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January - March 2019 Volume 1. Issue 134
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GOLD MINING JOURNAL (ISSN 1324-4396) NEWS 16
Published by Paydirt Media Pty Ltd.
A.C.N. 063 985 133 While Rio Tinto is keeping hush on its Paterson province discovery, AIM-

EDITORIAL listed Greatland Gold is happy to report its success nearby. A hit of 275m
Editor:
@ 4.77 g/t gold and 0.61% copper – equivalent to 275m @ 5.75 g/t – was
Dominic Piper
the latest result to spark interest in its Havieron project. Mark Andrews
Deputy editor: spoke with Greatland’s chief executive Gervaise Heddle and technical
Mark Andrews
director Callum Baxter about the company’s plans
Journalist:
Michael Washbourne COVER 20

Art director: In the history of GMJ’s Miner and Explorer of the Year awards, never have
Nick Brown
there been such decisive victors as Saracen and Bellevue were in 2018.
Contributors:
Keith Goode, GMJ sat down with industry experts to find out why both Saracen and
Brendan Ryan (Johannesburg)
Bellevue were standouts in their field last year
A dv erti s i n g
Advertising manager: AFRICA 50

Richa Fuller West Africa’s gold sector is humming along nicely. A number of Australian
companies are knee-deep in exploration, development and production
Subscriptions: across the continent, with West African Resources the latest to pull the
Mitchelle Matambo trigger on construction of its Sanbrado project in Burkina Faso

Pay dirt M edia Cover image: GMJ’s 2018 award winners: Bellevue Gold’s Steve Parsons
Executive chairman: and Saracen Minerals’ Raleigh Finlayson
Bill Repard
CONTACT US
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Co n f ere n ce s
Melita Fogarty

Namukale Nakazwe-Msiska
Christine Oelschlaeger

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EDITOR’S LETTER

Miners fly
as explorers toil

If it wasn’t already clear enough, formulating the shortlist for our annual GMJ
awards offered a stark assessment of the current difference between gold miners
and gold explorers in Australia.

In compiling the Miner of the Year finalists, there was a wealth of companies to choose
from, each with strongly performing assets, falling cash costs and rising share prices.
Companies such as Evolution Mining Ltd (up 33.61% year-on-year), Kirkland Lake
Gold Inc (up 59%) and OceanaGold Corp (24.84%) barely got a mention during the
panel discussion despite posting record production during the year.

Instead, the standouts were eventual winner Saracen Mineral Holdings Ltd (76%), St
Barbara Ltd (33% and 3,700% over the last three years) and Northern Star Resources
Ltd (40%).

While it was a difficult process of elimination to separate the miners, the most challenging aspect in defining a shortlist for
the Explorer of the Year category was finding juniors who qualified.

Winner Bellevue Gold Ltd was an obvious candidate, having doubled its share price this year and put on more than 1,400%
over the last two years but after that the options dry up.

The awards are not based purely on market performance but it is the best comparative tool you can use in picking
outperformers. The problem in 2018 was that investors have greeted every exciting exploration result with little more than a
shrug of the shoulders. As panellist (and junior exploration company executive) Allan Kelly said during our discussion, there
were some strong exploration results posted in 2018 but the companies couldn’t find any love from the market.

This has led to the absence of momentum, a vital component for any explorer. The traditional explorer model of drilling-
results-share appreciation-capital raising is temporarily broken. If the share price doesn’t go up after a few good holes or
a good programme, companies have no way of following up. Instead, they have to batten down the hatches and show
shareholders they are conserving cash.

Further complicating the problems for explorers looking to grow is the disasters which have struck single-asset gold
companies in the last 18 months. Gold companies are always liable to fall over but the recent spate of failures can be
traced back to market sentiment. Most of these companies raise the absolute minimum of project finance (debt and equity)
needed to get into production. When things go wrong – as they inevitably do on new projects – and they are in need of a
cash injection, the share price is already sliding and investors are unwilling to put their hand in their pockets again.

If those explorers and struggling single-mine juniors are looking for inspiration, they need only turn to Northern Star.

Six years ago, GMJ held a similar panel discussion for the awards. During that discussion, PCF Capital managing director
Liam Twigger made the following observation about the company and its only operating asset, the Paulsens mine.

“Northern Star have done a great job with their acquisition, optimising it, making further discoveries along strike or down
dip, the market has given them a premium for that and now the market is saying ‘well what are you going to do now?’
Northern Star… is a worthy finalist but not necessarily in the same league as Regis [Resources Ltd], Resolute and Silver
Lake [Resources Ltd].

All the best (words) Mark A

Finally, a hearty congratulations to GMJ and Paydirt deputy editor Mark Andrews who received
the Association of Mining and Exploration Companies (AMEC) Print Media Award in December
for his story A downstream flood: Can Australia build a battery industry? in the April 2018 edition
of Paydirt. The award is due recognition for the quality, diligence and integrity of Mark’s writing
and commitment to covering the industry.

[email protected] @DominicPiper /dominicpiper /PaydirtMediaAustralia

Page 4

NEWS

Cashed up and ready to go,
but where and with who?

by Mark Andrews

Consolidation of gold companies in 2018 never really There were mixed outcomes for Australian gold
eventuated to the levels many anticipated. companies entering the M&A melting pot in 2018

The surprise packet on a global scale was, of course, Barrick The examples of Gascoyne and Kin did not detract Capricorn
Gold Corp and Randgold Resources Ltd agreeing to tie the Metals Ltd’s largest shareholder – Hawke’s Point – from
knot with the union of New Barrick Group to become official blocking a move from Regis Resources Ltd for the company,
on January 1. despite many believing such a deal was a essentially a “no-
brainer”.
Despite the size of the New Barrick engagement, the biggest
ever done in the gold space, the deal was completed rather “I do think here in Australia, the bid by Regis for Capricorn
seamlessly, an indication of how keen shareholders were makes perfect sense because I think the challenges of
to see some value instead of the share price retraction getting a mine up as a single asset entity is always going
experienced by Barrick and Randgold over more than two to be difficult,” Noah’s Rule principal and managing director
years. Sean Russo told GMJ in 2018.

Comparatively, albeit on a much smaller scale, Australian Australian dollar gold prices ($1,672/oz in late 2018) are
gold companies are finding synergies. Silver Lake Resources affording domestic companies access to debt from banks
Ltd and Doray Minerals Ltd are in the throes of merging, and various other lenders to build projects and execute
while the formation of Bardoc Gold Ltd – a combination of growth strategies, but the strength of the precious metal also
Spitfire Minerals and Excelsior Gold – proceeded without means conjecture over true worth of companies and assets.
any fuss.
“The current gold price and exchange rates seem to drive
However, not everyone found common ground. companies’ values straight away which is not really reflective

At the time of print, Ramelius Resources Ltd’s attempt to
acquire West Australian Wheatbelt gold explorer Explaurum
Ltd appeared dashed, with the former deciding against
following through with an improved offer.

Ramelius’ pitch was primarily for Explaurum’s 7.2mt @ 2.09
g/t for 485,000oz Tampia deposit, 140km from Ramelius’
Edna May operation.

Explaurum was staunch in advising shareholders to take no
action and it appeared Ramelius would walk away when the
bid lapsed on December 21.

For some, the idea of treating ore from Tampia through
ready-to-go infrastructure at Edna May made perfect sense,
particularly given the snags hit by wannabe producers in
Australia in recent times.

Kin Mining NL curtailed construction of its Leonora gold
project in May due to uncertainty on the costs to complete
the project and the likelihood that DFS outcomes wouldn’t
be met.

Meanwhile, commissioning of Gascoyne Resources Ltd’s
Dalgaranga project has been stymied by underperforming
grades, temporary plant setbacks and slower than expected
ramp-up, demonstrating the challenges of bringing new
projects on-line.

Page 5

NEWS

PwC national mining leader Chris Dodd Dodd said all the signs were that gold players were “cashed up
and looking”.

“I think the likelihood of M&A is a lot higher, I think there are
more transactions in the market but not a truck-load more. I
think one of the observations from the small companies that
graduated out of mid-tier group 50 this time round is that three
of those four acquired unwanted deposits at a point in time and
made a truck-load out of it,” he said.

“Scooping up some of those unloved assets proved to be a
really good strategy. That is probably something the mid-tier
players will look at, more so than picking up another smaller
player where there might be a lot of baggage that they didn’t
necessarily see coming.”

Northern Star Resources Ltd was particularly active during
the period in which PwC’s report was compiled with three
acquisitions greater than $15 million, headlined by the purchase
of the Pogo gold mine in Alaska for $357 million.

Northern Star’s first venture into North America could be just

of how long it takes to extract value out of some of these the start, according to Argonaut Ltd metals and mining analyst
companies,” PwC national mining leader Chris Dodd told GMJ. James Wilson.

“Ultimately, people are trying to find high-quality, under-valued “We have seen that Northern Star is going to pull the trigger
assets and funnily enough everyone is trying to do that and are on North America and we can already see that Evolution
in for that.” [Mining Ltd] is probably looking there. The rhetoric from a
couple of these guys is formerly the [North American] assets
In light of PwC’s Aussie Mine 2018 report, based on Australia’s were overpriced or the expectation at least was that they were
top 50 mid-tier (MT50) miners with market capitalisations of overpriced and now they are not,” Wilson said.
less than $5 billion (end of June 30), Dodd said he expected
Australian companies to entertain assets overseas to see fair “Now they are going back to look at these assets. There are
value. half a dozen names that roll off the list in North America that
are underperforming, with companies that have halved in price
“I think there have been two or three decent-sized discoveries and halved again. There is potential to split up those assets and
talked about in the last month or so and they really haven’t had cherry pick the best ones.”
much impact on share prices,” he said.
Northern Star still needs to demonstrate its wares at Pogo and
“Getting these things to market can take such a long time now its progress will no doubt be watched closely by its Australian
with the various headwinds you have in terms of regulatory and peers.
community approvals. Therefore, the time of a new discovery
doesn’t actually move the share price at all. All these things “Northern Star is really applying Aussie know-how and seeing
add up to the fact that it is not probably in Australia where real benefit,” Wilson said. “Proof will be in the pudding, it is not
companies will be but places where you have to take a bit more there yet but we will see what they can do in the short term.
risk. We see a lot of development in Asia, Africa and the like.” They are probably the best underground miner on the ASX, so
we will see if they can translate that across. They are already
Seventeen of PwC’s MT50 were gold companies, demonstrating sending boggers up, they are changing quickly and it has only
the strengthening balance sheets built up over the past three taken six months.”
years.

Davyhurst on ice

Eastern Goldfields Ltd called in the administrators in late In August, GR Engineering Ltd won a courtroom battle which
2018. The company had struggled to hit production targets in required cash and shares totalling $8.25 million to be paid
Q1 and Q2 and was looking at recapitalisation efforts to keep by Eastern Goldfields. With the GR dispute settled, Eastern
the Davyhurst project, 120km north-west of Kalgoorlie, in Goldfields focused on strategies to keep the company afloat
operation. Eastern Goldfields had creditors chasing payments but by late November Ferrier Hodgson was called in to help
in mid-2018 when its securities were placed in a trading halt. restructure the company.

Page 6

Alkane earns stripes
with Explaurum

by Mark Andrews

Christmas couldn’t come quick enough for Alkane “We are very much excited by the exploration upside and that is
Resources Ltd managing director Nic Earner. what attracts us. The price that we estimated and that we were
prepared to transact at was at that mid-range BDO valuation and
“We’ll know by Christmas where it lands. It is always good to have that is just for the resource as it stands.
resolution,” Earner told GMJ.
“From our due diligence we can see there is a whole lot of
It was, of course, in the days leading into Christmas that Explaurum exploration upside so we were prepared to be engaged. We like
Ltd shareholders were to either accept or reject an off-market take- the ground, we like the region and we like the way Explaurum
over approach by gold producer Ramelius Resources Ltd. conducts their business in terms of exploration.”

From the outset, Explaurum strongly urged its shareholders to take Alkane itself has a small, but cash generating gold operation at
no action on Ramelius’ 1:4 scrip offer of 12.3c/share. Following Tomingley, New South Wales, which has allowed it to build a cash
Ramelius’ interest in Explaurum, diversified metals company position of $82 million.
Alkane moved to make an $8 million investment in Explaurum
through a placement of 66 million shares at 12c to become a The company has the Dubbo zirconia project, also in NSW, which
12.2% shareholder in the company, subject to approvals. it is working through off-take and funding activities.

Since the initial bid by Ramelius in September, Explaurum In the meantime, it has shown a penchant to back up-and-coming
gold explorers by taking an 8.8% stake in Calidus Resources Ltd
“repeatedly denounced the pitch as being under valued, a stance which has the 712,000oz @ 2.11 g/t Warrawoona gold resource,
an independent expert’s report concurred with in December. near Marble Bar, WA.

There is a point in time where Earner said Alkane was interested in doing more deals akin to
a lot of companies that we Explaurum and Calidus.

think have excellent exploration upside “We are out looking and will continue with that, but we are really
become unloved by the market because happy with the two we have chosen so far. We are not out making
deals willy-nilly, these were pretty long and considered positions,
they have done a lot of the initial but we always have our eye out, as well as conducting our own
exploration and they are now talking domestic exploration,” he said.

about converting the project. “There is a point in time where a lot of companies that we think
have excellent exploration upside become unloved by the market
BDO Corporate Finance (Queensland) Ltd concluded Ramelius’ because they have done a lot of the initial exploration and they are
offer to not be fair and reasonable given the lack of consideration now talking about converting the project. We think that partnering
to “potential value enhancements” Explaurum could make from with us or anyone like us will be welcome on the register and using
the Mace discovery (20,000oz @ 1.4 g/t inferred resource) and their technical resources and experience in developing projects
the operating and capital cost optimisations at its flagship Tampia and costings makes a lot of sense for both parties.”
project.
Nic Earner
Explaurum is currently undertaking a BFS on the 500,000oz @ 2
g/t gold (reserve) Tampia project in Western Australia’s Wheatbelt.

Ramelius is the dominant player in the Wheatbelt and is looking
to strengthen its position around the Edna May gold mine and
associated infrastructure.

Tampia is just 140km from Edna May, which Ramelius sees as
a synergistic opportunity to capitalise on, however, its drive to
execute appears to be short-changed.

“Our view is similar to BDO and that is not that surprising to us. We
all have been in the industry for ages, we understand the rough
capital costs and that sort of stuff, so people are always going to
be able to throw a rough blanket over the valuations,” Earner said.

Page 7

NEWS

Ausgold eyes Ausgold has unveiled a 32% resource
more ounces upgrade for its Katanning gold project

by Michael Washbourne

Ausgold Ltd managing director Matthew Greentree is local farmers in Western Australia’s Wheatbelt region.
confident his company can quickly double the size of
the newly upgraded resource at its Katanning gold project, Greentree, who joined Ausgold in April 2017 with a stated
275km south-east of Perth. intention of realising the full potential of the Katanning project,
Following extensive drilling throughout 2018, Ausgold was credited a reinterpretation of the geology as the catalyst for the
able to announce a 32% increase in the Katanning resource, successful resource upgrade.
which now stands at 25.1mt @ 1.2 g/t for 1.04 moz, including
47% classed as measured and indicated. “What we’ve been able to do is bring a number of isolated
The new resource – calculated by SRK Consulting – also deposits and show that there’s true continuity between those
includes 10% uplift in grade from the previous estimate in 2017. deposits,” he said.
While Ausgold has begun preliminary development studies
for Katanning, Greentree believes the immediate value driver “There’s still a few isolated pockets that we think we’ll bring
for shareholders involves a further expansion of the resource, in with future drilling through 2019 and that’s why we’re fairly
which now includes the Olympia and Dateline deposits. bullish on the potential to grow this project because we’ve
Ausgold plans to undertake drilling in early 2019 to test a series already demonstrated that we can do this.
of regional targets within 2.5km of the main resource area.
“Within that 17km Katanning belt which hosts our resource “Within the actual resource model we’ve identified another
areas, we’ve identified these western trends which were 800,000oz potentially, but the only reason why it wasn’t
previously undrilled, but have remarkable similarities to our included as resource was because of insufficient drilling. We
main trend,” Greentree told GMJ. think this is a very, very large system that we’ve cottoned on to
“We believe they represent real potential to take us past the 2 and the resource we’ve got now is still the tip of the iceberg.”
moz mark and that’s where we think we can really derive value
for our shareholders. And, as a small company, that’s what Greentree also plans to spend extended periods on the road in
we’re here for. 2019 marketing the Ausgold story to domestic and international
“I’m fairly ambitious for the project, as you can tell, but I think investors in a bid to boost Katanning’s promising profile.
we’ve got good reason to be.”
Follow-up drilling is also planned for Katanning’s three main Ausgold controls more than 4,000sq km of prospective tenure
lodes – Jinkas (8.47mt @ 1.48 g/t for 403,130oz), White Dam around Katanning and boasts a tight corporate register which
(6.81mt @ 1.26 g/t for 275,800oz) and Jackson (4.41mt @ 1.08 includes Chalice Gold Mines Ltd as a major shareholder.
g/t for 153,600oz) – in early 2019, pending clearance from
“I think there’s a lot of enthusiasm for a good domestic gold
Matthew Greentree story that’s sitting outside any major or mid-tier with a real
growth opportunity,” Greentree said.

