up an operation here.”
cult and expensive. have to do, we need to get over that,” An-
derson said. Giles said if there was one flaw to
He said it was getting to the point of be- PACE’s Copper Strategy – a new govern-
ing impractical to be granted an approval In addition to the high cost approvals ment policy designed to increase copper
for drilling. process, Anderson said energy costs production to 1 mtpa within the next two
also concerned Investigator. decades – it was the question of how the
“I don’t know what we are going to do State’s energy capacity would cope with
because the Aboriginal [groups] want to While a move to wind turbines and the such increases in demand.
clear every hole that we drill rather than use of low carbon energy was a good
an area, which means that we are en- step for the State, the impact of bringing Energy is a particular concern for Giles
cumbered with a very high expense, par- right now as Havilah targets a decision to
ticularly if you just want to go out and test mine at Kalkaroo – 622,000t copper and
a concept,” Giles said.
2 moz gold – in 2017.
“If you only want to test a few holes, “You need huge amounts of energy
your drilling is actually your minor
expense. It’s everything else in man- and I see that as the biggest single
agement time [that attracts the costs]. problem and unless that is addressed
I am not complaining, that is the soci- it is just not going to happen. It’s a
ety we are living in, but we also have serious problem, you cannot produce
to take a rain check as this is adding 1mt of copper in 15 years unless you
to the cost and is a big disincentive.” have much bigger and cheaper en-
ergy, it’s going to kill us,” Giles said.
Like Giles, Anderson – who runs
Investigator, owner of the Paris silver “The thing with Kalkaroo is cost;
project in the northern Eyre Peninsula we couldn’t be cost competitive with
– said he enjoyed solid relationships China or Chile where they have got
with land owners and traditional own- cheap power. That is a big concern,
ers, however, there was no denying renewable energy is a possibility if
Native Title and heritage clearances we have enough solar panels, but it is
were major hindrances to exploration very capital intensive and I don’t think
and discovery in the State. the numbers stack up at this stage to
run a processing plant on renewable
Anderson said getting areas energy.”
cleared to conduct surveys was cost-
ing about $50,000 for three days’ – Mark Andrews
Finlaysons partner George McKenzie



SA pushes for domestic
steel initiative

South Australian Treasur- procurement policy with a leading international technol-
er and Minister for Min- as a way of not only ogy provider to submit a concept de-

eral Resources and Energy supporting the in- sign to Oz Minerals for modularisation

Tom Koutsantonis chose dustry but also safe- of the proposed Carrapateena mineral

his opening address to the guarding standards processing facility and is also working

South Australian Resourc- on taxpayer-funded closely with Rex Minerals [Ltd] to further

es & Energy Investment projects. And, I have optimise the design of its process plant

Conference to reiterate his been encouraging for the proposed Hillside copper project.”

Government’s commitment other States to follow Both Oz and Rex are focused on cop-

to an industry that has fall- our lead and support per and the SA Government is keen to

en on hard times in recent our steel by certify- pursue what it perceives as its natural

years. ing Australian stand- advantages in the red metal. Thanks to

“You face pressure from ards.” Olympic Dam – and to a lesser extent

investors to cut costs and Tom Koutsantonis This desire to en- Prominent Hill, Carrapateena, Hillside
find new and innovative sure other sectors and others – SA contains more than 60%

ways to drive efficiencies to benefit from Aus- of Australia’s copper resources. The Gov-

adjust to the lower prices paid for your tralia’s mineral reserves has also led to ernment’s Copper Strategy is designed

products [and] I have been focused on the SA Government developing a mining to treble annual production in the State

what we as a Government can do to sup- engineering, technology and services to 1 mtpa through a focus on exploration

port your industry to respond to these (METS) strategy. and development (via a $20 million, two-

challenges but also to reposition the re- “From early beginnings, our METS year PACE Copper programme) and bet-

sources and energy sector for the inevi- sector has grown to some 500 sector ter production efficiencies to drive down

table recovery,” Koutsantonis said. suppliers, pooling a combined $2.4 bil- unit costs.

Nowhere has the pain of the resources lion contribution to our gross state prod- “If achieved, we will lift Australia into

downturn been more keenly felt than in uct. Our objective now is [to build] that the ranks of the top three copper-produc-

Whyalla where Arrium Ltd is in adminis- capacity so our local METS companies ing nations in the world,” he said.

tration, endangering some 2,000 jobs at can begin to target a share of the global Koutsantonis said the Government

its steelworks in the town. supply chain, and showcase some of the would also continue to make the State

“Admitting the Government had been innovation we have developed here in and Adelaide in particular an attractive
forced into being “more hands on than South Australia,” Koutsantonis said. place to do business.

we would otherwise be”, “We are now well on the

Koutsantonis said a Steel We cannot be a nation with huge path to becoming the lowest
Task Force had been estab- iron ore reserves that doesn’t taxing State for business in
lished to identify opportuni- the Commonwealth. We
ties for restructuring and produce our own structural steel – it’s are doing this by abolish-
co-investment to ensure ing stamp duty on business

the steel plant’s longevity. a question of national sovereignty. transactions worth almost
“I want to assure you that $670 million within four

the Government through years. No wonder KPMG

the Steel Task Force and in collaboration He said the Mining Industry Participa- recently ranked Adelaide as the cheap-

with the Commonwealth Government is tion Office, through the Mining and Pe- est city in Australia to run a business.”

doing everything it can to secure Whya- troleum Services Centre of Excellence, Uranium and nuclear energy is another

lla’s future,” he said. “I am heartened by had already supported 24 projects; “with area of keen interest for the SA Govern-

the many suppliers and customers that every dollar invested by the State Gov- ment with the Royal Commission into

have come forward, including BHP Bil- ernment leveraging $5 from industry in Participation in the Nuclear Fuel Cycle
set to be handed down as Paydirt went
liton [Ltd], to pledge their support for initiatives that range across the sector”.

Whyalla.” Another agency created through the to print.

He also called on governments across policy, the Industry Capability Network, Koutsantonis encouraged industry

Australia to back SA’s plan to establish is currently working with Nyrstar at Port participants to actively engage with the

procurement strategies which would sup- Pirie, BP on its Great Australian Bight process.

port Australian-made steel. project and Oz Minerals Ltd on develop- “Often these things are left to the loud-

“We cannot be a nation with huge iron ment of its Carrapateena copper project. est voices and industry voices will be an

ore reserves that doesn’t produce our Koutsantonis also pointed to the Ad- important contribution to the community

own structural steel – it’s a question of vanced Modular Solutions Alliance as an discussion that will determine the State’s

national sovereignty,” Koutsantonis said. example of South Australian collabora- future path.”

“I am also pleased that the Federal Labor tion. – Dominic Piper
Party has adopted South Australia’s steel “Already, the AMS team has partnered


Gray’s support for Whyalla

Whyalla is near and dear to the heart Shadow Federal Minister for Resources Gary ministrators KordaMentha, the right pil-
of Shadow Federal Minister for Re- Gray (right) speaks with Carpentaria Exploration lars were in place to solve the dilemmas
sources Hon Gary Gray and the outgoing at Arrium.
parliamentarian has pledged his support managing director Quentin Hill and South Aus-
to the community and people involved in tralia Department of State Development deputy Gray said Arrium had terrific business-
saving Arrium Ltd. es within its group including; the rolling
chief executive Paul Heithersay at SAREIC mill, mining, grinding, wire, arc furnaces
Gray still finds comfort in the sound of and the blast furnace at Whyalla, which
ore trains and lights of industry, some- alla succeed. It is why we have avoided has a chance of surviving given Korda-
thing of a residual effect of growing up the negative scourge of politicising this Mentha’s “planned methodical, strategic
in Whyalla, where his family settled 50 challenge.” approach” to its administrative duties.
years ago.
While there is an enormous amount “I note what KordaMentha said this
With his mother still residing in Whya- of debt to be settled, Gray said with the week: ‘We are all professionals working
lla, Gray is a frequent visitor to the town Australian Workers’ Union and bankers in the same industry’, so I have no rea-
and no doubt has a soft spot for the place. and financiers strongly supporting ad- son to doubt their view,” Gray said.

“If I can be helpful, I will be. But like “The view to which Mr Mentha referred
those I mention [Federal MP, Rowan was the firm view that Whyalla’s contin-
Ramsey, State MP Eddie Hughes, SA ued operation would deliver long-term
Premier Jay Weatherill, Christopher value to creditors. We all want that.
Pyne, SA Treasurer Tom Koutsantonis,
Federal Resources and Energy Minister “Critical parts of the pathway for Why-
Josh Frydenberg, Prime Minister Mal- alla include Arrium’s debt restructuring
colm Turnbull and Bill Shorten], I will not and a valid productivity pathway – walked
politicise or give false hope. It is not easy by workers and bankers – led by Korda-
to fix a mountain of debt,” Gray said in his Mentha.”
speech to SAREIC delegates.
– Mark Andrews
“They [politicians] all want to see Why-



Challenger acquisition
spurs WPG on

Far from taking attention away and trucking it the 70km to Chal-
from its existing portfolio, WPG
Resources Ltd’s acquisition of the lenger.”
mothballed Challenger gold mine will
reinvigorate its wider development Some of the Challenger plant
plans, according to managing direc-
tor Martin Jacobsen. and equipment could eventually be

The mine was acquired from King- transported to Tunkillia. The project
sgate Consolidated Ltd in March
in a $2 million deal which will see – a further 30km south of Tarcoola
WPG and mining contractor Diversi-
fied Minerals Pty Ltd split revenues – already has a resource of 12.3mt
@ 1.41 g/t for 558,000oz gold and
WPG – which is aiming to have
Challenger pouring gold again be- 1.5 moz silver. A 10-hole RC drilling
fore the end of June – also has the
Tarcoola and Tunkillia gold assets in programme was recently completed
its portfolio and Jacobsen said their
development had received a boost around Tunkillia as WPG aims to de-
from the arrival of Challenger as it gave
the company access to plant, equipment fine additional ounces.
and skills as well as regular cash flow.
“At Tunkillia, we are looking for
“Now that we have acquired Challeng-
er it has completed our golden trifecta in satellite deposits to make the pro-
South Australia,” Jacobsen said at SA-
REIC. ject more viable. The previous PFS

While the CIP mill at Challenger will be showed we needed a greater re-
switched back on with feed from existing
stockpiles, WPG expects to start trucking source because it is quite deep.”
ore in from Tarcoola – 70km south-east
of Challenger – before the end of 2016. Martin Jacobsen Drilling will also take place at Chal-

The project – which has reserves of lenger where WPG hopes to take
900,000t @ 2.6 g/t for 74,000oz gold –
was subject to a feasibility study on heap option of treatment at Challenger had advantage of earlier work by Kingsgate.
leaching last year but Jacobsen said the
dramatically changed its economics. “The Challenger SSW lode was going

“We had put out a feasibility study to be mined by Kingsgate previously but

based on heap leach because it didn’t one of the challenges is understanding

warrant its own CIP plant but when we the orientation of the structure. But, over

completed the Challenger acquisition, the next year we will be doing exploration

we revisited that and are now in negotia- to try to understand how best to exploit

tion with the Challenger JV to come to a this,” Jacobsen said.

