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contents
PAYDIRT (ISSN 1445-3436) NEWS
Published by 12
Paydirt Media Pty Ltd. Western Australia’s resistance to the pandemic
A.C.N. 063 985 133 and a strong gold price helped boost exploration
company coffers during the June quarter, with
Head Office: ASX-listed juniors bringing in $1.34 billion in
Suite 9, 1297 Hay St, West Perth the period, according to business advisory firm
Western Australia 6005 BDO. Dominic Piper spoke with BDO’s Global
P.O. Box 1589, West Perth Head of Natural Resources Sherif Andrawes
Western Australia 6872 about the “tsunami of money” coming into the
Phone: (+61 8) 9321 0355 Australian market and what impact COVID-19
Facsimile: (+61 8) 9321 0426 factors have had
[email protected]
www.paydirt.com.au
22 COVER
Just as Western Areas had reached a
Editorial: critical milestone with the firing of the full-
Editor: Dominic Piper face development of the Odysseus decline,
Deputy editor: Mark Andrews managing director Dan Lougher sat down 12
Journalist: Michael Washbourne with Dominic Piper to discuss how an asset
Art director: Nick Brown unwanted by others is starting to shape as an
Contributors: Brendan Ryan important source of nickel on a global scale.
(Johannesburg) Odysseus was part of the Cosmos complex
acquired by Western Areas in 2015 and is now
Advertising:
Advertising manager: Richa Fuller on track to deliver first underground ore in Q1
FY2022
Subscriptions: Kate Blanchard
Phone: (+61 8) 9321 0355
The Perth Mint Facsimile: (+61 8) 9321 0426 28 DIGGERS & DEALERS
In its 29th year, Diggers & Dealers promises to
Pre-press and printing:
be a memorable one for so many reasons. Sky-
Vanguard Press, 26 John St,
high prices for an array of commodities would
Northbridge WA 6003
– Australasia’s Member of: usually see Kalgoorlie bursting at the seams,
however, a global health crisis has meant tight
border controls will prevent delegates from
around the world and Australia’s East Coast
attending this year. Nevertheless, 53 corporate
refiner of choice Paydirt Media presentations over three days will garner wide- 22
spread attention and Paydirt will be there once
again to cover the event from all angles
Executive chairman: Bill Repard
Finance manager: Giovanny Jefferson
Accounts/administration: 80 AUSTRALIAN NICKEL
Lana Luketic CONFERENCE
Conferences: Namukale Nakazwe,
• Trusted as a partner to the • Trusted to deliver quality refining at Christine Oelschlaeger, The 25th Australian Nickel Conference is
Australasian mining industry for a competitive and sustainable price Melita Fogarty, Mitchelle Matambo certain to be like no other. Unprecedented
times globally and the changing nature of
120 years nickel demand will provide the backdrop for
• Trusted as the lowest risk refining October 2020 VOLUME 1. ISSUE 287 $11.95 Australia’s nickel fraternity to debate where
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gold producers Government of Western Australia Australia’s Paydirt October 2020 Cover image: of this year’s event at the Pan Pacific Hotel,
Nickel’s new Perth on October 6
odyssey Western Areas managing
director Dan Lougher at the
l Diggers & Dealers preview edition
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Talk to David Atkinson on +61 402 107 633 preview 09 company’s West Perth REGIONAL ROUNDUP
about a solution that meets your most Aurora Australis Network 104
Tel: +61 402 107 633
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The tussle for control of Ghanaian gold-
Member of: focused Cardinal Resources escalated last
perthmint.com/refine month as Shandong upped its bid to $1/share, 80
while ASX-listed companies Cobre and Mali
Lithium have proposed to partake in projects
Registered by Australia Post PP 643938/0071. in Botswana and Mali, respectively.
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Conference season
as important as ever
his edition hits the stands at the back the mining and exploration sectors by declaring them an
Theight of the – slightly delayed “essential industry”.
– mining conference season but From within the mining cocoon, it feels this was the only op-
with international and interstate del- tion McGowan had but on reflection, it could’ve gone in many
egates unable to attend, do confer- different directions. The industry has a big reliance on shifting
ences such as Diggers & Dealers, people in large numbers and any imposition of wider restric-
Africa Down Under or the Australian tions would’ve had a severe effect on productivity. Similarly, a
Nickel Conference still matter? single outbreak on any remote or regional mine site would have
The answer is yes and now more than ever. The interstate caused untold disruption, potentially leading to regional com-
and international visitors may not be in attendance but with the munities being put under great pressure and huge swathes of
sector buoyant and dripping with new stories, anyone who can the industry grinding to a halt.
attend will be in Kalgoorlie for Diggers or in Perth for Africa The hard border closures have obviously caused logistical
Down Under. problems regarding people movement from interstate and over-
There is also a sense of unity. For the Western Australian seas, but those challenges are nothing compared to the disrup-
sector it is a chance to celebrate its own achievements this year tion mass quarantine would have led to.
and make a vital contribution to the economy of one of the in- For the industry, having received the approval of government,
dustry’s most iconic towns. it couldn’t afford to erode confidence by erring in its response to
For the African-focused miners, explorers and service com- the pandemic. The effort has been remarkable and has show-
panies, Africa Down Under presents an opportunity to reinforce cased the active role the mining sector plays in the health and
the relationship with the continent via live streaming and video economic wellbeing of the WA community.
technology. The message at Africa Down Under – which will Amid all this, parts of the industry are enjoying unparalleled
be live streamed straight into the ministries around Africa and success.
investor boardrooms across the world – will be one of solidarity, In exploration it feels like the dams have burst after a decade
a chance for the Australian sector to say: “We may not be trav- of drought. A combination of technological innovation, new am-
elling to Africa as much as we would like but you are still at the bitious thinking and investor interest have coalesced to create a
front of our minds and we are pressing ahead with our invest- unique environment for explorers.
ment plans on the continent.” Research by BDO identified a 60% increase in capital rais-
At Diggers, Mark McGowan will become the first sitting Pre- ings among ASX-listed junior explorers in the June quarter to
mier to present the keynote opening address. After all the po- $1.34 billion, coming off a four-year low of $834 million in the
litical debate over nearly 30 years of Diggers & Dealers, who March 2020 quarter. It also represented a 12% increase from
would’ve thought it would be an ALP Premier who was the first the $1 billion financing inflows recorded in the June 2019 quar-
active parliamentarian to speak at the conference? ter. The quarter saw 28 companies raise funds of $10 million or
Former Prime Minister John Howard spoke to a rapturous au- more – up from 12 companies in the March 2020 quarter.
dience in 2019 and we have seen visits from various mines min- Those numbers show just how dramatic the swing towards
isters and federal MPs down the years but this is the only time exploration stories has been from the investment community
an active politician has been on the programme. but it is also translating into real success on the ground.
It is hardly surprising the Diggers & Dealers management Since the turn of the year companies such as De Grey Mining
would drop its aversion to government representatives this year, Ltd, Chalice Gold Mines Ltd and Legend Mining Ltd have caught
both because there is little choice while the world remains in the imagination with virgin discoveries in new terrains.
isolation but also as there can be few occasions when industry Behind them is a group of explorers actively regenerating
and government have been working in such harmony as they brownfields stories (Bellevue Gold Ltd, Mincor Resources NL)
are now. and making new discoveries in mature belts (Musgrave Miner-
As I sit here in my West Perth office six months after the crisis als Ltd, Rox Resources Ltd).
gripped the globe, I can catch public transport to a meeting, Not every exploration success is going to translate into a min-
have a coffee (or a beer) and even shake hands if I want, all in ing success but the big capital raisings ensure companies can
the confidence that WA is free from community transmission of focus on testing prospects to their limits, rather than focusing
coronavirus. This is in stark contrast to other parts of the coun- purely on keeping momentum in the stock until the next capital
try and the world. raising.
It is a remarkable situation and is testament to organisation,
communication and pragmatism from government, but also the
mining sector.
We are in this position because government, business and
community have shared interests. At the start of the outbreak,
the WA Government made the crucial, but risky, decision to [email protected] @DominicPiper
Page 4 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
neWs
Global
standard to
avoid tailings
disasters
newly launched industry standard will offer
A miners, governments, communities and
investors clear guidance on how tailings stor-
age facilities should be managed across the
globe.
The Global Industry Standard on Tailings
Management covers the entire tailings facil- native methods of mineral recovery to signifi- tailings monitoring capabilities. Companies
ity lifecycle – from site selection, design and cantly reduce or even eliminate the genera- such as Newmont Corp (at Boddington gold
construction, through management and tion of tailings.” Butler said. mine, Western Australia), Rio Tinto Ltd (at
monitoring, to closure and post-closure. It Adam Matthews, director ethics and en- Hope Downs 4, WA) and South32 Ltd are
was developed through the Global Tailings gagement, investment team at the Church of already using Geomotion equipment on their
Review which was co-convened in March England Pensions Board (a member of PRI) storage facilities.
2019 by the United Nations Environment Pro- said the new standard would drive best prac- Geomotion national manager Karl Crit-
gramme (UNEP), Principles for Responsible tice and give investors a benchmark to rate tenden said industry leaders were increas-
Investment (PRI) and International Council miners against. ingly conscious of the need to improve their
on Mining and Metals (ICMM) following the “For the first time we have a global stand- tailings monitoring capabilities.
tragic tailings facility collapse at Brumadinho, ard that goes beyond existing best practice “We have been approached by a number
Brazil which saw 270 people killed in the sub- and establishes the most comprehensive of majors who are preparing to standardise
sequent landslide. standard that investors will hold companies tailings monitoring across their portfolio,” he
The UNEP has committed to supporting accountable for in their implementation.” said. “These companies are very serious
governments in implementation of the stand- While Australian mining has a solid track about monitoring every aspect of their opera-
ard in national or state legislation and policies record in tailings management, the new tions and are seeing the value and reliability
while the ICMM has said its members would standard is likely to filter through the domestic of our sensors and the wireless loggers. Our
implement the standard as part of their mem- industry given the PRI’s involvement. software matches up a cross-section of the
bership. Adoption of global industry standards can operation, from slopes to tailings, integrating it
The PRI, which represents $US103.4 tril- be challenging for companies outside the all with geotechnical and environmental data.”
lion in assets under management is develop- majors but according to Geomotion Australia Butler said ICMM members had committed
ing investor expectations to guide miners in managing director Kim Malcolm, miners of all to conforming with the standard within three
adopting the standard. sizes needn’t be overawed by the task of ap- years of its launch date for facilities with “ex-
The Global Tailings Review chair, Dr Bruno plying the standards requirements for moni- treme” or “very high” potential consequences,
Oberle, said the standard would set a prec- toring of existing tailings dams. and all other facilities within five years.
edent for the safe management of tailings Geomotion has been installing soil moni- The near-real time monitoring allows op-
facilities. toring software on Australian tailings dams for erators to gain a clearer picture of a facility’s
“I am particularly pleased to deliver a docu- five years. Malcolm said the company’s latest performance, allowing them to accurately
ment which reflects and addresses the com- technology, which uses wireless communica- predict anomalies and failures.
plexity and multi-disciplinary nature of sound tions technology, made tailings monitoring “Instead of relying solely on operator ex-
tailings management,” he said. safer, more effective and cheaper than previ- perience and knowledge, operators can
“It is my hope that the Standard will be ous systems. analyse the data captured in the loggers,”
supported by an independent body that can “Previously, even a major company may Malcolm said.
maintain the quality and further refine and have only one employee spending a week The Geomotion software also allows man-
strengthen the standard over time.” each month checking all the monitoring in- agers to set up alerts and alarms for incidents
ICMM chief executive Tom Butler told strument readings at every tailings facility. or indications of worrying movement.
Paydirt the standard was a “significant step” Only once they had then manually uploaded “It allows companies to select who has ac-
toward achieving members’ commitment to that data could they begin analysis of the tail- cess to the alarms and they can even present
safe tailings facility management. ings facilities,” Malcolm said. “Using the wire- the monitoring data on open websites to en-
“ICMM’s longer-term goal is to develop less data makes this process quicker, cheap- sure their management has a more public-
safe and sustainable alternatives to conven- er and safer, taking all the data at the top of facing interface,” Crittenden said.
tional wet tailings storage facilities. As such, the hole and doing away with the manual
through ICMM’s Tailings programme, our aspects of the process.” – Dominic Piper
members promote the development of tech- The cost and time savings delivered by us-
nologies to remove moisture from tailings and ing piezometers with wireless data logging
identify and support the development of alter- means companies can rapidly expand their
Page 6 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
neWs
Double red tape victory for industry
ssociation of Mining & Exploration Ltd’s destruction of
ACompanies (AMEC) chief executive the 40,000-year-old
Warren Pearce is confident regulatory shelters in the Pil-
duplication between states and the Com- bara included a ref-
monwealth is on its way out despite calls erence to improving
for new federal legislation in light of the heritage protection
Juukan Gorge caves fiasco. through the EPBC
AMEC has worked tirelessly alongside Act. Instead of an-
several industry groups to convince the other layer of federal
Federal Government to remove unneces- regulation, AMEC is
sary duplication in Australia’s environmen- calling for WA’s un-
tal approvals system. der-revision Aborigi-
A finalisation of this push appeared to be nal Heritage Act to
near in July when an interim report into the be rolled out across
Environmental Protection and Biodiversity the country.