“When we do a peer comparison we see a real disjoint between
our current resource – even our previous resource – to what
our company is valued at, and that’s without considering some
of our pretty good exploration assets that we’ve now parked
into JV arrangements.”

Ausgold has retained a 30% contributing interest (or 20%
free-carried to a decision to mine) in its Doolgunna copper-
gold project in the Bryah Basin, under the terms of a farm-in
agreement with Intrepid Mines Ltd.

Great Boulder Resources Ltd is also farming into the Yamarna
nickel-copper-cobalt project, 125km north-east of Laverton,
with Ausgold 25% free-carried to a decision to mine.

Ausgold has also pegged more than 200sq km of ground near
Evolution Mining Ltd’s Cracow gold mine in Queensland, while
elevated pricing for vanadium has enticed the company to
explore options, including a farm-in or JV agreement, for the
Red Hill prospect on its Katanning tenements.

Page 8



NEWS Nullagine is now operating at
a 100,000 ozpa run rate

Ton up for Millennium

by Michael Washbourne

Few companies can lay claim to having achieved everything one jumbo, having originally said in their tender documents
they set out to do at the start of a year – and even fewer it would be 270-300m of development. They’ve consistently
are able to brag about ticking all the boxes ahead of schedule. over-delivered, so that development was done much sooner
than anticipated, without any risk to safety.”
Pilbara producer Millennium Minerals Ltd was one of those
companies which found itself enjoying that rare air in 2018, Millennium is also on track to start commissioning of the new
having hit the magical 100,000 ozpa run rate at its Nullagine sulphide circuit at the back end of the Nullagine processing
operation three months earlier than anticipated, while also plant during this quarter, with Ausenco Ltd overseeing the $15
bringing online its first underground mine and undertaking million build.
“game-changing” processing plant expansion works.
“Teaming up with Ausenco to commission the tails scavenging
Millennium was able to push more tonnes through the Nullagine option is a really interesting dynamic in that it’s not of a scale
plant after development ore from the new Bartons underground that Ausenco would normally drop down into, it’s well below
mine returned grades 50% higher than initially forecast. Further their bread and butter,” Cash said.
high-grade ore from Redbeard was also a contributing factor.
“What we’re doing is not new as far as using gravity separation to
“As we move into 2019 that sets the foundation for us to be capture the sulphides and then fine-grind, it’s about how do we
consistently producing at around 25,000oz per quarter and optimise recoveries in-mill and that’s more around introducing
then 100,000 ozpa,” Millennium chief executive Peter Cash additional heat and other reagents in-mill to maximise recovery.
told GMJ.
“Ausenco liked some of the leftfield thinking we’ve done and
“The key driver for that was not about driving the production want to be part of it. If we get proof of concept with some of
profile up for the sake of it, but reducing our AISC. With a large the patented technology that we’re planning to implement,
fixed-cost component within the business because we’re a they want to try rolling that out to other operations, not just in
remote operation, the only way for us to bring that AISC down Australia but globally.”
is to produce more ounces.
Cash said the company would likely scale back its exploration
“So, for us that 100,000 ozpa run rate is more about driving spend in 2019, but only due to the fact Millennium was now in
an improved margin over the steady-state 80,000 ozpa we’ve a position where it could undertake more refined targeting work
done historically.” with the drill bit.

First stoping ore from the Bartons underground is set to be Millennium completed an extensive gravity survey late last year
delivered to the Nullagine plant this quarter, with an average over its tenements at Nullagine and has employed the services
grade of at least 4.5 g/t expected, compared to the 1.5 g/t dirt of respected geoscientist Jon Hronsky to interpret the data.
traditionally extracted from the open pits.
“This is a very juicy system with regards to gold and you have
A second underground mine, most likely at Redbeard, is tipped to sort of turn your attention now to what else is it hiding,” Cash
to come online during the second half of 2019. said. “There is now maturity to the exploration strategy and so
our exploration efforts are going to be far more refined than
Cash said the presence of contractor GBF Underground Mining they have been in the past.”
Company on site ensured Millennium had made a seamless
transition to underground mining. Cash also hinted the company could be active in the M&A
space in 2019 if the right asset comes along to complement
“Our focus is absolutely on having multiple underground operations at Nullagine.
operations at Nullagine and GBF will be a big part of that,” he
said. “While we rate Nullagine very highly, we’re not looking to be a
one-mine company for much longer,” he said.
“GBF has done a sterling job. In September they did 405m by

Page 10

Genesis ready
to preach

creation story

by Dominic Piper Former Gold Fields executive Tommy McKeith
has joined Genesis as chairman
Genesis Minerals Ltd heads into 2019 with a robust scoping
study and healthy bank balance in hand but the company processed at the Paddington mill – not only handed it a timely
still plans to take a cautious approach to the development of its cash injection but exposed Ulysses’ geology.
Ulysses gold project.
“If we hadn’t undertaken the small mining campaign, it wouldn’t
Genesis released details of the scoping study in November, have put $4 million in the bank and we wouldn’t have understood
pointing to a project capable of producing 90,000 ozpa over the geology as well,” Fowler said.
four years for a capital cost of $84.4 million and AISC of $1,000-
1,100/oz. To fund its latest plans, Genesis tapped the market for $5 million in
mid-December. It has plenty of options for applying the proceeds
The study envisaged twin declines accessing the 3.01mt @ with Ulysses lacking the sort of rigorous exploration history one
4.1 g/t for 400,000oz gold resource over 330m vertical depth might expect of a project located just 30km from Leonora.
but Genesis managing director Michael Fowler is cognisant of
the difficulties peers have had in successfully establishing such “Nothing happened at Ulysses between Sons of Gwalia leaving
operations. and Genesis coming in so it missed a couple of gold exploration
booms and was only ever drilled to an average of 70m,” Fowler
“The market is concerned about small companies trying to said. “It is still open along strike and at depth. We are currently
develop 100,000 ozpa-sized operations,” Fowler told GMJ. drilling the Ulysses shear along strike east and west of the main
“There has been a litany of companies recently who have run resource and will move north before Christmas. It is then a
into trouble. All we can only do is complete the technical work, matter of drilling at depth; there’s no obvious structural chop or
grow the resources and come to a decision at the end of 2019 anything.”
on how we move forward.”
The recent capital raising should also allow the company to
The company’s work to date has given it a solid platform begin testing regional targets identified in a 2017 aircore drilling
from which to reach that position. The Ulysses resource was campaign.
increased 137% at less than $10/oz in 2018 and Genesis has
plans to continue that rate of growth. “There is plenty of upside away from the resource,” Fowler said.
“The resource has been the focus for more than two years but
“The plan is to continue to drill and expand the resource to get to now we can begin exploring further and work out what we’ve
plus-1 moz gold and then complete the feasibility study. There is got.”
clearly a long way to go on the resource and the next six months
will see a lot of drilling to expand it and the start of feasibility The Orient Well NW prospect is likely to be a priority target. The
work,” Fowler said. prospect has more than 2km of untested strike with Genesis
keen to follow up on shallow oxide potential shown in hits of 25m
The list of struggling single-asset gold miners increased @ 1.36 g/t, 20m @ 1.22 g/t and 5m @ 0.92 g/t gold.
considerably in 2018 but Fowler believes Ulysses has the
characteristics required to fortify Genesis against similar “Most of these open pit targets have not been looked at,” Fowler
difficulties. said.

“There is nothing here keeping us awake at night. It is high grade, The company’s 2019 push will be supported by incoming
is in a great location and we are starting to have the scale,” he chairman Tommy McKeith, the former Gold Fields Ltd executive
said. having been appointed in November.

“It will all be conventional mining with two declines out of the “Tommy has a well-established industry and investment banking
base of the two pits and long-hole stoping methods. It all works network, a deep understanding of the dynamics of a rapidly
well because it is one orebody on one structure; the Ulysses growing mining company and strong commercial acumen and
shear. So, there is plenty of upside if we find resources adjacent corporate capabilities,” Fowler said. “His input and guidance will
to development.” be invaluable as we embark on the next stage of development of
our Ulysses gold project, with feasibility work already under way
Genesis already has a fair idea of the geology it will encounter in parallel with ongoing exploration aimed at further expanding
in ongoing drilling programmes. The company’s decision in 2016 our resource inventory. I am confident Tommy will assist us to
to undertake the small mining campaign – ore was batched maximise the value of the project for our shareholders.”

Page 11

NEWS

AngloGold and Masta
tight at Lake Carey

by Mark Andrews

Not many juniors are afforded the opportunity to work closely Poli lamented the lack of traction Matsa received in the market
with one of the gold sector’s biggest hitters but Matsa for the cooperative MoU with AngloGold, which was the product
Resources Ltd has. of a budding relationship over a two-year period.

Courtesy of a MoU signed in June, Matsa can capitalise on During that time, trial mining from Matsa’s Fortitude gold mine
the depth of knowledge within AngloGold Ashanti Ltd. And the saw ore delivered to AngloGold’s Sunrise Dam operation under
knowledge transfer is reciprocal, Matsa executive chairman an ore purchasing agreement.
Paul Poli told GMJ.
Matsa completed trial mining at Fortitude in May and has since
“AngloGold get a fair bit out of the work we are doing as we are gone on to expand its ground holding in Lake Carey, including
throwing a fair bit of money into exploration. Absolutely, it’s [the at Red Dog, along strike from AngloGold’s Butcher Well project
non-binding MoU] still in play, we have regular meetings with where recent results in the ilk of 29m @ 12.9 g/t gold and 49m
regards to exploration, events and happenings in the area. We @ 5.2 g/t were reported.
are very appreciative of the dedication and commitment of such
a large company.” Matsa has started mining at Red Dog and expected to receive
first revenues from the operation in November.
The MoU concerns large areas surrounding Matsa’s Lake
Carey and Red October gold projects and AngloGold’s Lake Meanwhile, Poli anticipates mining will start in Q1 at Red
Carey and Sunrise Dam operations in Western Australia’s Lake October, where the company recently entered an option over
Carey district. Anova Metals Ltd’s 17.8sq km Devon tenements, south of Red
October.
Included in the MoU are options for AngloGold to receive first
refusal to treat any gold mined by Matsa within the MoU area; “2017 and 2018 were formative years for Matsa and in 2019
sharing of technical information and exploration data, subject we will be bringing all that hard work to fruition. Mining will start
to conditions and agreements; sharing of infrastructure where at Red October and we envision a 20,000 ozpa operation and
mutually beneficial; and a model access agreement to be used once mining starts we don’t see it stopping,” Poli said.
in all instances of overlapping tenements, particularly in regards
to miscellaneous licences (for haul roads and the like) in order “We are generating good reserves in cash and liquid
for the granting process to be streamlined. investments and if 2019 is as devastating as 2018 it will create
a hell of a lot of opportunity for Matsa. I think we are good at
doing deals, but I don’t expect 2019 to be any worse.”

ASX junior Metminco Ltd has courted AngloGold Meanwhile, AngloGold continued grade control-spaced
Ashanti Ltd in a JV agreement to explore and drilling on a northern and southern platform at the
develop the Chuscal gold prospect in Colombia. greenfields Gramalote opportunity in Colombia.

Chuscal is 1,700m south of Metminco’s proposed plant at Drilling at La Palma was delayed due to a later than expected
Miraflores and is another significant gold target, together finish to the geophysics IP survey, while rock sampling
with Tesorito, within a 3km radius of the Miraflores deposit. was carried out underground in four areas along the main
structure.
Metminco will manage the JV and can increase its current
10% share to 51% by spending $US2.5 million over the next Elsewhere in Colombia, La Colosa remained on care-and-
three years and completing 7,500m of drilling. AngloGold maintenance while at Quebradona the valley infrastructure
will be free-carried during this period. drilling was completed a month ahead of schedule,
AngloGold reported.
The plan is for Metminco to start drilling in Q2 2019, subject
to all exploration titles, permits and approvals being granted. The on-mountain drilling campaign at Quebradona was
expected to be completed at the time of print as two
Chuscal complements Metminco’s portfolio which is metallurgy and geotechnical drill holes were added to
comprised of Miraflores (880,000oz gold), Tesorito (253m @ the schedule. A geophysical seismic survey was also
1.01 g/t starting at 2.9m) and Dosquebradas (920,000oz NI completed.
43-101).

Page 12

Page 13

OPINION

Beta Hunt and old dogs
pulling new tricks

by Keith Goode

RNC Minerals’ Beta Hunt gold specimen discoveries have captured the geological imagination

That the gold and nickel mineralisation are mixed together appears to have been more commonly encountered at Beta
at Kambalda (and to some degree Widgiemooltha) is Hunt, with its association and reason for its location identified
well known, with gold being present at Beta Hunt (just south as being the interaction of shear/fault zones with the nickel
of Red Hill and the Kambalda nickel discovery hole). Red Hill sulphide basal contact (the contact between the basalt in the
was one of the first gold mines in what became Kambalda footwall and ultramafic in the hangingwall). That is, the gold
in around 1897 and reputedly historically mined 500,000oz was a later depositional event that was fed from the shear
gold up to around 1966. Depending on which version you zones into the lava/basalt contact.
believe, nickel sulphide was encountered at the end of
a gold mine drive, and the discovery hole that resulted in This basal contact has been 3D-modelled for all of the domes
WMC’s nickel division was drilled about 30m ahead of that (Kambalda, Widgiemooltha, and Lanfranchi), with the nickel
drive in January 1966. sulphide mainly associated with embayments in the contact.
The easiest practical example is the recent Kilauea eruption
Gold is recorded as having been encountered in the Long in Hawaii with the rivers of lava – Kambalda is the same, with
nickel mine, especially heading north towards Durkin, but it the nickel following the path of the rivers eroding channels or

Page 14

embayments in the underlying rock as shown in Paydirt in Of course, the next question whether there is more. That’s
2007 and then it was folded and faulted to create the 3D Beta where it starts to get tricky as many in Australia are aware where
Hunt model shown inset in the Figure (also shown inset in the many visible gold distributions are concerned. Theoretically
Paydirt article). there could be more – the gold especially in that quantity has
to come from somewhere – although many of the historical
However, Beta Hunt had a reputation for a weak ultramafic goldfields in Australia had slugs or material gold that was not
hangingwall; which is why it was for sale, had been for sale replicated. I have also seen circumstances where a “patch” of
for some time, and had no one really interested, especially in visible gold has been discovered, but the next patch/pocket has
Australia, in buying it. seemingly been a very erratic distribution.