toll-treating arrangement,” he said. Therein lies the difficulty in developing

“The financial metrics aren’t yet final- Challenger’s deeper mineralisation.

ised but the revised scoping study shows “It is difficult to drill a hole from under-

the massive uplift it gives Tarcoola. NPV ground and not intercept gold. The chal-

goes from $12 million to $22 million, lenge is tying it all together into a compre-

which makes a substantial difference hensive and understandable structure.”

because there is now very little capex – Dominic Piper
involved. It is simply a hole in the ground

Tyranna lifts Challenger response

WPG Resources Ltd is not the only techniques that led to Challenger’s dis- The most advanced targets are Golf
company attempting to reinvigorate covery. It has control of 8,000sq km of Bore where mineralisation has been
the Challenger goldfield with junior ex- ground (collectively known as the Jum- identified over an 800m strike length and
plorer Tyranna Resources Ltd also plan- buck gold project) around the Challenger recent intercepts included 5m @ 4.15 g/t,
ning a major exploration programme for mine and Seneque said the goal to de- 17m @ 1.59 g/t and 10m @ 2.61 g/t gold.
the district. velop potential feasibility of one or more
prospects based around a centrally lo- Drilling continued in April and May on
According to Tyranna managing direc- cated plant. the Golf Bore North prospect with the
tor Bruno Seneque, the area in remote potential to extend the combined strike
western South Australia has seen little “We are currently drilling four projects length to in excess of 1,500m.
exploration since Challenger’s discovery with a target of 500,000oz of shallow
nearly 20 years ago. ounces by the end of 2016.” Seneque said once these results were
received, the company would publish a
“Regional exploration has really died in The four current targets are all located JORC-compliant resource for the pros-
the bum since the Challenger discovery,” to the north of Challenger and Seneque pects.
Seneque told SAREIC delegates. said by defining a 250,000oz reserve
across them, the company could develop – Dominic Piper
Tyranna plans to rectify that by apply- a standalone mining camp.
ing the same gold-in-calcrete sampling


Copper strategy to peak in red time

Despite copper prices remaining sub- capita, Western Europe was being implemented.
dued, the South Australian Govern- and Japan it is up about
ment is convinced now is exactly the right that level in parts, Eastern So far, three main ac-
time to be plotting its new PACE Copper Europe, India, Africa and
Strategy. Russia are well below tions are at the heart of
CRU has taken 750,000t of copper the strategy; fast-tracking
production from its forward projections “We can help meet
for the next 10 years as demand contin- that demand in South discoveries, harnessing
ues to rise and supply diminishes. Australia. Regardless of
the forecast, by the time innovation to improve the
Department of State Development, copper prices are due to
Olympic Dam Taskforce resources and recover it will be too late cost competitiveness of
strategy director Charles Moore said to respond, so South Aus-
forecasts suggested copper prices – tralia’s copper strategy existing and future copper
$US2.15c/lb at the time of print – would provides a coordinated approach to ex-
not improve much in the short term, cite discovery, increase efficiency in pro- producing companies and
forcing a number of companies to defer duction and support capacity building.”
or cancel potential projects around the building trust between in-
world. It was 12 months ago that South Aus-
tralia’s copper strategy – tripling cop- dustry and community.
Therefore, a major copper supply defi- per production to 1 mpta by 2030 – was
cit would be realised in the 2020s. launched, however, the State has been Charles Moore “What we need to be
able to garner great support from the doing is bringing a whole
“That gives us a great opportunity, so mining industry, services sector and
we need to prepare now so that assets communities to execute such a bold plan. range of actions across
are in place when copper demand per
capita increases in countries such as In- In about 18 months time there will be a the resource value chain to get that
dia, China and Russia,” Moore said. review conducted to see how the strategy
through to make that work,” Moore said.
“China is at about 6kg [copper] per
“In that strategy, we are aiming to ac-

celerate exploration and discovery, im-

prove productivity and innovation and

efficiencies and innovation research

and the other part is to guide community

engagement to ensure continued public

support for the benefits derived from a

successful resource industry.”

– Mark Andrews



South Australia to soldier on

South Australia Depart- but it is underpinned by the Heithersay said the Government would
ment of State Devel- gradual expansion of Olym- work through all the issues and come up
with a solution and pointed to Nyrstar’s
opment deputy chief ex- pic Dam, Carrapateena, turnaround at Port Pirie as an example of
what can be achieved.
ecutive Paul Heithersay Prominent Hill, Hillgrove
In 2014, a funding arrangement be-
is confident the State will [Kanmantoo], Hillside... tween Nyrstar and the SA Government
worth $563 million was reached for the
emerge stronger from the the number of projects we redevelopment of the Port Pirie smelter,
which is set to be switched back on later
current mining slump. have around the state, all this year.

A back-to-basics ap- of which have some is- “Administration is, of course, a time
where people can take stock and look at
proach and persistence sues to go through and the a business overall and I am very confi-
dent we are going to come out with an
by miners and explorers whole thing with having energy-efficient globally competitive
mine steel works in the fullness of time,”
will be core to SA’s renais- Paul Heithersay this strategy is around go- Heithersay said.
sance, as the Government ing through those issues,”
“The situation we face now is very
prepares the ambitious $20 Heithersay said. similar to what we faced with Nyrstar,
where we had an old plant that needed
million PACE Copper Strategy to take The copper industry is a clear strength recapitalisation. The company came up
with an outstanding business plan, the
flight. on which SA can focus, however, it is Government supported it, it took a while
and patience and a fair bit of effort from
The Copper Strategy, which has been also looking to expand its efforts into all parties but we got there in the end
and I am very confident we can do it with
shown off and well received in Chile, magnetite. Whyalla as well.”

aims to unearth large endowments of “We are now embarking on a magnetite – Mark Andrews

copper by finally lifting the cover off the strategy starting with a major conference

Gawler Craton, Curnamona and Ade- coming up to bring more parties together

laide Fold Belt provinces. and work out what our targets should be

Underlining the strategy is a produc- and what we need to make that happen,”

tion goal of 1 mtpa copper by 2030, Heithersay said.

which factors in known production, de- While the Government is proactively

posits with some sort of production pro- looking into the future, issues at hand in

file and new deposits coming on stream. the State are not being overlooked.

“We are very confident that discover- The biggest issues currently are res-

ies will be made within a timeframe that cuing manufacturer and miner Arrium

allows them to be developed in that 2030 Ltd from administration and handling the

timeframe. It’s a stretch by all means, shutdown of the Leigh Creek coal mine.

Hallelujah Havilah

Relief is in sight for long-suffering Chris Giles (centre) gold from the mine.
shareholders of Havilah Resources Late last year, Havilah had 10,000oz
Ltd. come to that arrangement.”
South Australia’s Chamber of Minerals gold hedged at $1,618/oz and at current
By the end of the year, the company gold prices – $1,641/oz at the time of
should have $40 million in the bank cour- and Energy (SACOME) acknowledged print – Havilah expects to bank $40 mil-
tesy of gold production from the Portia the financing scheme Havilah and min- lion which will be transformational for the
mine, north-west of Broken Hill. ing contractor – Consolidated Mining and company, Giles said.
Civil Pty Ltd (CMC) – came up with to
After some difficulties, Havilah man- fund the Portia mine by awarding the for- “That will give us a lot more options
aging director Chris Giles was happy to mer with the inaugural Ocean Partners and flexibility to develop a pipeline of oth-
report first ore through the processing Commercial Achievement Award. er projects, which includes some quite
plant was in motion during SAREIC. significant copper deposits. It has been
Essentially, for fulfilling mining obliga- quite a remarkable year and we hope this
“Things have gone according to plan in tions at Portia, CMC will receive a 50% current year will be even more remark-
spite of numerous technical challenges, stake in the revenue on all recoverable able,” he said.
including the soft overburden and the
dewatering geotechnical issues, but we Kalkaroo – 622,000t copper and 2 moz
found it all manageable,” Giles said. gold – is the big game being chased and
Havilah expects to make a call on a deci-
“The processing plant has been com- sion to mine in the near future.
pleted and being commissioned on low-
grade ore. And, an innovative funding With the current inferred resource
arrangement with a mining contractor at Portia only 720,000t @ 2.9 g/t for
has worked very well, we have had a 67,000oz gold, Havilah is keen to bring
great partnership and they have abso- another project online as soon as pos-
lutely busted themselves to deliver. They sible.
have done a very good job and we feel
very fortunate that we have been able to – Mark Andrews


Renascor eyes Q3 study release

Potential cost advantages are driving David Christensen graphite resource in Australia and Chris-
Renascor Resources Ltd as it plays tensen believes it can be expanded.
catch up in South Australia’s emerging
graphite space. “There is ample room for growth.
There is another 1.5km of strike in a new
While the likes of Lincoln Minerals Ltd target area and we are confident it is high
and Archer Exploration Ltd have been grade,” he said.
developing their graphite plays on the
Eyre Peninsula for several years, Renas- However, size is far from the only de-
cor is a relative newcomer, only acquiring fining factor in graphite development
its Arno project from private concerns in and Christensen said the company was
December. However, managing director conscious of the need to prove Siviour’s
David Christensen believes the project metallurgy stacked up.
has advantages which will allow it to at-
tain a similar status to its peers in coming “We want to move quickly on this. We
months. will do more diamond and RC drilling
for metallurgical samples this quarter
“The key advantage is that it is near and that will form the basis of a scoping
surface and flat-lying. That means more study.”
efficient mining [is achievable] and oper-
ating costs are considerably less,” Chris- He believes that scoping study – due
tensen told SAREIC delegates. for completion in the September quarter
– will prove the project’s cost competi-
The focus at Arno – north of Port Lin- tiveness.
coln – is the Siviour deposit where Re-
nascor can already boast a 16.8mt @ “It is relatively easy and inexpensive
7.4% TGC resource with a high-grade to build to get to a globally competitive
core of 5.9mt @ 10% TGC. scale and push the project into the lowest
operating costs quartile,” he said.
That makes Siviour the largest reported
– Dominic Piper



Iron Road cuts more costs

Iron Road Ltd has shaved a further Andrew Stocks to put together one of Australia’s largest
$US2/t off operating costs at the Central resources – 4.5bt @ 16% iron, contain-
Eyre iron project (CEIP) in South Aus- plete infrastructure solution from the re- ing proven and probable reserves of
tralia. source to the steel mill and they saw that 3.6bt @ 15% iron.
we have completed the foundation works
The projected savings bring life-of- that you would expect of a project of this Known reserves are enough to sustain
mine FOB operating costs, excluding scale,” Iron Road managing director An- production at rate in excess of 20 mtpa,
state royalty and sustaining capital, to drew Stocks told delegates at SAREIC. however, pulling off the integrated mine
$US35.38/dmt at an exchange rate of and infrastructure project will cost $US4
75c to the US dollar. Stoking China Rail’s interest in the pro- billion.
ject would have been Iron Road’s ability
Iron Road has slashed opex from Multi-user rail and port facilities con-
$US44.33/t in the DFS and $US37.72/t necting CEIP to Cape Hardy, north of
in an optimisation study courtesy of a Tumby Bay, are included in the capital
further fall in market pricing in operating cost.
consumables, which account for 33% of
FOB operating costs. Iron Road and China Rail hope to trim
the multi-billion dollar capital require-
Improvements to opex represents the ment by a further $600-800 million.
type of inroads Iron Road hopes to make
under the strategic cooperation agree- “We look for opportunities continuous-
ment signed with China Railway Group ly and partners who can assist us with
in early April. the funding package and we seek users
of the infrastructure and we continue to
“China Rail joined our team after a dec- build the team. This involves a lot of shoe
ade of reviewing iron ore projects global- leather, talking to a lot of people,” Stocks
ly, including projects that failed during the said.
boom. They joined us primarily because
in the Central Eyre iron project they saw – Mark Andrews
three things; high quality product, com-

