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Published by Paydirt Media, 2017-12-13 22:45:16

GMJ130-January-March18-web

January – March 2018 VOLUME 1. ISSUE 130
$11.95
Registered by Australia Post PP 643938/00057

West African:
Explorer of theYear

Northern Star: Miner of theYear

ISSN 1324-4396 NEWGENGOLD REVIEW
01

9 771324 439005 January - March 2018

Gold Mining Journal

www.novoresources.com

Gold Mining Journal TSX-V:NVO
OTCQX:NSRPF
Leo Karabelas
[email protected]
VP Corporate Communications
416 543-3120

January - March 2018

GOLD MINING JOURNAL (ISSN 1324-4396) NEWS 14
Published by Paydirt Media Pty Ltd.
A.C.N. 063 985 133 Novo Resources has completed its buy-in requirements on ground host-
ing conglomerate gold potential held by Artemis Resources near Karratha
EDITORIAL in Western Australia’s Pilbara region. The 50:50 JV went live in December
Editor: as some of the other companies chasing projects in the region started to
see the sting dissipate from their stock prices. GMJ provides an update
Dominic Piper on the latest developments in the intriguing Pilbara conglomerate story

Deputy editor: COVER 16
Mark Andrews
The entire Australian gold sector was in full bloom in 2017 but Northern
Journalist: Star Resources once again provided the most vivid display and is the
Michael Washbourne deserved winner of GMJ’s Miner of the Year. Meanwhile, West African
Resources’ recent exploits in Burkina Faso made it a clear pick as
Art director: Explorer of the Year. Dominic Piper spoke to both companies about their
Marian Noonan secrets to success

Contributors: NEWGENGOLD REVIEW 33
Keith Goode,
Brendan Ryan (Johannesburg) NewGenGold 2017 was back to its best with attendances resembling
the heady days of the last gold boom. GMJ was on hand for the two-day
ADVERTISING show to report on how and where the next generation of world-class gold
Advertising manager: deposits will be found

Richa Fuller Cover image: West African Resources managing director Richard Hyde

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Finance manager: January - March 2018
Giovanny Jefferson

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CONFERENCES
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Gold Mining Journal

EDITOR’S LETTER

No worries mate

There is little in the world for Australian gold miners, developers and
explorers to be upset about as we start 2018.

The Australian dollar gold price is holding up well, cost pressures have not
been elevated despite the wider resources sector experiencing a rebound
and a gold royalty increase in Western Australia has been averted.

Where to next is the most pressing question. For most of this century, it has
not been a question worthy of pondering. Australian gold miners have, in
the main, offered underwhelming growth profiles and inferior balance sheets
to their North American counterparts but they now look like a much better
investment proposition than many of their peers.

The once upwardly mobile North American mid-tiers are now struggling to
present compelling development cases. The starburst of activity which saw
mine development and expansion in the early 2000s has slowed and those few TSX-listed gold miners
with growth prospects have most of their assets in high-risk jurisdictions such as West Africa and Central
America.

In contrast, Australian companies enjoy enviable political stability – regardless of state governments
tinkering with royalty rates – and the best, most modern infrastructure and technology available to gold
miners. Northern Star Resources Ltd and Evolution Mining Ltd are clearly the standouts in this regard
both domestically and internationally. Northern Star executive chairman Bill Beament says in this edition
of GMJ that offshore investors are beginning to recognise the advantages the two companies have.

“…overseas investors have discounted Australian gold stocks for some time. But we are very investible
companies with a great track record so, we are now pretty hard to ignore from an international investor’s
point-of-view.”

The likes of Evolution and Northern Star still undervalued against international peers.

“We beat Randgold [Resources Ltd] on every single metric but it is still held up as an ideal for the global
industry,” Beament told me. “Hopefully, investors will recognise our companies in the same way.”

If recognition does come, a greater question will be how the companies will react to this increased
attention. The temptation to grow their businesses to a size to rival Newcrest Mining Ltd will be strong but
there is a need to balance ounces with profitability. The industry has a poor track record in this regard.
As Beament points out, the gold majors squandered too much cash on expensive M&A during the early
2000s. They undertook the cash splurge at the behest of investors who were keen to see the majors
expand their portfolios.

Northern Star and Evolution were the major beneficiaries of this profligacy, picking up unloved assets
which have since proved more than a match for the “shiny new toys” the likes of Barrick Gold Corp and
Newmont Mining Corp abandoned them for.

The task is, as Evolution chairman Jake Klein says, to stay rational whether buying or selling: “You can’t
just keep buying things,” Klein told GMJ. “You need to keep improving the quality of the portfolio.”

In this market, finding value and quality becomes difficult and we have seen a number of companies sell
projects for what appears full value – see Saracen Mineral Holdings Ltd on page 23. If a junior miner can
realise full value for unwanted assets, how can the larger companies possibly expect to find undervalued
assets?

Investor interest means these are the best of times for the Australian gold industry but management teams
should remember that such interest can be a double-edged sword and they need to remain focused on
growing a sustainable business because shareholders will be quick to sell when the inevitable downside
comes along.

[email protected] @DominicPiper /dominicpiper /PaydirtMediaAustralia

Gold Mining Journal Page 4 January - March 2018

Gold Mining Journal January - March 2018

NEWS

Fotios has Eastern
Goldfields firing again

by Mark Andrews

From the threat of being wound up in the middle of the
year, to raising $30 million soon after, 2017 was a bumpy
year for Eastern Goldfields Ltd but it appears set for a bright
future.
GR Engineering Services Ltd and Genalysis Laboratory
Services Pty Ltd pursued Eastern Goldfields for non-
payments of monies for services provided, which led to
action in the Supreme Court of Western Australia.
The order made by the court to wind up Eastern Goldfields
was set aside on August 17, as a repayment of debt was
made and operations at Davyhurst resumed.
The corporate matters and an unseasonal weather event in
the Goldfields in November meant Davyhurst has been stop-
start since first gold was poured in July.

Michael Fotios

However, when GMJ caught up with executive chairman
Michael Fotios, it appeared the company was set for a
happier new year.

At the time of print, the company was close to completing
a $30 million capital raising and welcoming international
mining investor Hawke’s Point Holdings LP as a cornerstone
shareholder.

Hawke’s Point’s investment of $17.5 million was topped
up by $12.5 million from sophisticated, professional and
institutional investors keen to support exploration, resource
development and feasibility studies on the Mt Ida/Menzies
projects.

The company now also has enough working capital and can
crank the mill up to 160-165 tph, which is at or above the
desired nameplate of 1.2 mtpa.

Development of the Golden Eagle underground has gone
well and in addition to broken surface ore, stockpiles will be
the source of mill feed for the next couple of months.

Mining was also scheduled to restart from the Siberia open
pit in late 2017, with the initial focus being on the recent
surface laterite discovery.

“That ore wasn’t in our schedule and we will be mining that

Gold Mining Journal Page 6 January - March 2018

at a very low stripping ratio and then Eastern Goldfields’ September
we will move simultaneously into the quarter saw production of
cutback of the Sand King pit. That 70,512t @ 1.08 g/t gold
generates modest amounts of ore through Davyhurst
for a couple of months and then from
February onwards it produces about Pilbara conglomerate story had generated interest back
60-65,000 tpm ore. So, between that into the exploration sector and the overflow into the broader
and Golden Eagle, the bulk of the mining sector was a positive.
mill feed is provided and the balance “We are seeing evidence of that across the board, particularly
is made up from incremental feed of with the strong demand we are seeing in cobalt and lithium
stockpiles,” Fotios said. stocks,” he said.
The appetite for the new age metals could see Fotios re-
“In terms of the development beyond engage in the lithium space through his private vehicle
that, we plan to refurbish the Lights of InvestMet.
Israel decline once we get approval While there is some lithium potential in Eastern Goldfields’
from the Mines Department. The first portfolio, gold will be the focus for that company and any
rock we blast in Lights of Israel is ore prospective lithium potential will be farmed out separately.
because the access drives are in ore, Fotios remains a shareholder in the company he once
so we are hoping by the end of the chaired, Galaxy Resources Ltd, and said InvestMet was
March quarter we will have both Golden Eagle producing ore currently assessing a lithium project.
at about 20,000 tpm and be starting production from Lights “We have some things we are looking at in other parts of
of Israel.” the world – Africa in particular – but it is mainly all WA stuff.
There are still some great opportunities here in the hard
Open pit mining at Siberia is set to run for two years from the rock lithium space. I think the infrastructure will develop.
two main deposits of Sand King and Missouri (2mt @ 2.3 g/t When I first joined the industry in the early 1980s there were
gold for 150,000oz in reserve) which provides a good buffer only four gold mines operating – Telfer, Golden Mile and
to start ramping up Riverina, the next big open cut mining Charlotte, Central Norseman and Hill 50,” he said. “By the
centre for Eastern Goldfields. end of the decade there were 20. I think we are going to see
the same with the spodumene mines. There are two, maybe
Amid progress at Riverina, the Callion open pit mine will also four, coming on stream but in 10 years’ time there could be
be exploited with an existing decline leading the company 10-20 of these things providing a huge amount of material to
into underground activities. the global market, which I think is great.”
Tianqi Lithium Australia’s refinery at Kwinana and Albermale’s
“The Waihi central open pit is another satellite short-term pit proposed plant at Kemerton, near Bunbury, are major boons
of probably 300,000-500,000t. That will get us into a decline for local players with Fotios tipping more refineries to be built
position to go underground at Waihi, which represents our in WA and elsewhere around the world.
short and medium-term mining objectives,” Fotios said. “There are people in the hinterland of WA that want to pour
big money into that sector who are looking at value adding,
“Gradually, towards the end of 2018 we will be hoping to have or in the case of the Emiratees, diversifying away from oil
at least Golden Eagle, Lights of Israel and Callion starting and gas, which is dwindling, so there are some bloody good
to operate as underground mines. It will be a busy 12-18 opportunities out there,” he said.
months to try and push the production up from 100,000 ozpa
to 150,000 ozpa over the next couple of years and then try
and push it as close to 200,000 ozpa as we can get it from
that mill. That is largely not by putting more tonnes through
the mill, but just increasing the grade from underground.”

Widespread support for its $30 million capital raising
indicates investor satisfaction with the company’s strategy
and strong demand for gold stocks, as funds in London and
New York look to rebalance their weighting in the precious
metal after exiting during the downturn.

“To get the interest of the big instituions you still need to be
plus-$100 million market cap and you need to have had a
relationship with them for a year or two or three,” Fotios said.

“It is not the sort of thing where you walk in the door and
these guys write you a cheque for $17.5 million. They need
to know you and understand where you have been but
certainly the demand for gold stocks is pretty strong.”

Fotios said that “for better or worse”, the interest in the

Gold Mining Journal Page 7 January - March 2018

NEWS

Capricorn warms up

by Mark Andrews

Exploration at Karlawinda was
put on ice in 2017 as Capricorn
Metals Ltd signed off on a feasibility
study.

Results from the study released in
October indicated the viability of
extracting 713,000oz gold @ 1.06
g/t from a 3 mtpa CIL plant at a rate
of 100,000 ozpa over 6.5 years.

AISC of $1,025/oz was guided
and total revenue of $1 billion
estimated, with capital costs in
the range of $133 million to build
Karlawinda.

The study focused solely on the Capricorn will announce
large Bibra open pit and since a reserve update from
the project economics were Karlawinda in early 2018
released, Capricorn has delivered
a 20% increase in resources at At the time of print, Capricorn had two rigs in operation.
Karlawinda to 38.3mt @ 1.1 g/t Hellewell said the company, after a brief pause for the
for 1.3 moz gold at $1,700/oz and holiday period, would continue to reach out and test new
using a 0.5 g/t cut-off. areas and targets with the same attack at Karlawinda in the
new year.
Meanwhile, within the $1,500/oz optimised pit shell a
resource of 27.35mt @ 1.12 g/t for 985,600oz gold, with A new reserve update from Karlawinda is expected in early
897,400oz in the measured and indicated category, has 2018, as work on project optimisation, permitting, detailed
been defined. engineering and project debt financing continues throughout
the year.
Having strengthened the resource/reserve scenario at
Karlawinda, Capricorn moved to enhance its status as Assuming gold prices hold steady, Capricorn is well
one the more fancied near-term developers in the West positioned for gold production mid-2019.
Australian gold space by raising $9 million late in the year.
In the meantime, it appears interest in Capricorn will only
The institutional placement and accompanying SPP was keep growing, with Hellewell reporting that various parties
well supported, with new institutional investors a welcome wanted to engage with the Karlawinda story now.
addition to Capricorn’s register.
“There is always that prospect [of M&A activity] out in the
“In the second half of the year we have had some reasonably market and certainly as you continue to take a project
strong results and we have seen some resource growth forward and de-risk it that level of interest starts to grow and
which we expect will translate into reserve growth [this that is what we are seeing,” he said.
year],” Capricorn executive chairman Heath Hellewell told
GMJ. “We still have a lot of unfinished business where we are
and we are in a reasonably new area, even though we
“Thanks to the capital raising we are looking forward to have a proven deposit. We enjoy the double side of the coin
getting into exploration again, we have got some things we where we have proven endowment, but limited previous
are doing at the moment as the year winds up, we will carry exploration. We really do need to realise some of the
on with those early next year. It was a good way to round out exploration potential in our own package before we try and
the year with strong interest in our capital raising and now spread ourselves too far and wide, but we are always looking
we are funded for everything we want to do in 2018.” for the next opportunity for ourselves as well.”

Hellewell said there was a healthy interest in the grassroots
exploration sector, which was starting to fire up competition
for drill rigs.

Gold Mining Journal Page 8 January - March 2018

Gold Mining Journal January - March 2018

OPINION

A two-plunge theory

by Keith Goode

Some orebodies may have two high- be seen in the old Caledonian
grade plunge directions. This assertion pit at Nannine (south of

is based purely on observation, started to Meekatharra) and at the HBJ pit

some degree by an old black and white at Westgold’s South Kalgoorlie

section by Dominion through Meekatharra operations where, during a

which closely resembled that of its section recent site visit, it was remarked

through the Westralia pit at Mt Morgans. that two opposing steeply-

Mineralisation at Mt Morgans has dipping directions had been
historically been associated with steep, encountered in underground
south-dipping ore shoots. However, Dacian development on two levels.

