pd274-Aug19-mag-web_Neat

AUGUST 2019 Volume 1. Issue 274 $11.95

West African harmony
Miners counter security risk

S4p-e6ciaSlepprteevmiebwered2i0ti1o9n ISSN 1445-3436
07
Perth,Western Australia
9 771445 343007

Page 1 JUNE 2019 AUSTRALIA’S PAYDIRT

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contents

PAYDIRT (ISSN 1445-3436) 6 NEWS
Published by It is high-time in Western Australia’s mining
Paydirt Media Pty Ltd. sector, with iron ore and gold prices humming
A.C.N. 063 985 133 along nicely, the State’s battery minerals strategy
advancing and talk of a Tier 1 copper discovery in
Head Office: the Paterson province rejuvenating the exploration
Suite 9, 1297 Hay St, West Perth sector. Meanwhile, Fortescue and BHP have laid
Western Australia 6005 bare their plans for the future, with Paydirt on hand
P.O. Box 1589, West Perth to see the former turn the sod at its $1.7 billion
Western Australia 6872 Eliwana mine and rail project in the Pilbara. Mark
Phone: (+61 8) 9321 0355 Andrews reports
Facsimile: (+61 8) 9321 0426
[email protected] 18 COVER 18
www.paydirt.com.au Outbreaks of fatal disease, global economic
crises or local political upheaval have all
contributed to the disruption to progressive
economic development in Africa. In recent times,
Editorial: security concerns in parts of West Africa have
Editor: Dominic Piper also emerged as a potential obstacle for further
Deputy editor: Mark Andrews investment and development. Mark Andrews
Journalist: Michael Washbourne receives expert commentary on what is actually
Photography: Picture This happening in the region and speaks to a range of
Art director: Nick Brown people about how the security situation is being
Contributors: Brendan Ryan handled by governments and companies alike
(Johannesburg)
24 SITE VISIT 24
Advertising: Azumah Resources is on the cusp of defying the
Advertising manager: Richa Fuller odds and opening up a region of northern Ghana
Subscriptions: Kate Blanchard bereft of mining and exploration. “I could see
Phone: (+61 8) 9321 0355 the opportunity with the land package and the
Facsimile: (+61 8) 9321 0426 prospectivity despite all the naysayers saying that
there wasn’t much gold to be found in northern
Pre-press and printing: Ghana,” Azumah managing director Stephen
Vanguard Press, 26 John St, Stone said. The next step for Stone is to prove
Northbridge WA 6003 a mine can built in the region, with a decision
Member of: to mine in the making for the company and JV
partner Ibaera Capital. Mark Andrews reports
Paydirt Media
Executive chairman: Bill Repard 30 AFRICA DOWN UNDER
Finance manager: Giovanny Jefferson The 17th Africa Down Under conference, Pan
Accounts/administration: Pacific Perth on September 4-8, is the cornerstone
Lana Luketic of the burgeoning Australia-Africa Week and is
Conferences: Melita Fogarty, expected to attract at least 20 African ministerial
Namukale Nakazwe-Msiska, delegations and their African-based Australian
Christine Oelschlaeger, diplomatic corps, as well as, their African
Mitchelle Matambo colleagues in Canberra who will be among some
1,500 delegates. Paydirt provides a 79-page
Member of: preview to Africa Down Under in this edition

Registered by Australia Post PP 643938/0071. 110 REGIONAL ROUND-UP 30
No pages or articles in this publication may be re- It was an active June quarterly period for ASX
produced in any form without the consent of the companies all over the world, with Paydirt keeping
publisher. This includes photographs either taken an eye on the progress being made on the
by Paydirt Media staff or provided by other parties. exploration front across a myriad of commodities
in places such as America, Brazil, Italy and Spain

Risk is real but how
do you define it?

As Africa Down Under returns for a Welborn’s comment reiterates the point many African miners
17th year conversation, rather inevi- would make; African projects are not inherently more risky than
tably, turns to the various perceptions projects in Australia or Canada, the risks are simply different.
of risk encountered in the resources
sector on the continent. Despite record Australian gold prices, there has been a string
of failures in the WA gold sector in recent times. These projects
There is no doubt it is very tough did not fail because of geopolitical or regulatory circumstances
for African would-be miners at the but because of project delivery mistakes. Indeed, no amount of
moment. In periods such as these, when risk is off for the en- political or regulatory stability can cover poor execution.
tire mining sector, those operating in jurisdictions with additional
perceived risk are going to struggle to attract any of the limited It could be argued that African projects wouldn’t see such
capital available. failures. Project financiers’ sensitivity to external risk factors of
Where once African jurisdictions were warmly embraced by African projects is so heightened that miners must ensure the
Australian investors for their greenfields potential, they are now controllable risks – mining, processing, logistics – are watertight.
shunned because of geopolitical, security and regulatory uncer- Where in Australia a company or engineer may cut corners to de-
tainty. liver a cheaper, more attractive outcome, the African miner must
However, as always, risk attitudes are as much about percep- produce a gold-standard project if it is to attract finance, lessen-
tion as they are facts and reality.
Let us look at the notion of geopolitical risk. It is true that Af- “ing the chances of project failure.
rica continues to make slow advances to all-encompassing de- Sandfire received criticism
mocracy and that conflict and corruption continue to prove major for its decision to head
impediments to progress but a brief look around the world shows to Africa but if it manages to
that there is increasing instability in many places. convince the local market that
Trade wars, Brexit and increasing tensions with Iran are casting assets can be developed on the
geopolitical uncertainty across the western world at a time most continent, Australia may just see
African jurisdictions are enjoying relative stability (with obvious a return to the heady days of
notable exceptions such as Sudan). African investment.
Seventeen African countries have undergone presidential
change in the last two years, many via democratic elections. The In this regard, jurisdictional risk doesn’t come into play.
continued efforts to impeach President Donald Trump in the US There is proof in the market that appetite for Africa is begin-
and the farce which is UK politics at the moment sits in sharp ning to return. In putting together this edition, the Paydirt edito-
relief. rial team has spoken with some of the ASX’s best performers
The perception of regulatory and investment risk is often cited in recent months. Resolute is up more than 70% since June on
as a reason for the lack of investment in Africa but even com- the back of its ramp-up of the Syama underground mine in Mali.
parisons here are often misleading. It is true that governments in Shares in West African Resources Ltd have risen 76% in the last
some of the continent’s largest mining economies – South Africa, six months while it builds its Sanbrado gold mine in Burkina Faso.
DRC, Tanzania, Zambia – have created investment instability In East Africa, Walkabout Resources Ltd (up 380% between Jan-
with their policy and legislative actions but they are far from alone. uary 1 and June 30) and Black Rock Mining Ltd (up 100% in the
In Australia, widely regarded as the world’s most stable mining same period) are proof that investors are willing to back graphite
jurisdiction, state governments in New South Wales, South Aus- projects in Tanzania and in Southern Africa Mod Resources Ltd
tralia, Victoria and Queensland have cancelled licences, slowed is subject to a $168 million takeover offer from Sandfire Resourc-
development and restricted access to ground. Even in Western es NL, just three years after it boasted a market cap of $5 million.
Australia, the Government has been forced to climb down from Sandfire received criticism for its decision to head to Africa but
a recent EPA recommendation to impose new greenhouse gas if it manages to convince the local market that assets can be
emission restrictions on miners. developed on the continent, Australia may just see a return to the
Once such risks are acknowledged, the financing of African heady days of African investment.
projects becomes more palatable. I asked Gold Fields Ltd chief
executive Nick Holland about the risk investors attached to his
company’s South Deep asset in South Africa. His response was
clear: “The investor doesn’t care where a project is if it is suc-
cessful and making money,” he said.
Resolute Mining Ltd managing director John Welborn made a
similar point: “Gold and copper are the same no matter if they
come from WA or Mali,” he said.

[email protected] @DominicPiper

Page 4 AUGUST 2019 AUSTRALIA’S PAYDIRT

NEWS

Barrick cleans up Acacia

Acacia Mining plc shareholders have Some Acacia shareholders believed it had been working “constructively and col-
agreed to accept Barrick Gold Corp’s had a good chance of winning, effectively laboratively” with the Tanzanian Govern-
increased takeover offer, paving the way for increasing the company’s value and a pref- ment.
negotiations with the Tanzanian Government erable course of action in light of Barrick’s
to be concluded. perceived low-ball offer. Analysts at Berenberg, which rates Aca-
cia a “hold,” said the postponement request
Earlier this year, Barrick proposed to ac- “Acacia announces that its local Tanzani- should be received positively by Tanzania.
quire all the ordinary share capital of Acacia an operating subsidiaries, Bulyanhulu Gold
it did not already own in a deal valuing the Mine Ltd and Pangea Minerals Ltd, will im- But, they said a prolonged outage at North
latter at $US787 million, which was reject- mediately seek a stay of their international Mara would have a “very significant” impact
ed as Acacia deemed there was no value arbitration with the Government of Tanzania on finances, given the mine makes up 70%
given to its exploration assets. However, [GoT]. If the GoT agrees to the stay, Aca- of group revenue, and cannot operate with-
another proposal by Barrick, valuing Aca- cia would expect the arbitration hearing to out a tailings dam.
cia at $US979 million, was accepted and it be postponed to provide time for the GoT
is intended the acquisition will go ahead via to complete its settlement discussions with Meanwhile, it has been revealed that Bar-
a court-sanctioned scheme of arrangement Barrick. Acacia will continue to support those rick’s negotiations with the Government had
under Part 26 of the Companies Act. discussions and remains ready and willing to reached a point whereby “transaction docu-
engage directly with the GoT,” Acacia said in ments for a possible settlement had been
The deal was done in the days after Aca- statement on July 17. extensively negotiated and initialled by the
cia signalled it was seeking a stay of interna- GoT” in May this year.
tional arbitration proceedings against Tanza- Barrick – a 63.9% shareholder in Acacia
nia, a step that could ease tensions between before the acquisition – has been leading In a statement, some of the key principle’s
the two sides who are locked in a dispute negotiations with Tanzania over a $US190 of the transaction document were highlight-
following a $US190 billion tax bill. billion tax bill – about four times the country’s ed and included that the Government and
GDP – handed to Acacia in 2017 for alleged Acacia’s Tanzania mine operating subsidi-
However, that was tempered by the com- under-reporting output. Acacia denies the al- aries (TMCs) will share economic benefits
pany’s statement that it had been notified legation. derived from Tanzanian mines equally – and
of an imminent ban on the use of a storage to be reviewed annually – based on life of
dam that would prevent its North Mara gold Tanzanian allegations that Acacia has mines plans of the TMCs.
mine – its main source of revenue – from op- broken environmental regulations ratcheted
erating. up pressure it already faced. The Government’s share was stated to
be received through taxes, royalties, fees
The offer to postpone arbitration, which Acacia said it had received notice from and other fiscal levies and through its 16%
was scheduled to start on July 22, preceded Tanzania’s National Environment Manage- free-carried interest in all distributions, in-
a July 19 deadline for Barrick to make a firm ment Council ordering its North Mara mine cluding shareholder loan repayments, from
bid to buy Acacia. to stop using its tailings storage facility by the TMCs and new Tanzanian management
July 20, citing a breach of environment rules. company.
“This appears to be a conciliatory move
by Acacia after the Government of Tanzania Acacia said it would request the data and Additionally, the transaction document
effectively threatened to shut down the com- reports that had spurred the Government included a payment of $US300 million by
pany over the past few days,” Scotiabank notice for the North Mara mine to stop using Acacia “in consideration for the full, final and
analyst Tanya Jakusconek wrote in a note at the storage facility. comprehensive settlement of all existing
the time. disputes between the GoT and the Acacia
While the mine was issued an Environ- Group, including all liability to taxation and a
“It’s unclear at this point how the [Govern- mental Protection Order and fine in May waiver of actual or potential claims on a mu-
ment of Tanzania] will respond to this ges- 2019 for alleged deficiencies at a tailings tual basis”.
ture.” storage facility, Acacia said it had never re-
ceived any reports that would justify the ban “Shortly following the GoT negotiating
International arbitration is generally a last on use. team letter, an official spokesman of the GoT
resort for mining companies in disputes with confirmed, in a press conference, their po-
governments. It added the North Mara technical team sition that they would not deal with Acacia
going forward. Furthermore, Acacia’s local
Acacia shareholders accepted Barrick’s increased offer to acquire all staff have engaged with their counterparts in
the ordinary share capital of the company it did not already own government who have again confirmed that
the GoT will not engage with Acacia for the
purposes of agreeing a settlement,” a joint
statement released on July 19 by Barrick
and Acacia said.

“As things stand, therefore, there is a se-
rious question as to whether Acacia’s en-
try into the transaction documents and the
building of a long-term partnership with the
GoT on which the future for the business en-
visaged in the transaction documents nec-
essarily relies, are a realisable alternative for
Acacia as an independent company.”

– Paydirt staff with Reuters

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 5

NEWS Fortescue chief operating officer Greg Lilleyman, chief executive Elizabeth Gaines,
chairman Andrew Forrest, WA Premier Mark McGowan and Fortescue chief financial
officer Ian Wells turn the first sod on the $1.7 billion Eliwana project in the Western Hub

Backbone of Australia’s
economy secured

Western Australia’s mining sector is humming along nicely. The State Government has thrown
its weight behind an integrated battery minerals sector potentially worth billions of dollars,
while the materials which have helped carry the State’s economy during poor times continue to be
in high demand and in abundance. WA’s gold producers are thriving on record prices, Rio Tinto Ltd
appears to be onto another Tier 1 copper discovery in the Paterson province, in the process creating
exploration frenzy, while the nickel sector is on the cusp of a modern-day boom. In the meantime, WA’s
iron ore sector alone continues to be a great employer of people and massive cash cow for Australia,
and against a backdrop of strong pricing, two of the world’s premier producers of the bulk commodity
laid bare their future ambitions in the State. Paydirt takes a look at Fortescue Metals Group Ltd’s next

mining hub and BHP Ltd’s plans for the next 50 years in WA

Western Australia’s future as Austral- Production from Eliwana will be in full A total of $5.5 billion has been commit-
ia’s leading mining state received a swing as the $US2.6 billion, 22 mtpa (wet) ted to the developments of Eliwana and
boost from the iron ore sector last month. Iron Bridge magnetite project comes on Iron Bridge, which serve as important
stream during the first half of CY2022. sources to increase the average product
As iron ore prices – $US121/t at the time grade delivered by Fortescue.
of print – remained strong, Fortescue Met- Stage two of Iron Bridge was approved
als Group Ltd’s next chapter in the Pilbara in April. “We will achieve our strategy of the ma-
officially started with first sod turned at the jority of our products being greater than
$1.7 billion Eliwana mine and rail project “We have seen very strong demand for 60% iron content, so we are on the path
on July 5. iron ore, so there is a supply/demand imbal- to a long-term strategy, we are low-cost
ance,” Fortescue chief executive Elizabeth and we’re driving very strong margins and
“[It’s] an absolute turning point for Gaines said. returns for our shareholders,” Gaines said.
Fortescue”, chairman Andrew Forrest said
at the event. “Being the lowest cost producer, we Eliwana alone will provide another 20
know that through all market cycles we years of iron ore production for Fortescue,
Eliwana – the company’s largest project continue to generate very strong cash flows however, there are expansion opportu-
since the Kings Valley mine in 2014 – will and margins. We saw that even last year nities in the Western Hub to also be ex-
generate employment for 1,900 people when there was a much higher spread in ploited.
during construction, while 500 full-time pricing for the different grades of ore. We
employees will be required for the initial are making long-term decisions based on Since introducing autonomous opera-
20-year operation. the strength and demand for iron ore, we tions to the Solomon Hub in 2012 and then
are seeing record steel production and we later in the Chichesters, Fortescue has
First ore on train from Eliwana is sched- know that the market will go through cycles, continued to raise the ceiling on innovation
uled for the end of 2020 on the back of but we are incredibly well placed to make to create a culture of productivity and ef-
143km of rail, a new 30 mtpa ore process- sure that we can maximise those opportu- ficiency throughout its business.
ing facility (OPF) and associated infra- nities for those market cycles.”
structure being established. The company’s autonomous haulage

Page 6 AUGUST 2019 AUSTRALIA’S PAYDIRT

trucks alone are delivering 30% produc- goods and services
tivity efficiency, with Eliwana primed to be
fully autonomous almost from the outset. from 257 Australian

“The plan is that Eliwana will eventually companies, with 30
be fully autonomous, so the Chichesters
will be finished by the middle of next year contracts valued at
and then Eliwana will follow [production]
closely thereafter,” Gaines said. $1 million or more

Fortescue was one of the first in the in- awarded to Austral-
dustry to test the boundaries of automated
operations almost eight years ago and its ian entities.
measured approach back then is paying
dividends for the company today. Almost 80% of

