Paydirt June 2015

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nozzles and related products Expertise: Recruitment Web: www.technologyonecorp.com
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Expertise: Expertise and solutions in the en- Expertise: Engineering, project and manu- nia, 7000
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Deakin ACT 2600 Email: [email protected] Company: Thiess
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and exploration companies Tel: +61 8 9277 8800
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terkloof, Pretoria 0181 Web: www.syntechtron.com
Tel: +27 12 345 6779 Company: Titeline Drilling
Email: [email protected] Company: Systech International Expertise: Mineral exploration drilling
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6101 Company: Torque Recruitment Group
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AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 51

INTERNATIONAL SERVICES DIRECTORY 2015

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4031 Perth, Western Australia 6008
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Street, Pittsburgh, PA 15213-2582
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cles, 4WDS, motorbikes, trucks, transport Web: www.vitalengineering.com Address: 34 Kalamunda Roadd, South
means and vehicles in general Guildford WA 6055
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New Guinea Expertise: Drilling Tel: +61 8 9209 8500
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tracting mine dewatering, mine borefields, reinjection construction services
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Organisation
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Tel: +61 8 8371 0020
Email: [email protected]
Web: www.zonge.com.au

PAGE 52 JUNE 2015 AUSTRALIA’S PAYDIRT

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NEW SOUTH WALES

NSW to fast track
developments

The NSW New Frontiers initiative has drawn high praise from explorers in the State

From the outside looking in it often appears certainty and clarity. We continue to work to of the NSW Gas Plan. The NSW Gas Plan
the New South Wales mining industry is at ensure a rigorous framework is in place and builds on that scientific evidence and sets a
odds with the communities it impacts. that high environmental and social standards clear direction for gas exploration and produc-
are met. But this should not come at the ex- tion in NSW,” Roberts said.
This is perhaps a fair observation when it pense of consistency and timeliness. That is
comes to the State’s fledgling coal seam gas why we are committed to halving the assess- The CSG debate will still make headlines
sector (CSG); however, it is apparent that ment timeframe within this term of govern- when mining is mentioned in a NSW context,
many miners and explorers alike have en- ment for major projects,” Roberts said. but the State’s relevance as a coal producer is
joyed relative success in NSW. not lost, while gold and silver production con-
How effective the Government’s new ap- tinues to increase.
“NSW has a long tradition of mining within proach to approving new projects will be
the State and investors have shown confi- known in time, while its handling of the CSG And with the likes of new mine develop-
dence in the sector and government’s role in industry remains a work in progress. ments and expansion of existing operations
regulating it,” Minister for industry, Resources coming on line, including Mount Boppy (Ma-
and Energy Hon Anthony Roberts said. NSW chief scientist and engineer professor nuka), Mineral Hill, Hera, Cadia, Majors Creek
Mary O’Kane was commissioned to conduct and Hillgrove, precious metals output in NSW
The Government’s Cooperative Drilling a review on CSG activities, paying particular should continue to rise, subject to commodity
programme, part of the New Frontiers initia- attention to the impacts on human health and prices, Roberts said.
tive which offers grants of up to 50% of drilling the environment.
costs capped at $200,000, has been hugely Gold production in 2013/14 was 1.08 moz
popular with selected explorers across the Roberts said that O’Kane’s findings, re- worth around $1.5 billion, a 14% increase
State. leased in 2014, clearly indicated that the risks from the 2012/13, while silver production in
of gas development can be effectively man- 2013/14 was 5.6 moz worth around $116 mil-
Meanwhile, almost $6 million will be pro- aged with the right regulation, engineering lion, a 7% increase from the previous financial
vided under the New Frontiers initiative over solutions and continued learning, monitoring year.
two years for the extension of the Londonder- and research.
ry drill core library, which is a vital reference Roberts welcomed growth in the mining in-
point for explorers and the State. “The report, which has given us a roadmap dustry, emphasising the Government viewed
to establish a world leading industry that is it as a key part of the State’s economy.
“The New Frontiers initiative has contribut- safe and sustainable, led to the development
ed to the discovery of a number of new mineral “The mining sector has the ability to rejuve-
deposits by providing pre-competitive nate the economy and population of the
geoscience data, such as geophysics western and mid-western parts of the
and mapping and NSW-specific explo- State, therefore easing pressure on the
ration models,” Roberts said. eastern seaboard,” he said.
“Our focus is on ensuring a balance
Two years ago the Fraser Institute between industry and the broader com-
ranked NSW No 1. in the world for its munity and ensuring that a triple bottom
geosciences information, a mantle line of economic, social and environ-
the State wants to leverage from to in- mental factors are considered in rela-
crease interest its mining industry. tion to mining projects. Mining can work
harmoniously side-by-side with other
Furthermore, the Government wants natural resource land uses.
to enhance its status as a mining state
and has moved to cut assessment – Mark Andrews
timeframes for major projects.
New South Wales Minister for Industry, Resources
“We are committed to a strong, ro- and Energy Hon Anthony Roberts
bust and transparent mining sector in
New South Wales. Central to this is an
assessment framework that provides

PAGE 54 JUNE 2015 AUSTRALIA’S PAYDIRT

Argent backed in by
NSW Government

It is rare that an interview with a mining com- of higher grade lead-
pany starts with the company applauding the
efforts of government. zinc-silver, gold and

However, Argent Minerals Ltd managing possibly copper, to el-
director David Busch did exactly that when
speaking with Paydirt recently. evate Kempfield into a

“I must say a lot of what we have been able world-class polymetal-
to do has been done with government fund-
ing. We have been able to get [Federal Gov- lic project.
ernment] R&D claims to the tune of $2 mil-
lion since July 2013 and then with the recent “There has been
round of cooperative drilling grants has really
got us through funding in a critical period for a couple of goes at
the junior exploration industry in Australia,”
Busch said. a feasibility study at

“Government funding has kept us going Kempfield, with a lot
and we have been able to do some meaning-
ful work with the money. We have done some of metallurgy done and
serious exploration work to push Kempfield
forward and we would not have been able to an EIS submitted to the
get as far as we have – nowhere near it – if we
didn’t have Federal Government funding and NSW Government, and
funding from the New South Wales Coopera-
tive drilling scheme.” it is a development the

Busch’s complimentary words have been Government wants to
echoed by Argent’s peers, who have also
benefitted from exploration assistance, par- happen,” Busch said.
ticularly NSW’s New Frontier’s Cooperative
Drilling scheme. “However, the sil-

In return, Argent hopes it can deliver a ver price collapsed
polymetallic project at Kempfield, south of
Orange, which will benefit the State and sur- in 2013, which put it
rounding communities.
on the backburner a
Kempfield has been recognised as a NSW
State Significant Development, with Argent bit, but the approach
estimating polymetallic production of 1.5 mtpa
over a 20-year life-of-mine from Kempfield. now is to go for the

A resource update released in May 2014 lead-zinc. That is what
from Kempfield included 21.8mt for 33 moz
silver @ 47 g/t, 86,000oz gold @ 0.12 g/t, where have identified
97,000t lead, 200,000t zinc for a total silver
equivalent resource of 52 moz. huge potential. We

Busch said straight silver mines, outside might only need sev-
of South America, were difficult propositions
for companies to materialise, therefore Ar- eral million tonnes. We
gent’s aim was to discover an additional 5mt
already have a 22mt

resource, mainly filled

with berite, with some

lead-zinc thrown in. To

the west of the deposit

if we are able to get

anything like the Hera

grades then we’ll be

economic. And as soon

as we get 3-5mt at Kempfield has been recognised as a project of state
grades probably above significance by the NSW Government
5% lead-zinc, I think a

serious case will be made to reinvestigate the zinc in that area, which the company will be

feasibility study with high potential to push the targeting in its next round of drilling.

button on that one.” “We are pretty motivated and can’t wait to

On the western edge of the known miner- get into drilling the next series of holes,” he

alisation at Kempfield Argent has intersected said.

18% lead-zinc. “We have got a drilling programme that has

Busch said he expected to see more lead- been designed to test the lenses at depth and

also extensions to the strike and the po-

tential near the lens immediate to the

west.

“The programme will be seven dia-

mond holes for 3,200m. All the his-

torical drilling was done to a maximum

depth of 120m, so it is really shallow,

and we are doing the deepest we have

ever done and we’re expecting to hit

some nice stuff,” Busch said.

– Mark Andrews

A drilling programme targeting high grade base and precious metals is scheduled at Kempfield
AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 55

NEW SOUTH WALES

NSW Premier warned to
keep election promises

The head of the New South Wales Miner- The Tomingley gold project is one of a few new mines to open in NSW recently
als Council (NSWMC) has welcomed
proposed regulatory changes to the local ritory except Victoria (43rd) due to ongoing tal coal mining workforce) culled over the past
resources sector, but has warned further im- land access issues brought about by the rise two years.
provements are required for the State to be- in coal seam gas exploration.
come a credible force in the wider mining land- Unemployment in the Hunter Valley coal
scape. According to NSWMC, only 0.1% of land in region was recently reported at 13% – more
NSW is used for mining activities, yet Galilee than double the state (6%) and national (6.1%)
NSW Premier Mike Baird publicly declared questioned why an “unwarranted level” of en- averages.
his intentions to improve the State’s mining in- vironmental regulation remained in place.
dustry prior to his re-election in March and he Only a handful of bright spots have emerged
has since reaffirmed his commitment to make “While we accept that for world’s best prac- in other commodities, including the opening of
changes, including halving the average as- tice environmental regulation is absolutely es- new mines at Hera (Aurelia Metals Ltd) and
sessment time for major projects. sential – and we support that – we’re seeing Tomingley (Alkane Resources Ltd) in the past
a recent trend in NSW towards the imposition 18 months, but Galilee was optimistic about
One of the key proposed policy changes of environmental regulations that add unnec- the future of the resources sector in NSW.
is the introduction of an independent panel essary cost and compliance on the industry
to assess projects, namely the Planning As- for little or no environmental benefit, and often “We’ve got some of the best mineral depos-
sessment Commission, following endless where there is no real evidence that an en- its in the world, whether they be coal, gold or
complaints about the length of time it has tak- copper, we’ve got a world-class mining work-
en for relevant authorities to evaluate “critical” vironmental problem exists,” force, a long history of mining and we’ve got
developments over the last six years. Galilee said. mining communities across the state that un-
derstand the importance of the industry and
NSWMC chief executive Stephen Galilee “We need to see a plan- support it,” Galilee said.
has bemoaned the fact average assessment ning system that works quick-
times for major infrastructure projects, includ- ly and fairly and one that en- “It would be nice to see an increase in ex-
ing mining, in NSW has doubled from an al- sures projects are assessed ploration activity and investment in NSW be-
ready painstakingly long 500 days to more on their merits, based on cause there are some worrying trends that
than 1,000. science, facts and evidence, would have a long-term impact on our sector
and doesn’t get caught up in and therefore the State’s economy, particular-
Galilee described the first term of the Coali- public debate and commen- ly in relation to local roads and other elements
tion Government (Baird took over as Premier tary based on emotion.” of local infrastructure that help maintain an
from Barry O’Farrell in April 2014) as a “frus- improved quality of life for the people in our
trating” period for the resources sector, but Falling commodity prices communities.”
said the NSWMC was working with bureau- have negatively impacted the
crats to ensure the proposed changes were resources industry in NSW Galilee also expected to see some reform
implemented. like it has in so many other of the laws relating to illegal access of mine
Stephen Galilee jurisdictions and there is no sites amongst the proposed policy changes
“We’ve seen some early welcome progress question the biggest sector following a number of high-profile incidents,
on that commitment, but now that the election hit has been the local coal industry. including anti-mining protests at Whitehaven
is over we need to make sure that the prom- Coal production accounts for about 80% of Coal Ltd’s Maules Creek project.
ises made before the election are turned into the mining industry’s contribution to the NSW
action and that is our focus as an industry economy, but a low pricing environment has – Michael Washbourne
now,” Galilee told Paydirt. seen about 5,000 jobs (roughly 20% of the to-

“I’m confident the Premier fully intends to
deliver on his pre-election
commitment, but like any-
thing when you’re deal-
ing with government and
bureaucrats it’s important
to help them by reminding
them of the promises they’ve
made and the progress that
they may or may not be mak-
ing to deliver on those com-
mitments.”

Galilee said the industry
had “breathed a collective
sigh of relief” when Baird
acknowledged his Govern-
ment’s failure to pick up
on some of the flaws in the
planning systems and subsequent pledge to
implement change.

NSW was ranked 39th globally in last year’s
Fraser Institute Survey of Mining Companies
behind every other Australian state and ter-

PAGE 56 JUNE 2015 AUSTRALIA’S PAYDIRT

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NEW SOUTH WALES

Impact spoilt for choices

New South Wales’s Impact rhodium $1,506, iridium $763/
Resources Ltd is in a bind oz and ruthenium $65/oz, Bro-
of the best kind. ken Hill was shaping up as a
boon project.
While the vast majority of
Australia’s junior explorers are At the time of print Impact
handcuffed by financial con- was awaiting approvals for a
straints, Impact is crippled by drill programme targeting six
a conundrum which probably follow up targets at Broken Hill.
won’t field much sympathy from
its competitors: which standout While recent news flow might
project should it develop first. suggest favouritism towards
Broken Hill, Impact’s bumper
Impact has been steadfastly Commonwealth gold project is
working its Broken Hill Copper- certainly not back of mind.
nickel-PGM metals JV and
Commonwealth gold-VMS In February the company
projects since acquiring both announced a maiden inferred
in 2013, but it appears 2015 resource of 720,000t @ 4.7 g/t
could be the year the company gold for contained 110,000oz
cashes in on its potential gold- gold equivalent, comprising 2.8
en gooses. g.t gold, 48 g/t silver, 1.5% zinc,
0.6% lead and 0.1% copper.
Originally focused on Bro-
ken Hill’s nickel and copper Jones said though the re-
potential this year following source’s high grade was im-
the receipt of assays from a pressive as stated, there was
maiden drilling campaign net- much more potential at Com-
ting a best intercept of 4.2m @ monwealth.
2.6% copper and 5.1m @ 0.9%
nickel, Impact turned its atten- “The fact that it is open along
tion to the project’s PGM po- trend and at depth indicates
tential when it discovered the further drilling could rapidly
presence of osmium, iridium, increase the size and grade of
rhodium and ruthenium at its this deposit,” he said.
Red Hill deposit in April.
“The resource contains just
At the time, managing di- over 1,000oz per vertical metre
rector Mike Jones told share- of gold equivalent from sur-
holders Broken Hill harboured face. This is very encouraging
some of the highest grade for the possible future develop-
PGMs reported in Australia, ment of an open pit mine given
with reported intersects of that such values represent a
9.5m @ 4.7 g/t 3PGM and common threshold for profit-
5.1m @ 11 g/t 7PGM in Red able underground mines.”
Hill’s upper zone and 9.9m @
6.7 g/t 3PGM and 4.2m @ 11.8 Jones said Impact would
g/t 7PGM. prioritise follow up drilling at
the project’s Commonwealth
A review of historical results and Impact’s Broken Hill JV could be a game changer for the company South target, which had pro-
new assay data last month continued duced intercepts of 7m @ 25.5
to whet Impact’s appetite for the pro- g/t gold, and the Main Shaft prospect,
ject. which had a porphyry unit extending a
further 300m coincident with a zone of
A 120kg gossan sample from the very anomalous gold-silver-base metals
project’s Platinum Springs prospect geochemistry that had not been tested.
returned hits of 19.6 g/t platinum, 50 Impact would also look at targeting
g/t palladium, 3 g/t rhodium, 3 g/t osmi- the project’s Doughnut porphyry cop-
um, 4.4 g/t iridium and 2 g/t ruthenium, per-gold prospect, which was the sub-
while a nearby historical drill hole re- ject of an IP and ground gravity survey
turned 2m @ 52 g/t platinum equiva- last year.
lent comprising 10.9 g/t platinum and “Infill soil geochemistry surveys are
23.6 g/t palladium. also warranted and will commence upon
the completion of negotiations for land
Rock chip samples from the Round access, which are in progress,” Jones
Hill and Black Ridge prospects turned said.
in 5.6 g/t platinum, 8.8 g/t palladium
and 1 g/t rhodium, while the undrilled – Rhys Dickinson
Moorkai target delivered gossan sam-
ples of 27.8 g/t platinum, 27.9 g/t pal- Mike Jones
ladium and 14 g/t gold, with 9% copper
and 1.8% nickel credits.

