pd269-Mar19-magweb

The charismatic Ramaphosa’s presence at the conference – the first by a sitting South African head of state – reflected a
new level of engagement between government and industry

worked in the industry – admitted during Ramaphosa said his Government under- and give responsibility to each appropriate
his opening address to the conference the stood investors’ concerns. entity,” he said. “This will also enable Es-
Government “must work harder to do bet- kom to be able to raise funding for its vari-
ter” in attracting investment. “At times we only half listened, now you ous operations much easily from funders
have our undivided attention,” he said. and the market. Of particular and imme-
“We have finalised the Mining Charter “We have further recognised the chal- diate importance is the entity to manage
and…the legislation is in line with the ex- lenges raised with us by investors, among an independent state-owned transmission
pectations of investors,” Mantashe said. other things, port, rail and electricity tariffs, grid combined with the systems operator
“Given investment and regulatory policy as well as infrastructure bottlenecks.” and power planning, procurement and
certainty, we need to invite investors to buying functions.
come to South Africa.” Chief among the uncertainties around
infrastructure is the future of state power “Restoring and securing energy security
Mantahse has also been mandated to company Eskom which has been crippled for the country is an absolute imperative.”
clear his department of corruption. A task- by operational, financial and structural
force set up early last year has already missteps. Minerals Council South Africa wel-
closed two provincial department offices comed Ramaphosa’s comments on Es-
rife with corrupt practices, Limpopo and “Eskom’s contribution to the health of kom and the country’s other infrastructure
Mpumalanga, and is pressing for prosecu- our economy is too great for it to be al- challenges.
tion of officials. lowed to fail. It is too important and is too
big to fail. And we will not allow it to fail,” Council chief executive Roger Baxter
“We had a number of problems with li- Ramaphosa said. reinforced the President’s message of the
cences but we are working hard and pay- need for consultation and communication.
ing attention to individual provinces and Two days later during his State of the
I can assure investors we are now well Nation address, also in Cape Town, he “We have engaged extensively with
equipped,” he said announced the group would be split into government and other stakeholders on
three separate entities around generation, the challenges that have prevented min-
On the power and infrastructure prob- transmission and distribution. ing from reaching its true potential,” Baxter
lems which also plague the industry, said. “A collaborative approach is needed
“This will ensure that we isolate costs

AUSTRALIA’S PAYDIRT MARCH 2019 Page 51

INDABA REVIEW We don’t want to meet you in the court room
but in your boardroom or in the Minister of
to develop and implement solutions that
will see our industry grow and thrive in the “Mineral Resources’ office. The days of conflict
future for the benefit of all. We need to get should belong to the past.
investment back in mining. We, as the in- down from more than 80,000 five years replacing people with machines – but fun-
dustry, are fully committed to play our part.” previously – sees innovation as an opportu- damentally to improve efficiency, guaran-
nity for job creation rather than elimination. tee safety, produce a skilled workforce and,
The Mining Indaba also offered evidence most importantly, preserve jobs.”
that international investors are warming to “We can do much better with our assets,”
this new united approach. he said. “We have to make sure we are get- Ramaphosa also moved to ease foreign
ting the best out of our assets. If we do that, investor concerns about security of owner-
Speaking during a panel discussion in- we can build the employment base. The ship. Comments made early in his presi-
volving Minister Mantashe, Cheryl Carolus Fourth Industrial Revolution will change dency about the potential expropriation
(Gold Fields Ltd) and Mark Cutifani (Anglo that.” of land created mild panic in international
American plc), Investec Asset Manage- investment circles with fears South Africa
ment portfolio manager George Cheveley Minister Mantashe also welcomed the would head down a similar path to Zimba-
said his firm had taken note of the changes application of new technologies to the in- bwe.
and improving investment climate in South dustry but reminded companies that its em-
Africa. ployees were integral to their success. “Understandably, concern has been
raised about the proposal for the expropria-
“There are attractive things in South Af- “This is not about destroying jobs, it is tion without compensation,” he said. “Inves-
rica but we still need to see more consul- about creating new jobs,” the former mine- tors need not fear that their investments
tation,” he said. “It needs time and stability. worker said. “The industry must appreciate and assets will be taken away from them.
We want to see stable regulations.” that mining is not about rocks but about We must emphasise that our approach will
people. There is a joint responsibility. Gov- enhance, rather than undermine, property
Anglo American chief executive Cuti- ernment must generate the skills but we rights…the measure we are proposing will
fani said the progress made on the Mining have to talk to industry to know what the apply to land for the purposes of land re-
Charter and other policies in the last 12 relevant skills are and create the worker of form only, and within a clearly defined set of
months had been “very encouraging” but the future.” circumstances. This measure will be under-
urged the Government to continue wooing taken in a way that…does not undermine
investors. Gold Fields chairperson Carolus urged the principles of our Constitution or the rule
mineworkers and their unions to join in the of law.
“[We have] to make sure we make South debate.
Africa an attractive place for their capital,” “We must applaud those mining compa-
he said. “We need to make sure infrastruc- “I appeal to labour – I would like us to get nies that own surplus land they do not use
ture is world-class and cost competitive.” back to the days of collaboration,” she said. and have indicated to us that they are will-
ing to give away their land for housing to
Cutifani also addressed the increasingly Ramaphosa echoed Cutifani’s sentiment local government or for farming to various
debated issue of technological develop- about the future of mining in South Africa. communities.”
ment in the mining sector. As the industry
continues to shed jobs, unions are ramping “The Fourth Industrial Revolution is not – Dominic Piper
up their concerns about what automation about replacing people with machinery,”
and digitisation could mean for their mem- he said. “I am encouraged by some of our
bers. mining houses that are already making use
of technology – no longer for purposes of
Cutifani – whose company employed
52,000 people in South Africa in 2017,