“Artificial intelligence will be the most content sourced
powerful technology that man has invent-
ed by a very large quantum,” Forrest said. from Fortescue is
“We could have lost – if we went unthink-
ingly into this – a third of our workforce, coming from WA The site where the 30 mpta OPF for Eliwana will be established
thousands of people, but we didn’t.”
and, subject to ap-
Instrumental to Fortescue’s strategy
has been the trade-up and training pro- provals, a further tant to us,” McGowan said.
grammes implemented, which has seen $500 million could be awarded by the end “It is very important we continue to main-
opportunities for its employees to be re- of the year.
trained and up-skilled in areas driving min- tain that strong relationship with China.
ing in the future. Early mine earthworks at Eliwana are I know how much rests on that and how
being done by Jilpanti Enterprises, a 100% many jobs rest on that important relation-
“We now employ more people than we Aboriginal-owned business, as part of a JV ship. The iron ore industry is a magnificent
did when we first started. It has been a very with Cross Verwijmeren. Muntulgura Guru- industry and frankly carries a lot of the
happy ride,” Forrest said. ma Pty Ltd, also a 100% Aboriginal-owned country. Whilst most people in Sydney and
company, is working with Fortescue to car- Melbourne perhaps Brisbane, Canberra,
Lapping up the employment opportuni- ry out the access and enabling earthworks are vaguely aware that it even exists, it
ties generated by the mining sector in the for the rail development. does provide so many opportunities and
State is WA Premier Mark McGowan. wealth for people around the country.”
A JV between Puuti Kunti Kuruma Pini-
Speaking at the sod-turning event, kura (PKKP) Enterprises Pty Ltd and Ac- In light of the ground-breaking ceremony
McGowan said the iron ore sector account- tion Industrial Catering has been engaged at Eliwana, McGowan had more to smile
ed directly or indirectly for 17% of WA’s em- to supply catering services, administration about when he approved a 50-100 year
ployment. and general village services at the Eliwana strategic mining proposal for the Pilbara by
fly camp. BHP Ltd.
“Around 43,000 people work directly in
iron ore. You go back 10 years and it was Since 2011, Fortescue has awarded Ab- BHP’s plans include ideas for new and
half that, so if you think in the last 10 years it original businesses and JVs a total of $2.3 existing mines, which are expected to
has doubled in employment, the amount of billion, with the recent $179 million in con- create tens of thousands of jobs, with the
tonnes has almost nearly tripled,” McGow- tracts awarded to Yindjibarndi businesses global miner’s Pilbara Expansion Strategic
an said. through the company’s Billion Opportuni- Proposal detailing “a cumulative picture of
ties programme representing the largest the miner’s planned and potential opera-
The ripple effect of mining projects is well contracts awarded to 100% Aboriginal- tions across the Pilbara including mining
known and Eliwana alone will be highly lu- owned businesses in Fortescue’s history. operations, rail, storage areas, dams and
crative for related industries in WA. associated mine infrastructure”.
“It shows that it [iron ore sector] is a mas-
Fortescue has spent $330 million on sive employer of West Australians and that Subject to conditions, BHP’s strategic
of course has all the flow on effects and proposal was green lighted by WA’s Envi-
the like. Our iron ore industry is a large part ronmental Protection Authority (EPA), given
of us engaging with the world and having that strategic proposals help reduce red
strong relationships with our trading part- and green tape, ultimately allowing the EPA
ners, Japan, China, Korea, hopefully India; to consider the cumulative impacts of future
those strong relationships are very impor- proposals, rather than assessing impacts

on a case-by-case basis, as individual

mines or developments are proposed.

BHP must refer future individual propos-

als outlined in the Ministerial Statement to

the EPA to determine if they meet the high

environmental standards set by the strate-

gic assessment.

“We expect this Australian-first plan will

reduce environmental approval times by up

to 50%, while maintaining the highest en-

vironmental standards. Industry has been

crying out for this type of plan. It recognises

the need to reduce unnecessary ‘green

tape’ to increase investor confidence, and

pave the way for more jobs. It is another

sign our economy is improving with the ma-

jor miner taking a long-term view of its pro-

posals in the State,” McGowan said.

Fortescue non-executive director Jennifer Morris with deputy chair – Mark Andrews
Sharon Warburton at the Eliwana sod turning event last month

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 7

25NEWS Celebrating
Years

Est.1994

In the latest of our series of retrospectives to celebrate Paydirt’s 25th anniversary
this year, we look in the August archives and uncover diamond and platinum
ambitions, Barrick takeovers and Africa’s blossoming

1995 & 1996

A look back at Paydirt’s early years shows just Kimberley Diamonds Company Ltd spin-off Blina
how much the Australian resources sector has Diamonds NL was touting its own exploration
shifted in 25 years. Today, it is almost impossible credentials in the Ellendale diamond field.
to find a diamond company on the ASX but in Elsewhere, Troy Resources Ltd was planning to
1995, the bourse was littered with them. When use cash flow from newly developed mines to
it came to diamonds, the same names tended fund exploration (wasn’t it ever thus?) while in the
to reappear and so it proved in Paydirt with the “Computers” feature, Geophysicist Jeff Whittle
1995 cover story featuring a picture of a smiling explained how his Whittle Programming was the
Joseph Gutnick who was preparing to spend $6 only firm in the world which specialised in mining
million through Astro Mining to make a diamond optimisation software.
discovery in Western Australia. A year on,

2002 & 2003 2006

Paydirt has always had its eye In a case of the more things change, the more they remain, the 2006
out for the next big discovery and August edition featured Barrick Gold Corp and its big recent merger.
we have a decent track-record of While this year saw the Canadian gold major take on African-focused
identifying them early. In 2002, the Randgold Resources, its focus in 2006 was fellow Canadian Placer
team travelled to South Australia Dome, a move which meant 25-30% of Barrick’s gold production
to speak with Minotaur Exploration would come from Australia.
NL managing director Derek Carter
about the company’s promising
Prominent Hill discovery. Today,
Prominent Hill is the foundation of
Oz Minerals Ltd’s $3.3 billion market
cap. Elsewhere, Kerry Harmanis
was revelling in an improved nickel
price environment which had
pushed his Jubilee Mines to a $5.72
million half-year profit and newly
listed Independence Gold (now
Independence Group Ltd) confirmed
it was running the ruler over WMC’s
Long-Victor nickel complex.
Nickel was a major focus in 2003
with LionOre Australia chief Mark
Ashley heading to Kings Park in
Perth for the cover image but there
was also commodity diversity within
the pages as platinum, manganese
and diamond exploration all featured
heavily.

Page 8 AUGUST 2019 AUSTRALIA’S PAYDIRT

2011 & 2012

August 2012 VOLUME 1. ISSUE 197 $11.95 The last two years of Paydirt’s August Diggers into this story from the start but we won’t let it
& Dealers preview saw the focus turn to base distract us.”
Rare species: metal miners and two of the WA sector’s biggest Eight years on, DeGrussa has produced
characters. In 2011, we dropped in on Sandfire 438,000t copper and 254,000oz gold and
Western Areas defies the downturn Resources NL managing director Karl Simich Sandfire has more than $250 million in the bank.
who spoke (obviously at great length) about The following year, our cover subject was Dan
Plus: his company’s development of the DeGrussa Lougher, managing director of Western Areas
copper project in WA. Ltd. Lougher had taken over from longstanding
Diggers & Dealers... Preview to the 20th year ISSN 1445-3436 It was put to Simich that his lack of a “real” managing director Julian Hanna earlier in the
Unity Mining... Henty gold mine reborn 07 mining professional background and ebullient year and in Paydirt he set his stall out for the
Regional round-up... Africa, Latin America and Asia nature drew scepticism from within the industry kind of company Western Areas would be under
9 771445 343007 and while he acknowledged this was the case, his watch.
he was quick to dismiss any suggestion that “The biggest change is that I am an operations
DeGrussa wasn’t the real thing. person, not an explorer,” Lougher said. “When
“The knockers have been there from the start,” I look at Western Areas I see Australia’s third-
Simich said. “Even now, as we stand on the brink largest nickel producer and believe that is what
of production, they are throwing this at us: it isn’t should be driving the company.
a VMS, you haven’t made any other discoveries, “If you ignore the word nickel and look at our
you won’t get the funding in place and you have margins, we are as profitable as any good gold
no future plans. They’ve been trying to put holes or copper miner.”

2013 & 2014

From 2013, the August edition focus switched company had built a plus-1bt iron ore resource August 2013 VOLUME 1. ISSUE 208 $11.95
from the parochial to the more exotic as the and with Chinese interest in the Mbalam project
increasing vibrancy of Africa Down Under and the high, it seemed destined to become a genuine Sundance:
entire Australian investment scene in Africa took West African iron ore force. Two years later, with
hold. 2013 saw Mark Andrews visit Cameroon iron ore prices tumbling, the project’s $7 billion Out of the wilderness
and Republic of Congo just three years after price tag was insurmountable.
Sundance Resources Ltd had suffered the air In 2014, we returned to the never-ending Sp2e8c-ia3l0pAreuvgieuwste2d0i1ti3on ISSN 1445-3436
tragedy which claimed board and management, challenges of the South African mining sector Perth,Western Australia 08
including Sundance board members including through the lens of newly appointed Minister
Geoff Wedlock (chairman), Don Lewis (managing for Mineral Resources Ngoako Ramatlhodi. 9 771445 343007
director and chief executive), John Carr-Gregg Ramatlhodi hit the ground with gusto and was
(company secretary), Ken Talbot (non-executive soon winning support from industry and labour
director), John Jones (non-executive director), for his proactive approach. Within nine months
Craig Oliver (non-executive director) plus Jeff though, he was gone, President Jacob Zuma
Duff (Dynamiq consultant to the company), deciding to replace him with the inexperienced
Natasha Flason (personal assistant to Ken Mosebeni Zwane. Zwane last a little longer,
Talbot), James Cassley (analyst) and the two two years, but is currently facing corruption
pilots were among the deceased. allegations in the fallout from Zuma’s dismissal.
2013 perhaps represented the high point of
Sundance’s post-tragedy resurrection. The

2015 & 2016

We travelled to Tanzania to witness the In 2016, Paydirt visited Botswana – or Africa
burgeoning battery minerals revolution in the For Beginners as it is often known – to check in
country. Kibaran Resources NL was among the on Mod Resources Ltd and its new T3 copper
front-runners in the exciting new graphite sector discovery. Mod was in the middle of a market run
while Peak Resources Ltd was slowly building which eventually led it from a market cap of less
its Ngualla rare earths project in the country’s than $5 million to a $168 million takeover bid by
south-west. Four years on and after putting Sandfire (see page 38).
themselves in hibernation following President
John Magufuli’s dispute with Acacia Mining plc,
Kibaran and Peak are finally making the steps
they anticipated in 2015.

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 9

NEWS

Nelson lauds Tropicana-like
potential

Given the circumstances juniors are fac-
ing in trying to raise funds for explora-
tion, Nelson Resources Ltd appears to be in

a plumb position at the Woodline gold pro-

ject at the intersection of Western Australia’s

Albany Fraser belt and Yilgarn Craton.

The company listed in late 2017 and im-

mediately started drilling targets in the East-

ern Goldfields and has since consolidated

its position at the Socrates project by secur-

ing 656sq km of tenure at Woodline.

Recent exploration history at Woodline in-

cluded $11 million spent by Sipa Resources

Ltd and Newmont Mining Corp. Nelson ac-

quired Sipa/Newmont’s exploration dataset

after the 2018 Diggers & Dealers forum and

the company firmly believes it is primed to

discover the next Tropicana-scale deposit,

with its land package potentially hosting two

or three similarly sized orebodies.

“It has the ability to deliver a company-

making project, we believe we have more

than a reasonable chance of delivering a The 20km-long Woodline geochemical anomaly sits in the same bedrock as Tropicana
Tropicana-scale discovery [at Woodline],”

Nelson executive director Adam Schofield Nelson is gearing up for a proposed RC netic anomaly.
told Paydirt. drilling programme at a number of targets Given the big-company history at Wood-
– Redmill, Grindall and Harvey – within a
The 7.2 moz AngloGold Ashanti Ltd/Inde- 20km-long geochemical anomaly at Wood- line and the current gold price environment,
pendence Group Ltd Tropicana JV is some line. the project continues to attract attention,
350km north-east of Woodline, however, with Nelson open to discussions on poten-
both projects are within the same gold belt Schofield is buoyed by the fact Tropicana tial JV scenarios to take the asset forward.
and sit in the same Archaean greenstone was found after geochem returned a result
rocks. of 5 ppb gold, while results from Woodline Schofield said replicating Independ-
are in the ilk of 200 ppb. ence’s success in the Albany Fraser region
“There has to be a significant discovery was Nelson’s ultimate aspiration.
here and we are primed and ready to go,” “Newmont had done all the hard work and
Schofield said. now tighter spaced Popular industry figure Peter Cook was
Nelson’s inaugural chairman, but has since

drilling and more in- stepped away, with Warren Hallam recently

fill drilling is needed,” joining the company as non-executive

Schofield said. chairman.

“We’ve added $13 Hallam’s former company, Metals X Ltd,

million of exploration is Nelson’s largest shareholder (10.36%)

on this, so we’re 10 alongside HSBC Custody Nom Australia

steps ahead of what Ltd, while there are some other interesting

any other junior would shareholders in the company’s top 10.

be within the same Nelson is also well-served on the ground

timeframe.” with former Echo Resources Ltd managing

In addition to drill- director Simon Coxhell as the company’s

ing at Woodline, a senior geologist, supported by Albert Rie-

3,500m aircore pro- hm and Alexandra Galisson.

gramme west, north “We have a strong geology team and

and south of Socrates for an explorer we are well equipped with

and RC drilling east of things like our own vehicles which saves us

Socrates have been time and money,” Schofield said.

proposed to identify – Mark Andrews
Intercepts of 1m @ 142 g/t gold from 94m, 192m @ 0.5 g/t from mineralisation in fresh
58m, 8m @ 3.53 g/t from 194m and 25m @ 2.06 g/t from 29m are rock over a coincident
some of the highlights from drilling at Socrates last year geochemical/mag-

Page 10 AUGUST 2019 AUSTRALIA’S PAYDIRT

Sheffield steels itself
for BFS update

The value of Sheffield Resources Ltd’s the ilmenite roaster from the flow sheet. Bruce McFadzean
switch to zircon-rich production at its From there, it was a process of reschedul-
Thunderbird project should be confirmed ing and re-optimising the pit to replace the unroasted primary ilmenite with Bengbu
this month with the company nearing com- roasted ilmenite revenue with increased Zhongheng New Materials S&T Co Ltd.
pletion of an updated BFS. zircon revenue. We increased the size of
the upfront wet plant and pushed the roast- “Two years ago we couldn’t have
Sheffield has been working on the up- er out to Year 10.” dropped the roaster because you could
dated study for Thunderbird – 60km west only get into the sulphate pigments sector,”
of Derby on the Dampier Peninsula, West- The revision process is nearly complete McFadzean said. “Then, we began seeing
ern Australia – since the end of 2018. It with the company expected to release the offtakes in the chloride ilmenite slag mar-
chose to redraw the parameters of the updated BFS this month. The company ket. Bengbu want that product and under
mineral sands project to reduce capex released an updated reserve on July 10, the agreement we have formed a strate-
and make it more attractive to JV partners. increasing total heavy mineral reserves gic alliance which will include sharing pro-
That decision prompted the company to by 10% to 748mt @ 11.2% HM, including cessing technology, samples and data that
redesign the flowsheet, deferring the low a 500,000t of contained zircon to 6.4mt. will be mutually beneficial to future produc-
temperature roast ilmenite circuit in favour McFadzean said the increase confirmed tion of chloride grade slag.”
of increasing zircon production rates. Thunderbird as one of the largest undevel-
oped zircon-rich mineral sands deposits in Sheffield will be using those structural
The new plan could see 38% more a world increasingly devoid of zircon de- shifts alongside the BFS to entice financi-
ore mined, the project’s 40-year mine life velopment options. ers for Thunderbird.
shortened and the $466 million capex re-
duced. The increased zircon production “The market has shifted so much in the “When you are doing a BFS with a
will allow the project to maintain project two years since the BFS and zircon is $US1,000/t zircon price and projected
revenues. now going into a structural supply deficit; price of $US1,300, it is a very different sce-
there is global consensus on that,” he said. nario to when the price is $US1,640 and
Sheffield managing director Bruce Mc- “Vietnam has been capped out and the we are projecting $US1,400 using inde-
Fadzean told Paydirt although the chang- Government is slowing down production, pendent numbers from TZMI,” McFadzean
es were forced on the company by difficult Indonesia has pulled back as well, Rich- said.
market conditions, the end result would be ards Bay and Namakwa are 30 years old
a better overall project. and only replacing falling production, and “We feel pretty good and there are a
Jacinth-Ambrosia is coming to an end by number of parties eager to see the up-
“We started the updated BFS at the end 2026. dated study. We are seeing interest from
of 2018 with the idea that we had to reduce producers and consumers but also from
the capex, in particular to push along the “The new supply has to come from funds. There is a massive amount of capi-
strategic partner process,” McFadzean somewhere.” tal sloshing around looking for a home.
said. “We wanted to reinvent the project
because having a smaller capex brings in At the same time, Sheffield is experi- “We have still got the $350 million debt
a lot more players from a strategic partner encing interest in its ilmenite product de- facility sitting there and so if we can pull the
perspective. spite removing the roaster circuit. In June, equity component down from $260 million
the company signed a seven-year bind- to somewhere around $160 million it sud-
“We looked at where this was most ing offtake agreement for 650,000 tpa of denly makes it like funding a gold project.”
achievable and the first option was to cut
Thunderbird’s permitting process suf-
Zircon concentrate and titanium feedstock from Thunderbird will be shipped to fered from significant delays, particularly
customers from Derby port (pictured), while premium zircon and leucoxene will leave around Native Title, but with environmen-
tal and Native Title approvals in place, the
via the public dock at Broome port company is confident the last authorisa-
tions will come smoothly and quickly.