Former owner Consolidated Minerals (Consmin) tried to mine I recall seeing that visible gold at Silver Lake Resources Ltd’s
the nickel sulphide in development (i.e. cut under the sulphide, Daisy Milano mine at up to 6kg/t on one level and in one area
take out the piece of sulphide, and then take out the rest), but in 2008, which resembled someone dipping a paint brush in
dilution was high, average grades relatively low and tough gold paint and randomly marking the walls/roof, etc. but at that
going overall. And, the ultramafic ground conditions were tenor that was it. Elsewhere, other mines have found visible
reputedly worse on the developing east side than the west side gold more regularly.
of the ridge.
As for Beta Hunt, at least RNC now has a war chest to drill/
Beta Hunt’s current owner, RNC Minerals Inc, had Beta Hunt explore (and a queue at the door if they want to raise more
for sale but then they “struck lucky” and (similar to Kirkland money) as opposed to being in debt and having what was
Lake Gold Inc’s Fosterville mine in Victoria) observed that there thought to be an unprofitable mine for sale. As of November
was a potentially high-grade gold zone deeper in the mine. In 28, RNC had three drill rigs undertaking a 40,000m programme
Beta Hunt’s case it was only 100-150m deeper into the footwall to be completed by April 2019.
and associated with a pyrite-rich zone. However, because of
its location it has a basalt footwall and basalt hangingwall as The first drill has been planned to focus on the expansion and
shown inset in the image – i.e. excellent mining conditions, plus drill definition of the sediment layer in the shear zone associated
it had development next to it. with the “Father’s Day discovery” in the A Zone area, which
has accounted for most of the coarse gold production in 2018.
However, it was still not that obvious, as illustrated by the track The second drill was to be located at the northern end of the
record. In September 2017, a 740oz of specimen gold (gold Western Flanks shear for definition drilling of the main shear
and quartz) associated with pyritic sediments was found in the and the recently identified sediment layer. While the third drill
A Zone – 14 Level; in June-July 2018 a 1,500oz gold specimen has two purposes: tight infill drilling in the sediment zones and
was also found on the A Zone – 14 Level. In July-August, a resource infill drilling of the main shear zones.
177oz gold specimen was found in A Zone – 15 Level and
September/October 2018 saw 27-30,000oz gold recovered in More interestingly, Beta Hunt and Fosterville were both
the A Zone – 15 Level. regarded as “dogs”, yet they have had amazing deeper
significant gold mineralisation discoveries – both by North
The discovery was called the Father’s Day lode discovery American companies.
because it occurred on the first Sunday in September,
traditionally set aside as Father’s Day in Australia. Bellevue Gold Ltd’s Bellevue mine was also once classified
as a “dog” by Plutonic and closed it in 1997 and no one was
Apparently, jumbo development on 15 Level was not having interested – after all it was supposed to be truncated at depth –
any luck, so they switched to air-leg development in the except that the geology had been misinterpreted. Fortunately,
hangingwall. They still weren’t finding anything either after the mine was taken up by Bellevue although it could quite
three or more cuts, so RNC switched to air-leg development in easily have been a foreign/overseas company.
the footwall, following an extensional vein, and three cuts later
“Bingo!” It was later commented that the gold discovery was in The next most obvious question is: Are there other gold mines
fact only about two levels under where WMC had stopped its in Australia that have at some stage been classified as dogs,
original decline. but have a hidden deeper secret?

It has been stated that the gold-in-quartz specimens recovered This comment has been mainly drawn from a presentation
and shown at the conference all came from an approximate 10m that RNC Minerals Inc’s (Royal Nickel Corporation made
length and most of it would fit into a typical lounge room. The at Kerry Stevenson’s Precious Metals Symposium in Perth
two largest specimen, weighing 63kg and 95kg respectively, in October 2018, plus post presentation discussions with
are shown in the image. RNC, RNC’s November 2018 presentation and ERA’s own
knowledge from visiting Beta Hunt in 2005 and 2006 (reports
The specimens were on show at Mines & Money London in available on the Eagleres website) when it was owned by
November and expected to take a global circuit, including Consmin (CSM).
China, before being auctioned in January.
Disclosure and Disclaimer: This article has been written
No detail has been given of how the gold content of the by Keith Goode, the Managing Director of Eagle Research
specimens has been estimated (as far as I have seen), Advisory Pty Ltd, (an independent research company)
however, the New South Wales Holtermann gold nugget was who is a Financial Services Representative with State One
a 286kg gold-and-quartz specimen stone that was found to Stockbroking (AFSL 247100).
contain 93kg of gold (about 32.5%).

Page 15

NEWS

Making the Paterson
great again

by Mark Andrews

At a time when the district is generating plenty of opinions, The results from HAD005 sent Greatland’s share price surging
arguably the most talked about junior company by 60% to £1.80/share in late November.
in Western Australia’s Paterson province is AIM-listed
Greatland Gold plc. Havieron is one part of Greatland’s Paterson project which
also features the Black Hills and Paterson Range East licences
Rio Tinto plc remained tight lipped about its exploration in the prospective for IOCG-style deposits and Telfer-type deposits.
Paterson when GMJ went to print despite widespread rumours
it had discovered a Tier 1 copper-gold deposit. The lack of detail With a mantra of pegging ground in underexplored regions,
hasn’t stopped junior explorers jostling for a prime position in Greatland marked its territory in the Paterson in 2016, focused
the gold and copper-rich region – already host to Nifty and on tenements previously drilled by Newcrest Mining Ltd.
Telfer – but Greatland had been the first to provide concrete
evidence of mineralisation. “Newcrest had drilled size holes – very widely spaced holes –
around Havieron and all those holes were significantly hematite
The company’s first ever drill hole into the Havieron prospect alterations and generally anomalous copper and gold. In
returned 121m @ 2.93 g/t gold and 0.23% copper from 497m, particular, two of the holes had returned very wide intervals of
including 11.5m @ 21.23 g/t gold and 0.67% copper from mineralisation – 80m, 100m albeit at low grades of 0.2 g/t gold
568.5m, with a bonanza interval of 0.5m @ 137.69 g/t and – but in two of the holes we saw 30m @ 1 g/t. Mineralisation
1.8% copper from 573m and 0.5m @ 100.15 g/t and 4.1% there starts at 400m, so 30m @ 1 g/t from 400m wasn’t enough
copper from 575.5m. to set the world on fire, but we thought potentially there is
something very interesting going on there,” Greatland chief
The results from HAD001 were released by Greatland in mid- executive Gervaise Heddle told GMJ.
2018, while the first drill hole into the current campaign under
way at the time of print intersected 275m @ 4.77 g/t gold and Regional geophysics and geochemical data over the Paterson
0.61% copper; equivalent to 275m @ 5.75 g/t. project identified about 50 IOCG targets for Greatland, with
ground gravity and MMI sampling at Havieron in late 2017
Two wide zones of mineralisation included 118m @ 3.08 g/t paving the way for drilling in April/May 2018.
gold and 0.84% copper from 459m (equivalent to 118m @ 4.42
g/t) plus 157m @ 6.04 g/t and 0.44% copper from 660m (eq. Admittedly, the company wasn’t fully aware of the prospectivity
157m @ 6.75 g/t). of its Paterson project when it first arrived, but is now revelling
in its exploration success.

Innovations and refinements to geophysical
technology and the ease in which modern drilling
equipment can hit 400m – the depth to the top of
the Havieron target – has helped, and will assist
other companies with their endeavours in the
Paterson.

Greatland chief technical director Callum Baxter
told GMJ the company was led into the area by the
early work Newcrest had done.

“We thought that we could build on it. We have
developed an under-cover skillset and are
deploying various exploration methodologies
developed over the previous five or 10 years and

Greatland Gold reported multiple gold nuggets
found in thin sand cover at Black Hills

Page 16

AIM-listed Greatland Gold
entered the Paterson province

in 2016

it was a good opportunity for these magnetic targets similar to Havieron across our licences.
Greatland at the time,” Baxter We want to start a systematic process of going through them
said. and working them. Scallywag in particular is a large target where
some MMI work turned up an interesting copper response.”
“You can never say that you
have worked it out, but we In what was a difficult year for junior resources stocks,
have used various methods Greatland distinguished itself in the market by the success of
and refined them over a Havieron and Black Hills in the remote reaches of the Paterson.
period of time to give us the
edge and make our patterns Heddle said juniors listed in London had been under the same
of work more successful. pressure as their counterparts in Australia and Canada, but was
confident things would be different in the next 12-18 months.
“We are seeing a lot of gold
and copper, but we are also Heddle said that despite Greatland’s London listing, Australian
seeing other metals in the investors were taking to the story.
system; there is a lot of silver,
zinc, lead and quite high levels Heddle said an ASX listing was something Greatland
of cobalt. It is a bit different to “contemplated from time-to-time” but didn’t indicate if the
the traditional copper-gold set company would seek a dual listing.
up, but it certainly has a lot of
metal in the system. We will
probably require a processing
technique which is a little bit
different to what has been
established in the region
already,” he said.

Baxter said it was really “hotting up” in the Paterson with a raft
of vehicles and drilling rigs in the region.

The company will be in the thick of the action as it prepares for
a bumper 2019 in the field after topping up its cash reserves in
July to give it a treasury of $10 million.

In addition to drilling out Havieron, Greatland’s other priority is
the potential Telfer-style Black Hills gold target, Heddle said.

Rock chip samples from Saddle Reefs (up to 10 g/t gold)
and Rogers (several over 1 g/t and up to 8.9 g/t) have given
Greatland impetus to get cracking at Black Hills.

“We also made applications to the north which is Paterson
Range East. Between the Paterson Range East and Havieron
licences is a licence held by Rio Tinto, which contains a number
the bullseye-type magnetic anomalies; similar to our targets,”
Heddle said.

“We want to do our first campaign at Black Hills, we haven’t
released anything specific about our campaign but we will
do it in 2019. Also, regionally, we have about two dozen of

Page 17

NEWS

De Grey sets itself deeper
intentions

by Dominic Piper

De Grey Mining Ltd’s desire to separate itself far from the be defined across three gold systems at the Withnell mining
conglomerate crowd continues, with the Pilbara gold centre project but a succession of intersections on two
junior building the case for its Indee/Turner River project interpreted lodes at depth – including hits of 4.85m @ 8.46
PFS. g/t, 9.1m @ 7.34 g/t and 3m @ 16 g/t – has allowed De Grey
to place an underground exploration target of 2.6-3.5mt @
De Grey was caught up in the Pilbara conglomerate tidal 4-6.5 g/t for 330-720,000oz at Withnell.
wave last year after announcing it had detected 91 gold
nuggets downslope from a shallow dipping conglomerate at “Grade is still king and those higher grades at Withnell
the base of the Mt Roe Basalt on its Loudens Patch prospect. have the potential to change the economics on the project,”
The company’s share price put on more than 150% as a Beckwith said.
result but given the company’s presence in the region dates
back far before the conglomerate rush, it has spent much of De Grey has chosen to pursue the deeper mineralisation
the intervening 12 months trying to refocus investor interest and has started assessing the economics.
on a more conventional story.
The development of the underground story has seen the
De Grey has defined 1.4 moz in resources since combining company push back release of the PFS.
the Indee and Turner River projects into a single asset
covering 1,500sq km in the Pilbara, Western Australia. It is “We did one month more drilling than planned because
set to deliver a PFS on the project’s open pit potential early we’ve done the underground. So, we will put out an open
next year but with drilling continuing throughout the summer pit resource and extensions to include the underground
months on deeper mineralisation, the company has reset its mineralisation,” Beckwith said.
overall target at 3 moz.
The 2017 scoping study was based on processing shallow
“The primary aim of the PFS is to show the project has open pit oxide material through a 1 mtpa oxide CIL plant in
backbone but with the underground hits we are getting the early years before using free cash flow to add sulphide
we could turn 60-70,000 ozpa into more than 100,000 or flotation to the circuit in later years.
150,000 ozpa,” De Grey technical director Andrew Beckwith
told GMJ. A 250kg bulk sample from De Grey’s Loudens Patch
conglomerate target produced 1.98g of gold
“We think it can be very similar
to Dacian [Gold Ltd] which
went from zero to 1 moz to
3 moz very quickly when it
started hitting underground
targets.”

De Grey’s growing confidence
stems from a series of deeper
hits since a scoping study
was completed in 2017.

Like much of WA, Withnell
has witnessed little previous
deep drilling. De Grey’s
open pit scoping study
defined potential to extend
the existing 45m-deep pit to
120m. A resource of 16.16mt
@ 1.7 g/t for 874,300oz has

Page 18

Capex for the first stage of the 60,000 ozpa development Recent drilling success has De Grey excited about the
was estimated at $78 million with an additional $18 million underground potential of its Pilbara gold project
needed for the sulphide upgrade from Year 3.
“There is more work to do at Toweranna,” Beckwith said. “It
The task during the PFS, as Beckwith sees it, is to increase averages 2 g/t but has some high-grade veins.”
the gold production rate.
While it is generally pushed to the back of De Grey company
“The question now is very much how to demonstrate it is presentations, the conglomerate story remains live. Beckwith
plus-70,000 ozpa, virtually from inside the current resource,” said the company would continue with its cautious approach
he said. “To achieve that, you need to find a high-grade to the geological conundrum.
orebody, concentrate the ore or build a bigger mill.”
“We are doing some excavator work on the conglomerates
Given the lack of exploration across the 1,500sq km project and watching what others are doing,” he said. “We won’t be
area, Beckwith fancies his chances of achieving the latter. fussed about how it was created; we just want to know if we
can find it, define it and mine it.”
“We know we can keep growing the resource for 6-7 years
so we won’t be a producer that stops exploring,” he said. In November, De Grey released the first results from a bulk
“You only have to find a 5 g/t orebody to get more ounces sampling campaign at Loudens Patch. A 30t excavator
out of the mill.” scratched a 20m trench of the conglomerate horizon,
exposing visible coarse gold and nuggets.
In this regard, Withnell is joined by prospects further east,
including Mallina and Toweranna. Three 250kg bulk samples from the first 6m produced
0.204g, 0.98g and 1.98g of gold respectively. Further bulk
Mallina’s resource was recently increased to 160,700oz but samples will be taken from the remaining 14m of the trench,
subsequent drilling in October produced a hit of 56m @ 3.04 with additional trenching to continue along the creek line to
g/t from 14m, described by De Grey exploration manager further targets.
Phil Tornatora as “one of the best intersections” the company
had seen. “As this sampling is non-quantitative and only separates
coarse gold, a representative gold grade is not able to
At Toweranna, hits of 17.3m @ 3.91 g/t, 10m @ 2.52 g/t and be quoted,” the company reported. “De Grey intends to
6.8m @ 4.72 g/t in a series of high-grade vertically stacked complete the coarse gold assessment at each area before
sheeted veins have given the company encouragement to deciding on larger bulk samples to be taken and sent to an
continue testing the granite contacts at depth. independent assay laboratory for accredited gold grades.”

Page 19

COVER

Saracen, Bellevue
clear choice for experts

and investors

by Dominic Piper

When it came to assessing the
overall performances of the gold
industry’s miners and explorers over
the course of 2018, GMJ’s expert
panel was unanimous; the market
definitely knew best with Saracen
Mineral Holdings Ltd being judged
Miner of the Year and Bellevue Gold
Ltd anointed Explorer of the Year.

Aquick glance at the relative performance of the two “Hitting our longstanding target of 300,000 ozpa in the exact
companies reinforced the views of our judges. Saracen quarter we said we would was a big milestone for us,” he said.
enjoyed a 69.9% share price appreciation over the December “But also, backing our exploration spend; putting money back
1 2017 to December 1 2018 period, more than doubling the into the ground – which is something the industry has been
percentage growth of perennial market darlings such as devoid of in the last decade – has also brought reward. It is
Northern Star Resources Ltd, Evolution Mining Ltd and Regis still early days but there has been a nice return for us already
Resources Ltd. from that.”

That market performance by Saracen was driven by a FY18 Explorer of the Year Bellevue can boast a similar tale. In a
which saw record production of 316,453oz at $1,139/oz generally woeful year for gold explorers, the WA-focused junior
AISC, beating guidance. The company has set itself the task put 68.5% onto its share price thanks to the unfolding high-
of outstripping that in FY19 with guidance of 325-345,000oz grade story at its namesake project. It represents a return to the
at $1,050-1,100/oz AISC. Longer term plans involve hitting winners circle for Bellevue managing director Steve Parsons
400,0000 ozpa and a 4 moz reserve. and much of the Bellevue team, which had previously been
behind the success of 2009 Explorer of the Year Gryphon
Saracen managing director Raleigh Finlayson said the award Minerals.
was recognition of the loyalty the company’s workforce had
shown. Parsons put Bellevue’s victory down to the efforts of the
company’s exploration team.
“Most of our core management team has been with us the
entire decade we’ve been in production,” Finlayson said. “This “It is a great exploration team we have,” he said. “They’ve been
award is recognition of those efforts and the camaraderie we’ve very long and loyal and we have some strong technical people
built over the years. We don’t actively seek awards but it’s great and as a board of directors we back them on their decisions
to see the team getting recognised.” on where to drill the holes. On the back of that, it has been a
fantastic year of 1 moz of very high-grade gold discovered on a
Saracen’s ability to hit its long-term milestones represented its property that hasn’t been touched for a very long time.”
greatest achievement in 2018, according to Finlayson.