Gold Ltd has discovered multiple The super high-grade thrusts at At Draig Resources Ltd’s
shallow angled (about 20-30 degrees) Paddy’s Flat, Meekatharra Bellevue project, it is not too hard to infer low-
north-dipping thrusts controlling the angled, high-grade parallel thrusts dipping south,

high grades at Westralia. The north-dipping thrusts can in and possibly higher grade shoots also dipping steeply north.

fact now be seen in the sidewall of the dewatered Westralia Having just completed an IPO summary for BC8 (the Black
pit, with the steep angles in the opposite direction. Cat Syndicate) – expected to IPO in December 2017 – it was

Meekatharra’s ore shoots also dipped steeply north, interesting to read that the Main Lode in the Queen Margaret

and hence the sections appeared similar. So, when I (QM) Mines at Bulong plunged south, while the adjacent

saw Westgold Resources Ltd, I asked whether they had East Lode plunged north (the lodes are separated by albite

considered the possibility of shallow-dipping thrusts in the alteration).

opposite direction, i.e. south. Westgold said they had, just The QM Mines area is one of those unloved, forgotten areas
a month previously, unexpectedly encountered shallow- near Kalgoorlie that has remained dormant for more than
dipping thrusts with higher grades in the underground 100 years while explorers have been gallivanting over the
development of the Prohibition (Vivan-Consols) orebody on world searching for new orebodies.
three levels at Paddy’s Flat.
Quite amazingly, QM Mines in its day was renowned
Subsequent drilling identified the thrusts and, consequently, for discovering 100oz to 400oz “slugs” of pure gold and
Westgold announced intercepts up to 438 g/t on October 16, occasionally grades of 70 oz/t were mined. Even as recently
the day I walked into their new Perth offices. Westgold is as 2001, AngloGold Ashanti Ltd walked away from BC8’s
now mining those thrusts by air-leg methods. Bulong project area. Despite describing it as potentially a

However, these high-grade thrusts are subtle and it can be narrow-vein, high-grade Kundana lookalike, it failed to meet

seen how they were missed historically. As shown in the the company’s then expectations, as did Anomaly 38 which

picture, the geologists could not find the visible gold (grading returned intersections of 3m @ 31.4 g/t, 2m @ 38.4 g/t, 9m

around 200-400 g/t). Even viewing the drill core, we initially @ 9.3 g/t and 10m @ 7 g/t.

thought: “Have we got the right piece?” That was until the The high-grade plunge direction model continues to appear
sun glinted on the core and it appeared that someone had elsewhere. A colleague recently remarked that the two
sprinkled gold dust and it had sunk into the quartz, hence the opposing high-grade dip angles can also be seen at Northern
grade of 1,200 g/t. But, being in the lamination, the visible Star Resources Ltd’s Jundee mine.
gold was not obvious either in core or underground from side
on. This all begs the question as to whether the two opposite
high-grade, angled ore shoots on strike is just an Australian
However, the two opposing angles on strike appeared to “thing”. Even if it does only occur in Australia, the common
be an incredible coincidence and I thought back to a report practice of forcing orebodies to wireframe in one direction
I had compiled on MacPhersons Resources Ltd in August should perhaps instead be reconsidered, bearing in mind the
2017. During that visit I observed multiple north-dipping possibility that the higher grades in orebodies can plunge in
shallow thrusts compared to the steeper south-dipping ore two opposing directions at the same time.
zones in the Boorara South orebody.
Disclosure and Disclaimer: This article has been written by Keith
So armed with this knowledge, I began to look for two Goode, the Managing Director of Eagle Research Advisory Pty Ltd,
opposing angles of possibly higher grade mineralisation in (an independent research company) who is a Financial Services

open pits across Western Australia. I found the same could Representative with Taylor Collison Ltd (AFSL 247083).

Gold Mining Journal Page 10 January - March 2018

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NEWS

Pilbara gold too
close to call

There has been no end to publicity around companies
exploring for conglomerates in the Pilbara

Surbiton Associates Pty Ltd director Sandra Close has at a steady pace, despite production totalling 1t less in the
called for caution around the Pilbara conglomerates September quarter than the previous quarter.
story.
Production from Newcrest Mining Ltd’s Cadia East mine,
With more than 25 publicly-listed companies exploring for New South Wales, continues to recover following the
gold hosted in rocks of a similar type and age to those in damage caused by a seismic event in April.
South Africa’s Witwatersrand basin, Close said the publicity
generated needed to be tempered. Output from Cadia East in the September quarter was up
by 80,000oz from the June period, while Newmont Mining
“There is a great difference between an exploration play Corp at Tanami, Northern Territory, produced 16,000oz more
and a successful mining venture. Exploration is a risky and and AngloGold Ashanti Ltd reported production was up by
expensive business,” Close said. 13,000oz at Sunrise Dam, WA.

“Mark Creasy, one of Australia’s pre-eminent mineral Operations recording lower production during the quarter
explorers, spent the late 1970s and first half of the 1980s were the Super Pit in Kalgoorlie (down 24,000oz); Kirkland
in the Pilbara specifically searching for Witwatersrand-style Lake Gold Inc’s Fosterville mine in Victoria (down 15,600oz)
gold deposits. Although he was technically successful at and Newmont’s Boddington mine which produced 15,000oz.
that time and found conglomerates which carried high gold
values, the overall grades were too low to support economic “It was the usual case of swings and roundabouts.
development.” Notwithstanding the ups and downs of individual operations,
gold output in Australia remains relatively steady, taking into
The use of the Witwatersrand model in the search for gold- account all operations producing gold,” Close said.
bearing conglomerates in the Pilbara is not new and the
latest exploration attempts in the region should be put into Operation Ounces Owner
perspective, Close said.
Boddington 197,000 Newmont Mining Corp
“In addition to the usual uncertainties of exploration, these Newmont Mining Corp 50%,
types of occurrences involve one of the classic challenges of Super Pit – JV 170,000 Barrick Gold Corp 50%
sampling, the problem of the nugget effect,” she said. Newcrest Mining Ltd
AngloGold Ashanti Ltd 70%,
“Dealing with the nugget effect is an expensive and time Cadia Valley* 120,514 Independence Group 30%
consuming business. Such exploration involves collecting Newmont Mining Corp
and processing a large number of large samples in order to Tropicana – JV 116,087
obtain reliable results.”

While exploration for Pilbara gold conglomerates remains Tanami 114,000
mystifying for now, gold production in Australia continues
*two mills

Gold Mining Journal Page 12 January - March 2018

Conglomerate caution

by Michael Washbourne

Pilbara producer Millennium Minerals Ltd is Millennium is reviewing the conglomerate
reviewing the potential for conglomerate- potential of its Nullagine operations
hosted gold at its Nullagine operations, but
remains cautious of the industry’s latest craze. cost guidance at Nullagine for a third consecutive year.

Millennium is currently the only ASX-listed Separate feasibility studies assessing the viability of
company operating in the Pilbara to have developing an underground mine at Bartons as well as an
commercially mined and produced gold from integrated CIL and flotation plant are due in early 2018. Both
conglomerates, having churned at least 45,000oz are tipped to be approved by the company’s board once the
from several deposits associated with mapped respective studies have been completed.
conglomerates over the last 18 months.
A second underground mine, most likely at Shearers, is also
Despite being several hundred kilometres east of a target for Millennium before year’s end.
the conglomerate hotspot which has lured many
junior explorers to the Pilbara recently, Millennium Cash is confident the large amount of capital invested in
was compelled to review historical exploration exploration and expansion projects over the last 12 months
data to consider potential links between conglomerates and will soon start to bear fruit for the company.
the Mosquito Creek formation which hosts Nullagine.
“This last year has been all about consolidation and setting
“The first gold in conglomerate was actually discovered in ourselves up for the longer term,” he said. “The massive
the 1800s at Nullagine, so this is not a recent phenomenon,” capital investment, not just in exploration but in infrastructure
Millennium chief executive Peter Cash told GMJ. as well, has taken pretty much all of our free cash flow, but it
sets us up for a big 2019 and 2020. This next year won’t be
“At this stage, we’re unsure of the relationship between the so capital intensive, but we’re spending the money today so
conglomerate-hosted gold occurrences within Mosquito we can reap the rewards tomorrow.”
Creek and the high-grade, shear-hosted, structurally-
controlled gold we’ve been mining to date. Millennium is expected to budget circa $15 million for
exploration activities in 2018 – down on the $22 million
“There are a few classic examples on our ground. In fact, spend in 2017 – but Cash said his company would remain
the highest grade shoot at Shearers is intersected by a flexible as it targets a plus-100,000 ozpa production profile
conglomerate unit that is mineralised in its own right, so we’re with at least five years of reserve life.
investigating the association between the conglomerate and
some of the high-grade shoots. We’re also having a look at Six drill rigs were turning at the project at the time of print.
the two large dromedaries that bound our processing plant.”
“Our enthusiasm for this ground at Nullagine has only got
To date, the review has confirmed the presence of gold stronger and we can now be more refined about how we
mineralisation within the conglomerate-capped dromedaries, target some of these more meaningful discoveries,” Cash
returning peak values of 1m @ 2.34 g/t from diamond core said.
and 19 g/t from rock sampling traverses.
“It’s going to be quite a big step change for us in 2018.
Cash said prospectors were set to investigate the potential We’ve certainly learnt a lot and that always comes at the
shedding of nuggets out of those conglomerate units over end of the drill bit. A lot of work has been done to unlock the
the coming months, allowing Millennium to remain focused architecture and the structural controls and mineralisation
on keeping Nullagine operations ticking over. through this belt that we control 100% of.”

“We won’t let ourselves be distracted, other than this makes
sense for us to get a bit more awareness of what the
relationship of those conglomerates are,” Cash said.

“We note that the Beatons Creek conglomerate deposit sits
on our doorstep and we note that gold in conglomerate is
shed off our ground, but we are cautious. It could be very
exciting if this is the second coming of Witwatersrand, but I
don’t think we’ve seen enough yet for that to be conclusive.”

Millennium was gearing up for a big finish to 2017 at the time
of print, with the company expected to hit production and

Gold Mining Journal Page 13 January - March 2018

NEWS KARRATHA

Pilbara
gold rush

Swing and hit for Artemis

Since declaring a new-style of gold mineralisation presence of explorers into the region, many lack the
in Australia at Purdy’s Reward last February, credibility Artemis – which saw its share price surge from
Artemis Resources Ltd has turned the gold industry on 6c/share in January 2017 to 27c by December – has at this
its head. stage.
In December, Artemis locked in 50:50 JV terms with $C640
But, the naysayers remain, with doubts mounting on the million Canadian outfit Novo Resources Corp over Purdy’s
potential of Western Australia’s Pilbara bearing resemblance Reward.
to South Africa’s Witwatersrand Basin. At the time of print, the JV was holding discussions around
exploration planning and budgets for 2018.
However, Artemis executive director Ed Mead argues there Mead said there was significant support from the North
is more and more evidence supporting a gold rush in the American investment community, while their Australian
Pilbara. counterparts had been slow to respond to a new style of
mineralisation in their own backyard.
“To generate income, I ended up swinging a metal detector
after a really, really bad year in 2016. From that point in Metal detecting in the Pilbara has been the game-changer for Artemis
September [2016] when I first went up to Karratha to when
we had enough evidence to come out
with a new style of mineralisation, I
don’t think anybody believed what I
put out,” Mead told GMJ.

“Now there is any number of other
companies following the same
exploration model and successfully
identifying a whole lot of gold. We had
been fairly lonely as the only guys
there with a placard saying: ‘This
is huge’ but now we have created
a party. It has now got to the level
where people are thinking it must be
real, as people keep finding gold over
such a large area – east-west 350km
and north-south 270km – it is a bit
hard for a lot of people to ignore.”

Mead said he was keeping tabs on
about 16 other companies he was
aware of with Pilbara conglomerate
potential.

While he welcomes a growing

Gold Mining Journal Page 14 January - March 2018

PORT HEDLAND Kairos Minerals Ltd

Kairos has identified the conglomerate horizon
and has found visible gold in panning in four
prospects at its Croydon project. The company
raised $7 million to explore further and a
helicopter-supported programme was scheduled
for December ahead of stream sediment
sampling, trenching, metal detecting and drilling
later this year.

Castle Minerals Ltd

Acquired ground at two separate locations
in October and November. It is now tracking
the prospective contact and any associated
conglomerate horizons. The project vendors
are experienced metal detectorists and will be
deployed to look for both the conglomerate and
gold nuggets on the ground.

De Grey Mining Ltd Impact Minerals Ltd

The first company to react after the Novo/Artemis The company identified 90km of prospective
story broke, De Grey already held 1,800sq km of Fortescue Group conglomerate on ELAs with
tenure and a 1.2 moz resource in the Pilbara. rock chip samples of up to 11.2 g/t reported from
Kirkland Lake Gold Inc’s $5 million investment the Glen Herring prospect. Impact has been
has given the junior a dedicated conglomerate watching Novo/Artemis closely for indications on
exploration kitty for its Louden’s Patch prospect. the best exploration techniques to use.
The company expects to start trenching and bulk
sampling work this quarter, once it has received
heritage survey clearance.

Gold Mining Journal Page 15 January - March 2018

COVER

Miner of the Year:
Northern Star

by Dominic Piper

It was a case of something old and something new in this year’s GMJ Miner
and Explorer of the Year awards with domestic operational excellence and
high-grade offshore exploration numbers attracting the interest of voters.

Back in 2014, when Northern Star Resources Ltd last won replenishment trend and has also budgeted $65 million for
the award, the company had beguiled voters with its expansionary capital which will see group production reach
audacious swoop on unwanted West Australian gold assets. 600,000oz for the 2018 calendar year.