“We should have final approval in the
next few weeks,” McFadzean said. “From
there, we only need the equity funding and
we are away.

“If you have a project with a long mine
life in a good jurisdiction it is simply about
getting a deal done, either with a partner or
a partner and a capital raising.”

– Dominic Piper

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 11

NEWS

Perth, Western Australia 9 ratineEca$.r1lGy,4Sb5Ti0r.d00
November 12-13

KEYNOTE ADDRESSES:

Professor Nikolay Goryachev: The largest gold deposits in Northeast Asia: the history
of discoveries and exploration. A look from Russia.

Professor Franco Pirajno: The Gold Deposits of China with particular emphasis on the
world-class gold provinces of Jiadong (E China) and Golden Triangle (SW China).

PRESENTATIONS TO DATE INCLUDE:

Fosterville Tabakoroni Karlawinda

Kirkland Lake Gold Ltd. Resolute Mining Limited Capricorn Metals Ltd
Australia Mali Australia

Back River Okvau Kora North

Sabina Gold & Silver Corp. Emerald Resources NL K92 Mining Inc.
Canada Cambodia Papua New Guinea

Bolcana Kharmagtai BOMBORA

Eldorado Gold Corporation Xanadu Mines Ltd Breaker Resources NL
Romania Mongolia Australia

Osiris Bellevue ABUJAR

ATAC Resources Ltd. Bellevue Gold Limited Tietto Minerals Ltd
Canada Australia Côte d’Ivoire

www.newgengold.com

The world’s pre-eminent gold exploration event

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Exhibitors:

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For all enquiries about presenting, exhibiting or attending NewGenGold please contact
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on (+61) 8 9321 0355 or email [email protected]

NEWS

Orminex steadies towards
cash flow

Orminex Ltd is on the cusp of achieving Orminex’s Daryl Henthorn, Wyllie Group chairman Wayne McGrath and GBF principal
steady-state production from what ex- Ross Graham at the portal entrance to the Kings Bounty decline, Comet Vale
ecutive chairman Daryl Henthorn hopes will
be the first of several high-grade gold mines cutting the portal and we’ll be in fresh ore end goal is to have a couple of projects in
his company will develop over the coming within 6-8 weeks. It fits our model perfectly. the pipeline and 3-4 projects in production
years. We’re about producing gold, we’re not ex- at any one time in the next few years.”
plorers, so really all we need to do is keep
At the time of print, more than 12,000t supplying projects to that pipeline.” Subject to certain conditions precedent,
of development and stoping ore from the GBF will soon be acquired by Macmahon
Kings Bounty decline, part of the com- Henthorn was instrumental in the relist- Holdings Ltd but Orminex insists the stra-
pany’s 51%-owned Comet Vale project, ing of Orminex (formerly Mintails) early last tegic alliance will operate exactly the same
100km north-west of Kalgoorlie, was sitting year and bringing underground mining spe- under the new ownership structure.
on the ROM pad ready for processing via cialists GBF in as a strategic partner. The
the nearby Lakewood mill. prolific Wyllie Group then came on board Henthorn expects his company will at-
as a major shareholder, having supported tract more interest once the GBF tie-up with
Orminex was expecting to process up to the concept of the mineral ventures model Macmahon is completed, along with regu-
20,000t from the aforementioned campaign for a number of years prior. lar reporting of production numbers once
which was slated to begin late last month. Comet Vale hits steady state.
Orminex also has the Golden Lode and
Henthorn said his company was confi- Happy Jack projects on its books, with “We deliberately didn’t have any produc-
dent of hitting its steady-state production Henthorn adding that his company was typ- tion targets when we listed the company
target of 10,000 tpm during the current ically assessing as many as four potential and took Comet Vale to the market be-
quarter. development opportunities at any one time. cause we’re very focused on reporting what
it is we deliver,” he said.
“We are now 12 months into a 27-month “We run a very active pipeline because
mine plan for the first stage of this particular this whole model is scalable and repeat- “Our model is all about shortening the
mine,” Henthorn told Paydirt. able, which I think is a key underlying fac- lead time to production, so we don’t need
tor in any successful business model,” a DFS, we don’t need to go through the
“The next big step for us, in terms of time, Henthorn said. normal JORC requirements of financing
is to get this next campaign through, achieve because we’ve got that financing capability
some good grades out of what we’re doing “I think we’re at that point in our business to take a mine to production. People like to
and then get to steady-state production and strategy where we just need to get Comet see companies in production and making
look to extend the mine plan. Vale producing at a steady state, bring Pen- money and really that’s what we’re focused
ny’s online and then we’ll be looking for that on.”
“My ideal outcome would be to extend next acquisition.
that mine plan to twice what we’ve deliv- – Michael Washbourne
ered, so potentially another four years mine “This was a very well thought-out plan
life post this current mine plan, and that will before we brought it to market and now our
basically underpin and provide the busi-
ness with cash flow to be able to continue
on with our ‘mineral ventures’ model on
other projects.”

Comet Vale is the first project to be de-
veloped under the mineral ventures model
which Orminex and strategic partner GBF
Holdings Pty Ltd are looking to apply to a
number of stranded, high-grade gold as-
sets, particularly in the Eastern Goldfields
of Western Australia.

Earlier this year, Orminex acquired 100%
of the historic Penny’s Find gold mine from
Empire Resources Ltd and is aiming to start
underground mining activities at its new
purchase before the Christmas/New Year
break.

“That mine has been developed previ-
ously, it’s got a grade history and is a great
example of how the mineral ventures model
works in terms of what we like to call fund-
ing and mining stranded assets,” Henthorn
said.

“All the open cut is done, the [under-
ground] access is in place, it’s just basically

Page 14 AUGUST 2019 AUSTRALIA’S PAYDIRT

Planets aligning for Saturn

Saturn Metals Ltd managing director big gold mines in Western Australia to see Peel Mining Ltd has confirmed
Ian Bamborough insists there is no they keep going and keep surprising, and maiden resource estimates for its
magic formula behind his company’s suc- it’s that sort of attitude we’re bringing to Wagga Tank and Southern Nights
cess on the share market. this system. deposits in New South Wales, less
than two years after their initial
Only two resources companies – UK- “We probably have a bit better technol- discoveries.
based explorer Adriatic Metals plc and ogy to be able to look at this system than Using a 3.5% zinc equivalent (ZnEq)
Indonesia-focused Nickel Mines Ltd – what has been conducted in the past, so cut-off, Wagga Tank and Southern
from the IPO class of 2018 are currently when you put all of those things togeth- Nights were reported to host a
trading at a higher valuation than Saturn, er – not to mention having a really good resource of 4.1mt @ 9.2% ZnEq for
which was the vehicle Peel Mining Ltd team of geologists – our chances of find- 382,000t, including a high-grade
created to house its non-core Apollo Hill ing something big are pretty good.” component of 1.8mt @ 15% ZnEq.
gold project, about 60km south-east of “It is worth noting that the scale of
Leonora. Bamborough said the project had his- resource at Wagga Tank-Southern
torically suffered from “low-grade syn- Nights is similar to that of other
Saturn’s stock hit 37c/share last month drome” despite being widely recognised Cobar Basin mines at the time they
on the back of the latest results from re- as a potential large tonnage, low strip ra- were brought into production –
source drilling of the main lode at Apollo tio, metallurgically simple deposit. mines that have gone on to become
Hill, including 30m @ 1.23 g/t gold from world-class operations,” Peel
88m (including 15m @ 2 g/t from 103m), Saturn started drilling the hanging wall managing director Rob Tyson said.
18m @ 1.3 g/t from 18m (including 8m @ aspect of the deposit in June, following up
2.4 g/t from 28m) and 7m @ 3.39 g/t from on previous high-grade intercepts of 13m Saturn will unveil a resource upgrade for
31m. @ 5.05 g/t gold from 74m (including 4m Apollo Hill later this year
@ 9.8 g/t) and 10m @ 5.78 g/t from 46m
An update to the current resource of (including 5m @ 11 g/t).
20.7mt @ 1 g/t gold for 685,000oz will be
unveiled in the coming months. Up to 10,000m will be drilled in this pro-
gramme after Saturn successfully raised
“We’re not just looking to make Apollo $1.5 million in May to top up its already
Hill bigger, one of our key goals is to make healthy cash reserves.
it better,” Bamborough told Paydirt.
“Usually the best place to add ounces
“Our last resource upgrade delivered a is immediately next to your existing ounc-
36% increase in ounces and at the same es,” Bamborough said. “We have a lot of
time we also increased the grade by 14%. confidence in the geology. You just have
We’re working really hard to improve this to give the system the opportunity to join
deposit in every way we possibly can. To the dots and then really get stuck into it.”
that end, we’re very fortunate that we’ve
got a very supportive shareholder base Bamborough said it was likely his com-
which has stuck by us and is backing our pany would need to accumulate more
strategy.” than 1 moz in resource before it could
seriously pursue development studies on
Peel elected to spin out Apollo Hill so it Apollo Hill. On top of that, he also wants
could focus solely on its promising base to convert more inferred resources into
metal assets in the Cobar Basin, New indicated and measured status.
South Wales. Saturn officially went live in
March 2018 following an oversubscribed Saturn’s last resource upgrade in No-
$7 million IPO. vember 2018 saw 22% of the previous
estimate converted to the indicated cat-
It is the first time in recent memory egory.
the project had received standalone at-
tention despite its known prospectivity. Bamborough attributed some of his
Saturn has since consolidated more than company’s success in the market to in-
1,000sq km of contiguous ground in the vestor pragmatism for “real” exploration.
Leonora district.
“If anything, I think people are looking
Bamborough believes Apollo Hill is part for more gold opportunities, it’s just that
of a multi-million ounce gold province. everybody is taking their time with that
process, but the appetite is very much still
“If you look at the commodity cycles there,” he said.
when other people were exploring here,
things weren’t always in favour at the right “There’s been a clear widening be-
time,” he said. tween the producers and the exploration
companies, but I think that provides an
“We’re taking a fairly aggressive stance opportunity for people to take a closer
with our drilling. To me, this is a major gold look at those who are getting some real
system and the one thing I know about work done.”
major gold systems is they always get
bigger and they always provide surprises. – Michael Washbourne
You only have to look at the history of the

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 15

NEWS

Speculators flock to nickel

Nickel is enlivening an otherwise torpid in over the course of 2017 and have picked full force in 2022.
summer for the base metals complex. up momentum ever since. However, they Assuming, of course, the Indonesian
The market is on a bull charge in both Lon- have not displaced Philippine material. Chi-
don and Shanghai. na imported 1.7mt of nickel ore from Indo- Government doesn’t change its mind again
nesia in May. Imports from the Philippines at that stage.
London Metal Exchange three-month were higher at 3.3mt.
nickel has jumped 23% since the start of None of which matters in a market where
June and at a current $US14,250/t is trad- China’s nickel ore buyers have success- speculative momentum has taken over.
ing at its highest level in a year. fully diversified their sourcing to reduce
their reliance on Indonesia, cushioning The move higher may have started in
Chinese speculators are surging into them against another complete export ban. London but it’s the Shanghai market that
the Shanghai Futures Exchange contract, has been setting the more recent pace.
which is also nudging one-year highs. It’s also highly uncertain how much nickel
ore Indonesia will be exporting in 2022 any- The Shanghai futures market is experi-
The trigger for this collective exuberance way. encing one of those speculative surges that
is news that Indonesia will stop allowing the characterise commodity trading on Chi-
export of unprocessed nickel ore in 2022. The comments that triggered the recent nese exchanges.
market excitement were made by Indone-
Since this is a key raw material pipeline sian Energy and Minerals Resources Min- Market open interest has mushroomed
for China’s giant nickel pig iron (NPI) sector, ister, Bambang Gatot Ariyono, in a July 8 by 47% in the space of two weeks as the
the price reaction might seem rational. parliamentary hearing. price has risen. Volumes are running at
their highest levels in a year.
Except that the “news” is not new. The West Australian nickel miners such
2022 deadline was set in 2017, when the In- as Western Areas Ltd have enjoyed All of which should ring alarm bells about
donesian Government allowed a five-year what happens if the upward momentum
grace period for ore exporters in return for a market rebound on the back of stalls. So should talk in London of produc-
investment in processing capacity. recent spot price surge ers selling forwards at these price levels
and a pick-up in interest for downside put
How much nickel ore the country will be He reaffirmed the 2022 cut-off point for options.
exporting come 2022 is also a highly moot all unprocessed mineral exports but with
point. the important caveat that the ministry fore- There is more than a whiff of irrational
casts there will be 41 smelters, including 22 exuberance to nickel’s stellar performance
But such niceties have done nothing to nickel smelters, operating in the country by over the last couple of months.
damp speculative buying interest, proof that stage.
perhaps that Goldman Sachs was right But the current market dynamics merely
when it described nickel as behaving like a That may be on the optimistic side but In- reinforce nickel’s “hope stock” status con-
biotech stock. donesia’s policy of pushing miners towards ferred by analysts at Goldman Sachs,
downstream processing is undoubtedly
Indonesia introduced a ban on the export working. A “hope stock”, such as a small biotech or
of unprocessed minerals in January 2014 software start-up, trades above any rational
with the explicit aim of forcing miners to China’s Tsingshan Group has gone all projection of its current operating metrics
build domestic processing capacity. the way down the processing chain, off- basis the “hope” that it will outperform at a
shoring some of its mainland stainless steel future date.
The nickel market was caught unawares, capacity with a 3 mtpa plant in Indonesia
even though the law had been pending for fed by local nickel ore. So nickel, while currently linked to the for-
five years. The price surged to a mid-2014 tunes of the stainless steel sector, is simul-
peak of $US21,625/t. It and others are now looking at building taneously pricing in a premium for its future
capacity to produce battery-grade nickel to usage in the EV revolution.
Indonesia’s exports of nickel ore ground meet rising demand from EVs.
to a halt over the course of 2014-2016, al- Against a backdrop of broader investor
though the expected hit on China’s NPI sec- Some operators are just converting ore interest in anything and everything metallic
tor never materialised because of the rise to nickel pig iron and shipping the interme- that goes into a lithium-ion battery, nickel is
of the Philippines as an alternative supplier. diate product to China. now firmly on the speculative radar.

January 2017 was supposed to see the All this evolving processing capacity will That much is clear from the Shanghai
ban reaffirmed and exemptions such as naturally reduce the amount of ore available crowd-surge but speculative buying, both
that for copper concentrate ended. for export by the time the ban comes into in the paper and physical markets, has be-
come an ever more noticeable feature of
However, the Indonesian Government the London market over the last couple of
did an about-turn, perhaps accepting that years.
getting smelters built in such a short period
of time was unrealistic. It means nickel is constantly primed for
the sort of mini-burst higher currently under
It pushed back the deadline to 2022 and way.
introduced a system of annual export per-
mits for those operators who could prove It doesn’t matter that an Indonesian nick-
they were building processing plants. el ore export ban is still three years away.
Or that it will take even longer for the EV
Progress is regularly reviewed. Four min- demand pull to outweigh that of stainless
ers, three nickel and one bauxite, had their steel.
export licences suspended in August 2018.
Two, both nickel, were subsequently rein- Nickel has got the speculative bug.
stated after demonstrating they had met the Looks like it’s going to be a bumpy ride
conditions. until further notice.

Nickel ore exports to China kicked back – Andy Home, Reuters

Page 16 AUGUST 2019 AUSTRALIA’S PAYDIRT

REGISTER NOW

15 October 2019

Perth,Western Australia

Presenters to date:

Hon. Bill Johnston MLA, Dan Lougher, Peter Bradford,
Minister for Mines and Petroleum, Managing Director & CEO, Managing Director & CEO,
Government of Western Australia Western Areas Ltd Independence Group NL

John Prineas, Mark Wilson, Andrew Penkethman,
Executive Chairman, Managing Director, Chief Executive Officer,
St George Mining Ltd Legend Mining Ltd Ardea Resources Ltd

Scott Williamson, Peter Harold, Eduard Haegel,
Managing Director, Managing Director, Asset President,
Blackstone Minerals Ltd Panoramic Resources Ltd BHP Nickel West

David Southam, Richard Bevan, Tim Maclean,
Managing Director, Managing Director, Chief Operating Officer,
Mincor Resources NL Cassini Resources Ltd Australian Mines Ltd

Martin Kavanagh, Aidan Platel,
Non-Executive Director, Chief Executive Officer,

Chase Mining Corporation Ltd Auroch Minerals Ltd

Sponsorship and exhibition opportunities available!

Sponsors to date:

australiannickelconference.com

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

COVER

Making
the call
in Africa

Over the last 20 years, ardent mining
investors have risen above the

often capricious nature of investing
in Africa to deliver a generation
of projects which are providing

genuine economic upliftment to the
continent but the nature of challenges

continues to change.