Super Hawsons steels Carpentaria

Marketing of magnetite material from that are crying out for domestic magnetite
the Hawsons project will be a key this product,” Hill said.
objective for Carpentaria Exploration Ltd, feed, hematite does
according to managing director Quentin “The Middle East di-
Hill. rect reduction market; not work as effective-
the customers there are
Leading into SAREIC, Carpentaria an- seeking independent ly and we know there
nounced a number of non-binding letters sources of supply. Cur-
of intent (LOI) which cover 40% of target- rently, four producers has been over 200mt
ed production from Hawsons. produce up to 75% of
the market. Asian mills of domestic supply in
In March, a LOI with Mitsubishi Corp seek independent high-
was signed for 1 mtpa of super-grade grade sources to im- China closed over the
product from Hawsons, while Carpentar- prove productivity and
ia’s latest achievement has been court- reduce pollution. Some last few years.”
ing Bahrain Steel to take 3 mtpa. of the mills we talk to
want to close one fur- Hill said Carpen-
Carpentaria is targeting production of nace down and increase the productiv-
10 mtpa from Hawsons which boasts re- ity of the others; you do that by feeding it taria was aiming to
sources of 1.8bt @ 15% mass recovery much higher grade raw materials.
for 263mt concentrate grading 69.7% complete a number
iron. “At 70% Fe or 67% Fe pellet, that pro-
vides an 8-10% productivity increase. of studies and be
The material from Hawsons is easy to They also want to address the gradual
crush into a fine grain therefore reducing decline in grades over time. Chinese ready for the market
energy requirements. mills are also another market for us. The
Chinese mills are seeking pellet feed to Quentin Hill development window
Pelletising test work conducted ear- replace the shutting down of domestic which appears to be
lier this year demonstrated super-grade production from their pellet plants. Many
iron ore pellet feed from Hawsons was of these pellet plants are designed for opening towards the
a standout product and would be much
sought after by international customers. back end of 2017.

“There are three very distinct markets “All of our project work and costs are

based on pre-feasibility study engineer-

ing or better, however, the resource is

predominantly inferred and the next step

is to upgrade that resource,” Hill said.

“We plan to complete our feasibility study

in two years and production two years af-

ter that.”

– Mark Andrews


Investigator maintains
exploration ingenuity

Even among the recent dark days tigator’s exploration work is begin-
for South Australia’s exploration ning to prove their existence in the

sector, there remains a handful of Paris-Nankivel mineral system.

mining executives who retain en- “There are a number of magnetic

thusiasm for the pursuit of discov- anomalies around the copper dior-

ery and Investigator Resources Ltd ite at the Nankivel prospect. We are

managing director John Anderson is now moving towards drilling epith-

clearly one. ermal, skarn and porphyry potential

“We chose the southern Gawler targets particularly at Helen, Nan-

Craton because we believed it was kivel and Nankivel SW.”

still a geological and discovery fron- One such target sits on Nankivel

tier,” Anderson told SAREIC del- Hill where mapping and petrology

egates. “And, we are finding things undertaken during the December

that are new in the geology of South quarter identified areas of breccia-

Australia.” tion and alteration silica along with

Anderson said Investigator “put some topaz-altered volcanics which

a lot of effort” into collaborative re- is consistent with the porphyry sys-

search both with academics and tem model.

through the SA Government’s PACE “It [the magnetics and mapping

programme. work] suggests we are getting close

“We keep an eye on research in to the porphyry system,” Anderson

areas we think we can progress said. “The shorter holes we are drill-

things and try and act first,” he said. ing are testing the possibility for high

“As an example, we have been fol- sulphidation epithermal mineralisa-

lowing the magneto-telluric research tion [another hallmark of a porphyry

being done by Adelaide University, system]. It is all adding up.”

the South Australian Geological Nickel mineralisation has also

Survey and Geoscience Australia. It been identified at the Diomedes

may change how we explore under prospect, 7km from Paris.

cover around Australia. Anderson said Diomedes, Nan-

“Off the back of the first survey kivel and the Maslins IOCG target

we pegged a bunch of ground in John Anderson identified in the corridor between the

the corridor between the Olympic Olympic Dam province and Uno belt

Dam province and the Uno belt and have to exploring for new mineral systems.” would all be drilled this year.

come up with a first IOCG target. The A dyke-sill and diatreme complex, the At the same time, the company will

magnetic anomaly is a bit deeper than 33 moz silver Paris is a new deposit style set Paris back on the development path

what we have been exploring for but the for SA and recent work has presented having slowed its progress in the face of

size of the prize encourages us to have a strong evidence it is part of a wider skarn hostile market conditions.

“further look at it.” and perhaps porphyry copper-gold sys- “Since February when commodity

This commitment to innovation and tem. prices began to recover, I think investors

cutting-edge technology has have gone home and thought

led Investigator to the discov- We chose the southern about which were the companies
ery of new mineral systems on with assets that would be able to

the southern Gawler; a district Gawler Craton because we join in the next market cycle and
most synonymous with IOCG believed it was still a geological the interest in bullion is also driv-
systems. ing our market price,” Anderson

The company’s most ad- and discovery frontier. said.
vanced prospect, the Paris sil- “We have enough cash to cov-

ver project, is representative of er the drilling for the coming year

Investigator’s willingness to look further “There is a lot of scepticism about por- and we have the objective of developing

than SA’s traditional IOCG mineralisation phyry systems in SA but we know we are Paris to indicated status and beginning

models. dealing with something different to the studies this year. Our intentions are to

“We have been taking a mineral sys- Olympic Dam system,” Anderson said. move it forward with renewed market in-

tems approach for quite some time. We The standard porphyry system model terest which will make it a lot easier for

are prepared to get out there and do suggests the presence of epithermal and us.”

scout drilling and bring in old data and skarn zones are found around the por- – Dominic Piper
apply new concepts. That gives us a start phyry core and Anderson believes Inves-



SA to mull over nuclear options

Shortly after SAREIC wrapped up ernment and broader community with
for 2016, the highly anticipated a sound basis to make informed and

South Australian Nuclear Fuel Cycle better decisions, Frydenburg said the

Royal Commission final report was Federal Government would carefully

handed down. consider the findings of the report

Former Governor of SA, Rear Ad- and consult with SA in developing a

miral the Hon Kevin Scarce AC CSC response.

RAN, led the Royal Commission “A re-elected Turnbull Govern-

which was established by the SA ment stands ready to work with the

Government last year to determine if South Australian Government if they

the State could increase its participa- choose to pursue any new economic

tion in nuclear activities. opportunities in this area which cre-

In short, the $7.2 million Royal ate jobs and growth,” Frydenburg

Commission report declared that SA said in a statement.

could deepen its involvement in nu- One finding SA will be particularly

clear activities in a safe manner. keen to pursue will be the opportunity

A total of 12 key recommendations to provide a secure, reliable and safe

were made: location for spent nuclear fuel.

• Pursue the simplification of state It is estimated a facility of this sort

and federal mining approval require- could be worth $455 billion in state

ments for radioactive ores, to deliver Kyra Reznikov wealth to SA and could provide

a single assessment and approvals much needed infrastructure and wel-

process gies, including nuclear, to contribute to a fare funding while the income could also

• Further enhance the integration and reliable, low-carbon electricity network at be used to conserve or even improves

public availability of pre-competitive geo- the lowest possible system cost the quality of the State’s national parks.

physical data in SA • Collaborate with the Australian Gov- The work being done by the SA Gov-

• Undertake further geophysical sur- ernment to commission expert monitor- ernment on increasing its participation

veys in priority areas, where mineral ing and reporting on the commercialisa- in the nuclear fuel cycle appears to be

prospectivity is high and available data is tion of new nuclear reactor designs that paying off, with a recent survey of almost

limited may offer economic value for nuclear 1,600 people conducted by SACOME in-

• Commit to increased, long-term power generation dicating 26% of respondents oppose ura-

and counter cyclical investment in pro- • Pursue the opportunity to establish nium mining, 30% oppose nuclear power

grammes such as PACE to encourage used nuclear fuel and intermediate level for SA and 38% oppose the establish-

and support industry investment in the waste storage and disposal facilities in ment of a high-level waste facility.

exploration of greenfield locations SA consistent with the process and prin- Furthermore, another poll revealed
from miners through associated 39% of Greens voters are in favour of
or don’t oppose nuclear power, con-
“• Remove at the state level, and firming an increased awareness
• Ensure the full costs of decommis- ciples outlined in Chapter 10 of the report about the role nuclear can play in ad-
dressing climate change.
sioning and remediation with re-
Speaking at SAREIC, Finlay-
spect to radioactive ore mining For the resources sons Lawyers special counsel Kyra
projects are secured in advance

pursue removal of at the federal industry it should be Reznikov said the stage was set for
seen as just the beginning...

level, existing prohibitions on the a more informed debate on nuclear

licensing of further processing activi- • Remove the legislative constraint in in Australia and now was the chance to

ties, to enable commercial development section 13 of the Nuclear Waste Storage scope the potential opportunities that

of multilateral facilities as part of nuclear Facility (Prohibition) Act 2000 that would were before SA.

fuel leasing arrangements preclude an orderly, detailed and thor- “For the resources industry it should

• Promote and actively support com- ough analysis and discussion of the op- be seen as just the beginning because

mercialisation strategies for the in- portunity to establish such facilities SA. from here wherever this goes the involve-

creased and more efficient use of the Findings and recommendations con- ment of the resources industry is going to

cyclotron at the South Australian Health cluded in the report were welcomed come into effect in a multitude of ways,”

and Medical Research Institute (SAH- by various levels of state and federal she said.