Mark Cutifani (far left), Gwede Mantashe (centre), Cheryl Carolus (second right) and George Cheveley
(far right) joined moderator Iman Rappetti to debate the future of South African mining

Page 52 MARCH 2019 AUSTRALIA’S PAYDIRT

Eskom stability a priority: South 32

South African President Cyril component of a long-term re-industriali- communities and employees to share
Ramaphosa’s plan to split power util-
ity Eskom into three key divisions is cer- sation of South Africa that can boost jobs in the value generated by the business
tain to be welcomed by one of its biggest
coal suppliers. and business opportunities. However, – in keeping with the spirit of the Mining

Addressing delegates on the opening the price of electricity is a key factor in Charter.”
day of Mining Indaba, South32 Ltd chief
operating officer Mike Fraser expressed South Africa’s ability to compete for in- – Michael Washbourne
concern that Eskom’s ongoing chal- vestment in industrial development.”
lenges had “increasingly threatened the
sustainability of its business”, thus also Fraser welcomed suggestions that an
hindering South Africa’s ability to attract
much-needed foreign investment. industrial tariff could boost efforts to at-

Three days later, Ramaphosa an- tract foreign investment, but warned it
nounced Eskom would be split into three
separate entities around generation, must be designed and implemented with
transmission and distribution.
that goal in mind.
Fraser did not hold back in calling for
change within Eskom during his 15-min- “It is imperative that this tariff reform
ute speech to the conference.
takes place urgently to protect industry in
“South Africa’s future economic growth
and the fulfilment of its development aims the near term,” he said.
are inextricably linked to the sustainabil-
ity of Eskom – but Eskom’s current situ- “Over the longer term, Eskom needs
ation is the single biggest risk to South
Africa’s economy,” he said. a business model which will retain key

“When compared to other countries, industrial customers, who are already
the cost of power weighs on South Afri-
ca’s bid to increase foreign direct invest- large domestic employers, while also
ment and impacts existing industry.
supporting South Africa’s competitive-
“The current scenario risks a down-
ward trend in the proportion of electricity ness on the global stage.
sales derived from industrial customers
– a reduction that Eskom cannot afford “Eskom is the engine of South Africa’s
and that increases the likelihood of fur-
ther tariff hikes for all. economic growth; a robust national pow-

“These consequences can jeopardise er utility that is sustainable over the long
South Africa’s economy, reduce enter-
prise development and slow the creation term will benefit everyone.”
of jobs.”
South32’s decision to run SAEC as a
South32 is both a major supplier and
customer of Eskom via its South Africa standalone business will deliver about Mike Fraser
Energy Coal (SAEC) operations, which $US50 million of annual cost savings to
became a standalone business within
the group last April. the company, ac-

In FY2018, 85% of South32’s $US20 cording to Fraser,
million investment in community projects
was spent in South Africa. who added the