Jones said given platinum was
fetching $1,528/oz, palladium $1,015,

PAGE 58 JUNE 2015 AUSTRALIA’S PAYDIRT

Rimfire burns up Yoes field

Assay results from Rimfire Over 25 targets have been identified at Fifield, where Rimfire already has a resource of 7.9 moz silver
Pacific Mining NL’s Yoes and 125,000oz gold at the Sorpresa deposit
Lookout area confirmed what
their XRF was telling them. covery made in 2010. we have planned [4,000m] is rebate-able,”
The company announced a maiden in- Kaminsky said.
However, Rimfire managing
director John Kaminsky was ferred and indicated resource of 6.4mt for While Rimfire has benefitted from the Gov-
pleasantly surprised that the 7.9 moz silver @ 25 g/t (cut-off grade) and ernment’s willingness to back its explorers in
assay results returned better 125,000oz gold @ 0.5 g/t for Sorpresa in De- what is a tough environment for juniors trying
than expected copper anomal- cember 2014. to access capital, Kaminsky’s attitude sug-
ism and gold presence at Yoes. gests he would have tried every way possible
Sorpresa covers an area of about 35sq km to continue exploring.
“We had a good view in the at Fifield, which is part of a contiguous 313sq
field with the portable XRF, km tenement position held, in which no less “Our strategy has been to continue spend-
which is good at picking up than 25 targets prioritised for work. ing during these tough times; there’s no point
base metals, and we picked it if you don’t spend,” he said.
up earlier. But with the assays Of the key targets emerging, Carlilse is one.
there was about a 50-60% About 500m of RC drilling at Carlisle start- “At the end of March we had just under $2
uplift than what we saw in the ed in May, which along with programmes million and that doesn’t go far, but it certainly
field,” Kaminsky told Paydirt. planned at Sorpresa, Eclipse and Yoes will goes a lot further than it used to. The Govern-
keep Rimfire busy. ment grant is no doubt timely, with up to 20
The assay results were from For a junior that ended the March quarter recipients, and really gives us an impetus to
a completed first pass RC drill- with under $2 million in the bank, Rimfire has drill. [It] makes a difference.”
ing programme comprising 13 been able to plan drilling programmes cour-
holes for 1,114m. tesy of the NSW Government’s New Frontiers – Mark Andrews
Cooperative Drilling scheme.
Drilling was focused on two “The NSW Frontiers grant contribution es-
targets within Yoes, 6km east sentially means we’re being matched dollar-
of Rimfire’s Sopresa gold-silver for-dollar and therefore 50% of our drilling
resource, at Fifield in NSW.

Kaminsky said drilling con-
firmed copper-gold potential
with skarn-style geology host-
ing copper sulphides and some
associated gold.

Best intersections included
Fi0563: 30m @ 0.11% copper
from 102m, including 4m @
0.27% copper and Fi0560: 56m
@ 0.06% copper from 40m, in-
cluding 4m @ 0.12% copper
plus 4m @ 0.14 g/t gold from
62m.

The results were well re-
ceived by the market, with Rim-
fire’s shares jumping 37% on
the day of the announcement to
2.2c/share.

To follow up on its success at Yoes, a fur-
ther 420m of RC drilling was planned 700m
north to test a new target for gold and copper.

“It’s preliminary testing but we are starting
to define our area in a very important copper-
gold area. Everybody is pleased with the im-
provement in our share price, but whether or
not it is sustained remains to be seen,” Kamin-
sky said.

Keen to capitalise on its good work at Yoes,
Rimfire has applied to expand its exploration
licence holdings and has lodged an applica-
tion for another 200sq km of ground at Fifield.

Meanwhile, a RC drilling programme is un-
der way in the Eclipse trend, situated between
Sopresa and Yoes, with 2,000m to be drilled
along 2.2km of known strike testing surface
geochemistry for gold, copper and base met-
als.

Kaminsky said the exploration on the
Eclipse trend was part of a whole host of work
Rimfire was immersed in within a 6km radius
of the greenfields gold-silver Sorpresa dis-

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 59

NEW SOUTH WALES

White Rock in great red hunt

There is a much more evidence still to be With epithermal and supergene mineralisation already identified at Mt Carrington, White Rock
gathered on the company’s New England is aiming to establish a primary porphyry source on the project
tenements, but the mere potential for a copper
porphyry discovery has White Rock Minerals are chasing a porphyry or not. If we are onto The focus on the porphyry potential of Mt
Ltd managing director Geoff Lowe brimming something, it may bring a few more people out Carrington has come at the expense of the
with excitement. of the woodwork.” project’s existing gold-silver resource. Lowe
said the 338,000oz gold/24.4 moz silver pro-
Explorers have so far failed to turn the ac- Porphyry exploration is an expensive ex- ject was parked at the scoping study phase
cepted technical potential for porphyry ore- ercise however and Lowe admitted all future while the company awaited a more positive
bodies in New South Wales into economic financing options were being considered by a market climate.
reality but with White Rock and a number of company with a bank balance of $618,000 at
other juniors beginning to narrow their search, the end of the March quarter. “We’ve always got the silver-gold resource
the likelihood of a discovery is on the increase. there. It had been the main game for the com-
“We are happy to discuss any financing pany for five years but we are happy to let that
Lowe’s enthusiasm has been burnished mechanisms for the future. We were hop- sit at the scoping study level until we find a
by the results of a recent geophysical survey ing for more from the recent share purchase suitable way to fund a DFS. It is not going any-
which highlighted several high chargeability plan [which raised $150,000 with a further where though,” he said.
anomalies on the company’s Mt Carrington $125,000 contributed by directors] but what
project. we want to do is create value ourselves with The New England region has been the bat-
the first programme and then we can have tleground for the anti-fracking movement in
The “MIMDAS” survey revealed an anom- more specific discussions about the way for- NSW but according to Lowe, White Rock has
aly 3.5km long, 1.5km deep close to known ward,” he said. avoided any friction with the “lock-the-gate”
shallow copper mineralisation on the central campaign.
Mt Carrington lease. Lowe said although Such discussions could begin this month
more work was needed it could represent a with initial drilling results due at the time of “The community is onside with us because
porphyry system. print. there is not a lot of employment in the region
and they understand this would be an old op-
“We are not 100% sure but the geophysics “We should get those results in June, inter- eration reopening. We are close to the gas
in February came back with results like noth- pret them and then look at how to fund the projects but we haven’t seen any of the nega-
ing we have seen before. It is probably the next programme.”
most exciting geophysics results we’ve seen tivity associated with that.
in our careers,” Lowe told Paydirt. “It could “We have been at pains to explain
be a porphyry but could also be a breccia or
gold system.” what we’re doing and prove we’ll
be able to rehab the area properly;
The well-defined presence of epithermal something that didn’t happen previ-
silver-gold has Lowe hoping the chargeabil- ously.”
ity anomaly could represent the source of Mt
Carrington mineralisation. So positive has White Rock’s ex-
perience been in the State, Lowe
“The epithermal silver-gold and supergene continues to keep an eye on avail-
copper is already there and we know there able projects in NSW.
must be a primary source,” he said.
“The company is comfortable
The aim now is to confirm with drilling the working in NSW. The Government
potential identified by geophysics. has been good, including giving us
the $200,000 grant for this drilling
“We will drill 2,000m over three or four programme. We are always look-
holes,” Lowe said. However, Lowe is not pin- ing and there are opportunities out
ning all hopes on turning up major copper por- there. I think there is some reason-
phyry mineralisation in the first programme. able ground available,” he said.

“Obviously, the aim is to hit an orebody but – Dominic Piper
we may only get a small amount of minerali-
sation first up but finding alteration Investors are awaiting drilling results from Mt Carrington
while getting sniffs of copper and before deciding on further investment in White Rock
gold, that would be fantastic from
this programme.”

Any favourable results may give
added weight to the momentum cur-
rently in White Rock’s share price.
The company’s stock has enjoyed
a good start to the year, recovering
from a low of 0.9c/share in February
to a high of 3.5c in mid-March (3c at
time of print).

Lowe said investors were eagerly
awaiting results from the drilling be-
fore deciding on further investment.

“People are keen for us to get this
first programme completed. The
announcement regarding the geo-
physics resulted in a 200% increase
and now we have had this rerating
to 3c. People are keen to see the
three holes and to know whether we

PAGE 60 JUNE 2015 AUSTRALIA’S PAYDIRT

Heron tips cash into Woodlawn

With a seemingly end-
less pile of cash to
draw on, Heron Resources

Ltd has been the envy of

other juniors for many years.

However, what the com-

pany lacked until recently

was a development-ready

project to spend those cash

reserves on.

The Woodlawn zinc-cop-

per project, about 250km

south-west of Sydney, fitted

that niche and was last year

incorporated into Heron’s

portfolio following the merg-

er with TriAusMin Ltd.

Woodlawn’s robust eco-

nomics were confirmed in

late April when Heron re-

leased the findings of a pre-

liminary economic assess-

ment (PEA) to the market,

indicating the project could

support an 11-year mine life

from underground and tail-

ings resources for an initial

capital cost of $140 million. Heron’s strong cash position will be crucial to the proposed restart of operations at the Woodlawn zinc-copper project

It is the first time the un-

derground resource economics have been ment capital position, which is encouraging sions would be ongoing during the feasibility

assessed and Heron managing director for when we want to pull together a financial process.

Wayne Taylor is excited about the further po- structure for it.” Encouraging forecasts around zinc also

tential it could deliver. Taylor and his team were also pleasantly has Taylor excited about what the project

“The PEA has come up with the sort of surprised to find a substantial amount of eco- could deliver to base metals markets. Zinc

results that certainly give us the impetus to nomic material was defined at relatively shal- was trading at $US2,355/t on the LME at the

move ahead and we think there’s a lot more low depths. time of print and some forecasters have pre-

to be discovered underground in that environ- About 80% of the underground tonnes in dicted a price rise to beyond $US3,000/t with

ment,” Taylor told Paydirt. Heron’s production schedule are outside ar- several zinc mines about to close.

“We’ve really only been targeting shallow eas where previous mining took place for al- “It’s a commodity you could see was always

positions and we can see the inventory grow- most two decades until 1998. going to, from purely a supply-demand funda-

ing over time. It’s a solid project and certainly “In that top 500m we’ve come up with quite mental perspective, go into a period where it

where zinc is going it’s looking like an opera- an extensive amount of mineralisation which was going to get a lot of support – and we’re

tion that could contribute to that insatiable de- at this point in time has been classified as in- now entering that period,” Taylor said.

sire to see zinc out into the marketplace.” ferred resource, but we’re just about to start “There are a number of what you would

The study flagged a total life-of-mine drilling out there now to look to convert that consider mainstream supply sources that are

production target of 350,000t zinc, 77,000t to at least indicated so we can put a reserve winding down so it’s going to make it a good

copper, 112,000t lead, 8.9 moz silver and around it,” Taylor said. market to be in and I think we can reasonably

59,000oz gold from combined underground “We’re pleasantly surprised with the quanti- expect to see some good pricing strength in

and tailings resources, including 1mt indi- ty of material we’ve found there and it’s meant zinc over the next few years.”

cated and 2.8mt inferred resources from the there’s less reliance on more remanent ma- Taylor also spoke highly of New South

underground. terial that was left by the previous operators. Wales as a mining jurisdiction, rejecting the

Other key economics from the study were This is more virgin material and allows us to widely held belief that the State is a “basket

C1 and C3 cash costs of $US0.01/lb and take a clean sheet of paper to looking at how case” when it comes to supporting and ap-

$US0.44/lb respectively, a post-tax NPV of we’re going to extract it.” proving the many prospective resources pro-

$300 million, an IRR of 46% and payback Heron has since started work on a feasibil- jects.

within two years of commissioning. ity study to incorporate the underground as- “We may be a little bit special in that we’re

Taylor, who previously served as managing pects of the project into the findings of a FEED on an existing/disturbed site, but we’ve had

director of TriAusMin until last year’s merger, study completed on the tailings resource in nothing but good support from the regulators

said the proposed initial development capital 2012. and from the community in general,” Taylor

of $140 million had come in well under previ- The feasibility study is expected to be com- said.

ous estimates. pleted within the next 12 months and Heron “We can only speak very highly of our inter-

“I guess we loosely considered it would has already set aside some of its $25.6 mil- actions with other stakeholders who want to

cost us $150-200 million to see development lion cash reserves for upcoming exploration see this operation get back up and running.”

and what we’ve come up with is around $140 drilling. – Michael Washbourne
million, which is obviously below the lowest Taylor said his company was looking at

line we had in the sand,” Taylor said. a combination of debt and equity options to

“That puts us in a much lower develop- fund development of Woodlawn and discus-

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 61

NEW SOUTH WALES

Owendale scandium in
high demand

Apositive scoping study in September.
has confirmed Platina However, Mosig is not

Resources Ltd’s Owendale getting ahead of himself

project as a potential ma- when it comes to talking

jor player in the scandium about finances in these

game. challenging markets.