MRI) government, with Federal Minister for “There are still a lot of questions to be

• Pursue removal at the federal level Resources, Energy and Northern Aus- asked and answered. There are still a

of existing prohibitions on nuclear power tralia Hon Josh Frydenburg saying the lot for us to learn. We are now poised to

generation to allow it to contribute to a Commonwealth Government had an have a more informed and focused de-

low-carbon electricity system, if required important role to play in the discussion, bate; there is still clearly a great deal of

• Promote and collaborate on the de- including through the management of ra- work that needs to be done.”

velopment of a comprehensive national dioactive waste. – Mark Andrews
energy policy that enables all technolo- While the report provides the SA Gov-


Australia’s solar energy opportunity

The opportunity for Australia to take low carbon products,” he said. mains a work in progress,
the lead in solar thermal technologies
is now, according to Centre for Energy “Imagine solar metals with but once it can be demon-
Technology Institute for Mineral and En-
ergy Resources director at the University an Australian stamp on them strated there is a reliable al-
of Adelaide, Professor Gus Nathan.
as being recognised [global- ternative to non-renewable
Nathan’s address to delegates at SA-
REIC was highly anticipated in light of ly]. We have got good regula- fuels, which also results in
the University of Adelaide receiving $4.5
million from the Australian Renewable tory framework, high-quality, a reduction in greenhouse
Energy Agency (ARENA) towards de-
veloping next generation solar thermal low carbon [potential sources emissions through the im-
of energy]...this is really a plementation of solar ther-
The research project, which aims to
reduce the reliance on natural gas, is market opportunity for the fu- mal energy, heavy industry
valued at over $15 million and involves
Alcoa, CSIRO, ETH Zurich, Hatch, IT ture.” could be changed forever.
Power, San Diego State University, Uni-
versity of New South Wales and the Uni- While most people’s per- “Anticipated cost increas-
versity of Adelaide.
ception of energy use is for Gus Nathan es of natural gas and other
Nathan said Australia was in a position electricity, Nathan said it was non-renewable energy
to be a provider of high-grade, high-value
solar thermal products throughout the re- important to note that elec- sources, and the carbon
sources sector and conversations with a
number of companies to commercialise tricity only accounts for a quarter of Aus- footprint associated with their consump-
this opportunity are already under way.
tralia’s energy consumption. tion, mean that alternative, next gen-
“We [Australia] have got good solar
resources in general and we could also “There is roughly almost twice as eration solar technologies are becoming
look at the potential to do the reforming
of natural gas as only one option,” he much [energy] used in our transport sec- more appealing to industry,” Nathan said.
tor, which is fuel currently simply provid- “This new project builds on our exper-
“It is also possible to generate syngas
from other carbonaceous feed stocks ed by crude oil, but could be provided by tise in concentrating solar thermal [CST]
which could be [done] on current bio-
mass or waste resources, but also could renewable resources. This also applies technologies which harness the power
be done from future biomass resources
such as algae which can grow in saline to the mineral resources sector,” Nathan of the sun to generate alternative liquid
waters, maybe.
said. fuels from carbon-rich sources, including
“This is particularly possible where
there is a double value such as mine With alumina [aluminium oxide] pro- agricultural residues.”
site remediation. This is where there is
potential for a range of other feed stocks duction accounting for 40% of Australia’s – Mark Andrews
that could combine with solar to give bet- greenhouse gas emissions, the alumina
ter value than simply doing it from bio-
mass alone.” industry is a target for the solar energy

Nathan said solar thermal is by far the project to focus on.
best opportunity for high temperature,
high-grade heat that is renewable and Alcoa – supplier
with society being steered towards a low
carbon future, Australia is in the box seat of 15% of the inter-
to capture the market’s attention with any
technological breakthroughs. national alumina

“Of course, in the future, we anticipate, market – is a key in-
particularly with the recent signing of the
Paris agreement in the UN’s international dustry partner in the
framework, we now know that this inter-
national agreement to drive towards low project, which aims
carbon, irrespective of whether or not
there is a carbon trading or whatever to integrate current 20 April 2016 – Hilton Adelaide
market might happen, we anticipate that and next generation
there will be a market for higher value,
solar thermal tech-

nologies into the

refining process in


It is hoped knowl-

edge and findings

from this project

will enhance other

mining and miner-

als processing op-

erations around the


Nathan believes

innovation in hybrid

solar energy for the

solarised produc- The CD-Rom of the 2016
tion of mineral prod- South Australian Resources and
ucts and liquid fuels

offers significant Energy Investment Conference
opportunities for in- will be available soon
dustry to capitalise


Of course, com- CD-Rom – $60 (inc. GST)

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

opportunities re-



A likely return to
physical investment

Do you remember JPMorgan’s Physi- time the SEC approved both products their own cycle, one which can interact in
cal Copper Trust? in late 2012, the investment tide had al- price in unexpected ways.

Registered in October 2010 with the ready turned. With hindsight JPMorgan and Black-

Securities and Exchange Commission The initial boom in commodities invest- Rock’s physical copper funds represent-

(SEC), it was probably one of the most ment had turned to bust, leaving a long ed the high-water mark of the first boom

controversial commodity investment ve- trail of fund casualties in its wake. in commodities investment.

hicles ever conceived. A new boom is currently building mo- Money was pouring into the sector,

Although structured as a publicly- mentum but it’s a boom of a completely $US71 billion of it in 2009 and $US91 bil-

traded stock offering, it was to be backed different kind, a reminder that investment lion in 2010, according to estimates from

“by physical copper, 61,800t of it. Within trends in metals such as copper follow Barclays Capital.Heavyweight pension
days BlackRock had filed for

an identical product almost Those two physical copper funds such as The Cali-
funds were conceived as a way
twice the size with an im- fornia Public Employees
plied holding of 121,000t. Retirement System (CalP-
ERS) had been experi-
Copper manufacturers

were outraged at the con- of tapping into that surge in interest... menting with the commodi-
cept of nebulous “investors” however, by the time the SEC gave its ties sector since 2006,
stepping into the physical Commodities, the idea

supply chain and several of formal seal of approval to JPMorgan’s went, behaved differently
them fought a two-year rear- Physical Copper Trust in December from stocks and bonds
guard action in the courts to and therefore acted both

block it. 2012, the rationale for investing in as stabilisers in a broader
That action was ultimately commodities was already unravelling. portfolio and as a built-in
inflationary hedge.
unsuccessful. But by the


The trickle of initial investment, how- last year, the lowest level since 2007. for new ways to express a negative view

ever, turned into a deluge in the wake of Did the mass exit by fund managers on the Chinese growth story after Bei-

the Global Financial Crisis. exacerbate the collapse in prices? It de- jing clamped down on “malicious short-

Central banks changed the rules of the pends on whether you believe the origi- selling” on Chinese stock markets in July

previous investment game, offering both nal investment boom was a driver of ris- last year.

stick and carrot for fund managers to in- ing prices in 2009-2010. Five years after JPMorgan and Black-

vest in commodities. Disentangling cause and correlation Rock dreamt of bringing metals to the

In the developed world, zero interest is nigh impossible and the whole topic is masses via their pension fund manag-

rates and quantitative easing wreaked still a subject of heated debate. ers, the masses in China appear to have

havoc on returns on cash and bonds, But it is worth considering that the out- found their own path to commodity mar-

both bedrock components of most big flow of money from the base metals com- kets.

funds’ portfolios. plex may have translated into the loss of There’s still considerable uncertainty

China, meanwhile, was so alarmed over 600,000t of continuously rolling long to what exactly is taking place on China’s

at the contraction in exports that it un- positioning by funds invested in a com- commodity exchanges.

leashed a massive infrastructure stimu- modity index such as Goldman Sachs’ But the argument that retail players are

lus, stimulating prices across the com- GSCI. getting involved was strengthened this

modities spectrum. Just as investment interest in com- year when trading volumes in Shanghai

Nuanced academic arguments on modities was dwindling in the developed steel contracts and the Dalian iron ore

portfolio diversification were swamped world, it was about to flourish in a com- contract went supernova.

“in the general stampede to move money pletely different form in a completely dif- The price of iron ore surged by 20%

out of non-performing assets into rising ferent place. in a single day, on March 8, and it did

commodities. so amid an explosion of

Those two physical Most of that investment went into trading volume on the
copper funds were con- Dalian exchange.

ceived as a way of tapping precious metals and the energy One of the most
into that surge in interest, sector, but if it is the start of a larger (re-) physically-rooted com-
aimed as they were at the modities, it seems, was

most conservative of U.S. investment trend, it will only be a matter dragged sharply higher
pension funds, those pro- of time before the trickle-down effect by speculative trading
hibited from investing in flows.

anything other than U.S. washes into the base metals sector. It’s a new phenomenon
listed stocks. for commodity markets,

However, by the time where investment has in

the SEC gave its formal seal of approval The London Metal Exchange copper the past been largely confined to profes-

to JPMorgan’s Physical Copper Trust in price plunged over 11% over the course sional fund managers. High entry thresh-

December 2012, the rationale for invest- of just two days in January 2015. olds, particularly on the LME itself, have

ing in commodities was already unravel- It did so because of a wave of selling locked out all but the very wealthiest man

ling. emanating from the Shanghai Futures in the street.

The copper price peaked at $US10,190/t Exchange, where market open interest And it’s happening just as Western

in February 2011. By December 2012 it hit an all-time high and volumes were the fund managers are starting to dip their

had fallen below $US8,000/t, undermin- second highest on record. toes in the commodity waters again.

ing the appeal of what was in essence a Overnight the rest of the market woke Barclays estimates that more than

bull-market product. up to the existence of little-known Chi- $US20 billion flowed into commodities

It wasn’t just copper. As the tail winds nese hedge funds such as the exotically in January and February this year, the

of Chinese stimulus faded, the entire in- named Shanghai Chaos. strongest start to any year since 2011.

dustrial commodities sector was topping Unlike their Western counterparts, who Most of that investment went into pre-

out, bringing an end to what had been a had been drawn into commodities on the cious metals and the energy sector, but

one-way bet since the start of 2009. long side via broad-based commodity if it is the start of a larger (re-)investment

At a deeper level early experimenters indices, these new players showed they trend, it will only be a matter of time be-

such as CalPERS were finding that com- could aggressively play markets from the fore the trickle-down effect washes into

modities were not behaving as expected. short side. the base metals sector.

The years 2009-2011 were character- And they returned to attack the copper And who knows? Maybe the dust will

ised by the risk-on/risk-off trade with market in both July and November of last be blown off those filings for physical

every part of the risk universe moving in year. copper funds at some stage in the future.

lock-step. Indeed, by November, it wasn’t just After all, a long-only physically-backed

And by the time that changed, it was copper that was being hit. Both Shanghai copper investment to ultra-conservative

to the detriment of commodities, which aluminium and zinc contracts saw mass pension fund managers may be a much

started falling even while stock indices bear raids with volumes and open inter- easier sell now than it was back in De-

were still rising. est spiking to previously unseen levels. cember 2012.

Assets under management in the com- Aluminium was particularly interesting – Andy Home, Reuters
modities space peaked at $US451 billion since the Shanghai contract had histori-

in the fourth quarter of 2012, according cally been relatively low in liquidity rela-

to Barclays. tive to copper.

Under the double impact of collapsing In both cases the bear attacks last-

prices and disinvestment the figure had ed only a few days, suggesting a retail

fallen to just $US160 billion at the end of crowd surge that may have been looking



Venturex’s future is base metals

It would be foolish of Venturex Resourc-
es Ltd if it didn’t investigate the potential
for lithium mineralisation on its Sulphur

Springs tenements in Western Australia’s

East Pilbara region.