Fraser said the break-up of Eskom impending owner-
would ensure “appropriate management
focus” in each of its core areas, calling on ship restructure
the utility to urgently address overstaffing
and skills shortage issues. would likely trigger

“Urgent action on stabilising Eskom further benefits for
can help minimise interruptions to cus-
tomers while avoiding tariff hikes, which both the group and
is key to ensuring industry remains com-
petitive and continues to employ millions South Africa.
of South Africans,” he said.
“Our inten-
“The Government has focused on in-
creasing foreign investment as a key tion is that SAEC
becomes black-

Exploring together for successowned and oper-

ated, as we believe

this will best sup-

port the long-term

sustainability of the

business while also

supporting South

Africa’s transfor-

mation agenda,”

Fraser said.

“Divesting our

thermal coal posi-

tion in South Africa

to a black-owned

business will en-

able SAEC to more

effectively compete

for new supply con-

tracts and mining 29a Clayton St, Bellevue WA 6056
rights. We are also www.bostech.com.au 08 9250 4252
working to define

a mechanism for

AUSTRALIA’S PAYDIRT MARCH 2019 Page 53

INDABA REVIEW

Friedland plates up copper feast

Robert Friedland’s Ivanhoe Mines Ltd Mineralisation is reportedly within Robert Friedland
plans to develop the world’s second 190m of surface.
largest copper mine in the DRC. meet future projected demand; we are
The drill hole in question is just 18km definitely going into deficit,” he said.
During his keynote address to Mining north of the initial mine development
Indaba last month, Friedland unveiled area at Kamoa-Kakula and only 8km “My grandson and every kid in Africa
Ivanhoe’s staged development strat- from Kansoko. and every kid in the emerging world is
egy to transform its high-grade Kamoa- going to need to breathe fresh air and
Kakula project into a 700,000 tpa copper “This is the world’s best copper discov- to do that they need copper, they need
operation, second only to Escondida in ery, make no mistake,” Friedland said. zinc, they need platinum to enjoy a good
Chile as the world’s largest producer of lifestyle.
the red metal. “Don’t think we’re getting to the end of
this discovery process, it’s actually just “We are the miners and the world
Ivanhoe initially plans to build a 6 mtpa getting started. There is no end in sight to needs us now. We are part of the solu-
operation at Kakula which, according to the 50mt of copper we’ve already found. tion, not part of a problem.”
a PFS, will require $US1.1 billion of de- On that western foreland, there’s vast ar-
velopment capital. Production over the eas of copper yet to be discovered. We’re Friedland also used his time at the lec-
estimated 25-year mine life is set to yield going to find and develop the copper the tern to pay tribute to newly elected DRC
a post-tax NPV of $US5.4 billion and an world desperately needs.” President Felix Tshisekedi, who suc-
IRR of 47%. ceeded the long-serving Joseph Kabila
Attending his 25th Mining Indaba, earlier this year.
Stage one operations at Kakula will re- Friedland unashamedly went through
portedly average 6.8% copper over the the same global health problems and “Felix has said some really good
first five years, with mine-site cash costs how and where the mining industry could things, I’ve studied his words and his
of $US0.43/lb. make a difference. This included yet speech, he’s talked about really, really
another explanation on why the world good things,” Friedland said
Ivanhoe intends to use the cash gen- needs more copper.
erated from those operations to develop “I couldn’t possibly be more optimistic
two more 6 mtpa mines at Kansoko and “Our industry is facing a crisis for about the positive winds of change that
Kakula West, as well as its own direct- copper metal in the next decade…not will come under his presidency.”
to-blister smelter. Preliminary econom- enough copper is being discovered to
ics indicate the expanded 18 mtpa pro- – Michael Washbourne
duction rate will yield a post-tax NPV of
$US10 billion and an IRR of 41%.

“The mine will generate an enormous
amount of cash to finance its own expan-
sion,” Friedland said.

“The first starter mine can finance the
second mine, and the third mine, and the
smelter, and become the second largest
copper mine in the world for a total in-
vestment of $US1.1 billion. That is mind-
boggling, we’ve never seen anything like
that before.”

Friedland said development of Kamoa-
Kakula would transform the Katanga
province which hosts the project into “the
place where the world’s investors will
flock”.