Page 18 AUGUST 2019 AUSTRALIA’S PAYDIRT

Outbreaks of fatal disease, global eco- tinguish and has enforced the need for areas covered under JV terms with ASX-
nomic crises or local political upheav-
al have all contributed to the disruption to greater surveillance in vulnerable areas. listed Predictive Discovery Ltd.
progressive economic development on
the continent. In recent times, security “The security threats in West Africa “The reality is that we are focusing our
has also emerged as a potential obstacle
for further investment and development. to some extent vary in each country, by work in the coastal countries – Guinea

Since the 2011 uprising in Libya, Jihad- region and local operating areas,” Pink- and Cote d’Ivoire. Early-stage explora-
ist groups in the Middle East and North
Africa have been motivated to establish erton principal risk advisor Andrew Nor- tion work in Burkina Faso carries risk and
an Islamic empire and claim territory
south of their traditional strongholds. thover told Paydirt. “The movement of costs for our shareholders because of

Parts of West and East Africa are con- retreating Jihadis from the Middle East the need for enhanced security,” Predic-
sidered under the influence of Jihadist
groups with activity in Burkina Faso, Mali and North Africa into the Sahel region tive managing director Paul Roberts told
and Niger currently of particular concern.
has had the greatest impact on secu- Paydirt. “We remain committed to the
Lured by cash, local bandits in the
aforementioned states are falling into the rity. Their ability to interfere with main Progress JV in Burkina Faso and look
laps of well-armed terrorist groups in the
Greater Sahara. While banditry has been road routes, coordinate armed attacks forward to continuing work when security
a consistent problem across West Africa,
the alignment of local bandits with ter- and to create a market for the kidnap of measures are in place.”
rorist groups makes activity hard to dis-
foreign executives has increased. The Also in Burkina Faso, West African Re-
Jihadist violence in Niger has been on the
rise in the first half of 2019. Militants operat- US, France, Britain and a number of Eu- sources Ltd (WAF) has not only discov-

ing in Mali – many of whom expanded their ropean countries have made significant ered an abundance of gold, but courted
operations into eastern Burkina Faso in 2018
– are now gradually forcing their way into the increases to their political and military sufficient investment to build the $US200
country. Attacks against population centres
in rural border areas, as well as against local support to governments throughout West million Sandbrado project such is the

and foreign security forces are occurring Africa.” benign environment in which the mine is
more regularly.
Miners operating in the region have al- located.
The security situation has become more
complex and difficult for governments, the ways had to contend with the localised Nevertheless, WAF managing direc-
military and security forces throughout the
region, with the situation likely to degrade criminal activity but according to North- tor Richard Hyde says it is an ongoing

before it gets better in some parts over, they must now also consider the process in keeping people aware of the

political dimension. security situation in Burkina Faso.

“The threat actors with greatest ability “We have upgraded site security and

to impact on mining operations has shift- integrated experienced security person-

ed from local organised criminal activity nel into our operations team to ensure

and anti-government groups to transna- we provide a safe workplace for our staff

tional militant jihadi groups,” he said. and contractors,” Hyde told Paydirt.

Although the threat is changing, Nor- “Our project is located in the cen-
“thover does not believe it is preventing tral part of Burkina near a military base
companies in the re-

gion. We don’t want to stop or
“The current secu- scare away our investment
or engagement with the region;
rity situation throughout
West Africa, though

degraded, won’t stop

miners from pursuing that is not what we are about.
opportunities in the re-

gion,” he said. “Those

with a mature risk-man-

agement culture have been following in- which is a good thing for us. Through

cidents in the region; updating threat as- our interaction with the Government it’s

sessments and reviewing their security clear they are focussed on improving

and safety control measures.” the situation in conjunction with interna-

There has been specific attention to tional assistance. My first visit to Burkina

the deterioration of security in parts of was in 2002 and the security scene has

south and eastern Burkina Faso. The changed a lot since then, but the geology

country has enjoyed peace for the last hasn’t and people haven’t, which is why

20 years and has been a highly attractive we are there.”

investment destination for mining com- Although there are heightened secu-

panies. rity concerns in certain parts of West

The development of 10 new gold mines Africa, government, industry, investors

over the past decade and the hive of ex- and security consultants emphasise that

ploration activity from junior companies the risk of attacks remain proportionately

is testament to the Burkinabe Govern- low.

ment’s strategy of providing an environ- “There are very experienced miners in

ment investors feel comfortable in. West Africa; there will always be oppor-

However, the kidnap and killing of TSX- tunities for Australian companies. All that

listed Progress Minerals Inc geologist has changed is that there is greater need

Kirk Woodman in January further high- for security analysis and reporting to be

lighted the present troubles in Burkina augmented in a systematic manner by

Faso. mining companies given the change in

Woodman was captured from the Tian- security threats over the past two years,”

bongou exploration camp in the north- Northover said.

east of the country, which is one of the “Political conditions in Burkina Faso

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 19

COVER Developing sustainable agriculture “Firstly, the current
sectors in Africa would help security situation
Max de Vietri throughout West Africa,
improve the standard of living
Page 20 AUGUST 2019 AUSTRALIA’S PAYDIRT across the continent though degraded,
won’t stop miners from
pursuing opportunities

in the region. Those
with a mature risk-
management culture
have been following

incidents in the
region; updating threat

assessments and
reviewing their security

and safety control
measures.

in particular have been deteriorating for
years. Western powers have made many
announcements about their commitment
to the region, but it will take several years
to see these foreign military support pro-
grammes start to have a discernible im-
pact on local security conditions.”

With Australian companies well spread
throughout West Africa, the Austral-
ian High Commission, Ghana, has been
particularly active in running outreach
programmes addressing kidnap and ran-
som situations, most recently hosting the
West Africa Mining Security Conference
in Accra in June.

Some 200 people representing about
80 companies attended the conference,
which was intended to inform future se-
curity and investment decisions.

According to DFAT, there are more
than 170 ASX-listed companies operat-
ing in 35 of the 54 countries in Africa,
with a large presence of Australian ac-
tivity in West Africa’s gold scene given
the geological similarities in the region to
Western Australia.

An indication of the heightened aware-
ness of the security concerns covered at
the conference was the sponsorship sup-
port of Resolute Mining Ltd, Newmont
(Ghana) Mining Corp, Perseus Resourc-
es Ltd, Azumah Resources Ltd, Geodrill
and African Mining Services.

“We don’t want to scare off invest-
ment in Africa,” Australian Department of
Foreign Affairs and Trade (DFAT) deputy
high commissioner, Ghana, Glen Askew
told Paydirt. “Australian companies have
a lot invested here and there is money

to be made. It is important for regional

countries that Australian mining compa-

nies and Australian mining services com-

panies remain engaged in the region. We

don’t want to stop or scare away our in-

vestment or engagement with the region;

that is not what we are about.

“The message is that you can’t be com-

placent and things have changed. Part of

the problem for the likes of Burkina Faso

is that for a long time the country had

been quite safe to operate in and I think

companies have to react to that change

and not be complacent about the secu-

rity situation and see it as it had been for

the last 20 years.”

Security concerns have come to the

fore two years after the general climate

for investment started to pick up. Pro-

spective African projects are once again

taking centre stage after a period away

from the limelight.

A handful of Australian juniors have

even managed to list new ventures in

places like Cote d’Ivoire, which is proving

highly attractive to gold bugs. “ Empowering women to be effective decision-makers
The willingness of companies and in- within communities needs greater emphasis
There are very experienced miners in West
vestors to back African projects demon- Africa; there will always be opportunities
strates the level of sophistication with for Australian companies. All that has changed
which the continent is now understood. is that there is greater need for security analysis
Investors are seeing a collection of di-
verse jurisdictions with differing risk pro-
files, rather than a single state.

“Africa is the easiest option for us –
Namibia, Botswana, Ghana – places

where big mines can be built, but having and reporting to be augmented in a systematic
said that we are pretty selective about manner by mining companies given the change in
Africa,” Ibaera Capital GP Ltd managing

director James Wallbank said. security threats over the past two years.
Ibaera is JV partner with Azumah Re-

sources Ltd at the Wa gold project in

northern Ghana. trict chief executive Katherine Lankono Burkina Faso where the terrorism is lin-
Although the threat of terrorism in told Paydirt the district’s borders were gering. It is not an alarming situation, but
being safeguarded to prevent any at- we have security checks, we have some
northern Ghana is deemed low, like in tempt to disrupt the country’s largely other specialised police units around the
many other parts of West Africa security peaceful existence. community which are manning the illegal
has been beefed up in the region given bodies where they come through” Lanko-
the activity of terrorist groups across the “We are concerned because of the no said.
border in Burkina Faso. proximity of the region to our neighbour
“Immigration, where they come
Northern Ghana, Nadowli-Kaleo dis-

The security situation in parts of West Africa need to be monitored closely through, has also been boosted and
largely the security has been boosted

around the district which has borders

with our Francophone neighbour. Large-

ly, Ghana is peaceful because we are not

polarised by religions, so I am not sure it

is a fertile ground for extremism.”

While the effort to thwart terrorists

destabilising segments of Africa has in-

creased, African Geopolitics principal

adviser Max de Vietri told Paydirt an

intimate understanding of the conditions

people faced in vulnerable regions must

be at the forefront of tactics to tame such

threats.

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 21

COVER

Despite close attention to the security situation in southern and eastern Burkina Faso, “Educating women and educating girls
the country has proved to be an investment destination of choice in recent times will reduce the birth rate and reduces
poverty. This is something that the West
With poverty and poor living stand- for their children they would be happy; should be doing; it is not going to happen
ards still a large problem, de Vietri urged that is how simple it is. Companies as- in one day,” Roberts said.
companies to support governments in sisting governments in helping develop
programmes that could help boost indus- new industries is the way forward. Is in- Women remain incredibly disadvan-
tries like agriculture. dustrialisation the right way? Not neces- taged in parts of Africa, with Sipa Resourc-
sarily, it is too much of a jump for some es Ltd noting that in the northern part of
According to the Australian Govern- people.” Uganda where it is focused, it is natural for
ment, it is estimated that agriculture sup- each woman to have up to nine children.
ports the livelihoods of 80% of Africans Poverty, poor governance, corruption
and provides employment for about 60% and inactivity are the daily frustrations many Sipa managing director Lynda Burnett
of the economically active population. Africans have to contend with and the em- said her company had strongly focused
phasis has to be on making sure young on empowering the women and girls it can
“Developing a sustainable agriculture people are meaningfully employed and impact.
industry to help people be happy and don’t become “fodder” to terrorist groups.
help raise their standard of living would “We have been working with that pro-
be one way to stop radicalisation and il- Roberts said education and empow- gramme [Days for Girls feminine hygiene
legal trafficking,” de Vietri said. ering women within communities would and education programme] now for three
also make a huge difference. years and hopefully we’ll see an effect in
“If people lived with fridges and food attendance of girls in schools and empow-
ering those girls to do way more than they
have been able to do in the past,” Burnett
said at last year’s Africa Down Under con-
ference.

By empowering women to become de-
cision-makers and have an impact in their
communities, there is a better chance of
creating conclaves of prosperity, leading
people away from criminal activity born of
desperate circumstances.

In 2019/20, the Australian Government’s
total Official Development Assistance to
Sub-Saharan Africa will be an estimated
$119 million, including an estimated $31.8
million in bilateral funding to the African
Programme, managed by DFAT.

The Australia Awards, humanitarian as-
sistance, agriculture productivity, empower-

Andrew Northover is a security consultant
and the Principal Risk Advisor for Pinkerton
in Africa. Andrew, a former intelligence
officer in the Australian Army, has 25 years
of experience delivering risk and advisory
services to clients throughout Africa and
Asia. He has conducted a broad range of
sensitive due-diligence tasks and managed
the resolution of critical incidents for
clients in exploration, mining, logistics and
offshore oil & gas. Andrew most recently
updated the security threat assessments
for several clients operating in West Africa,
including Burkina Faso. Conducting this
review, Andrew reviewed and analysed
a range of security incidents in detail,
including recent kidnapping events and
armed attacks targeting foreign companies
operating in the mining sector and
supporting the resources sector.
Andrew has worked as security consultant
for several specialist advisory groups,
including Osprey International and I-SOS

Page 22 AUGUST 2019 AUSTRALIA’S PAYDIRT

“Educating women and educating girls @MENASTREAM is a good source of
will reduce the birth rate and reduces security information on Twitter, while
poverty. This is something that the West the Live Universal Awareness app is a
should be doing; it is not going to happen in free application that provides up to date
information on events happening around
one day. the world. The Australian Mining Network

WhatsApp group has been efficient
in providing updates and was at full

capacity at the time of print

ing women and girls and improving gender regional vulnerabilities, ning. Having a vigilant workforce, good
equality outcomes and civil society out- often engaging a com- security culture at all levels of the organi-
comes are some of the areas targeted for bination of intimidation, sation and an effective means of captur-
Australian Government assistance. exploitation of ethnic ten- ing security-related information is always
sions and financial con- a critical component for reviewing the pri-
Meanwhile, outreach programmes such trol to gain influence. ority on various risks. There are proven
as the security conference and forums preventative security measures that can
addressing kidnap and ransom situations “Unfortunately large assist to deter and limit the potential ac-
have been on DFAT’s agenda in recent ransoms paid by some cess availability. The most resilient mining
years. countries/people have operations will be constantly updating their
helped sustain terrorist risk assessment.”
At the security conference, First Assis- activity, and we are wor-
tant Secretary of the Africa and Middle East ried that it is possible that – Mark Andrews
Division, HK Yu, announced support for extremist groups will shift
the Kofi Annan International Peacekeeping focus to commercial tar- Education is key to ensuring living
Training Centre to host two Regional Inter- geting in the future. This standards are lifted across Africa in
Agency Counter-Terrorism workshops, requires a more securi-
which aim to improve coordination and co- tised approach to mining the future
operation among regional police, military operations and the Aus-
and intelligence services. tralian High Commission in consultation
with other key stakeholders, will explore op-
The first of two workshops will take place portunities for further mining industry-wide
in Ghana in August. initiatives to improve safety and security for
personnel and assets in the region,” Askew
“With the mining industry in the region said.
facing threats from kidnapping for ransom,
direct action raids and denial of access at- In the meantime, Northover from Pinker-
tacks, companies are encouraged to en- ton – a global leader in risk management
gage in risk management and mitigation; services – believes the climate is still ripe
and complete risk assessments and a risk for investment in Africa, as long as compa-
registry,” Australia Africa Minerals and En- nies have a clear idea of the security situa-
ergy Group (AAMEG) chief executive Wil- tion they face.
liam Witham said.
Northover emphasised the situation in
AAMEG is collaborating with DFAT and parts of West Africa would degarde further
the Australian Strategic Policy Institute before they improved.
(ASPI), in response to the changing secu-
rity situation in West Africa through discus- “Companies operating in West Africa
sion focused on greater industry collabo- must be very clear on what a robust se-
ration, information sharing and collective curity threat analysis looks like; with a re-
action against the backdrop of underlying alistic assessment on the capabilities of
drivers including; the impacts of the 2011 specific groups. There is
Libyan uprising; partial displacement of Is- limited value in grouping
lamic State from Iraq and Syria into West all security risks under
Africa; the fall of the Blaise Compaoré re- the “terrorist” banner
gime, Burkina Faso, in 2014 and challenges without assessing the
confronting the UN’s MINUSMA peace- more likely risk events
keeping initiative. that apply in the local
operating area such
While threats over the past 12 months as illegal mining, theft,
have shifted from historic religious drivers community protests and
to varied and overlapping factors including malicious acts,” North-
income and protection, growing risks ex- over said.
ist where terrorist groups (Ansaroul Islam,
Jama’at Nasr al-Islam wal Muslimin [JNIM], “Jihadi groups, lo-
and Islamic State in the Greater Sahara), cal militants and crimi-
new violent extremist groups and coalitions nal gangs will typically
are increasing the tempo of complex at- conduct surveillance on
tacks via local disgruntled groups. target facilities and con-
sider security measures
These terrorist groups are focused on in place during their plan-
addressing the concerns of local communi-
ties and exploiting community divisions and

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 23

SITE VISIT

Azumah readies
to plant one
in Ghana

Agolden moment is in the making for
Azumah Resources Ltd managing
director Stephen Stone at the Wa gold

project in Ghana’s Upper West.

Having started as non-executive chair- developers bereft
man and investing personally in Azu-
mah, Stone has toiled hard for well over of investor support,
a decade to bring Wa – in Ghana’s less
prolific northern region – to the verge of essentially placing
development. He has ridden the highs of
the West African gold boom and also en- Wa on hold. How-
dured the ensuing lull, remaining loyal to
the cause throughout. ever, both com-

Now, he is on the cusp of delivering on pany and project
the potential he first saw in 2006. By the
end of this year, a new DFS on Wa – now were thrown a life-
subject to a JV with private equity group
Ibaera Capital GP Ltd – will be unveiled. line in September

“I could see the opportunity with the 2017 with the ar-
land package and the prospectivity de-
spite all the naysayers saying that there rival of Ibaera.
wasn’t much gold to be found in northern
Ghana,” Stone told Paydirt in light of a Under terms of
recent site visit.
the agreement, pri-
“It has obviously taken a while to get
to where we are because of the vagar- vate equity group
ies of the market and the availability of
capital but when we have had the funds Ibaera could earn Magdalene Agoe is among a host of young, enthusiastic
available we have applied that to drilling. an initial 42.5% geologists working on the Wa gold project
The proof is in the steady increase in interest in Wa by
resources and we don’t see any reason
why, with the land package we have, it spending $US11.5
won’t continue.”
million over two helped in some areas,” she said.
Flying solo at Wa, Azumah had de-
fined a 2.1 moz gold resource (1.4 moz years. The Nadowli-Kaleo district is one of
measured and indicated) for reserves of
624,000oz @ 2.14 g/t, which was suffi- The cash injection has reinvigorated the poorest in Ghana, with about 60% of
cient for a seven-year project producing
90,000 ozpa, according to a 2015 feasi- the project and given hope to a region the population in the region illiterate, well
bility study.
of Ghana in desperate need of new eco- below the national average.
The 2015 study was updated the fol-
lowing year, with the fresh set of num- nomic opportunities. Currently, there are 54 Azumah em-
bers indicating potential to deliver the 1.2
mtpa CIL operation for $142 million. “The potential benefits of the mines ployees at Wa, with 73% sourced from

The gold price was seeing some re- to the district and the region as a whole the Upper West region.
juvenation back in 2016 when Azumah
updated its capital cost measures for cannot be emphasised enough. It is go- A total of about 1,500 people are esti-
Wa, however, by December gold dipped
sharply to below $US1,150/oz. ing to give us economic benefits largely mated to be required at Wa during con-

Azumah was among a clutch of gold and it is also going to improve the popu- struction and more than 550 full-time

lation, tourism and the assembly is going employees when the project is in steady-

to get royalties and fees from the com- state operation. It is intended that the Wa

pany,” Nadowli-Kaleo district chief ex- JV will exhaust as much local content as

ecutive Katherine Lankono told Paydirt. possible.