Page 20

There appears little chance of Bellevue slowing down. Parsons lunch debate. For more details, please contact Mayfair Lane
said the recent $15 million capital raising was already being put on (08) 9425 5222 or email at [email protected]
to use with a fourth rig to be deployed to site shortly.
The GMJ judges unanimously agreed on the magazine’s
“From the first quarter there will be four drill rigs turning and we 2018 Explorer and Miner of the Year winners
anticipate increasing that resource rapidly as we step out within
that top 500m,” he said. “Our philosophy is to drill as many holes
as possible to find as much high-grade gold as possible for
as cheaply as possible; we’re just going to keep on doing that
and will hopefully have a lot more ounces this time next year at
Bellevue.”

That aggression has piqued the interest of the global gold
investment community.

“The North American investor long gold market is very strong,”
Parsons said. “They figured out quite quickly what we had and
they were the backbone of the recent $15 million capital raising.”

To reach a conclusion on the best miner and explorer for 2018,
GMJ gathered industry experts Michael Anderson (Taurus
Funds Management), Allan Kelly (Riversgold Ltd) and James
Wilson (Argonaut Ltd) at the iconic West Perth eatery Mayfair
Lane to discuss the merits of each of the finalists and the intrinsic
qualities which make a successful gold miner and explorer. Our
thanks to Mayfair Lane for playing host to the GMJ Awards

Page 21

COVER

Why was Saracen the stand

James Wilson: In terms of year-on-year performance MA: They have done well since taking over a project which
Saracen is a standout. In some respects, Evolution and under previous owners was considered a bit of a basket-case;
Northern Star have reached maturity, while Saracen has room it has been a tremendous achievement.
to grow. Northern Star has done really well in terms of share
price but I don’t think they are quite there yet. They have done really JW: Kirkland Lake is a really good testament to new ideas
well with Jundee but Kalgoorlie is OK and Pogo is really good. and testing different ways to look at things. They found Swan
I like Saracen because they have demonstrated the Carosue Zone by just drilling in a different direction, I think. That is the
Dam system is actually bigger than originally thought. They great thing about these companies, they are throwing money
were actually meant to go back there four years ago and have at exploration and the more you drill the more you find.
a look regionally and at Red October. They finally started
drilling holes in the system and the whole thing has just gone AK: When Newmarket had Fosterville everyone thought it
boom. It has got costs down from $1,300/oz to $900/oz, so in was overpriced, but Kirkland Lake has come in, checked it out
terms of price performance improvement it has killed the pig. and since gone really well and made us all look silly.
Whether that is sustainable or not I’m not sure, but certainly as
the Miner of the Year they have done really, really well. Australian gold producers are cashed up.
Will this lead to additional demands from investors?
Allan Kelly: In many respects, Saracen has an easier
growth story than Northern Star so has more room to move. JW: It is probably alright for a company like Saracen whose
Northern Star probably has to make another big acquisition cash isn’t a big component of their market cap. St Barbara
to go to the next level. Northern Star’s timing in acquiring has close to $400 million cash; that is a significant amount of
Barrick’s assets was impeccable; it could have gone the other money in the bank. The more cash you have got, the more
way but the gold price suited. Now, Northern Star has to bed pressure there is to do something with it. That is playing on St
down Pogo and get costs down. Barbs [sic] a bit at the moment I think, so what they do next
will be key. They are going deeper at Gwalia and doing bits
Michael Anderson: They are all good companies. The and pieces around the sides but nothing particularly risky.
market doesn’t care how they do it but they need to build
value and to get value these days isn’t easy. Saracen has AK: You have to be able to convince your shareholders that
done very well, continues to do well and from a market you are able to do something better with that cash than they
perspective they are a standout on the charts so it took me can. You can be seen two ways; rewarding shareholders or
a millisecond to decide Saracen was the Miner of the Year. ‘we can’t think of anything better to do with it so we are giving
it back to you’. It is a double-edged sword.
Domestically-focused Saracen, Northern Star and
Evolution were once again standout performers. Do MA: Definitely there is added pressure. It does really depend
companies such as St Barbara Ltd and OceanaGold on who your shareholders are. From personal experience,
Corp get discounted because they have assets in when Exco sold a project to Xstrata seven or eight years
riskier jurisdictions? ago, our shareholders told us in no uncertain terms what they
wanted us to do with the money; give it all back to them. On
JW: OceanaGold trades at a bit of a discount on the Aussie reflection, we probably gave too much back, but we were
exchange because they have no Aussie assets. They have under pressure to do so.
Didipio [Philippines] and even Mick Wilkes says that because
the company is not in Australia they are discounted. However, It depends on the shareholder base. If they are sympathetic
just in the last three months or so OceanaGold has come up to your plans and conceded to the fact that you are not going
in to the realms of Evolution, Regis and Saracen. Didipio is to go splurge it on something wasteful, then that is a good
going OK now; they are not having impact on the land because position to be in because it gives you a bit of time.
they are mining underground and even before then there were
only perceived problems from the locals. Why are Australian companies thriving against their
North American peers?
MA: St Barbara possibly gets discounted, but if there is
nothing going wrong, production is going well and costs are JW: We actually have the ability in Australia to walk up all-year
maintained then the perception of risk goes away. round and drill holes whereas they are limited in parts of North
America. In Alaska, you have permafrost and snow, bears,
Kirkland Lake Gold Inc is going gangbusters at earthquakes etc. I haven’t had much experience in the North
Fosterville in Victoria; is it discounted in Australia American institutions and this [2018] is the first year of seeing
for being a Canadian-listed company with an them all. I have come away thinking that we were actually on
unfamiliar asset? par with them, that we’re equal. Some North Americans haven’t
heard of OreXplore/Chrysos or ore sorting, so we are making
quantum leaps in technology. We should be on the same level

Page 22

out gold producer in 2018?

as the Canadians because we have the same FX tail wind, the explorer category]. They’ve got some great results coming
Aussie and Canadian dollar are almost on parity. out, but their market cap is $20 million and they’re not getting
AK: I think one of the other things is that the Canadians have any response. It’s tough for explorers. You put out good
been perennial over-promisers. The number of years I went to results and they’re just getting lost in the ether.
Denver [Gold Forum] it was just amazing what the CEOs tell
the funds. I think they are being caught out a bit now, while I So, why has Bellevue got a response?
think the Australians have been quite quiet in the background
generating money. MA: Grade. To really capture the market’s attention I think
Which companies will feature in GMJ’s Miner of the you need the volume and the grade. Those are the stories that
Year category in 2019? are going to be differentiated by the market.

JW: By the end of 2019 Gruyere will be running, but AK: Steve Parsons is a good promotor. He did really well
something we have seen, particularly with the smaller guys with Gryphon before it got taken over. People are looking at
coming on is execution risk. Dacian [Gold Ltd] has done it that and saying ‘this is the likely scenario here; they’re going to
before but they have objectives to get to 180-210,000 ozpa grow it and then someone’s going to knock them off.’ So they
and we believe that they will get there. There are probably want to be there for the ride.
parts of the market that are a bit more critical of that. Cardinal
[Resources Ltd] should have pulled the trigger on Namdini Gryphon was criticised for not doing a deal on the
by then so this could change materially, plus West African Banfora project earlier. Will Steve Parsons get it right
[Resources Ltd] will be amongst it as well. this time around?
MA: Perseus [Mining Ltd] which we were a shareholder of
back since it only had Edikan, now has three assets. That is MA: When you think back to the peak of the West African
the growth story playing out. They have to demonstrate the times with Gryphon and Ampella and all these other
value of it all now, but they have already shown the ability to companies that had hundreds of millions of dollars market
develop assets, acquire assets, grow and fill in the missing cap…you had to get your timing right. Notwithstanding, they
pieces. all were multi-million ounce discoveries, but the grade in West
Africa wasn’t like this [the Bellevue project]. When stories
Mayfair Lane hosted the 2018 mature and you start taking a bit longer doing the study work,
GMJ Awards lunch debate that’s when the market loses interest, especially now. People
don’t want to be the first money in anymore – they don’t
A lot of the companies on this list for Explorer of the want to be even the pre-feasibility money or the feasibility
Year are already miners. If you look at the share prices money – they want to be the construction money, the last bit
for pure explorers, it’s a pretty woeful collection. of equity that goes in because sideways is the new up. So,
you could either put your money in at 20c when they’re in the
MA: It’s very profound and that’s what makes Bellevue even exploration/scoping/pre-feasibility phase, or you could put it
more remarkable. You’re quoting an absolute performance, in now at the end when they’re still 20c and then the uplift will
yet their comparative performance in that peer group, it’s an come from when the project kicks off.
incredible standout. However you achieve that in any market it
deserves recognition. AK: You can’t go past the grade. If you look at a lot of the
AK: Musgrave [Minerals Ltd] is the one I look at [in the pure development or pre-development stage assets out there now,
they’re all 1 g/t to 1.3 g/t orebodies. So Bellevue is a standout.

JW: The average open-pit grade of most mines these days
is 1.3 g/t and underground would be 4-6 g/t. Bellevue has an
orebody part of which is averaging 22 g/t. You could make a
lot of mistakes for 22 g/t and still come out with a profit.

So, is grade king more than ever now?

AK: It just gives you room to move. It gives you options for
how you’re going to mine, how you’re going to process it, how
you’re going to fund it. If you go from 12 g/t to 11 g/t; that’s a
lot different going from 2 g/t to 1 g/t. Plus, people get excited
about multi-ounce intersections. That’s why Musgrave should
be getting some traction. The problem with Musgrave is, I
think, people are not sure what they’re going to do because

Page 23

COVER

there’s not a clear path. They’ve got mills all around them so From a jurisdiction point-of-view, we’ve seen
are they going to truck it? Are you going to get shafted on toll Northern Star go into North America on the
treatment? They’re probably not asking those questions of acquisition front, but we haven’t see any of
Bellevue just yet, but there will be a question at some point. them move into the active West African space or
generally take risks on greenfields or jurisdictional
We included some of these larger companies because opportunities. Is that likely to continue?
if you look at purely the exploration dollar spend, it far
outstrips what any juniors have been able to do in the JW: Endeavour [Mining Corp] showed us a really good slide
last 3-4 years, which is very different to 7-8 years ago. on perceived risk in Africa which shows all these countries
Is that a trend that will continue? [Tanzania, Ghana, Mali, etc.] are lifting their royalty rates and
taxes to match the rest of the world. So, it’s a bit like the free
MA: That’s all brownfields, so I think that’s where you’ve got ride is over in that part of the world.
to differentiate. I think the really credible finds are those that
are truly greenfields because they’re few and far between Will there be West African companies on this list
globally now. Anyone discovering something substantial in a next year?
greenfields context deserves significantly more credit because
that is going to be transformational for companies. You’re in a MA: I think so. You could argue somebody like Cardinal
small minority, whatever the percentage would be, of people should be on there this year. They’ve certainly put together
to have achieved that. a sizeable resource portfolio and they’re taking it towards
development. And they’re doing that in a relatively mature
AK: You have to have the dollars to spend though. If you environment in Ghana, but there’s still plenty of gold to be
haven’t got the dollars to spend, it’s tough. So, while it’s found.
cheaper to find it than buy it, sure, why not?
Aside from Musgrave, is there anybody else you
JW: They would also see better value in their own tenements think we’ve missed on this list?
than they would in other people’s stuff at the moment.
Northern Star [Resources Ltd] is spending $60 million this AK: Apollo [Consolidated Ltd] looks good too, but it’s quite
year and I think Saracen [Mineral Holdings Ltd] is doing a short strike length. Unless they can show a big depth
the same. They could spend $60 million on finding what extension or another one, it’s hard. It’s a nice discovery
Musgrave has, but would they get same value out of that though.
as drilling a 1,000m stratigraphic hole through Zodiac and
demonstrate there’s a 3km mineralised system underneath JW: The other one is Andrew Muir’s NTM Gold [Ltd]. Maybe
that. That’s the sort of trade-off you’re seeing now. not for this Explorer of the Year, but it is certainly one to watch.

Page 24

Perth, Western Australia 9
November 12-13

24 years of world-class discoveries from
43 countries around the globe

The world’s pre-eminent gold exploration conference.
Mark it in your 2019 calendar!

Jointly organised by:

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

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previous conference please contact Mel Fogarty on (+61) 8 9321 0355 or email [email protected]

COVER

Saracen shines
in thunderous year

by Mark Andrews

Trading at an all-time high share price and carrying a which will in turn underpin increases in our production and
market cap in excess of $2 billion, it appears things are cash flow,” Finlayson said.
only going to get better for Saracen Mineral Holdings Ltd.
“We are starting to put some money into greenfields
The company has been one of the standout miners in Australia exploration, so a new discovery wouldn’t go astray. We haven’t
for some time and is now showing its hand in the exploration done greenfields on our tenure for probably the last five years.
space by reporting two new discoveries in the Carosue Dam We are hopeful that it will be the far greater value creation we
Corridor. can do.”

Discovery holes at Atbara – 40m @ 3.8 g/t gold, including 12m A game-changing greenfields discovery is atop Finlayson’s
@ 7.7 g/t – and Qena – 20m @ 2.8 g/t – are both within 4km of wish list, followed by bringing an asset into the portfolio
the 2.4 mtpa plant at Carosue Dam. through M&A.

Saracen managing director Raleigh Finlayson said the results “We don’t do a lot of deals, but the ones that we do create
represented an “outstanding” start to the company’s $60 wealth for our shareholders. We are remaining patient, but
million investment in exploration for FY2019. we’d love to bring an asset in that can complement our assets
very well,” he told GMJ.
“We have outlined a clear strategy to increase production
to 400,000 ozpa based on organic growth and these results Given its solid balance sheet and strong production forecasts,
show that this strategy is well on track. The two discoveries which will mean significant cash generation for the foreseeable
in the Carosue Dam corridor are promising and demonstrate future, Saracen has long been touted as a major contender in
the key role this area stands to play in growing our inventory, the M&A space.

A lower strip ratio and higher grade at Thunderbox
made a big impact for Saracen in FY2018

Page 26

There is no urgency for any rash decisions stemming from
the Saracen camp however Finlayson sees the window of
opportunity getting wider and potentially being thrown open
if there is any legitimacy to speculation about a deal between
Newcrest Mining Ltd and Canada’s Goldcorp Inc.

“Newcrest and Goldcorp is interesting and if that is actually
true, then we are starting to see some really top end M&A,”
Finlayson said.

“Further to that, maybe for the first time in a long time we Raleigh Finlayson
are seeing some North American interest coming back into
Australia, which would be really interesting if Newcrest were Regardless of ensuing corporate activity, confidence is
to fall off the top perch. All of a sudden it puts the spotlight high within the Saracen stable coming off a year of record
on the Northern Stars [Resources Ltd], Evolutions [Mining Ltd] production and profit.
Saracens, Regis [Resources Ltd] and St Barbara [Ltd] of the
world; that would be very interesting.” FY2018 saw the company exceed gold production guidance
by 16% (316,453oz at AISC of $1,139/oz) and net profit after
Should Newcrest and Goldcorp follow the lead taken by tax was up 167% to $76 million.
Barrick Gold Corp and Randgold Resources Ltd, the assets
these blue-chip miners decide to bench could be swallowed The company has cash and bullion of $122 million and total
up by Saracen and others. available funding of $281 million.

“I think that creates real opportunity for the next tier coming The company has never been in a better position and the future
through and Saracen is well positioned along with its peers,” is even brighter, with $60 million committed to exploration and
Finlayson said. $80 million in growth capital in FY2019.