After all, Sulphur Springs is 7km from

Pilbara Minerals Ltd’s emerging Pilgan-

goora deposit, while Canadian company

MacArthur Minerals has recently indicat-

ed the possibility of lithium mineralisation

in the Shaw River district, which hosts

Venturex’s Sulphur Springs copper-zinc


While happy to explore the potential for

lithium at Sulphur Springs and capitalise

on any opportunities forthcoming in that

sector, Venturex is not getting carried

away with the hype currently capturing

the imagination of investors.

Rather, now more than ever, the com-

pany is assured its forte in base metals is

the right place to be and it is very much

focused on the copper-zinc space.

“Our society is based on copper and Its share in Whim Creek means Venturex is one of the few juniors to boast cash flow

zinc,” Venturex managing director John
Nitschke told Paydirt.
based on copper and zinc, they are fun- ficult, although not for Venturex.

“Every graphite/lithium battery that damental parts of our society; the pricing Last month the company delivered a

is made will be connected with a cop- is not opaque and the world will eventu- 6% increase to the 2012 resource esti-

per wire and will be charged by a cop- ally come back and realise the true value mate at Sulphur Springs, 162km south-

per wire, and it will probably be in a car of zinc and copper.” east of Port Hedland.

that is galvanised by zinc. Our society is Perhaps the tide is already turning in The updated resource is now 13.4mt

the zinc sector, given that @ 1.5% copper and 4% zinc for 194,000t

the last shipment from the contained copper and 530,000t con-

Century mine has sailed, tained zinc, which includes a newly iden-

while LME stockpiles are tified supergene resource near surface,

about one-third of what 800,000t @ 4.2% copper for 34,000t

they were three years contained copper.

ago. Nitschke said the supergene resource

Treatment charges at is the company’s most exciting near-

smelters have dropped term opportunity and the next six months

40% off their averages would be spent evaluating potential pro-

and zinc prices have im- duction scenarios.

proved from $US1,600/t “Sulphur Springs is a classic VMS

to about $US1,900/t in re- deposit and shows the typical weather-

cent times. ing profile and the new model identified

“There is simply no zinc is a result we’re really happy with. That

and people will wake up 34,000t of copper metal should be heap

to that and we will see a leachable [using SXEW processing

strong reflection in zinc methods] and the best part is that day-

prices in the next few light should be hitting that ore on the floor

years...the longer that of the valley at Sulphur Springs,” he said.

takes the higher prices Bringing something to fruition at Sul-

will be,” Nitschke said. phur Springs by 2018 is the aim for Ven-

It is obvious Nitschke turex and a critical component of that

is bullish on a zinc re- timeframe is the performance of Whim

bound, which appears to Creek.

be happening, however Whim Creek, west of Sulphur Springs,

with copper struggling at is a cash cow for Venturex right now and

$US4,700/t at the time of could be the centrepiece for a quick turn

Venturex is due $500,000 from copper production print, being enthusiastic into production for Sulphur Springs.

at Whim Creek before the end of June about the red metal is dif- Venturex and private company Black-


Existing infrastructure provides Venturex with some leverage in the Pilbara

rock Metals Pty Ltd recently agreed to which is indicating the potential for a new resource model identifying an en-
extend their relationship for the repro- 600,000 tpa processing plant based on a riched near-surface zone of supergene
cessing of existing oxide copper heap resource of 6.6mt @ 1.3% copper, 2.1% mineralisation which sits on top of the
leach pads at Whim Creek. zinc.” main sulphide orebody at the base of the
Blackrock has rights to use a refur- Nitschke said increasing the resource
bished 5 tpd SXEW treatment facility at or grade slightly would give Venturex “The new resource model wasn’t just
the Whim Creek processing site and un- confidence in pulling off something sig- about new opportunities such as super-
der the new agreement Venturex will in- nificant at a low cost and in quick time at gene, it was also about identifying, man-
crease its net profit at the operation from Whim Creek. aging and mitigating the risks associated
30% in 2016 to 49% in next year. with mining the deposit,” Nitschke said.
Additionally, there is scope to integrate
Blackrock has guaranteed net profit the Sulphur Springs project with the pro- “Those risks are primarily the treat-
distribution from the extended agree- cessing facilities at Whim Creek. ment of the transitional material, the
ment at Whim Creek, where production transitional sulphide material and also
from the March 2015 quarter to March “The obvious thing is to renegotiate managing the waste that you generate
2016 quarter was 1,362t copper, with the deal with Blackrock, it doesn’t cur- from the open pit.
$500,000 to be paid to Venturex before rently cover the Sulphur Springs ore so
June 30. we could negotiate something that is “We need to be able to demonstrate
more favourable for us. We could truck that we are able to deal with the waste
Venturex is focused on maximising its that ore around to Whim Creek as soon products and store them so that they are
cash flow from Whim Creek, with imme- as we had environmental and necessary not environmental liabilities in the long
diate concerns being to boost production mining approvals. Alternatively we could term. We believe we will be able to op-
back up to 4.5 tpd and perhaps looking at spend the money we would spend on timise Sulphur Springs for the long term
expanding to 6 tpd. trucking on a new facility and we believe and it will be ready to go when the prices
we should have something up and run- are right and also when our capitalisation
“We are throwing everything at getting ning in 2018,” Nitschke said. and our capabilities are there.”
that plant up and running as hard and
fast as we can,” Nitschke said. There is further opportunity to optimise – Mark Andrews
Sulphur Springs, particularly with the
Conservatively, Nitschke estimates
that Whim Creek could be producing at Despite investor attention being focused on lithium, Venturex is
5,000 tpa by 2018 (targeted production confident people will see copper as an essential commodity in society
for 2016 is 1,200-1,500t copper), 50% of
which will be attributable to Venturex.

The company is also working hard to
increase the tonnages at Whim Creek
and to do so it has beefed up its explo-
ration team to include former senior Oxi-
ana/MMG Ltd exploration chief Stefan

An area of focus will be Mons Cupri,
where field mapping has identified po-
tential for high-grade massive sulphide
extensions around the deposit and also
areas of alteration which show potential
for an orebody to exist between Whim
Creek and Mons Cupri.

“We will be committing to an IP survey
over that bit of ground,” Nitschke said.

“We are also looking at near-term op-
portunities that we can achieve and the
obvious priority is Whim Creek where
there is tremendous infrastructure, which
means we can do something quickly
and cheaply if we find something. We
have already done a scoping study there



Caravel cool on Calingiri

Could a project only 120km north- to your market cap,” Hilmer said.
east of Perth become Australia’s “Of course, when I say expensive I

next big copper mine? mean it’s worthwhile and it’s neces-

The answer to that question will sary in order to achieve a resource

become clearer later this month and then the studies that follow. We

when forgotten junior Caravel Min- were able to manage that because

erals Ltd completes a scoping study we had interest from external com-

on its flagship Calingiri copper pro- panies, who felt, like we did, that it

ject. had great prospectivity.

Caravel emerged from a market “We were very fortunate to reach

slumber in early April when it an- an agreement with First Quantum,

nounced a maiden resource esti- who funded last year’s explora-

mate of 251mt @ 0.34% copper for tion programmes and some of our

844,000t at Calingiri, based on a overheads, which has enabled us to

0.25% cut-off grade. make some of these big advances.

The estimate, prepared by CSA Caravel’s maiden resource estimate for Calingiri It was a challenge, but we’ve been

Global Pty Ltd, is comprised of re- comprises three prospects, including Bindi able to meet that challenge with the

sources from three prospects – right partner.”

Bindi, Dasher and Opie – with 187mt @ we’ve announced will be released in this Hilmer said investor feedback follow-

0.34% copper for 626,300t (more than quarter and we remain on track to do ing the release of the maiden resource

74% of the total resource) classed as that.” had been positive, particularly from

indicated and 64mt @ 0.34% copper for Caravel acquired Calingiri from Kings- those with relatively small shareholdings

218,000t in the inferred category. gate Consolidated Ltd in January 2013, in the company.

External test work also flagged poten- just three months after the company (for- First Quantum (12.3%) and Kingsgate

tial recoveries of at least 90% copper and merly known as Silver Swan Group) re- (12.6%) are the two largest shareholders

80% molybdenum. branded with a focus on projects in Spain in Caravel.

Ahead of the release of the scoping and Portugal. Hilmer expects all external aspects

study on Calingiri, Caravel chief execu- The first broad zones of copper-molyb- of the project that he and his company
tive Marcel Hilmer told Paydirt the maid- denum mineralisation were intersected consider attractive – 120km from Perth,

en resource estimate had exceeded in- at the Dasher prospect in May 2013. Fur- close to existing infrastructure, low en-

ternal company expectations. ther discoveries have followed over the vironmental risk, no Native Title issues,

“This is a bulk tonnage, low-grade de- past three years, culminating in the en- good topography – will be reflected in the

posit, so we never expected to announce couraging maiden resource. upcoming scoping study.

huge grades, but the results were be- Recent drilling at Calingiri returned a “That’s part of the reason why I think in-

yond our expectations in announcing in number of promising hits, including 232m vestors are following us closely because

excess of 1mt copper [at a lower 0.15% @ 0.32% copper from 36m (including they can see that and they understand

cut-off grade],” Hilmer said. 50m @ 0.58% from 122m and 12m @ this project is a little bit unique, not just in

“It is a very substantial resource and at 1.19% from 136m), 26m @ 0.47% copper the style of the deposit, but it’s location,”

various cut-offs, we have the potential to from 160m and 20m @ 0.40% copper Hilmer said.

achieve significant volumes of copper at from 260m. “I worked in Africa for many years and I

reasonable grades. Hilmer credited some of Caravel’s suc- used to travel for up to 36 hours to get to

“We’ve engaged CSA Global again cess with the drill bit to the project’s JV site. I can go up to Calingiri and back in a

to undertake the scoping study, which partner First Quantum Minerals Ltd. The day – and have plenty of time up there –

TSX-listed base metals pro- so it’s unique in that sense.

ducer struck an initial farm-in “When you hear people talking about

deal with the company in late the urban sprawl from Perth going north

2013 and last June moved to towards Calingiri and Wongan Hills, it’s

acquire up to 50.1% of Calin- not inconceivable that a significant per-

giri via a $3.6 million funding centage of our possible workforce will

commitment, including $1.2 just drive there and back, and be happy

million in the first 12 months. to do so.”