Demand for the metal – “It’s very tough out there

important for usage in aero- at the moment and it would

space and energy industry be wrong to say it’s easy

applications – is expected times,” he said.

to increase in the coming “Scandium is a good

years. concept and one we feel

Owendale is the world’s very confident on, so we’re

largest and highest grade happy we’ve got some in-

laterite-hosted scandium terested shareholders, but

deposit with a global re- it’s anything but easy.”

source of 23.7mt @ 384 The growth potential for

ppm scandium for 9,083t scandium exists in two ma-

of contained scandium, or jor markets, particularly the

13,932t of scandium oxide. aerospace industry where

Platina is proposing to up to 37,000 new commer-

use proven and convention- cial airplanes are expected

al recovery technologies to Platina is on track to complete a PFS on its Owendale scandium project in August to come online by 2033.

extract large quantities of Scandium-based solid

the metal at high purity levels to service a $US7,000/kg and that’s because not a lot is oxide fuel cells are also being flagged a po-

number of key growth markets. sold,” Mosig said. tential replacement for the internal combus-

The scoping study found the Owendale “Currently we estimate the world consumes tion engine because of its cleaner, more ef-

project could support a mining operation between 15-20 tpa of scandium oxide – or at ficient and flexible attributes.

which produced 30 tpa of scandium oxide at least that is what has been reported – so it’s Kaiser Research is forecasting the demand

99.9% purity with optional platinum, nickel very hard to get a good figure, but we think for scandium in the aircraft and solid oxide

and cobalt credits. $US2,000/kg seems a reasonable and appro- fuel cells markets could reach 300 tpa – a po-

Only about 50,000 tpa of ore is scheduled priate number for the price of the triple nine tential $US600 million market – by 2025.

for treatment and concentration on site, about purity.” Owendale has the lowest capex of any pro-

75km north-west of Parkes and 350km west Platina has wasted no time getting to work ject expected to come online during that time-

of Sydney. on a PFS and plans to complete a final feasi- frame, aside from a number of small Russian

Platina managing director Robert Mosig bility study by August so it can almost immedi- projects with estimated production of less

said the scoping study results had come in ately apply for a mining lease, which typically than 5 tpa.

line with expectations. takes about 12 months to be granted. So far the market is yet to cotton on to

“We were absolutely delighted with the Funding for both studies – expected to total Owendale’s potential, including the platinum

results, especially the capex and opex num- about $4-4.5 million – is unlikely to be an is- opportunities on offer, but Mosig is hoping

bers, which were relatively modest amounts,” sue. The company was looking to raise about that will change in the not too distant future.

Mosig told Paydirt. $2.3 million via a share purchase plan at the Owendale contains a platinum resource of

“For a processing plant that requires HPAL time of print and will look to exercise about 31.1mt @ 0.52 g/t platinum for 519,000oz of

[high pressure acid leach] recovery, we were $5 million worth of options when convertible contained platinum.

quite impressed that the capex came in “Hopefully the market will sit up one

around $73 million, which is $US57 mil- day and sober up to the fact we’ve got

lion.” a unique deposit there which contains

Other key economics for the poten- both scandium and platinum,” Mosig

tial high-margin operation include an- said.

nual revenue of $77 million ($US60 mil- “Both metals are going to be in ab-

lion) and all-in cash costs of $598/kg solutely big demand for the future so

($US466/kg), based on a scandium oxide we feel very confident we’re on the

price of $US2,000/kg. right commodities here at Platina.”

Platina is currently in binding off-take Mosig was also strong in his praise

discussions with China-based Honfine of New South Wales as a mining ju-

Oriental Zirconium Industry Co Ltd for risdiction, declaring the state’s re-

the potential sale of 15 tpa of 99.9% pure sources sector tantamount with that

scandium oxide from Owendale once of the globally respected industry in

production gets under way in 2017. Western Australia.

“Scandium oxide at 99.9% purity, or Owendale is the world’s largest and highest grade – Michael Washbourne
what they call ‘three-nines’, has a vari-

able rate of between $US1,500/kg to laterite-hosted scandium deposit

PAGE 62 JUNE 2015 AUSTRALIA’S PAYDIRT

By-product boosts Alkane’s DZP

Alkane Resources Ltd’s al- The proposed layout for Alkane’s Dubbo zirconia project
ready compelling Dubbo
zirconia project (DZP) story Should that be the case, Alkane could play “We believe that mining fresh rock consist-
just got a whole lot more in- a role in stabilising the commodity’s price, ently on the Caloma deposit should stabilise
teresting, according to man- which soared from roughly $600/kg late last production and we should get back to near
aging director Ian Chalmers. year to beyond $1,200/kg at the time of print, budget, which is about 16,000oz per quarter,”
he said. Chalmers said.
While the New South
Wales miner/explorer has “We don’t want to see what happened in Alkane also recently wrapped up a 1,516m
been hard at work proving the rare earths sector in 2011 when prices scout RC drilling campaign at its Elsienora
up the zirconium and rare just went through the roof, everyone started gold play, 75km from Blayney.
earths credentials of its to panic and they were looking at substitution
massive $1 billion project, and thrift,” Chalmers said. Standout intersects included 29m @ 1.53
Chalmers said it was a by- g/t golf from surface and 8m @ 3.14 g/t golf
product that had caught the “What we’ve said to the aerospace indus- from 30m at the target’s Cuddyong prospect
market’s attention of late. try is we believe we are in a strong enough and 18m @ 0.44 g/t gold and 5.4 g/t silver
position that it won’t happen. We can supply from 27m.
Hafnium, a ductile, corro- them with all of their needs – certainly in the
sion-resistant metal chemi- short term – and keep the price stable without “Those drill results, which were a wild-
cally similar to zirconium, it rocketing through the roof.” guess first pass, were pretty good,” Chalmers
has stolen the DZP show said.
due to its increased use in Chalmers also confirmed Alkane had de-
the aerospace sector for cided not to exercise an offer from the NSW “We are very encouraged by them as they
making super alloys, where Department of Trade and Investment, Region- indicate the style of mineralisation that we are
it is added in small amounts al Infrastructure and Services to apply for a looking for and potentially big target zones. If
to improve performance un- separate exploration licence for uranium and we didn’t have such a major commitment to
der severe conditions. thorium at the DZP. Dubbo in the next two years we would prob-
ably be back drilling Elsienora now, but we
Chalmers told Paydirt al- He explained the company only investigat- just don’t want to do that until we have all the
though Alkane had always ed the option to protect itself from a third party financing in place for Dubbo.”
been aware of the hafnium taking its DZP land.
in the DZP’s deposit, more Chalmers said should Alkane receive its
interest in the specialty metal prompted the Chalmers said further investigations con- approval for the DZP this month, it would get
company to investigate its processing poten- firmed the existing title for group one metals, to work on securing preliminary finance for
tial. including all of the proposed DZP production, the project and start off-take negotiations.
would protect Alkane from opportunistic over-
“We became aware of it about 18 months lapping applications. – Rhys Dickinson
ago,” Chalmers said.
While everything is coming up roses in
“People asked us what happened to our Dubbo, a transition from mining oxide to fresh
hafnium in the flow sheets as there was a ore hurt Alkane’s numbers at its Tomingley
growing demand for it. That crystallised late gold operation.
last year when the interest was escalating and
we thought we should have a proper look at it. Tomingley produced 13,947oz in the March
We asked the Australian Nuclear Science and quarter for an all-in sustaining cost of $1,588/
Technology Organisation (ANSTO) to have a oz, but still managed to sell 16,000oz for a
conceptual look at a flow sheet, which is what $2.64 million profit.
they’ve done. We’ve now got a conceptual
flow sheet to recover the hafnium and basi-
cally we’ll trial that at a pilot plant scale over
the next couple of months.”

A report by the Minor Metals Trade As-
sociation (MMTA) highlighted the imbalance
between global hafnium supply and demand.

The MMTA study revealed there was at
least a 10mt supply shortfall in the market,
which only demands roughly 74 mtpa.

But Chalmers said should the DZP enter
the frame, it would only increase demand,

“It’s quite an amazing metal because … the
demand is driven by the supply,” he said.

“If we can supply more, the demand will
go up because people will use more in their
alloys. That’s why it’s become so important
to us strategically because it throws open a
completely additional revenue stream. We
could come into a market that is growing
strongly and there are financing options that
come with that as well.”

The managing director said Alkane’s cur-
rent estimates would place the DZP among
the world’s top hafnium producers.

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 63

NEW SOUTH WALES

Willing spenders come to Clancy

Funding early stage exploration Ramelius Resources Ltd on the
projects has not been easy,
but New South Wales explorer Condobolin base metals and gold
Clancy Exploration Ltd is showing
life still exists in the sector. project in NSW.

The company has numerous A farm-in agreement in which
interests in the State but little
cash to burn to exploit the true Ramelius can earn an 80% inter-
potential of its portfolio.
est in Condobolin by spending $2
Its strategy has been to en-
gage partners in its projects, par- million over four years was an-
ticularly ones with a capacity to
fund exploration. nounced in late April.

“It is a bit of a feather in Clan- Barnes said Clancy had in-
cy’s cap being able to attract the
high calibre of people we have. vested heavily in Condobolin the
They can see the value in our
project portfolio but also our past few years; however, work on
team,” Clancy managing director
Gordon Barnes told Paydirt. the project had stagnated as the

“There are still ways to get company’s attention was else-
early stage exploration funded
and Clancy’s strategy historically where.
has relied heavily on JVs and
enabled us to get going through “Condobolin needed money
the down turn. We will continue
to keep doing these JVs going spent on it and hence we were
forward as far as it is reasonably
possibly to do so.” keen to partner up with Ramelius

The latest deal penned by who have experience in exploring
Clancy was in May with High
Power Exploration Inc (HPX) at for and bringing into development
its Trundle copper-gold project
in NSW. smaller, high grade systems,”

Under the terms of the JV Barnes said.
and farm-in agreement, HPX
subscribed for 50 million Clancy “The Condobolin mineral field
shares at 1.5c/share to raise
$750,000. has lots of showings and from

HPX is required to fund $1 mil- previously drilling we have inter-
lion on exploration over 12 months to earn an
initial 51% in Trundle. sected some high grade gold.

To take its interest to a total of 80%, HPX However, it is likely to be limited
must spend a further $4 million over three
years. in tonnes based on what we have

The provision of substantial funding during done to date, so it needed some
these lean times is a boon for Clancy, how-
ever, the relationship with HPX offers decent money spent on it, which
a lot more, Barnes said.
is what we are going to be doing
“It also enables us to partner with
companies that have got pedigree in partnership with Ramelius.”
and smarts, and in the case of HPX,
they have smart guys working with Work completed by Clancy to
them and we have access to their
proprietary geophysical technology date at Condobolin includes drill-
[Typhoon] which we have been using.
It gives us a competitive edge with ex- ing at Meritilga (4m @ 20 g/t gold,
ploration,” he said.
0.26% copper, 30.2 g/t silver from
Trundle, in Central West NSW, is
believed to have originally been a part 75m) and Phoenix (8m @ 3.7 g/t
of the Northparkes complex, which
hosts the China Molybdenum Co. gold from 59m and 8m @ 3.73 g/t
Ltd’s and Sumitomo Group’s North-
parkes copper-gold mine. HPX can earn 80% of the Trundle copper-gold project by gold form 72m).
spending a total of $5 million Ramelius will help the compa-
Clancy will look to use HPX’s Ty- ny investigate the project further
phoon technology at Trundle with the
aim of zeroing in on drilling targets where previous exploration – 2m @ 20 g/t while Clancy continues work at its other inter-

gold, 6.97% copper and 81 g/t silver from 64m ests in NSW.

– has demonstrated potential for copper-gold Clancy has seven wholly-owned and man-

and related skarn mineralisation. aged projects in NSW, plus two JVs with Mit-

Clancy and HPX are scheduled to start subishi Materials Corp and one with Kaizen

work at Trundle in the June quarter. Discovery Inc.

Meanwhile, Clancy will also start work with “We have been quite active over the last

18 months with the benefit of the JVs.

We have been able to get out there

and drill holes funded by our partners.

That has allowed us to keep on keep-

ing on,” Barnes said.

“There are people who still believe

in the value proposition of explora-

tion. It is a long term proposition and

it takes meaningful risk capital to be

deployed. There are people out there

trying to do that [spend money] on

good projects.”

– Mark Andrews

Ramelius will fund exploration at Clancy’s Condobolin
base metals and gold project in NSW

PAGE 64 JUNE 2015 AUSTRALIA’S PAYDIRT

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COPPER

Copper shows some
mettle: Trench

Copper prices have held steady in a volatile environment for commodities

Amidst the rollercoaster ride that is the glob- justing for historical disruption factors is ex- tion will increase year-on-year by about 4%
al commodities market, copper has held a pected to increase by around 5% in both 2015 to 23.4mt from FY2015 on the back of capac-

relatively steady course compared to its peer and 2016 to 19.5mt and 20.5mt respectively,” ity expansions at electrolytic plants in China.

metals. according to the ICSG. Primary refined production should grow by

But when it comes to predicting where the “The increases will reflect expansions at ex- roughly 6% due to an increased availability

red metal will stand in the near future, experts isting operations, ramp-up in production from of concentrate, while secondary production is

continue to butt heads – some foretelling mines that have recently come on stream and forecast to decrease by 2% due to continued

fortunes for established miners and others tightness in the scrap market. In 2016 world
insisting the red metal is refined copper production is
bound for a slip shortly. predicted to grow by 2.5% to
24mt, according to the ICSG.
The International Cop- “Following growth of around
7% in apparent usage in 2014,
After underperforming in 2014 withper Study Group’s (ICSG) ICSG expects world apparent
refined usage on 2015 to in-
copper market forecast

growth of just 2.4%, world mine2015-16 put forward an

“production after adjusting for historicalargument for the commod-
output from a few new mine projects. Most of

ity’s naysayers, predict- disruption factors is expected to increase crease by only 0.6% mainly be-
ing world refined copper by around 5% in both 2015 and 2016 to cause … apparent demand in
production will exceed de- China is expected to increase

mand by up to 365,000t by 19.5mt and 20.5mt respectively. by 1%,” the ICSG said.
the end of this year. “On the other hand, usage

In 2016, the group be- in the rest of the world is ex-

lieves the copper market pected to remain essentially

will record a second consecutive production the new production is expected to be in the flat. For 2016, the growth in apparent refined

surplus, albeit at a lower 230,000t. form of copper in concentrate.” usage is expected to be around 3% with un-

“After underperforming in 2014 with growth Following an increase of 7% last year, the derlying Chinese industrial demand growth

of just 2.4%, world mine production after ad- ICSG predicts world refined copper produc- expected at 5%. Usage in the rest of the world