“Natives who own the land where the Building mining sector capacity and

mine is situated are going to get their capability around Wa will be critical to

royalties paid. The citizens will get jobs Azumah’s longevity in the area, a concept

and will also create jobs as a result of the which the company has only begun con-

mine so it is a win-win situation and there sidering since Ibaera’s cash injection.

are other economic activities that can go Wa itself is unfolding to be a 100,000

on. There will be guest houses, hotels ozpa, 11-year project boasting an NPV

and other things and largely the popula- of $US177 million, a 35% IRR with ini-

tion will grow and increase and our local tial capital payback estimated to take 1.6

economy will grow. years.

“Azumah has been here for a while ex- The Kunche and Bepkong deposits

ploring and although they are not com- underpin the bulk of the 1 moz reserves

mercial yet, we have seen the intent from and 2.5 moz resource at Wa where an av-

Azumah to the community and they have erage 107,000 ozpa gold for the first six

Page 24 AUGUST 2019 AUSTRALIA’S PAYDIRT

Azumah has established impressive
camp facilities near the Wa project

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 25

SITE VISIT

years at an 2.06 g/t (years 1-8) burst into calculations after

is estimated. coming from virtually nothing

However, with the path to six months ago.

production looking increas- Orelogy Mine Consulting

ingly clear, the JV can now was engaged in an under-

begin considering longer ground scoping study, with

term options. an assessment of the bene-

“We have tended to focus fits of mining due for comple-

on resources and reserves tion at the time of print.

to support an open pit mining It has been stated that the

operation,” Stone said. underground development

“We haven’t, until the JV would only need to cover in-

with Ibaera, focused too cremental development cap-

much on what might be un- ital and associated operating

der those pits. We’ve always costs, given open pit opera-

had high expectations that tions will generate enough

there is gold to be found and capital to payback establish-

I think what we have deliv- ment costs within 1.6 years.

ered with Bepkong and, to a The addition of under-

certain extent Kunche, this Unlike some parts of West Africa where exploration is led by artisanal ground ounces would no
year highlights the opportu- miners, the transported soils at Wa effectively means exploration doubt add to Wa’s bottom

nity there is throughout the has been blind and artisanals have tailgated off the back of line and spur further inter-

whole project.” Azumah’s success est in the project at a time

Last month, Azumah an- when investors are pushing

nounced a maiden underground re- “Apart from the exploration opportunity miners to have multiple ore and revenue

source from Bepkong – 279,700oz @ and open cut mining opportunity it opens sources.

3.59 g/t gold – increasing total resources up a whole new dimension to the project, “We are very conscious of the fact that

at Wa to 2.8 moz. which we always knew was there but the we are a single-asset company in West

“These deposits go down hundreds market was obviously waiting for that to Africa and that is very much part of our

of metres, if not kilometres, so it comes be demonstrated.” thinking as to how we develop the com-

down to the economics of mining what is The underground resource at Bepkong pany going forward and certainly part of

down there,” Stone said. sits below the current design pit and has our thinking in terms of how we finance

Unlike Western Australia, there is
no super gene dispersion at Wa
and auger drilling has been critical
in providing samples at the rock
interface for consistency

Page 26 AUGUST 2019 AUSTRALIA’S PAYDIRT

the project,” Stone said. Nadowli-Kaleo district chief executive Katherine Lankono has welcomed Azumah’s
Project financing discussions will start contributions to the community during its exploration phase

to heat up in the near future and poten- Community leaders in WA hope new mining projects will help increase
tial parties will begin looking at what Wa literacy level in the region
might offer beyond current reserves.
AUSTRALIA’S PAYDIRT AUGUST 2019 Page 27
Azumah has compiled a land package
totalling 2,400sq km in northern Ghana,
a region with 10 moz gold resource en-
dowment.

“Our approach to this project is to get it
right and up and running. We see this as
a starter project in what will be a region-
ally-focused operation. Once we get up
and running we fully expect to either get
bigger or go longer.

“It is very hard to put land packages
together over the right rocks [like we
have] and to me that is a real asset to the
company – the regional scale ground. As
long as we have the funds to explore, we
will keep finding gold.”

Ibaera’s influence at Wa since en-
tering JV terms with Azumah in 2017
extends well beyond its cash stocks.
Consummated by a key group of Fortes-
cue Metals Group Ltd alumni, including
James Wallbank (managing director),
Paul L’Herpiniere (exploration manager)
and Peter Hairsine (project manager),
the group has Chris Alexander as chief
financial officer, Dr John Hronsky as
partner in global targeting and research,

while experienced African
explorationist Jonathan
Hunt gives Ibaera the nec-
essary grunt on the ground
to help the JV realise the
absolute gold potential in
northern Ghana.

Ibaera is approaching
its expenditure hurdle of
$US11.25 million to earn a
42.5% interest in Wa.

Once Ibaera reaches
that milestone, and if Azu-
mah elects not to contrib-
ute its pro-rata 57.5% inter-
est of the further $US2.25
million programme to com-
plete the feasibility study,
Ibaera can earn an ad-
ditional 5% interest in the
project.

The group is fully com-
mitted to the project, ac-
cording to Wallbank.

“This is a successful
Ghana story which we
should be promoting. Eve-
ryone has been keen to
push all the resources into
Ghana and we are all keen
to see something built,”
Wallbank told Paydirt.

The Azumah deal was
done under Ibaera’s first

site visit

close of $US30 million two years ago, tion. Stone likens Wa to highly profitable, There is a lot of low-hanging fruit at Wa
with the group looking to deploy a further run-of-the-mill gold operations seen in East, which could potentially be trucked
$US100 million in Africa. Western Australia and is acutely aware to Wa for processing. It is not part of the
of the challenges faced by some of his plan to start mining that material earlier
In the meantime, Ibaera and Azumah ASX peers recently. on as further exploration success could
will look to get Wa – one of Ghana’s larg-
est undeveloped gold projects – off the “There have been some companies warrant a satellite operation
ground in a timely fashion. that have floundered recently and I think
that’s really puts the emphasis on mak-
“We are starting to talk to financiers now ing sure that before you develop you re-
and certainly there are no issues in lend- ally know your geology and resources
ing into a Ghana-based operation and they intimately and have a lot of confidence in
consider it a pretty low risk jurisdiction,” metallurgy before you go ahead,” Stone
Stone said. said.

“Financing will probably look along the “What is really exciting is that to the
lines of a common debt facility and then naysayers who said there was no gold
the JV partners will be responsible for their up there to us building an inventory of 2.8
pro rata shares of the remaining finance moz and Cardinal [Resources Ltd] hav-
that is required which is also something we ing 6-7 moz a few hundred kilometres to
are looking at now. There is a lot of interest the east. There is a lot of ground yet to be
in financing the project and increasingly so explored and northern Ghana is becom-
with the gold price, a lot of financiers are ing a hot spot for exploration,” he said.
interested in funding a project like this.”
– Mark Andrews
The West African gold sector is begin-
ning to recover its pre-2011 lustre and pro-
jects like Wa are set up to cajole fair atten-

There is about 79,000oz gold at Collette. Pictured is Azumah senior geologist Prince Ofori Amponsah
Page 28 AUGUST 2019 AUSTRALIA’S PAYDIRT

CENTRAL PARK

52PLUNGE 2019

Are you daring enough to take the plunge for Ronald
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NOW OPEN for the 2019 Central Park Plunge.

FLOORSJoin us on September 13th for Australia’s tallest urbanKeeping Families Clos

charity abseil.
Register as an individual or in a team of four to
descend Perth’s tallest building with your colleagues.
With only 100 spaces available, this popular
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*Source: G. Daniel, C.E. Wakefield, B. Ryan, C.A.K Fleming, N. Levett and R.J. Cohn Rural and Remote Health (2013)

ADU PREVIEW

Diversity, risk and raising
take centre stage

The 17th Africa Down Under conference will take place at the Pan Pacific Perth on September 4-8.
The cornerstone of the now burgeoning Australia-Africa Week, Africa Down Under has
established itself as the key meeting point between governments, miners, explorers, financiers,
investors, service provides and media. Paydirt chairman and conference organiser Bill Repard
said the conference continued to provide a unique opportunity for delegates.“The forum offers an
unrivalled mix of government, industry and media engagement,” Repard said. “There is no other
event which offers this level of engagement. We expect to welcome nearly 20 African ministerial
delegations to the conference, the African-based Australian diplomatic corps as well as their
African colleagues in Canberra and a host of other international delegates. To host it in Perth, the
undisputed mining capital of Australia and the gateway to the African continent, gives it added
relevance. Perth is the destination international investors and financiers come to when they
are looking for mining investments and Africa Down Under is the event they all choose when
looking for a broad understanding of the opportunities on offer on the continent.” Ahead of the
conference, Paydirt looks at five key areas of interest set to dominate discussion among more

than 1,500 delegates.

Security by, alternative options are increasing. This veloper Mod Resources Ltd (see pages 38-
year’s Mining Indaba in Cape Town saw a 39). With several mid-tier miners sending
As this month’s cover story attests, proliferation of streaming and royalty com- their business development teams to Africa
security is to be a major topic of conversa- panies prowling the exhibition space and Down Under, Sandfire may not be the only
tion at this year’s conference. presentation halls. This alternative form of company to bridge the Indian Ocean over
financing has proved popular in North and the coming 12 months.
Heightened concerns in Niger, Mali and South America but is yet to take hold in Af-
Burkina Faso, as well as ongoing threats in rica or Australia but the presence of stream- Africa Down Under’s Mandjar business
Nigeria, Kenya and Sudan, have brought ers could provide companies with leverage matchmaking lounge will reflect this chang-
security issues to the forefront of investors’ for development. ing dynamic. In 2018, just the second year
risk assessments. since its launch, Mandjar played host to
Could M&A be another way of break- more than 280 meetings across three days
Africa Down Under’s programme will re- ing the impasse? BDO global and national between mining companies and a variety of
flect this growing issue. As well as presen- practice leader – natural resources Sherif investors from Australia, Asia, Europe and
tations from several of the countries deal- Andrawes believes it is possible. North America.
ing with security threats, the conference
will host its first ever security main stage “There is no doubt that alternatives are The lounge is expected to grow this year
panel discussion. The panel session, to be being looked at by juniors and developers,” with interest from London being particularly
held prior to lunch on Day 1 of the confer- he said. “The best source of funding for prevalent.
ence, will feature HE Lelenta Hawa Baba them is the larger mining companies who
Ba (Minister of Mines and Petroleum, have cash inflows from production. Those “There is money in London,” Andrawes
Mali), Senator Linda Reynolds (Austral- companies recognise their skillset is best said. “We have seen Mod and Resolute
ian Minister for Defence), Tony Sheehan suited to operating a mine rather than ex- [Mining Ltd] seek secondary listings on the
(Australian Department of Foreign Affairs ploring or sometimes even developing and, main market there and talking to my coun-
deputy secretary), Lisa Sharland (Austral- given relatively strong commodity prices, terparts at BDO in London there is still capi-
ian Strategic Policy Institute) and John especially in Australian dollar terms, they tal and interest in London for African com-
Welborn (Resolute Mining Ltd). have the ability to fund exploration. “For panies. It is a market that is not impacted
those companies it is a lower risk way of by Brexit.”
Finance replenishing future resources by funding
juniors who specialise in exploration to build Project development
Despite the ASX enjoying record gains in their future stocks for them.”
the last 12 months, there is no escaping the The next six months will see at least
fact that junior miners are struggling to at- Corporate activity has already begun. three Australian-owned gold operations
tract funding from their traditional sources. In June, Australian copper miner Sandfire in Africa hit steady-state production with a
Resources NL announced a $168 million host of others further up the development
If traditional financing is difficult to come takeover of Botswana-focused copper de- pipeline. After a string of failures in the

Page 30 AUGUST 2019 AUSTRALIA’S PAYDIRT

Former Nigeria President Olusegun
Obasanjo was among the speakers
at the 2018 forum

Australian gold space, project execution When women are empowered, economies After a slow start, the Australian mining
will be of keen interest. are lifted out of poverty. sector is finally embracing gender diversity
but the African sector still lacks equality.
Africa Down Under sponsor Lycopo- “Yet too many women are stuck in the Welborn said his company recognised the
dium Ltd has been involved in an array of era of the moneylender and the forced imbalance inherent in its workforce and
successful mining projects in Africa and chicken sale.” was working to bring more diversity.
managing director Peter de Leo urges cli-
ents to ensure they have a Plan B as well Gates’ statements could find their way “Up until recently it was illegal for wom-
as Plan A. into the discussions on Day 2 of Africa en to work underground in Mali but now
Down Under which will include a focus on 4% of our workforce is female,” Welborn
“It is important to optimise – no-one Women in Mining. said. “There is still a long way to go but I
wants to pay more than they need to – but am very proud to see underground female
groups get too close to their project and Following last year’s highly successful workers at our Syama mine and of the five
bank on everything going their way but session, the organisers will again host a senior managers on site, two of them are
that’s not enough, you need proper contin- Women in Mining panel discussion and women.”
gency,” de Leo said. “By putting effort in at Women in Leadership lunch at Africa
the study phase you can make sure those Down Under.
problems are not going to hurt you once
you’re in development.” The Women in Leadership lunch was a new initiative in 2018 and will return this year
AUSTRALIA’S PAYDIRT AUGUST 2019 Page 31
The importance of contingency is even
more important in Africa where a number
of geopolitical, logistics and community
variables often lay out of the control of min-
ers.

“My advice is to engage expert groups
early on and deliver quality studies before
you try to build the project. The cost of the
study, in the scheme of things, is less than
2% versus the ultimate cost of the project.”

Resolute and West African Resources
Ltd will present their development stories
and give an indication of how they intend
to avoid the ramp-up pitfalls of their local
peers.

While the likes of Cardinal Resources
Ltd, Orion Minerals Ltd and Walkabout
Resources Ltd will discuss their impending
developments.

Women in mining

In July, Melinda Gates, co-founder of the
world’s largest private charitable organisa-
tion, the Gates Foundation, spoke at the
G7 Finance Ministers meeting in France,
urging ministers to focus on the inclusion
of women in the growing African digital
economy.

“Digital financial services is not a lever
we had 15 years ago,” Gates told The
Guardian ahead of the G7 meeting. “We
have it now. Yet the mobile phone opera-
tors are going to pick off the low-hanging
fruit, the middle class,” she said. “They
are not going to go the extra mile to help
the poor or women. We are already see-
ing these gaps that are going to set back
women’s empowerment.

“We know from good research that
when a woman has her own digital finan-
cial bank account, she often moves from
the informal farming sector to the formal
entrepreneurial sector. When they have
assets in their hands, women often invest
differently from their husbands. They in-
vest in health and their kids’ education.