“The merits of a green- Caravel last month completed the sale

fields project have to be of the Wynberg gold project in Queens-

such that it can attract the land to CopperChem Ltd for $400,000.

right type of investor or part- The company continues to seek a JV

ner to assist you, because partner for its Bryah project, just south

otherwise, as a junior with a of Sandfire Resources NL’s DeGrussa

relatively low market cap, it’s copper-gold mine and the recent Monty

just too dilutive to be continu- discovery.
A scoping study on Calingiri is due for release ally funding what is a rather
later this month expensive process, relative – Michael Washbourne


Encounter’s sporting chance

Encounter Resources Ltd has a new An iron-rich gossanous outcrop was identified ping gossan adjacent to broad zones of
game plan for the coming season next to broad zones of copper anomalism at copper anomalism previously drilled.
as it continues its pursuit of the ultimate Lookout Rocks late last year
glory – a major discovery at its Yeneena Chilean copper major Antofagasta plc
copper-zinc project in Western Australia’s thing and expecting a different result… is earning into Lookout Rocks, about
Paterson Province. we just haven’t found that range of Tier 30-35km north of BM1-BM7, and must
One undercover discoveries,” Robinson spend up to $US6 million over the next
The greenfields explorer kicked off a said. four years to acquire a 70% stake in the
new drilling campaign at Yeneena last project.
month that will initially focus on three pre- “To me, what we’re doing is the next
viously untested density anomalies along frontier; this is where the industry is Rock chip samples collected from the
a 6km trend between the BM1 and BM7 heading. And there’s plenty of good sci- gossan late last year returned assays of
copper prospects. ence and reasons why that has to hap- up to 0.2% copper and also exhibited
pen, but it’s a constant learning loop. similarities to the iron-rich surface sam-
It comes after Encounter’s explora- ples taken at Nifty.
tion team spent the summer off-season “If this works, using cover-corrected
grinding out a new, cover-corrected grav- residual gravity as a potential tool for di- “As far as an analogy with the Nifty dis-
ity model for BM1-BM7, having struggled rectly detecting the better parts of these covery, this is about as close as we’ve
to correlate the existing image with previ- systems, it could be really important to got. Nifty was found by an outcropping
ous drilling results. the way we explore for both copper and gossan that was picked up in a mag sur-
zinc inside this basin. vey at about the sort of grades which led
Encounter managing director Will Rob- to the initial discovery,” Robinson said.
inson said the revised strategy had given “Making step changes in the science,
his company a chance of emulating dis- both in the methodology and the tech- “Lookout Rocks has gone from a good
coveries made by Sandfire Resources nologies that we use, is going to be mas- idea, nice location to now having evi-
NL (DeGrussa) and Sirius Resources NL sively important over the next couple of dence in drilling with the right sort of pro-
(Nova) in the last decade. decades as the big base and precious cesses, a sub-cropping gossan adjacent
metals mines that are so important to this to the drilling. We’ll be going back there
“The guys came up with a really good industry reach the end of their lives – and straight away with probably two diamond
idea to put a Y-frame around the cover, we’ve got to find new ones.” drill holes to start this year and we’ll see
look at the topography and the basic oxi- where that takes us.”
dation, apply ESGs to them, then remove Drilling at BM1-BM7 will be 50% fund-
that from the gravity image and give us ed (up to $150,000) by the WA Govern- The rig will then shift to the Millennium
a basement gravity image to work off,” ment Exploration Incentive Scheme zinc project. An extensive geochemical
Robinson told Paydirt. (EIS). Once that campaign is complete, and geophysical review was ongoing at
the rig will move to Lookout Rocks for a the time of print and is expected to define
“Obviously we can only do it in places brief diamond hole programme to follow three new drill targets.
where we’ve got a lot of data as to where up on last year’s discovery of a sub-crop-
those two boundaries are, but now we’ve “There seems to be a fair bit of support
got a gravity image that makes sense in the gravity survey we did late last year
and out of that has popped three really for further drilling in the south-east,” Rob-
exciting, high-priority targets. inson said. “Our most south-eastern drill
hole has 7m @ 5% zinc, with 3m of core
“Each of the three targets are adjacent loss in that intersection. We don’t know
to high-grade copper intersected previ- what those 3m were – they may have
ously, they’re all untested and they’re been better, they may have been worse
good targets to start the year on. We’ll – but we really need to understand more
see what the results of the drilling say, about that gossan.”
but there’s a lot of good science that’s
gone behind it all and hopefully it’s going Encounter’s stock has more than dou-
to bear some fruit.” bled over the past two months to 12.5c/
share, suggesting those outside the walls
Yeneena has been in Encounter’s port- of the company are also backing the new
folio since before the DeGrussa discov- game plan.
ery in 2009, but the junior remains com-
mitted to exploring the full potential of its “We’ve always had good investor sup-
1,950sq km land package, south of the port, I think we’ve got a good share reg-
2mt Nifty copper mine and west of New- ister and they continue to be very sup-
crest Mining Ltd’s Telfer gold operations. portive of what we’re trying to achieve,
which is to make a Tier One discovery,”
Robinson, an executive member of the Robinson said.
UNCOVER initiative and the long-stand-
ing president of the Association of Min- “You could say we’ve created a lot of
ing and Exploration Companies (AMEC), scoring opportunities, we’ve had a lot of
said rudimentary exploration methods inside 50s and I think we’re due to put
alone would not be enough to unearth one through the big sticks.”
the country’s next major copper mine.
– Michael Washbourne
“I think we’ve got enough data over the
last 20 years to know that doing the same



Freeport to release Tenke

Freeport-McMoRan Inc has agreed
to sell its majority stake in the Tenke
copper project in the Democratic Repub-

lic of Congo to China Molybdenum Co Ltd

(CMOC) for $US2.65 billion in cash, re-

ducing the US miner’s debt and handing

the Chinese company one of the world’s

prized copper assets.

The deal is a vote of confidence in cop-

per, which many consider a bright spot

among base metals. It is also the biggest

copper deal since Glencore sold its Las

Bambas mine in Peru for $US6 billion in


The China Moly acquisition in May, its

second in as many weeks, came days af-

ter Rio Tinto Ltd approved a $US5.3 bil-

lion underground expansion of the Oyu

Tolgoi copper mine in Mongolia.

Even though copper prices are lan-

guishing near seven-year lows due to a To relieve some of its mounting debt pressures Freeport-McMoRan has agreed
supply glut, the recent corporate activity to sell a copper asset in the DRC to Chinese interests
is a sign some investors are willing to call

a bottom on the commodities cycle and Congolese copper belt, is one of the mines.

expect a copper deficit ahead. world’s largest copper deposits. Pro- CMOC, one of China’s largest produc-

The deal is “further evidence of what ducing since 2009, it is 56% owned by ers of molybdenum, agreed last month to

China sees as a fair long-term copper Freeport, with a 24% stake held by Lun- pay $US1.5 billion to buy Anglo American

price, which is north of where current din Mining Plc and a 20% stake by Ge- plc’s niobium and phosphates business

levels are trading,” Paul Gait, senior re- camines, DRC’s state mining firm. in Brazil. The company told the Financial

search analyst at Bernstein Investment Toronto-based Lundin has a right of Times last week it had more than $US4

Research in London, said. first offer on any change of control trans- billion to pursue acquisitions, betting that
Freeport, like other big miners, has action over Tenke. The offer is open for the commodities cycle had bottomed.

been selling assets to cut debt, ...further evidence of Freeport said it would receive an-
while China has been snapping up what China sees as a other $US60 million from China Moly
commodity assets around the world fair long-term copper price, if the average copper price exceeds
to feed its massive economy. $US3.50/lb and $US60 million if the
average cobalt price exceeds $US20/
The deal takes China’s an- lb between 2018 and 2019.

“nounced outbound M&A tally to The US miner agreed to sell its 70%
about $US100 billion in 2016, near- which is north of where stake in TF Holdings Ltd, a Bermuda
ing last year’s record $US104 bil- current levels are trading. holding company that indirectly owns
lion. It is China Moly’s largest out- an 80% interest in Tenke Fungurume
bound deal to date.

Shareholders have put many Mining SA.

companies on notice, piling on pres- 90 days once the company receives no- Freeport also said it agreed to nego-

sure to sell assets to repair their balance tice, which it hasn’t yet, spokesman John tiate exclusively with China Moly for the

sheets. Including this deal, Freeport, Miniotis said in an email. sale of its interests in Freeport Cobalt,

which has debt of nearly $US21 billion, “Lundin will carefully evaluate all op- including the Kokkola Cobalt Refinery in

has sold about $US4 billion worth of tions for its stake in Tenke and will update Finland and the Kisanfu Exploration pro-

assets this year. The Phoenix, Arizona- the market in due course,” he said. ject in the DRC.

based miner needed to sell $US3 billion The mine is one of Freeport’s prized Citigroup advised China Moly on the

of assets by mid-year to keep its debt un- assets, along with Morenci, Cerro Verde deal, according to sources familiar with

secured. in Peru and Grasberg in Indonesia, but the matter.

“It is a good price for the asset and it it had deferred development and expan- – Anet Josline Pinto and Denny
significantly improves their liquidity and sion plans due to sluggish copper prices. Thomas, Reuters
their balance sheet,” Jefferies analyst
Freeport also slashed planned capi-

Christopher LaFemina said. tal spending at Tenke for 2016 by 50%,

The deal follows Freeport’s sale in alongside initiatives to reduce adminis-

February of a 13% stake in its Morenci trative costs.

copper mine in Arizona to Sumitomo China relies heavily on imported cop-

Metal Mining for $US1 billion. per for its smelters and Chinese compa-

Tenke Fungurume, in the southern nies have been looking to buy overseas


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Land access issues
persist in NSW

The contentious issue of land rights and access continues to plague NSW’s mining and energy sector

International mining and energy investors may think twice about ny was reviewing its case. At the time
entering New South Wales after another court decision has of print, Hume Coal was yet to decide
favoured land owners. whether it would appeal the Land and
Environment Court’s decision.

“It is a case that is being referred back

Land access issues have plagued the State over land access and rights. to the commissioner for further examina-

State for decades and during May, un- Hume Coal media co-ordinator Ben tion,” Fitzsimmons said.

der Section 31 of the Mining Act (1992), Fitzsimmons told Paydirt the compa- “The commissioner was the one who

the NSW Land and Environment Court

sided with land owners in the Southern

Highlands over ground being explored

by Hume Coal, a subsidiary of South Ko-

rean giant POSCO.

Affected land owners in the region es-

sentially won their appeal, which was

lodged in November, to stop Hume Coal

from undertaking coal exploration on

their properties.

Hume Coal has been ordered to pay

the applicants’ costs of the appeal as a


The NSW Commissioner for Mining

originally backed Hume Coal’s explora-

tion endeavours – carried out in accord-

ance to Approval Conditions and the

approved Review of Environmental Fac-

tors (REF) – in the Southern Highlands,

which means the Court’s most recent de- Despite a negative court ruling, Hume Coal will continue development plans

cision has caused much confusion in the for its namesake project in the Southern Highlands


Miners and explorers have had a tough time being accepted in NSW

Hume Coal is currently progressing Given the State’s long history of land

with the EIS approval process which access disputes, NSW could have done

will form part of the wider approvals pro- without this latest episode, particularly as

gramme. it appears the commissioners and chief

With regards exploration, Hume Coal justice of the Land and Environment

has stopped activities on the four proper- Court have different interpretations of

ties in the Southern Highlands subject to the law, which is a concern for potential

the appeal. investors.