Four years on, audacity has been replaced by predictability Northern Star pipped its perennial challenger (and last
with Northern Star gaining most of its votes for the consistent year’s award winner) Evolution Mining Ltd which has
performance it maintained throughout 2017. undergone a similar transformation from ambitious junior to
well-credentialed mid-tier in just four years.
“They just do everything better,” Argonaut Securities analyst
James Wilson said. “From cash generation, corporate The last 12 months have seen Evolution focus on operational
contact and access – the whole team are possibly the excellence after the high-profile acquisitions of previous
friendliest management team out there and that counts years. Group production was up 5% to 844,124oz for
for a lot. They have a fantastic corporate culture within the FY2017. Combined with industry low AISC of $772/oz, this
organisation too.” led to a record net profit after tax of $217.6 million.

Hartley’s Paul Howard is another who sees achievement in Emmerson Resources Ltd managing director Rob Bills
Northern Star’s consistency. believes the company has delivered in that regard.

“Look at Northern Star’s cash balance and the fact that its “It has shown a superb execution of strategy to significantly
share price is up almost 50% for the year rolling,” Howard upgrade its portfolio of mines,” Bills said. “It has turned a very
told GMJ. “Northern Star has matured to a fairly quiet mediocre portfolio into a cash generator with the addition of
achiever. Jundee is starting to look amazing and Kal Ops Cowal and Ernest Henry. It has also shown an incredibly
is kicking goals. It has been doing all this at low costs too.” disciplined approach to costs and it will be interesting to see
if the company can continue this into executing a successful
Northern Star’s hard production and financial figures lay greenfields portfolio.”
bare the achievements of the last 12 months. For FY2017,
the company posted gold production of 515,000oz and Third place in the poll went to one of 2017’s turnaround
AISC of $1,013/oz, at the top and bottom end of guidance stories; Saracen Mineral Holdings Ltd. Saracen attracted
respectively. This led to record net profit after tax and a 43% attention for its work in driving down unit costs at its Karari
return on equity and 30% return on invested capital. and Thunderbox operations in WA.

The first quarter for FY2018 followed suit with the company One gold mining executive who contributed to the GMJ polls
selling 138,459oz in the September period. was impressed by Saracen’s ability to optimise its portfolio.

The future is looking just as bright as the present. Northern “Saracen has two well-performing gold mines with much
Star has increased reserves by 292% to 3.5 moz and resource improved reserve life,” the executive said.
by 136% to 10.2 moz, pushing out mine lives at both Jundee
and Kalgoorlie Ops to 10 years. It plans to spend a further Saracen’s rebound has seen it double gold production to
$35 million in FY2018 to continue that reserve/resource 300,000 ozpa and set itself an achievable target of $950/oz
AISC by FY2020. It has also began redrawing its ambitions,

Gold Mining Journal Page 16 January - March 2018

divesting of the Red October asset as it looks to focus on rapid development of the Swan orebody at its Fosterville
higher grade feed sources for its two mills. operations in Victoria.

2016’s Miner of the Year, St Barbara Ltd, again won support The performance of Fosterville has come as a surprise to
for its own turnaround story with its success being followed many Australian gold observers given it has been in the
in 2017 by the clearing of debt and payment of a fully-franked hands of North Americans for more than a decade.
6c dividend to shareholders.
Fosterville was set to produce 250-260,000oz in the 2017
Perhaps the most intriguing company to poll in the Miner of calendar year at AISC of $US500/oz, catapulting the newly
the Year category was Kirkland Lake Gold Inc. The TSX- listed Kirkland Lake to the top echelon of ASX-listed gold
listed (and now ASX-listed) company made a splash at companies.
Diggers & Dealers in August thanks to the discovery and

Explorer of the Year: West African

Four years on from the region’s last appearance on the West African’s ability to define a high-grade 750,000oz resource at M1
honours board, this year’s GMJ Explorer of the Year South, made it a runaway winner as GMJ’s Explorer of the Year
voting was dominated by West African stories.
of drilling in 2017 and is still defining the resource,” Howard
West African Resources Ltd, Cardinal Resources Ltd and said. “The cost of discovery is $6/oz when others are doing
Oklo Resources Ltd all attracted votes with Burkina Faso- it for more than $100/oz.”
focused West African (WAF) storming home in the poll
thanks to its rapid delineation of the high-grade M1 South Oklo could be the next West African company to produce a
deposit on its Sanbrado project. big find and the junior collected a number of votes despite
only just starting exploration at its Dandoko project in Mali.
WAF’s success comes as little surprise with the company
taking less than two years to define a 750,000oz resource The company has completed more than 100,000m of
at the deposit. There is little to suggest the company’s work shallow drilling in the past 12 months, with results from five
is done with recent hits of 13.5m @ 18.21 g/t and 2.5m @ anomalies catching the eye. When Oklo followed up the
43.97 g/t likely to be plugged into a further resource update shallow results with aircore drilling hits of 42m @ 6.14 g/t
scheduled for February. (from surface to the end of the hole), 30m @ 4.47 g/t and
40m @ 1.18 g/t from 42m, investors sent the company’s
Argonaut’s Wilson said WAF was an obvious candidate for shares to their highest levels since early 2012.
the award.
Even one of the domestic stories which polled well has a
“It’s a clear standout for discovery, adding a few hundred West African link to it. Draig Resources Ltd – which attracted
thousand ounces of ore at more than 24 g/t gold… amazing. votes thanks to its work at the old Bellevue gold mine in WA
It will seriously change the economics of this project,” he – is led by Steve Parsons, last seen as managing director
said. of Burkina Faso-focused (and previous Explorer of the Year
winner) Gryphon Minerals.
A senior Australian gold exploration manager said M1
South’s impact went even further. Also on the domestic front, Breaker Resources Ltd
could probably count itself as unlucky as Cardinal after a
“It has completely transformed the company,” he said, remarkable 12 months which have seen it build the Lake
pointing to WAF’s climb from 5.6c/share in February 2016 to Roe project into one of the most exciting in WA gold circles.
40.5c/share at the time of print.
The company has doubled its share price in the last 15
The Cardinal team may feel itself hard done by in not months thanks to continued success on its Bombera
winning the Explorer of the Year award. The company’s discovery at Lake Roe, WA.
Namdini project is larger (7.4 moz gold) and more advanced
than Sanbrado with construction set to start this year. The Breaker has drilled 95,000m in that period with a maiden
company’s achievements in 2017 have been all the more resource planned for the March quarter based on results
remarkable given the hammering it took on the market in including 7m @ 61.78 g/t, 24m @ 7.75 g/t, 19m @ 7.56 g/t,
late 2016 when investors questioned Namdini’s metallurgy. 9m @ 53.29 g/t and 28m @ 6.01 g/t.

The Archie Koimtsidis-led company has recovered
its composure and now ranks among the best placed
development stories in the West African gold sector.

Howard said the company had played the role of active
explorer adroitly.

“Cardinal has 14 rigs on site at Namdini, has done 37,000m

Gold Mining Journal Page 17 January - March 2018

MINER OF THE YEAR

Transformation still at
hand for Northern Star

When Northern Star Resources Ltd first won the GMJ Miner of the Year award in 2013,
it had just produced 100,000oz in the calendar year. Four years on, the company is

preparing to produce 600,000oz but many of the company’s principles remain the same.

It has always been a motto within the company; if the At that stage, underperformance at the company’s only
operations are going well, the company is going well,” asset had a material impact on group production. In 2018,
Northern Star executive chairman Bill
Beament says. any individual setbacks will likely be covered
by production at one of two other operating
It may sound like a “motherhood statement” centres.
but Beament also has more practical
evidence to compel the company’s workforce Between Paulsens, Jundee and the Kalgoorlie
to ensure that Northern Star hits its targets. Ops, 515,000oz at AISC of $1,013/oz was
produced in FY2017, meeting guidance and
“We’ve only had one underperforming allowing Northern Star to generate net after
quarter out of 30 we have operated for,” tax profit of $215.3 million.
Beament says. “It was in 2012; we hit a dyke
in the underground and also burnt out a bore Consistency has been a hallmark of the
pump in the plant at Paulsens. Production company’s performance since it acquired
went down 20% for the quarter and we got Jundee and the Kal Ops from Newmont Mining
hammered by the market. I still reference Corp and Barrick Gold Corp respectively in
that experience with our management. 2013-14 but Beament believes the Northern
By not meeting our expectations, we got Star story has a few more interesting chapters
punished by the market.” Bill Beament in it yet.

“There is still a lot of transformation in

Gold Mining Journal Page 18 January - March 2018

Northern Star,” he says. “We are growing production “Production went down 20% for
20% next year, potential to grow even above and beyond the quarter and we got hammered
that. There is the step up in reserves and resources as by the market. I still reference that
well but we have a lot to deliver on. experience with our management. By
not meeting our expectations, we got
“That growth potential is why we have got investors like
Black Rock in and increasing their holding. Investors are
looking for growth stories but when you look around the
world, there are not a lot of growth stocks in resources.”

Around 50% of Northern Star’s share register is now punished by the market.
based offshore and Beament believes international
attention in the company will continue to grow. from which it can carefully consider new opportunities.

“Jake Klein [Evolution Mining Ltd’s executive chairman] was “Having that 10 years’ visibility means we can make long-
right on the money when he said overseas investors have term decisions and that’s a luxury to have,” Beament says.
discounted Australian gold stocks for some time. But we are “We only buy stuff where we see great value in assets and
very investible companies with a great track record so, we where we can stick to the disciplines we know well; namely
are now pretty hard to ignore from an international investor’s underground gold mining. If we find such an opportunity I am
point-of-view.” confident it would get a lot of investor support and outside
growth still gets rewarded in the right circumstances.”
The lack of growth stories in the global gold sector betrays
the industry’s recent inability to build compelling investment Longevity within the company’s employee base also delivers
cases. The industry eroded investor support by squandering benefits, according to Beament.
the best market conditions in a generation on expensive
corporate deals and the chase for greater, but less profitable, “In most companies, the executive teams have five-year
ounces. tenures but we’re playing a much longer game,” he says.
“People are our No.1 resource; that’s how Northern Star was
Despite transforming the business through acquisition, created.
Beament is confident Northern Star will avoid the pitfalls
many gold companies fell into in the early 2010s “If you invest in people, you have them engaged and they
put back into the company.”
“You get most value by organic growth,” he says plainly.
“Imagine what could have been achieved if the money spent On being awarded GMJ’s Miner of the Year title for the third
7-10 years ago on M&A was instead invested in organic time, Beament said peer recognition was something to be
growth.” particularly proud of.

Jundee and the Kalgoorlie Ops are examples of operations “To be recognised by your peers is probably more important
which were neglected while owners went chasing new than receiving something from a panel of judges,” he says.
opportunities. “We are competing for investment dollars and people with
these companies so it is a fantastic achievement for the
“These are beautiful mineral systems and they have all the team and is testament to their ability to continue to deliver.”
infrastructure there; you should never walk away from that,”
Beament says. “You shouldn’t just
go looking for the next shiny toy
which was the attitude during that
era.”

Northern Star doesn’t intend to allow
the opportunity at Kalgoorlie and
Jundee to be passed up again.

“We are focused on those assets
and have already told the market we
can get them to 300,000 ozpa and
maybe even more,” Beament says.

The recent increase in reserves “People are our No.1 resource”. Amy Perriman
and resources – they now sit at 3.5 keeps an eye on things in the Jundee gold room
moz and 10.2 moz respectively –
has handed both operations the
longevity they’ve lacked in the last
decade.

It also gives the company a base

Gold Mining Journal Page 19 January - March 2018

EXPLORER OF THE YEAR

M1 a route to
prosperity for WAF

by Dominic Piper

High-grade gold in panned samples grading 534.45 g/t gold from West African’s
TAN16-RC122 drill-hole at the Sanbrado project in Burkina Faso

West African Resources Ltd managing director Richard Hyde has plenty of experience of
gold deposits in West Africa but even he is struggling to change his mindset around the

company’s M1 South discovery in Burkina Faso.

It is still a surprise to see how much value can be generated updated resource for its Sanbrado gold project in Burkina
out of a small amount of tonnes,” Hyde tells GMJ. “My Faso. The update saw indicated resources at the high-
experience of exploring in Africa tells me that, generally, if grade M1 South orebody increase 150% to 1.2mt @ 14.4
you can’t get the geology to hang together on 200m sections g/t for 556,000oz gold, with a further 410,000t @ 14.4 g/t for
you move onto other targets. But we have to get this on 191,000oz still in the inferred category.
12.5m sections and it hangs together very well on a short
strike.” A further resource update is expected in February as the
company’s drilling continues to return high-grade numbers,
West Africa has been the gold sector’s go-to exploration particularly from underground targets.
region in the past decade but while there have been a few
high-grade discoveries, its reputation has been built on “We will have six rigs going all the way through to the middle
large, low-to-medium grade systems. of 2018,” Hyde says. “There will be lots of results with infill
drilling down to 500m to convert the inferred resources into
A brief examination of WAF’s resource figures indicates just indicated and then we will start stepping out to 600-700m
why Hyde has had to adjust expectations. The company was below surface. Mineralisation looks open, even if the plunge
struggling at the end of 2015 due to a poorly received DFS has changed. Given these orogenic deposits in West Africa
on a low-cost heap leach project based at the M5 deposit at tend to keep going there is incentive to keep drilling.”
Sanbrado.
The company is redrawing its DFS to incorporate
However, by the end of October 2017, WAF delivered an underground operations from the get-go but Hyde is also