Conservation (EPBC) Act recommended WA Minister for
a single touch system which would be Aboriginal Affairs,
framed through a national environmental Ben Wyatt has been
standards structure. leading a reform
Federal Resources Minister Keith Pitt process around the
said the review should help remove dupli- Aboriginal Herit-
cation in the project approval process. age Act for more
“I particularly welcome any move to es- than two years and
tablish ‘single touch approvals’ and bilat- Pearce believes
eral agreements with state and territory the updated legisla-
government by establishing national en- tion will form a gold
vironmental standards,” Minister Pitt said. standard for Abo-
“The single touch’ environmental bilater- riginal affairs in Aus-
al assessment and approvals, and positive tralia.
ongoing discussions with State and Terri- “Industry, Tradi-
tory Governments, suggest there is now a tional Owners and
real chance of meaningful reform.” government have
Pearce told Paydirt the interim report worked together on
was “a broadly positive step towards more the Aboriginal Her-
efficient legislation”. itage Review Act in
“The agreement with states on bilateral WA for some time
approval would be a big step forward for but the Rio Tinto in- Warren Pearce
licensing timeframes and more work on a cident has put a negative spotlight on the
national environmental standard would be sector with calls for the Federal Govern- inquiry, AMEC said “any recommendation
great,” he said. “That standard needs to be ment to intervene and put legislation in for Commonwealth Government interven-
outcome-focused, not too proscriptive.” place. The roll out of the WA Act is sup- tion at this stage of the legislation’s devel-
WA Environment Minister Stephen Daw- ported by Traditional Owners and indus- opment is unlikely to improve outcomes for
son said the bilateral agreement would be try as a framework for all of Australia. So, any of the participants”.
a kick-start to the economy and streamline rather than react to this incident – which I “It seems counter-intuitive that as the
the environmental approvals process”. don’t think is reflective of the broader in- State legislation, the Commonwealth Gov-
“It’s also significant because consistent dustry – with more legislation, we should ernment’s statutory EPBC Act Review and
and timely environmental decision-making be taking on board the lessons learnt. the Productivity Commission’s Resource
benefits the community in Western Aus- “The Juukan Gorge caves has high- Regulation Sector Inquiry all seek to re-
tralia and is a win for the environment,” lighted the importance of good heritage duce overlap, the Joint Standing Commit-
Dawson said. “The State’s pipeline of surveys but also that the relationship with tee contemplates expanding duplication,”
development proposals will benefit from Traditional Owners is an ongoing one. AMEC said in its submission.
the faster, clearer and more consistent Companies must work with Traditional “Any move to expand the existing du-
environmental assessments and approv- Owners across the project life, balanc- plication of Commonwealth Government
als that we can achieve with a bilateral ap- ing company investment with an ongoing legislation will be an overreach. It is our
proval agreement.” learning of land they’re working on. It is view that Aboriginal Heritage will be best,
While the agreement paves the way for difficult to frame legislation around that. and most appropriately, protected through
an end to environmental approval dupli- Agreements need to be outcomes-based State legislation.”
cation, Pearce is wary of public calls for and relationships are the critical part of it
more regulation around heritage surveys (that was our submission to the parliamen- – Dominic Piper
following the Juukan Gorge Caves inci- tary inquiry).
dent. The senate inquiry into Rio Tinto In its submission to the parliamentary
Page 8 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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neWs
Golden State shows faith in Yule
rom the depths of trying to conjure also a boon for the company. “There’s copper along that shear zone
Fsupport for an IPO in late 2018 to an- “Bostech did the drilling for De Grey and we have nickel numbers in some of
ticipating drilling results from Yule South and are very, very good to work with. the historical drilling,” Moore said.
– 13km north of Hemi – Golden State Having them drill for us means that they “There is a feast of opportunity there,
Mining Ltd’s fortunes have certainly are used to the environment up there. Yule South is pretty heavily gold fo-
swung around in the last 20 months. They have the experience with tricky cused, but we do have a bit of granite, so
Yule has been part of Golden State’s cover and know how to get into the inter- we do think there is some potential in the
portfolio since pre-IPO and was always esting rocks. The team at Bostech have tin-tantalum-lithium things as well.
going to be third in line to be drilled be- that can-do attitude and know how to “We picked up some ground last year
hind the company’s projects in the Mur- push on and get through the crusty bits.” and there is an old 7-8km anomaly on
chison and Laverton districts. Golden State’s 702sq km ground it that has never been followed up from
Golden State managing director Mi- package at Yule, north of both De Grey’s aircore drilling previously done by Troy
chael Moore told Paydirt Yule was con- Hemi prospect within the Mallina project, Resources [Ltd]. That is a ridgy-didge
sidered elephant country but a lack of also contains intrusive bodies, including anomaly we need to get onto which is
exploration in the under application
area meant no- [13sq km]. But
one had formed a again, that is an-
“real position” on other thing to get
the ground. the rigs on over
However, given and above what
highly regarded we have at Yule
geologist, the North and Yule
late Graeme Hut- South,” he said.
ton pegged Yule, A $2.2 million
there was never placement locked
any question away by Taylor
of the ground’s Collison and Hart-
prospectivity in leys Ltd will help
Moore’s mind. Golden State bet-
“We put a lot of ter understand the
faith in his initial opportunities at
identification of Yule in the next
this ground hav- year.
ing some worth,” Moore said the
Moore said. company’s cur-
“Because it has rent cash posi-
cover, it had been tion would see
dismissed as be- it through to the
ing a bit too hard back end of 2021,
to explore. We Geophysics and aircore drilling will help Golden State get a better handle on the geology at however, the
always had faith Yule, near Hemi, in WA’s Pilbara prospect of rais-
in it and planned ing more money
on moving towards exploring it this year. granite complexes and major structures. to keep exploration momentum going
This was always going to be the third A hint of the potential at Yule South would be dependent on discovery suc-
cab off the rank for us because it was by was given in late August with results cess.
far the biggest project we had on top of from phase one aircore drilling over five Meanwhile, an agreement for Adaman
dealing with the various issues of being targets revealing gold in multiple targets, Resources Pty Ltd to purchase, mine
in a new area.” including hits of 8m @ 0.92 g/t gold from and process 48,000t of remnant mine
Backing Hutton’s judgement appears 96m, including 4m @ 1.81 from 96m and tailings (battery sands) from Golden
on-song now that De Grey Mining Ltd 19m @ 91 ppb from 46m, including 4m State’s Cue No.1 and Salisbury mines
has verified the region with the Hemi dis- @ 350 ppb from 58m. through the Kirkalocka gold plant could
covery in the Archaean Mallina basin of More assays were pending at the time also deliver profits.
the Pilbara. of print, with the company also reporting At the time of print, the agreement was
“De Grey has legitimised that area multiple anomalous plus-100 ppb gold subject to conditions precedent and if
and given it hard rock gold credibility in intersections. Phase two drilling was triggered, processing of the sands is ex-
the marketplace. The results are speak- planned to start in September. pected to take 2-3 months.
ing for themselves and we are very en- The next round of drilling is likely to in-
thused about the ground and position clude a programme at Yule North where – Mark Andrews
that we hold,’ Moore said, adding that there is base metals potential along the
having Bostech Drilling onboard was Sholl Shear zone.
Page 10 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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neWs
Cash floods into junior space
estern Australia’s resistance to the
Wpandemic and a strong gold price Cash magnets: Largest junior capital raisings in June quarter
helped boost exploration company coffers
during the June quarter.
While the rest of the global economy ex- Company Commodity Amount (source)
perienced a sharp decline on the back of Red 5 Ltd Gold $125 million (equity)
the COVID-19 lockdown, the June quarter
saw Australian explorers enjoy their best Emerald Resources NL Gold $99 million (debt + equity)
three-month period in a decade with a
60% increase in financing cash inflows, Dacian Gold Ltd Gold $98 million (equity)
according to business advisory firm BDO. Kalium Lakes Ltd Potash $88.5 million (equity + debt)
ASX-listed juniors brought in $1.34 bil-
lion in the June period, exceeding the five- New Century Resources Ltd Zinc $50 million (equity)
year average of $1.22 billion and offsetting
the four-year low of $834 million in the
March 2020 quarter. “We are getting a lot of interest from ex- Andrawes pointed to examples in the
Sherif Andrawes, BDO’s Global Head plorers coming home to Australia,” Pearce September quarter such as Bellevue Gold
of Natural Resources, said there was a said. “They are looking to pick up projects Ltd ($135 million), Salt Lake Potash Ltd
“tsunami of money” coming to Australian in a place they know they can operate in.” ($98 million), Gascoyne Resources Ltd
resources companies, thanks to several WA has been relatively untouched by ($85 million plus $40 million debt) and Ga-
coronavirus-related factors. the global pandemic with low levels of in- lena Mining Ltd ($12 million plus $US110
“There are a number of reasons for the fections and next-to-no community trans- million debt) as evidence of the continued
change,” Andrawes told Paydirt. “Obvi- mission. The WA Government’s decision strength of the market.
ously, commodity prices are important, to declare mining and exploration an “es- For Pearce and AMEC, the focus will
particularly with gold through the roof but sential industry” also meant explorers be on ensuring government and regula-
also in times of uncertainty people go with could carry on without the disruption ex- tors understand the importance of keeping
what they know which has led to a lot of perienced by peers in other jurisdictions. pace with industry.
backing for WA-focused companies.” The main concern now would appear to “The road ahead actually looks good,
Andrawes said institutional investors be finding operators to carry out work pro- there is a window of opportunity, but we
were lining up looking for investment op- grammes with exploration services in high need to ensure the regulatory environment
portunities in the WA gold space with capi- demand. is there to allow the industry to develop,”
tal raisings closing quickly despite the av- “All the exploration companies are Pearce said.
erage size of raisings increasing. cashed up but the question is how they Both Pearce and Andrawes are mindful
“They haven’t just gone for $4-5 million, are going to spend the money, I’m not sure of the potential impact recent Foreign In-
they are raising big chunks,” he said. the capacity is there to spend it quickly vestment Review Board (FIRB) decisions
BDO’s analysis of the quarter showed because of the limited ability to do work,” could have on the sector.
28 companies raised funds of $10 million Andrawes said. “There are concerns over the FIRB
or more – up from 12 companies in the “The oil and gas exploration equipment changes,” Pearce said. “You have to rec-
March 2020 quarter – with gold compa- is parked up but in hard rock it is very busy. ognise Australia was built on foreign in-
nies leading the field. Second-hand drilling equipment is actually vestment, particularly the big resource
Andrawes said the trend would eventu- worth more than new orders at the mo- projects whether that be from Japan and
ally lead to a revival of resources IPOs in ment because they want access now.” Korea in the 60s and 70s or China more
the latter part of 2020 and into 2021. With hard borders still in place, explor- recently. We should recognise the net ben-
“We are seeing IPOs re-emerge again,” ers and service providers are beginning to efit to Australia of this investment. If you
he said. “Our book of IPOs is bulging with fear a squeeze in labour. turn it away where are the investors going
a dozen exploration and related compa- “The drillers are very busy so will see to come from? The options aren’t as wide
nies who have cash.” employment problems in the next few as some people believe.”
Again, the focus is likely to be on gold months,” Andrawes said. Andrawes is conscious of the Austral-
and Australian-focused companies. Despite the tightening of the services ian resources sector getting caught up in
“Three of the IPOs we are working on market, Andrawes expected junior fund- wider geopolitical narratives.
are for Canadian companies coming to raising to continue through the September “The whole Australia-China, US-China
Australia. They came out of our roadshow quarter and even beyond. relations situation is a concern,” he said.
with the ASX in Canada last year. There is “BDO expects that the current positive “Where it goes with iron ore will depend
a recognition from overseas-focused com- trend in financing for junior explorers will on a few things, including the future of the
panies which are starting to focus on WA persist and even grow in the next quarter,” Simandou project in Guinea but China
projects.” he said. “This June quarter, we observed certainly still needs Australian iron ore. I
Association of Mining & Explora- 175 companies reporting less than two esti- believe cultural diplomacy – for instance,
tion Companies chief executive Warren mated quarters of funding available, of which the relationships Football West is forming
Pearce has also noticed a trend for over- 149 (85%) indicated that they have already in China – become very important in these
seas-focused and domiciled companies taken or propose to take steps to raise fur- circumstances.”
hunting for Australian assets. ther cash to fund ongoing operations.”
Page 12 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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neWs
Yansteel, Sheffield united
in Thunderbird plan
fter more than a year, Sheffield Re- said. “Yansteel is a long-term, new player
Asources Ltd has landed the sort of into the sector and its objective is to se-
project partner it has been searching for; cure years of supply and they know that
a group with deep pockets and a strategic by investing in Australia and Thunderbird
interest in the long-term future of the com- in particular they will get that without any
pany’s Thunderbird mineral sands mine in disruption.”