PAGE 66 JUNE 2015 AUSTRALIA’S PAYDIRT

REGIONS MINE PRODUCTION REFINED PRODUCTION REFINED USAGE

(1000 t) 2014 2015 2016 2014 2015 2016 2014 2015 2016

Africa 1,931 2,212 2,512 1,362 1,515 1,684 247 268 279
N.America 2,598 2,792 2,912 1,809 1,905 1,970 2,316 2,358 2,403
Latin America 7,562 7,887 8,407 3,362 3,331 3,335 579 592 616
Asean-10 / Oceania 1,725 1,958 2,377 999 999 1,098 898 947 996
Asia ex Asean/CIS 2,545 2,733 2,955 10,789 11,729 12,425 14,491 14,690 15,233
Asia-CIS 578 625 675 370 437 485 102 103 103
EU 847 844 864 2,741 2,723 2,708 3,179 3,214 3,247
Europe Others 924 926 924 1,057 1,085 1,100 1,099 875 880
TOTAL 18,710 19,976 21,625 22,487 23,723 24,804 22,910 23,046 23,757

World adjusted 1/ 2/ 18,710 19,533 20,536 22,487 23,410 23,985 22,910 23,046 23,757
% change 4.4% 5.1% 4.1% 2.5% 0.6% 3.1%

World Refined Balance -423 364 228

World Refined Balance Adjusted for Chinese Bonded Stocks Change 3/ -430

International Copper Study Group’s copper production forecasts

is expected to increase by about 2%.” “What we’ve seen in iron ore and coal is that if they close the gap they’ve got a massive
The copper price had rallied to things got structurally oversupplied and that’s way to go to get anywhere near self-sufficient.
because people have now built big projects But if they can increase their local mining ca-
$US6,361.50/t at the time of print, but CRU where they can move tonnes quite quickly in pacity, they will. They have done that in other
Group expected the “quiet market” to persist big volume and the demand side hasn’t been commodities, like zinc, iron ore and coal and
into June as industry continued to wait for a flash. Whereas in cop-
more definitive picture of demand in China. per it’s been, in some they have increased
ways, a little boring. their copper so far. Re-
“Focus will increase on the exchange stock When you build a pro- gardless, I wouldn’t see
position in the coming weeks as we enter the ject you don’t open up that as a major threat.”
peak demand season, with exchange plus the logistics to a point
bonded stocks having fallen in every month where you can easily Though he was posi-
of May and June since 2010,” a CRU group scale the tonnes up via tive on most things,
spokesperson said. the logistics train.” Trench had concerns for
the future of Australia’s
“At the current time we believe the risks to Falling fuel and acid copper story.
our price forecast are trending to the down- prices were also in cop-
side, although an improvement in Chinese per’s favour, as well He said while there
demand could quickly change this.” as weakening labour was real potential in
markets, according to South Australia – specif-
Independent mining and metals profession- Trench, who called for ically at Olympic Dam,
al Allan Trench told Paydirt he was still bullish tempered reactions to Oz Minerals Ltd’s Cara-
on copper’s fundamentals and believed there rumours China was in- pateena and Prominent
was still plenty of money to be made by min- creasing its copper pro- Hill projects and Rex
ers and explorers. duction in a bid to be- Minerals Ltd’s Hillside
come self-sufficient. project – any efforts to
The CRU Group associate consultant said rival Latin America’s
copper would hold firm for the next couple of He said while there major producers ap-
years before hitting its straps in 2018 upon the was potential in its Yun- Allan Trench peared futile.
emergence of a supply deficit of “several hun- nan province, China was
dred thousand tonnes”. a way off achieving copper independence. “Of the top 10 largest
copper producing na-
Trench said while copper hadn’t gone “There are some low-grade porphyries in tions in the world we are right down the bot-
“gangbusters” of late, it was still one of the the east, but there is a quality issue there,” tom,” he said.
market’s best performers. he said. “We are in positions 8-10 in terms of our up-
side. The real opportunities globally are still in
“It’s in a little bit of a sweet spot in the fact “I think they’d be fairly happy importing Chile or Peru.”
that there’s been struggles for many years to copper concentrate and they have plenty of
bring through the next generation of copper smelting capacity. They are about 30-40% – Rhys Dickinson
projects and even when they come through … self-sufficient – there’s quite a big deficit in
it’s not as if you are building big railway lines terms of the concentrate required … so even
or ports and various things that once you’ve
got them you can throw loads of tonnes down
the logistics chain,” Trench said.

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 67

COPPER

Coventry’s quick hit in Alaska

An exploration target of 5-10mt @ 2.5-4% copper has been set at Caribou Dome

With the ink barely dry on the Caribou pected that the investment community would es NL] DeGrussa but our grades are probably
Dome copper project transaction, Cov- be excited by the prospects at Caribou Dome a little bit higher in copper. We don’t have the
entry Resources Inc was penning an aggres- as the company looked to raise some cash for size proven to that level yet, but very quickly
sive exploration programme in Alaska last exploration. I think we can demonstrate that we have that
month. size of deposit.”
“It is virtually an unheard of story to this
In the March quarter, Coventry completed a point,” Haynes said. The company is looking to spend about
deal which allows it to acquire 80% of Caribou $US600,000 on exploration this year, most of
Dome, 250km north-east of the Alaskan capi- “It is a new acquisition for the company, it is which will be on diamond drilling of known and
tal, Anchorage, in the US. going to be an exciting time as we have a lot new targets.
of work commencing in late May, starting with
After divesting its Canadian gold projects geophysics, then drilling, resource definition By acquiring unlisted Australian company
to Chalice Gold Mines Ltd in 2014, Coventry’s and then probably into mining studies. There Aldevco Pty Ltd, Coventry can earn its 80%
focus switched to copper in the heartland of is going to be a huge amount of news flow in interest in the project by meeting obligations
base and precious metals projects in Alaska. the next six to nine months and very quickly to keep the project in good standing and mak-
I think we can demonstrate that we have an ing a series of payments to Hatcher Resourc-
Kinross Gold Corp’s 4 moz @ 0.44 g/t gold economically viable deposit.” es Inc.
mine, Sumitomo Metal Mining Co Ltd’s 5 moz
@ 12.5 g/t gold mine and the historic 4.6mt @ Discovered in 1963, there has been only 17 “I think the acquisition positions the compa-
13% Kennecott copper mine are some of the holes drilled at the project since 1970, with the ny extremely well for a very rapid share price
major plays within striking distance of Caribou last round of them (nine) completed in 2011, appreciation. We haven’t stolen it but the ac-
Dome. while in 2008 average grades of 6.7% cop- quisition terms are extremely reasonable and
per from a 225kg bulk sample were reported, that is one of the reasons why we are involved
A review of historic data suggests Coven- which included metallurgical recoveries of in it,” Haynes said.
try may also be sitting on a plum at Caribou 91.7%.
Dome, with multiple high priority targets iden- “This is very high grade, a lot of investors
tified over about 15km of strike. Detailed modern day work has been lim- haven’t seen grades like these – up to 8-9% –
ited, however, there is no end to expectations in copper deposits.”
So far, two targets have prevailed as stand- at Caribou Dome, and Haynes is confident it
outs; Lens 2 which is 200m long, up to 15m has sky-high potential. Coventry has over 21,000 acres of pro-
wide and coincides with a 350m-long IP spective ground in the Caribou Dome project
anomaly and, a 400m-long soil with assays “If we can be the next Kennecott, which got area and adding to its immediate concerns is
up to 0.63% copper and coincident IP anoma- taken out by Rio Tinto [Ltd], that wouldn’t be not a priority.
ly at Caribou South. a bad model to compare to. The Kennecott
mine had 4.6mt @ 13% copper. We are in the “There are some assets further to the east
Both targets have been untested by drill- same geology, same age rocks and the same but in due course we will probably have dis-
ing while additional drilling is required to de- style of mineralisation. We think there are cussions with the owners. At present, if we
termine strike and depth extensions of nine a huge number of similarities and if we can can prove there is mineralisation 15km from
known mineralised lenses which include, be half as successful as them that would be one end to the other, then we’re going to have
18.1m @ 9.34% copper, 18.4m @ 6.25% cop- great,” Haynes said. our hands full with the potential of a self-sus-
per, 15.4m @ 7% copper and 13.1m @ 7.2% taining mining operation,” Haynes said.
copper. “A somewhat analogous deposit in Austral-
ia at present is probably Sandfire’s [Resourc- – Mark Andrews
Coventry chief executive Mike Haynes ex-

PAGE 68 JUNE 2015 AUSTRALIA’S PAYDIRT

Metal Bank sees red in Nevada

Backed by a world-class team, Metal Bank
Ltd now believes it has a world-class pro-
ject to pursue.

Chaired by former chief executive of Ivan-

hoe Australia and managing director of Cita-

del Resource Group Ltd, Inés Scotland, and

with the expertise of executive directors Tony

Shreck and Guy Robertson, Metal Bank is

well equipped to have an impact on the cop-

per scene.

The team will hone its attention on the Ma-

son Valley copper project in Nevada after it

recently secured a JV agreement with Mason

Valley Copper Properties Ltd and its parent

company, GRG International Corp.

Metal Bank will farm into the project by sole

funding $US1 million exploration expenditure,

including an initial payment of $US250,000, to

the end of March 2016.

After committing its initial obligations, Syd-

ney-based Metal Bank may proceed to form a

JV which will trigger further rights to earn up

to 80% in the project over six years, subject

to spending $US14 million and completion of Metal Bank director Tony Schreck stands atop the Mason Valley copper project in Nevada, USA

a BFS.

Additional payments, subject to share- Shreck said in early May. cal underground mines – Mason Valley (1.7mt

holder approval, of $US9.5 million in cash and A first phase drilling programme is being @ 2.5-7% copper), Bluestone (1.5mt @ 1.5-

shares is also a consideration. planned to start at Mason Valley this month, 3.5%) and Malachite (0.6mt @ 3.5-6.2%) – to

“What attracted us to the project is that it is upon completion of airborne magnetics, geo- depths of 150m.

central to a world-class copper district – 13mt logical mapping and IP geophysics to iden- Originally, the company was keen to pri-

of copper production and resources,” Shreck tify and confirm historical IP targets yet to be oritise Bluestone, however, Mason Valley has

told Paydirt. tested. prevailed as the number one target in a region
“Within the project there are a number of With RC and diamond drilling campaigns bustling with activity.

[historical] high-grade copper mines and we planned for 2015, Metal Bank hopes to be “There are a number of mines being de-

are targeting extensions of known mineralisa- heading towards a resource drill out in the veloped in the local area and there is a lot of

tion. The JV was completed in February and near future. government and community support. We’re

with not much snow around we were able “It is a bit ambitious to think we could have definitely looking at other opportunities and

to do some mapping and channel sampling a resource by the end of the year but hopeful- are in discussions. With a lot of mining activ-

which showed 40m @ 2.68% copper, with ly we’ll have some strong indications that we ity going on we’ll have a number of options to

the copper associated with breccia-style min- can move into resource drilling,” Shreck said. consider, including toll treating opportunities

eralisation. Out of the geological mapping Mason Valley comprises three main histori- and mining ourselves,” Shreck said.

came the idea that previ- When it comes to assess-

ously everyone thought the ing production scenarios,

old mine was faulted off at Metal Bank can confidently

depth, however, it is actually proceed with detailed plan-

tilted to the side and likely to ning knowing that it is pre-

continue at depth. This is an sent in one of the hottest

enormous breakthrough for mining jurisdictions in the

the project.” world.

New ideas and good on- The latest Fraser Insti-

the-ground geological map- tute survey ranked Nevada

ping and sampling provided as the third most attractive

Metal Bank with a refreshed jurisdiction in the world for

outlook on Mason Valley, mining investment.

however, Shreck made it “Nevada is one of the top

clear the work to do was places in the world to ex-

ahead of the company. plore, which is part of the

“We’re not getting ahead reason the board identified

of ourselves,” he said. “Drill- Nevada – we’re in to low risk

ing is planned, the channel countries with potential high

sampling is a good test but returns,” Shreck said.

we’re excited to be drilling – Mark Andrews
in the next four weeks and

that will be the ultimate test.

Based on the data we have,

there are some nice back The Yerington district is flush with copper mines. Nick Tate, consultant geologist

of the envelope numbers,” to Metal Bank, is excited by the style of mineralisation he is presented with

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 69

COPPER

New prospects excite Stavely

Copper hopeful Stavely Minerals Ltd has Stavely has entered into a JV with Minotaur at the Ararat project
uncovered two new prospects at its Ararat
project in western Victoria. and it hoped to complete a geochemical sam- gional exploration and in the early explora-
pling survey on the new tenure this quarter. tion there was very little gold work done, so
Stavely was “head down, bum up” in the it’s worth noting there are opportunities for a
field during the first quarter, according to man- “Diatreme approached us knowing we were Lake Cowal or Gidginbung gold-style system
aging director Chris Cairns, and the team ap- active in the area because they had a change to occur within that belt and we expect the
pears to have been rewarded for their efforts of management and a change of focus and porphyries and gold deposits to go hand-in-
with gold and base metals discoveries at the this asset had become non-core to their ef- hand.”
White Lead and Carroll’s prospects. forts,” Cairns said.
Cairns said his team would continue with
Soil geochemistry at the Carroll’s base “The first stages of exploration were done “back-to-basics” exploration as part of the
metals prospect defined a 1.5km long by very much in accordance with what we would company’s grander plans to define the min-
500m wide anomaly which remains open to do in that they completed quite a lot of grav- eralised zones and improve the existing re-
the north and south and appears larger in “or- ity in the northern portion of that tenure and it sources at Stavely (inferred 28mt @ 0.4%
ders of magnitude” than the soil anomaly as- looks like there is a portion of the Stavely belt copper) and Ararat (inferred 1.2mt @ 2% cop-
sociated with the Mt Ararat copper-gold-zinc offset into that position, so we have a good per, 0.5 g/t gold, 0.4% zinc and 6 g/t silver).
deposit. foundation to move on with.”
Funding could be an issue for the compa-
Perhaps the most pleasing return from re- Stavely has also entered into a JV with a ny – Stavely reported a cash position of just
cent exploration at Carroll’s was a rock-chip subsidiary of Minotaur Exploration Ltd over $950,000 at the end of the March quarter –
sample of 24% copper, 1.1% zinc and 0.52 g/t tenements EL5403 and EL5450 in the Ara- but Cairns was confident a restructure of the
gold from a copper-mineralised float. share subscription agreement with Titeline
rat project area. The company Drilling Pty Ltd would see his team through
“This was a float sample which definitely must spend a minimum of the planned work programmes.
had malachite staining so we knew it was $44,000 in the first year before
copper mineralised, but to date nobody had it can withdraw from the agree- “At some point in time we’ll have to come
followed anything up,” Cairns told Paydirt. ment if it chooses to do so. back to the market and seek some funds, but
I would hope we’re doing so on the strength of
“It may not be representative of mineralisa- The company must spend some very strong results and some compel-
tion at depth, but having said that it’s an awe- $100,000 on exploration and ling opportunities,” he said.
some sign to find that sort of material just lying related costs within the first
around at surface so we’re quite excited.” three years to earn 51% equity Cairns also declared he was as bullish as
in the tenements and another ever about the base and precious metals mar-
Soil geochemistry at White Lead defined $100,000 within five years to kets, particularly in jurisdictions where the
a 1.2km “Stawell-style” anomaly, while rock- earn 75% equity. Australian dollar is devalued.
chip sampling returned gold anomalous re-
sults of up to 5.57 g/t gold. Stavely’s decision to pursue “We’ve seen the goldies start to get some
the Minotaur ground adjacent recognition for the lower Aussie dollar gold
A similar “Stawell-style” gold anomaly over to the Ararat project came as price and I think it’s true to date that investors
800m was discovered at the Cathcart Hill Chris Cairns a result of the extensive VMS- have yet to extrapolate that to base metals,”
prospect in late April. style mineralisation proving to Cairns said.
be much wider than initially thought.
Cairns said his company’s recent explora- “I think it’s fair to say that exploration of “When you look at it on an annual basis, it’s
tion success was indicative of the relatively the Stavely belt, other than sporadic explora- the highest it’s been for 12 months and I think
untouched ground which Stavely acquired tion from the early 1970s to the early 1990s, historically it’s shown we’re not at a bad price.”
two years ago. was very much focused on the known depos-
its, being Thursday’s Gossan, Junction and – Michael Washbourne
“I think the opportunities that are coming Wickliff,” Cairns said.
through are genuine and it’s a reflection of the “There’s been very little in the way of re-
relative immaturity of opportunities for explo-
ration in Victoria where a very
basic type of exploration pro-
gramme can create wonders,”
Cairns said.