Gold Mining Journal Page 20 January - March 2018

intent on finding time and money to begin looking for further West African plans to have six rigs operating
M1s. at Sanbrado through to the middle of the year
“Both M1 and M5 are on the southern side of the granite
diorite intrusive but on the north side we have what looks like South is redefining Sanbrado.
a repeat setting on,” he says.
Hyde is not getting overconfident and knows WAF will have “It was a hard start for WAF after an underwhelming
to get everything right in order to make another discovery. feasibility study but they bounced back with the discovery
“We found M1 South by being dogged and drilling lots of of M1 South,” Wilson tells GMJ. “It’s a clear standout for
holes. It only had 3-4 auger soil anomalies of plus-50 ppb discovery adding a few hundred thousand ounces of ore at
gold so it was very subtle. The first drilling programmes were more than 24 g/t gold… amazing. It will seriously change the
uninspiring and it wasn’t until the second round of RC drilling economics of this project.”
in early 2016 that we returned 20m @ 50 g/t gold and now
it is well on its way to 1 moz gold,” Hyde says. “We have to The M1 South discovery has come at a time when
look for any subtle anomaly we can identify because another development options for gold juniors are expanding thanks
M1 could add another 100,000 ozpa for a relatively small to a bullish market. For Hyde, it is validation of the company’s
capital outlay.” approach during more difficult times.
To aid its chances of further discovery, WAF has employed
renowned structural geologist Dr Greg Cameron to build the “The secret to our success has been to keep on drilling,”
structural understanding of Sanbrado. he says. “In 2011 when we couldn’t get access to a rig,
“Structure is definitely key,” Hyde says. “We have got some we bought our own and set up our own drilling company.
structural targets, having just finished a lot of structural work That kept us drilling throughout 2013 to 2015 which was a
with Dr Greg Cameron. I’m looking forward to getting a difficult time for the sector. We undertook a couple of very
massive download from him.” difficult capital raisings to keep the company going and
Recognition of Sanbrado’s development has carried wider came through that period with a real prospect and a plan to
than GMJ’s poll of experts. WAF shares have doubled in capitalise on it; which we have done.
the last 12 months as the resource has grown and investor
interest towards West African gold stories has thawed. The “It is about value creation at the drill bit. As long as you stay
brokers have followed with most of the major Australian focused on that, the market will always come back to you.”
broking firms now covering the company.
In an initiation report released in late November, Bell Potter
analyst Duncan Hughes said the addition of the M1 South
underground ounces would appreciably improve Sanbrado’s
economics.
“M1 South underground resource will add overall grade and
production ounces to the first years of mining [and life-of-
mine], lower strip ratios and potentially improve recoveries.
An updated DFS is expected in mid-2018 and we expect this
to be vastly improved,” Hughes said.
Argonaut Securities analyst James Wilson agrees that M1

Richard Hyde

Gold Mining Journal Page 21 January - March 2018

MINER OF THE YEAR FINALISTS

World at Evolution’s feet

by Michael Washbourne

Evolution Mining Ltd may have been Jake Klein “It is emotional to divest of an asset, but it’s
pipped at the finishing post for rational as well and ultimately we need to do
back-to-back Miner of the Year gongs, things which are in the rational, long-term
but the company continues to garner interests of our shareholders. Edna May is
acknowledgment as one of the world’s in better hands now. With an EBITDA margin
lowest cost gold producers. of 18% on a per ounce basis, it would never
have been able to compete for capital in an
In fact, Evolution headed all global gold Evolution portfolio which is now averaging
majors and mid-tiers with a sector-leading
AISC of $786/oz ($US620/oz) for the above 50%.”
September quarter. This was despite the
now-divested Edna May mine chewing up $1,588/oz AISC Evolution’s impressive financial year allowed
over the first three months of FY2018. the company to tweak its dividend policy, gifting shareholders
a 3c/share fully franked dividend on the back of a switch to a
Evolution executive chairman Jake Klein said his company’s payout ratio of 50% of after-tax earnings.
rise correlated with a “remarkable” turnaround for the
Australian gold sector. “I think that shows you how far the sector has come, that
gold companies can deliver a dividend yield,” Klein said.
“If you look at the September quarterly results across the “We also have an average reserve life in our portfolio of nine
board, Australian gold producers occupy the number one, years, so that should answer the question people have as to
two and three spots as the lowest cost gold producers in the how sustainable it is.”
world amongst global mid-tiers and majors, with Evolution
proudly sitting at number one,” Klein told GMJ. While the operational performance of mines such as Cowal,
Ernest Henry and Mt Carlton continues to exceed company
“Go back five years and we were being written off as a sector expectations, Klein is also excited about the untapped
because we were high cost, had low geological prospectivity exploration potential across Evolution’s portfolio of assets in
and were not very interesting. I think the change in the Queensland, New South Wales and Western Australia.
Aussie gold sector has been remarkable.”
Recent follow-up drilling testing a new zone of mineralisation
Records tumbled in almost every category for Evolution in at Cowal’s E41 West deposit returned hits of 31m @ 1.01
FY2017 as Australia’s second largest gold miner achieved g/t gold from 298m, 21m @ 2.19 g/t from 349m and 88m @
production and cost guidance for a sixth straight year. 0.72 g/t from 448m. Impressive intercepts of 6.9m @ 46.2
g/t gold and 9.4m @ 25.9 g/t were also returned at Cracow’s
Group production of 844,124oz was up 5% on the previous Imperial zone.
financial year, helping the company post a record statutory
net profit after tax of $217.6 million and slash $325 million The encouraging results saw Evolution allocate an extra $5-
of debt off its balance sheet. New records were also set for 10 million to its exploration budget – now circa $60 million
operating cash flow ($706.5 million) and net mine cash flow – for FY2018.
($461.5 million).
“We’ve taken a giant step forward in the discovery space,”
Operational momentum has continued into FY2018 with Klein said.
285,345oz produced at an average AISC of $772/oz
($US607/oz) for operating mine cash flow of $278 million “Cowal was discovered in 1988, but we don’t believe this
and net mine cash flow of $205.1 million. Net bank debt has field has been very extensively explored by anyone since
been reduced to $282 million, with gearing also slashed that initial drill phase.”
from 15.9% to 11.3%.
Despite watching Evolution bloom into a $4.3 billion
Following the sale of Edna May in October to Ramelius company during a downturn in the resources sector, Klein
Resources Ltd for $40 million cash plus up to $50 million in forever remains wary of falling for the same traps which cut
consideration payments, Evolution’s EBIDTA margin is now down previous industry leaders.
54%, up from 49% at the end of FY2017.
“We’re determined that Evolution is going to be a company
“Selling assets is as important as buying assets,” Klein that prospers through the cycle. We like the higher gold price,
said. “You can’t just keep buying things. You need to keep we want to bank every dollar above our long-term planning
improving the quality of the portfolio. We’ve said that from price of $1,500/oz, but we also recognise that the gold price
the beginning. is cyclical and we need to operate a business that prospers
when the gold price is going up and when it’s going down.”

Gold Mining Journal Page 22 January - March 2018

Finlayson’s eyes on future

by Mark Andrews

Saracen Mineral Holdings Ltd has enjoyed many of them in the past. I think it is a matter
another stellar 12 months of production of what the catalyst will be – probably the gold
in Western Australia, with Raleigh Finlayson price peeling off a couple hundred bucks may
juggling managing director and chief operating be that catalyst.
officer responsibilities with aplomb.
“Obviously we don’t want that to happen,
As of January 1 though, Finlayson will be but the reality is it is inevitable and over the
relinquished of the latter position with the course of history it has been proven. So,
addition of Simon Jessop, formerly Evolution when that happens we will be ready to go
Mining Ltd’s Kalgoorlie region general and you will probably see some bigger deals
manager, to the Saracen stable. where valuations come off but also, more
importantly, expectations will peel off. But,
“It will allow Simon Jessop to focus on the until that happens I don’t see much changing.”
ops and will enable me to start looking a bit
more outward into the future on the strategy Raleigh Finlayson Saracen’s success in building longevity at
stuff, M&A and maybe some of the growth Karari and Thunderbox has also compelled
opportunities that present themselves,” Finlayson told GMJ.
the company to look inwardly when spending cash in the last
In 2017, Saracen hit the eject button and disposed of non- couple of years.
core assets Red October and King of the Hills, as production
from Karari and Thunderbox performed on-song and Carosue Dam – which hosts the 160,000-170,000 ozpa
exploration success continued. Karari gold operation near Kalgoorlie – has delivered 1 moz
under Saracen’s ownership, while the 130,000-140,000 ozpa
Sustained production at a rate of 300,000 ozpa gold has Thunderbox mine has produced 2 moz gold since 2002.
been achieved from Karari and Thunderbox, which has seen
Saracen pull in the cash and find recognition as one of the Through the drill bit, Saracen has managed to grow the
most fancied gold stocks worldwide. reserve base at both operations and its inventory of 2.1 moz
gold will see production from both centres continue for in
“Probably most important has been our cash build; $30 excess of seven years.
million in total for the last six months. That has been the real
driver as we have obviously been developing Thunderbox The company is focused on opportunities adjacent to both
and growing mines, which has consumed our operating cash operations, as it looks to bulk up the mine lives to 10 years
flow for the last couple of years. That is the most pleasing or more.
part, and probably why our stock in the last six months has
been in the top 1-2% of gold companies globally,” Finlayson First underground drilling from Whirling Dervish at Carosue
said. Dam returned thick, high-grade gold results including 14.2m
@ 2.4 g/t, 34m @ 4.2 g/t, 34m @ 4.1 g/t, 7m @ 3.2 g/t and
While the limelight is on Saracen, the weight of expectation 7m @ 5.3 g/t. At Karari, 13.8m @ 9.1 g/t was struck 50m
to participate in any M&A activity is not being felt by Finlayson north of the current reserve.
who believes market conditions are more conducive to
sellers than buyers. Meanwhile, highlights from grade control drilling from Kailis
at Thunderbox included 22m @ 8.8 g/t gold, 21m @ 38.4 g/t,
Unlike in 2013/14 when gold assets could be bought at a 15m @ 37.7 g/t, 9m @ 12.7 g/t, 9m @ 2.2 g/t, 22m @ 20 g/t,
“steal”, sellers were achieving close to what they expected 21m @ 38.4 g/t, 15m @ 26.4 g/t and 7m @ 45.5 g/t.
for assets in the current market, Finlayson said.
Finlayson said the results instilled further confidence in
“I think that is where it is at the moment. We can yield the organic opportunities in front of the company, which
essentially the NPV of these projects [Red October and King was providing further impetus for inward investment in its
of the Hills], so we went through the sale process now rather portfolio.
than holding on to them and having to mine them for 7-10
years, while also incurring the holding costs for that period,” “As far as acquiring other assets, frankly, I look at it more
he said. of a competition for capital at the moment and allocation of
capital into our existing assets. If you look at our exploration
“I think it is very much a seller’s market hence why we have spend in the last year and what that yielded at a cost of $35/
been looking to offload some of our smaller assets. That will oz over the additional ounces that we put into our reserves
change, of course, it is a cycle and we have been through statement, you would be looking at 10 times that in the M&A
space at the moment,” he said.

Gold Mining Journal Page 23 January - March 2018

MINER OF THE YEAR FINALISTS

St Barbara banking wins

by Mark Andrews

It is hard writing a story about St Barbara Ltd without Simberi is now a shining light in St Barbara’s portfolio
mentioning what a stunning comeback it has made in the
gold sector. like, so we are busy with that and hope to be able to give
some visibility on that in the half-year results.”
With debt of $400 million and a share price of 7c/share, St
Barbara looked gone for all money in late 2014. St Barbara reported a strong start to production at Gwalia
in the first quarter of FY2018, backing up on the 265,000oz
However, three years on the company returned a fully gold at $785/oz ASIC in FY2017.
franked dividend of 6c to shareholders, while the operating
cash flow once used to reduce debt is being banked, as the Meanwhile, oxide production from Simberi, Papua New
company starts on its growth trajectory with $199 million in Guinea, totalled 116,000oz in FY2017; the highest amount
the bank. of gold St Barbara has extracted from the operation since
taking charge of it in 2012.
“Growth is important, but more importantly you have to make
sure you are pulling all the levers on your organic growth,” Further near-mine drilling for oxide ore is part of the growth
St Barbara managing director Bob Vassie explained to GMJ. strategy at Simberi, where a sulphide reserve of 1.4 moz
gold (open at depth) remains untouched.
“I think what is pleasing is that in the last couple of years we
have drilled deep at Gwalia, 200m below the old base of our With Simberi continuing to yield results, fortunes in PNG
reserve – which used to be 1,800m below surface to 1,940m have changed and the appetite for exploration in the region
officially – and added about 1 moz of resource in 2016. We has returned.
have done the same again this year and at June 2017, the
Gwalia reserve extended to 2,140m and resource to 2,200m In addition to near-mine drilling at Simberi, St Barbara will
[below surface]. ramp up exploration activities with JV partner Newcrest
Mining Ltd on Tatau and Big Tabar Island in FY2018.
“While people observe it can be a bit thinner at depth, it is
still quite value accretive and at the moment we are working The JV with Newcrest is a demonstration of St Barbara’s
out ways to give the market a longer view than just a one- willingness to assess opportunities capable of diversifying its
year guidance.” portfolio and lessen its reliance on the high-margin Gwalia
operation.
St Barbara’s conservative forecast is due to its emphasis
on fast-tracking the $100 million Gwalia Extension project. Vassie said the company was active in the M&A space and
The project will see two vent shafts installed in two sections while having visited “a few data rooms and cast an eye
down to 1,500m and a paste-filled aggregate plant placed around”, not all things were necessarily “transact-able”,
underground to enable further mining at depth. particularly within the timeframe in which St Barbara would
want to see value for its shareholders.
Parallel construction of two shafts at once to accelerate
the Gwalia Extension project is the desired outcome, with Therefore, the company is happy to participate in JVs and
contractor RUC Mining looking at the best sequencing take shareholdings, such as the 16.3% it holds in Peel
options to complete the task. Mining Ltd and the 7.23% it has of Catalyst Metals Ltd.

“The earlier you can get the ventilation in and the waste “We see value investing in other companies and spending
handling in, the quicker you can reduce [implementation of] money on their ground. We are pleased with both Peel and
the project by a year, meaning you have got an extra year in Catalyst and enjoy a solid and friendly relationship with
the higher grade hotspot of the orebody – the purple patch both,” Vassie said.
we call it – to really cane it,” Vassie said.

“When we look out five years, we are still in the hotspot of the
orebody and once we get the gear into the mine from these
vent shafts and once we deal with the waste underground
with crushing and pumping, then we can really go hard at
it and be able to lift our production rate for a period of time.