“Kamoa-Kakula is officially among
the world’s 10 largest copper deposits,
but has the highest grade of all of them,
there’s nothing that even comes close,”
Friedland said.

The PFS comes less than three years
after the Kakula deposit was discovered
by Ivanhoe, and only one week after the
company reported the thickest, highest
grade copper intersection drilled to date
on its mining licence.

Drill hole DD1450 returned an unprec-
edented intercept of 22.3m @ 13.05%
copper, as well as multiple 1m intersec-
tions with copper grades higher than
20%, including one hit of 40%.

Page 54 MARCH 2019 AUSTRALIA’S PAYDIRT

4 - 6 September 2019
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AUSTRALIA’S PAYDIRT MARCH 2019 Page 55

INDABA REVIEW

Ghana urges more equitable
mining shares

Ghana President Nana Afuko-Addo

Ghanaian President Nana Afuko-Addo as a high risk, politically unstable place yers, accountants and engineers to ne-
has urged the mining sector to re- to do business.” gotiate business deals in a transparent
dress centuries of exploitation and work and honest manner,” he said. “We must
with African governments and communi- Ghana has toyed with changing its strike deals that are fair to both sides and
ties to build more equitable contracts and mineral policy and lifting royalty and tax ensure the African people that they are
fiscal regimes. rates several times in recent years and no longer being unfairly treated.”
while steering clear of making any de-
The first ever African head of state to finitive policy announcements, Afuko- Both government and industry face a
address the conference (he beat South Addo’s address did confirm the Govern- trust deficit in Africa, one which Afuko-
African President Cyril Ramaphosa to ment would continue to push for greater Addo said needed to be eliminated. In
the stage by five hours), Afuko-Addo laid involvement in the sector. striking mining agreements, he said,
out a vision for African mining which in- governments and companies should pur-
cluded fairer tax and investment terms, “I believe we’ve come of age and be- sue transparent, accessible and easily
room for local capital to invest and allow- lieve we should not have to give tax and understood negotiations.
ances for downstream value-addition. royalty incentives and mining companies
shouldn’t expect to make extraordinary “Governments and companies have to
“There is no question that African profits on our continent,” he said. “We work hard to gain the trust of the people.
countries have not always done well in are realistic enough to know that com- Communities should be able to examine
negotiations with companies,” Afuko- panies must make their profit but we mining contracts, find out how much rev-
Addo said. “We’ve been handicapped want to work with them under the normal enue has been generated and see what
in our negotiations with the big mining conditions which occur elsewhere in the it is being spent on,” he said.
companies by political instability, bad world.”
reputations and sometimes incompetent Achieving equitable contracts and fis-
or corrupt representatives negotiating on Much of the problem stems from a lack cal regimes would also ensure mining
our behalf. of experience with African governments communities are better compensated
unable to call upon negotiators of a simi- for their wealth generation, according to
“Today, we are a more politically sta- lar calibre to those representing compa- Afuko-Addo.
ble continent and more committed to nies. Afuko-Addo said this was a prob-
rules of law. And thus mining companies lem which needed addressing. “The distressed state of communities
shouldn’t sink to the perception of Africa in which companies operate is nothing
“Africa needs its own smart, tough law- short of a disgrace and we must work to