Western Australia. The agreement will see Yansteel invest
From its discovery in 2014, it was always $13 million for a 9.9% chunk of Sheffield (at Sheffield is confident in the product mix it
assumed Thunderbird would move seam- a 130% premium) and commit $130 million has coming out of the Thunderbird mineral
lessly through development, funding and for a 50% share in the project. The deal sands project
then construction; its high-quality orebody also includes life-of-mine Stage 1 offtake
seemingly prime for development. Howev- of Thunderbird’s ilmenite product at arm’s
er, this assumption never took into account length pricing. McFadzean said.
the vagaries of the mineral sands scene. “It is as simple as that, there is no other The deal will also see Thunderbird’s
“The expectation from the market was complexity,” McFadzean said. flowsheet redesigned. Sheffield’s 2019 up-
that, because it was such a good project, The main complexity hanging over the dated BFS replaced the low-temperature
it would be a three-month process to find investment is largely in the court of the roast circuit with a mineral separation plant,
a partner but this is not a gold project; you Foreign Investment Review Board (FIRB) designed to reduce capex and produce a
could fit all the mineral sands industry which is yet to rule on Yansteel’s proposed premium zircon product. McFadzean said
players on two hands,” Sheffield manag- investment. Several Chinese takeovers that change would be reversed to suit Yan-
ing director Bruce McFadzean explained of Australian resources companies have steel’s requirements.
of the company’s long search. been stymied in the last 12 months but “We have been working with Yansteel
While Sheffield had arranged the $240 McFadzean is confident the Yansteel bid on what they want, and they are keen on
million debt component of Thunderbird’s will clear all relevant hurdles. a low-temperature roast process because
$463 million capex in late 2018, a change “We support the FIRB process and you it produces the best ilmenite product for
in conditions meant it was in no position have to be conscious of what’s key in their them.”
to raise the equity portion on market. An decision-making,” he said. “The company The mineral separation plant will be re-
exhaustive process ensued but after the is of good character, it will not go beyond moved from the flowsheet with all zircon
company announced in August that it had 50/50 ownership, there are no board seats sold in concentrate format.
secured a $143 million investment from attached to the deal and the offtake is “The objective is to produce a concen-
Chinese group Yansteel for a 50/50 share kept at arm’s length. The recent examples trate and then customers do the premium
in the project, McFadzean declared the which have been denied have had differ- upgrade somewhere else,” McFadzean
search over. ent structures. We are positive it will be said. “It removes a lot of risk because we
“We set out last year to fill that $143 mil- seen as being in favour of the national in- are not guessing what offtake parties will
lion equity gap, so we have achieved what terest.” want for either product.”
we set out to,” McFadzean said. “The trou- McFadzean also expects Yansteel’s sta- Once FIRB approval is granted, Shef-
ble is when you are down at 10c/share it tus as a new supplier of pigments to play field will restart development in earnest.
is difficult to fund a project equitably for in its favour. The industry has undergone The Thunderbird BFS will be updated to
shareholders, so you have to look else- a prolonged period of consolidation in the satisfy debt providers Taurus Funds Man-
where. Private equity groups have expec- last five years and with supply now tight- agement and the government-backed
tations for returns which can be very ag- ening, feedstock availability is falling. The Northern Australia Infrastructure Fund
gressive, so the only alternative is to have arrival of a new player could ease some of (NAIF).
a strategic partner who is in it for reasons the squeeze throughout the supply chain. “Because of the shift in flowsheet we
other than the short-term return on invest- “In the pigment industry globally titanium have to renegotiate the terms of the debt
ment.” feedstocks are falling away so a new pro- finance, but it won’t take long there has
In Yansteel, that is exactly what Shef- ducer like Yansteel could provide alterna- been no stone unturned on the due dili-
field has found. The company is a sub- tive supply,” he said. “They could do that gence and NAIF and Taurus keen to con-
sidiary of Tangshan Yanshan Iron & Steel by going into the market, but they are much tinue the process,” McFadzean said.
Co. Ltd which produces around 10 mtpa of better off JV’ing with a producer, which is “If FIRB comes through early we can
steel products in Hebei province, China. It what they are doing with us. The JV allows get on the ground early and have GRES
is now expanding into the pigment market Yansteel to underpin its investment in the at the start of the dry season. It is only a
by building a 500,000 tpa integrated tita- pigment plant.” 15-month build for Stage 1 which is when
nium dioxide processing facility including Yansteel’s focus on ilmenite means we generate a lot of cash.
a titanium slag smelter. Thunderbird offers Sheffield is free to sell its zircon product to “Once FIRB is done, we will be cashed
ideal feedstock for the facility. third parties. up and in a pretty good spot to execute this
“We are really glad we have an industry “Some 70% of the revenue comes from project.”
player involved because they are commit- zircon but that is not attached to the JV, so – Dominic Piper
ted to long-term outcomes,” McFadzean we are free to sell it into the marketplace,”
Page 14 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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neWs
Manuka making sweet success
anuka Resources Ltd executive chair- The company then secured a $US14 mil- We’ve got a project which is cash flow posi-
Mman Dennis Karp admits to being lost for lion debt facility from a Hong Kong-based tive and will continue to be so for some time
words at the reaction to his company’s recent lender but was given a strict mandate not to to come and we’re also in the processing of
listing on the ASX. spend any of that money on exploration. Ma- upgrading our 52 moz silver resource at Won-
Following its July 14 debut as the first re- nuka then made plans to undertake a com- awinta.
sources IPO since the onset of the global plete refurbishment and upgrade of the Won- “Internally we believe we’ll be mining for the
coronavirus pandemic, Manuka’s stock has awinta plant with a view towards processing next 5-6 years on what we know, but we do
tripled in value and at one stage in late August stockpiled ore from Mt Boppy. need to have a look at what is beneath the
the New South Wales-focused surface because it hasn’t really
gold producer and silver hopeful been explored properly before.
was trading as high as 71c/share. Both of our projects are very shal-
It could have been a very dif- low and the Cobar Basin is a very
ferent story for Manuka given deep basin.”
the lack of resources floats in the Of the $7 million raised from
queue at the time and the feelings the IPO, $3.58 million has been
of trepidation from Karp and his set aside for Manuka’s three-
team after being forced to post- stage exploration and resources
pone their initial plans to list the conversion programme at both
company back in May as financial Wonawinta and Mt Boppy.
markets around the world closed Infill drilling is the primary focus
ranks. at Wonawinta, although the com-
However, with the resources pany has indicated it will assess
sector showing signs of a fast re- the potential of some “advanced
covery from a low point in March greenfields” targets towards the
and prices for both gold and silver end of the 9,000m RC and dia-
steadily surging, Manuka reset Stockpiled ore from the Mt Boppy gold mine (above) is being trucked to mond campaign.
the dial for a mid-year listing. the 850,000 tpa plant at Wonawinta (below) for processing. Drilling to test for depth exten-
The Sydney-based company Manuka is currently upgrading the existing 52 moz silver resource sions to the Mt Boppy hits is also
subsequently raised $7 million via at Wonawinta, near Cobar in central NSW under way and has already yield-
an oversubscribed IPO as inves- ed encouraging intercepts of 10m
tors threw their support behind @ 34.48 g/t gold from 57m and
Manuka’s impressive start to pro- 14m @ 14.51 g/t gold from 59m.
duction at the Mt Boppy gold mine Manuka was finalising a 3D
and its plans to rejuvenate the model at the time of print to soon
nearby Wonawinta silver project. begin exploring a prospective
In fact, the uptake was so strong 9sq km area which incorporates
a number of investment applica- historical workings at Canbelego
tions had to be scaled back. King, Reid-Rankins and Birthday.
Since listing, Manuka’s share- Karp is supported on the Ma-
holder base has grown from nuka board by former general
about 600 to more than 2,000 at manager for Newcrest Mining
the time of print. Ltd’s Cadia Valley operations
“Given there were no IPOs at Tony McPaul and experienced
the time, we weren’t certain how silver mineralogist Nick Lindsay.
the market was going to take a Haydn Lynch is the company’s
new resources IPO,” Karp told chief operating officer, with Cobar
Paydirt. identity Dave Power also on the
“We were very pleasantly sur- team as general manager, opera-
prised after two days [of launch- tions.
ing the prospectus] we had more than dou- Proceeds from Mt Boppy (existing resource “We’ve kept the team pretty lean to this
bled the high-end of the amount of money we of 320,000t @ 3 g/t gold for 31,000oz) are ex- point in time, but we believe we’ve got all bas-
were looking for. We were actually a bit lost for pected to wipe the company free of any debt es covered and if we find ourselves short in
words, but at the same time very pleased to over the course of the next 10 months. certain areas then we’ll look to recruit accord-
have had that level of support, which has just “Between 1895 and 1925 this was the ingly,” Karp said.
continued on after the listing.” richest gold mine in NSW,” Karp said. “It pro- “We’ve gone from having a care-and-main-
Manuka has essentially been a story four duced 500,000oz at an average head grade tenance crew of two back in December last
years in the making following on from Karp’s of 15 g/t, which for NSW is pretty significant. year to now having 55 full-time employees on
Rescap Investment acquiring the Wonawinta We’re mining the remnants of that. the project. We’ve been running 24/7 with es-
project, including the mothballed 850,000 tpa “Our lenders wouldn’t allow us to spend sentially three crews on shift at the mine. The
processing plant, in August 2016. Almost any money on exploration and I think that is start-up has been pretty seamless.”
three years later the historic Mt Boppy gold the key value proposition that is going to rise – Michael Washbourne
mine was added to the Cobar-based portfolio. from those two projects over the years ahead.
Page 16 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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neWs
The Paris silver project has been in
Investigator’s portfolio since 2012. Paris is
the highest-grade silver project in Australia
Better late than never:
ment in late July.
Silver comes three times as much in the Cannacord
The company was offered almost
Genuity (Australia Pty Ltd) led place-
ment, giving it a clear pathway to meet
to the party its objectives at Paris without having to
worry about cash.
Investigator’s largest shareholder –
UK-based Merian Gold and Silver Fund
– participated in the placement to the
tune of $4 million such is its bullishness
on Paris.
At the time of print, a 15,000m RC
infill drilling programme was being con-
ducted on the known resource at Paris
to upgrade inferred resources into the
indicated category.
“Each time the Paris resource has
been revised the resource grade has
gone up, the total ounces have gone
up; that is the nature of how high grade
some of it is,” McIlwain said.
“As they have grown in confidence and
as drilling has increased, the grade has
improved, so when we do the modelling,
we have no doubt there will be grade
improvement again. This is the highest-
grade silver project in Australia by far.”
Paris currently hosts an open pit re-
source of 9.3mt @ 139 g/t silver and
0.6% lead for 42 moz contained silver
and 55,000t contained lead.
Amid the RC campaign, a second rig
for diamond drilling was scheduled to
arrive on site for a 1,000m programme
in early October, while regional targets
along strike of Paris will also be tested,
as Investigator works towards a PFS.
Should the PFS provide robust out-
comes, Investigator’s cash will give it the
thriving gold price usually drags its a strategic review of its Nimbus silver- impetus to carry on with a DFS in what
A sister precious metal – silver – along zinc project, near Kalgoorlie, which was is shaping as a healthy silver price en-
for the ride. The scenario appears to be placed on care-and-maintenance in vironment.
happening again, albeit at a slower pace 2017 due to low silver prices, while Sil- There is a growing demand for silver
than some might have expected. ver Mines Ltd continues drilling and pre- from solar cells and batteries, on top of
“It has been a little disconnected,” In- development activities at the Bowdens traditional uses in medical appliances,
vestigator Resources Ltd managing di- project in New South Wales after it man- jewellery, tableware and electronics.
rector Andrew McIlwain told Paydirt. aged to raise $12 million in May. In contrast, supply is shrinking with
“There is a gold/silver ratio and the The return of silver is being reflected at the world’s major sources of silver ex-
long-term historical levels have been Investigator, which has already complet- periencing a drop in quality over the last
about 60-ish. It has been lower, and it ed extensive work at the Paris project on decade.
has been higher, but more recently it ran South Australia’s Eyre Peninsula. The “The head-grade of the major produc-
away to 125 which is a real disconnect recent interest has seen the company ing silver miners in the world have dimin-
between silver and gold.” restart activity. ished significantly, almost halved, and
At the time of print, the ratio had re- “All along I said my magic number was production is going to fall on the back of
tracted back to 73 and the silver spot $30/oz and when we saw it getting to that,” McIIwain said. “The primary silver
price of $US27.44/oz ($37.95/oz) pro- that we would press the button on the producers in South America; their head-
vided enough encouragement for silver next stage of work. Once it did hit that grade used to be more than 450 g/t but is
players in Australia to get excited again. mark it all came together quickly,” McIl- now around 250 g/t and they are gener-
Horizon Minerals Ltd is undertaking wain said in light of an $8 million place- ally underground miners as well.
Page 18 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Andrew McIlwain
South32 Ltd’s Cannington mine in McIlwain said.
Queensland has become one of the Furthermore, Western Areas Ltd has
world’s premier silver mines and ac- added another dimension to the explora-
counts for about 6% of global supply, tion scene in SA with the Sahara nick-
and while there is significant secondary el-copper sulphide discovery, Western
production from gold mines in Australia Gawler, this year.
the sector is largely devoid of significant Investigator was one of three compa-
activity. nies that applied for ground next door to
The lack of primary production means Sahara and McIlwain was confident a
the market is not well understood do- deal could be struck between the three
mestically, forcing McIIwain to describe parties, as the company continues to
Investigator’s value proposition in more pursue other opportunities to expand its
recognisable terms. portfolio.
“I try and talk to people about what Domestic precious metals assets on
Paris looks like as a gold project; as the east coast of Australia, including
it currently stands there is more than Tasmania, where it has the White Spur
500,000oz gold in the ground at better project adjacent to Rosebery and Henty,
than 2 g/t gold within 120m of surface. If are favoured by Melbourne-based McIl-
you had one of those within a few hun- wain.
dred kilometres of Kalgoorlie it would “We are still on the hunt for projects,
have been gone by now. I try to draw preferably on the east coast. If we can
people’s attention to everything that we find something that we can be competi-
will do in South Australia is going to be nered fair attention, while McIlwain tive on a process in Western Australia
Australian dollar-domiciled so fuel, wag- notes the work being done by Rex Min- we would, but our preference is east
es everything else will be in Australian erals Ltd on the Hillside copper-gold coast or Tassie,” he said. “We have
dollars.” project (Yorke Peninsula), the activity touched base with a couple of majors
It is an opportune time to be dusting in Tarcoola and also the noise north of which have projects off their radar inter-
off previous work completed at Paris Challenger at the moment. nally and we’re looking at having some
given the weight of excitement on the ex- “It is probably not too dissimilar to what of those discussions.”
ploration side of the sector in the State. is happening around Bendigo in Victoria
In recent times, Oak Dam has gar- at the moment; rising tides lift all boats,” – Mark Andrews
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 19
neWs
Familiar face looks into
Browns Range
ark Tory has been in the rare earths welcomed further support from both the temporarily suspended at Browns Range at
Mgame long enough to provide meas- Federal and West Australian Governments the peak of the pandemic earlier this year.
ured commentary on what is a complex in developing the critical minerals sector. A partial restart to operations at Browns
market. “We have a lot of support, but the prob- Range took effect in August, while the com-
Even so, the impact that China wields in lem is getting western money, the ones that pany is on track to clear its debt burdens to
the heavy rare earths (HRE) sector still pro- put their hands in their pockets are the Chi- EPC contractor Sinosteel ($2.1 million) and
vides challenges for the likes of Tory, who nese. In relation to rare earths, my gut feel JHY Investments Pty Ltd ($4 million con-
replaced George Bauk as chief executive of is that something is going to happen in the vertible notes) by the end of the year.