Saracen’s priorities are assets around its existing infrastructure Saracen’s production forecast for FY2019 is 325-345,000oz at
and gold in Australia, which have been the value-drivers for AISC of $1,050-1,100/oz.
the company.
Saracen will invest significantly in items such as the Karari
Nevertheless, the company has started gauging the type of paste plant initiative, underground developments at Whirling
opportunities present offshore. Dervish and Thunderbox, Kailis stage two open pit and an
airstrip at Carosue Dam as it strives to hit its next target of
“That is why we attend the Beaver Creeks [conferences] of 400,000 ozpa gold production.
the world; to understand the landscape. We also recognise
that among the Aussies who have ventured into North America “We started the year with a target of 300,000oz, so doing extra
there have been more losers than winners over the journey,” production at a similar cost base had a big positive impact
Finlayson said. on our AISC, which was one positive impact throughout the
year. But, also Karari and Thunderbox are two key drivers
“But, we need to understand what our strengths and at both our operations. We are getting into Thunderbox with
weaknesses are, there are tight borders around what we
would do, but I am sure if an opportunity presented itself, made a lower strip ratio and higher grade and at Karari it
sense and was appropriate we’d be amenable to that.” was a case of increasing grades and higher ounces
per vertical metre which was better than FY2017,”
Finlayson said.

“But, the good news is that FY19, 20, 21 are
reasonably better as well. We are of the view that we
are going to get higher production at a similar cost
base and lower sustaining costs over the next 2-3
years.”

With $140 million to be invested in the business
during FY2019, Saracen made the conscious
decision to beef up its hedge book over the course of
2018, giving it the ability to fund all its exploration and
growth capital from cash flow.

FY2018 saw increasing grades and higher ounces The company added $104/oz on to the hedge book
per vertical metre from Karari at Carosue Dam during FY2018 and has a total 272,400oz locked
away at $1,743/oz until March 2021.

Page 27

COVER

Parsons on a beauty
at Bellevue

by Mark Andrews

It has been 10 years since Steve Parsons graced the cover the world at the moment, not just in Australia. At 12.5 g/t gold
of GMJ as Australia’s leading gold explorer. – and it keeps on growing at that grade – Bellevue is always
Back in 2009, Parsons fronted the Gryphon Minerals vehicle going to be valued at a good price,” Parsons said.
charging along in Burkina Faso at the Banfora gold project.
“We always try and hit our targets and hit what we say we
Banfora – now Wahgnion under new owner Teranga Gold are going to hit. We have a very good geological team and
Corp – is forecast to produce 132,000 ozpa at $US761/oz they are right on top of where they think the mineralisation is
AISC in the first five years and 114,000 ozpa at $US904/oz going and what the mineralisation can add to the resource
AISC over its 13-year mine life. base, so we want to keep expectations realistic.

No doubt Parsons will “We are adding about
pause for a moment as 100,000oz gold per month
the switch is flicked on at typically and we have been
Wahgnion, however, any doing that for the last 12
deep reflection will be saved months since we made the
for later, such is the all- discovery. At this stage we
consuming effort required at see it growing at the same
the award-winning Bellevue rates and grades that we
project near Leinster in have now. We are now
Western Australia. anticipating moving to 1.5-2
moz gold mid to late 2019,”
“I love Africa; it is a great he said.

place to do business, Bellevue will release
resource updates in both
especially West Africa. Q1 and Q2, with scoping/
feasibility studies in line for
There have been some the end of Q2.

great big discoveries Bellevue was able to set
a clear path for 2019
there in the last 10 years after raising $15 million in
October.
or so, but it is really good
Drilling under way in
to come back down to November comprised three diamond core rigs operating
double shifts targeting the Bellevue Lode, Viago Lode and
Western Australia. When exploration drilling at Northern Bellevue.

the Bellevue opportunity Steve Parsons Bellevue is hitting its straps at an opportune time for WA’s
presented itself to me we exploration sector, with interest being stirred by the buzz
surrounding Rio Tinto Ltd’s work in the Paterson province.
really did jump at it; these
While Rio Tinto’s exploration success is shrouded in secrecy,
opportunities don’t come around very often. We saw there Parsons is a bit more open door on what Bellevue might
become.
was some huge potential there that we wanted to get stuck
“It is always good to see good discoveries happening,
into,” Parsons told GMJ. especially in Western Australia and without a doubt it’s great
to see Rio Tinto and the Paterson becoming favourable
Parsons joined Bellevue Gold Ltd, formerly Draig Resources, again. Hopefully, it’s something of serious size Rio Tinto has
in March 2017 and the company has quickly ascended to be
one of Australia’s – if not the world’s – premier gold explorers.

It has been some years since GMJ has seen such a clear-cut
Explorer of the Year contender as Bellevue with its inferred
resource of 1.04 moz @ 12.3 g/t gold.

Prior to judging on this year’s award, Bellevue had hit 50c/
share before tapering to 44c at the time of print.

“We will always be valued more than lower grade projects;
Bellevue is one of the best highest grade new discoveries in

Page 28

Focus of resource
expansion drilling

• Bellevue Lode: Nearby extensions to the north
and south of the Bellevue underground, as
well as a number of unmined areas close to
the existing underground development

• Viago Lode: A maiden inferred resource of
550,000oz gold @ 22 g/t gold was declared
from Viago. Step-out, down-plunge and down-
dip resources are being targeted as well as
multiple DHEM conductors

• Northern Bellevue: Step-out scout diamond
core holes followed up by DHEM to detect lode
potential in the vicinity

found. In the meantime, Bellevue is hopefully going to be Historical production from Bellevue was 700,000oz @ 15 g/t
one of the top gold discoveries in WA in recent years,” he gold, with a further 100,000oz extracted from open pit resources
said.
Bellevue had three diamond rigs operating
“We are fortunate that the grade is so high and it is a real double shifts in November
standout globally. At the moment we are fortunate that the
resource grades have been able to grow at such a rapid “From our perspective, we are focused on what we are doing
rate of knots and I think the investor base has seen there’s at the moment and on our very simple strategy; adding
a clear path to future growth at similar sorts of grades and ounces at as high a grade as possible, as quickly as possible
numbers.” and trying to grow that resource to be substantial. Bellevue
is a very high-grade gold discovery that sits globally as one
The company’s $15 million placement to institutional of the better ones. I’m sure a lot of people all around the
investors in October saw “a huge amount of interest from world are following us.”
North American and European gold funds” enabling Bellevue
to secure the cash quickly and attract the attention of “high
class” institutional investors.

Exploration success achieved by Bellevue in 2018 was hard
to match and while big money M&A transactions had spiked
some interest in the gold sector, Parsons is certain Bellevue
is on the radar.

“It looks like it is heating up a little bit and it is always good
to see mergers and acquisitions and the like. You’ll probably
see a bit more of that in the next short while,” Parsons said.

Page 29

FINALIST: MINER

Predictable Star finds
new way to sparkle

Predictability is hardly a bad thing for shareholders of Northern Star Resources Ltd who have
enjoyed unrivalled returns over the past five years.

by Michael Washbourne

During a year in which its share price hit an all-time high of Northern Star’s performance in FY2018. On the back of
$9.49, Northern Star benefitted from investing heavily in production of 575,121oz at an AISC of $1,029/oz, the Bill
exploration and development, while executing further strategic Beament-chaired company posted a record net profit of $194
acquisitions to boost its already impressive production profile. million and delivered a full-year dividend payout of 9.5c/share
to shareholders, up 11% on the previous financial year.
It is a familiar story for those who have followed Northern Star
since the then-unheralded single-asset producer swooped With $45 million tipped into exploration, Northern Star also lifted
on a series of unloved mines held by Barrick Gold Corp and its resources to 15.9 moz and reserves to 4 moz for its two
Newmont Mining Corp five years ago. key Australian mining centres in Kalgoorlie and Jundee, both of
which achieved 300,000 ozpa production run rates six months
Northern Star chief executive Stuart Tonkin said predictability ahead of schedule in late FY2018.
for investors was a critical part of the company’s business
model. Then in August, the company pounced on Sumitomo Metal
Mining Co Ltd’s Pogo mine in Alaska, paving the way for
“Investors do look for stability and they look for whether they Northern Star to churn 850,000-900,000oz at an AISC of
can predict where a company is going,” Tonkin told GMJ. $1,050-1,150/oz across its portfolio in FY2019.

“What’s been important at Northern Star is we have always “Acquisitions like the Pogo was not a surprise to investors in
articulated our strategy and demonstrated and stuck to a that whilst we were stepping offshore, we’re still in a Tier 1
very simple and similar formula on each of our acquisitions. jurisdiction, sticking to the underground theme and applying
We buy mines, we invest heavily with the drill bit, we improve our skillset which is productivity improvements and big margin
their margins through productivity gains and then obviously recoveries,” Tonkin said.
expand those margins and add mine life by adding reserves
and resource growth. “Credit really goes to the depth of our team and probably one
of the biggest things for us over the last year has been the
“On each of the assets we’ve acquired through our journey investment in our people. We’ve had a lot of addition on the
that’s what we’ve done, we’ve just done on it on larger scale technical side, brought a lot of graduates into the business,
assets as we’ve picked things up.”

Investors had very little, if anything, to complain about from

Page 30

Stuart Tonkin Northern Star has budgeted $60 million for exploration activities
through FY2019 as it looks to further strengthen its enviable
a lot of apprentices into our trades and a lot of training and resource position of 20.5 moz following the Pogo acquisition.
innovation for our operators as well.
Organic growth from within the portfolio has largely driven the
“We have over 2,400 employees and contractors presently, so company’s success since its initial acquisition spree in late
it’s been a rapid growth and keeping that culture true to what 2013. According to statistics collated by the Shareholders’
we want has probably been why those achievements have Gold Council, Northern Star has delivered unrivalled total
been met.” shareholder returns of 869% over the past five years despite
the GDX falling 17% and the gold price slipping 8% during that
Pogo contributed 59,567oz at an AISC of $1,493/oz ($US1,105/ period.
oz) during the September quarter despite only being on
Northern Star’s books for one month of the reporting period, Northern Star’s main Australian rival Evolution Mining Ltd was
while the mill was running at just 70% capacity. next best with 267%, followed by Kirkland Lake Gold Ltd with
256%. In startling comparison, majors Newmont and Newcrest
Mill utilisation rates were forecast to rise to 90% during the Mining Ltd could only manage 24% and 65% respectively,
December quarter and are on track to hit 100% in the June while Barrick (-24%) and Yamana Gold Inc (-73%) recorded
quarter following a series of operational changes implemented negative returns for shareholders.
by the new management team.
“The whole gold sector domestically has done well because
Despite having forked out $347 million for Pogo, Northern Star we’ve invested back in our assets, improved their margins and
plans to invest further capital into an operation the company been cost-conscious, so no one stands out differently from
is confident will become its third 300,000 ozpa mining centre knuckling down and doing the heavy lifting,” Tonkin said.
within the next 12 months.
“As far as the growth for a company like Northern Star, it is
“Our business development team is now our integration team linked to generating cash and building up that cash for paying
and they’re working closely on site to basically implement our off debts and using the rest to reinvest back into the business
business model,” Tonkin said. so we’re able to pay dividends, we’re able to retain cash and
we’re able to reinvest expansionary capex into the assets.
“I think people were very comfortable with understanding how
this mine fit our skillset and our company strategy. It’s already “When you’re doing that and not diluting your shareholders,
getting a lot attention from investors, but I think as the years that’s where you get growth on earnings per share and I think
and the quarters go by, people will see greater visibility of an that’s really where Northern Star has been a standout over our
asset that probably hasn’t been in the limelight for the last 5-10 journey.”
years.”
As the calendar ticks over into 2019, perhaps the only hurdle for
Northern Star to overcome is a resolution around the ownership
structure for the East Kundana JV, one of the key pillars of its
Kalgoorlie operations which also includes the Kanowna Belle
mine.

Following an order from the Takeovers Panel for Tribune
Resources (36.75%) and Rand Mining Ltd (12.25%) to unwind
their cross-ownership structure, Northern Star (51%) put
forward a $150 million cash offer to seize total control of East
Kundana.

At the time of print, Rand and Tribune – both controlled by
colourful mining executive Anton Billis – were considering
Northern Star’s offer.

“We think it’s a compelling offer for Rand and Tribune
shareholders,” Tonkin said.

“It hasn’t distracted us from our current business. We’re still
the manager of the EKJV as it stands and we’re obviously
continuing on with all our activity at Jundee, Kalgoorlie and
Pogo, so it really is not a distraction to us at all and we’ll just
see how it plays out over the coming months.”

Page 31

FINALIST: MINER

Evolution’s
culture club

For Evolution Mining Ltd executive
chairman Jake Klein, the true measure of
his company’s success is not defined by
the number of ounces produced, but rather
how many enquiries he fields from people
seeking to join his business and be part of

its ongoing success.

by Michael Washbourne

Klein is often the recipient of widespread praise for overseeing million), resulting in shareholders collecting $127 million of fully
Evolution’s transformation into a globally recognised mid- franked cash dividends, based on a payout ratio policy of 50%
tier producer, despite advocating for more plaudits to be thrown of after-tax earnings.
the way of his dedicated colleagues.
FY2019 is already off to a promising start with 200,218oz
Evolution produced 801,187oz at an AISC of $797/oz ($US618/ produced at anAISC of $885/oz ($US647/oz) for the September
oz) in FY2018 across its suite of operations, reaffirming its quarter. The company has guided 720,000-770,000oz at $850-
position as one of the world’s lowest-cost gold producers. 900/oz AISC for the current financial year.

However, it takes the phone to start ringing hot about matters Evolution has set aside up to $135 million for sustaining capital
other than dividends for Klein to be certain Evolution is kicking works and up to $200 million for major project capital, including
goals from all corners. the upcoming plant expansion at Cowal, New South Wales,
some 12 months ahead of schedule.
“My measure of success – outside of the usual parameters of
how much gold we’re producing at what cost and doing it safely “I think having a strong balance sheet enables you to take a
– is when people start to call or enquire about jobs at Evolution longer term look at the business and fundamentally we have a
unsolicited because they’ve heard it’s a good place to work and very strong business at the moment,” Klein said.
it’s going to be good for their careers,” Klein told GMJ.
“We’re operating at 50% EBITDA margins, our net debt is $78.2
“We aspire for every person’s time at Evolution to be the million as at the end of September and decreasing significantly.
highlight of their career. We really can’t ask for more than that. We have tremendous organic growth opportunities and
If they go on to bigger and better things, it’s great for Evolution continue to scour the horizon for acquisition opportunities.”
and it’s great for the mining industry.”
Since mid-2015 when Evolution embarked on the acquisition
Evolution’s output in FY2018 saw the company post records spree which saw it land Cowal, Mungari in Western Australia
for operating cash flow ($811.8 million), net mine cash flow and an economic interest in Glencore’s Ernest Henry operation
($539.9 million) and statutory net profit after tax ($263.4 in Queensland, the company has generated net mine cash

Page 32

flow of more than $1.4 billion post all capital Evolution given its reduced production profile (down to
investment in organic growth projects. During that 120,000 ozpa after being acquired running at 150,000 ozpa)
time the company has also increased its reserve and low reserve life, but Klein says the asset is going nowhere.
base from 2.2 moz to 7.2 moz and extended the “We’ve got 2-3 years of mine life currently assessed in
average reserve life of its portfolio from 5.1 years reserves and then lower-grade feed which there’s plenty of
to 9.6 years. from White Foil or Castle Hill or various other things,” he said.
“I don’t want to give the impression that I’m giving up on
Perhaps most importantly, the addition of Cowal, Mungari. We know we need to find some higher grade
Mungari and Ernest Henry, coupled with the mineralisation and are committed to doing that. We think it is
divestments of Pajingo and Edna May, helped there, it’s just a case of finding it.”
Evolution reduce its group AISC from $1,036/oz at While Evolution and other Australian gold producers continue
the end of FY2015 to the $797/oz it is averaging to shine, Klein still bemoans the underwhelming state of the
across the portfolio today. global gold sector, pointing to the fact many investors are still
feeling the effects of more than $US85 billion of impairments
“I’ve been saying for the last 3-4 years that we want which followed the 2011 peaks.
to be there [among the world’s lowest-cost gold The former Sino Gold Mining boss also queried whether the
producers], so it’s good that we’re now there, but gold industry has truly learnt from its past mistakes.
the challenge for us now is to sustain that – and I
think we can,” Klein said. Jake Klein

“We’ve taken a slightly different view of the space “It seems to me there are plenty of gold mines currently being
to be in and I’m very confident that we’re right. We operated which aren’t making money and you have to wonder
want to focus on profitability, we want to focus on whether they’re better put on care-and-maintenance than
margin; we’re not volume focused, we’re not driven operated at effectively what is a cash loss per ounce,” Klein
by growth without profitability. It’s all about returns said.
on capital, it’s all about returns to our investors and “I think the Aussie gold sector has a lot to be proud about
the quality of our portfolio. That’s what you’re seeing through 2018…but the gold sector as a whole is not in quite
Evolution positioned for now and we’re challenging as good a shape and I think is struggling a bit from investor
ourselves to continue that and be true to our view fatigue and negative sentiment.”
and our vision.” Klein said the merger of Randgold Resources Ltd into Barrick
Gold Corp had effectively vacated top spot in the global mid-
Work on the $25-30 million plant expansion at Cowal tier gold space, but it was still too early to tell what impact it
to increase throughput from 7.5 mtpa to 8.7 mtpa would have on companies such as Evolution.
will begin this quarter, with commissioning expected “I think investors are hopeful that the merger is going to be
about a year after. Evolution is also permitted for a successful, but I think we’ve got to give it some time to settle
further increase to 9.8 mtpa. down and to see the real impacts of it on the sector,” he said.
“I’m not yet convinced that a rash of M&A is really going to be
A $14 million float tails leach project targeting an increase in in investors’ interest, unless there are clear synergistic and
recoveries by 4-6% is also under way, as well as development compelling value proposition reasons.”
of an exploration decline to follow up on a series of promising
step-out drill hits, such as 0.9m @ 946 g/t gold from 526m and
46m @ 7.8 g/t from 625m.