“Then we can look at how we mine the really deep stuff, the
shallow stuff that we have left behind over the years and the
other lodes that are going to be mined. We want to be a bit
more transparent in the market in revealing what that looks

Gold Mining Journal Page 24 January - March 2018

Kirkland increases
Aussie flavour

by Dominic Piper

Kirkland Lake Gold Inc’s emergence as one
of Australia’s best performing mid-tier gold
companies will surely be better recognised this
year after the company listed its chess depositary
instruments on the ASX in November.
Kirkland Lake has largely operated under the radar in
Australia since acquiring the Fosterville and Cosmo
gold mines as part of its takeover of Newmarket
Gold Inc in November 2016. Its entry onto the local
bourse will likely spark interest from investors given
it was on course to produce 580-595,000oz in 2017
and its Toronto-listed shares were trading at $C18.34
(market cap $US3.8 billion) at the time of print.
Given current guidance numbers, Kirkland Lake’s

Gold Mining Journal Page 25 January - March 2018

MINER OF THE YEAR FINALISTS

underground reserve of 1.03 moz for
Fosterville, including 281,000t @ 58.8 g/t
for 532,000oz from Swan Zone.

The high-grade intercepts have since
continued with hits of 4.6m @ 33 g/t gold,
3.6m @ 42.9 g/t and 18m @ 11.4 g/t 90m
down-plunge of reserves announced in
August, followed by hits of 6.7m @ 51.1
g/t and 1.8m @ 30.3 g/t from 210m down-
plunge in November.

However, the most remarkable intercepts

came from drilling targeting mineralisation

outside of known resources with hits

of 8.2m @ 991 g/t, 0.9m @ 9,115 g/t,

6.6m @ 422 g/t, 1.4m @ 649 g/t and

6.7m @ 122 g/t returned from drilling in

Novo Resources president Quinton Hennigh with Kirkland Lake chief executive Tony Makuch November.

in the Pilbara. Kirkland Lake spent $US61 million to acquire 25.5% of TSXV-listed Novo The Swan Zone has now been defined

which has shot to prominence over its Pilbara conglomerate discovery over 460m of plunge extent and 300m

vertical extent and Makuch is intent on

forecasts would place it among the largest ASX-listed gold delivering further high-grade ounces from Swan Zone ahead

producers behind Newcrest Mining Ltd and Evolution Mining of first stoping in mid-2018.

Ltd and level with Northern Star Resources Ltd. “While pleased with current results, we strongly believe that

Despite having five assets in the portfolio, the company’s the best is yet to come at Fosterville, given that we are not

valuation is largely based on two strongly performing mines yet producing from the high-grade Swan Zone, with initial

in Canada and Australia. In its home country, the Macassa stope production scheduled for mid-2018,” Makuch said. “In

mine was set to produce 195,000oz for the 2017 calendar addition, we are also continuing development work aimed

year at AISC of around $US938/oz but it is its flagship at establishing multiple mining fronts, with our Harrier gold

Australian asset, Fosterville, which will likely attract most system expected to come into production late next year. As

investor interest. we advance, we envision both higher grades and increased

Fosterville is a bit of an enigma in Australian gold circles. The throughput, with our medium to longer term goal being to
mine is tucked away in the forgotten Victorian goldfields – it achieve 400,000oz of annual gold production at Fosterville
is located in Bendigo – and has spent more than a decade in over the next three years.

the hands of North American companies. “In support of our growth plans, we continue to invest

Victorian gold mines have developed a reputation for being strongly in Fosterville with 10 drills in operation on near-mine
nuggetty, difficult operations but with 61,535oz of production and regional targets, focused on our objectives of achieving
at AISC of $US643/oz for the September quarter, Fosterville production growth, extending mine life and realising the full
is one of Australia’s highest margin gold mines. potential of the Fosterville mine.”

Kirkland Lake chief executive Tony Makuch said Fosterville Adding to Kirkland Lake’s growing influence in Australian
continued to prove a valuable asset for the company. gold is the investment recently made in Pilbara conglomerate
hopeful Novo Resources Corp.
“Fosterville is very quickly emerging as one of the world’s
great underground gold deposits,” Makuch said. “We In September, Kirkland Lake spent $US61 million to acquire
produced 184,688oz in the first nine months of 2017, and 25.5% of TSXV-listed Novo which has shot to prominence
just finished a record month in October, producing over over its Pilbara conglomerate JV with Artemis Resources
30,000oz at an average grade of around 23 g/t gold.” Ltd.

However, Makuch is already eyeing the next stage of Makuch said the company’s ASX listing would reinforce its
development at Fosterville, based around the recently local credentials.

discovered Swan Zone. “The ASX listing reflects our company’s long-term

“While pleased with current results, we strongly believe that commitment to Australia as one of our two core markets
the best is yet to come at Fosterville, given that we are not and provides existing and potential shareholders based in
yet producing from the high-grade Swan Zone, with initial the country, including our 470 employees, with access to an
stope production scheduled for mid-2018.” Australian-based trading platform.”

The Swan Zone looks set to become an operation-changing
discovery. In July, Kirkland Lake announced an updated

Gold Mining Journal Page 26 January - March 2018

Westgold cooking with gas

by Michael Washbourne

Acquisitions and the aggressive ramp up of
key assets were the underlying themes of
Westgold Resources Ltd’s first 12 months on the
bourse.

Westgold – successfully spun out of Metals X Ltd
in late 2016 – picked up Silver Lake Resources
Ltd’s Tuckabianna processing plant mid-last
year as part of a long-term growth strategy for its
Central Murchison operations.

The 1.2 mtpa Tuckabianna mill is set to come
online this quarter, giving Westgold at least 3 mtpa
of processing capacity in the region.

Westgold managing director Peter Cook said the Peter Cook
“stars aligned at the right time” for his company
to pounce on the mothballed plant, about 90km
south of its existing 1.8 mtpa Bluebird mill.

“A year prior to that we wouldn’t have done it, but that just remained confident the operation still had plenty of life left in
shows you how much the Central Murchison project has it due to the fact it is the only major operating gold plant in
matured,” Cook told GMJ. the Norseman region.

“This opportunity was a no brainer for us in terms of adding Cook also acknowledged his company’s acquisition of
a plant in the south of that strategic area. It’s a really big Australian Contract Mining Pty Ltd as another major milestone
aggregation play we have here, probably the biggest one achieved by Westgold in 2017, with the underground mining
we’ve seen in the gold industry in Western Australia since contractor now operating as a wholly owned subsidiary and
Bondy [Alan Bond] put the Super Pit together.” saving the miner about $75-100/oz in production costs.

Westgold’s first year as its own entity is nothing to be sneezed “This gold industry has matured to a point where most of
at. Gold production in FY2017 totalled 266,910oz at an AISC the future we’re looking at is aimed towards underground
of $1,204/oz, helping the company generate $437 million of mining, because most of the simple open pits have been
revenue and $75.6 million of cash flow. found,” Cook said.

FY2018 is off to a promising start with 66,288oz produced “To do that you need equipment and skilled people and we
at an AISC of $1,229/oz in the September quarter, as the were fortunate enough to be able to do both of those in the
company seeks to churn 310,000-340,000oz at an AISC of one transaction. Becoming owner-operator and trying to
$1,220-1,270/oz from its four operational centres, including work our cost base down to the lowest common denominator
Fortnum, South Kalgoorlie and Higginsville. meant internalising our mining contracts, both underground
and open pit. So, that’s been a big thing for us and it’s all part
Fortnum was turned back on last year after a 10-year of our drive to produce at the lowest cost possible.”
hiatus. Almost 8,000oz was produced from processing of
low-grade ore in its first full quarter of operation, with Cook Cook said his company would continue to allocate about $25
expecting quarterly output to build rapidly as processing flow million annually for exploration activities, with about 80%
bottlenecks are ironed out. of that spend going towards brownfields work, particularly
conversion of existing resources to reserves.
South Kalgoorlie celebrated its 30th year of operation in
2017 and appears to be showing no signs of slowing down. Westgold has forecast output of up to 420,000 ozpa by
FY2020 from its current operations, however, Cook would
“This is a project that’s supposedly been going to die for the not rule out adding to his company’s burgeoning production
last 15 years because it’s run out of ore, but it just keeps profile.
finding a way to keep on keeping on,” Cook said. “I think
it’s averaging 90,000 ozpa for every one of those 30 years.” “I have my eye on every gold asset in Australia and have done
for the past 30 years,” he said. “We look at all acquisitions, we
Higginsville has transitioned high-grade underground feed to certainly wouldn’t discount another acquisition in Australia.”
mostly open pit material over the past 12 months, but Cook

Gold Mining Journal Page 27 January - March 2018

EXPLORER OF THE YEAR FINALISTS

An explorer at heart

by Michael Washbourne

Dacian Gold Ltd has launched an aggressive exploration Dacian executive chairman Rohan Williams with
campaign for 2018 despite the imminent production of exploration manager Dan Baldwin on site at Mt Morgans
first gold from Mt Morgans.
Dacian fielded as many enquiries about Cameron Well as
Construction of the 2.5 mtpa processing plant was more it did about development of the Mt Morgans project when
than 75% complete at the time of print, with mining of the discovery of the former was announced last August.
the Beresford and Allanson underground 750m ahead of Recent infill drilling has provided the company with plenty
schedule. of supporting evidence that the initial mouth-watering drill
intercept of 2m @ 311.3 g/t from 140m is not a one-off.
First gold is tipped for late March, ensuring Dacian’s
transition from explorer to 200,000 ozpa producer in a little “What that hit tells us is that there is clearly good gold
over five years since the company floated on the ASX via a below the oxide anomaly we’ve spent a fair bit of effort
$20 million IPO. defining,” Williams said. “That’s given us a huge amount of
encouragement to push the exploration pretty hard into the
While Dacian – last year’s Explorer of the Year – will soon fresh rock because we now know there are some rich zones
identify as a mining company, exploration will always remain out there at Cameron Well.”
a core business pillar, particularly if discoveries such as the
recent Cameron Well find continue to be unearthed. Williams and other members of the Dacian crew have a
strong track record when it comes to building and operating
“We’re in the home straight of construction of the plant and new mines into operation, having been through the process
project now,” Dacian executive chairman Rohan Williams with Avoca Resources in the mid-2000s.
told GMJ. “The next job for us is how fast can we determine
the ultimate endowment of the Mt Morgans goldfield. That’s Having recently watched GR Engineering Services Ltd bolt
why we’re back into very aggressive exploration.” the SAG and ball mills into place and RUC Mining dump
the first stockpiles of underground ore on the ROM pad,
At the time of print, Dacian had eight rigs turning on various Williams is confident there will be no teething problems
mining and exploration activities at Mt Morgans, about 25km when Mt Morgans is formally switched on.
south-west of Laverton.
“We’ve always said – and it’s true – this is very much an off-
Two rigs were focused on grade control drilling of the the-shelf plant. In fact, the whole operation is off-the-shelf in
Beresford underground, while a surface RC rig was a way,” Williams said.
completing a similar mission at the Jupiter pit. Another RC
rig is operating on a double shift at Cameron Well. “The underground mine, the open pit mine and the plant,
they’re all using standard WA processes and equipment.
An aircore rig recently kicked off reconnaissance work at There’s nothing particularly unusual about the plant or the
the new Basin Margin exploration target, with three diamond way we’re mining; it’s just about competent execution of the
rigs planted at Westralia for both infill and deeper resource- task.”
extension drilling duties.
Macmahon Contractors Pty Ltd was recently awarded the
Dacian will allocate about $15 million towards exploration open-pit mining contract for the Jupiter pit.
this year – a similar amount to what the company spent in
2017 – with Williams and his team champing at the bit to
determine the extent of the Mt Morgans goldfield.

“There’s plenty more gold to be found here,” he said.
“We’ve had some very interesting results at Cameron Well,
which looks to me to be a very large ore system. We’ve got
mineralisation over 6sq km, it’s a large body of near-surface
gold and we’re starting to look for something similar at Basin
Margin, which is another interesting play.

“I think the market is right to expect that we’ve still got some
exploration to do at Mt Morgans and we hope to deliver more
exploration success. Certainly Cameron Well looks like it’s
going to be successful. No doubt the market is cognisant of
our ability to maintain good exploration in an underexplored
goldfield.”

Gold Mining Journal Page 28 January - March 2018

Gold Mining Journal January - March 2018

EXPLORER OF THE YEAR FINALISTS

Parsons & Co are back

by Mark Andrews

Loyal followers of GMJ would at the time of print) when news
have watched the Gryphon broke about the discovery, with

Minerals team lead the Australian the company quick to acquire

exploration contingent in West tenements adjoining Bellevue

Africa. before rattling the tin for $5 million

Gryphon’s development of the to fast-track exploration.

million ounce Banfora reserve With another possible repeat of

received worldwide acclaim in Bellevue in a new area and at

the decade leading into the 2016 depth of the historic underground

takeover by Teranga Gold Corp. mine – 800,000oz @ 15 g/t – plus

Along the way, Gryphon was untapped regional targets, the
a regular contender for GMJ’s exploration potential for Draig to
Explorer of the Year award, assess appears limitless.

claiming line honours in 2009. Funds raised in November will be

While not scooping the big prize in used to follow up on the high-grade
2017, Steve Parsons and the old gold intersection at Tribune.

Gryphon gang teamed up again at “Obviously going deeper is one of

Draig Resources Ltd and quickly the targets and we will get on to

re-established themselves among that, but it is great stepping west

Australia’s best explorers. Draig is set to ramp up drilling activities at Tribune to a new area and coming up with

Having picked up the Bellevue such an amazing couple of drill

gold project, 40km north-east intercepts with what look likes

of Leinster, Western Australia, in late 2016, it wasn’t until possibly a repeat of Bellevue,” Parsons said.