“If these were in Western
Australia they would have been
very heavily explored and whilst
WA is easier to move around in
terms of landholders and so on,
I think if you put in the effort to
communicate and liaise with the
community in Victoria you can
get land access for low impact
activities – and the rewards are
definitely worth that little bit of
extra effort.”

The company may have been
quiet on the market front while out in the field
during the first quarter, but it was quietly work-
ing away on two tenement acquisitions at the
Ararat and Stavely projects.

Stavely agreed to pay $5,000 plus expendi-
ture commitments to Diatreme Resources Ltd
for tenement EL5478, which adjoins ground
forming the company’s namesake project,

PAGE 70 JUNE 2015 AUSTRALIA’S PAYDIRT

Avanco breaks mould at Antas

Some might see it as ambitious; others, near over the stage one asset. Brazilian banks Antas is located in the Brazilian state of Pará
impossible. But Avanco Resources Ltd ex- have taken heavy loses of late, on big com-
ecutive director Simon Mottram says the com- pany failures. Some of those defaults are with ian project, Pedra Branca.
pany’s decision to pursue equity financing to the very banks we were talking to. We had “There’s always going to be debt because
fully fund its Antas copper project in Brazil is other offers, but the timing was not going to
the right one. work for us, and the terms were far different.” we already have the second mine (Stage Two)
in the pipeline; and it is a much larger under-
Avanco aims to raise close to $64 million Mottram said once Avanco ruled out fi- ground mine” Mottram said.
by the way of a placement of approximately nancing Antas via bank debt, it returned to its
$19.9 million through the issue of 249.25 mil- shareholders to seek their advice. “If you load up Stage One with expensive
lion ordinary shares at 8c/share. debt in the formative years of becoming a pro-
It was at that point two of the company’s ducer you’ve then got to survive the conse-
The placement will be issued under Avan- major shareholders pitched the ambitious quences. The method we have proposed gets
co’s 15% placement capacity to a new private plan of funding Antas outright. Stage One into production, wholly-owned and
equity fund, Greenstone Resources LP, which debt free. Then we can use debt at Stage
is managed by BlackRock Inc and the Appian Mottram said Avanco had undertakings Two with far greater leverage, which is sure
Natural Resources fund. from its three cornerstone investors to take to produce better terms for the company and
up their full entitlements and a “substantial its shareholders, as we will have 100% equity
In addition to the placement, Avanco has commitment” from all to take up any under- in Stage One.”
engaged Bell Potter Securities Ltd to act as subscriptions.
lead manager to a non-renounceable enti- In Brazil, Avanco has been ramping up
tlements issue to exisiting shareholders on Although the plan would result in significant work at Antas in preparation for construction,
a two-for-seven basis at 8c to raise approxi- share dilution, the company believed it would which it hopes will get under way early next
mately $44.2 million. benefit from the play in the long run, particu- year.
larly given its commitment to a second Brazil-
Should the placement and entitlements is- With the project’s front end engineering
sue be successful, Avanco hopes BlackRock Infill drilling is under way at Pedra Branca completed, access arrangements finalised
will make good on a $15.6 million royalty and a 10km mine road upgraded, Avanco has
transaction negotiated in October 2013. started the installation of temporary offices,
drainage controls and prepared ground for
Mottram said although it would have been the flotation area.
ideal to secure debt from a bank, a number of
factors steered Avanco down a different path. At the time of print, the company was ex-
pecting the delivery of its crushing circuit as
In a statement accompanying the financing assembly of key plant equipment was in pro-
proposition, managing director Mark Polglase gress.
said: “Management’s opinion is that while
the Brazilian banks remain supportive and Avanco is simultaneously working on Pedra
tried hard to close the syndication, this was Branca, a much larger copper project 50km
against a backdrop of an increasingly tough south west of Antas.
microeconomic climate and significant expo-
sure to existing construction and mining debt. A drilling team is currently on the ground
This appeared to be weighing heavy on the completing a 4,000m infill programme with an
potential syndicating groups such that closure aim to upgrade half of Pedra Brancas’ inferred
within Avanco’s timeframe was considered by resource to the indicated category.
the company as uncertain.”
Mottram said the completion of the infill
Mottram added: “The preferred option for campaign would coincide with the finalisation
us was Brazilian bank debt, as it’s structured of a scoping study for Pedra Branca, which
a little more simply and requires security only would hopefully lead straight to a PFS.

He said Avanco was committed to reach a
decision to mine at Pedra Branca by year’s
end.

– Rhys Dickinson

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 71

COPPER

Encounter seeks major discovery

Forecast deficits in the copper and zinc sup- A major discovery at Encounter’s Yeneena project could make the
ply markets in the coming years has En- Paterson Province a hot address for exploration
counter Resources Ltd frothing at the oppor-
tunity of making a breakthrough base metals “We think we’ve got a bit of a competitive with some pretty high expectations that we
discovery. advantage in this part of the world on how to can do better than last year. We’re hoping to
find the next Nifty out of the work we’ve done,” do a bit better than last year and if we’re doing
Encounter’s Yeneena project in Western Robinson said. a bit better we may well hit an orebody.”
Australia’s Paterson Province boasts two ex-
citing copper and zinc prospects discovered “We’ll test that theory in the early part of Encounter has taken comfort from the find-
over the last two years and the company is this year’s drilling and hopefully we’ll be able ings of a geological review by the University of
desperately seeking to convert at least one of to prove it’s a pretty important piece of work Tasmania’s Professor Ross Large on Millen-
those opportunities into something economic. because the alteration vectors we’ve estab- nium, with his study confirming the potential
lished so far could be pretty important else- for a large sedex zinc system.
Zinc is widely touted as the commodity of where.”
2015 due to the impending closure of the Cen- The company has also entered into a JV
tury mine and similar base metals operations Previous exploration of the copper mineral- and earn-in agreement with Hampton Hill
around the world, while forecasters are also ised system at Yeneena that stretches 14km Mining NL that will ensure exploration pro-
tipping a potential copper deficit as early as grammes on the zinc prospect remain funded
2017. has returned other promis- for some time to come.
ing hits of 10m @ 6.8% cop-
That puts Yeneena, situated nicely be- per from 32m, 16m @ 3.2% Hampton has committed to spend $500,000
tween established mines at Nifty and Telfer, copper from 26m, 50m @ on exploration to earn a 10% interest of Mil-
in a strong position to cater to both markets 1.1% copper from 12m and lennium and can earn 25% interest by funding
if Encounter’s 2015 exploration programme 5m @ 2.5% copper from $2 million of the next $3 million of exploration
strikes a major find. 388m. expenditure.

Encounter managing director Will Robinson Plenty of attention will Antofagasta will continue to fund the cop-
said his company could expect to win a new also be devoted to the near- per exploration.
group of friends on the back of a potential ma- by Millennium zinc prospect,
jor discovery at either one of its copper or zinc about 35km north-east of Robinson hoped a major discovery by his
prospects. the BM1-BM7 copper dis- company would entice other explorers to
coveries, to follow up on the Paterson Province and make the region
“Obviously macro factors haven’t helped the impressive last drill hole a “pretty hot mining address” in the years to
us in the last little bit, but it seems to me the from 2014 which intersected come.
zinc market looks poised for a pretty good pe- 7m @ 5% zinc.
riod ahead and I don’t think there’s very many Will Robinson The drill rig currently in “The next phase for us is really to prove up
zinc opportunities globally that have large operation at BM7 will be an economic pot of mineralisation inside one
tonnage, high-grade potential that we think moved to Millennium once the copper explo- of these two large systems and I think if we do
our Millennium prospect has,” Robinson told ration programme is completed. that we’ll be able to open up all the other pros-
Paydirt. “The zinc stuff took a big step forward last pects that we’ve identified up there,” he said.
year to step out 3km away and provide evi-
“Likewise on the copper. I think if I had to dence the system is large and can produce “We think this is the sort of place where
choose two commodities to be at this point in high grade on both sections we’ve drilled so there could be a belt of new discoveries over
time I would choose zinc and copper, so that’s far,” Robinson said. the next five or so years.”
pretty fortunate. “We’re going into this year’s drill programme
– Michael Washbourne
“Hopefully the general market continues
to improve like it has over the last month or
two and if we get some
early success I think we can
see ourselves in a different
league pretty quickly.”

A diamond drilling cam-
paign started at the BM7
copper prospect last month
to test a strong geochemical
and structural vector identi-
fied north-east of the final
hole drilled in last year’s pro-
gramme.

That hole intersected an
encouraging 140m @ 0.2%
copper, including 1.3m @
3.2% copper from 250.4m,
and displayed some strong
correlations to the Nifty ore-
body, such as the potential to form part of a
halo to a copper sulphide system.

A total of 11 diamond holes have been
drilled at BM7 since Chilean copper major An-
tofagasta plc entered into an agreement with
Encounter to earn a 51% interest in two tene-
ments at Yeneena by spending $US20 million
over five years.

PAGE 72 JUNE 2015 AUSTRALIA’S PAYDIRT

No dampener at Horseshoe Lights

Horseshoe Metals Ltd is expected to com- Neil Marston cated the potential for a low-cost tailings and
plete a 5,000m RC drilling programme at stockpile retreatment project at Horseshoe
its Horseshoe Lights copper-gold project in An early entry into production ranks is also Lights.
Western Australia’s Gascoyne region by the being assessed by the company.
end of the month. Inferred resources from the M15 stockpile
Testwork programmes on tailings have indi- include 243,000t @ 1.1% copper, 0.17 g/t gold
The campaign will target areas around ex- and 4.7 g/t silver for 2,650t copper, 1,300oz
isting open pit resources and new areas in or- gold and 36,700oz silver, while estimated
der to improve geological confidence. resources of flotation tailings are 1.42mt @
0.48% copper, 0.34 g/t gold and 6.5 g/t sil-
In what has been a difficult time accessing ver for 6,800t copper, 15,300oz gold and
funding, a drilling-for-scrip agreement struck 294,800oz silver.
with Whitestone Minerals Ltd in 2014 enables
Horseshoe to complete its designated cam- Results from preliminary gravity separation
paign. tests on five composite samples from flotation
and CIP tailings were expected soon.
“We’ve issued the shares already and we
can get a fair bit of drilling done without put- “A decision to mine could be executed very
ting our hands too deep into our pockets,” quickly. Equipment can also be fabricated
Horseshoe managing director Neil Marston quickly and if we have some success with
told Paydirt. the test work we will move forward. This time
next year would be ideal [to start production]
The agreement with Whitestone is worth but there are a lot of hurdles to overcome,”
about $235,000 which will be used for infill Marston said.
drilling to investigate the potential for addi-
tional tonnes and grade outside the pit shell. To widen its horizons for production possi-
bilities, Horseshoe recently acquired a mining
Additional resources and better grades will lease adjacent to its flagship copper-gold pro-
bode well for a restart to production at Horse- ject, near Meekatharra.
shoe Lights after a positive scoping study was
completed in December last year. The company believes there is potential for
the ground to host mineralisa-
The scoping study was based tion similar to its VMS Horse-
on an indicated and inferred re- shoe Lights project.
source of 12.85mt @ 1% cop- Marston said while the com-
per and 0.1 g/t gold for 128,600t pany would consider other
copper and 36,000oz gold. opportunities which became
available, exploiting its es-
“We have a much better tablished pipeline of projects,
handle on the block model including Kumarina, was a pri-
and we’re doing some step out ority.
or infill drilling to increase ton- Kumarina, north of Sand-
nages which we hope will bring fire Resources NL’s DeGrussa
us closer to a production sce- mine, is subject to field work
nario,” Marston said. upon analysis of aeromagnetic
data to be completed in the
“There has been no drilling June quarter.
in other target areas as yet, so “We haven’t gone to sleep at
we want to see what’s there with Kumarina, we are just doing a
deeper drilling because fresh different tier of work there than
discoveries get rewarded. We at Horseshoe Lights,” Marston
will probably have a drill rig out said.
there for two or three months.” “It’s all about monetising
our assets; which is our goal.
Pending success, Horse- Some people are doing that by
shoe may well continue and is selling them but if you can do
planning to have 100 holes ap- it with assets at your fingertips
proved for drilling. While it does that’s great and we’re going to
not expect to drill each one, try and run our assets as hard
having targets approved will en- as we can.”
able the company to fast-track
further campaigns and capital- – Mark Andrews
ise on positive results.
Drilling at Horseshoe Lights started in May. Rain earlier this year
At this stage, Marston said, delayed the start of a 5,000m RC drilling programme
there was no trigger to restart
open pit operations at Horse-
shoe Lights however with cost
inputs expected to flat line for
the next couple of years pro-
duction in the near future is a
consideration.

Copper prices above $7,750/t
(about $8,000/t at the time of
print) would definitely encour-
age the company to pursue pro-
duction more aggressively.

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 73

REGIONAL ROUNDUP AFRICA

Regal welcome for Ivanhoe

Regal Resources Ltd has teamed with Can-
ada’s Ivanhoe Mines Ltd in a bid to prove
up more of the prospective ground which sur-

rounds its Kalongwe copper project in the

DRC.

The ASX-listed company has entered into a

binding conditional agreement with the Rob-

ert Friedland-led Ivanhoe to acquire up to

98% interest in five exploration permits near

the western end of the Katanga copperbelt

which are known to be contiguous with Ka-

longwe.