Northern Minerals Ltd in July. shorter term rather than the medium term A $22 million private placement and $10
Tory has been with Northern Minerals for with China,” Tory said. million SPP completed in April and June,
almost a decade serving the company as “This is my personal feeling only; I don’t respectively, has provided Tory with some
chief financial officer and company secre- think China is too far off their supply meet- clout to take Northern Minerals along its
tary. ing their own domestic needs. I don’t know preferred path in the HRE sector.
“Rare earths is a difficult market; I have how much they have stockpiled while “COVID enabled us to sit back and take
been at Northern Minerals nearly eight they continue to make sure that there are stock. It has been a good thing for North-
years and I’m still learning. In that time, we no competitors in the space, but one day, ern Minerals to have been able to evaluate
have been trying to teach government, criti- which I don’t think is too far down the track, what the pilot plant has been doing over the
last 18 months, look at our financial situa-
tion and see where we want to move going
forward,” Tory said.
“We have reassessed what we really
want to do rather than continuing down the
path of wanting to run the whole operation Maximum
and trying to get results out of it. We’ve
gone through a thought process about what
it all means for us.”
Northern Minerals’ thinktank has de- gold extraction
livered plans for $5 million to be spent in
FY2021 on 16,500m of exploration drilling
at Browns Range, with greenfields targets
starting to be tested this month as well as Our team at IMO has proven capabilities in the design and management of gold testwork
follow-up drilling at the Dazzler and Ban-
shee deposits. programs, project development, commissioning and operations both in Australia & worldwide.
“Finding Dazzler lookalikes will be a pri-
ority for exploration in the next 12 months,
as its grades are up to three times the total
Browns Range resource grade. If we can
Browns Range is being primed to be a globally significant producer of dysprosium. find a few more of these it will help us real-
Production of HRE carbonate started in 2018 as part of a three-year pilot plant programme ise the current strategy to increase mine life
to assess the viability of a larger scale development at Browns Range to 20-plus years,” Tory said.
Meanwhile, Tory hopes the board ap-
cal minerals groups and the like what rare they are going to say ‘sorry we need it our- proval for procurement of the electrical
earths is about, how China dominates the selves’.” equipment for the ore sorting system will be
market and what’s needed in the future When that day arrives, Northern Minerals granted in the September 2020 quarter, al-
for us to have a non-China source of rare hopes to be in position to capture a portion lowing commissioning of the system to be Trust us to best develop your gold project
earths supply,” Tory told Paydirt. of the HRE market with material from its completed by the end of the March quarter
“China has over 98% of supply, but the Browns Range heavy rare earths project in 2021.
way they mine and process it is very en- WA’s Kimberley. “Once we have the ore sorting system
vironmentally unfriendly, but it is cheap for Browns Range remains the only project commissioned, we will be able to run addi-
them. The grades are low, but all of their to have successfully exported a commer- tional testwork at Browns Range on stock-
HRE companies are heavily subsidised, cial quantity of HRE outside of China after piles of mined ore to reconfirm the results
they don’t make money and they keep production of a mixed HRE carbonate two achieved in the laboratory testwork of this
prices for these heavy rare earths down so years ago. equipment. These results will provide valu-
there is no competition out there.” The company has had its battles since, able data around efficiency of the ore sort-
While China continues to keep rare namely a R&D tax dispute with the Austral- ing system which can be fed into a full-scale
earths competitors at bay, Tory’s personal ian Taxation Office which saw Northern feasibility study update,” Tory said.
view is that things are changing and a turn- Minerals receive a net refund of almost $10
ing point for the sector is not far away. He million in September, while operations were – Mark Andrews 14757 AB P +61 8 9254 6900 F +61 8 9322 1808 E [email protected] W www.indmetops.com.au
Page 20 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Maximum
gold extraction
Our team at IMO has proven capabilities in the design and management of gold testwork
programs, project development, commissioning and operations both in Australia & worldwide.
Trust us to best develop your gold project
14757 AB P +61 8 9254 6900 F +61 8 9322 1808 E [email protected] W www.indmetops.com.au
coVeR
Western Areas’
nickel bet set
to pay out
hen Western Areas Ltd announced its intention to stump up $25 million for the Cosmos
W nickel complex in October 2015, the market response was largely underwhelming.
Shares in the nickel miner didn’t spike immediately, and while they closed up 33% within two
weeks of the announcement, the purchase did little to fire the imagination.
Although Western Areas was a solid In 2020 though, with base metal peers the acquisition.
performer through its Forrestania nickel hunting for suitable projects to expand “At the time, nickel generally was on
operations, the Cosmos deal appeared shrinking reserve bases and projections the nose and Glencore wanted rid of
to be the wrong project, in the wrong for nickel demand at their rosiest in a the asset. Now, the overall view is that
metal at the wrong time. While the rem- generation, the acquisition is beginning we got a bargain,” Lougher explained to
nant ore in the Odysseus deposit was at- to look highly prescient. Paydirt. “There is a lot of nickel at Odys-
tractive, Glencore had walked away from Odysseus not only provides Western seus, a lot of underground development
Cosmos for a reason and it appeared Areas with a second production hub already in place and a lot of surface infra-
Western Areas was taking on a whole away from Forrestania, it has the depth structure we can use.”
new set of risks for a metal which was of reserves and mine life required to give Having completed a DFS in October
fundamentally restricted by the rise of the certainty to the new end-users circling 2018, Western Areas committed to Od-
Asian nickel pig iron (NPI) sector. BHP the world’s nickel suppliers. ysseus’ development in December of
Ltd was considering its exit options at Having announced the start of main that year. Unusually for Australian un-
Nickel West, Norilsk Nickel was walking decline development at Odysseus in derground operations, the company has
away from WA and other than the Fraser September, Western Areas managing chosen a shaft hoisting system to bring
Range story, nickel exploration had ef- director Dan Lougher reflected on the ore from Odysseus to surface.
fectively ground to a halt. journey the company set itself on with “The geometry and the size of the ore-
Page 22 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Western Areas managing director Dan Lougher talks exploration strategy
with Graeme Gribbin – general manager, exploration
tonnage to get through,” Lougher said. and acted as sub-underwriter to a $38
“We expect the mine life to push out and million retail entitlement offer in Pano-
there are optimisation studies in play on ramic Resources Ltd, owner of the asset.
throughput rates.” Panoramic has struggled to get Savan-
There also remains wider exploration nah performing, weighed down as it has
opportunity in the Cosmos complex. been by poor underground conditions,
“There are a lot of unanswered ques- equipment availability issues and venti-
tions around AM6 and the Odysseus lation problems as well as a heavy debt
deposit, as well as Mt Goode which sits burden.
above us,” Lougher said. “There are a lot Western Areas’ arrival has bought
of lenses of high-grade nickel there for Panoramic time and expertise to solve
which we don’t have the structural set- the crisis and come up with a plan to get
ting telling us why they are there. We will the Savannah North deposit into produc-
begin underground drilling from Novem- tion.
ber which will hopefully give us some an- In September, Panoramic announced
swers; that was one of the drivers of the an updated underground development
acquisition. Once we are up and running plan which will see the Savannah North
exploration will become more of a focal ventilation access drive completed this
point.” month after contractor Barminco started
Lougher is excited about the wider im- the project in August.
pact Odysseus will have on Western Ar- “That investment gives us strategic
eas’ growth projections. optionality. It is one of the few remain-
“It means we have production out to ing nickel sulphide projects available, so
the 2030s which is something few nickel it was always going to get attention. The
sulphide producers can claim.” balance sheet was in a mess and there
There is no doubt nickel is back in were a lot of things technically to sort out.
vogue. BHP’s Damascene moment over But it is nickel sulphides in WA, and it will
Nickel West has led it to build a new nick- come into play for the EV market require-
el sulphate plant at its Kwinana refinery, ments.
while at the junior end Mincor Resources It just adds another production front
NL raised $60 million in June to fund a for us. It is not absolutely critical to get
restart at its Kambalda operation. it producing now, we have to sort out the
For those aiming to emulate Western ventilation shaft but we’re sharing techni-
Areas’ growth plans, options are cur- cal support on that.”
rently limited. A recent wave of nickel ex- Lougher wouldn’t be led on the com-
body makes hoisting compelling,” Lough-
er said. “The pre-production capital is At the time, nickel generally was on the nose
higher but over a seven-year mine life “
the cost-effectiveness of hoisting over and Glencore wanted rid of the asset. Now,
trucking is considerable. You are talking
single digits versus double digits which the overall view is that we got a bargain.
lowers cut-off grades, which then boosts
tonnages and makes it a bigger overall
operation.” ploration success has fuelled excitement pany’s ultimate plans for its Panoramic
Despite pandemic restrictions, Odys- in the sector but discoveries by the likes investment but admitted it had pole posi-
seus development is now in full swing. of Legend Mining Ltd and Chalice Gold tion for any future corporate play.
In September, the company announced Mines Ltd are still at the earliest stages, “We’ve paid for the right to take an op-
it had started firing the main Odysseus leaving established producers contem- tion on it. It is an option on the future of
decline with first ore expected to be plating how they will fill out production nickel. If the price goes up, the desire
developed in September 2021. In addi- pipelines. for it will increase. We will see how the
tion, a maiden reserve of 2.1mt @ 2.2% “Try looking for a reasonable nickel sul- technical challenges pan out but if things
for 47,100t nickel was produced for the phide mine and the options are limited,” start to stack up then it would be good
AM6 orebody – directly accessible via Lougher said. “You have Forrestania and to add to the production profile, it is very
the AM5 decline – lifting the global Od- Cosmos, then Nova, Kambalda, Leinster quick to get into production.”
ysseus reserve to 10.3mt @ 2.1% for and Savannah and that’s it.” While new project growth is the priority,
212,000t nickel. Mention of the Savannah mine in the Western Areas is also assessing ways to
“It is obviously a big addition to Odys- Kimberley leads to Western Areas’ next keep its longstanding Forrestania opera-
seus and it takes us beyond 200,000t punt on nickel. In June, the company- tions where Flying Fox (two years mine
nickel at more than 2%, which is a decent committed to a $21 million placement life) and Spotted Quoll (five years) have
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 23
coVeR
The Odysseus shaft construction
(this page and opposite has begun in earnest)
It means we have
production out to
the 2030s which is
“ething few nickel
som
sulphide producers
can claim.
Page 24 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
been consistent performers.
“It is still a key operation with good
cash coming out of it so it is important we
keep it going as long as we can,” Lougher
said.
The FY2020 results highlighted why
Lougher is so keen to keep the For-
restania operations ticking along.
The company posted its highest profit
in seven years in the period, with net
profit after tax up 125% to $31.9 million
and EBITDA increased to $121.9 million.
The cash generation came off the back
of 20,926t of nickel-in-concentrate pro-
duced over the 12-month period.
“Flying Fox is getting a bit long in the
tooth, but it is still producing good nickel,
we just have to work a bit harder to push
the mine life beyond two years,” he said.
“At Spotted Quoll we are doing some
work with HiSeis to target new orebod-
ies, then at New Morning we have the
potential for another small underground
mine in the next few years.”
Away from the drill bit, the company is
intent on deploying its patented BioHeap
processing technology to extract a high-
grade nickel product out of mill scats.
Lougher believes the project – sched-
uled to start construction by Christmas –
could provide a pathway to treatment of
lower-grade nickel deposits well into the
future at Forrestania. to increase its market share. The battery demand dynamics, leading to the crea-
“Once it is established, it opens up a market currently uses around 8% of glob- tion of the Chinese nickel pig iron indus-
number of other targets in that region,” al nickel production but this is predicted try. Since establishing itself in the early
he said. to rise to as much as 25% by 2035 as EV 2010s, NPI has fed the Chinese stain-
Outside its home state, Western Ar- penetration increases. less steel market with cheap nickel, pro-
eas is finding early exploration success The demand side of the equation is duced from laterite deposits in Indone-
on its Western Gawler project in South more complicated. Nickel’s price spike sia, Philippines and New Caledonia. Its
Australia. to $US50,000/t in 2007 disrupted supply/ emergence placed a ceiling on the nickel
“We moved into the area six years
ago because we thought, like a lot of
Australia, it was being ignored because
it was under cover,” Lougher said. “We
took a punt and it has been six years in
the making. The JV with Iluka Resources
[Ltd] has allowed us to zoom in on an
area we like. There is still a lot of work to
do and the plan is to next do some more
geophysics to better delineate further
targets. It is early days but the quality of
the drill results to date are very positive
for future exploration.”
Driving Western Areas’ enthusiasm
for nickel is the bullish predictions of de-
mand growth through the 2020s. Since
before the discovery of the Kambalda
nickel camp in the late 1960s, the base
metal’s prospects have been pinned to
the stainless steel sector – first in the US
and Europe, then Korea and Japan and
latterly China.
While stainless steel remains the
dominant user of nickel (more than 70%
in 2019) the lithium-ion battery sector,
particularly for EV batteries, continues
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 25
coVeR
price, pushing most Australian nickel sul- precursor market,” Lougher said.
phide mines into marginal territory. While miners have rarely dealt directly
The chemical requirement of the bat- with end-users, Lougher believes the time
tery sector has turned that cost equation is coming. European, US, Japanese and
on its head. Nickel sulphide concentrate Korean car manufacturers are increas-
offers a cheaper, most efficient route to ingly desperate to lessen their reliance
nickel sulphate production than NPI, plac- on China for battery ingredients such as
ing the WA nickel miners in prime position nickel, lithium and cobalt and could soon
to meet battery demand. It is a demand find themselves speaking with the source.
shift Western Areas has spent four years In July, Tesla Motors Inc chief Elon Musk
assessing. expressed his eagerness to secure nickel
“We are bullish on nickel,” Lougher supply, tweeting: “Tesla will give you a gi-
said. “NPI supply is sorting out the stain- ant contract for a long period of time if you
less steel sector’s requirements and has mine nickel efficiently and in an environ-
a good growth profile but new demand is mentally sensitive way”.
coming from modern uses such as jet en- “That’s the next stage, encouraging
gine alloys and EVs. NPI can’t satisfy the OEMs to buy through the mining houses;
entire world of nickel demand. The prob- that’ll be the next catalyst for the nickel
lem is the price is still too low to incentiv- sector,” Lougher said.
ise new nickel development.” However, if a major car manufactur-
The question for Western Areas and er were to strike a deal over supply at
its peers is how it takes advantage of source, it would demand long-term sup-
the shift. Junior WA nickel miners have ply guarantees which leaves few options
traditionally locked themselves on nickel in the current nickel market. That is where
concentrate offtake contracts with BHP Lougher sees opportunity for his com-
Nickel West or, in the case of Western pany and its latest, long-life development.