April that Draig really got moving, making the company’s “The raising was heavily oversubscribed and the amount

nomination for Explorer of the Year even more outstanding. that came in was actually quite unbelievable. We just

“We deliberately wanted to get involved in Bellevue because needed enough to kick-start the year knowing that we have
it looked like it had all the ingredients for a new big discovery full funding that can take us through that next stage and fast-
there,” Parsons told GMJ. track the drilling. We have the confidence now to go out with
a few rigs and drill holes and know that we don’t have to go
“If you go into brownfields the chances of finding something back to the market for a very long time.”
are a lot higher, especially a brownfields project which hasn’t
had a lot of work done on it for a very, very long time. We Parsons said Bellevue had triggered a similar sense of
wanted to apply our exploration skill to this project and excitement as when the potential of Banfora was initially
the geologists that have been behind Gryphon have been being realised.

fantastic and hats off to them for wanting to get involved in “We don’t want to try and jump in too quickly,” he said. “We

this one and come across. really are all about the geology and making sure we have

“We really wanted to dive in and look at all the old data, look it right. We have a couple of structural geologists on site,
at the old mine and then approach it with a modern view ground geophysics, down-hole geophysics are happening.
because it was 20 years ago that anyone did any work on it.” We are doing a bit of diamond drilling as well to make sure
we know what we are on to and when we are really on to it,
Early days of exploration has seen the Western Mineralised and we obviously think we are, then it is about hitting it hard
Corridor – 5m @ 37.5 g/t gold within a broader zone of 7m from there.”
@ 27.4 g/t from 92m down-hole – declared a new discovery.
In addition to the exploration potential, residual gold in the
The mineralisation was struck west of the Highway fault, tailings storage facility, if proven to be economically viable,
with drill results indicating potential for similar Bellevue-style could also provide potential cash flow for Draig.
ore shoots on the adjacent parallel Tribune lode, within the
Western Mineralised Corridor. Significant mineralisation of 76.31 g/t gold, 25.8 g/t and
20.26 g/t from waste dump sampling has been reported.
Draig’s share price soared from 12c to 27.5c/share (25.5c

Gold Mining Journal Page 30 January - March 2018

Elephants roaming
in West Africa

by Mark Andrews

Despite already defining a 7.4 moz gold resource at its flying Cardinal and WAF, however, there is one company
Namdini project, exploration still remains high on the emerging above all others in West Africa at the moment –
agenda for Cardinal Resources Ltd in north-east Ghana. Oklo Resources Ltd.

The company’s 4.3 moz @ 1.1 g/t gold indicated and 3.1 Oklo has pegged ground in the Kenieba Inlier of western

moz @ 1.2 g/t inferred resource at Namdini was compiled at Mali, with its Dandoko and adjoining Moussala and

a cost of $US6/oz and using a cut-off grade of 0.5 g/t. Kouroufing projects 30km, east of B2Gold Corp’s 5.15 moz

While there were some concerns around the metallurgy Fekola and 50km south-east of Randgold Resources Ltd’s
when initial test results were released in conjunction with 12.5 moz Loulo gold mine.

the maiden resource estimate in November 2016, positive Oklo started its march in Mali in late 2016, with a

outcomes from ongoing work by Cardinal has helped reconnaissance auger geochemistry programme over

improve investor confidence in Namdini. Dandoko and Moussala delineating the 12km-long Dandoko

Twelve months on, an overall recovery rate of 86% corridor, which included the Seko find.

continues to be optimised from the Namdini open pit, while Early days of the 2018 phase one aircore, RC and

most pleasing for Cardinal chief executive Archie Koimtsidis diamond drilling programme at Seko had delivered further

has been the 17-fold increase in encouragement in the propsectivity

indicated resources and almost at Seko Anomaly 1 (SK1) for Oklo.

doubling of total resources since At the time of print, more than
the release of maiden estimate. 7,500m of aircore and 2,260m of

“The highlight would have to be the RC drilling had been completed,

massive increase in the resource with significant intersections from

update and we can expect another 12 aircore holes including 76m @

one in Q1 2018,” Koimtsidis told 1.65 g/t gold from 8m, including

GMJ. Since announcing a maiden resource at Namdini in late 2016, 52m @ 2.23 g/t from 11m
Cardinal has almost doubled the size of the total resource including 27m @ 3.11 g/t from
“We also expect to release a 27m; 29m @ 1.59 g/t from 0m,
PEA in Q1 as well as regional
including 7m @ 2.45 g/t from 6m; 40m @ 1.41 g/t from 69m,
exploration drilling results. We are now on the hunt for
including 12m @ 2.39 g/t from 71m; 12m @ 2.14 g/t from 0m
another elephant.”
including 3m @ 7.34 g/t from 3m.
At the time of print, a 9,000m infill and extensional resource
The aircore drilling programme is testing strike and depth
drilling programme was in progress in addition to auger
extensions to the significant shallow oxide mineralisation at
campaigns at Kunongo, Ndongo and Bongo, while other drill
Seko to a depth of about 80m vertical, while deeper RC and
targets were being generated.
diamond drilling to 180-200m vertical was in progress.
Further exploration success will only add to the attention
Phase drilling was expected to be completed by the end of
Cardinal received in 2017, with the likes of Gold Fields Ltd
January at a cost of $3.5 million.
(11.17%), Bank of Nova Scotia – Dynamic Fund Canada

(10.77%), Van Eck (7.49%), Royal Bank of Canada Speaking to GMJ, Oklo managing director Simon Taylor

(7.08%) and Sprott Asset Management LP (4.98%) keenly said it definitely felt like another West African gold boom

participating in the company, which is also now dual-listed in was on the way, particularly in Mali, where the company has

Australia and Canada. expanded its ground at Dandoko.

Cardinal’s bravery to keep drilling during the downturn – and “Things are being built in Mali and things are going into
a similar mantra from West African Resources Ltd (WAF) in production, with B2Gold ahead of schedule with production
Burkina Faso – kept the light on for Australian gold explorers at Fekola and Hummingbird [Resources Inc] also building
in West Africa. a mine. Things are going well in Mali and things have gone
really well for us,” he said.
It will take ASX juniors some time to catch the high-

Gold Mining Journal Page 31 January - March 2018

7

Hope Bay
(Canada)

Moose River Sanbrado Öksüt Hot Maden Gross
(Canada) (Burkina Faso) (Turkey) (Turkey) (Russia)

Cascabel Yaramoko Namdini Tulu Kapi Dead Bullock
(Ecuador) (Burkina Faso) (Ghana) (Ethiopia) (Australia)

Alturas Houndé Mount Morgans
(Chile) (Burkina Faso) (Australia)

Yaouré Nyanzaga
(Côte d’Ivoire) (Tanzania)

THANK YOU

TO ALL SPONSORS, SPEAKERS, EXHIBITORS AND DELEGATES

The 2017 Conference Proceedings book and CD-Rom are now available!

Download an order form at www.newgengold.com

Gold Mining Journal Phone (+61) 8 9321 0355 or email [email protected] January - March 2018

NEWGENGOLD REVIEW

The surface yet to be
scratched

by Mark Andrews

The NewGenGold forum panel. Newcrest general manager of exploration Fraser MacCorquodale, Gold Road executive director
Justin Osborne, Northern Star exploration manager Jamie Rogers, Barrick vice president for exploration,

Latin America, Raul Guerra and Endeavour senior vice president exploration Gerard de Hert discuss the sector’s key issues

From juniors to majors, gold exploration around the world potential low-cost, low-risk, but high return growth
is back in vogue but there remains conflicting opinions on opportunities, Ecuador and Argentina have been identified
the how and the where of the hunt for the next big elephant. as new search spaces for the company.

The lack of unanimous opinion surely bodes well for the Newcrest has built its capabilities in Australia, Cote d’Ivoire,
sector as exploration teams test different ideas and theories Indonesia and Papua New Guinea, developing strategies
at depth, near surface, in tested belts and in new pastures. around what it believes is the best way to uncover gold.

Whichever the terrain or hypothesis chosen to pursue, “We believe that the search base is from 200m to probably
exploration teams can call on modern-day technology and, 1.5km and we are fortunate that we have the mining capability
more importantly, capital investment support as boards to do it. We have the expertise within the company and we
begin to show faith once again in boots on the ground. are also developing the expertise. It is a big experiment for
us and costs a lot of money,” MacCorquodale said.
Newcrest Mining Ltd spends about $70 million in exploration
and since chief executive Sandeep Biswas took them helm in “What we are doing around the world is leveraging off that
2014 there has been a renewed emphasis on field activities, capability and probably one of the reasons why Newcrest
according to general manager of exploration at the company is appearing in the Andes [is because] we really believe
Fraser MacCorquodale. if you take that attitude into those regions you can make
discoveries like Gold Fields [Ltd] has done at Salares Norte.”
“We are very fortunate now that Newcrest has actually
reset itself as a business and has money and is now totally Newcrest’s interest in South America has been spurred on
focused back into exploration. Through our new CEO, who by SolGold plc’s Cascabel discovery in Ecuador.
has been a very strong supporter of exploration, we have
been able to convince the board to go back into exploration,” On the back of Cascabel, Newcrest has invested heavily in
MacCorquodale said. SolGold and now holds about 15% of issued equity in the
company.
While Newcrest sees brownfields exploration as offering
Surface mineralisation at Cascabel was confirmed with

Gold Mining Journal Page 33 January - March 2018

NEWGENGOLD REVIEW

drilling in 2013, with further work to date providing evidence of Fields, will be an open pit extending to 400m depth grading
the untapped potential around the world to make discoveries 1.2 g/t gold, which somewhat debunks the myth open pits
near surface, Gold Road Resources Ltd executive director don’t generally go below 200m.
Justin Osborne said.
Osborne found an ally in Northern Star Resources Ltd
Having been one of the masterminds behind the 6.7 moz exploration manager Jamie Rogers who also believes not
Gruyere gold project, Western Australia, Osborne needs all near-surface plays have been exhausted, particularly in
little convincing that gold can be found in greenfields Australia.
environments without digging too deep.
“We have had challenges here; obviously geotechnical and
“There are potential new exploration areas and we saw that innovation and other things, but there are still vast tracks
with SolGold which is actually discovering deposits in new where you can make discoveries, too. Tanami, Paterson;
areas. In Australia, there is a vast amount of this country there are some big, big tracks of land where the regolith is
under cover and under shallow cover where we don’t really poorly understood in parts of this country that are far from
understand the cover conditions terribly well,” Osborne said. anywhere,” Rogers said.

“About 80% of the Yilgarn is under cover. The 20% of the Junior companies account for more than 50% of the gold
Yilgarn which is exposed hosts about 85% of the gold that industry and despite being laden with talent, access to
has been discovered. I think there is huge exposure in the capital has often been the bugbear for smaller companies
Yilgarn if we can start understanding the cover context, cover with ambitions bigger than their budgets.
sequences and what has been effectively and ineffectively
explored. If you go back over the years, there was a very Dan Wood, former Newcrest exploration manager, believes
poor range of exploration, no drilling and deposits may have more connectivity within industry could enhance the chances
been missed.” of making Tier 1 discoveries.

The discovery holes at Gruyere, in WA’s Yamarna greenstone “There are some really talented people working for juniors
belt, were only drilled in 2013 in an area characterised by 2m who lack the capital, so somehow you have to work out a
of cover. way to share the risk. That really means you start looking for
bigger deposits. Instead of looking for 1 moz, start looking
Gruyere, now a 50:50 JV between Gold Road and Gold for 5 moz or 10 moz, which may mean you end up owning

Gold Mining Journal Page 34 January - March 2018

10-30% of one of those,” Wood said. to have to large capital investment and the right expertise,
especially talking about West Africa. The expertise is still
“It really comes down to company size. I don’t disagree with not there, so we need to take that into the account on the
trying to find near-surface discoveries but we just haven’t exploration side,” de Hert said.
done it in the last 10 years. Maybe that was because
everybody was focused on brownfields and haven’t had the “Of course, if we see the opportunity there at depth [we’ll
resource base, but I don’t really believe that.” go for it], but that is not the priority the priority. I completely
disagree that most of the ground has been explored and we
Wood also believes exploring beyond the depths of 300m have to go deeper, you just have to look at the Andes and
“is the only certain way to transform the business of gold the large discoveries there. I think the rest of the world needs
exploration”, something the likes of Barrick Gold Corp have to be explored. Parts of Africa and some other countries
the budget and know-how to do. can’t be explored for political reasons but there are still a lot
of discoveries to be made.”
“We have to explore for deeper deposits, it requires capex to
find these types of economic deposits. I am very confident
that these deposits, at least in South America, that we are
finding are deep, [are economic] and also in North America
we are also finding things at depth,” Barrick vice president
for exploration, Latin America, Raul Guerra said.

A mid-tier company such as Endeavour Mining Corp, which
has a market cap of $C2.4 billion and was trading at $C23/
share at the time of print, has to take a more balanced
approach to exploration, according to senior vice president
exploration Gerard de Hert.

He said the company’s first thought needed to be eking out
opportunities at surface.

“The first thing we have to do is find what we have from surface
before we go underground. Underground exploration has

Gold Mining Journal Page 35 January - March 2018

NEWGENGOLD REVIEW

Tinkering with porphyries

by Mark Andrews

Billions of dollars were squandered during the last Gerard de Hert
boom in the chase for highly marginal ounces
around porphyry deposits, according to Gold Road for opportunities where the majors don’t want to be,” de Hert
Resources Ltd executive director Justin Osborne. said.

Osborne said industry did a poor job trying to find De Hert’s company is likely to spend more time and budget
porphyry deposits, however, companies alone were dedicated to prospective greenfields projects in West Africa,
not to blame for a poor success rate. than the likes of his counterparts at Newcrest Mining Ltd.

“We were forced to invest into those projects by the Newcrest has a very small percentage of its budget looking
investment community who then pointed fingers at for orogenic systems in West Africa and a lot more invested
all the mining companies and said we did the wrong in the “bread and butter” of its business – porphyries.
thing even though they told us to do it,” Osborne said.
“They do generate a lot of cash but you have to pick the
“During the last boom, we were spectacularly poor right ones. Just like any deposit, if you chase the marginal
at developing porphyry deposits around the globe ones you have to be very careful of what you do,” Newcrest
and the reason the investment community lost a lot general manager of exploration Fraser MacCorquodale said
of confidence in the industry is because of that poor of orogenic systems.
performance.
“We have got a balanced portfolio, porphyry is our bread and
“I think there are great opportunities for porphyries, we just butter, but porphyries also take you into the epithermals. We
have to have a look at the right ones. I was at Gold Fields balance that by looking at the higher grade porphyries, we’re
[Ltd] at that time and we had numerous discussions as a looking at high-grade epithermals as well and gold price and
management team and a big focus was on porphyries. The copper price is critical in all of that.”
only things we found were highly marginal projects starting
at under about 1,000m of depth in the Philippines, which had
its own problems. There is no doubt they are out there, but
they are highly challenging.”