Regal will initially pay Ivanhoe $US100,000

for access to the permitted ground, cover-

ing about 400sq km, followed by a subse-

quent and non-refundable signing fee of

$US150,000 within 12 months.

The company will earn 80% interest in the

tenements by spending $US3 million on ex-

ploration within the first three years and then

90% interest by spending another $US3 mil- A scoping study at Kalongwe outlined the potential for a 1.03 mtpa copper
lion within a subsequent two-year period. An HMS operation estimated to cost $US38.9 million
option exists to acquire the remaining 8% at

an agreed price. knowledge of the Katanga geology and ter- transport costs included) and total sales rev-

Ivanhoe can claw back up to 30% of the rain is also high on the company’s agenda. enue of $US397.3 million.

permit areas within one year of the second “Our priority is to go to the high-level tar- “Based on the scoping study results, we

earn-in phase of the agreement or upon the gets where there’s been economic drill inter- would have just about the lowest C1 cash

release of a resource estimate of more than sections which are contiguous or along strike costs of all [copper] producers listed on the

500,000t of contained copper in the meas- from Kalongwe to see if we can build up a ASX and we will have the lowest capital inten-

ured and indicated category. In doing so, the much larger resource base that would possi- sity,” Young said.

TSX-listed company will be required to fork bly then justify developing a larger project at “It’s a pretty simple, tried and tested meth-

out four times the total exploration expendi- Kalongwe,” Young said. od, using a HMS processing plant similar to

ture incurred by Regal to that point. “Hopefully we’ll make a significant discov- the one that Tiger Resources [Ltd] uses at the

Regal managing director David Young said ery that has the potential to be developed into Kipoi project [also in the DRC] so we know

his company had been in discussions with mining operations and then Ivanhoe are there it works, our geology is very amenable to a

Ivanhoe over the ground for some time and and have an option to claw back in and help HMS plant and the mineralogy is very suitable

he believed the deal would be beneficial for jointly fund that development if they want to.” for upgrading through the HMS plant.”

both parties. Kalongwe has emerged as a project of Regal has started preparing a BFS for re-

“It’s kind of a dream land package and it’s great interest to the copper market following lease in the fourth quarter and it would take

particularly difficult in the DRC copperbelt to the release of a robust scoping study just one into consideration other possible develop-

acquire a reasonable and procured ground day prior to the announcement of the Ivanhoe ment options, including processing through

holding because it’s such a patchwork of per- deal. a SXEW plant for production of copper cath-

mits,” Young told Paydirt. The scoping study found the project could odes.

“Many of the permits are held by local support a 1.03 mtpa operation, processed via Young said his company was well funded

Congolese [groups] and they can be quite a heavy media separation (HMS) plant, for an for the next phases of work, including the BFS

small permits so to be able to build up a large initial capital cost of $US38.9 million and pay- and exploration on the Ivanhoe JV, following

ground holding means that you need to be back within 13 months of first production. a successful share placement of $6.3 million

in discussions with quite a number of permit Other key economics from the study were (in two tranches) with London-based private

holders. Fortunately, this worked out really a NPV of $US77.9 million, an IRR of 81%, op- equity group Tembo Capital Mining Fund LP

well and most importantly we believe it is re- erating costs of $US1.01/lb ($US1.38/lb with earlier this year.

ally excellent ground. The managing director also has a very

“Ivanhoe has done first-pass explora- bullish view on copper based on forecast

tion work over a good part of the area strong demand for the red metal, partic-

and the work carried out was done by ularly out of China, in the coming years.

the same geological team that discov- “I’ve seen presentations by Glencore

ered the Kamoa deposit – the largest, and others who are quite bullish towards

high-grade undeveloped copper project copper, particularly as some people

in the world – and it’s right on the door- have overestimated the supply of copper

step of these permit areas.” on to the market,” Young said.

Young said his company was plan- “It looks as though the demand for

ning a detailed exploration programme copper will actually outstrip the actual

to follow up on a number of drill-ready availability of copper to come into the

targets, including a recent diamond hit market and all of that should lead us to

of 5m @ 4.9% copper. having a pretty firm copper price as we

Retaining the services of several move towards developing this mine.”

geologists who have worked on the – Michael Washbourne
Ivanhoe ground and have strong local A BFS from Kalongwe is expected for release in the fourth quarter

PAGE 74 JUNE 2015 AUSTRALIA’S PAYDIRT

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REGIONAL ROUNDUP

Cardinal mans the field

The bustling gold exploration scene in Gha- Cardinal is one of the few junior gold explorers currently active in Ghana
na has petered out, however, one ASX jun-
ior – Cardinal Resources Ltd – has remained told Paydirt during a recent visit to Perth. “We are the only exploration company that
defiant during these austere times. “SRK has been incredibly helpful in get- is seriously drilling for new gold discoveries in
Ghana,” Koimtsidis said.
Cardinal has drilled more than 50 holes at ting our story out into the mainstream invest-
the Namdini project – upper east region of ment community and we now believe we have “With any luck the market will be more re-
Ghana – with high-grade RC results includ- caught the tail of something. Whether it is a ceptive to what we are doing and see the po-
ing; 51m @ 3.58 g/t gold from 85m; 43m @ tiger or an elephant, we don’t know yet but it tential for more upside. We believe the region
2.27 g/t from 87m; 42m @ 2.35 g/t from 61m is something significant. Our future focus is to has significant ounces; it is under developed
and 41m @ 2.7 g/t from 98m. further explore along strike and with that we and under explored. Now that we have put
should have significantly more news flow as our foot on mineralisation, we simply need to
Encouraged by such results returned from we continue to search for more mineralisa- grow it and exploit its potential.”
the 150m mineralised zone, Cardinal recently tion.”
moved to acquire an additional 1,900m of Positive cyanide leach results from 15 2kg
strike north of the Namdini mining licence With shallow, high-grade mineralisation re- RC drill samples taken from the oxide, tran-
where 6,000m RC drilling – 32 holes at 50m vealed during the early stages of exploration, sitional and fresh material mineralised zones
by 50m spacing – have been planned to de- Koimtsidis said the challenge was to grow this returned recoveries of 99% gold (oxide), 95%
termine extensions to the current mineralisa- mineralisation between now and Christmas. (transitional zone) and 84% (fresh samples).
tion.
While the market may sit up and take notice Further encouraging results from Namdini,
Furthermore, 12 diamond holes for about of Cardinal’s drilling results as they appear, which is comprised of the Ndongo prospect-
2,000m will be drilled to verify the RC cam- there is no doubt the explorer is a favourite in ing license and Kungongo and Bongo recon-
paign. Ghana at the moment. naissance licenses, will no doubt help draw
attention to the company and its other assets.
For all its activity in an otherwise dormant
West African exploration sector, Cardinal is Next to Namdini, the Bolgatanga gold pro-
yet to receive any credit for its work, however ject has attracted some initial interest.
managing director Archie Koimtsidis remains
unperturbed by the situation. “There have been various parties approach
Cardinal expressing an interest in our land
“We are definitely not seeing market appre- package. Our landholding is considerable as
ciation reflected through Cardinal share price we have over 100 line-km of interpretive geo-
purchases,” Koimtsidis said. physical structures. The Bolgatanga region is
the only place left in Ghana which is under
“It could be that, overall, investors are think- explored. We identified the opportunity early,
ing of gold as a lower priority which directly hence why we pegged the ground ourselves,”
affects junior gold explorers. However, on Koimtsidis said.
our latest investor roadshow there were very
positive comments and encouraging feed- In addition to Bolgatanga and Namdini in
back from both analysts and brokering firms, Ghana’s north, Cardinal is represented in the
especially now that we have drilled out Nam- country’s south at the Subranum gold project
dini and have secured more ground along the where ground IP surveys are to be considered
mineralised trend.” for further target refinement.

Having access to two of its own drill rigs – Mark Andrews
gives Cardinal the advantage of drilling quick-
ly and at a discounted rate to contract pricing, Archie Koimtsidis
allowing it to conduct its planned extensional
drilling programme over the next three to six
months. The purpose of the programme is to
get a greater understanding of the geological
setting and gold mineralisation in what is a
known gold mining jurisdiction.

It is too early for Cardinal to be consider-
ing production scenarios, with the emphasis
largely on drilling to build its confidence in
the ground, but Koimtsidis pointed out that
just 6km from Namdini the Chinese-owned
Shaanxi gold mine is operational and sup-
ported by established infrastructure.

SRK Consulting has validated much of Car-
dinal’s work, providing impetus for the com-
pany to continue with its strategy.

SRK’s review in March, in preparation for a
resource estimate, was based on geological
structural mapping and a review of geological
logging procedures and sampling quality.

Its summation was that Namdini and ad-
jacent areas contain potential for a shallow
open pit resource over a 250m-wide zone
along 2km of strike.

“Our story has grown and the sentiment
towards us has greatly improved,” Koimtsidis

PAGE 76 JUNE 2015 AUSTRALIA’S PAYDIRT

AFRICA

Lindi Jumbo gathers pace

Walkabout Resources Ltd has confirmed “I think they have run a only need to identify about
high grade graphite results from its Lin-
di Jumbo project in south east Tanzania last very good campaign, both 10mt at the optimum grade
month.
in marketing and techni- and quality,” he said.
Assay results from 26 samples confirmed
total graphitic carbon (TGC) grades of up to cally,” Mulligan said. “We are only going to be
44% at or near surface, which have encour-
aged the company to move speedily towards “We would look to fol- mining about 250,000 tpa, so
a production scenario.
low what they have done it is a very small footprint that
“We have to move quickly as this particu-
lar model works for graphite in this particular as close as possible. The is required even though we
area and we have to lock in an end user as
soon as possible. We don’t want to be going to advantage for us is that we have a very large area which
the free market in 3-4 years,” Walkabout man-
aging director Allan Mulligan told Paydirt. can fast track our work. We gives us flexibility.”

In what is fast becoming a cluttered graph- know where they had to do At the time of print, final
ite exploration sector, Walkabout is differenti-
ating itself in the ‘jumbo flake size’ category, a lot of exploration; we can metallurgy and flake size re-
where prices are estimated to fetch up to
$US4,000/t in 2020. run faster with that and met sults were still pending as

Walkabout is in the advantageous position test. We expect to be able Walkabout was preparing a
of having neighbours in Tanzania – Magnis
Resources Ltd – to use as a role model. to do that in a short amount programme of works at Lindi

Magnis has advanced its Nahcu graphite of time.” Jumbo.
project to BFS stage and courted Chinese
outfit SINOMA as a partner to provide $US150 While there may be Equipment for an EM sur-
million in debt to cover EPC and finance for
the project, while taking its market cap to $74 synergies for Magnis and vey was on site, which was
million and share price to 24c.
Walkabout to explore in planned to run in parallel with

time, the latter’s priority is Walkabout managing director Allan a 1,000m drilling (RC and dia-
demonstrating the viabil- Mulligan with a sample from the mond) campaign.
ity of a 250,000 tpa mining company’s Lindi Jumbo graphite
operation, likely to attract a project in Tanzania Work at Lindi Jumbo –
capex in the vicinity of $55 which Walkabout has signed
a MoU for the staged pur-

million. chase of 70% of four pros-

Mulligan said it was possible to start build- pecting licences covering 325sq km – was

ing the Lindi Jumbo project in 2017. scheduled to start in June/July.

“We are aiming for a very fast resource – Mark Andrews
definition and the reason why we can do that

quickly is because it is not about volume. We

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 77

REGIONAL ROUNDUP

IMX heats up graphite race

IMX Resources Ltd is quickly closing the gap impact assessment for the project.
on its graphite rivals in Tanzania. IMX has also signed a MoU with respected

IMX ticked off a number of key milestones international commodities trader China-Base

on its Nachingwea property during April, in- Ningbo Foreign Trade Co Ltd for the supply of

cluding a maiden resource estimate for the 25,000 tpa of graphite for five years.

Chilalo graphite project and signing a MoU “One of the great things about the MoU we

for the sale of 25,000 tpa of the carbon-based signed is it’s with a party that we had a pre-ex-

product. isting trading relationship with,” Hoskins said.

The first stage of permitting for Chilalo has “We sold 10 shipments of iron ore for ap-

been completed while initial metallurgical proximately $US87 million during 2013/14

testwork and a high-level engineering study so we know they are an excellent customer

has also confirmed the project’s development and they have now developed relationships

potential. with graphite end-users. They’ve expressed a

IMX has made remarkable progress on its strong interest in financing the project as well.

graphite interests in Tanzania over the past Chilalo boasts one of the highest grade graphite “I think the market has come a long way in
10 months, having previously been focused resources in Tanzania its understanding of graphite. Twelve months
on nickel exploration in the country and iron ago companies were being rewarded for rock

ore production in South Australia. measured at greater than 180 microns. chip samples or graphite intersections, but

The Perth-based company has now “We’re stressing this is only initial testwork now people are becoming more educated and

launched a PFS on the back of its latest suc- at the moment and is subject to further optimi- understanding of things like flake size, purity

cess at Chilalo and is eyeing a small-scale sation,” Hoskins said. of concentrate and, ultimately, the importance

graphite operation in Tanzania in the not too “It’s already world class, high purity and of establishing a reliable and credible market

distant future. very coarse flake size, but we expect to see to sell into.”

IMX chief executive Phil Hoskins said his vast improvements in flake size distribution.” In a further piece of good news for IMX

company’s late arrival on the graphite scene No economics were released with the en- in late April, the Tanzanian Fair Competition

meant his team could learn from the mistakes gineering study, compiled by consultancy Commission approved the company’s JV with

made by others in similar jurisdictions. firm BatteryLimits Pty Ltd, due to the inferred Mauritius-based private equity fund Fig Tree

“We were able to learn from other compa- nature of the resource, but Hoskins said his Resources Fund II over the Ntaka Hill nickel

nies’ programmes so when it came to drilling company had no hesitation in pushing ahead rights.

last year we made sure we drilled enough with a PFS. IMX received the retention licence for Ntaka

core to guarantee we could put out a resource Tanzania’s National Environment Manage- Hill earlier that month followed by a $US2 mil-

estimate, complete our metallurgical testwork ment Council recently signed off on the first lion cash injection as the upfront considera-

and have enough sample for our customers,” stage of permitting for Chilalo and the compa- tion for the JV. Fig Tree will now begin a $US1

Hoskins told Paydirt. ny has since engaged a specialist consultant million geotechnical studies programme, from
“Another reason we’ve been able to move to help prepare an environmental and social which IMX stands to gain another $US4 mil-

quickly is we had the benefit of 10 lion upon successful completion.

years of nickel exploration on the prop- The company also raised $1.57 mil-

erty, so that gave us a head start over lion via an oversubscribed placement

the others, with our extensive geo- to boost its cash reserves and fast-

physical and geochemical datasets al- track development of Chilalo.

lowed us to rapidly refine the explora- Hoskins praised the “highly commit-

tion search space. ted” team at IMX for the strong position

“We also learnt that size wasn’t nec- the company now finds itself in.

essarily a driver of company valuation “The end of the last financial year

and so our strategy with the explora- was a very challenging period as Cairn

tion programme was to only ever drill Hill was put into administration and we

to 100m depth, firstly to conserve our were forced to dispose of the Mt Woods

funding but secondly to find a quality, tenements to pay off some of the debts

mineable resource that could underpin that came out of that,” Hoskins said.

the rapid development of a graphite “I’ve been both pleased and sur-

mine.” prised at how quickly things have

A maiden resource of 7.4mt @ turned around and it’s through the

10.7% TGC for 792,000t of contained hard work of the individuals we’ve got

graphite for the Shimba deposit now involved here that we find ourselves in

places the Chilalo project among the the position we are now.

highest grade graphite resources in “We’ve had to complete a couple of

Tanzania. capital raisings at prices that historical-

Promising initial metallurgical test- ly we wouldn’t have been proud of, but

work, including concentrate grades as with many juniors it is about survival

averaging 95.9% total carbon, has through a challenging period in an even

also helped confirm the strong devel- more challenging market, but we have

opment potential of the project. come out the other side now fully fund-

A high proportion of the mineralisa- ed with an excellent project in Chilalo.”

tion is classified as large or jumbo flake – Michael Washbourne
size, including 53% of the fresh mate-

rial and 47% of the transition material.