“It’s an asset which is opportunity-rich and unique in the gold
space because it is really overflowing with opportunity, both
geological and optimisation opportunities like this float tails
leach and increases to throughput,” Klein said.

“Over the next couple of years, our challenge is to find out the
scale and size of the Cowal mineral system because clearly
we have something materially and significantly bigger than
what we anticipated. The great thing we now have is time and
opportunity in front of us to do this asset justice.”

Ernest Henry remains the premier cash generator in Evolution’s
stable, contributing $53.8 million for the September quarter,
having produced 95,000oz for a negative AISC of $641/oz in
FY2018.

Also in Queensland, the consistent performances of Cracow and
Mt Rawdon continue to fly under the radar amid the headline
successes achieved by other assets in the portfolio, while
Evolution is preparing to take the Mt Carlton mine underground.

Mungari’s long-term future is the only cloud hovering over

Page 33

FINALIST: MINER

St Barbara sends
records tumbling

by Mark Andrews

Bob Vassie marked his four-year anniversary as managing nothing has been done yet,” Vassie told GMJ.
director of St Barbara Ltd in fine fashion with records
reported across key areas of the company’s business in 2018. “We haven’t given up on Australia, but just as some of our peers
have looked offshore our focus has also been on North America
FY2018 saw the company produce in excess of 400,000oz gold and to some extent South America.”
for the first time ever, with consolidated production from Gwalia
and Simberi totalling 403,089oz @ AISC of $891/oz. Consolidation in the gold sector was anticipated at the junior/
mid-tier end of the market in 2018, instead it was the big boys of
Record profit after tax of $227 million was achieved, while a Barrick Gold Corp and Randgold Resources Ltd who surprised
“respectable” full year dividend of 12c/share yielding 3% for many with a proposed deal in October.
shareholders was also a highlight.
It appears the New Barrick tie-up, which was expected to
The company has made year-on-year improvements since be closed on January 1, has inspired others in its field, with
Vassie took over in 2014, but the performance in FY2018 Newcrest Mining Ltd and Goldcorp Inc rumoured to be on the
enhances St Barbara’s five-year strategy of growing “stronger dance floor.
for longer”.
Vassie said such activity was generally positive for the sector.
And, with $350 million cash and no debt as at September 30,
St Barbara is well placed for both organic and inorganic growth. “There is some speculation that there is more activity on the
way at the bigger end. If it did happen, the spin-off of non-core
“We spent the first couple of years repairing the company assets is something that Australian companies have been able
and the balance sheet and over the past 1.5 years looking at to benefit from in the past,” Vassie said.
inorganic growth. We have certainly been in a number of data
rooms and have gone a long way down the track on some “For us, it is not about doubling production, but about diversifying
opportunities, but for one reason or another, mainly valuations, it and we’re still focused on gold.”

On the early stage opportunities St Barbara has been actively

Page 34

taking positions in junior explorers, Vassie said: “We have a robust. The Gwalia Mass
punch list of ground that we like and it is like having children; it is Extraction feasibility
hard to pick a favourite.” study [due March] will
also allow us to step
For the time being, St Barbara has narrowed its favourites up production tonnage
down to four and made investments in polymetallic explorer underground as it gets
Peel Mining Ltd in the Cobar Basin, New South Wales, plus deeper,” Vassie said.
gold hopefuls Catalyst Metals Ltd (Victoria), Prodigy Gold NL
(Northern Territory) and Duketon Mining Ltd (Western Australia). The mass extraction
initiative at Gwalia will
More recently, St Barbara entered an earn-in/JV agreement with see production at the
Australian Potash Ltd concerning ground at the Lake Wells gold mine extended to 2031,
project, 150km north-east of Laverton. while Vassie was looking Bob Vassie
forward to seeing some
For a total of $7 million, St Barbara can eventually earn 70% of exploration results from around Gwalia this year.
the project.
Exploration is also ongoing at Simberi, whereby the aim is to
The company also has a JV with Newcrest in Papua New extend the mine life by targeting further sulphide ore.
Guinea, in which drilling is ongoing, with a promising copper-gold
porphyry the target in the early part of 2019. The current mine life at Simberi is out to FY2021, at which stage
low-grade stockpiles will be processed.
St Barbara’s ability to branch out and entertain options is
essentially born from the turnaround in operations and expansion To ensure a reliable cash margin is received from Simberi
strategies at its existing Gwalia and Simberi mines. production in FY2020/21. St Barbara has entered into a total of
50,000oz of forward gold contracts to be delivered in monthly
Vassie said there were key milestones ahead in early 2019, instalments from January to December 2020 at a forward price
particularly at Gwalia, which would make a material difference of $1,809/oz.
to operations.
Forecast production from Simberi for FY2019 is 105,000-
“We’re completing the paste aggregate fill underground at Gwalia, 115,000oz gold at AISC $1,275-1,375/oz, however, in the first
that is important as it allows us to deal with waste underground quarter of the financial year the mine produced 35,900oz at
and raise bore waste underground. It is coming in later than AISC $1,068.
we would have liked but we have changed it to make it more

CREATING AUSTRALIA'S
PREMIER GOLD COMPANY

www.evolutionmining.com.au • ASX:EVN

Page 35

FINALIST: MINER

OceanaGold takes its mid-Pacific

Mick Wilkes doesn’t mind being caught gold sector which has seen the investment community
mid-Pacific between underperforming North abandon it due to decades of underperformance.

American gold companies and their “It is very different to how gold equities have been perceived
overachieving Australian peers, as long by the North American market over the last 10-20 years
as his OceanaGold Corp continues its when there was so much wasted capital,” Wilkes added.
“There is certainly a new breed in the sector and we’re part
upward trajectory. of it and getting good response from investors. It is all about
running a gold company like any other business.”
Over the last decade since dual-listing on the TSX,
OceanaGold has watched North American investors The company’s financials are clear evidence as to why
flee the precious metals space but in recent years the investors are returning to the stock. Along with Randgold
company has also seen its Australian peers become Resources Ltd it is the only gold miner in the world to deliver
international market darlings. positive returns on investment every quarter in the last eight
years.
At times, this has led to OceanaGold being compared
unfavourably with ASX counterparts but has recently seen Gold production for the calendar year to September 30 was
the company win support of disaffected North American 406,621oz at AISC of $US751/oz. That produced revenue of
investors. $US589 million and EBITDA of $US290 million as well as a
33% increase in net project and a 13% increase in cash flow
Its ASX-listed shares had increased by 20.85% year-on- per share to $US0.44.
year at the time of print while its Toronto-domiciled shares
had appreciated more than 25% after the company posted If North American investors are beginning to warm to
record revenue numbers for the year. OceanaGold’s Australian sensibilities, Wilkes believes
Australian investors may soon wake to the company’s
“I think ourselves and our Australian peers have captured multinational portfolio.
the interest of investors globally in recent times,” Wilkes told
GMJ. “We make cash and have proven we can run gold The Brisbane-headquartered company boasts assets in
companies, make profits, reinvest and pay dividends and three countries – New Zealand, Philippines and the US –
give great returns to shareholders; that’s got the interest of a fact which sets it apart from most of its Australian peers.
the market.” While this may lead to OceanaGold trading at a discount to
its domestic equivalents, advantages could soon materialise.
Such performance stands at odds with the North American
“We have set ourselves up with a portfolio to grow the
company into the future, with different operations in different

Page 36

mark by the Martha underground. It is an exciting project with lots of
Dominic Piper potential. There is a lot of gold there and we keep finding
more.”

OceanaGold started the permitting process to extend
the Martha mining permit a further 10 years and take in
underground development in March. Resources at the target
have grown from a little over 100,000oz gold in 2017 to
more than 300,000oz and with only a third of planned drilling
completed, the company expects a further 50% increase to
5-8mt @ 4-6 g/t of resources.

At the company’s other 2015 acquisition – Haile in South
Carolina, US – commissioning issues appear to have finally
been solved with a pebble crusher and upgrader thickener
now installed.

“Commissioning took five months longer than anticipated

after we found some process design elements that didn’t

work,” Wilkes said. “We are now investing $US30-40 million

in the plant to upgrade throughput and increase recoveries.

And it is all going well. We are pleased with the progress and

achieved nameplate capacity and will hit 4 mtpa consistently

j OceanaGold has now marked Waihi to in the next two years.
produce 200,000 ozpa in coming years
“It is still a work-in-progress but building towards its full
potential. Also, from an exploration perspective, there is plenty

of opportunity for near-mine and district-scale discovery.”

jurisdictions,” he said. “We have a philosophy of going where At the company’s oldest asset, Macraes on New Zealand’s
the gold is and our [corporate] infrastructure allows us to do South Island, the company is confident of producing a further
that. It means we have the ability to develop and operate the 600,000oz over the next five years.
best assets anywhere in the world.
“We’ve added three years with a new mining plan and the
“The Australian sector is very crowded now which makes discovery of high-grade ounces further down-dip,” Wilkes
it hard for those companies to grow domestically. We see said.
ourselves as a stronger, more robust company with greater
flexibility if we invest in the right assets.” The company’s most consistent operational asset is the
Didipio gold-copper mine in the Philippines where the
The company’s recent acquisition track record is proof of its company produced 32,844oz gold and 4,232t copper at ASIC
ability to take on differing locations and asset types. of $US719/oz in the September quarter.

At Waihi, the company has enjoyed improved productivity “Didipio is still smashing it out of the park,” Wilkes said. “It
and exploration success since picking up the New Zealand is a terrific workforce with a great culture and records have
mine from Newmont Mining Corp in a $US101 million cash continually been broken. It is a real solid mine these days and
deal in 2015. the political risk has subsided in the last 12-18 months.”

“We see Waihi as having potential to be a plus-200,000 ozpa The irony is that for all Didipio’s consistency, it continues to
producer. We will achieve that in three phases; the first being weigh heavily on OceanaGold’s value rating due to its location.

The erratic behaviour of maverick Filipino President
Rodrigo Duterte has made investors extremely wary
of companies committing funds to the South-East
Asian nation.

Wilkes is comfortable with OceanaGold’s investment
and Didipio’s ability to deliver for the company but
he is aware of the problems the country’s political
situation poses.

Waihi’s life has been extended by 10 years thanks “Even though I’m comfortable with investing further
to the opening of the Martha underground mine there, we’ve had to say no to further exploration
because investors are not,” he said. “There are a lot
of questions about new developments in the country.”

Page 37

FINALIST: MINER

Kirkland continues
high times
at Fosterville

by Dominic Piper Ian Holland

The biggest surprise package in the Australian gold space in the last two
years, Kirkland Lake Gold Inc’s remarkable performance at the Fosterville

in Victoria is set to continue in 2019.

When Kirkland Lake picked up Fosterville as part of its continuing, Swan’s reserve-resource numbers were expected
takeover of Newmarket Gold in December 2016, it was to dramatically increase in the December 31 resource-
an unremarkable mine. The project had been in the hands of reserve statement.
North American companies for more than 20 years and it had
developed a reputation as high-grade but “difficult” due to the Kirkland Lake drilled more than 120,000m at Fosterville in
nugget effect synonymous with most Victorian gold plays. 2018, with numerous high-grade hits. Recent infill drilling
delivered intercepts of 6m @ 289 g/t, 99m @ 155 g/t, 3.2m
Two years on from the acquisition, Fosterville is now @ 423 g/t and 5.9m @ 215 g/t while an intersection 200m
established as one of Australia’s best-performing gold down-plunge of the current Swan reserve returned an assay
operations. It had produced 231,923oz for the year to the of 6.8m @ 83.1 g/t gold.
end of September at average grades of 25.6 g/t gold and has
increased reserves from 338,000oz in 2015 to 1.7 moz @ Speaking on the company’s September quarterly call, vice
23.1 g/t at the end of 2017. president Australian operations Ian Holland said mining into
the Swan zone wouldn’t be fully operational for another year.
“The locals scoffed at Kirkland and thought they paid too
much for it,” GMJ Awards panellist Allan Kelly said. “There “We will expect to see a handful of stopes over the course
was a feeling of: ‘look at these silly Canadians coming in for of Q4 and into early next year as we ramp up,” Holland said.
this asset.’ It is the Australians who are looking a little bit silly “And really, Swan doesn’t reach the full production levels
now.” until 2020. The Swan reserve grade is 61 g/t, but it’s not the
overall reserve grade because there’s other material as well.
The September quarter alone saw a 17% increase in So, we will continue to see an increase in head grade. And
production from Fosterville, leaving the company anticipating that really drives the production level to in excess to 400,000
330,000oz gold production for 2018 against guidance of 300- ozpa by 2020. It’s not all Swan, it’s a proportional increase.”
310,000oz. AISC for the September quarter was $US416/oz.
The company’s exploration plans have also expanded to
Kirkland Lake chief executive Tony Makuch said investment Northern Territory. Kirkland Lake suspended mining at its
in mine infrastructure at Fosterville led to a dramatic Cosmo mine in the NT in June 2017 but in November, hits of
improvement in performance. 3.4m @ 8.9 g/t and 4.1m @ 7.5 g/t from the Lady Alice deposit
and 0.3m @ 60.4 g/t from below the existing Union Reefs
“We installed and commissioned a new gravity circuit at the resource at Cosmo have the company confident operations
Fosterville mill during Q3 and have since seen our recovery can restart.
of gravity gold increase to well over 50% of the total ounces
produced,” Makuch said. “The continued exploration success we are achieving at Union
Reefs, as well as with underground drilling at the Lantern
Remarkably, the mine is set to increase its contribution to deposit, is increasing our confidence that an attractive five-
Kirkland Lake’s 600,000 ozpa group production in 2019. year mine plan can be established, which could lead to the
resumption of operations in the NT in 2019,” Makuch said.
The December quarter saw mining begin in the high-grade
Swan zone (171,000oz @ 116 g/t indicated and 671,000oz
@ 36.6 g/t inferred). However, with exploration success

Page 38

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FINALIST: EXPLORER

Catalyst comes in
from the shadows

by Mark Andrews

Catalyst Metals Ltd’s tightly held share register and big name backers are on cloud nine.