Page 56 MARCH 2019 AUSTRALIA’S PAYDIRT

change the situation,” Afuko-Addo said. said at the opening ceremony. “The days ticipating in downstream value-addition.
“Why does Obuasi [the town in Ghana of forceful encroachment on the conces- “We cannot and should not continue to
which hosts the namesake gold mine] not sion of the company, as witnessed be-
look like the place from which hundreds tween 2010 and 2016, are over.” be merely exporters of raw materials,” he
of millions of dollars has been made? It said. “The value chain of mineral extrac-
should be the most beautiful city in Gha- The invasion of ‘galamasy’ miners tion has great potential for transformation
na but it is far from it. It is my hope and at Obuasi is indicative of the problems around the continent.”
expectation that this time around, the Ghana faces in stemming illegal activity
development of Obuasi will reflect the in its goldfields. Ghana is leading the way with the
wealth the mine produces.” establishment of state corporations for
“Time was that it [small-scale mining] aluminium and steel as it looks to exploit
Obuasi looms as a test case for the was undertaken by individuals in the lo- its long dormant bauxite and iron ore re-
future of the gold sector in Ghana. Mine cal communities and had a romantic serves.
owner AngloGold Ashanti Ltd recently re- sense to it as young people tried their
turned to the operation after a five-year hand at it before moving onto their main Beneficiation has often proven a step
absence. During that time, illegal miners professions,” Afuko-Addo said of illegal too far on the African continent where
overran the mine, forcing the company mining activity. “Now, they are large op- affordable, reliable power is scarce and
to abandon restart plans. AngloGold erations with sophisticated equipment labour skills inadequate. However, Afu-
Ashanti was left bereft of ideas as crimi- which are run by foreign-controlled crimi- ko-Addo believes demographics are be-
nal elements took hold and the Ghanaian nal syndicates.” ginning to provide a solution to the latter
Government appeared powerless to stop problem.
the illegal activity. Afuko-Addo’s government enforced a
two-year ban on small-scale mining from “I want to remind you there are riches
The company is spending $US550 mil- 2017 in an effort to clean up the sector, on the top of the lands also in the form
lion on the mine’s redevelopment which both socially and environmentally. of a young, vibrant, dynamic population
will see 400-450,000 ozpa gold pro- anxious to work and who with the requi-
duced over a 20-year mine life. “We have trained some miners in re- site skills represent an extremely positive
sponsible mining and found alternative factor in the rapid development of the
Afuko-Addo reopened Obuasi in Janu- sources of income for those involved in continent,” he said.
ary, saying during his address that his illegal mining,” he said. “Our efforts are
Government would not be as rapacious beginning to yield dividends. Some of our “Africa had made the world rich with
as predecessors who had played their heavily polluted rivers are showing signs our minerals. It is time for Africa to be
own part in the closure of the mine in of being restored to health and recently prosperous and enable her people to
2014. there was a lot of excitement when fish attain a dignified standard of living. The
were seen again after many years.” people of Africa do not have to be poor
“I assure management and staff of the for others to be rich.”
mine that the sequence of events that led Afuko-Addo also addressed the issue
to the closure of the mine will not recur of beneficiation, another hot topic for – Dominic Piper
under the watch of this government,” he African governments and communities,
saying African countries should be par-

AngloGold Ashanti reopened the Obuasi gold mine in Ghana, five years after suspending operations

“Time was that it [small-scale mining] was undertaken by individuals in the
local communities… Now, they are large operations with sophisticated
equipment which are run by foreign-controlled criminal syndicates.”
AUSTRALIA’S PAYDIRT MARCH 2019 Page 57

INDABA REVIEW

AngloGold to open up
on exploration

“Obuasi is a big chunky
mine that delivers year
after year and it will be coming

on line and on budget and is
the priority this year.