More than 50% of the mineralisation is IMX has moved quickly to start a PFS on its Chilalo graphite project

PAGE 78 JUNE 2015 AUSTRALIA’S PAYDIRT

AFRICA

Money comes for
Ferrum’s Moonlight

Ferrum Crescent Ltd has defied senti- and a feasibility financing solution in
ment in the iron ore space and re-
ceived indicative financial support for its place, Ferrum is inching closer to its tar-
Moonlight iron project in South Africa’s
Limpopo province. get of hitting cash flow around 2019.

However, as Ferrum managing director Of course, the company will have to
Tom Revy pointed out, trends in the iron
ore market should not be seen as a major build the 6 mtpa project first, at an ex-
factor in the company’s ambitions.
pected cost of about $US1.5 billion.
“People associate us with the iron ore
industry however we’re more aligned with Just how receptive the Australian mar-
the steel industry,” Revy told Paydirt.
ket is to such projects will be known later
Ferrum endeavours to produce a high-
grade concentrate for pellet manufactur- this year when Ferrum hits the road show
ing which will be used for production of
direct reduction and blast furnace grade circuit in July/August.
iron pellets to be sold locally and interna-
tionally. Investors may be impressed with Fer-

“Overall we have been looking for part- rum’s work done to date, including an off-
ners since October, but with this particular
group we have been talking since November. take agreement for 4.5 mtpa and the first
We found that it was better for us to go direct
[to the parties] rather through an intermedi- right of refusal for the remaining 1.5 mtpa
ary. I don’t think some of the intermediaries
were fully understanding of our story, so we with Swiss-based Duferco.
basically did it ourselves. We worked hard in
South Africa and the Middle East and found a While Ferrum has ticked some neces-
good BEE partner,” Revy said.
sary boxes, Revy is mindful of the upside
It appears BEE-controlled Principle Mon-
archy Investments Pty Ltd (PMI) understands Tom Revy at Moonlight and is keen to display it.
Ferrum’s concept at Moonlight and has come
forward with a $US12 million BFS financing “We’re looking to do a programme
agreement.
signed off on late next year. through the Julietta area [near the Moonlight
Ferrum and PMI entered a MoU in May
which will see the latter acquire 39% of the In the meantime, the next stages of BFS deposit] and we’d like to put some holes in
Moonlight project through the subscription of
Ferrum Iron Ore Pty Ltd shares. work will include a domestic steel market sup- there, without taking the focus away from the

PMI’s $US12 million or R142 million invest- ply survey, large scale pit designing, sampling feasibility study. We’d like to put an explora-
ment will be made in three tranches, with key
milestones to trigger capital injections, while work to determine need for bulk sampling and tion target on the whole property to give peo-
interim funding of R2 million per month will be
provided until the first tranche of R30 million definitive metallurgical testing for processing ple an idea of the magnitude of the project,”
is paid.
purposes. he said.
The first of the R2 million payments is ex-
pected to be made on or by June 1 whereby Infrastructure is commonly a key concern Moonlight, Julietta and Gouda Fontein are
the MoU will become legally binding and PMI
obligated to make its first tranche commitment for bulk commodity projects however Moon- the main areas of focus for Ferrum, with work
of R30 million by December 1.
light is blessed by the national N11 highway done by previous owner, Iscor, indicating the
Failure to make payments upon deadline
will see PMI owe R6 million in damages. passing through it and the Medupi power sta- deposits could be easily mined to produce a

“I think that the market has been surprised tion being about 100km away. concentrate grading 68.7% iron.
[by the deal]. It was done on a valuation of
Ferrum of $33 million which is many multiples Additionally, Ferrum plans to transport its – Mark Andrews
above our current market cap,” Revy said. concentrate to a pellet manufacturing facil-

“PMI understand our project, what it means ity near or to the town of Thabazimbi, about
for South Africa and the potential returns that
can be made. The deal was done in rand, 200km away.
most of the money will be coming in rand and
95% will be spent in rand.” With infrastructure options at its disposal

Completion of the Moonlight DFS is subject Ferrum’s Juliette prospect is likely to garner attention as the company widens its scope at Moonlight
to the timing of PMI making its financial com-
mitments, with Revy hopeful the study can be

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 79

REGIONAL ROUNDUP

High times for Highfield in Spain

Potash developer Highfield Re-
sources Ltd may have just raised
$101 million to build its Muga mine in

Spain, but is yet to determine which

one of its five projects is the com-

pany’s best.

“The Muga project is fantastic but

the Vipasca project could be our

best one,” Highfield managing direc-

tor Anthony Hall told Paydirt from
Pamplona.

“We have another four projects

and we are debating which one is

better; Sierra del Perdón or Vipasca.

We are going to start doing work on

Vipasca just to make sure we un-

derstand the pros and cons of that

against Sierra del Pardón. Internally

we have the view that Vipasca may

be our best project.” Highfield expects to be elevated into the ASX300 or even the ASX200 after raising
With a scoping study completed $US100 million to build its Muga potash project in Spain

at Sierra del Pardón in April, it is

slightly more advanced than Vipasca where de-risked the project which was a significant in recent times, Muga will provide timely em-

Highfield is looking to fast-track directly into a step regarding the approvals process. ployment opportunities for Spanish locals,

DFS upon completion of resource delineation “It means that any politician backing us and with the 18-month construction period ex-

and metallurgical test work. saying we want this thing to happen as quickly pected to generate 1,000 jobs, while 500 peo-

Demonstrating the viability of Vipasca will as possible, can do it with the knowledge that ple will be required full time to run operations.

be a boon for the company, considering all the as soon as we get the licence we can start Another 900 indirect jobs will be created.

pieces are just about in place for Highfield’s construction,” Hall said. Highfield currently has 35 people running

transition from potash explorer to producer at “There is no risk for the mining department its office in Pamplona, and will look to bring

Muga. or political parties to take in backing us and some directors on at board level as it antici-

Last month, a share placement of 56.125 as soon as we start construction we can start pates elevation into the ASX300 or ASX200

million shares at $1.80/share netted Highfield to stimulate the economies in the provinces of demonstrating its standing in the resources

$101 million, the bulk of which will fund the eq- Aragón and Navarra.” sector.

uity component of the pre-production capital The DFS released in March highlighted ini- Highfield’s success so far, particularly its

expenditure at Muga, northern Spain. tial mine life at Muga was 24 years, with pro- recent fund raising coup, is sure to draw at-

European commercial banks have provided duction of 1.1 mtpa of granular K60 MOP from tention to the fertiliser space. Whether or not

financing term sheets indicating a 65% debt- underground mining. other potash players can ride on the coattails

to-equity ratio can be expected to finance the There is substantial upside expected with remains to be seen.

project, which will include capital expenditure, ongoing exploration likely to expand the lon- That is hardly a problem for Highfield to

VAT facility, working capital and a potential gevity of operations. worry about, as it looks for financial and per-

overrun facility. Considering the struggles of the economy mitting closure at Muga in the near future.

Proceeds from the placement “I think we will have some

beefed Highfield’s cash balance positivity stem from the ap-

to $120 million and with the com- provals process. We’ve had

pany carrying no debt, the Euro- indications from the provinces

pean banks are confident there is that they are looking to and I

capacity to fund the total $US354 have heard they want to term

million capex (pre-production the projects as ‘projects of re-

$US256 million) at Muga. gional significance’. Fingers

“We have said to the market crossed, I think that it will be

that we want to be in construction very significant,” Hall said.

in Q4 this year and it will take 20 “This is certainly not an ex-

months from construction for us to ercise in dressing something

start seeing initial revenue. Putting up and hoping that someone

$100 million in the bank in what is will buy it. This is an exercise in

a very difficult resources market getting ourselves in a position

is a wonderful result. It really con- to construct a mine and raising

firms that there are lots of people the money we did is unbeliev-

out there who think we have got a ably significant and demon-

standout potash project,” Hall said. strates to the Government that

Start of construction at Muga we are ready.”

hinges on the necessary environ- – Mark Andrews
mental and mining approvals being

granted. Highfield director Derek Carter (right), with Jesús Cía, director of Josenea, a

Hall said securing financing charitable organisation dedicated to the ecological cultivation of crops.

from the recent placement further Carter is planting the first tree at the OrganiK project

PAGE 80 JUNE 2015 AUSTRALIA’S PAYDIRT

EUROPE

Lithium takes Cinovec
to new level

Both good timing and good man- The process design for Ci-
agement had a part to play in
the evolving story of European Met- novec’s tin and tungsten was
als Holdings Ltd’s Cinovec story,
according to managing director pieced together by GR Engineer-
Keith Coughlan.
ing Services Ltd, which indicated
Originally purchased as a tin-
tungsten project in 2013, European a near $US72 million, 2 mtpa plant
Metals did an about face at the
Czech Republic asset late last year achieving 80% tin and 53% tung-
as tin prices started to head south
and interest in lithium soared. sten recoveries could produce up

Coughlan told Paydirt the eco- to 4,200 tpa tin and 800 tpa tung-
nomic shift prompted the company
to “re-work the numbers” at Ci- sten.
novec to investigate its true lithium
potential following some success- “That part of the project looks
ful tests on its ore conducted by
fellow Perth-based junior Cobre great and more than covers the
Montana NL.
cost of mining and milling the ma-
Those tests produced concen-
trate exceeding 6% lithium carbonate equiva- terial allowing effectively a nega-
lent (LCE), which later encouraged Cobre
Montana to enter into a heads of agreement tive cost feed to the lithium plant,”
JV with European Metals to process Ci-
novec’s lithium component. he said.

“It’ll probably prove up to be the larg- “We’d just like to see the tin
est hard rock lithium deposit in the world,”
Coughlan said. price a little higher. All the indica-

“We are at 5.5mt (inferred) of LCE as we sit tions are by the time it becomes a
right now. There’s a further exploration target
of an additional 3.4-5.3mt. So far we have a major issue for us hopefully it will
100% conversion rate from target to inferred
and inferred to indicated, so we see no reason Quartz and zinnwaldite from Cinovec be back near the $US20,000/t
for all of this to not come in. It’s already the mark.
third or fourth biggest hard rock lithium de-
posit in the world. If the entire study, and produce up to 19,400 tpa lithium Tungsten is also considered to be a critical
exploration target comes in it
will be more than 10mt LCE” concentrate. raw material by the European Union. Selling

European Metals recently “It not only looks like being one of the larg- the tungsten won’t be an issue.”
completed a scoping study on
Cinovec based on an indicat- est hard rock lithium deposits in the world, it The study suggested a mechanised long
ed resource of 7mt @ 0.21%
lithium, 0.23% tin and 0.03% looks like being one of the lowest cost produc- hole open stoping mining method in which
tungsten and an inferred re-
source of 72.7mt @ 0.21% ers of lithium carbonate too,” Coughlan said. haulage could proceed via an existing central
lithium, 0.23% tin and 0.03 %
tungsten. “No matter how excited we want to get shaft. This combined with historic exploration

The study estimates Euro- about lithium and where it is going, if you are drives keeps capital costs down and reduces
pean Metals can achieve a
competitive operating cost of not a bottom quartile producer it’s going to be project lead time.
less than $2,000/t LCE.
hard to compete with the brine miners of the Coughlan said European Metals’ next step
Operating costs are based
on feeding a 2 mtpa plant with world. We have a fair way to go, but it’s an to advancing Cinovec would be a 5,000m drill-
tailings from a separate tin-
tungsten plant using Cobre exciting space to be in.” ing campaign aimed at bolstering a percent-
Montana’s propriety atmos-
pheric leach process, exclud- Coughlan also said it would be remiss of age of the project’s inferred resource into the
ing tin and tungsten credits.
the market to overlook both Cinovec’s tin- indicated category.
The lithium processing
plant could cost as much as tungsten credits and credentials. It was also eyeing starts to the project’s
$164 million, according to the
permitting and environmental

impact study.

“We could drill the whole

orebody, but from a bang

for your buck point of view

it’s probably not worthwhile,”

Coughlan said.

“We are mapping it now

and already some of the pro-

posed holes have just been

too difficult with the terrain …

and we are not going to cut

expensive drill roads for a

few holes at this point of time.

We are still a junior company;

we still have to preserve our

cash and use it as wisely as

possible.”