“We can still continue to explore in oth- In the light of the Hume Coal case,

er properties or land that we own provid- Fitzsimmons called upon the NSW Gov-

ing that is covered under the approval of ernment to consider reviewing recom-

the REF,” Fitzsimmons said. mendations to the Mining Act which was

“Essentially, where we can get land handed down by Bret Walker SC a few

access agreements or agreements with years ago.

a land holder it is all good. But, if they Furthermore, he urged the NSW Min-

deny that then this kind of ruling sets the erals Council to liaise with the Govern-

precedent for significant improvements ment and come up with a solution to this

made the original ruling in favour of [to me made] on properties for prospect- seemingly never-ending problem .

Hume Coal, so I guess once that [exami- ing or exploration activities.” “Maybe it is time to look at implement-

nation] is done we will have more clarity Fitzsimmons said he was unsure what ing those [recommendations from the

about where we go from here.” the ramifications of the ruling against Walker Review] so that there is clarity for

Despite the Court’s ruling last month, Hume Coal would be, but did not dismiss land owners, for explorers and miners

Hume Coal plans to forge ahead with its the potential for the precedent now set to so investors can have confidence when

“namesake project in the State’s Southern flow into other states. they come to NSW and want to explore

Highlands, which, subject and extract resources, so

to all necessary approv- it is not as risky as it may

als being granted, could To give people confidence that seem right now,” Fitzsim-
come on stream in 2020. NSW is a place to invest someone mons said.

It is estimated POSCO “To give people confi-

has already invested $100 is going to have to come up with a dence that NSW is a place
million in the project and solution that suits both parties so that to invest someone is going

won’t be backing away to have to come up with

from its commitments. landholders and explorers can all work a solution that suits both
The plan is for the together to progress [growth] for the parties so that landhold-

Hume Coal project to pro- ers and explorers can all

duce 3 mtpa of metallurgi- State and the economy. work together to progress
cal coal for steel making [growth] for the State and

and industrial coal to feed the economy. Coal and

markets where demand mining as a whole are al-

will drive best prices. “This law may set the precedent now ready suffering, now is the time to give

During the construction phase about that people can deny access for explor- that confidence to overseas investors,

400 people will be required, while ongo- ers to come on their land. The flow-on ef- especially that NSW and Australia as a

ing operations will need a workforce of fect [could disuade] people that want to whole, is a place to invest in.”

300. It is Hume Coal’s intention to gar- invest in the State and explore for miner- – Mark Andrews
ner its workforce from within 45 minutes als now that they can’t gain access,” he

drive of site. said.



Alkane raises the stakes for DZP

Alkane Resources Ltd will tick off a Ian Chalmers ture for producing rare earths.
number of key milestones at its Dub- “In fact, right now they’re probably pro-
bo zirconia project (DZP) in New South caused by geopolitical reasons, and
Wales over the coming months after suc- suddenly the world went crazy for rare ducing rare earths cheaper than the Chi-
cessfully rattling the tin for $16 million. earths,” he said. “We had been working nese,” he said. “Having a cost structure
on Dubbo at that point for about 10-12 which keeps us below the Chinese is a
Last month’s non-renounceable en- years, so it was interesting but kind of big bonus and that has enabled us to go
titlement offer was strongly supported frustrating at the same time watching all back to all the customers we’ve been de-
by Alkane shareholders and the funds this unfold. veloping over the last three of four years
raised will be used to help complete the and say we can now supply you with ex-
purchase of the final parcels of farming “Suddenly there were 300 rare earth actly what you wanted, either a certified
land within the project area. projects around the world and you sat rare earth oxide or a certified rare earth
back thinking, ‘where is this going to lead metal of some kind.
Funds will also be directed towards a to?’. Of course, what it led to after about
two-month pilot plant run at ANSTO in two years was a complete decimation of “It was a big step forward, but again
Sydney to confirm recent process modi- the rare earths space, except for us and the sole-destroying part of it was the
fications and to produce samples for po- a few others. market just did not react. I wouldn’t even
tential off-take customers. call it a flicker of interest…however, the
“I think we’re seeing the same thing practical reality is it has enabled us to
The capital raising will also benefit Al- with lithium after we saw the same thing push on with those off-take agreements,
kane’s Tomingley gold operations, about in rare earths and in graphite as well. which lead to both the financing and also
50km south-west of Dubbo, with more Graphite has come off its peaks and the potential strategic investment.
funds available for regional exploration. hype has died right away and, for a lot
Since the first gold bar was poured in of graphite companies, value has come “The belief is that over the next 7-8
early 2014, about 90% of the cash flow back to reality.” months, we’ll put enough of those agree-
has been tipped into the development of ments in place – and we’ll have partial
DZP. With at least 30% of the detailed engi- funding at that stage – to at least push
neering design work for DZP complete, the button on DZP. We believe we can
While Alkane managing director Ian Alkane can now turn its attention to final- start the construction phase sometime
Chalmers was pleased with the positive ising off-take agreements and the major late in the second half of this year.”
uptake, he lamented having to go to the financing package for the $1 billion pro-
market at an issue price he considered ject. Chalmers said he was looking forward
to be less than half the true value of the to increasing exploration efforts around
company. Alkane has signed a letter of intent with Tomingley and following up on several
Vietnam Rare Earth JSC (VTRE) to toll promising recent drill hits, including 111m
“It caused us a lot of internal grief to process rare earths concentrate from @ 0.61 g/t gold from 42m (including 4m
do it at this time – and to do it at a price DZP, offering a potential alternative sup- @ 9.69 g/t from 110m) at the Kaiser tar-
which we think is ridiculous – but the op- ply of separated rare earths products to get and 8m @ 2.78 g/t gold from surface
tion was we either didn’t go ahead with that from China. and 2m @ 2.6 g/t gold from 44m at the
DZP and the land acquisitions, which is Cuddyong prospect.
something we couldn’t afford not to do, or Chalmers said the highlight of the deal
we don’t explore Tomingley and sudden- was VTRE’s “incredibly low” cost struc- Tomingley continues to be a reliable
ly find ourselves in a production hole in cash flow generator for Alkane, churning
three years time,” Chalmers told Paydirt. out 49,748oz over the first three quarters
of FY2016, with site net cash inflow total-
“We think if you look at Tomingley, ling $18.6 million, including $6 million for
our production profile and the cash flow the March quarter.
we’re generating out of that mine, our
market cap [$104 million] should be more “It happily ticks along in the back-
than double what it currently is, and that ground,” Chalmers said. “If we didn’t
would mean Alkane’s share price should have Tomingley up and running, we
be in the 40-50c range and we could would have had to go back to the market
have done a capital raising at that sort for a significant capital raising to get DZP
of price, not the 20c/share we’ve had to to where it is today.
do it.”
“Interestingly, it’s been a bit of a sales
Alkane’s call to the market coincided pitch when we’ve brought out interna-
with other capital raisings by notable tional investors to show them DZP…
ASX-listed juniors, including lithium it actually has quite an impact because
hopefuls Pilbara Minerals Ltd ($100 mil- people see we’re not just an explorer with
lion) and Dakota Minerals Ltd ($12.3 mil- delusions of grandeur about putting a big
lion). project like DZP into production.”

Chalmers acknowledged lithium was – Michael Washbourne
the “absolute flavour of the month” and
said the current craze for the alkali metal
reminded him of the excitement around
rare earths in 2011.

“We saw this amazing price spike,


Heron flight dependent on timing

Investors may not have serve modelling and mine
awoken to the fact yet but planning while GR Engineer-

Heron Resources Ltd could ing Services Ltd is undertak-

be about to time its run to ing metallurgical float sheet

zinc production to perfection. and process plant design

The New South Wales- work.

focused junior hopes to un- The PEA identified capital

veil a DFS for its Woodlawn requirements of $140 mil-

zinc-copper project by the lion and C3 cash costs of

end of the June quarter be- $US0.44/lb zinc, numbers

fore pressing ahead with a which, if repeated in the

development schedule which DFS, Taylor believes will al-

could see production start low Woodlawn to standout

just as the global zinc market from other zinc develop-

falls into a deep deficit. ments.

Zinc prices hit decade “We are looking forward

lows of around $US0.66/lb to a project that from a peer

in January but have since re- Woodlawn operated for 20 years largely as an open pit mine but Heron comparison perspective will
covered to around $US0.86/ now has designs on building its underground capabilities deliver strong results; it is a
lb as supply tightens up fol- very high quality project,” he

lowing the closure of several large mines stones will be completion of a DFS for said. “It is about size, quality and cost

in the last six months. In August last year, Woodlawn – 220km south-west of Syd- base. This is not a remote operation; it is

MMG Ltd closed the 500,000 tpa Centu- ney – which was a consistent producer a residential site with access to state grid

ry mine in Queensland while Australia’s from surface and underground for 20 power and proximity to service centres.

other major zinc mines – Mt Isa, McAr- years until its closure in 1998. That means there is not a lot of support

thur River, Broken Hill and Endeavour – Heron acquired the project as part of infrastructure needed and we expect to

all pulled back production. its 2014 merger with TriAusMin Ltd and see cost advantages from that.”

This supply response was followed has since focused on pulling together the Taylor would not be drawn on the exact

by increased demand from China and underground resource with Woodlawn’s make-up of project finance for Woodlawn

in April and the International Lead and 11.2mt tailings resource into a unified op- but did say he expected a senior debt fa-

Zinc Study Group increased its forecast eration. cility to be secured.

deficit for 2016 from 152,000t (made in A 2015 PEA highlighted “We haven’t set our fund-

October 2015) to 352,000t. the potential for an 11-year ing structure in stone yet,”

Heron managing director Wayne operation at Woodlawn he said. “We will get the
Taylor told Paydirt while the company producing up to 51,000 study done and see what the

remained confident about future zinc tpa zinc, 10,000 tpa cop- feedback from the market is.

prices, investors had been slower to rec- per, 16,000 tpa lead, 1 Global sentiment will be the

ognise the significance of recent shifts in mozpa silver and 9,000 driver. We have seen over

supply/demand dynamics. ozpa gold. the last few years if you hit

“Among investors there is not neces- Given the strong busi- the market at the right time,

sarily great appreciation about zinc, cer- ness case presented in and it may be only a couple

tainly not compared to their understand- the PEA – NPV was esti- of weeks’ window, you can

ing of copper or gold projects,” Taylor mated at $300 million and be surprised by what you

said. “Even though zinc has the strong- IRR at 46% – the DFS was can achieve.”

est supply/demand fundamentals I think being built around similar While the DFS is taking up

the situation will have to become really parameters, Taylor said. Wayne Taylor the majority of the compa-
tight and obvious before investors get “The PEA is a well struc- ny’s time, Taylor said Heron

behind it.” tured study and was inde- was also keen to return to

That delay may mean Heron’s share pendently signed off by SRK so we are exploration.

price is not setting the world alight now already a long way down the technical “We have taken this opportunity to

but may also buy the company the time and commercial path for the project,” he stand back and look at the information

it needs to ensure it becomes an invest- said. generated in the studies before we go

ment-of-choice when sentiment does Having completed further drilling last back into exploration,” he said. “We have

turn. year, the company expects to provide an developed a list of priorities and targets