Catalyst was trading at an all-time $1.92c/share high in late 3m @ 154 g/t, 4m @ 20 g/t); Hayanmi (20m @ 21.4 g/t, 22m @
2018 on the back of tremendous success in the Whitelaw 36.5 g/t, 6m @ 21.5 g/t); Discovery (6m @ 82.7 g/t, 3m @ 9.6
Gold Corridor, north of Bendigo, Victoria. g/t) and Cunneen’s (1m @ 1.26 g/t from 149m, 1m @ 1.26 g/t
from 107m and 1m @ 3.1 g/t from 124m [2017]).
With about 500 shareholders, including St Barbara Ltd holding Meanwhile, at Tandarra, south of Four Eagles, intersections of
16% equity, plus Hancock Prospecting Pty Ltd as a JV partner 17m @ 7.1 g/t gold, 10m @ 17.9 g/t and 5m @ 17 g/t have
at Four Eagles, finding a way into the stock now won’t be cheap provided Catalyst impetus to put the foot down on more drilling.
or easy. Kay told GMJ that between December and June a further
23,000m would be completed at Four Eagles and 10,000m
And, neither will be claiming territory near Catalyst, with the at Tandarra, however, no indications on when any resource
company’s inroads in the Whitelaw Gold Corridor now attracting information would be revealed.
large crowds. “At Boyd’s Dam we did infill drilling on about 25m spacing.
We are in there at the moment with some RC drilling looking
“There is a lot of competition in the district now, whereas five at some areas of the model where we haven’t got enough
or six years ago nobody wanted to know us or be there, to information. But, once we have done that we should be able to
be honest. We struggled along and tried to build a whole field have some sort of information there,” Kay said.
position. That has taken six years for us to do and our success “We now see it prevailing at depth, the same as Fosterville and
along with Fosterville is all adding to the story of Victorian gold Bendigo with stacked orebodies below the surface. Originally,
under cover,” Catalyst technical director Bruce Kay told GMJ. the only information we had was in the top 100m from RC
drilling. Similarly at Tandarra, there was a diamond hole that
“The thing that drives us is the outcrop areas to the south; had another parallel zone at depth, so that will have to be
Bendigo with 22 moz gold and Fosterville headed for 10 moz followed up in 2019.”
and maybe more. There is 32 moz there, so we think that the Kay said the large amounts of diamond drilling completed in
chance of getting something big under cover is quite strong.
Catalyst’s five-year share price history. The company was market
“We are being well supported in JV with Hancock and equity capped at $132 million in late 2018. Source: Google Finance
from St Barbara; they’re not there for the little things, they are
there for the elephants,” he said.

Drilling at Four Eagles and Tandarra, where Catalyst has
earned a 51% interest in the project with Navarre Minerals
Ltd, started later than Kay would have liked in 2018 due to
the “cumbersome” nature of gaining retention licences from
the Victorian Department of Economic Development, Jobs,
Transport and Resources.

Despite the elongated process, the retention licences at both
Four Eagles and Tandarra are now good for the next 10 years.

The progress made by Catalyst in 2018 indicated why it was
eager to get going at Four Eagles and Tandarra.

Diamond drilling at both projects showed evidence of stacked
high-grade shoots.

Catalyst has had outstanding success in 2018 from Four
Eagles prospects such as Boyd’s Dam (16m @ 63 g/t gold,
19m @ 10.5 g/t and 17m @ 8.5 g/t; Boyd North (9m @ 8.2 g/t,

Page 40

Catalyst controls 75km of the
Whitelaw gold corridor in Victoria

2018 gave the company a fair idea of where it was
in the structure, with high-grade hits at Boyd’s Dam
particularly pleasing.

The company controls the entire Whitelaw gold corridor
and is committed to taking the time to discover whether
there are more Bendigos and Fostervilles under cover.

Through the drill bit and prudent exploration activities,
Catalyst could go some way to reshaping the
reputations of the Victorian goldfields which have been
negative since the failures at Bendigo and Ballarat in
the 1990s.

However, with strong shareholder support and Tier
1 partners, Catalyst is slowly burying some of the
demons of the past in Victoria and along with Kirkland
Lake Gold Inc’s production and exploration success at
Fosterville, a new dawn in Victoria’s gold mining sector
could be in the making.

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Page 41

FINALIST: EXPLORER

Apollo opens up Rebecca
to growth

by Dominic Piper

Most gold projects go through several sets of hands before their true value is finally unearthed,
fortunately for Apollo Consolidated Ltd, it was still holding onto the prospect when its potential

was eventually identified.

The progress of the Lake Rebecca gold project – 150km gneissic host rock to the west of the Laverton Tectonic Zone.
east of Kalgoorlie, Western Australia – is a classic slow- Aberfoyle had mainly focused on Redskin and Duke but
burn exploration story of changing ownership amid shifting
when Apollo returned in 2017, it was keen to follow up on the
priorities but despite neglecting the project when its attention
less drilled Bombora prospect.
was dragged elsewhere, Apollo is now unstinting in its
devotion. “Aberfoyle did most of the early-stage work at Redskin and
Duke because they had good soil results and outcrop,”
“The route to tripping over Rebecca was longer because we
Castleden said. “Aberfoyle put in 6-7 RC holes into Bombora
were distracted by Cote d’Ivoire,” Apollo managing director
[now renamed Rebecca] and had a best intercept of 20m @
Nick Castleden admitted to GMJ. “It had been the start-off
2 g/t, so they almost found it.
project in the company’s recapitalisation in 2012 but that was
during West Africa’s heyday so we went there and largely “So, it was under cover and under drilled but had high-grade
forgot about Lake Rebecca.” mineralisation, making it a classic case of simply needing to
continue where previous explorers had left off,” Castleden
Apollo found some success in Cote d’Ivoire but a lack of
said.
market interest through 2016 and 2017 led it to revisit Lake
Rebecca. Apollo’s own drilling returned a hit of 42m @ 7.75 g/t gold
in August 2012 but with Cote d’Ivoire showing increasing
Once the exploration team returned, it quickly remembered
strength, funding was redirected to West Africa.
why it had been so interesting in the first place.
The big breakthrough came in June 2017 when the first
“We went into the field expecting to be disappointed but soon
diamond hole into Rebecca returned two hits of 17.84m @
realised there was a serious alteration event and so within
15.95 g/t from 142m and 49m @ 4.57 g/t from 166m.
the low-grade numbers previously reported there could be
potential for high-grade mineralisation,” Castleden said. “That was the hit which made the market sit up and take
notice. We could’ve probably drilled that hole in 2012 but for
The Rebecca tenements had last been worked by Aberfoyle
circumstances,” Castleden said.
“in the 1990s. It had identified three lode-style prospects
Bombora, Redskin and Duke, all of which host broad gold Regardless of previous delays, the hits sparked Apollo into
mineralisation associated with disseminated sulphide in a action at Rebecca.

The mineralisation is broadly similar
but with different host rocks to the

likes of Explaurum, Ausgold and Cygnus with

similarities to Tropicana and the discovery

made in the granite at Jundee recently. They

are complicated as they are folded and Cross sections from Apollo Consolidated’s
cooked but there is a bit of technical noise Jennifer lode discovery on the Rebecca prospect

about exploring in these rocks.

Page 42

“We haven’t really stopped since we drilled that hole,” Gold zones at Rebecca are
Castleden said. hosted in altered felsic gneiss
with gold related to cloud
The company drilled more than 14,000m of RC and diamond disseminated sulphides
holes in 2018 as it first built its understanding of the Jennifer
lode at Rebecca and then expanded its horizons. The new discoveries at Jennifer and Laura have also given
Apollo confidence to return to Redskin and Duke where
Apollo has had a consistent run of drilling success but previous drilling had returned 23m @ 1.51 g/t and 35m @
Castleden is conscious of the challenges he has in front of 1.41 g/t gold respectively.
him.
Duke has displayed good continuity over a 300m long zone
“At first it was very easy to hit mineralisation at Jennifer and remains open at depth and to the east.
but these are highly metamorphosed rocks with twists and
turns,” he said. “The deepest hole was the weakest because “Duke is a ripper,” Castleden said. “It definitely needs more
of the abrupt geometry changes; as it gets deeper it pinches work but will be a bolt-on deposit to Jennifer.”
out. But, it is unlikely to stay pinched out so we must find
where it dilates out again.” Such confidence may hint at an impending resource
announcement but Castleden said the company would
Drilling results in October from RC hole RCLR0270 produced remain patient.
intersections of 22m @ 3.33 g/t from 204 and 12m @ 1.86 g/t
from 229, indicating there was still potential for the Jennifer “We are still in the growth phase so we won’t calculate
lode to open up again at depth. anything yet,” he said. “You don’t need to be putting out
premature numbers in different systems because they can
The October results also included hits of 17m @ 2.92 g/t and become irrelevant very quickly. But, from next year with the
15m @ 3.29 g/t gold which heralded the discovery of the market watching it we are going to have to consider a resource
Laura lode, 300m south of Jennifer. And, a further intercept because people can begin working it out themselves.”
of 25m @ 1.36 g/t gold 100m to the west of Laura confirmed
a an additional prospect in the area. That market observers are beginning to keep tabs on Apollo is
obvious. The company’s share price climbed more than 400%
“We found the Laura lode which is looking like a 10-15m in mid-2017 off the back of the early discoveries at Rebecca
thick slab of mineralisation, not quite the grade of Jennifer and unlike many of its peers Apollo has managed to maintain
but with simpler geology,” Castleden said. momentum in 2018. Its shares were up 23% over the year,
including a rally from 15c/share in June to 26.5c at the time
He is convinced Rebecca hosts multiple mineralised of print.
surfaces along the strike horizon.
The share performance could be attributed in part to a wider
“Jennifer will be the driver but we plan to flesh out the other market interest in other non-greenstone gold discoveries of
lodes. We are now stepping out to find where the lode recent times.
repeats elsewhere. We are into a phase of strike drilling
north and south. We are at 1.3km strike and it is still open in “The mineralisation is broadly similar but with different host
both directions.” rocks to the likes of Explaurum [Ltd], Ausgold [Ltd] and
Cygnus [Gold Ltd] with similarities to Tropicana and the
discovery made in the granite at Jundee recently,” Castleden
said. “They are complicated as they are folded and cooked
but there is a bit of technical noise about exploring in these
rocks.”

Page 43

Namdini moving closer
gold project to fruition

in Ghana

Cardinal Resources Ltd’s Namdini gold robust low‐cost mining operation. it to be technically sound and financially
project in north-east Ghana has moved viable and could generate $US1.4 billion
closer to fruition on the back of a positive The study evaluated three separate free cash flow [pre-tax] utilising the 9.5 mtpa
PFS. production throughput rates – 4.5 mtpa, 7 throughput model.”
mtpa and 9.5 mpta – which all resulted in
In March, following an intensive infill drilling very strong returns. Permitting and approvals work is
programme, Cardinal upgraded the Namdini also continuing in line with Cardinal’s
indicated mineral resource used in the Given current market conditions in the global expectations. The Namdini mining licence is
Preliminary Economic Assessment (PEA) from gold sector, a variety of development options located 50km south-east of the regional town
4.3 moz to 6.5 moz gold with 0.5 moz gold in were considered, including commencing with of Bolgatanga, the capital of the Bolgatanga
the inferred mineral resource category. a 4.5 mtpa throughput with allowance for Municipal District and Upper East Region of
later expansion. northern Ghana. It is approximately 60km
The infill drill programme – 15,684m across south of the Ghana-Burkina Faso border and
35 drill holes – also incorporated grade The PEA was based on the 4.5 mtpa option 15km from Cardinal’s Ndongo East Prospect.
control, pit geotechnical, hydrogeology and and a $US275 million development capital Namdini lies within the Nangodi greenstone
tailings infrastructure drilling, which assisted cost suggested a potential mine life of 27 belt, one of a series of southwest–northeast
in PFS work. years and a post-tax internal rate of return of trending granite-greenstone belts which host
41%, while the 9.5 mtpa option (capital cost significant gold mineralisation in Ghana and
Cardinal managing director Archie Koimtsidis of $US426 million) offered a mine life of 14 Burkina Faso.
said the infill drilling had greatly increased years and a post-tax IRR of 44%.
the size and level of confidence in the Cardinal holds a 100% interest in the large-
Namdini resource and suggested further Based on the current larger resource of scale mining licence covering 19.54sq km of
potential given the resource remained 6.5 moz (indicated) and 0.5 moz (inferred), its Namdini project. During the December
open both along strike and down dip, with announced by Cardinal in March, the 2017 quarter, a large-scale mining licence
mineralisation intersected down to 650m company expects the Namdini mine life to covering the Namdini mining lease was
vertical and still open. increase materially, hence the company assigned to Cardinal by the Minister of Lands
explored the possibility of even larger and Natural Resources under the regulations
“With the majority of the indicated mineral throughputs. of the Minerals and Mining Act of Ghana
resource continuous from surface to a 2006 (Act 703). The large-scale mining
vertical open pit depth of approximately The latest study information released by licence is valid for an initial period of 15 years
400m, we anticipate a greater conversion Cardinal in September was a PFS on Namdini. and is renewable.
of mineral resources to ore reserves within
a simple, single, large-scale open pit, with The PFS highlighted potential for a 9.5 mtpa Although the presence of gold in the region
a very low strip ratio of approximately 1.2:1 operation producing from probable reserves was recorded in the 1930s, it was not until
over the life-of-mine as the preferred mining of 129.6mt @ 1.14 g/t for 4.76 moz gold (0.5 g/t the Namdini deposit was discovered by
method,” Koimtsidis said. cut-off). Savannah Mining in February 2015 that

“The higher-grade areas of the deposit, close Gold production of 294,000 ozpa gold over
to surface, will be targeted within the Stage 14 years was estimated.
1 pit in the early years of production. As the
recent results of our PEA indicate, this Stage “We now have a compelling business case
1 pit will be the area most likely to repay to move into the DFS phase for the 9.5 mtpa
capital investment soonest. throughput processing facility based upon
the optimum return on capital employed. The
“The Stage 1 pit will see approximately 1 moz feasibility study is fully funded and will form
mined over three to four years at an average the basis for the development of our Namdini
head grade of approximately 1.3 to 1.5 g/t project in Ghana, with completion anticipated
gold, based upon the existing PEA results in Q3 2019,” Koimtsidis said.
and the final throughput size selected.”
“The PFS confirms the Namdini project as
Cardinal’s PEA for Namdini, released to the one of Ghana’s and Africa’s most promising
market in February, indicated the project undeveloped, large gold assets. The
could deliver a technically and financially financial modelling of the project shows

Page 44

Archie Koimtsidis

September 2018 PFS estimates
Namdini life of mine production
summary, including starter pit -