Areas, Chinese stainless steel produc- “Western Areas, with Forrestania and
ers. BHP Nickel West is already making Odysseus, has the capacity and the mine
its own moves into the battery precursor life to start those conversations now.”
market with the construction of a nickel If he is right, the company could be just
sulphate plant at its Kwinana refinery, but at the start of its epic journey.
Western Areas and others are consider- – Dominic Piper
ing their own futures.
“The big strategic challenge for us now
is how we integrate our product into the
Page 26 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
“ NPI supply is sorting out the stainless steel
sector’s requirements and has a good growth
profile but new demand is coming from modern uses
such as jet engine alloys and EVs. NPI can’t satisfy
the entire world of nickel demand.
Forrestania produced 20,926t
nickel-in-concentrate in FY20
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 27
DIGGeRs & DeALeRs
The show goes on:
Diggers & Dealers 2020
ecord breaking gold prices, people in. We are happy with the numbers
Ra re-emerging nickel sector now and where they are going to, so we’ll
be quite content with where we get to. The
and sky-high iron ore prices; it’s dinner is pretty much booked, with a few
a backdrop that would normally tables left if that is any indication,” Walker
told Paydirt.
see Kalgoorlie bursting at the Although the forum space has the ca- West Australian Premier Hon Mark
seams come Diggers pacity to cater for 2,000 delegates with re- McGowan will open Diggers & Dealers –
spect to physical distancing, numbers will
now in its 29th year – with Walker saying
& Dealers time. be capped at a lower level to ensure the it was a “privilege” to have his presence in
However, given this forum runs within the strict COVID-related Kalgoorlie during a parliamentary sitting
guidelines.
extraordinary year, Diggers & Nevertheless, Diggers & Dealers chair- week.
It is testament to the resilience of the
Dealers organisers are grateful man Jim Walker expects a big turnout for sector in the face of COVID-19 that Aus-
the annual talkfest.
just for the opportunity to be “I am not sure of the numbers that we tralia has a mining industry moving forward
despite the challenges of mobilising peo-
able to host the event in 2020. are going to expect, it won’t be the same ple across borders, and no doubt the Pre-
as last year because we just can’t get the mier’s address will be warmly received by
Page 28 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
the parochial mining crowd that will gather managing director Raleigh Finlayson. Bowler added that post pandemic, the
at the Goldfields Art Centre from October “It is good for the long term of Kalgoorlie job opportunities in Kalgoorlie would attract
12-14. and I know they are investing in the op- more people to the region and the city was
“Diggers & Dealers will be the end of erations; it was a great move by them and preparing for the influx.
a wonderful fortnight in Kalgoorlie. In the very positive for WA and Kalgoorlie.” In August, the Central Regional TAFE re-
lead up we will have the annual Kalgoorlie The Northern Star/Saracen acquisi- ceived a $10 million cash injection from the
race round and the WA Golf PGA, so it is tion of KCGM for the famed Super Pit has WA Government, with $9 million going into
going to be fantastic,” Mayor of Kalgoorlie provided another uplift for the people of a new heavy plant and engineering trades
John Bowler told Paydirt. Kalgoorlie. workshop and $1 million to upgrade and
“As Mayor, I hope that Mark McGowan “Two years ago, we were a bit down- expand the automotive electrical workshop
continues his hard-line [on border con- beat, but excitement was starting to build and light automotive training.
this time last year when gold went “I know that the Kalgoorlie-Boulder [Cen-
through $2,000/oz. It has not only tral Regional] TAFE is gearing up to do
been the gold price, but the new more training and that is the great message
owners of the Super Pit have had a to young families; if you come here you’re
clear positive impact,” Bowler said. son or daughter can get a traineeship and
“Northern Star and Saracen are you end up a with job yourself. The City
as good as any gold companies Council is also facilitating the construction
in the world and they are looking of a 120-odd bed day-care facility and we
at a long-term view of the Super expect that to be sold out by the time it is
Pit, which is great for our city. We built. Families will benefit from that child-
have seen recently the life span of care increase and it will enhance job pros-
the Super Pit go up and I’m sure pects for people,” Bowler said.
they will get much more life out of “Post-COVID, traditional jobs in the air-
Mt Charlotte.” line and tourism industry aren’t going to
A residentially run mine, there be there and there will be lots of unem-
are about 1,100 people employed ployment in those areas at a time when
to run the Super Pit, with around Kalgoorlie offers solid, long-term employ-
30% of KCGM suppliers sourced ment opportunities.
from the Kalgoorlie-Boul-
der area.
Currently, the Super Pit
is poised for production
until 2035 with output to ex-
ceed 675,000 ozpa gold by
FY2028.
The reserve base at the
Super Pit is 9.7 moz gold,
with expected production
in FY2021 of 440,000-
Jim Walker
480,000oz @ AISC
$1,470-1,570/oz. KCGM
trols]. I know that some people say maybe has allocated $198 million in growth
we should have a bubble with South Aus- capital and $12 million in explora-
tralia and Northern Territory, but I think tion in the same period.
while he is keeping a hard-line we can KCGM’s commitment to the
have things like the PGA and Diggers & Super Pit comes at a time that
Dealers without the virus getting into WA.” Kalgoorlie is seeing diversification
Travel restrictions mean that the in- of its economy.
ternational and interstate guests accus- “Lynas [Corp Ltd see page 40] is
tomed to making the annual pilgrimage an advantage to our city as it is not
to Kalgoorlie for Diggers & Dealers will nickel or gold; it is another industry.
be missing in 2020, however, they won’t Ever since Paddy Hannan walked
be completely shutout with the 53 com- over the hill, community leaders
pany presentations taking centre stage to have been trying to expand the eco-
be live streamed during the course of the nomic base of Kalgoorlie. Now the
three-day event. economy is going to be the broad-
Gold stories – about 30 in all – are once est it’s ever been,” Bowler said.
again in abundance on the programme, “People have been moving back Mark McGowan
with new KCGM owners Northern Star into town, houses prices are going
Resources Ltd and Saracen Mineral Hold- up – not disconcertingly for those that want “The services and retail industries are
ings Ltd headline acts. to come and buy – but vacancy rates for suffering world-wide and the COVID period
“Two local boys that went to the Kalgoor- rentals is down to 2%, which is considered has seen us hold our own in those areas,
lie School of Mines and would have been very low. You always have a turnover of which is better than the international aver-
looking over that pit as young budding stu- people leaving and people moving in, but age. Target is a loss, but Kmart and Coles
dents and now they own it; what a great today I was told it was under 1%. We are are moving in and indications are that we
story,” Walker said of Northern Star execu- going to need more housing because there may also get an Aldi,” he said.
tive chairman Bill Beament and Saracen are more jobs coming.”
– Mark Andrews
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 29
DIGGeRs & DeALeRs
Goro off but nickel,
copper still on for IGO
GO Ltd has walked away from its flirtation with the Goro laterite nickel project
I in New Caledonia, selling its 19% stake in fellow ASX-listed miner and Goro
option holder New Century Resources Ltd.
GO divested its 180 million shares in New has so far failed to achieve its top-10 nickel problem for us was the cost structure and
ICentury in August after deciding against fur- producer potential. the plans in place to get the costs down. The
ther supporting New Century’s ambitious bid “New Century was ahead of the curve on risk/reward balance wasn’t right for IGO at
for the large Pacific nickel project. a deal, having already begun due diligence this time,” Bradford said.
“The investment in New Century was on the ground before COVID hit; we can’t do “Our assets and the message we’ve giv-
a strategy to give us an option to look at that at the moment. We leveraged their work, en about our strategic direction has always
Goro and work out whether it was a fit and did some further due diligence.” been clear; project scale and longevity but
to potentially work with New Century on the That due diligence complete, IGO couldn’t also quality, and we couldn’t see a future
acquisition,” IGO managing director Peter identify a way in which the asset would fit into where Goro was a high-quality asset in our
Bradford told Paydirt. the company portfolio. portfolio. It would always be at the midpoint
At face value it appears unusual for a IGO’s withdrawal was quickly followed by in the cost curve.
company to take such a sizeable stake in a New Century’s own decision not to proceed “Goro would make us relevant in that
fellow miner before quickly dumping its posi- with the transaction. space and if I had a spare couple of million
tion but for Bradford it was always part of the “At the end of the process, I still have a lot dollars I would commit completely to it. Be-
plan and worth the effort to get a look under of confidence in the future of the project. It cause it has the potential to be a company-
the bonnet of Goro, an intriguing project built has scale and mine life and projects like that maker. One of the highest grade laterite pro-
by Vale SA more than a decade ago, which don’t come along every day. The biggest jects in the world.”
Peter Bradford
The Nova nickel operation produced 30,436t nickel,
13,772t copper and 1,142t cobalt in FY20
Page 30 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Comprehensive Supply Chain Solutions
He said the decision to swiftly liquidate its company would review its cash allocation “On lithium, we have said we wouldn’t en-
position was best for both parties. framework at the beginning of 2021 given gage at an operating level because we don’t
“The market would’ve twigged anyway both Tropicana and Nova are in cash har- understand that business today. But if we
and the holding would’ve been an overhang vesting mode. could find the right tenure, we would explore
on New Century, stopping them doing a deal “We take a balanced approach but we to find a hard rock deposit which could com-
on it.” have fantastic cash flow from Tropicana and pete in that lowest cost quartile.”
With the Goro deal iced analysts ques- Nova so we can allocate consistent returns However, given the current woes of es-
tions will likely to return to another favoured and consistent investment in exploration tablished lithium miners, Bradford admitted
M&A topic at IGO; its 30% share of the Trop- and grow the balance sheet to fund future there could be room for an opportunistic
icana gold JV. growth, all at the same time,” he said. switch in tactics.
“That rumour has been doing the rounds “Come next year, we will revise that “Lithium prices are now at seven-year
for three or four years and is the most com- framework. We should have $600 million in lows, so we are revisiting that strategy and
mon question I get on calls,” Bradford said. cash by then so there is potential for a higher we are asking if it is worth looking at M&A in
“My consistent response is: ‘Tropicana as a allocation to shareholders. It is a fantastic the lithium space,” he said.
gold asset is not aligned with our strategy problem to have when you are generating IGO presentations have taken on an
but it’s a high-quality asset so it is core to so much cash.” obviously clean technology theme in re-
our portfolio.” One looming possible application of that cent years. Bradford acknowledged the
growing cash bal- company has a strong leaning towards the
ance is a new de- thematic but said any investment decisions
velopment. IGO would always be based on mining business
currently boasts a first principles.
six-year mine life at “There is broadly an attraction towards
Nova but if it is to responsible investors, but we don’t want
fulfil its longer-term to lose sight of the fundamentals,” he said.
aim of producing “We are looking for projects of scale, longev-
downstream battery ity and quality. We won’t jump into an aver-
products, it will need age project just because it is aligned with the
deeper mineral re- clean energy theme but the growing desire
serves. Bradford is to decarbonise the planet will result in more
acutely aware of the renewables, grid storage and electrification
need to find more of transport.”
tonnes. The main Despite not being a priority for the compa-
question is whether ny, Bradford sees advantage in IGO aligning
they will be nickel itself with the clean energy thematic.
at Nova or copper “There is a huge opportunity for mining
elsewhere. companies,” he said. “Employees, com-
With a six-year mine life at Nova, IGO is contemplating its next “All mining com- munities, investors; we all want to make a
growth move panies are always difference and leave a better planet for fu-
doing some M&A ture generations and I think without COVID
The gold mine – held in JV with Anglo- and I’ve made no secret of the fact we are this could’ve been bubbling along for years
Gold Ashanti Ltd – delivered 141,169oz gold looking but the problem is we have looked at without us truly understanding the benefits.
in FY20 at AISC of $1,171/oz, producing 24 projects at different phases; from desk- But suddenly, the air in cities has cleaned up
underlying EBITDA of $175 million for the top assessments to boots-on-ground, and within months and people are beginning to
year. IGO is understandably cautious about haven’t found a lot which interests us,” he recognise the size of the prize we have in
giving such an asset away for anything less said. front of us.”
than full market value. “Our strategic focus is about being more IGO is far from alone in aligning itself with
“We shouldn’t take it for granted that it will relevant in the clean energy metal space so renewables, EVs and battery technology
always be in the portfolio, but any sale would first prize will be nickel or copper projects with majors from Rio Tinto Ltd and BHP
rely on the value being well understood. My which deliver on a Nova scale or more, that Ltd to Anglo American plc and Glencore
view is that with Boston Shaker coming into is similar mine life and the same quality met- charting a path towards greater copper and/
production later this year and two more un- rics which is plus-50% EBITDA.” or nickel dominance. Could IGO be on the
derground prospects still to be developed, The rapidly evolving nature of battery and M&A radar for such companies?
Tropicana is only partway through its jour- renewable technology means there are new “M&A is always driven by two elements,
ney.” energy applications emerging every year. valuations today and whether we can see
For Bradford, there must be a compelling While IGO keeps a watching brief on this additional value which warrants paying a
reason to sell such a profitable asset. “entire encyclopedia of clean energy metals premium,” Bradford said. “For someone
“If we do sell, why would we be doing it? out there”, it is conscious of sticking with the with horsepower to make a play for IGO,
We could use the proceeds to give back to commodities it knows best. they would want to see more than six years
shareholders, but it would be a question of “We have pretty much ruled out every- mine life at Nova. When we put that drill hole
whether that is better than retaining the as- thing apart from copper and nickel,” Bradford which delivers the next 10 years of mine life;
set and producing a higher annual dividend.” said. “Given our understanding about them, that’s when potential predators will begin
Dividends are a regular part of the IGO our shareholders’ understanding about them looking.”
investment these days with the company’s and the fact they are both strongly aligned to – Dominic Piper
final dividend taking total FY20 dividends the clean energy theme, we would invest in
to 11c, up 1c from FY19. Bradford said the any stage of nickel or copper project.