Osborne said Gold Road wouldn’t outright knockback
any development opportunities, however, greenfields,
greenstone, orogenic gold plays are where the company
hopes to build on its success.

Endeavour Mining Corp senior vice president exploration
Gerard de Hert said the massive investment required meant
blue chip gold miners were better suited to exploring for
porphyry deposits.

“It is not the type of target we are looking for, we are looking

Gold Mining Journal Page 36 January - March 2018

NewGenGold insight

As part of GMJ’s coverage of the 2017 NewGenGold conference, we spoke
with Fraser MacCorquodale – exploration manager for Australia’s largest
gold miner, Newcrest Mining Ltd – about the company’s exploration
philosophy and his views on the future of gold exploration.

GMJ: Industry observers have been bemoaning the The other key to our
majors’ lack of appetite for exploration yet Newcrest
has made any number of world-class discoveries in the success is the strong
last two decades. What is the company’s exploration
philosophy/strategy and how has this led to building the commitment from our
longest reserve life in the industry?
board and executive Fraser MacCorquodale
Fraser MacCorquodale: The company has grown on the
back of exploration success, initially at Telfer, then at New committee. I would
Celebration, followed by the success in the Cadia District
in New South Wales, Gosowong district in Indonesia, and also like to single out Dan Wood who led and developed the
in more recent times within the Golpu district of Papua New
Guinea. exploration group in 1990s and early 2000s; we have had

Our exploration strategy is built on the early capture of projects the luxury to continue to build on the great foundation that
in what we consider fertile terrains, where our geologists
recognise the potential for significant exploration success. Dan built.

GMJ: You’ve had great success finding ounces at depth,
particularly at Cadia and Golpu. What do you attribute
this success to: Technological innovation, willingness
to drill deeper, geological modelling?

FM: It’s the combination of all of these that has led to
our success. At Cadia, it was the development of good

Gold Mining Journal Page 37 January - March 2018

NEWGENGOLD REVIEW

the underlying key to exploration success at Golpu and
Cadia was identifying and getting our foot on prospective
land in gold-rich districts.

GMJ: Most of the low-hanging fruit in the low-risk
jurisdictions appear to have been discovered. How
does Newcrest’s exploration strategy strike a balance
between the two?

Newcrest has identified FM: The discovery trends highlight that the traditional
Cote d’Ivoire as a gold search spaces – that is, the first 200m below surface in
politically stable jurisdictions – are mature, and near surface
exploration hotspot discoveries are getting harder to find. However, you can
change the maturity of these districts through the application
exploration models and the willingness to drill deep which of innovation in mining, processing and exploration (drilling
led to the Ridgeway and Cadia East discoveries. Innovation and targeting), which will allow you to mine deeper, process
then played a key role in understanding how to mine these lower grade orebodies and target blind deposits. We have
deep deposits and make a profit. The development of bulk a strong belief that discoveries will still be made in mature
underground mining capability led the company to unlocking countries like Australia. In countries with perceived higher
the value of these deposits, allowing the JV partners to look political risk, the potential for near-surface discoveries is
at Golpu differently. Good geology and confidence to drill significant, as these countries are largely under-explored.
deep, built on this underground mining capability, led to the Our exploration strategy is presently balanced between
Golpu deep discovery. However, I would like to stress that mature exploration addresses like Australia and within new
frontiers such as Cote d’Ivoire and fertile geological belts in
the Andes.

However, the political and investment riskiness of jurisdictions
can change quite quickly, affecting the potential economics

Gold Mining Journal Page 38 January - March 2018

of discoveries or exploration commitment. These A willingness to drill deeper has often set
sorts of decisions can, logically, have a significant Newcrest apart from its gold industry peers
effect on where Newcrest invests exploration dollars.
differently and can turn mature districts into underexplored
GMJ: Of the new frontiers; which jurisdictions/ districts. The other advantage we have, is by having great
regions do you expect to be gold exploration deposits in our portfolio such as Cadia, Gosowong and
hotspots over the next decade? Golpu, we have been able to build significant knowledge on
these deposit styles. We are now applying this knowledge to
FM: New frontiers such a Cote d’Ivoire and Ecuador other parts of the globe as we search for our next generation
are and will be hotspots for some time into the future, of discoveries.
while Newcrest is also monitoring a number of
emerging regions globally. However, I would not be
surprised if, through the application of innovation, that
the traditional search spaces will continue to deliver
big discoveries in the future, especially in areas under
cover.

GMJ: How does Newcrest’s approach to
exploration align itself with the goals of the wider
group?

FM: Exploration is a critical part of Newcrest’s
strategy, as the key to any successful gold mining company
is the ongoing delivery of new growth options, and within
Newcrest that will largely come from the exploration
group. Newcrest’s mining successes in the area of bulk
underground mining has opened up new opportunities for
the exploration team. Based on our mining capability, our
search space is 0-2km. This allows us to look at gold districts

Gold Mining Journal Page 39 January - March 2018

NEWGENGOLD REVIEW

A meeting of the minds

by Mark Andrews

It was unanimously agreed that the NewGenGold conference so don’t be in such a rush and don’t miss any rungs on the
is one of the best forums in the world for geologists to learn ladder. See as much as you can as a geo at project level,”
more about their craft. Rogers said.

And, the message was not lost on the next generation of The corporate crunch, particularly in larger companies, often
world-leading geologists, with the conference attracting a means young geologists are thrust straight into the fast-
higher number of young geologists than in years past. moving world of mining and aren’t afforded the necessary
time for critical analysis and interpretations of data.
“I am really encouraged to see young geologists here and it
is coming to conferences like this where you can really learn Newcrest Mining Ltd general manager of exploration Fraser
from people,” Gold Road Resources Ltd executive director MacCorquodale said exploration groups, particularly in
Justin Osborne said. bigger companies, occasionally had to push back against
company demands and “clear the air for geologists to be
While up and coming geologists are energetic and able to do good geology”.
enthusiastic now amid a buoyant gold market, Northern Star
Resources Ltd exploration manager Jamie Rogers reminded “Geologists have to take their time. I encourage all young
the young brigade that patience would be the key to future geologists to go to the project, that’s what encouraged me
success. in my career. It is not the company, it is the project; what
can I learn, where is the porphyry system, where is the
“My main comment to young geos is; don’t be in such a hurry epithermal. That is where you drive yourself at that age,”
to get up the ladder because once you are up the ladder MacCorquodale said.
[reporting] is all you do. I spend my whole day doing that,

Gold Mining Journal Page 40 January - March 2018

Bristow laments
benched reserves

Randgold Resources Ltd chief executive Mark Bristow Mark Bristow
has continued to lambast the exploration efforts of his
gold major peers, saying the industry had summarily failed
to replace the ounces it had mined in recent years.

Bristow has been an outspoken critic of the industry for
the last five years and told analysts during his company’s
quarterly results conference call in November that the gold
sector was still failing in its fundamental duties.

“The hunt for additional reserves continues,” Bristow said.
“Once we start mining, we start exploring again because by
its very nature, mining is a consumptive industry and you
need to replace the mine, the gold you mine. And that’s one
of the big issues in our mining industry. No one’s bothered to
do that. Now everyone’s worrying about what next.”

Bristow can afford to be critical given Randgold has been

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NEWGENGOLD REVIEW one of the few top 20 gold
companies to add significant
The Kibali JV’s commissioning of underground ounces organically in the last
operations was set for completion in December decade.

The company’s most recent
appearance at NewGenGold
came in 2013 when it and JV
partner AngloGold Ashanti
Ltd presented the Kibali gold
project in DRC.

Kibali has since grown into a
consistent 610,000 ozpa gold
producer for Randgold and
AngloGold Ashanti.

Full commissioning of the Kibali
underground operation was due
for completion before the end of
2017. The Kibali underground
features Africa’s first advanced
integrated automated ore
handling system, which
Bristow described as critical
to achieving greater all-round
efficiencies.

He said such advances would

Gold Mining Journal Page 42 January - March 2018

be a crucial feature of future African mining Massawa is close to hosting a
operations. reserve in excess of 3 moz gold

“We’re going to have the bottom haulage fully comfortably in the upper quartile of global gold development
automated along with all the ore handling projects,” Bristow said.
procedures, the crushing and the tripping and
hoisting into the skips in the shaft,” he said. “And, In Côte d’Ivoire, Randgold has concluded a JV with
it will all be run by surface. So when it’s fully Endeavour Mining Corp which will give it access to the
commissioned, there will be no people on that ground immediately north of its Mankono permit, where
level. So again, I’ve always said, people think, in the promising Gbongogo target is located. Grassroots
Africa, you need to build mines where the workers exploration in the DRC is progressing the Moku and Ngayu
arrive, pick a shovel up from a bin and go and do projects.
some hard labour. We’ve shown that you can build
world-class mines with leading-edge technology “Randgold stands out as one of only a few gold mining
and if you want to make profits, you’re going to companies that consistently outperforms the gold price and
have to do that, particularly with these very large delivers real value to its shareholders, host countries and
orebodies that require substantial technology to other stakeholders. Our continuing investment in the future
exploit them in every aspect.” is in line with our long-term strategy of creating value through
exploration and development, and allocating capital against
Another technological advance Randgold is a strict set of criteria,” Bristow said.
testing is the use of drones to survey inside
cavities underground.

“We’re busy developing that. We’re very far
advanced in all our surveys on surface, but
we’re trying to get that technology to work for us
underground, which is quite challenging,” Bristow
said.

The performance of the Kibali underground is perhaps
the biggest variable in the company’s annual production
forecasts with its West African operations all tracking on or
above guidance.

Randgold had $US621 million in cash at the end of the
September 2017 quarter, up from $US361 million 12
months previously. The healthy cash position will mean both
shareholders (through dividends) and exploration budgets
will likely be well furnished.

While brownfields exploration will continue, Randgold’s
stated objective is to define three new projects in the next
four years.

“In Senegal, our focus is on delivering a Massawa feasibility
study with a plus-3 moz reserve that passes our investment
filters. Massawa is close to that mark and currently sits

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Gold Mining Journal Page 43 January - March 2018

DRILL BITS strikedrilling.com.au

Blackham has flagged a likely flat-lying and continuous zone of mineralisation 1m
extension to Wiluna’s reserve life to 14m thick, typically from 3m to 10m below surface,
and remained open in several directions.
BLACKHAM POISED FOR RESERVE LIFE The company recently exercised an option to acquire
EXTENSION 100% of Red Dog, about 25km west of its Fortitude
trial mine.
Blackham Resources Ltd is set to announce an extension
to the reserve life of its Wiluna gold operations following a GOLDEN START TO MAJOR DRILL
series of promising drilling results. CAMPAIGN AT KOURI
Reserve definition drilling at the Bulletin lode struck hits of
16.6m @ 6.03 g/t gold, 8m @ 11.1 g/t (including 2.3m @ Golden Rim Resources Ltd received good news
9.44 g/t), 15m @ 5.32 g/t (including 8m @ 4.31 g/t and 5m from the first batch of assays from a major resource
@ 6.91 g/t) and 11.3m @ 6.63 g/t. definition drilling programme at its Kouri project in
The drilling programme was part of an expansion study Burkina Faso.
being undertaken by the company and will provide the basis The results include a high-grade intercept of 12m @
for a reserve update for the Bulletin underground mine. 8.3 g/t gold from 92m, including 1m @ 78.9 g/t. Three
Drilling tested areas currently classified as inferred and are closely spaced parallel hits of 2m @ 7 g/t from 97m,
likely to be accessible within three years of the restart of 4.2m @ 18.8 g/t from 104.8m (including 0.6m @ 138.4 g/t)
underground mining at Bulletin. and 0.8m @ 7.9 g/t from 122m, were also intersected.
A high-grade zone of mineralisation was also identified in
MATSA OFF AND RUNNING WITH RED DOG adjacent drill sections which remain open at depth and along
strike.
Initial RC drilling at Matsa Resources Ltd’s Red Dog project Drilling to date has successfully extended mineralisation
has returned a headline intercept of 6m @ 155 g/t gold from by a further 200m to the north-east, as well as extending
6m, including 1m @ 921 g/t.
Other strong hits from the programme were 11m @ 2.59 g/t The latest drill campaign at Golden Rim’s
from 5m, 14m @ 1.97 g/t, 6m @ 4.57 g/t and 8m @ 3.11 g/t. Kouri project is off to a promising start
Matsa said the results highlighted a near-surface, relatively

the future force in drilling

mineral exploration

Gold Mining Journal Page 44 January - March 2018

strikedrilling.com.au

the depth of known mineralisation from 70m to 120m below gold from 106m (including 5m @ 7.02 g/t from 113m and
surface. 1m @ 19.41 g/t from 115m) and 22m @ 1.56g/t from 96m
(including 16m @ 1.95 g/t from 102m and 1m @ 7.48g/t from
Only 6,800m of the planned 15,000m of RC drilling had been 110m).
completed at the time of print.
MUSGRAVE OPENS UP BREAK OF DAY
NEW DISCOVERY AT YANDAL WEST POSSIBILITIES

Maiden RC drilling at Great Western Exploration Ltd’s The open-cut potential of Musgrave Minerals Ltd’s Break
Yandal West project is pointing to the discovery of a large- of Day deposit has been enhanced following recent infill
scale gold system. drilling.