Probable ore reserves: 129.6mt @ 1.14 g/t
for 4.76 moz gold (0.5 g/t cut-off)
Throughput: 9.5 mtpa
Average production: 294,000 ozpa
Gold price: $US1,250/oz
Life-of-mine production: 3.975 moz
Life-of-mine average head grade: 1.14 g/t
Mine life: 14 years
Capital cost: $US414 million (including
owners cost and 15% contingency)
Project payback: 1.8 years

modern exploration techniques were “Clearly, it’s a vote of confidence in the project footprint.
employed in the area. Cardinal team and our Namdini project
in Ghana as well as giving Gold Fields a Koimtsidis said the company planned
Cardinal signed an agreement with strategic position going forward,” he said. further infill and extensional drilling with
Savannah over the Namdini area in July 2014 both RC and diamond drill rigs at Ndongo
and commenced drilling later that month, “Ultimately, we are not privy to Gold Fields’ to target the strike and dip extensions of the
with the first results announced in August long-term intentions. We remain focused on mineralisation.
2014. Drilling continued throughout 2015 and progressing Namdini to deliver value to all
2016 and Namdini’s maiden resource was our shareholders which includes board and “We are highly encouraged with the results
announced in November 2016. management who also have hard currency at Ndongo, particularly given the strong
invested.” grades we are seeing near surface,” he said.
Follow-up exploration in the area has
included aeromagnetic surveying, regional- While work is progressing on the Namdini “These results further strengthen our resolve
and prospect-scale geological mapping and development studies, Cardinal is continuing that the Ndongo licence is highly prospective
rock chip sampling. Ground magnetic and its exploration focus at nearby prospects that with several untested drill targets which could
induced polarisation surveys and subsequent could provide significant additional ore feed. deliver another significant gold discovery.”
geological and structural interpretations
were completed over the deposit in 2016. In May, Cardinal reported encouraging results Shallow RC results from Ndongo East:
from first-pass shallow RC drilling designed to
The success of Cardinal at Namdini attracted test one of its six coincident gold-in-soil and • 3m @ 29.3 g/t gold from 45m
the interest of Gold Fields Ltd in April 2017 geophysical targets on the Ndongo licence • 3m @ 4.1 g/t from 122m
and resulted in the South African major within the Bolgatanga project, located • 9m @ 23.3 g/t (including 3m @
gold producer acquiring a substantial 15km north of Namdini. Cardinal’s interest 59.2 g/t) from 60m,
stake through on-market share purchases at Ndongo project covers an area of 295sq • 9m @ 11.5 g/t from surface (includes
throughout 2017. Gold Fields, which has been km, having been augmented by the addition 3m at 29.8 g/t),
operating in Ghana for more than 25 years, of two exploration licence areas from Kinross • 9m @ 2.4 g/t from 43m,
controls 11.2% of Cardinal shares and 8.7% of Gold in August 2017. • 7m @ 4.4 g/t from 14m,
the listed options – a position that Koimtsidis, • 6m @ 2.0 g/t from 11m,
a resident in Ghana, says he is comfortable Ndongo is one of three prospects – the • 24m @ 1.2 g/t from 2m, and 14m at
with. other two are Bongo and Kungongo – 1.4 g/t from 46m,
that are within trucking distance of the • 4m @ 1.2 g/t from 20m, and
The investment by Gold Fields led to market Namdini project. Although it is too early • 8m @ 1.4 g/t from 1m
speculation that it has earmarked Namdini as to factor those prospects into Namdini’s
a potential addition to its existing Ghanaian development studies, the potential exists for
portfolio, though this is a topic Koimtsidis will any discovered satellite deposits to further
not be drawn on. enhance the greater Namdini resource and

Page 45

AFRICA

New Barrick chief eyes
miners’ alliance to fix

Tanzania tax row

by Zandi Shabalala, Susan Taylor, Reuters

Barrick Gold Corp’s incoming chief executive said he wants to speak publicly, said it may be challenging to unite Tanzania’s
to pull together Tanzania’s mining industry to tackle a mining industry, which may “not want to inherit” Acacia’s issues.
“desperate” tax dispute that has snared several companies,
including the firm’s Acacia Mining plc unit. The collective approach is not assured to succeed.

In an increasingly acrimonious conflict that has lasted almost A new code in the DRC, which scrapped a stability agreement
two years, the Government has torn up mining contracts, hiked while hiking royalties and taxes, was enacted despite vigorous
taxes and royalties, and banned raw minerals exports. opposition from miners led by Randgold and Glencore.

President John Magufuli, nicknamed “The Bulldozer”, swept to But Bristow, who says he plans to intervene in Tanzania before
power in 2015 pledging to secure a bigger share of resource the takeover closes, is confident he can break the impasse.
wealth and cut corruption. Acacia was later handed a $US190
billion tax bill – about four times the country’s GDP – for “Barrick is concerned about the situation in country at the
underreporting output. moment. It’s desperate,” he said.

The miner, 63.9% owned by Barrick, now faces dozens of Barrick executive chairman John Thornton, who last October
criminal charges, from tax evasion to money laundering, with struck a framework deal with the Government that is still not
three employees arrested on related accusations enacted, said Bristow has “great standing” in Tanzania.

Randgold Resources Ltd founder Mark Bristow, Barrick’s new Under the October deal, Acacia was to pay the Government
chief executive after its $US6.1 billion acquisition of Randgold $US300 million, give it 16% ownership and split the economic
closes on January 1, says fixing Barrick’s mounting problem in benefits of its mines.
Tanzania could require a collective strategy that has not been
used there before. Acacia, which has lost more than two-thirds of its value since
early 2017, was blindsided by the deal, a source said. The
“Tanzania has got a broader [mining] industry and the importance biggest hurdle to its enactment is disagreement over the
of the industry itself getting together with government is not a $US300 million pay-out schedule and whether it settles the
bad idea,” Bristow told Reuters in November. long-standing tax dispute, the source said.

While there is as yet no agreement to coordinate, Bristow said: One of Barrick’s two lead negotiators, special envoy to Tanzania
“I don’t think it’s a bad place to start.” and former chief operating officer Richard Williams, recently left
the company.
Mining accounted for 4.8% of Tanzania’s GDP in 2016, the
last year for which figures are available. Acacia dominates the Barrick’s head of strategy Kevin Thomson will now work on
industry, followed by AngloGold Ashanti Ltd, Petra Diamonds the matter with Barrick’s new Africa and Middle East chief
Ltd and Shanta Gold. operating officer Willem Jacobs, who will take up Williams’
responsibilities.
AngloGold said it would consider allying with Acacia on the
issue. A source at another mining company, who did not want Jacobs, formerly Randgold’s head of Central and East African
operations, ran talks for the miner in Congo.

Page 46

4 - 6 September 2019

Perth,Western Australia

Africa Down Under (ADU) continues to deliver the leading forum for Australia-Africa business relations.
The conference was introduced to raise awareness of Australia’s interests in African mining and energy,

and has grown to form the central pillar of Australia’s “Africa Week”.

Since the inaugural conference in 2003 ADU has assembled the best success stories from across Africa,
and continues to demystify the notion that doing business in Africa is “too hard”. ADU has since become

the MUST ATTEND event for those planning to invest in projects in Africa, who already have projects in
Africa; or those interested in doing business in Africa.

Join us on 4-6 September 2019 when Perth once again asserts its position as a global capital for
African mining, as well as the driving force of Australian-African relations.

SNAPSHOT: ADU 2018

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Interested in presenting or sponsoring? Contact Namukale Nakazwe-Msiska [email protected]
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For all queries phone +61 (0)8 9321 0355

AFRICA

Mako makes
instant impact

by Michael Washbourne

As far as maiden drilling programmes go, Mako Gold Ltd an alternating iron carbonate and sericite zone in one of the
managing director Peter Ledwidge could not be happier with diamond drill holes over 76m, so that’s really what we’re going
the outcome of the first holes punched into his company’s Napie to be chasing up; these broad zones which are not necessarily
project in Cote d’Ivoire. completely continuous.”

While one drill hit returned 1m @ 215.53 g/t from 65m at the Mako also has two projects – Niou and Tangora – in Burkina
Tchaga prospect, it is a series of wider intercepts – including Faso in its exploration-focused stable. Both Ledwidge and his
25m @ 3.43 g/t from 53m, 10m @ 1.54 g/t from 10m and 8m geologist wife Ann are very familiar with the country, having
@ 8.53 g/t from 31m – which has Ledwidge and his team been key players behind the success of Orbis Gold.
champing at the bit to get back on the exploration tools post the
wet season. Several promising intersections were also struck A 7km soil anomaly overlying greenstone/granite contact has
at the Gogbala prospect, such as 12m @ 5.39 g/t from 11m been identified at Niou, with similarities drawn between the
(including 5m @ 10.74 g/t from 15m) and 6m @ 1.16 g/t from 7m settings which host the Yaramoko and Nabanga deposits, the
(including 11m @ 1.67 g/t from 29m). latter being a discovery attributed to the Ledwidges.

“We went beyond our expectations with this drilling, to be Geological mapping had just been completed at the time of print
honest,” Ledwidge told GMJ. ahead of an imminent drilling programme at Niou.

“We’re hoping to identify several hundred metres of strike length “We’re waiting to get the results from that and then we’re going
and then announce that to the market. Once we do that, we to do a line of RC drilling across it, heel to toe, over the bullseye
can then look towards moving to a resource, that’s basically the of the anomaly,” Ledwidge said.
short-term approach for the next year.
“We know there’s gold there in those shafts and because we
“The IP crew is on the ground there now and we plan to be can see visible gold. Whether it’s significant widths or not, that’s
drilling in probably the third, maybe the fourth week of January.” what we’re there to find out.”

Mako is earning up to 75% of Napie under a farm-in agreement Mako is on the lookout for a JV partner to fund further exploration
with Occidental Gold SARL, a subsidiary of Perseus Mining Ltd. at Tangora after a brief drilling campaign in mid-2018 returned
Tchaga was the only prospect along the prospective 13km gold disappointing results.
corridor with any previous diamond drilling history.
Ledwidge said the company, which listed on the ASX last April,
Ledwidge said two types of gold mineralisation had been was also seeking to add more projects to its West African
observed during Mako’s maiden drilling campaign and the portfolio.
current IP programme was
testing a possible association “We’ve always had the philosophy that if projects don’t deliver
between silica, sericite and
iron carbonate alteration and Mako managing director Peter what you hoped they would,
the high-grade gold. Ledwidge at Gogbala, one of the then you have to replace them
key prospects at the company’s with something else,” he said.
“Even though we got some
very good gold results on the Napie project, Cote d’Ivoire “We’ve got a clear exit strategy,
Gogbala prospect to the south, which is probably a reason
on our next phase of drilling
we’ll be concentrating on the why Resolute [Mining Ltd] is
Tchaga prospect, which from
north to south is roughly 5km,” a large shareholder, in that we
he said.
never want to be a producer.
“We’re not looking for one
big quartz vein or that sort We want to get taken out by a
of thing. We know we have
large company for our main

asset and then spin out a new

company with the other pipeline

of projects that we’ll have

advanced to a stage where we

can move those forward.”

Page 48

Bassari expects to be in production at
Makabingui within the next six months

Bassari soars in Senegal

by Michael Washbourne

Bassari Resources Ltd is on track to pour first gold from With cash flow of more than $US100 million set to be
its Makabingui project in Senegal during the first half of generated from the first 18 months of operations at
2019. Makabingui, Mackenzie hopes to put as much of that back
into the ground as possible.
At the time of print, the company was finalising the acquisition
of some crushers and ball mills and had appointed a “Rather than keep issuing capital to obtain money for
construction manager and senior mine geologist to oversee drilling, we will get into production and make the most of that
the development of Senegal’s next gold mine. significant cash flow,” he said.

Other pre-production works included repairs to a 500 mega- “Out of the cash flow, under the mining code, Bassari gets all
litre dam and setting out access roads to the plant site. of its exploration costs back within about $US50 million, so
that will come back to Bassari and with that we can drill out
Bassari executive chairman Alex Mackenzie, who has spent the 8km of strike and also convert a lot more of the resource
most of the past 25 years of his career developing projects in into proven reserves. As I said, our aim is to become a multi-
Senegal, said there was no better address to develop a new million ounce company.”
gold mine than West Africa.
Makabingui’s current camp facilities cater for about 110
“I’ve never seen a better potential gold area anywhere in the people, with an upgrade set to house more than 200 people
world, quite a number of companies now have discovered on site once in production.
deposits there,” Mackenzie told GMJ.
Mackenzie expects to employ only a handful of expats in
“We hope to convert what we’ve got into a multi-million specialist roles at the mine, given the abundance of local
ounce deposit. I think that’s the potential of a lot of the gold mining talent available to the company.
areas in West Africa, whether it be Senegal, Cote d’Ivoire or
Burkina Faso; there’s Birimian rocks all through the region, He also flagged a potential tweak of the company’s mining
along the lines of Kalgoorlie. I couldn’t speak higher of the plan for Makabingui following a recent site visit, led by
great potential for mining in West Africa.” technical director Peter Spivey, to the Tabakoto gold mine
in Mali.
In October, the signing of a presidential decree granting the
Makabingui tenement title to Makabingui Gold Operations “Peter also does consulting for one of our major shareholders,
SA (MGO), a 63%-owned subsidiary of Bassari, was the final BCM [Investments Ltd], probably the biggest mining
prerequisite for the Senegalese division of Coris International contractor in West Africa, which just acquired the Tabakoto
Bank to approve a $US13 million project finance package for mine,” Mackenzie said.
mine development.
“He was also involved in that acquisition and he said to me, ‘I
According to the 2017 feasibility study, Makabingui can be think this is a mirror image of Makabingui, except your grade
developed for $US13 million to produce 174,375oz at a life-of- is much, much higher than Tabakoto. Also your veins are
mine (3.4 years) grade of 5.66 g/t, based on a 1.3 g/t cut-off. much thicker and wider and more vertical, which makes it
cheaper for underground mining’.
Key financial estimates include LOM revenue of $US209
million, net cash of $US76.9 million, NPV of $US62.2 million, “Tabakoto did a small open cut to take the gold from the top
IRR of 188.5% and cash costs of $US678/oz, assuming a and then went underground and are now making a lot of
$US1,200/oz gold price. money. So, on the advice of Peter, who has built many mines
throughout Africa, I’ve got the experts looking at that and we
Makabingui hosts a resource of 11.9mt @ 2.6 g/t for 1 moz may change our mining plan to follow Tabakoto.”
and probable reserves of 0.86mt @ 5.7 g/t for 158,000oz. Of
the four pits to be mined, one contains 110,000oz @ 7.6 g/t.

Page 49

AFRICA West African Resources had started building
the construction camp when GMJ visited its

Sanbrado gold project in November

Sanbrado funding
finalised

by Dominic Piper

WestAfrican Resources Ltd’s 2019 development plans are WAF can now press ahead with project construction, having
now set in stone after the company completed project started early works, including development of the box cut, in
financing for its Sanbrado gold project before Christmas. late 2018.

West African (WAF) announced on December 6 that it raised In late November, the company awarded the underground
$43.2 million via a placement to institutional investors, back mining contract to experienced gold mining contractor
up by a $5 million SPP to retail investors. Byrnecut, having already awarded the EPCM deal to
Lycopodium Ltd.
The capital raising completed WAF’s financing requirements
for the $US185 million Sanbrado project (Burkina Faso), Hyde said the appointments were proof of the high-quality
coming as it did a day after completion of a $278 million debt services available in West Africa, making for straightforward
facility with Taurus Funds Management. project execution.

Based on a reserve of 20.4mt @ 2.4 g/t for 1.57 moz gold, “There are mining contractors here who know how to operate
Sanbrado is expected to host an 11-year, 2 mtpa CIL operation in West Africa,” he said. “We have at least six good companies
producing 133,000 ozpa at life-of-mine AISC of $US640/oz. here in Burkina Faso including Byrnecut and Barminco who
are active here and have had recent contract wins. If you took
WAF managing director Richard Hyde said completion of away the security risk you would realise just how well serviced
funding ahead of schedule was testament to the quality of Burkina Faso is.”
Sanbrado.
Operations at Sanbrado – 120km south-east of Ouagadougou
“We have one of the best undeveloped gold projects globally, – will incorporate open pit mining from the M5, M3, M1 North
an experienced project build team and we now are now and M1 South deposits as well as concurrent underground
fully funded and looking forward to getting Sanbrado into mining from the high-grade M1 South (1.55mt @ 15.9 g/t
production in the second half of 2020,” Hyde said. for 780,000oz gold). The decision to start underground at
the same time has allowed WAF to compress mine life to
“We have worked for the past five months to get the best debt 7.5 years. To counter the truncated mine life, the company
terms for shareholders. The award of the $US200 million debt intends to continue pursuing exploration opportunities.
mandate to Taurus follows a thorough competitive process
involving technical due diligence, site visits and detailed In mid-November, the company reported its deepest hole
negotiations.” to date at M1 South (1,000.8m to the end of hole). The hole
produced an intercept of 25m @ 15.03 g/t gold from 862m,
Speaking to GMJ’s sister publication Paydirt in December, including intervals of 5.5m @ 40.42 g/t, 1.5m @ 26.02 g/t and
Hyde said there had been widespread interest in funding 0.5m @ 71.8 g/t.
Sanbrado’s debt component.
The step-out hole had been intended to intercept
“We received good interest from 14 Tier One financiers with mineralisation 200-250m beneath the M1 South underground
competitive non-binding offers ranging from $US160-215 reserve (470m below surface), meaning there is now a further
million,” Hyde said. “They are offering a lot of debt because 220m of potential mineralisation to target.
the project generates so much free cash flow in the first four
years.”

Page 50