ADU PREVIEW

Deeper economic will see the panels split between regions Engaging the diaspora
engagement with participation from Australia’s heads of
mission on the continent as well as their Kojo Annan (son of former UN Secretary
While mining investment continues to African counterparts from Canberra. Also General Kofi) is visiting Perth to speak at
dominate the Africa Down Under agenda, on the panel agenda will be conversations Africa Down Under and the associated
there are indications of widening engage- around wider economic activity, including Australian-African Research Forum host-
ment between the two regions. infrastructure, education and agriculture. ed by Murdoch University. Among his ar-
eas of interest is how African economies
This year will see METS industry growth This year will also see a new initiative – can activate the latent capacity in the Afri-
centre METS Ignited present for the first Africa Down Under Smart Farming, Smart can diaspora throughout the world.
time. The group’s mission is “to strengthen Food – launched at the conference. While
Australia’s position as a global hub for min- Australia is a well-established in African African-Australia Week is already show-
ing innovation, and, enhance the global resources projects, its agricultural invest- ing the extent to which Africans are active
competitive advantage of the Australian ment is less advanced. The innovative pro- in Australia. Events include the Succeed-
METS industry” and with Australian ser- gramme for Smart Farming, Smart Food is ing Beyond Borders conference, the West
vice companies increasingly active on the designed to begin the conversation about Australian African Community Awards
continent, Africa could prove a major ben- how the two continents – which have so Gala Dinner and the Africa Down Un-
eficiary of Australian expertise. much in common climactically – can sup- der Cup which brings African community
port each other and what role mining com- groups and conference sponsors together
METS is also sure to be one of the topics panies could play in agricultural develop- for a highly competitive football tourna-
of discussion among this year’s two Meet ment in Africa. ment.
the Ambassador panels on Day 1 and
Day 3 of the conference. The new format

South African Minister of Mineral
Resources Gwede Mantashe is set
to attend Africa Down Under
again in 2019

Page 32 AUGUST 2019 AUSTRALIA’S PAYDIRT

REGISTER NOW

4 - 6 September 2019

Perth,Western Australia

Tuesday 3 September 2019

17:00 Welcome Reception, Bar Uma (Lobby Lounge), Pan Pacific Hotel, sponsored by Australian Stock Exchange Ltd

Programme Day One Wednesday 4 September 2019

07:15 Arrival Tea, Coffee and Registration

Session One

08:15 Welcome: Bill Repard, Executive Chairman, Paydirt Media Pty Ltd (5)
08:20 Opening Address (15)
08:35 H.E. Madame Lelenta Hawa Baba Ba, Minister of Mines and Petroleum, Republic of Mali (20)
08:55 John Welborn, Managing Director and CEO, Resolute Mining Ltd (25)
09:20 Chris Evans, Managing Director, Mali Lithium Ltd (15)
09:35 Julian Hanna, Managing Director, MOD Resources Ltd (25)
10:00 Questions (5)
10:05 Morning Tea, Exhibition Area, sponsored by South African Airways (20)

Session Two

10:25 Ministerial Presentation TBA (20)
10:45 Richard Hyde, Managing Director, West African Resources Ltd (15)
11:00 Archie Koimtsidis, Managing Director and CEO, Cardinal Resources Ltd (15)
11:15 Craig Mackay, Managing Director, Golden Rim Resources Ltd (15)
11:30 Questions (5)
11:35 Q&A: Mitigating and responding to security risks (45)
12:20 Lunch, Exhibition Area (50)

Session Three

13:10 Ministerial Presentation TBA (20)
13:30 Tim Carstens, Managing Director, Base Resources Ltd (20)
13:50 Tom Revy, Managing Director, BlackEarth Minerals NL (15)
14:05 Andrew Cunningham, Director, Walkabout Resources Ltd (15)
14:20 Questions (5)
14:25 Panel Discussion: Meet the Ambassadors Part One – Australian and African diplomatic corps come together to discuss the
landscape for investment in their respective regions (45)

15:10 Afternoon Tea, Exhibition Area, sponsored by Geodrill (20)

Session Four

15:30 Hon. Aziz Rabbah, Minister of Energy, Mines and Sustainable Development, Kingdom of Morocco (20)
15:50 Richard Taylor, Chief Executive Officer, Terramin Australia Ltd (15)
16:05 Kojo Annan, Investor and Entrepreneur; Director, Vector Global (20)
16:25 John de Vries, Managing Director and CEO; Raymond Hekima, Vice President - Corporate, Black Rock Mining Ltd (15)
16:40 Yann Alix, Partner - London, Ashurst (20)
17:00 Ollie Marion, Partner - Corporate Tax, PwC (15)
17:15 Questions (5)
17:20 Presentation of the Australia-Africa Minerals and Energy Group (AAMEG) Awards:
William Witham, Chief Executive Officer, AAMEG (30)
17:50 Cocktail Function, Exhibition Area

* This programme is subject to change

6 - 8 September 2017 Preliminary

Perth,Western Australia

Pr0o7:3g0r4 aP-Amerr6rimvatlhSTee,aWe,DCpoeafftesyeetaeTnmdrwRnebgoAise truNartsiotPno2rar0wlio1a9gArvaamilambele! Thursday 5 September 2019

Session Five

08:30 Keynote Address (20)

SPEAKER HIGHLIGHTS 08:50 Hon. Gwede Mantashe MP, Minister of Mineral Resources and Energy, Republic of South Africa (TBC) (20)

09:10 Nick Holland, Chief Executive Officer, Gold Fields Ltd (20)

09:30 Errol Smart, Managing Director and CEO, Orion Minerals Ltd (15)

09:45 DBiallveGuMya, nCnhainirmg,anG,loTbCNhaheliitHecafekGaEdoHxloedfcoMHultiylnibaverenisdO,dLJtfudfwic(1ie5Rr),eGneowladblFeieElndesrgLietsdPty Ltd (15)
10:00

10:15 Questions (5)

10:20 Morning Tea, ExhibNitiiocnkAHroeall,asnpdohnassobreeednbCyEAOshouf rGsotl(d20F)ields – the South African-based gold miner – since

Session Six 2008. Prior to that he was CFO of the company for 10 years. Under Nick the company
has introduced its vision of “Being the global leader in sustainable gold mining” and has
10:40 Dr Victor Jânio Comrraedae,sSigecnriefitcaraynotfsSttraitdeefsorinGeboelocgoymanindgMaintersu, lRyegpluobbliaclomf iAnningoglcao(2m0)pany with operating mines
11:00 Stephen Wetheralaln, dMpanraogjiencgtDsirinecstoixr acnoduCnEtOr,ieLsu.capa Diamond Company Ltd (15)

11:15 Lindsay Reed, Chief Executive Officer, Minbos Resources Ltd (15)
11:30 Phil Edmands, PartnBeerf-oErneerjgoyinanindgReGsooulrdcesF, iGelidlbserNt +icTkobhinelLdawsyeenriso(r20p)osition in other South Africa mining
11:50 Questions (5) companies, including Impala Platinum and Gencor. He joined the mining industry in 1990

11:55 Panel Discussion: WfroommaecncoinunMtiinnginfgir(m45)Deloitte where he spent the first 11 years of his professional

12:40 Lunch, Exhibition Arceaar, esepronafstoeregdrabdyuaOtirnegzwoniteh Da rBil.Clinogm(5a0n)d B.Acc from Wits University in Johannesburg.
13:00 Women in LeaderNshiicpk Lmuantcrihc,uSlailtveedr RatooKmin, gNEodvowtealrdPesrVthII LSacnhgoleoyl,Haolstoel in Johannesburg.

Session Seven SKInovopejhsotioerAGanlnanddaEimnntare, pMrienniseteurro; fDMirineecstoarn,dVGeecotloogry,GRleopbuabllic

13:30 H.E. Pr. Aissatou of Senegal (20)
13:50 Speaker TBA (20)

14:10 RJWGQeeauriplleelluasimagtbmiyhloiecSnWriso,nfS(ict5Mlph)aeaioramz,kaM,emCaiiaKrsnnnhboTaidceiijgBnqofuisnfEurArtgArxeraeeDon(s,c1nitnunrS5rtetag)pliucvynteectortmarOi,auskfBcarfeaikaencrte,astrregetT,eerirAcnByciuoagAhMslrVntidern(eoa2necoll0riotta)farogleAgsyrprf,LrorGtsicedwpalnoo(iM2nebr5ugitan),rlne,ereaadanwnlusdcaibnaniunvtdsiveoEiesnnntseemtsraogsenrye,ndsGwtbarihotcioohurtopldaes(nicAsnhgAei.nxMKctteoEoerGmnjno)spai(tv1sai5tenoa)ynrgtalwoel dbimtahhal riinsnkeetctetawsrre.oeHsretkers
14:30
14:55
15:10
15:25
15:30 Afternoon Tea, ExihnibintiaotnuArarel ar, esspoounrscoersedanbdy iSnkfryaTsEtrMuc(t2u0r)e most notably by founding Meridian Port
Services (MPS) in partnership with the Ghana Ports and Harbour Authority, Bolloré

Session Eight and Maersk (APMTerminals) to develop a modern container terminal inTema, Ghana.

15:50 Ministerial PresenKtoajotiAonnnaTnBwAill (a2ls0o) be the Keynote Speaker at the Australia Africa Universities Network
16:10 Andrew Spinks, MFanoarguinmg D(AireAcRtoFr,)K, hiboasrtaendRoensTouuerscdeasyLt3dS(1e5p)t ember 2019 by Murdoch University.
16:25 Jason Brewer, Managing Director, Force Commodities Ltd (15)

$111A766E:::1344a0,50a6r vl30ya10iBl.MaCQP0ibr0aoaudlenyceinrkes2uacltt0nt.aiDe1toGii9lilnsSFscTuu(5ns)scitoionn: ,FEinCxPahOinbRcitNiiEnongSTApEArreNoaCjOeTTcPAtsPTTinOHIAOREfrNTiCcUa,O-SNNPhIOoFToENIpEsR,SSEhOuNSrRTdClSeIELsHaLOInPdARfAViGshANAbIoDNLttAIEoSmBXEsLRH(E4S5I!)BTITOIDOANY
TO CONFIRM YOUR PARTICIPATION.

* This programme is subject to change

www.africadownunderconference.com

PRESENTERS INCLUDE: REGISTER TODAY

6 - 8 September 2017

Perth,Western Australia

ProJgohrnaWmelbomrn e Day TJhuliarneHaenn a Tim Carstens Friday 6Archie Koimtsidis SeptemJohbn ederVri2es019
Managing Director & CEO Managing Director Managing Director CEO & Managing Director CEO & Managing Director
Base Resources Ltd
0R8e:s3o0lu te MAirnrinivgalLtTdea, Coffee ManOdDRReegissoturracteiosnLtd Cardinal Resources Ltd Black Rock Mining Ltd

Session Nine

09:00 Hon. Jean Claude Kouassi, Minister of Geology and Mines, Republic of Ivory Coast (20)
09:20 Justin Tremain, Managing Director, Exore Resources Ltd (15)
09:35 Peter Ledwidge, Managing Director, Mako Gold Ltd (15)
B110laM009c:::ak520En055Taa ogrtmihngMRQBSDetienuveierryevertcasertltsoaPirNonaLndrssMo(n5o)sn, WtEexaEemlkxcauTebbrtcievouavetuuiotvDlreRtirBeCe,sechPotnaaousrirrro,tcmAnneeasfrrnL,ictHadnerGboelrdtBLSatmdtMtDei(at1rhan5yva)FMigdriiennFegelharDainllilasrsegL(cai2mtno0irt)ed Len Kolff Justin Tremain
Chief Operating Officer Managing Director
IronRidge Resources Ltd Exore Resources Ltd

10:30 Morning Tea, Exhibition Area, sponsored by PCF Capital Group (30)

Session Ten

11:00 Panel Discussion: Meet the Ambassadors Part Two - Australian and African diplomatic corps come together to discuss the
11M:4aC5nr aagiginMgHlaaDnocdirknseacc.yatWopre ifnorsitnovenPstaCmrthenneittPraih-nniEltndEheedorimgr, yrMaenRsidenpssiesoctuetirrvceoefsreMgiinoenss a(D4n5idre)MMctioiknrein-CgEhxDrpeilsovteriaelotipomn ent, RepubMlicanCoahfgrZiinsimgEDvbaairnbeswcteor(20)
Go1ld2e:0n5R im RMesiokuerceCshLtrdistie, DireGctiolbre-rtE+xpTolobraintion, First QFiursatnQtuumantMumineMrianlesrLaltsdL(td20) William Witham
Chief Executive Officer

Birimian Ltd AAMEG

12:25 Len Kolff, Chief Operating Officer, IronRidge Resources Ltd (15)
12:40 Eddie Grieve, Head of Listings and Issuer Services, Australian Stock Exchange Ltd (15)
12:55 Questions (5)
13:00 Lunch, Exhibition Area (60)

SessioRinchaErdleHvyeden Eddie Grieve Ben Gargett Errol Smart Speaker TBA
We11s44Mt::A20af0n0ra i cgainngRHIleDuosiokrneua.crctFRoeorseLdstadoyurRcaedsHoLetYaIsddos,uokAeSfiSreLpXSi,seeLtMraitnvdkiignceseissartenTrdoBf AMin(2e0s)and MinePraarltnReersources, RepubMliacnoagf iSnigerDriareLcetoorne&(C2E0O) METS Ignited Australia Ltd

PwC Orion Minerals Ltd

14:40 METS Ignited Australia Ltd, Speaker TBA (20)
15:00 Dr Marina Confait, Principal Secretary, Department of Foreign Affairs, Republic of Seychelles (20)

1S5:I2G0 NQUuePstiTonOs (D5)AY AND JOIN OUR SPONSORS AND SUPPORTERS TO DATE:
15:25 Afternoon Tea, Exhibition Area (30)

Session Twelve

15:55 Ministerial Presentation TBA (20)
16:15 Speaker TBA (15)
16:30 Speaker TBA (15)
16:45 Questions (5)
16:50 Closing Panel Discussion (40)
17:30 Closing Drinks, Bar Uma (Lobby Lounge), sponsored by PwC

* This programme is subject to change

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

ADU PREVIEW

Tarkwa - with its 6.1 moz gold reserve
and 15-year mine life – remains a key

component of the Gold Fields portfolio

Holland delights in Ghanaian performance

Ghana may have developed a reputation local content requirements weakened the a disgrace and we must work to change the
as the most mature and politically chal- country’s investment climate. situation.

lenging gold jurisdiction in West Africa but In 2016, Randgold Resources walked “I believe we’ve come of age and believe

Gold Fields Ltd chief executive Nick Holland away from a proposed redevelopment of we should not have to give tax and royalty

is more than satisfied with the role it is playing the Obuasi mine due to what chief executive incentives and mining companies shouldn’t

in the company’s growth strategy. Mark Bristow described as a “complete lack expect to make extraordinary profits on our

While Australia will account for more than of support from the Government”. continent. We are realistic enough to know

50% of group production from 2020, Gha- Holland recognises that issues remain in that companies must make their profit but

na continues to play a key role in the Gold the country but believes Gold Fields’ long we want to work with them under the nor-

Fields portfolio. The company produced history has given it greater insight into deal- mal conditions which occur elsewhere in the

750,000oz from the Tarkwa and Damang ing with such concerns. world.”

mines in 2018 but with an expansion project “There are challenges sometimes about While Akufo-Addo’s remarks could not be

at Damang set for completion next year and how we work out the best value proposition construed as all-out resource nationalism,

the recently acquired 50% interest in the for all stakeholders but we believe we can they do reflect a common theme among

Asanko mine also set to contribute, regional manage those challenges,” he said. governments across the world.

production is forecast to increase to 870,000 Ensuring the economic benefits are “The problem we have with many govern-

ozpa from 2020 and beyond. spread throughout the various stakeholder ments, and this applies to Western Australia

“We are comfortable with Ghana; it is groups is of particular concern in Ghana. as well, is they are overspending budgets

Africa’s largest gold producer and its fast- Speaking at the Mining Indaba in February and then look for short-term solutions,”

est growing economy,” Holland told Paydirt this year, Ghanaian President Nana Akufo- Holland said. “They look to captive mining

over the phone from the company’s Johan- Addo called on the gold industry to ensure companies as a source of revenue at the

nesburg headquarters. operations provided economic opportunities expense of long-term value for the state and

Gold Fields first entered the West African for all stakeholders. investors. But, we have seen what has hap-

country in 1994, making it the longest-estab- “We must strike deals that are fair to both pened in Tanzania and we have had prob-

lished of the country’s major miners. sides and ensure the African people that lems in Zambia, DRC, etc. We have got to

“We have been there a long time, longer they are no longer being unfairly treated,” he be careful about that short-term approach.”

than AngloGold [Ashanti Ltd] or Newmont said. “The distressed state of communities in Holland acknowledges, however, that the
“[Mining Corp] and 25 years is enough time which companies operate is nothing short of industry has played a role in creating the cur-
to get to know a country,” Hol- rent policy environment.

land said. We are scoring a few own goals “The industry needs a uni-
While its gold credentials in that regard; you can’t fool fied message but unfortu-
nately we are not projecting it.
are undisputed, Ghana’s The way we report our earn-
reputation for welcoming for-

eign investment has slipped the investors and they’ll work out for ings suggests to investors we

over the last decade as suc- themselves how much money you are making good profits; then
cessive governments investi- we say to government ‘we’re

gated ways of extracting more are making but governments are not struggling’. We are scoring a
revenue from the gold sector. sophisticated enough to do that and few own goals in that regard;
Ongoing issues with illegal you can’t fool the investors and

mining incursions, stringent will only look at the headline numbers. they’ll work out for themselves
visa conditions and growing how much money you are