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 31
DIGGeRs & DeALeRs
Evolution removes risk
from Red Lake
t has taken Evolution Mining Ltd only ternational travel, the Evolution team has ownership, Red Lake produced 27,428oz
Inine months to completely reset the dial once again proved the doubters wrong at an AISC of $1,943/oz, having con-
for its Red Lake gold operation in Cana- and only four months after officially tak- servatively guided 25,000oz at $2,100/oz
da, flagging the potential for production of ing the wheel at Red Lake, the company from the mine in the three months to the
up to 500,000 ozpa from its newest asset unveiled an 11 moz gold resource which end of June.
in the years ahead. all but ensures the 70-year-old mine in Evolution is expecting an output of
When Evolution announced the pro- Ontario will continue ticking over for at 125,000-135,000oz with an AISC range
posed acquisition of Red Lake from least a few more decades. of $2,050-2,100/oz from Red Lake in
Newmont Corp late last year for $US375 Speaking on the company’s virtual in- FY2021, with overall group guidance set
million (plus a contingent consideration vestor call in early September, Evolution at 670,000-730,000oz at $1,240-1,300/
of $US100 million for the addition of up executive chairman Jake Klein indicated oz AISC.
to 5 moz over the next five years), the the opportunity to add further ounces to Klein said aspirations for production
company told investors it was giving it- the existing resource base (48.1mt @ 7.1 of 300,000-500,000 ozpa gold at Red
self three years to have the mine churn- g/t gold for 11 moz) still remained. Lake could arrive much sooner than an-
ing out in excess of 200,000 ozpa at an “We are getting drill results from the ticipated.
AISC of less than $US1,000/oz. lower areas of Red Lake which are really “I can only give you some anecdo-
tal perspective as to the conversations
[chief operating officer] Bob Fulker and
I had when we looked at that resource,”
he said.
“Bob was saying ‘gee Jake, if we’ve
got an 11 moz resource and we mine it at
200,000 ozpa that’s going to take us 50
years to mine; we better go faster than
that’, which is true. And that’s where we
have to recalibrate completely.
“The mine had been depleting its re-
serves and resources way too quickly
and was really in a harvesting mode
and headed towards closure because
of a lack of exploration or development
expenditure. We need to rebuild that up,
get the inventory up and start to make
the mill the constraining feature.
“Bob has thrown around numbers that
Only nine months after making a move on the asset, Evolution is eyeing future production clearly suggest even optimising these
of 300,000-500,000 ozpa gold from Red Lake in Ontario, Canada current mills at their current 1.1 mtpa
capacity is not going to be big enough,
but that’s going to be determined by the
At the time, Red Lake appeared very emphasising the justification we had for scale of opportunity and the potential of
much the unloved asset with its output the investment decision earlier on and it.”
slumping dramatically over the preced- there’s lot of potential upside over there,” Klein paid tribute to the likes of Glen
ing five years and guidance for FY2020 Klein said. Masterman (vice-president of discovery
estimated in the realm of just 150,000- “The next step is going to be to develop and business development) and Dean
160,000oz. AISC had also blown out to a new reserve estimate, that will be done Frederickson (manager geology and
$US1,600/oz. and completed with our annual state- planning) for their efforts to fast-track
It loomed as a very risky acquisition for ment which will be out in the first quarter Red Lake’s potential. In fact, Freder-
Evolution which had just been crowned of next year. That should show a signifi- ickson – integral in establishing the im-
Miner of the Year by Paydirt’s sister pub- cant uplift in the reserves and will allow proved mine life forecast for Evolution’s
lication Gold Mining Journal for achiev- us to start assessing these potential op- Cowal gold mine in New South Wales
ing consistent production across its port- portunities.” – requested to relocate to Canada for
folio. The company was also heralded for Klein said travel restrictions and other 18 months, citing a desire to be part of
being one of the world’s lowest-cost gold limitations resulting from the global COV- “something special” at what is now the
producers with group AISC for FY2019 of ID-19 pandemic had impacted his com- company’s largest and highest-grade as-
just $924/oz ($US661/oz). pany’s transformational vision for Red set.
Despite a global health crisis which has Lake “much less than we anticipated”. There has also been a major cultural
placed unprecedented restrictions on in- In the only quarter under full Evolution shift among the workforce at Red Lake,
Page 32 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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DIGGeRs & DeALeRs
“ We’re in a very good and favourable part of the cycle and I think that’s going to
continue, but I get nervous when deals are just being done for deals sake.
according to the mine’s interim general
manager Amber Adams. The only disrup-
tion in recent times was a short suspension
of operations in mid-August following a mu-
nicipal-led evacuation of the region due to
the threat of a nearby forest fire. Evolution
is not anticipating any impact on its planned
September quarter production forecasts.
“Employees are commenting that they’re
happy to come to work, they’re more moti-
vated and they’re excited about the future,”
Adams said. “We’re also pleased to see our
employees now start to speak up and have
open and honest conversations, and they’re
offering up a lot of improvement ideas which
has a positive impact on the operations as
a whole.
“Evolution has enabled us to look at this
operation differently than we have in the
past…all of those things have had a really
positive impact on us, even just bringing in
different ways of doing things in terms of
mining methods and the like.”
While there is plenty of both internal and
external excitement around the future of Red
Lake, Evolution is equally buoyant about the
future of Cowal following the declaration of a
maiden underground reserve of 840,000oz
in late July.
Evolution’s board immediately approved
the accelerated development of the un-
derground opportunity at Cowal where the
company has added 7 moz gold in resource
and 4.2 moz in reserve, prior to depletion, Jake Klein
since acquiring the mine from Barrick Gold
Corp in mid-2015. only acquiring projects which will add value steadied the ship at the operation and we’re
“The scale of the opportunity there is im- to the portfolio. looking to deliver to the guidance this year;
mense and we are of the view we have not “We’ve clearly differentiated ourselves we do continue to assess assets and see
finished discovering ounces on our tene- and said we’re all about margin, we’re all where they really fit into a portfolio, but I
ments,” Klein said. “We have unbelievable about cash flow, we’re all about dividends,” think we need to look at what the drilling at
organic growth opportunities in our portfo- he said. Crush Creek delivers before making any
lio.” “I think the quality of our portfolio is best decisions on that asset.”
Evolution delivered its 15th consecutive in class and you can see that from the mar- With the gold price at record levels in
dividend to shareholders last month – a gins and cash flow generation we’re get- Australian dollar terms, some commenta-
fully franked dividend of 9c/share for a to- ting. We’ve said no to a lot of things, we’ve tors are speculating about consolidation
tal distribution of $153.4 million – despite kicked a lot of tyres and we’re happy to do among some of the high-end producers.
its group production of 746,463oz for the that because this is a business about qual- Klein, who has always maintained a con-
last financial year being slightly short of its ity, it’s about margin and not about volume.” trarian approach to business, remains
FY2019 output. Records were set for oper- The only downside to Evolution’s other- sceptical of the benefits of such corporate
ating mine cash flow (up 45% to $1.12 bil- wise stellar FY2019 – which included the activity.
lion), net mine cash flow (up 48% to $736 sale of its Cracow gold mine in Queensland “We’re in a very good and favourable part
million) and group free cash flow (up 86% to to Aeris Resources Ltd for $125 million – of the cycle and I think that’s going to con-
$541.8 million). was recording a $101 million post-tax im- tinue, but I get nervous when deals are just
The company also posted record statu- pairment at Mt Carlton due to a downgrade being done for deals sake,” Klein said.
tory net profit after tax (up 38% to $301.6 in its resource and reserve base. “If there’s logical and value accretion and
million), underlying net profit after tax (up Klein remains confident there is still a fu- both sets of shareholders are going to do
86% to $405.4 million) and EBITDA (up ture for the foundation asset in Evolution’s well out of it, I’m all in favour. But in the past,
41% to $1.03 billion). portfolio despite an expected reduced out- generally the sellers have done better than
Klein said one of the keys to his com- put of 47,500-52,500oz in FY2021. the buyers in a rising gold price environ-
pany’s success over almost a decade was “We’re doing some really interesting drill- ment, and that concerns me.”
not once having a focus on the number of ing at Crush Creek which is 30km away
ounces produced from its operations and from Mt Carlton,” he said. “The team have – Michael Washbourne
Page 34 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
DIGGeRs & DeALeRs
While the traditional heartlands of the Eastern Goldfields and Pilbara
iron ore districts appear stronger than ever despite, and even because
of, the impact of COVID-19, Western Australia’s resources sector could
be at the beginning of a dramatic diversification as new commodities,
new regions and new technologies emerge over the decade.
Association of Mining & Exploration Companies (AMEC) chief executive Warren Pearce led the push for state and federal
governments to adopt dedicated battery and critical minerals policies to foster the development of new industries.
With the WA Government reaffirming its commitment to a battery minerals industry and the Federal Government signing
a critical minerals cooperation agreement with the US, Pearce is eager to expand support to other commodities.
“The road ahead actually looks good, there is a window of opportunity for a range of new industries in the critical
minerals space but also vanadium and potash,” Pearce told Paydirt. “There are three or four vanadium projects and
seven or eight potash projects with the potential to create what will essentially be new industries offering significant
investment opportunities for WA in the coming decade.
“We will try to play a role in supporting vanadium and potash just as we did with lithium although they are both probably
a bit beneath the public consciousness at the moment.
“We will strive to ensure the regulatory environment is there to allow the industry to develop.”
However, vanadium and potash are not the only changes likely to emerge in the coming decade. Paydirt looks
at some of the commodities and trends set to alter the WA landscape over the next 10 years.
Page 36 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Comprehensive Supply Chain Solutions
Potash
While not a battery mineral, potash is emerging
as another “sustainable mineral” thanks to its low
operational carbon footprint and ability to increase
agricultural yields and improve nutrition in developing
nations. The WA sector is being driven by a group of
ambitious juniors with potential to grow production to fit
demand for sulphate-of-potash, a high-quality fertiliser
which is increasingly in demand across the globe
New gold terrains
A process which started more than a decade ago
with the discovery of Tropicana and continued last
decade with the Gruyere find has continued in 2020
with the discovery of the Hemi gold deposit in the
Pilbara. Not only does Hemi represent a new style
of gold mineralisation for WA (intrusion-related
gold systems), it was also found under a thin layer
of transported cover, encouraging explorers
to deploy new technology to test previously
unheralded regions in remote parts of the State
Vanadium
One of WA’s forgotten commodities, vanadium has
flattered to deceive down the years thanks to an
uneven market and operational issues at the few
projects which have got close to production. Now,
however, its role in static battery technology means
there is a market beyond steel giving players such
as Australian Vanadium Ltd and Technology Metals
Australia Ltd confidence they can finally get their
long-awaited projects into production
Nickel
It has been a long time coming but signs of the
next big nickel discovery in WA have finally started
showing in 2020. The success of Legend Mining Ltd
and then Chalice Gold Mines Ltd earlier in the year has
thrown the exploration spotlight back on one of WA’s
favourite commodities and with BHP Ltd announcing
its intentions to expand its nickel business, there is
plenty of incentive for others to chase new deposits
Lithium
Lithium was the first of the battery minerals to
boom but also the first to see its run stall. While
the current travails of the established producers
suggest the market may have gotten ahead of
itself, long-term projections remain positive for
the metal. Outside current operators such as
Greenbushes, Pilbara Minerals Ltd and Altura
Mining Ltd there is a dozen or so lithium plays
primed for any eventual upswing in demand. With
EV production expected to increase dramatically
in the second half of the decade, the WA lithium
sector could eventually fulfill its promise
Downstream processing
Attempts to build battery precursor and cathode manufacturing facilities in WA continue despite the coronavirus setbacks. In August, the WA
Government announced a $13.2 million incentives programme to attract a global cathode active materials production facility in the State.
this comes on the back of similar backing for the Future Battery Industries CRC and BHP Nickel West’s construction of a nickel sulphate plant at
its Kwinana nickel refinery. While COVID has slowed the EV revolution, many analysts believe it could reinforce WA’s downstream ambitions
by highlighting Europe and the US’s need to diversify away from their reliance on China for key ingredients in the EV process
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 37
Time to #Believe:
Bellevue sets
the PACE Steve Parsons
Few companies have asserted
themselves the way Bellevue Gold
Ltd has in the past three years.
Coming to market with the hope of reviving a forgotten about gold project in Work on the decline, preliminary surface infrastructure plus mining studies
Western Australia’s Leinster region, the company’s dream is quickly becoming and continued exploration to grow the current 2.3 moz @ 10 g/t gold resource
reality as first gold from the Bellevue gold project is in sight in 2022. at Bellevue, are part of the early-stage work programme designed to help the
Significantly, specialist underground mining contractor GBF Mining and Industrial company achieve production as quick as commercially possible.
Services Pty Ltd from the Macmahon Holdings Ltd stable, started Stage 1 works at A feasibility study on Bellevue is on track for completion late this year/early 2021,
Bellevue recently. as the company aims to keep pace with its discovery success on the back of over
Early works by GBF are centred around construction of a new portal which will open 240,000m of diamond drilling completed so far.
the way for access to historical underground workings and link up with the existing It is fair to say that the company’s strike rate of 75,000 oz gold discovered on
decline. a monthly basis at $18/oz since 2017 has borne a decent amount of fruit for
Underground activities will be made somewhat easier by the 28km of development shareholders who are revelling in Bellevue’s $1.02c/share price and market cap of
left behind when the mine was closed in 1997 after 800,000oz gold @ 15 g/t was $865 million.
produced. In Western Australia’s second biggest gold mining district outside of Kalgoorlie, the
Re-establishing the existing decline for mechanised use at Bellevue means that sky appears the limit for what could unfold across Bellevue’s 3,500sq km of ground
underground drilling platforms can be created allowing for accelerated infill and in Leinster.
exploration drilling Given that others had discounted the potential of the property when it closed
Completing such work now helps reduce costs ahead of an intended low capital- over 20 years ago, the ability of the current owners to find gold at a quick rate
intensive restart at Bellevue, with the refurbishment of the existing decline to be indicates the confidence and philosophies driving Bellevue’s success are a winning
used for future exploration and haulage. combination.