Significant widths of gold mineralisation were intersected in Headline intersections include 11m @ 13.8 g/t gold from
three consecutive lines spaced over 2km. A fourth line also 115m (including 6m @ 24.5 g/t from 120m), 10m @ 7.6 g/t
displayed further significant widths of gold mineralisation from 96m, 6m @ 8.2 g/t from 84m (including 2m @ 20.9 g/t
within an eastern parallel aeromagnetic structure. from 86m) and 3m @ 12.6 g/t from 142m, within a broader
interval assaying 39m @ 1.7 g/t from 142m.
Mineralisation remains open and appears to be coincident
with a gold-in-soil anomaly and aeromagnetic structural Diamond drilling to confirm geological interpretation and to
setting. test for deep extensions to the mineralisation was ongoing
at the time of print.
Some of the better intercepts included 24m @ 1.51 g/t gold
(including 4m @ 5.68 g/t and 4m @ 2.63 g/t), 20m @ 1.63 Results from a major gravity survey testing further targets
g/t (including 4m @ 6.19 g/t and 4m @ 2.8 g/t) and 12m @ along the 20km Break of Day/Lena shear zone are due in
1.17 g/t gold (including 4m @ 4.07 g/t). early 2018.

A further 1,500m of RC drilling was under way at the time Musgrave
of print, stepping out along strike as well as testing other continues
aeromagnetic structural targets with strong gold-in-soil to report
anomalies. high-grade
gold hits
KAIROS ENTERTAINS PROSPECT OF LARGER from Break
MT YORK
of Day
Kairos Minerals Ltd believes its Mt York project in the Pilbara
may contain a significantly larger BIF-hosted gold system
than previously thought.

On the back of drill results from a recent 2,600m RC drilling
programme at Mt York, Kairos has flagged a likely increase
to the project’s current resource of 5.69mt @ 1.42 g/t for
258,000oz.

Assays from the first seven holes reportedly intersected
wide zones of shallow BIF-hosted gold mineralization within
a previously untested area immediately east of the historical
Main Hill-Breccia Hill open pits.

Best intercepts from the programme were 22m @ 1.93 g/t

deep reverse circulation
high capacity aircore

10 Bradford Street Kewdale Western Australia 6105

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Gold Mining Journal Page 45 January - March 2018

DEALS OF GOLD www.ddh1.com.au

Macmahon research programmes to fund during the three-year period,
has been including three postgraduate rock engineering projects, two
geological resource modelling projects and two postgraduate
awarded the drill and blast improvement projects.
final mining As part of the partnership, Gold Fields has been granted
contract at naming rights for the Genmin Laboratories building on the
Wits Campus, which will now be known as the Gold Fields
Dacian’s Laboratories building.
Mt Morgans Gold Fields previously pledged R18 million to the university
on a three-year sponsorship deal comprising a number
project of investments in the Faculty of Engineering and the Built
Environment, the last of which was spent in 2015.
MACMAHON COMPLETES MT MORGANS
CONTRACTORS AUSDRILL GIFTED A HAT-TRICK OF CONTRACTS

Dacian Gold Ltd has been awarded the contract for open pit Syama was one of three key contract
mining of the Jupiter deposit at its Mt Morgans gold project extensions recently awarded to Ausdrill
to Macmahon Contractors Pty Ltd.
Ausdrill Ltd received an early Christmas present in December
It represents the final material contract to be awarded ahead in the form of three contract extensions.
of first gold production at Mt Morgans, about 25k south-west Evolution Mining Ltd granted the leading ASX-listed drilling
of Laverton, later this quarter. firm a three-year extension for production drilling works at
the company’s Mungari operations, near Kalgoorlie.
The open pit mining contract carries an initial term of Ausdrill’s wholly owned subsidiary African Mining Services
60 months, plus three option periods extending over an (AMS) also received a provisional letter of award from
additional 31 months, based on the current scheduled life AngloGold Ashanti Ltd for a full suite of mining services
of the pit. for another two years – valued at $US108 million – at the
Iduapriem gold mine in Ghana. AMS has been active at the
Open pit mining was due to begin at the time of print, with the mine since 2014.
first ore to be mined from the Heffernans Hill area. AMS will also continue to provide a full suite of contract
mining services – including drilling, blasting and load and
GOLD FIELDS RENEWS TIES WITH WITS haul operations – at Resolute Mining Ltd’s Syama gold mine
UNIVERSITY in Mali until May.

Gold Fields Ltd will pour R6 million into furthering the
academia of South Africa’s mechanised mining and rock
engineering industry over the next three years.

In a landmark deal with the University of Witwatersrand,
Gold Fields is seeking to fill a gap in mechanised mining
skills in the country in a bid to realise the full potential of its
South Deep gold mine.

South Deep is the largest and deepest underground
mechanised gold mine in South Africa and currently boasts
an expected life of more than 30 years.

Gold Fields has already identified a number of university

Gold Mining Journal Page 46 January - March 2018

www.ddh1.com.au

Meanwhile, Ausdrill has entered into a drilling for equity Primary has also reached an in-principle agreement with
arrangement with Golden Rim Resources Ltd for up to $US1 Maximus Resources Ltd to toll treat initial ore from Coolgardie
million worth of shares in the junior explorer in return for at the Burbanks processing facility from March until the end
drilling services at the Kouri gold project in Burkina Faso. of June, subject to an array of conditions, including approval
of the final mining proposal.
ZENITH TRUMPS KPS AT TANAMI Meanwhile, Hampton Mining and Civil has been confirmed
as the preferred contractor for all drill and blast, excavation
Zenith Energy Ltd has been selected as the preferred bidder and haulage operations. Mining and Drilling Services Pty Ltd
for the building, ownership and operation of a 52MW gas- will undertake RC grade control drilling, pending approval of
based power station at Newmont Mining Corp’s Tanami gold the final mining proposal.
mine in the Northern Territory.
RADIO HILL RETUNED FOR NEW PILBARA
Under the proposed power purchase agreement contract GOLD RUSH
term of 10 years, Zenith will build, own and operate the power
station – with circa 10MW of diesel back-up generation – Engineers have turned the lights back on at Artemis
from early 2019. Resources Ltd’s Radio Hill treatment plant in the West
Pilbara.
Newmont will also have an option to extend the agreement Artemis and its contractors are working towards having the
for a further 10 years beyond the initial contract term. plant, which has been on care-and-maintenance since 2008,
fully operational as a multi-metals processing facility by the
The power station will incorporate natural gas generators end of June.
which will provide Tanami with “cost-effective and clean The company has ordered a new $3 million gold recovery
gas fuelled power”, according to Zenith managing director plant to be installed within that timeframe. Gecko Systems
Hamish Moffat. Pty Ltd has been asked to provide a stage two gravity gold
plant with nominal capacity of 70-100 tph, to be integrated
Kalgoorlie Power Systems, a subsidiary of Pacific Energy with the existing crushing and grinding areas.
Ltd, is expected to remain on site until at least the end of With a nominal capacity of 500,000 tpa, the existing plant
2018 when the existing contract expires and the new gas at Radio Hill was historically used to process nickel, copper
pipeline and power stations are permitted, constructed and and cobalt ores.
commissioned.
Artemis is attempting to restart the
KPS had been the major power supplier to Tanami since mothballed Radio Hill processing plant
2001.

PRIMARY ON TARGET FOR COOLGARDIE
DEVELOPMENT

Primary Gold Ltd is negotiating with Westgold Resources
Ltd over a two-year toll treatment agreement to process ore
from the Coolgardie project at the nearby Jubilee mill.

A MoU signed in late November gave both parties just over a
month to agree to commercial terms and confirmation of an
estimated schedule for toll treatment at the Westgold-owned
1.2 mtpa CIP gold processing plant.

If agreed, toll treatment is expected to begin on July 1.

Gold Mining Journal Page 47 January - March 2018

LATIN AMERICA

London crusade is the aim

by Michael Washbourne

New managing director Marcus Engelbrecht is Crusader hopes to take the Borborema gold project to a
spearheading an immediate bid to list Crusader decision to mine within the next 12 months
Resources Ltd on London’s AIM exchange this quarter.
decision to mine within the next 12 months.
Engelbrecht, who replaced long-serving predecessor Rob
Smakman in November, will work with UK-based advisory A drilling programme of up to 35,000m is slated for Juruena,
group Hannam & Partners to attract a new group of Central Brazil, for the year ahead in a bid to establish an
institutional investors to the Brazil-focused company. economic reserve over a project which is host to seven
different areas of mineralisation.
The decision to complete a secondary listing comes
after Crusader’s planned merger with AIM-listed Stratex Headline intercepts of 3.6m @ 554 g/t gold from 147m
International plc – then headed by Engelbrecht – fell through (including 1m @ 1,992 g/t) and 10m @ 101 g/t from 125m
when shareholders from the latter blocked the move. (including 0.4m @ 2,009 g/t) were reported during the 2016
drilling campaign at Juruena.
Engelbrecht, whose previous roles include managing
director of Indonesia-focused Archipelago Resources plc “It’s really a question of focusing on those areas where we
and chief financial officer at OceanaGold Corp, said an AIM think we have the biggest chance of bringing an economic
listing would give Crusader the best possible chance of reserve up as quickly as possible,” Engelbrecht said.
landing development funding for its Borborema and Juruena
gold projects. “We’ll bring in a structural geologist and a focused team to
decide what that drilling programme will be, but I’m quite
“Brazil is a destination which I think resonates quite well in confident we’ll be able to bring something to market that is
the northern hemisphere,” Engelbrecht told GMJ. quite interesting.”

“I’ve been speaking to a number of institutions and gold Engelbrecht, who will be based in London, dismissed
funds in the UK market and there’s a lot of excitement suggestions that Australian investors had struggled to warm
around Brazil and opportunity to develop a gold operation to Brazilian mining stories given the lack of major success by
over there. ASX-listed companies in the country.

“By listing in London we’ll have access to a broader range of “Australian investors are savvy investors and I think what
investors and capital markets than we do just in Australia.” they want is for companies to communicate a clear path to
value,” he said.
Borborema, in Brazil’s north-east, was one of the first assets
acquired by Crusader in 2007. Over the past decade, the “I think that’s what we have in Brazil. We have Borborema,
company has completed 95,000m of drilling across the which we now have permitted, we have infrastructure and
project, with 2.43 moz of resources and 1.6 moz of reserves we have interest in funding. We also have Juruena where a
now hosted over the three licenced areas. lot of upside exists.

Crusader was awarded a key environmental permit last “This is an easy story to sell. I think that this will resonate not
April, paving the way for the project to be developed. only with the new UK investors, but also with the Australian
market as well.”
Engelbrecht said Borborema “jumped out” at him while he
was completing his initial due diligence work on Crusader’s Perth-based executive director Paul Stephen will continue to
projects as the best near-term development option in the liaise with Crusader’s Australian shareholder base.
portfolio.
An exclusive one-on-one with Crusader managing
“This is a no-brainer asset, it’s low risk and is something that director Marcus Engelbrecht is featured on Paydirt TV
we’ll be able to develop relatively quickly,” he said.

“We’ve effectively done most of the BFS work needed, we
have the environmental permits in place, we have great
infrastructure and we own the property it’s situated on.

“This is an orebody that starts at surface and just keeps
going down. We think we can put a plant on there. It will
be about 2 mtpa producing about 70,000 ozpa with AISC of
about $US800/oz.”

Engelbrecht said he hoped to take Borborema through to a

Gold Mining Journal Page 48 January - March 2018

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HIDDEN TREASURES

Gruyere’s golden hat-trick

Gold Road Resources Ltd’s lucrative partnership
with Gold Fields Ltd has again been recognised
by the global mining investment community.

The Ian Murray-led company received the prestigious
Small Cap Deal of the Year award at the Mines &
Money London Achievement Awards and Gala
Dinner for its decision to form a 50:50 JV with Gold
Fields to fund and develop the Gruyere gold project
in Western Australia’s Yilgarn Craton.

Gold Road was judged the winner from a group of
finalists that included Franco-Nevada Corp, Berkeley
Energia Ltd, Africa Finance Corp, Endeavour Mining
Corp and Lithium Americas Corp.

It is the third major award Gold Road has collected in

recent years, having already pocketed the Mines & Gold Road managing director Ian Murray (far right) with Paydirt’s Mark
Money London award for Outstanding Achievement Andrews, Michael Washbourne and Dominic Piper at Diggers & Dealers
in Exploration in 2014 and the Dealer Award at last

year’s Diggers & Dealers Mining Forum in Kalgoorlie. the transformational Gruyere JV.”

“It speaks volumes of the value generated by the Gruyere Meanwhile, GMJ took home the Print Media Award at the
JV that Gold Road has been recognised by investors in 2017 Association of Mining and Exploration Companies
Australia and Asia – and now by leading investors in Europe annual awards dinner for editor Dominic Piper’s cover story
as well,” Murray said. titled “Collaboration, innovation and the future of exploration”.

“At Gold Road, we are very proud of the quality of our team

and I’d like to recognise their tremendous work in delivering

INDEX

AngloGold 10, 12, 42, 46 Eastern Goldfields 6-7 Kirkland Lake 12, 15, 17, Peel 24
Archipelago 48 25-26 Primary 47
Artemis Emmerson 16
14-15, 26, 47
Endeavour 33, 35, 36, MacPhersons 10
43 Matsa 44
Maximus 47 Ramelius 22
B2Gold 31 Evolution 4, 16, 19, Metals X 27 Randgold 4, 31, 41-43
Barrick 4, 12, 18, 33, 35 22, 23, 26, 46 Millennium 13 Resolute
Blackham Musgrave 45 46
Breaker 44
17 Galaxy 7 Saracen 4, 16, 23
Gold Fields 31, 33, 34, Silver Lake 27
Capricorn 8 Newcrest 4, 12, 24, 26, SolGold
Cardinal 17, 31 Gold Road 36, 46 33, 34, 37-39, 40 St Barbara 33, 34
Castle Golden Rim 33, 34, 36, 40 Stratex 17, 24
Catalyst 15 GWE Newmont 4, 12, 18, 47
Crusader 24 45, 47 48
48 44

Northern Star 4, 10, 16, Teranga 30
Hummingbird 31 18-19, 26, 33, 34, 40

Dacian 10, 28, 46 Novo 14-15, 26 West African 17, 20-21, 31
De Grey 15
Draig Impact 15 OceanaGold 48 Westgold 10, 27, 47
10, 17, 30 Independence 12 Oklo 17, 31

Kairos 15, 45

Gold Mining Journal Page 50 January - March 2018


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