– Rhys Dickinson

Cinovec is just 100km north-west of Prague and on Germany’s border

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 81

REGIONAL ROUNDUP

Drilling delivers at Caninde

Last month Paradigm Met- 06 produced a hit of 2.04m @
als Ltd managing director 3.04% graphite from 14.92m,
Anthony Reilly made it clear to
Paydirt the company’s future in including 1.02m @ 4.06%
Brazil hinged on the assay re-
sults from a maiden eight-hole graphite.
diamond drilling campaign at
the Caninde graphite project. Hole-07 intersected miner-
alisation throughout the core to
Historic trenching results of
up to 25m @ 13.29% graph- the end of the hole at 20.2m.
ite and a first hole intersect of
13.69m @ 18.38% graphite at Reilly said the assays gave
Caninde’s Pedra Preta pros-
pect had Reilly confident of the Paradigm hope Pedra Preta
project’s success, but he was
weary of making an early call could be a company making
before Paradigm received the
latest update on its January deposit.
drilling programme.
“The company is extremely
But now the results are in
and Paradigm has a reason to encouraged by these initial
smile.
drilling results, which confirm
The remaining downhole ex-
tension of Hole-01, which produced the com- the presence of shallow, high
pany’s initial eye catching intersect, was min-
eralised throughout the entirety of its length grade graphite layers and wide
and featured multiple wide zones associated
with disseminated graphite hosted on a biotite zones associated with dissemi-
leucogneiss host rock.
nated graphite,” the managing
Standout assays included 9.63m @ 1.03%
graphite from 18.02m, including 5.23m @ director said.
1.44% graphite from 20.35m, 2.07m @ 4.06%
graphite, 13.65m @ 0.58% graphite from “The mineralisation is open
37.15m, including 6.05m @ 0.64% graphite
from 40.25m, 3.03m @ 1.53% graphite from at depth and along strike with
63.4m, including 1.5m @ 2.48% graphite from
63.4m and 4.5m @ 0.62% from 71.01m. Stratabound massive coarse graphite-rich beds at Caninde potential for geophysics and

Hole-02 also intersected high grade miner- further drilling to define a com-
alisation near surface associated with a mas-
sive graphite layer and several other miner- alised intervals associated with disseminated mercial scale resource.”

graphite zones. Reilly said Paradigm recently completed

The hole’s best results included a 6.5m @ petrophysics on core samples from the drill-

5.8% graphite hit from surface, which includ- ing programme and was currently planning a

ed 2.98m @ 9.73% graphite, 24.1m @ 1.76% ground geophysics survey at Pedra Preta.

graphite from 15.5m, including 7.5m @ 3% The survey would help in defining exten-

graphite from 15.5m, 5.34m @ 2.94% graph- sions to the graphite mineralisation inter-

ite from 41m and 10.03m @ 1.28% graph- sected in drilling, drill pad excavations and in

ite from 64.34m, including 4.38m @ 2.14% trenches.

graphite from 68m. Based on the success of the drilling pro-

Hole-03 and Hole-04 encountered graph- gramme, Paradigm decided to undertake fur-

ite mineralisation, but as expected weren’t ther detailed mapping and sampling to identify

deep enough to adequately test their intended new targets within the Caninde project area,

targets. which was in progress at the time of print.

Hole-05 returned a best intersect of 11m @
1.72% graphite from 14.05m, including 4.07m

@ 2.89% graphite from 18.05m, while Hole-

Mineros eyes more gold outside Colombia

Colombia’s biggest gold miner, Mineros to 200,000 troy ounces and is hopeful explo- these industries would ease the problem.
S.A., is seeking to expand by buying ration in Nicaragua will prove later this year The company has handed back a number
smaller miners elsewhere in Latin America that Hemco could double its output within 3-4
amid a dearth of big mineral discoveries and years. of exploration concessions it had been grant-
growing resistance to extractive industries at ed in Colombia which proved too small and
home, its outgoing chief executive said. “If things go well, Hemco could be a has no plans for any exploration at home this
150,000 ozpa gold producer,” Uribe said. year.
Mineros, the only miner listed on Colom-
bia’s stock exchange, has been looking at Mineros will invest around $US8 million to Colombia’s government approved a meas-
projects in Peru, Brazil and Mexico after buy- study a promising area near the existing mine. ure to speed up delivery of operating permits,
ing Nicaragua’s 75,000 ozpa gold producer a top industry plea.
Hemco in 2013 for $US95 million, but it has In Colombia, protests and blockades
not found a take-over target yet. against mining and oil projects have become Most of Colombia’s estimated 57 tpa output
a major problem since a 2011 law cut direct is extracted by artisanal and illegal miners.
“Our strategy is to search for projects in royalty payments to towns and villages host- Uribe estimated only 15-20% was produced
other countries in Latin America that are al- ing them, instead distributing the cash to all by licensed companies. Armed criminal
ready producing or have reached feasibility parts of the country. groups including leftist rebels are heavily in-
study stage. It’s not easy,” Beatriz Uribe, who volved in illegal gold mining in which fatal ac-
is leaving after 39 years, told Reuters in an “It has become difficult to advance even cidents frequently occur.
interview in May. with exploration projects (in Colombia) be-
cause of communities. This has led us to seek – Peter Murphy, Reuters
The company expects to raise gold output opportunities in other countries,” Uribe said,
from existing projects by around 5% in 2015 who like many mining sector leaders says im-
proving incentives for communities to receive

PAGE 82 JUNE 2015 AUSTRALIA’S PAYDIRT

LATIN AMERICA

Miners stay on the job in Peru

Mine workers in Peru want the Government to impose tighter restrictions on companies firing staff

Peru’s production of copper and gold was Copper output from Peru’s four top produc- Workers at the Peruvian unit of Shougang
largely unaffected by a national strike on ers, Antamina, Southern Copper, Cerro Verde Group Co Ltd downed tools to back the na-
May 18 as unionised workers declined to down and Antapaccay, was normal, union bosses at tional strike.
tools for fear of losing their jobs and compa- the mines said. The mines together produced
nies used replacements. about a 1mt of the red metal last year, or more The company and the union disagreed over
than three quarters of Peru’s total copper out- the impact of the labor action. Managing di-
Walk-outs at some mines, however, might put. rector Raul Vera said production continued at
have curbed silver, tin and iron output, ac- 100% while union boss Julio Ortiz said it had
cording to unions in Peru, the world’s third Likewise, production at Peru’s top gold de- stopped.
biggest copper, silver, zinc and tin producer posits, Yanacocha and Misquichilca, which
and the seventh-ranked gold producer. together churned out 1.6moz of gold last year, Tin output from Minsur likely slipped as
continued unaffected, union leaders said. unionised workers went on strike, union boss
The strike, organised by the National Min- Marco Sarca said. Minsur did not respond to
ing Federation that represents about 20,000 But silver output from Uchucchacua was requests for comment. The mine produced
workers, aimed to press the Government to partially hurt by a strike that began earlier in 23,100t of tin last year.
tighten restrictions on firings and the use of May, Carlos Galvez, the chief financial officer
contract workers. of operator Buenaventura said. The union and management at Peru’s sec-
ond biggest zinc and first biggest lead miner,
But plans for an ambitious stoppage across Galvez declined to specify by how much. Milpo, did not answer requests for comment.
Peru were upended after the Government de- The head of the Uchucchacua union said 50%
clared the strike unfounded and companies of the mine’s total workforce remained active. – Mitra Taj and Marco Aquino, Reuters
threatened to dismiss strikers or ordered con-
tract workers to fill in, federation head Ricardo Operations were normal at other lead-
Juarez said. ing silver producers, including Volcan and
Antamina, union leaders there said..

Ecuador’s firm stance on mining tax

In May, Ecuador’s President Rafael Correa grammes in the poor OPEC nation. I have to give away the country’s natural re-
said he was not planning any additional over- “The changes have been made already, we sources, go look for another country.”
haul of the Andean country’s mining law, likely
disappointing investors who have been push- have a lot of interest,” Correa said during a While a handful of foreign mining compa-
ing for lower taxes. briefing with foreign correspondents. nies have ventured into Ecuador in the past
decade, investment has been minimal.
The Government has pushed through a “If to render mining investment attractive
number of reforms since 2009, but foreign The country’s reputation took a hit in 2013,
gold, silver and copper mining companies say when large Canadian-based producer Kin-
heavy taxation works against Ecuador’s aim ross Gold Corp pulled out of the largest gold
of attracting $US5 billion worth of mining in- project, Fruta del Norte, saying the Govern-
vestment over the next five years. ment refused to compromise on a 70% tax.

The left-wing Correa frames the tax debate – Alexandra Valencia, Reuters
as an issue of Ecuadorian sovereignty and
says the funds are used to bolster social pro-

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 83

REGIONAL ROUNDUP

Multi-faceted Sigatoka
pleases Dome

The Sigatoka iron sands project has capacity to generate multiple products, making the iron ore price much less of a worry for Dome

Mineral sands and magnetite projects are the-envelope job. I think it can go ahead in from a market point of view,” McCarthy said.
probably way down the investment peck- any environment but we are seeing even good “We’re looking at spending about $5 mil-
ing order right now, however, in Sigatoka, projects finding it seriously difficult to get any
Dome Gold Mines Ltd believes it has a project momentum.” lion on both projects [Ono Island and Na-
capable of standing the test of time. drau], with first phase IP surveys for both and
With a PFS in hand, Dome has managed magnetometer surveys. We expect they will
A PFS completed on the Sigatoka iron to lock away a small raising of $210,000 from deliver targets we can drill and we’re looking
sands project, Fiji, earlier this year, indicated professional and sophisticated investors to to move as fast as we can because that’s the
a 351,000 tpa magnetite sand @ 58% iron, keep momentum up at Sigatoka. aim of the game, we’ve got to keep generating
260,000 tpa non magnetic heavy mineral con- projects.”
centrate, 1.96 mtpa industrial and 684,000 Sigatoka is the most advanced project in its
tpa gravel project was viable. Fijian portfolio and will attract a large amount The Naqara prospect on Ono Island and
of the company’s spend however it is also Namoli and Wainivau prospects at Nadrau
Mineral sands and iron ore markets have keen to learn more about its other projects. are the opportunities for Dome to beef up its
seen better days, however, the current state pipeline of projects in Fiji, while tightening up
of play has done little to deter Dome chief ex- McCarthy said its prospective gold-silver the Sigatoka PFS through a higher level study
ecutive Jack McCarthy from progressing Si- Ono Island and Nadrau copper-gold porphyry is also a priority.
gatoka as quick as possible. projects also deserved some attention this
year. McCarthy said the company would like to
“It is quite an economically robust study, progress the DFS this year but was unable to
with multiple products to be produced from a “We hope to see all three programmes pro- provide certainty as to when a study would be
dredging operation,” McCarthy told Paydirt. ceed this year and I think we are closer to the completed.
resumption to somewhat of a normal invest-
“There is a lot more work to be done to ment market. I don’t think China will fall off the Despite low commodity prices for iron ore
crystallise the PFS but the level of detail in the cliff, the US economy is looking at growing and mineral sands, McCarthy said favourable
PFS was good and definitely not a back-of- and in England the election outcome is good input costs would be major factors in Dome
improving upon PFS numbers at Sigatoka,
In addition to Sigatoka, Dome has the prospective Ono Island gold-silver and which includes an NPV of $US236.9 million,
Nadrau copper-gold porphyry projects in Fiji IRR of 55% and a capex, Dome is comfort-
able of paying back in under two years, of
$US83.2 million.

“We’d like it [DFS] to be done sooner rather
than later, but we are making progress. We
raised some cash not long ago which is a
positive and we are not even worried about
the viability of the company,” McCarthy said.

“The cost of some of the equipment would
have reduced from the time we did the PFS
last year and the cost of personnel would have
also come down slightly. We’re looking at all
efficiencies, the oil price is half what it was
this time last year, so from an energy perspec-
tive that is beneficial. The impact on costs of
doing things; engineering, cost of plant and
equipment and availability of professional
people are also in our favour,” McCarthy said.

– Mark Andrews

PAGE 84 JUNE 2015 AUSTRALIA’S PAYDIRT

ASIA

Red metal moves Matsa

It might have entered Thailand with a dream of
imitating one of the region’s best miners, but
Matsa Resources Ltd is forging its own com-

pelling story.

Executive director Paul Poli told Paydirt
that Matsa ventured to Thailand in 2009 with a

goal to replicate Kingsgate Consolidated Ltd’s

successful Chatree gold project.

“Our view was that Chatree was a fantastic

gold mine, it was a world class operation and

there was an abundant amount of gold there

as well as a very low operating cost environ-

ment,” Poli said.

“With a view of emulating their success,

we did a small deal with a local geologist to

acquire a gold-in-soil anomaly and our view

then was if we had a presence in Thailand we

should make it worth our while and increase

our footprint. We got our own team together

and we started prospecting.”

With much of Central Thailand’s west

snapped up by Kingsgate, Matsa looked

south, where it pegged roughly 800sq km for

magnetite anomalies, and then east, where

the company secured 700sq km for copper.

“We went out there and because no one The Siam copper project site
else was sniffing around we got the pick of the

land,” Poli said. per stream sediment anomalies, the largest more extensive exploration on the project,

“We got what we believed to be extraordi- being Siam 1 at 25sq km. specifically drilling.

narily high quality copper prospective ground.” Preliminary investigations at Siam 1 led to Further mapping of the Siam 1 prospect

Poli said Matsa was “completely enam- assays exceeding 1% copper in rocks com- defined three specific areas of future works:

oured” with its land in the east, which boasted prising epidote prehnite altered andesite in an Siam 1 East, Siam 1 West and Siam 1 North,

surface rocks exhibiting native, primary cop- area of extensive soil cover and later Matsa each approximately 1sq km in size.

per. discovered surface boulders containing na- Poli said Siam 1 West, which contained vis-

“It was the gold that brought us to Thailand, tive copper with up to 3.9% copper. ible native copper and malachite mineralisa-

but when we were prospecting we were doing At Siam 2, the project’s second best pros- tion, and Siam 1 East, had the hallmarks of

so for a mine,” the managing director said. pect, Matsa identified float containing visible underlying copper sulphide mineralisation

“As it so happens, there are still issues secondary copper minerals with up to 1.2% and would likely be the subject of Matsa’s

with getting gold licences in Thailand. I think copper within a stream sediment copper maiden drilling campaign.

there is still government resistance. There anomaly approximately 16sq km. “That’s as good a walk up target as you’ll

was a moratorium for gold licences for a fair On April 8 Matsa realised an almost six ever get,” he said.

while and although that has now been lifted year dream when it was granted 37 special “We need to do some IP to determine the

they haven’t really sorted out their gold policy. prospecting licences covering an area of size of a potential structure and then pepper

When we came across copper we were de- 570sq km at Siam, which allowed it to start it with diamond holes. We could potentially

lighted, because it gave us diver- be diamond drilling it within 3-4

sity – diversity of products and weeks.”

diversity of geopolitical risks. We Native copper at surface

liked the idea of being in Aus- aside, Poli said Siam had all the

tralia and Thailand. So when we traits of a cracking project.

saw that we had these potential “The site is serviced by sealed

copper plays we went to work roads and we’ve got grid power

hard on it.” within 1km of the potential areas

Favourable permitting con- we are interested in,” he said.

ditions allowed Matsa to start “We are probably only 50km

work immediately on the ground, to the east of Chatree and the

which is located on a region- land is relatively low value farm-

ally extensive stream sediment ing country. There is a relatively

anomaly identified by the Thai high unemployment rate … so

Department of Mineral Resourc- the local community would re-

es survey in 2006. ally welcome an operation of our

The project area is 300km type. We would create substan-

north of Bangkok and consists of tial jobs in an area that’s got lim-

49 special prospect licence ap- ited employment opportunities

plications. for locals.”

Matsa completed 1,114 soil – Rhys Dickinson
and stream sediment samples

and identified four coherent cop- Matsa executive chairman Paul Poli, right, with the Siam exploration team

AUSTRALIA’S PAYDIRT JUNE 2015 PAGE 85