Page 38 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
Bellevue Gold Ltd (ASX:BGL) Key people:
Share price: $1.02 Steve Parsons (managing director),
Michael Naylor (executive director/company secretary),
Market cap: $865 million
Sam Brooks (chief geologist),
Address: Suite 3, Level 3, 24 Outram St West Perth, WA, 6005 Kevin Tomlinson (independent non-executive chairman),
Craig Jones (chief operating officer),
Phone: +61 (8) 6424 8077
Fiona Robertson (non-executive director),
Email: [email protected] Shannon Coates (non-executive director),
LinkedIn: @bellevuegold Luke Gleeson (head of corporate development),
Daina Del Borrello (GM people and company culture)
Facebook: @bellevuegold
Twitter: @bellevuegold
“One of the programs that has proved dear to us at the moment is at the
Leonora high school. The high school principal said that attendance was at such
a low rate and indicated that food was a problem. Therefore, we’ve started
providing lunch for the school which has seen attendance rates increase and
kids are getting an education. The program with the Leonora High School aligns
directly with everyone of our PACE core values”
Now more than ever, mining companies are being held to high account for the
impact they have on the surrounding communities and environment, factors
Parsons and the Bellevue team are warmly embracing.
While the questions are being asked on the ground, having completed a $100
million equity raising and $35 million share placement this year, Parsons is fully
aware of the expectations within the global investment community as well.
“ESG is the new paradigm in investing. Ten years ago, you’d say what does that
mean? I am telling you now it is super important. Every investor globally wants
to know what your policies are, what you have in place,” he said.
“Climate, community, corporate governance, environment are all super
important and the thing about Bellevue is that we have a clean slate. We are on
granted mining licences for an underground development and we are looking at
a whole bunch of options to make sure we get it right.
“Of course these things take time and making sure we are on the right path to
having a low carbon footprint and environmental footprint in developing an
underground gold mine the best we possibly can,” he said.
Having consolidated its bank balance to be well funded with $151 million,
indicates Bellevue has ticked the right boxes for all stakeholders and investors
“The mine closed because of a fault that the nickel company [previous owners] along the chain thus far.
thought killed the mineralisation. Over the fault is where we hit 7m @ 27 g/t; The company’s cash will see it through the completion of feasibility studies
theories change as does science,” Bellevue managing director Steve Parsons said. and development activities for Bellevue to unlock the full potential of one of
“You have to sell yourself and your thoughts, have ownership of what you’re doing Australia’s great historical high-grade gold mines.
that is important.”
Empowerment within the wider Bellevue organisation, which boasts 40% woman
leadership at board level and 36% woman participation overall, went another level
earlier this year.
“We came up with our core values with what we see and what the staff see as what
is important; what they really want to take on board and where they want to see the
company go and we came up with PACE,” Parsons said.
“We thought this was quite appropriate given we are working at quiet a rapid pace
with our discovery and the pace of turning this into a mine.”
Passion, Accountability, Community, Excellence – PACE – is the acronym
representing Bellevue’s drive now and what will take it into the future as a gold
mining company.
“Given we work in Western Australia in remote communities, we need our
stakeholders on side and support from them, so we like to support the community
as much as we can. There is a whole bunch of things we are doing at the moment
that we are very proud of,” Parsons said.
DIGGeRs & DeALeRs
Comprehensive Supply Chain Solutions
Lynas is ‘go’ in Kalgoorlie
here is unlikely to be anyone more dis- for another three years amid the removal
Tappointed at not being able to attend of the problematic Pakatan Harapan coali-
this year’s Diggers & Dealers in Kalgoorlie tion government.
than Lynas Corporation Ltd managing di- Lacaze said the new administration led
rector Amanda Lacaze. by Muhyiddin Yassin – Malaysia’s eighth
Due to Western Australia’s hard border Prime Minister – had sent a clear message
closure, Lacaze – a popular fixture on the to the rest of the country about the value it
annual Diggers programme – will instead saw in the Lynas Malaysia plant.
present the Lynas story via video link from “It was a difficult 18 months…but we are
the east coast where she has been isolat- moving forward and are confident we can
ing since the onset of the global COVID-19 meet all of the conditions of the licence,”
pandemic. she said.
While catching up with old friends and “Our operations in Malaysia are a signifi-
mingling with potential new investors can cant portion of our business and our peo-
still occur by remote means during the ple there are now highly skilled with the IP
three-day conference, Lacaze said her necessary to do what is quite a challeng-
biggest regret was missing out on the ing process.
chance to meet with local members of the “The new government has shown them-
community who are set to benefit from the selves to be active and supportive and
Kalgoorlie rare earths processing facility the new minister, who has more account-
which Lynas plans to have operational by ability in the area that licences Lynas, has
July 2023. been quite public about the need to make
“It’s really frustrating, but it is what it is,” science-based decisions – and that’s very
Lacaze told Paydirt, adding that her WA- Amanda Lacaze helpful for us because the science is very
based team was more than capable of ex- clear. A lot of the other issues [of the past]
plaining the finer details of the company’s 50% increase in overall production capa- have been primarily political.”
downstream vision for the Goldfields. bility, the Kalgoorlie facility is set to take If Lacaze and the rest of the Lynas team
Lynas confirmed Kalgoorlie as the pre- rare earth concentrate from Mt Weld and thought the worst was over at that point in
ferred location for an Australian-based process it into a mixed carbonate product time, they were in for a rude awakening
rare earths processing facility late last which will undergo further refinement in when the current global health and finan-
year, citing proximity to its Mt Weld mine Malaysia. cial crisis began to unfold from late Febru-
– 35km south of Laverton – and the avail- A project team for the Kalgoorlie facility ary onwards.
ability of a skilled workforce from a long- was established shortly after its proposed In accordance with the Malaysian Gov-
standing mining town as the main reasons location was announced. Since then, ernment’s COVID-19 movement control
behind its ultimate decision. FEED work on critical areas of the future order, Lynas was forced to shut down
Construction of the facility on an in- operation has been completed and an or- operations for six weeks. This temporary
dustrial-zoned property within the City of der placed for the rotary kiln considered to production halt significantly impacted the
Kalgoorlie-Boulder is expected to begin be the most crucial long-lead item in the company’s FY2020 results with revenue
mid-next year, subject to obtaining all of construction process. ($305.1 million) down 16% and EBITDA
the required approvals. Lynas ticked off a key milestone last ($59.8 million) down 41% on the previous
Underpinning development of the month when it opened a pop-up office in financial year.
Kalgoorlie facility is a $425 million equity Kalgoorlie for members of the commu- Cash flow remained positive at $32.1
raising which Lynas unveiled in August. nity to express interest in being part of the million but suffered a huge drop from the
The company successfully collected $311 upcoming construction window and/or its $104.1 million recorded in FY2019.
million via an oversubscribed placement eventual operation. “We were on track for a very good year,
and institutional offer within 48 hours of the “We think that this is an excellent oppor- but of course the COVID shutdowns af-
announcement and pulled in the remaining tunity for small and medium businesses fected us in Malaysia and that certainly
$114 million from a fully-underwritten retail in Kalgoorlie, and WA more broadly, to be changed the complexion of our results
entitlement offer early last month. engaged,” Lacaze said. quite significantly,” Lacaze said.
Lacaze said having a fully-funded pure “We do have a policy where we will seek “We have had a successful restart. We
equity solution was preferred over a mix to preference local suppliers and as we actually restarted our operations in Malay-
of debt and equity. An undisclosed portion move forward we’re also seeking to have sia at about 75% of our new nameplate
of the raising will also be directed towards our permanent staff, as much as possible, capacity. It’s actually now the same as our
upgrades at the existing Lynas Malaysia living residentially in Kalgoorlie.” original nameplate from before our signifi-
plant which has been the cornerstone of One of the other catalysts for the cant debottlenecking project we complet-
the business for many years. Kalgoorlie facility was uncertainty over ed in 2018/19 and we plan to keep working
According to the company’s “Lynas the future of the Lynas Malaysia plant as towards that new target in accordance with
2025” vision which will strengthen its po- political turmoil in the country spilled over. the guidelines.”
sition as the world’s leading rare earths However, the company’s Malaysian op-
producer outside of China via a proposed erating licence was renewed in February – Michael Washbourne
Page 40 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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DIGGeRs & DeALeRs
Comprehensive Supply Chain Solutions
S2 prepares script for Nova sequel
hether it’s X-Files or Groundhog ing campaign. are other things to move onto, other tar-
WDay he’s not sure but Mark Bennett “At Nova, we could only afford three gets to test,” Bennet said. “Exploration is
is certain of one thing; the coincidences RC holes, this time we can go straight about putting in the hard yards and we
between the original Nova nickel discov- into diamond drilling,” Bennett said. “We stay realistic. It is important to be in with
ery and his latest prospect on the Fraser haven’t had to do soils or aircore to zero a chance all the time.”
Range are eerie. in on the target, that is all redundant be- That includes not being wedded to one
Bennett and the rest of the S2 Re- cause it has 200m of transported cover project. As well as winning the Fraser
sources Ltd team began work on the on top of it. Range ground, S2 has also pegged land
company’s new Fraser Range project “Instead, it will be death or glory with at the other margin of the Yilgarn Craton.
in July, just months after the tenements these holes. Because it models so well, “The Fraser Range wraps around the
were granted following a ballot process. we are very confident of where it sits, so south-eastern edge of the Yilgarn Cra-
S2 started its exploration push with we can go for the jugular. It will take a ton so we started looking at the west-
a moving-loop EM survey which imme- couple of holes because you can some- ern side; the Darling Fault runs up the
diately highlighted an enticing anomaly. times hit the conductor in a barren part of western side of WA and to us it looked a
Bennett said the anomaly shared many the system but the response is so unam- bit like the mid-continental right system
characteristics with the Nova nickel-cop- biguous we will get an answer quickly.” which hosts all the major nickel deposits
per deposit, the S2 team’s last big find. With an exploration portfolio bulging in North America.”
“Usually with EM you get nothing or with gold, nickel and PGE targets else- The S2 team may have been looking
just lots of noise and the trick is working where in WA and in Finland, Bennett for some time but they weren’t the first
out what is real,” Bennett explained. to act. Instead Chalice Gold Mines
“This time, we got a sea of blue noth- Ltd stole the headlines in late March
ing then in one area, this unambigu- when it announced the Julimar nick-
ous, big bold response sat out on its el-copper-PGE-gold discovery just
own, just like Nova was. 70km from Perth.
“Once Newexco modelled it in 3D, “We were gobsmacked by that dis-
it read almost the same as Nova; an covery,” Bennett admitted. “And after
800m elongated rectangle plunging that, things went crazy and we had to
to the north and highly conductive. stop looking and start pegging. It is
It was like Groundhog Day, every- safe to say that without the Julimar
thing was just repeating itself. Usu- discovery we may not have had the
ally when something looks too good impetus to peg the ground.”
to be true that’s because it isn’t, and Now it is waiting on approvals for
you are half scared to drill it; it was two projects – Three Springs 250km
the same in the Sirius days.” north of Perth and West Murchison
Given that S2 only secured the 500km north of Perth.
ground by luck of a ballot, the coinci- “They are not granted yet so we
dences were starting to stack up. can push too hard, but we have only
“The likelihood of getting three of done some quick soils and already
the four tenements in the ballot were got a nice nickel-copper target based
remote, then the likelihood of getting A distinct EM anomaly on S2 Resources’ newly granted on the broad sampling,” Bennett said.
a similar response to Nova was low; Fraser Range ground shares many similarities to the “There are PGEs in there as well and
it was eerie so we joke that it’s like original Nova nickel-copper discovery in the district a surprisingly big gold anomaly of
something from the X-Files.” more than 1 g/t. It is a bit of a mystery
Higher forces or not, S2 will ap- bag and we will extend the soils now
ply the same geoscience discipline to its is happy to have a quick result on the because the anomaly remains open to
new nickel target as Sirius did in the early Fraser Range. the east.”
days at Nova. “That’s how we like to be; in and out,” Travel restrictions around COVID-19
“We are trying to maintain our common he said. “There are a number of people prompted the renewed interest in WA but
sense,” Bennett said. “Just because it is a watching it because if we do get nickel, Bennett remains hopeful of restarting ac-
strong response doesn’t mean it is nickel it is not hard to work out how much there tivity on S2’s assets in Finland once the
sulphides. The rational part of our brain will be. It is like drilling an oil well: it could pandemic is under control.
is saying it could be barren sulphides or be a duster, or it could be onto something, “We had to abandon drilling in Finland
graphite. there won’t be anything in between.” with the onset of COVID,” he said. “We
“Our plan is to do almost exactly the If the target does turn out to be barren, have a nice gold target over there and we
same as we did with Nova, the difference S2 will be swift to move on. The company know it’s a live structure, but we will keep
being, we have money this time.” now has three tenements granted on the it up our sleeve for now.”
Sirius’ discovery of Nova has gone Fraser Range but has only limited infor-
down in Australian exploration folklore, mation on the ground. – Dominic Piper
the penny dreadful explorer hitting the “We have only done EM on a small
nickel system in a last roll of the dice drill- portion of the ground, so maybe there
Page 42 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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STEINERT
sorts out
industry
success
There is currently nothing History would suggest the most successful ore sorting operations
hotter in mining circles than over the years have been tied to the base metals sector and one of
the best-known case studies on record is leading nickel producer
gold and iron ore - a fact Western Areas Ltd.
not lost on the team at Western Areas used revolutionary ore sorting technology from STEINERT
STEINERT Australia. to convert 170,000t of previously disregarded material into low-cost feed
for processing at its Forrestania nickel operations.