“Investors will get behind zinc eventu- updated resource and new reserve for and we are pulling together the pros-

ally but there won’t be a lot of projects for the underground deposit as part of the pects we like and the board will decide

them to get behind. We have got a few feasibility study. when is the right time to go back because

milestones to hit but I think we can be in a “That will be the first underground re- we think we are in a world-class VMS

position to be one of those projects worth serve at Woodlawn in nearly 20 years,” district.”

getting behind,” Taylor said. Taylor said. – Dominic Piper
The most immediate of those mile- SRK is working on the resource/re-



Thomson stays the course with tin

Lithium and gold are sharing Rothery told Paydirt.
the limelight at the moment, “There are a number of

however, Thomson Resourc- things to follow up and it is a

es Ltd is staying true to its tin matter of figuring out which

search in New South Wales. way to go. Hopefully we

Exploration success at the will restart [drilling] in May/

Bygoo project in the Ardlethan June. We have the drillers

tin field, central NSW, and on side, but it is a little bit

some positive analysis sug- cash dependent.”

gesting supply is dwindling Thomson’s March quar-

but demand remains strong, terly indicated cash at hand

is the encouragement keeping was $178,000, therefore

Thomson interested in the tin any assistance in funding

sector. for drilling at Bygoo or any

Tin dropped to about of its other projects would

$US16,400/t in April and be welcomed.

while it rebounded to above The company was suc-

$US17,00/t at the time of print, cessful in attracting sup-

such prices are not enticing port for work at its Mt Jacob

further investment in the sec- and Cuttaburra A and B

tor. Thomson has applied for grants under the NSW Government’s New gold projects during the last
Therefore, the stalled pro- Frontiers Cooperative Drilling programme for its Mt Jacob and Cut- round of NSW’s New Fron-

ject pipeline could mean there taburra projects tiers Cooperative Drilling
is a risk to supply over the programme.

next five years, however, with global tin also enhance the prospects of in-ground “We were awarded three grants last

resources totalling some 11.7mt (includ- resources being unlocked. time, but they frittered away. The amount

ing 2.2mt reserves and 3.4mt resources) Thomson can do little to impact either we received wasn’t enough to fund the

reported in 2015, there is enough of the of these scenarios, instead the compa- holes, but they have doubled the fund-

metal to satisfy long-term demand, ac- ny’s energy is being expended in the field ing this time. We have reapplied and if

cording to ITRI. making discoveries. they double the funding that might make

Of course, higher tin prices are re- In April, a strong intersection of 8m @ those holes viable,” Rothery said.

quired to bring these resources to the 1.3% tin from 57m from old workings was “We have already hit good mineralisa-

surface, while better technologies im- announced from Bygoo South where tion in those areas, we hit gold at Mt Ja-

proving metal extraction costs would three holes were tested. cob, that is a really good gold project and

The drilling at that is sitting waiting to be drilled which

Bygoo South was we’d love to get onto as well.”

in addition to five In December, Thomson struck a deal

holes conducted at with Silver Mines Ltd over EL7391, 10km

the newly discov- west of Bowdens in central west NSW.

ered tin-bearing Silver Mines acquired Bowdens

griesens at Bygoo from Kingsgate Consolidated Ltd, with

North where stand- EL7391 sitting in the middle of the tene-

out results included ment package.

11m @ 2.1% tin from Silver Mines can earn an 80% inter-

78m, 8m @ 1.7% est in the project by spending an initial

from 121m, 4m @ $300,000 over a three-year period and

2.4% from 97m, 9m conducting a minimum 1,000m of drilling.

@ 0.7% from 141m Once Silver Mines has satisfied earn-

and 3m @ 0.5% in requirements, Thomson retains a 20%

from 65m. free carried interest in the project to deci-

“We have drill rigs sion to develop.

on site, but we are “Silver Mines should be drilling that

pausing at the mo- this year and that has a very good EM

ment as we plan anomaly [copper-zinc] which is very simi-

the next round of lar to the one at Wilga Downs. We still

drilling. We need to have 100% of Wilga Downs and we are

extend to the east intending to try and actually include that

and at depth and we in the next round of drilling we do at By-

also want to have a goo,” Rothery said.

Thomson expects farm-in partner at Bowdens, go west,” Thomson – Mark Andrews
Silver Mines, to start drilling soon chief executive Eoin


Drilling set to make an Impact

History suggests Impact Miner- ter Impact has reached the $2.5
als Ltd will taste some sort of
success from the current drilling million expenditure target, most
programme at its Commonwealth
gold project in New South Wales. likely in the September quarter

Impact pulled the trigger on a when the drill rigs are dispatched
new campaign at Commonwealth,
about 95km north of Orange, early to Broken Hill.
last month after identifying sever-
al new drill targets at the project’s Impact intersected some of the
four main prospects – Common-
wealth, Silica Hill, Welcome Jack highest reported drill assays for
and Doughnut.
PGMs in Australia at Broken Hill
About 10-15 of the 40-odd drill
targets will be tested initially and, during last year’s programme,
according to Impact managing
director Mike Jones, each one of headlined by a standout intercept
them has the potential to lead to
a major discovery in the Lachlan of 1.2m @ 10.4 g/t platinum, 10.9
Fold Belt.
g/t gold, 294 g/t palladium, 4.6 g/t
Jones continues to be amazed
at the success his company has rhodium, 7.2 g/t iridium, 5.6 g/t
enjoyed in NSW over the last 12-
18 months, particularly the geo- osmium, 3.1 g/t ruthenium, 7.4%
physical work at Commonwealth
that generated the new drill tar- nickel, 1.8% copper and 19 g/t sil-
ver at the Red Hill prospect.
“One of the things that’s really
struck us about this project over “We generated some spectacu-
the three years we’ve had it is
every time we do something and lar drill results over the last quarter
spend money on it, we seem to
get really good results back,” Jones told of 2015 and at the moment we’re
compiling all that information – we
“Every geochem survey and every
geophysical survey has done nothing but generated a huge amount – with
add new targets and added to the ones
that we’ve already got. That is an extraor- a view to a follow-up drill pro-
dinarily unusual situation and indicates to
us that, in fact, the four prospects could gramme to start in Q3 this year
actually be part of one major system cov-
ering many square kilometres. after we’ve finished at Common-

“If that’s correct, then really it’s got the wealth,” Jones said.
hallmarks of a major system and hope-
fully a major discovery to go with it.” “Unfortunately, we don’t quite

Up to 3,000m of RC and diamond drill- have the resources to run two pro-
ing will be completed over the next few
months in one of the biggest programmes grammes at once, but we’re cer-
to be undertaken in that particular catch-
ment of the Lachlan Fold Belt in recent tainly excited about heading back
out to Broken Hill and following up
Jones said initial groundwork had in-
dicated the mineralisation at Common- A new drilling campaign has started at Commonwealth on those outstanding results.”
wealth was being driven by a porphyry
copper system similar to the one which Impact’s standing in NSW con-
hosts Newcrest Mining Ltd’s Cadia-
Ridgeway operations. major mining provinces – Broken Hill and tinues to rise, with the company recently

“NSW, whilst having a long history of also the Lachlan Fold Belt – we’ve been named as one of four finalists for the
mining and exploration, in many areas
it’s very poorly explored,” Jones said. really quite amazed how little work has NSW Minerals Council’s annual Explorer

“We’ve found that going to two of the been done. Certainly there’s not been of the Year award.

the type of rigorous detailed groundwork With a heavy focus on NSW for at least

in some of these areas to actually make the next two quarters and a dwindling

a breakthrough. nickel price, Impact has put its Mulga

“It’s not like there’s still orebodies out- Tank project in Western Australia on the

cropping on surface, big ones at least, backburner and started the search for a

but we need to do all the right work to potential JV partner.

identify the targets.” Jones said a major discovery by fellow

Impact closed a $1 million share pur- junior St George Mining Ltd at one of its

chase plan shortly after punching the first nearby nickel-gold projects would pro-

hole in the ground at Commonwealth, all vide a massive boost for his company, let

but ensuring the Perth-based explorer alone the wider resources industry.

will be funded to complete the proposed “I’ve said it before and I keep saying

drilling programme. it – what the market needs right now is

Funds spent during the current cam- another Sandfire [Resources NL, De-

paign are likely to see the company meet Grussa] or another Sirius [Resources

its $2.5 million expenditure target as part NL, Nova],” Jones said.

of its agreement with Squadron Resourc- “We hope it’s going to be us, but there

es Pty Ltd, the private investment arm of are actually a lot of people out there do-

Andrew and Nicola Forrest’s Minderoo ing some great work and I think if we

Group, to potentially JV into Common- get a nice, big discovery it will put a real

wealth and Impact’s other NSW project rocket under this recovery we’re starting

at Broken Hill later this year. to see.”

Squadron, at its sole discretion, can – Michael Washbourne
invest a further $1 million into either pro-

ject, or both, to earn a 19.9% interest af-



Sirius offers historical
miners new opportunity

Although its rich mineral endowment helped fuel the Industrial Revolution, Western Europe was largely
forgotten in the modern day commodities super-cycle. However, as political risk appetite narrows and Eu-
ropean governments look for solutions to rising unemployment levels, the continent is slowly coming back into
exploration and development focus.

According to SNL Metals & Mining data, there are 37 ASX-listed companies currently active in Europe cover-
ing a variety of countries, commodities and developmental stages.

Some, such as Highfield Resources Ltd in Spain and Talga Resources Ltd in Sweden, have gathered plenty of
investor attention but many still struggle to convince the Australian market that developing mining projects in Eu-
rope – with all its associated regulatory and legal framework and advanced services economies – is achievable.

This month, Paydirt looks at the factors surrounding mining investment in Europe and investigates the pro-
gress of a new generation of European miners.

The region of North Yorkshire and nally surrendered last year when Thai In an era when the opening of a new
Teesside was the birthplace of the Indus- conglomerate SSI liquidated the Redcar supermarket or call centre is hailed as
trial Revolution. It was there that George blast furnace. As well as the 2,200 jobs a major economic boost to a region, a
Stevenson built his Rocket and Locomo- which were lost with the closure, there project which is slated to create 1,000
tive No.1 – the first passenger steam en- was a lamenting of the loss of identity for permanent direct jobs and inject £48mil-
gine in the world – and it was the pres- a region which has been synonymous lion into the local economy is a rare op-
ence of coking coal and iron ore in the with industrial output for 200 years. portunity.
Cleveland Hills which allowed the steel
industry to burgeon in the 19th Century. Hope and a major economic injection Sirius chief executive, Australian Chris
Indeed, for much of the 19th and 20th may be at hand thanks to a project which Fraser, said the level of support the com-
centuries it was impossible to travel to a is shaping as Britain’s largest mineral in- pany had received from national and
modern city without witnessing the influ- vestment in more than 50 years. local government as well as local com-
ence of the Teesside steel industry. As a munities belied the myth that mining de-
well-known Teesside poem says: Every Controlled by AIM-listed Sirius Miner- velopments were offered little support in
metropolis came from the Ironopolis. als plc, the North Yorkshire polyhalite Europe.
project (previously the York potash pro-
The last remnants of that era were fi- ject) is the sort of project UK politicians “Support from local government and
dream of attracting to their districts. community has been tremendous since


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