Page 36 AUGUST 2019 AUSTRALIA’S PAYDIRT

Nick Holland rent reserve; there our assets, hence the decision to invest in
has been very little Gruyere, Damang and Salares Norte,” he
making but governments are not sophisti- exploration in that said. “I think timing was important with the
cated enough to do that and will only look at area.” deals we did in Australia. We were lucky to
the headline numbers.” get Granny Smith; it is a fantastic mine and
Expansion is al- deals like that are difficult to do.
Holland said the mixed messaging was ready afoot at Da-
part of a wider problem within the gold sec- mang where Gold “I think what you are seeing with deals like
tor which had companies desperate to paint Fields is spending the Barrick [Gold Corp]/Randgold merger is
their operations in the best possible light. $US1.1 billion to the need to do something different; Barrick
extend mine life to had to sacrifice some of its future to get its
“The fear is we want to show the industry 2025 and lift pro- balance sheet in order. We weren’t in that po-
is in a much better state than it actually is,” duction. sition, we were always in charge of our own
he said. “If we put all the costs together it is destiny. We have been proactive to a point
probably $US1,100-1,200/oz but a lot of peo- “The Damang that we don’t need anyone else to solve our
ple in the industry say: ‘We can’t give that orebody just contin- future. We are confidently sitting on 2 mozpa
message’. ues,” Holland said. for the foreseeable future.”
“Once we have done the pushback we have
“Instead, they do things like leave on- got another pushback lined up to start in The one asset for which the future is hazy
licence exploration out of costs or classify 2022/23 after some more drilling and a fea- is the South Deep gold mine in South Af-
ounces as growth instead of replacement.” sibility study. We will probably do it while we rica. The deep-level mine has been a con-
still have the contractor mobilised. It is not a stant underperformer for Gold Fields, fail-
Gold Fields’ longevity in Ghana has al- difficult decision, it just need the costs to be ing to ever live up to expectations of being
lowed it to work on such situations and Hol- competitive.” a 700,000 ozpa producer. However, given
land feels it is satisfying the Government’s Competition is a key driver of Gold Fields’ it is its only remaining domestic asset, there
desire to provide wide-ranging economic development strategy. While other gold ma- is a political dimension to any decision Gold
opportunities. jors are restructuring their portfolios in an Fields makes on South Deep’s future.
effort to identify growth opportunities, Gold
The company has achieved an in-country Fields is currently spoilt for choice. Last year, the company risked widespread
spend rate of 84% at Tarkwa and 90% at Da- “We do have to undertake capital rank- condemnation by restructuring the opera-
mang. Localisation compliance is currently ing but it is a good problem to have more tion, reducing the workforce from 4,000 to
at 3.6%, below the legislated 6% and by projects than money at the moment,” Hol- 2,460. Holland said the decision was una-
the end of 2019, there will be only 14 expats land said. “Gruyere [in Western Australia] voidable.
working between the operations. is nearly there and we will have broken the
back of the expansion at Damang by the end “Putting a third of the workforce on the
“We have a very strong localised team,” of 2019. The next big mine we will build will street was not done lightly,” he said. “Such
Holland said. “The regional head, Alfred be Salares Norte [in Chile].” a massive restructuring of South Deep has
Baku, is a Ghanaian who has come through Construction at Salares Norte will be the never been done before and it took us a long
the ranks. At Tarkwa, we are running with culmination of a transformational seven- time to get to that point but the reality is we
an exclusively Ghanaian workforce, which year period for Gold Fields. Since 2012 it had exhausted all other options.
is unique. Ghana is a great hunting ground has hived off the majority of its South Af-
for skills and we have some of our Ghana- rican portfolio into Sibanye Stillwater Ltd, “Since then, the culture of the mine has
ian workforce on our operations in Australia bought the Granny Smith and Agnew mines changed. The entitlement attitude has gone
now.” in WA, committed to expansion at Damang and we are getting better daily performance.
and spent $US250 million to acquire a 50% The orebody hasn’t disappeared on us,
The depth of the company’s investment in share of the Gruyere project. With its in- the mining method can work and we have
the country means Holland has little desire house portfolio now full, Holland has no de- pruned 25% from the cost structure. That
to spread Gold Fields’ footprint beyond cur- sire to send Gold Fields out into the market drops the breakeven price and at today’s
rent borders. again. prices it will probably wash its own face, as
“We believe we’ve been counter-cyclical. a minimum.
“We are very comfortable with our Gha- We decided three years ago that we need-
naian exposure and we think it will be posi- ed to improve the quality and longevity of “Does it have a place in the company?
tive for the country for the next 25 years,” he We’ll see. If it is making good money, no one
said. “We are probably not all that interested cares where the operation is,” he said.
in the wider West African region; we think the
best place to spend our money is in Ghana. – Dominic Piper

“We have the infrastructure in place and Gold Fields’ Damang mine in Ghana is undergoing a $US1.1 billion expansion
the opportunities are there. We think Tarkwa
has depth opportunities and the drill bit is tell-
ing us there is still gold there. Damang has a
further 4 moz in resources outside the cur-
rent expansion project and the Asanko ac-
quisition was about much more than the cur-

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 37

ADU PREVIEW

Sandfire gets its
Mod target

The perceived risk attached to Sandfire Resources NL’s Julian Hanna and Karl Simich
$168 million acquisition of the T3 copper project in
Botswana will soon be forgotten once domestic investors learn meaning we don’t have the challenge of
more about project and country, according to the company’s oxides. The realisation of that calcrete
layer is one of the big breakthroughs of
managing director. this project, because it both stopped the
oxidation and hid the other deposits from
Sandfire will become the first estab- Both Simich and Hanna agree the best discovery.”
lished Australian miner to buy an African way to change perceptions about per-
asset since Newcrest Mining Ltd picked ceived risk would be to introduce people Simich said the recent success of Khoe-
up the Bonikro mine in 2010 if its deal to to Botswana. macau Copper Mining – the local subsidi-
acquire Mod Resources Ltd is ratified in ary of private equity group Cupric Canyon
early October. Sandfire shares dropped “The quickest way to mitigate that per- Capital – in funding and constructing the
on news of the deal in June and managing ception is to get people into the country to Khoemacau project on the belt.
director Karl Simich was questioned by a see the project,” Hanna said.
sceptical analyst on a subsequent confer- “That is a $500 million development
ence call about the risk he was bringing Simich has taken on the task of educat- which is demonstrating both the interest
into a company which had built its reputa- ing investors with his usual enthusiasm. from the investment community and the
tion on an asset in one of the world’s most viability of copper mining on that belt,”
stable jurisdictions, Western Australia. “It is a process of educating and inform- Simich said. “The beauty for us is that they
ing people and articulating the message in have only one-third of the belt, Mod has
Simich was clear and vociferous in his a simple fashion so they can absorb it,” he the other two-thirds.”
rebuttal of that perception. A month later, said. “People are a bit uninformed about
having begun marketing the deal to in- Africa, a bit uncomfortable. Once they un- All of which suggests T3 – resource:
vestors, he is comfortable the market will derstand it better that will change.” 60.2mt @ 0.98% copper and 13.9 g/t silver
eventually fall in line with Sandfire’s risk with 36.6mt @ 1.14% copper and 15.8 g/t
assessment of T3 and Botswana. Even those Australian investors and silver indicated – should be a shoe-in for
analysts familiar with Botswana are likely development. So, why has Mod not taken
“It is actually all about perception be- to retain some preconceived ideas about on the task itself?
cause every project in the world has some the company’s copper prospects from the
risk attached; whether geological, engi- last Australian company to forge an opera- Hanna points to the harrowing market
neering, permitting or political,” he said. “At tion there. conditions for all junior miners, regardless
DeGrussa [the company’s flagship asset of commodity or jurisdiction.
in WA], the risk is mine life, at Black Butte In the mid-2000s, Discovery Metals was
[its development project in Montana, US] a leader in the burgeoning Australian-Afri- “T3 was only discovered in March 2016.
it is permitting. When people look at T3 can investment scene, building and com- Prior to that Mod had a $5 million market
and Botswana they would assume some missioning the 36,000 tpa copper/1.1 mo- cap,” he said. “It looked like a mine from
sovereign risk but the political environment zpa silver Boseto mine in 2009. In 2012, the first hole and for the first 18 months the
is stable and there is a healthy regulatory/ it rejected an $830 million takeover offer share price was driven by the exploration
permitting framework which is transparent from Chinese firm Cathay Fortune but success and attracted enormous interest.
and well-defined. There are no community less than two years later a bearish copper Reality came after that with the scoping
or First Nation issues and there is huge market conspired with an underperforming study, PFS and BFS and inevitable driving
support from the local community.” plant and poor grade reconciliation to send south of the share price as the question
Boseto into care-and-maintenance. about funding the $250 million market cap
Botswana is widely regarded as Africa’s began to be raised.”
most stable jurisdiction – “Africa for Be- Discovery was eventually wound up
ginners” is the phrase most often used – in June 2015 and its cautionary tale has From there, the company was caught
and Mod managing director Julian Hanna some investors sceptical about the qual- between two strategies; press ahead with
is entirely comfortable with the concept ity of the copper deposits on Botswana’s a $250 million development in a flat market
of building a successful operation in the Kalahari copper belt. or park T3 up and look for further discover-
Southern African country, particularly one ies in its 12,000sq km land package.
as simple as T3. Simich said Sandfire’s deep due dili-
gence efforts had confirmed what Mod’s “Investor sentiment become bipo-
“There is no security risk, it is remark- progress had been suggesting for some lar, which is a common situation in a flat
ably stable and it is easy to get around. At time; T3 is a very different orebody to Bo- market,” Hanna said. “In a booming mar-
the project level it is very flat, open terrain, seto, located 100km north-east along the ket, it wouldn’t have been a problem, we
akin to what we find in Western Australia,” belt. could’ve funded both, but the licence con-
he said. “The geotechnical risk is low on ditions mean we have obligations to meet
the open pit, there is no metallurgical risk “There is a very clear reason for under- on each of the licences and the board de-
and the Ghanzi Highway, which runs right standing what happened,” Hanna said. cided we needed a partner to explore the
through the project, is better than most “They severely underestimated the extent
highways in WA.” of the oxidised and transitional ore zones
so by the time they got to the fresh rock,
it was too late. We are fortunate that the
surface calcrete cap on our ground has
preserved the sulphides close to surface,

Page 38 AUGUST 2019 AUSTRALIA’S PAYDIRT

region and develop T3. multiple recent development experience, a miners,” he said. “Nowhere
“We are happy to be working with Sand- is that clearer than in Lon-
wonderful sales and marketing team and don – the heartbeat of
fire and bring out the best of both teams. copper investment – and
Sandfire is the sort of partner we have the systems and infrastructure needed. We I think those UK Mod
been looking for.” investors are looking
also have relationships with banks, debt upon this as an oppor-
For Sandfire, the acquisition will bring a tunity to be involved
much needed second development option providers, offtakers and marketing groups in an expanding
as DeGrussa mine life continues to shorten mid-cap company.”
and Black Butte appears to be interminably and new projects will benefit immediately
stuck at the permitting stage. – Dominic Piper
from all of that, essentially at zero cost.”
Simich believes the takeover also of-
fers Mod shareholders the best option for If the deal leads to a cheaper develop-
retaining the value which has been built at
T3, the stronger financial position of the es- ment for T3, it could also act as a catalyst
tablished miner allowing for greater funding
flexibility. for Sandfire to enter a different investment

“A capex of $250 million with a market space. The company has watched its do-
cap of $100 million; on that balance sheet
debt doesn’t come free,” he said. “The ore- mestic gold cousins turn into the darlings
body and the commodity price create an
inherent value in the asset, it is then about of the international investment community
how you put it together which decides who
gets the value. By taking it on collectively, off the back of a string of acquisitions and
there is the opportunity to maintain more of
the inherent value.” Simich is now eyeing a similar growth tra-

T3 would also likely benefit from Sand- jectory.
fire’s more extensive corporate infrastruc-
ture. “Sandfire is trying to develop a bigger

“The skills and attributes Sandfire can platform to get into that mid-tier space and
bring means we can move this forward
positively,” Simich said. “Sandfire has a bal- T3 is a great platform to leverage off. It pro-
ance sheet fast approaching $250 million,
vides a very strong foundation block for us

to expand into new markets. Being a multi-

jurisdictional, multi-

mine mid-tier operator

is our aspiration,” he

said.

Hanna has wit-

nessed obvious po-

tential in this regard.

“The five-year

downturn in the cop-

per space has created

a vacuum of mid-tier

Mod has put $40 million into in-ground
exploration programmes in and
around T3

T3 represents one of the few sedimentary-
hosted copper development opportunities

in the world

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 39

COST SAVINGS
VISIBILITY
OPTIMISATION

Johannesburg-based Nucleus Mining & Africa Logistics
is celebrating its 15th anniversary in 2019. From humble
beginnings, the company has grown organically to become
one of the most recognised and respected logistical
solutions providers on the African continent. Since day
one, the focus has always been on improving a customer’s
competitive edge and their bottom line by continuously
adding value wherever possible.

For chief executive Iain Clark, Nucleus has won respect and While Nucleus has traditionally focused on regions it knows well, the
recognition in the industry for maintaining a customer-first company welcomes all opportunities to expand its presence into new
approach over the past 15 years, particular in more recent jurisdictions and its capabilities to new customers.
times when construction and development costs have been “It’s about engaging with the right people in the right areas and where
heavily scrutinised. we don’t have our own people we have got very good partners who
we can work with,” Clark said.
“We’re still a medium-sized business, but we compete in the market “That’s the key to working in Africa, making sure that you have the
with the multinationals for projects, which is a real feather in our cap right people on the ground to give you the relevant feedback on any
that people see us in the same category as those huge multinationals,” potential changes to requirements for importation, for example.
Clark said. “Over the last 18 months, we’ve probably become a lot more reliant
on modern technology in terms of warehousing systems and track-
“There are a number of benefits in dealing with a business of our size. ing interfaces for our customers. We’ve really stepped up our IT side
We are lucky enough that we can make decisions immediately and we which I think is a really important part of where logistics is going.”
don’t have to go through board meetings to get decisions on what we If there is one thing which Clark looks back on with more fondness
can and can’t do. We are still an owner-managed business. than anything else from the last 15 years it is the fact Nucleus has es-
sentially grown from “word of mouth”.
“We engage at all levels with our customers through having open dis- “Often the suppliers and service providers to the mines we deal with
cussions. We like to work very closely with our customers in terms come back to us and ask if we can help them in other areas,” Clark said.
of both pricing and strategy. We don’t have a fixed formula. How we “We have had mostly organic growth from the mines we deal with
put our operations together is based purely on individual projects and where out of 50 different suppliers, many of them come back to us
what their needs are.” seeking help with logistics into Tanzania or elsewhere. I see that as be-
ing quite a positive outcome for our business.
While headquartered in South Africa, Nucleus has offices in Zambia, “We still very much believe in personal relationships. Africa is a big
Mozambique and the DRC where the majority of its business come place and there are many big multinational mining companies and ser-
from. The company specialises in offering logistics solutions services vice providers that operate there, many of whom operate in multiple
for both the construction and operational aspects of a mine. regions and projects. Nucleus offers high service levels and cost effec-
tive logistics solutions.
Earlier this year, Nucleus signed off on a full logistics programme for “Our business has grown substantially by word of mouth and industry
the construction of Alphamin Resources Corp’s Bisie tin mine, north- recommendations and we’re very proud of that.”
eastern DRC. Finalisation of this contract took place while the country
was undergoing major changes in government, including the election Contact us
of a new president.
Stand 208B, Corner Malibongwe Drive
Clark believes the contract was not impacted by the elections due to and Ebsom Ave, Boundary Park, Northriding,
the ground work his company has put in place over several years. Johannesburg
Tel +27 (0)11 0281181
“In many African countries, the lay of the land changes constantly and Email [email protected]
you’ve got to be aware of these situations and how they could poten-
tially affect you and your clients,” Clark said. www.nucleusml.co.za

“We always strive to be ahead of the game. We get involved with pro-
jects sometimes 2-3 years before we start moving anything in country.
That’s why we try to work with our clients to understand their lo-
gistics needs right from day one when they’re still doing exploration
drilling out of small camps.

“So, by the time we’re moving thousands of tonnes into a particular
area, we’ve got the whole route planned, we know the area, we know
who the contacts are in the region and we even have our own logistics
manager out on the ground as well.”

Exposure to a number of logistics projects in key markets appears to
have prepared Nucleus for what has already been a busy year to date.
On top of completing work at Bisie, the company has been pressing
ahead with long-term project contracts and operational mines in the
DRC and moving operational loads into Mozambique via the Balama
graphite mine where required.

Clark is optimistic the company will add further projects to its broad
scope of work over the coming months as sentiment continues to re-
turn to the African resources sector, especially from a construction
perspective.

ADU PREVIEW

Walkabout nears
funding finish line

Walkabout Resources Ltd has been gathering
the kind of market momentum which has
become a rarity for juniors in 2019.