Since then a number of other base metals companies have followed suite
and deployed STEINERT ore sorting machines. Therefore, it is no surprise
that several gold and iron ore players are lining up for the chance to see
whether the value of their projects can be boosted through an investment
in ore sorting.
Pantoro Ltd successfully pioneered ore sorting for gold producers two
years ago when the unheralded miner installed a STEINERT ore sorter as
part of a processing plant upgrade at its Nicolsons mine.
With the price of gold trading at unprecedented levels, other producers
are keen to get in on the action, according to STEINERT Australia managing
director Johan van Zyl.
“We have done well in excess of 100 individual trials for different
companies over the last year or so and the vast majority of those were for
gold producers,” van Zyl says.
“Because the gold price is so high, a lot of people are now investigating
what technologies are out there to ensure their projects are more robust
when it comes to leaner times. We certainly think there’s a benefit for the
gold producers to look into using ore sorters, regardless of the point in the
commodity cycle.”
Another gold company which has recognised the benefits of ore sorting
is Novo Resources Corp. The Canadian-based explorers have purchased a
www.steinert.com.au 1m wide STEINERT KSS | XT CLI sensor sorter for upcoming field trials at
the Purdy’s Reward, Comet Well and 47K concessions in the Pilbara.
Page 44 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
The machine is being manufactured in Cologne, Germany and
remains on track for delivery to site before the end of the year.
Novo captured the market’s imagination in late 2017 with its
discovery of a potential conglomerate-style deposit just outside
of Karratha.
“The orebody spans over vast areas, it’s not concentrated in one
deep pocket where you can just go and mine in one space, even
though, as far as I understand, it’s not very deep underground,”
van Zyl said.
“It’s not an exceptionally high-grade area either, but it’s easy to
get to and you can easily recover the gold nuggets with an ore
sorter. ore sorting into their flowsheets, often at the request of
“STEINERT are incredibly excited about this opportunity. I end-users,” van Zyl said.
believe Novo’s plan is to run the ore sorter for 12-18 months and
then look to further expanding their infrastructure.” “There’s also a couple of small engineering companies who are
now specialising in building ore sorting plants, so that’s quite a
The resurgence of the iron ore price has also spilled over to big change in ideology from a couple of years ago.”
STEINERT with two of the company’s ore sorting machines
selected to play a key role in the processing of existing iron ore
stockpiles at the Frances Creek mining centre, about 250km
south of Darwin, Northern Territory. Gideon van Wyk (WA Regional Manager) will be
It is the first time STEINERT ore sorters have been contracted to STEINERT Australia’s representative at Diggers & Dealers.
a commercial iron ore operation in Australia. Please contact Gideon on +61 488 900 450 or
“This is a totally dry process, different to any other iron ore [email protected] to arrange a meeting
if in Kalgoorlie.
operation in the country, being that it is the only one using ore
sorters to commercially produce iron ore,” van Zyl says. Non-attending delegates are encouraged to contact
Peter Fenby (Senior Business Development Mining)
“What makes this really interesting is that up until now most on +61 417 437 230 or [email protected] or
of the successful operations using ore sorting has always been Johan van Zyl (Managing Director) on +61 400 987 860
high-value base metal operations. It’s a really exciting time for or [email protected]
all concerned.
“I think over the longer term there will be a lot of iron ore
producers that keep an eye on that project to see how it’s going. AbouT STEINERT AuSTRAlIA
We’ve done trials in the past with the large consortiums, but With a rich history dating back 130 years, this German family-
they always felt ore sorters didn’t quite have the throughputs owned business is a world leader in sensor sorting technology
required to make it commercially viable. Now that it’s been and magnetic separation for the mining, waste and recycling
proven, it will be interesting to see if they come back for another sectors.
STEINERT’s Australian headquarters and manufacturing facility
look.” in Melbourne, Victoria and test facility in Bibra Lake, Perth bring
STEINERT has also been contracted to supply all the dry drum cutting-edge technology to the Australian market. Our team of
and dewatering drum magnetic separators for Fortescue experts in mining, waste and resource recovery work alongside
Metals Group Ltd’s Iron Bridge project in WA. It is the largest specialist service engineers to support you in a rapidly changing
order the company’s Australian division has ever received. industry.
Our extended capabilities include the supply of products and the
Growing interest in ore sorting opportunities prompted customer service in Australia for Allmineral, specialising in gravity
STEINERT to establish a second Australian office and testing separation using wet/dry jigging and classification technology.
facility in the Perth suburb of Bibra Lake early last year. For more information please go to www.steinert.com.au
“We have invested a significant amount of money into
growing our service capability locally in Australia,” van Zyl
says. “We are now fully operational and independent
from our parent company in Germany, as far as our
test plants and R&D is concerned.”
While the uptake of ore sorters has been slower than
van Zyl would have liked – notwithstanding the
challenges of operating through a global health
pandemic – he believes interest in the technology
is as strong as ever.
“In the last 18 months to two years, we’ve seen
more engineering houses starting to incorporate
aUSTRaLIa’S PaYDIRT OCTOBeR 2020 Page 45
DIGGeRs & DeALeRs
Comprehensive Supply Chain Solutions
TNG stays
on virtual
course
t is only recently that TNG Ltd managing di-
I rector Paul Burton has come to appreciate
the value of all the ink he has stamped in his
passport over many years of overseas busi- Paul Burton
ness travel. “Doing presentations at 8pm or 9pm in the
Despite being grounded in Perth for the fore- evening has become the norm, but it’s all posi- TNG now has binding offtake agreements in
seeable future, Burton remains as optimistic tive. We’re getting good airtime and a good re- place for all but 40% of the proposed vanadium
as ever of bedding down the funds required to sponse from people and I’m hoping that there pentoxide output. The company is currently in
develop the Mount Peake vanadium-titanium- will be something that we can announce in the exclusive talks with Singaporean firm Gunvor
iron project in the Northern Territory into one of near future on that front.” Group over this unallocated production stream.
Australia’s pre-eminent strategic metals opera- Last month, TNG confirmed the appoint- “We recently agreed to a 90-day extension
tions. ment of KPMG Corporate Finance as its finan- so there’s still another couple of months to run
While face-to-face meetings with potential cial advisor. on that one,” Burton said.
financiers, including TNG’s senior debt advi- Burton said the company had not been “I think they’ve perhaps been more affected
sors KfW IPEX-Bank GmbH, are likely off the adversely impacted by the various COVID-19 than us with their ability to close agreements,
agenda until the emergence of a vaccine for shutdowns around the world with most of but we don’t see any issues. We do have other
COVID-19, Burton and his team have contin- TNG’s work able to be completed by staff and interested parties as well, it’s certainly a com-
ued their negotiations with European counter- contractors working from home, particularly modity in demand, so we’re not concerned
parties by virtual means. during the early stages of the global pandemic. about it.”
All of this, according to Burton, has only been However, he is looking forward to seeing Burton also expects the company to have fi-
possible because of regular visits to Europe by international and interstate borders being reo- nalised and submitted the paperwork required
the TNG crew in the preceding decade. pened for travellers – albeit at a time when safe for an environmental permit – one of only two
“I must admit there were times where I could to do so – with German-based engineers yet regulatory approvals, alongside the mining
see people were becoming quite critical of us to complete their due diligence of the project for management plan – for its proposed TIVAN
spending too much time overseas, but looking FEED study purposes. processing refinery in Darwin by year’s end.
back I think if we had not put that time in and “It’s probably added a few months to over- TNG submitted a draft EIS to Northern Ter-
worn out that leather on the ground in Europe all completion, but [our engineering partners] ritory regulators at the end of 2019 and has
and seen everybody, things would have just SMS Group were able to operate at pretty since been asked to address a number of
come to a standstill,” Burton told Paydirt. much around 80-90% efficiency with the work comments in relation to that document. It is a
“These negotiations don’t need a physical that’s going on with our FEED,” Burton said. similar scenario for the mining management
face-to-face meeting anymore. We’re quite “We did readjust the areas for them to focus plan concerning the proposed Mount Peake
comfortable now with what we can progress on in the various front-end loading stages and development.
on the video screen and I see that as advan- I think that was a very pragmatic move by us to “We don’t see any major issues,” Burton
tage, having done all that groundwork in the ensure we got critical items completed for the said. “Any concerns that have been raised,
past. cash expenditure that we were outlaying, but or areas for us to address, we have come up
“Project finance is still going to be a chal- overall it’s kept us on a good track to comple- with very elegant and novel ways to mitigate
lenge, but we’ve been doing some good work tion.” any concerns from the community and various
during this forced lockdown and it’s enabled The lockdown period also saw TNG finalise stakeholders there. They will be announced
a different sort of approach to some different a binding life-of-mine offtake agreement with as we bed them down, and we’ll be very clear
companies. We’ve had a lot of meetings on India’s VIMSON Group for all future iron prod- about our intentions.
[Microsoft] Teams, a lot of meetings with Euro- ucts to be produced from Mount Peake, about “We were advised recently that there will be
peans late into the evenings for their time. 235km north of Alice Springs. a crown lease arrangement [for the TIVAN re-
finery] so I’m satisfied that’s going to be benefi-
cial for us and we’ll get it on acceptable terms
once the NT Government comes out of their
own ‘lockdown’ from the election [held in mid-
August with the incumbent Labor Government
being retained].”
– Michael Washbourne
TNG is set to produce an eclectic mix of
vanadium, titanium and iron products from its
Mount Peake project in the Northern Territory
Page 46 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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DIGGeRs & DeALeRs
Comprehensive Supply Chain Solutions
WA prepares for new
mineral industry
iven the State’s long, deep history in items have been ordered and are on their
Gmining, it is rare for a West Australian way. The crystalliser parts are on site now. It
mining executive to be at the vanguard of an is all getting very real now.”
entirely new industry but by early 2021, Salt The company plans to start dry commis-
Lake Potash Ltd (SO4) managing director sioning in January with full wet commission- SO4 now has 400ha of salts in ponds at its
Tony Swiericzuk should find himself in just ing to follow in February. Lake Way potash project
that position. The company is keeping a relentless de-
By March, SO4 plans to have shipped first velopment pace reminiscent of Swiericzuk’s operations demand water-soluble SoP and
product from its Lake Way potash project. previous employer Fortescue Metals Group a regular, stable supply of it.”
Once up and running, Lake Way will pro- Ltd. He admits to having plenty to keep him SO4 is aiming to place around 120,000
duce the first batches of sulphate-of-potash occupied but isn’t overawed by the chal- tpa of Lake Way’s production into the water-
(SoP) ever in the State. lenge. soluble market but Swiericzuk is conscious
With several other potash developers “There is always the worry that you miss of supply/demand dynamics.
close behind, there will be plenty of eyes on something because we have so many work “All of our annual production fits into that
SO4’s progress over the remainder of 2020. fronts open and I do go to bed pretty ex- high-quality product but we don’t want to
“We’re in the final sprint now and will tie up hausted every night but that is the advantage bomb that market, we want to maximise our
final approvals by mid-October,” Swiericzuk of a having an A-grade team. We’re going margins. Instead, we will also produce a low-
told Paydirt. gangbusters at the moment.” er-grade product and grow with the water-
SO4 is actually in the middle of a 24-month Even COVID-19 has failed to stem the soluble market.”
development ramp-up at Lake Way, near pace with EPC contractor GR Engineering With myriad product lines and shifting de-
Wiluna in the North Eastern Goldfields. The Services Ltd (GRES) able to continue work mand dynamics, the fertiliser market can be
company has already built 400ha of on-lake “basically non-stop” throughout the pan- confusing to the uninitiated. Swiericzuk said
solar evaporation ponds and trenches on the demic. the company’s job was to educate investors
project, the first of which has been under sun Outside of the construction risks of long- on the opportunities opening for the WA SoP
since early 2019. lead items, labour and weather, the next sector.
“The construction is 60% complete and major project challenge will be commission- “SoP is very different to MoP (muriate-of-
is on schedule and on budget,” Swiericzuk ing and achieving quality product out of the potash) and we have to make people aware
said. “Train 1 has been operating for 15 plant. of that,” he said. “The MoP market has been
months, Trains 2 and 3 are up and running “Our test work shows we are capable of very flat in recent years, so we have to differ-
now and we have 60km of trenches dug getting on-spec quickly,” Swiericzuk said. entiate our products which have increasing
feeding the ponds. “We are tuning the flotation circuits and demand.”
“It is all Control-C, Control-V stuff with the we’ve tested and optimised the crystalliser The company is hopeful some of that
ponds now – all very predictable and boring.” for temperature and time.” demand will come from domestic sources.
The major engineering task in front of SO4 SO4’s target is a product suitable for While SoP isn’t widely used in Australia,
is Lake Way’s processing plant which Swier- water-soluble fertigation, one of the highest- Swiericzuk does expect interest to increase
iczuk said was also progressing on time and growth agribusiness market segments. once a local supply chain is established.
budget. “It currently only makes up 10% of the “It will be interesting to see how the demand
“We finished pouring concrete early in Au- total SoP market but is growing at 10% an- side plays out locally when SoP production
gust and the steel erection started before the nually. This is the real high value farming starts in WA,” he said. “There hasn’t been a
end of that month,” he said. “All the long-lead – underground greenhouses – etc. These
stampede from farmers but those I’ve talked
to say it is difficult to access and when they
can get it, it is too expensive at $US1,000/t.
We want to look after local farmers and have
kept back 21,000 tpa for a local focus.”
SoP is not widely used in Australia with
most local farmers choosing to use the
cheaper and more widely available MoP.
However, with SO4 and the other potash
hopefuls capable of producing under $300/t,
there is potential for disruption in the domes-
tic fertiliser market.
“There is certainly something there which
we will look closely at once we are in produc-
tion,” Swiericzuk said.
– Dominic Piper
Construction of the Lake Way processing plant is on schedule with commissioning
set to begin in January
Page 48 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT
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