While the majority of the junior sector marketing agreements it is often difficult adds another layer to the growing confi-
has suffered from a general market for developers to prove to financiers their dence within Walkabout that Lindi Jumbo
malaise, Walkabout has shrugged off the project economics are based on some- will be the next graphite project into pro-
lethargy to post a 313% share price rise thing more than ambitious projections. duction. In May, the company announced
since January 1. The company is now Walkabout appears to have achieved it had raised $3.1 million via placement to
capped at $120 million, having seen its this, locking in three binding offtake fund an early start works programme at
share price increase from 9c to as high agreements over output from Lindi Jum- Lindi Jumbo. The early start programme
as 44c in June. In comparison, the ma- bo in April. is intended to have the project shovel-
jority of its peers have struggled to post ready as soon as financing is settled.
gains as investors continue to steer clear In April, Walkabout struck binding
of smaller resources companies. offtake agreements with expandable “The early-start programme has started
graphite producer Inner Mongolia Qianx- with our local Tanzanian mining contractor
Even more impressive is that Walka- in Graphite Co Ltd (for up to 50% of beginningearthworksontheroad,plantsite
bout has achieved its price rise based on planned production) and graphite prod- andtailingsfacility,”Mulligansaid.“Doingthis
its flagship Lindi Jumbo graphite project ucts manufacturer Qingdao Risingdawn ticks a number of boxes. It means we are
in Tanzania, both a commodity and juris- Graphite Technology Co. Ltd (25% an- thefirstASX-listedcompany[inTanzania]to
diction which have been on the nose in nual production). start on-site works, it has validated the min-
recent times. ing licence in the eyes of the Ministry and
These offtake deals were followed by theMineralsCommissionandithasallowed
Executive director Allan Mulligan told a sales, purchase and marketing agree- ourselves, the community and the contrac-
Paydirt Walkabout’s 2019 performance ments with Hong Kong trading house tortolearnaboutoperationsandreducethe
was testament to the perseverance of Wogen Pacific Ltd for 10-30,000 tpa of amount of chaos and resolve any niggling
both management and shareholders. graphite concentrate from Lindi Jumbo. issues well before the start of actual con-
struction.”
“We believe the market has seen the Under the multilayered agreement,
value in Walkabout because we’ve main- Wogen will make an advanced payment In China, the early-start work includes
tained our strategy of high-grade, re- worth 80% of the value of each consign- Yantai Jinpeng Mining and Machinery CO.
duced risk, premium products from the ment on receipt of shipping documents. Pty Ltd starting primary and long lead
beginning,” Mulligan said. “We have also equipment procurement and manufacture
achieved what we said we would – al- Mulligan said the Wogen deal would for a $US500,000 down payment.
though there have been delays such as not only reduce supply chain cash-flow
the mining licence – and, the signing of risk but also open Walkabout up to the “Jinpeng is getting that procurement
the binding offtake agreements is evi- trader’s international marketing net- and manufacturing of the key plant
dence that the revenue model [with the works. equipment such as the major compo-
price structuring in the offtake] is now nents of the mills and the flotation cells,”
real.” “The agreement allows us to utilise all Mulligan said. “We have sent an engi-
of their marketing facilities; from ware- neer and metallurgist to project man-
In a sector ruled by multiple product houses to their marketing team, which age that in China. So, while we wait for
lines, opaque pricing and confidential will be a huge benefit for us.”
continued on page 44
Page 42 AUGUST 2019 AUSTRALIA’S PAYDIRT Access to a graphite marketing team

“Our promise is about developing
smart blasting solutions through
engaging with our customers and

understanding their needs.

This is how we deliver
Intelligent Blasting.”

Edwin Ludick

AEL Managing Director

AEL Intelligent Blasting

Tel: +61 7 322 101 68
www.aelworld.com

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 43

adu preview

funding negotiatons and processes to uity component of some sort. The split Strandline announced it had signed a
be worked through, we are getting a will depend on the negotiated outcome term sheet for a $US26 million finance
huge advantage on the long-lead items. which is a function of the due diligence.” facility with Nedbank CIB.

“There is no long-term risk in doing this While technical and commercial as- “The securing of debt finance by Stran-
work. If there is a fatal flaw in the market pects appear in hand, the legal aspects dline from an African bank is a huge
which forces the project to be put on hold of the due diligence may take longer to breakthrough for the aspiring industry
– such as an international market event satisfy lenders. over there,” Mulligan said.
– these things will be just parked up. It
is not like we would’ve started full con- “The legal aspects run across three The fallout from the Acacia affair has
struction and committed huge amounts jurisdictions and because of Tanzania’s been a new Mining Act in Tanzania which
of capital.” recent history it has the potential to be requires both 5% local ownership and a
the longest lead time,” Mulligan said. 16% free-carried interest for the Govern-
Walkabout has stated its intentions ment.
of financing Lindi Jumbo’s build via a Tanzania’s standing among interna-
high-yield short-term debt instrument. tional mining investors has taken a beat- Walkabout sees neither stipulation as
Its intentions are to issue a quasi-debt ing in recent years thanks to its long- a fundamental game-changer for Lindi
instrument to wholesale and sophisti- running dispute with Acacia Mining plc Jumbo and has taken the climate of
cated investor and shareholder groups, but Mulligan said Walkabout’s in-country change to set the terms of its working re-
secured by the mineral asset, and re- experience was very different to market lationship with the Government.
deemed through equity conversions or perceptions.
repayment. A second option is to secure “When working in Africa you have to
high-yield short-term debt by one or “The comment we receive from gov- strive to be African. We have set Lindi
more institutions under similar terms. ernment is that they are all systems go Jumbo up as a standalone Tanzanian
and are fully behind the project,” he said. company through which all relationships
“Funding discussions are well under “They visited the site recently and were – including marketing – go through,”
way and we are in deep due diligence impressed by the work and encouraged Mulligan said. “There is a single umbili-
now on commercial, technical and legal us to move as quickly as possible. We cal cord back to Walkabout in Australia
terms across Australia, Tanzania and also enjoy a positive and constructive which is used for funding and the repatri-
China,” Mulligan said. working environment with them.” ation of funds. We use local banks, local
law firms and our insurance is through
“We want to maximise the non-bank Mulligan also gleaned assurance from local firms.
debt to reduce the equity by as much as Strandline Resources Ltd’s ability to se-
possible, although there will be an eq- cure debt finance for its Fungoni min- “On the 5% local content requirement
eral sands project in Tanzania. In June, we have written to the minister and asked

Walkabout’s focus on low-risk development has placed it at the front
of the graphite queue

Page 44 AUGUST 2019 AUSTRALIA’S PAYDIRT

Walkabout’s investment ensures Lindi Jumbo operates as standalone Tanzanian company

to set up a village trust, to be managed by graphite companies can avoid. The ASX- through its current challenges but said
the village elders, a company represent- listed miner is both a role model and ele- there was little to compare between the
ative and a local councillor while for the phant in the room for other developers as massive Balama operation (245,000 tpa
free-carried interest we are in the pro- it highlights opportunities and downside graphite concentrate in 2019) and Lindi
cess of executing shareholder approval risk at play in the sector. Jumbo (40,000 tpa forecast production).
to put in place a new class of share, en-
titling the Government to dividends when Syrah’s Balama mine in Mozambique “Due to the high-grade nature of our
applicable.” was the first of a new generation of project, the mining risk is negligible but
graphite mines to hit the market however there is always marketing and process-
While Walkabout is travelling serenely, it has since struggled to live up to expec- ing risk,” he said. “We believe we have
the wider graphite development sector tations with ramp-up and customer prob- engineered the processing risk out of the
continues to face choppy waters. Howev- lems slowing its progress. project and we believe we are mitigat-
er, Mulligan sees positives on the horizon ing the marketing risk by extending the
for Walkabout and its peers. Mulligan is hopeful Syrah will come
marketing beyond our current
“We believe graphite will have another offtake agreements.
price run, subject to increased demand
and limited supply in certain categories,” “We have expanded our
he said. “The large volumes out of Syrah marketing exposure by dis-
[Resources Ltd] in Mozambique are af- cussing future expansion with
fecting certain categories and putting different groups and we have
the squeeze on certain Chinese produc- a scoping study ongoing for
ers. The swing of China from exporter to downstream processing once
importer is a result not only of Syrah’s we are settled into operations.
impact on the market but also domestic If you have offtake locked in
supply issues. as we have, it gives you op-
portunity to become a genu-
“We believe the growth in batteries will ine swing supplier to other
draw supply from other areas, creating customers.
demand in the traditional markets. Cur-
rently, 25% of our production will be suit- “It is quite clear the US will
able for the battery market but we would come aggressively into the
like to reduce our reliance on that market graphite market. No one has
because we believe it will suffer some foreseen that dimension yet
price movements. In the traditional and but there is a lot of opportunity
new era segments of the market, particu- to be an international supplier
larly expandable graphite and fire retard- of graphite as opposed to only
ants, we see very strong demand.” supplying the Asian market.”

The reference to Syrah is one few – Dominic Piper

AUSTRALIA’S PAYDIRT AUGUST 2019 Page 45

The Cardinal continues to soar

Kudos continues to come for Cardinal The life-of-mine at Namdini is currently 14 years
Resources Ltd’s Namdini gold project and is scheduled to produce an average 294,000
in Ghana’s Bolgatanga region. oz each year @ 1.14 g/t gold at AISC of $US769/
oz, with estimated development costs of $US414
Recognised in March with the 2019 Thayer million.
Lindsley Award by the Prospectors and De-
velopers Association of Canada (PDAC) for A pre-tax cash flow of $US1.4 billion, post-tax NPV
the Namdini discovery in 2014, interest in (5% discount) of $US586 million and post-tax IRR
Cardinal has increased. of 38% were other highlights of the Namdini PFS,
which took in the an ore reserve of 4.76 moz gold
The company is on the cusp of producing a from 129.6mt @ 1.14 g/t gold (0.5 g/t cut-off).
feasibility study on Namdini, which is poised
to demonstrate why the 7 moz gold project In addition to an increase in ore reserves follow-
is currently one of the best in West Africa. ing the PFS, positive project enhancements at
Namdini include leach recovery results from the
Since the PFS, circumstances in the gold AachenTM pilot-scale test work indicating potential
sector have changed, most notably the improvements to the overall economics.
price of gold which was trading at $US1,425/
oz at the time of print, Cardinal has also in- Subject to material gains from using the AachenTM
creased ore reserves at Namdini from an process, Cardinal will include it into the process
initial 4.76 moz to 5.1 moz. flowsheet and in the Namdini feasibility study.

Cardinal’s PFS on Namdini assumed a gold Maelgwyn Mineral Services (MMS) Africa, Gold
price of $US1,250/oz, with the company Process & Environment Manager Peter Lotz
choosing the option of a 9.5 mtpa project said:
producing 907,000oz @ 1.31 g/t gold from
starter pit operations estimated to span
some 2.5 years.

“Our AachenTM process is currently de- Schultz’s appointment followed the ad- “We are positioning to go down the build
ployed at nine different mine sites in six dition of Kenneth Thomas as a non-ex- path. We are more than happy to consider
countries, having served for more than 10 ecutive director at Cardinal late last year. partnerships or funding alternatives but all
years at one of the largest bullion produc- Thomas is also a non-executive at Conti- decisions will be made in the best interests
ers within the African continent,” nental Gold Corp and was formerly senior of our shareholders,” he said.
vice president at Barrick.
“We’ve seen our process increase gold re- “We can’t stand still and wait, particularly
coveries to between 2% and 19% in gold The inclusion of directors with big compa- not with a project of this scale and our fo-
producing operations. ny experience allows Cardinal to provide cus is on de-risking the project in all re-
prospective financiers with a level of com- spects with a view to proceeding as soon
“Randgold Resources [now Barrick Gold fort that it is equipped to make the conver- as we can,” said Mr Koimtsidis.
Corp], a major client of MMS, is using sion from explorer to developer.
AachenTM equipment at its Lulo and Morila Namdini is a standout gold project glob-
mines in Mali, at its Tongon operation in London-based project finance advisor ally, in its current state, however, Koimtsi-
Cote d’Ivoire, and at the Kibali gold mine in Cutfield Freeman has been engaged by dis is certain that Cardinal is just starting
the Democratic Republic of Congo. Cardinal to handle funding affairs for Nam- to demonstrate the regional potential that
dini, with indicative term sheets received it has.
“We look forward to our continuing work from banks and other potential suitors be-
with Cardinal in this regard.” ing assessed. “Ndongo East is taking shape and what is
interesting is that there is a 7km-long zone
Lycopodium Ltd is engaged in the process “There is nothing else in the market at the that we have only just begun to explore,”
flowsheet design at Namdini, which could moment of this magnitude. Koimtsidis said of the prospect which is
now feature the AachenTM process, Cardi- 24km trucking distance from Namdini.
nal managing director Archie Koimtsidis “We have people on the ground ready to
said. start work, but I am not sure how long it “There is potential for satellite pits that can
will take after the DFS is released [for add grade and ounces to the outstanding
“We are looking forward to Namdini be- project financing to be triggered], how Namdini project.
coming a mine with improved econom- -ever, I’d like to think something will close
ics using this AachenTM process, which is by the end of the year,” Koimtsidis said. “We’re on the hunt for more ounces from
used by global multinationals.” satellite resources, given that we have
found 15 years’ worth of gold produc-
Cardinal is building a team capable of tion from one single open pit at Nam-
delivering production at Namdini, with dini,” he said.
the likes of Trevor Schultz, formerly chief
operating officer at Ashanti Ltd and execu-
tive director at Centamin (Egypt) plc, join-
ing as a non-executive director in January.

Latest hits from diamond drilling
at Ndongo East

5.3m @ 13.9 g/t from 78m 2.7m @ 7.7 g/t from 19m
5.5m @ 3.8 g/t from 31m 2m @ 18.3 g/t from 59m
3.7m @ 3.3 g/t from 59m

Previously reported gold intersections

14m @ 7 g/t from 69m 6m @ 12.6 g/t from 2m
9m @ 23.3 g/t from 60m 5.2m @ 4.5 g/t from 60m
8.3m @ 11.3 g/t from 76m 3m @ 29.3 g/t 45m
7m @ 4.4 g/t from 14m

cardinalresources.com.au AUSTRALIA OFFICE GHANA OFFICE
Suite 1, 28 Ord Street,West Perth, WA 6005 Durugu Residential Area, Kumbosco,
PO Box 829, West Perth, WA, 6872 Australia Bolgatanga
+ 61 8 6558 0573 PO Box 350, Bolgatanga, Ghana
[email protected] Tel: + 233 382 021 838
[email protected]

ADU PREVIEW

Swiss refiner walks away
from artisinal supply

Switzerland’s Metalor, one of the after having already announced its de- Gold from artisanal mines and collec-
world’s biggest gold refineries, has cision to stop any business relationship tors accounted for less than 5% of this,
said it would work only with gold from with collectors/aggregators of gold dore he added.
large industrial mines in order to reduce in Peru.”
the risk of illegality in its supply chain. Metalor stopped working with artisan-
Gold dore is non-refined mined gold. ally-mined gold from Africa in 2015. It
Metalor said it would stop working with Most large refiners that supply gold to said it had not been using artisanal gold
artisanal mines or collectors and aggre- major Western banks, central banks and from any countries other than Colombia
gators – companies which collect and re- jewellers are wary of taking gold from ar- and Peru.
sell gold from artisanal mines – because tisanal mines, leaving them to find other
of the difficulty of ascertaining the mines’ buyers. A Reuters investigation in April Metalor is one of four large refineries
legality and the origin of the gold. found that gold worth billions of dollars that together refine around 2,500 tpa of
was being smuggled from Africa to the gold a year in Switzerland which data
“The increasing resources to secure United Arab Emirates, a gateway to oth- from the United States Geological Sur-
compliance and the challenging condi- er global markets. vey shows is worth more than $US100
tions at the mining regions have forced Metalor processes around 500 tpa billion at today’s prices and equal to
Metalor to reassess its approach to arti- of gold at refineries in Switzerland, the around 60% of the world’s annual supply
sanal mining,” Metalor said. United States and Asia, its chief execu- of gold.
tive Antoine de Montmollin told Reuters.
“As a result of this decision, Metalor – Peter Hobson, Reuters
will cease its operations in Colombia,

• African Gold (ASX:A1G) newly listed on the ASX in 2019.
• A proven Board & Management team with a track record of major discoveries

and creating shareholder wealth.
• Strong financial backing.
• Highly prospective tenement portfolio targeting gold adjacent to world class

mines in both Cote D’Ivoire & Mali, West Africa.

+61 8 6166 9161 ASX: A1G
[email protected]
www.african-gold.com

Page 48 AUGUST 2019 AUSTRALIA’S PAYDIRT



ADU PREVIEW

Resolute on
automated high

Resolute has doubled levels of female participation in the Syama
workforce, including recruitment of two senior managers

Life is pretty good for Resolute Mining ing more than 80% of nameplate capac- with double pike and deliver Syama under-
Ltd chief John Welborn at the moment ity. Mining rates were expected to reach ground. So, it has been really pleasing the
thanks to an innovative new gold mine nearly 600,000t for the June quarter with team has been able to do that.”
start-up, a big reserve increase and a soar- ore hauled to the ROM pad set to total
ing share price. 320,000t, more than double the March There is still some way to go before Res-
quarter figure. The company put the im- olute’s vision for a fully automated mine is
“We are an overnight success which provement down to the successful devel- delivered – Syama will process 2.4 mtpa
has been years in the making,” managing opment of additional production stopes and produce more than 300,000 ozpa at
director Welborn told Paydirt last month. which allowed the number of active stopes full capacity – but Welborn is happy with
to be increased from six to 12. the progress to date.
If the share price is the ultimate objec-
tive judgement of a company’s health, Welborn said it was a significant achieve- “We are already seeing the benefits of
Resolute is positively glowing at the mo- ment for the company on a mine which is automation in the mine,” he said. “A man-
ment. On the ASX, Resolute shares are up breaking new technological ground. Sy- ual driller can actually outperform an au-
55% in 2019, 77% since the start of June ama is the world’s first fully-automated un- tomated rig in terms of speed but that is
alone. Welborn lays the market perfor- derground gold mine. at the expense of accuracy and efficiency
mance squarely at the feet of the opera- so we are now seeing improvements in the
tions team which has delivered the Syama “It is a major event for us and the market drilling productivity. We will see the full pro-
underground development in Mali. has reacted accordingly,” Welborn said. ductivity benefits when the fully automated
“The share price was going sideways for fleet of loading and hauling is rolled out by
The company declared commercial a few years while the market waited to see the end of the year.
production at Syama underground on if we could achieve our triple somersault
June 27 with mine and haul rates reach- “The proof will be when we get those

The new control room at Resolute’s fully automated Syama underground gold mine in Mali John Welborn
Page 50 AUGUST 2019 AUSTRALIA’S PAYDIRT