One of the priorities for Kevin Dush- The company may also be able to ap- property, with military personnel called to
nisky during his term as AngloGold proach exploration more freely in the site to protect AngloGold employees in
Ashanti Ltd chief executive is to commu- near future, given the hefty commitment early 2016.
nicate the company’s exploration strategy of $US60 million a year spent on having
and plans better. Obuasi on care-and-maintenance for no “Stakeholder engagement is really key
return since 2016 is over. to the success of this asset,” Dushnisky
“Our objective is to have more transpar- said.
ency, provide updates on a more regular After a protracted approvals process,
basis and [show] the progress on our ex- the underground Obuasi mine, 260km The Ghanaian Ministry of Lands and
ploration programmes,” Dushnisky said at north-west of Accra, is primed to deliver Natural Resources has worked closely
Mining Indaba. first gold by the end of 2019. with AngloGold in dealing with the illegal
miners and other matters relating to the
“We see exploration as the best way to An initial project capex of $US495- rebirth of Obuasi, including environmen-
maintain our portfolio. It is important be- 545 million, funded through the balance tal concerns.
cause then we don’t need to rely on M&A sheet, has been guided by AngloGold to
to keep our pipeline full.” bring Obuasi back on stream, with pay- As a result, stability and security agree-
back estimated to take 6.5 years. ments at Obuasi have been ratified by
At the time of print, AngloGold was set parliament, while a new labour model in
to release its 2018 results, which should Obuasi will produce 8.6 moz gold over place provides for a more efficient con-
include a detailed overview of last year’s 20 years at an average throughput of 1.6- tract workforce to operate.
bumper exploration campaign. 1.8 mtpa @ 8.8 g/t for AISC of $US725-
$US825/oz. At gold prices of $US1,00- Meanwhile, AngloGold has pulled sen-
“In the first nine months of 2018, we $US1,300/oz, an IRR of 16-25.3% has ior members from the Tropicana leader-
drilled over 600,000m,” Dushnisky said. been forecast. ship team to manage Obuasi.
“We look forward to presenting the 2018
exploration progress and also the plans The mine is expected to produce Having arrived at AngloGold in Septem-
for 2019.” 350,000-400,000 ozpa gold. ber, Dushnisky said he was impressed by
the level of communication across the en-
The focus of AngloGold’s exploration Dushnisky, formerly president of Bar- tire AngloGold business, which has tran-
in 2018 was generative opportunities in rick Gold Corp, compared Obuasi to his sitioned from a cost-cutting to investing
Australia and the US, with the budget split previous employer’s Gold Strike mine in vehicle since 2016.
80/20 on brownfields and greenfields, re- Nevada.
spectively. “My early impressions...I’m impressed
“Expectations in Ghana by everyone with all the general managers who are
“Over the past 15 years we have discov- are high. Obuasi is the big one for Anglo- highly experienced and there is good
ered some 49 moz gold outside of South Gold this year, it took a little while longer communication between them all,” he
Africa at roughly 3.3 mozpa. We’ve add- for agreements at Obuasi to be put in said.
ed that inventory at about $US35/oz on place but I am 100% certain it was worth
brownfields programmes and $US13/oz the wait; Obuasi is in a class of its own,” “[The period] 2013 to 2015 was all
on greenfields exploration; that is world- Dushnisky said. about cutting costs and making improve-
class drilling. We will continue to invest in ments and from 2016 it was back into in-
exploration to make sure our pipeline is “Obuasi is a big chunky mine that deliv- vesting and working more efficiently.”
well stocked,” Dushnisky said. ers year after year and it will be coming
on line and on budget and is the priority Dushnisky is targeting continued im-
While keen to push the in-house ex- this year.” provement at AngloGold and is eyeing
ploration team to its potential, Dushnisky lower costs across the portfolio.
said AngloGold was also well spread on Operations at Obuasi were shut down
the exploration front through the variety in 2014 as AngloGold strived to make the The company expected to reach top
of earn-ins and equity investments made mine produce gold more efficiently. half of production guidance – 3.45 moz
around the world. gold at $US990/oz, the lower end of AISC
Following the shut down, the mine was range – for the full year 2018.
hampered by illegal miners entering the
– Mark Andrews

Page 58 MARCH 2019 AUSTRALIA’S PAYDIRT



INDABA REVIEW

Banding together in the Sahel

The kidnapping and murder of geolo- William Witham throughout the region.”
gist Kirk Woodman in Burkina Faso AAMEG – the peak body representing
has elevated security concerns across Askew encouraged senior executives,
West Africa, as the threat of banditry, ter- operations and security managers to at- Australian companies engaged in the de-
rorism and kidnapping increases in the tend and share critical information to in- velopment of Africa’s resources industry
region. form future security and investment deci- – has been heavily involved in the secu-
sions. rity discussion in Africa and was a key
Woodman was kidnapped from an player behind MS Risk’s D-Risk Live Se-
exploration camp at Tiabongou, while Day one of the conference will address curity Alert App and the Australian Min-
undertaking work for the Progress Min- the social, economic, political and envi- ing Network WhatsApp group.
erals JV between Australia’s Predictive ronmental factors, which may have a fu-
Discovery Ltd and Canada’s Progress ture impact on security, safety of employ- The WhatsApp group was an initiative
Minerals Inc. ees and mining operations. from the first kidnap and ransom event in
October 2017 and has grown from a net-
“It is no secret that the security situa- “Day two will provide something a little work of just 30 people to more than 250,
tion across the Sahel has deteriorated more strategic and it will be about offer- including mining company executives.
over the last couple of years and at the ing some practical measures that com-
moment we are particularly focused on panies can take to mitigate the threat and “People are recognising that this is
Burkina Faso. We’ve had this conference be more practically focused. We want to something that they need to be on to
in the pipeline before the tragic kidnap- get as many strategic decision makers in know what is happening in the region,
ping and murder of Kirk Woodman, but I the room as we possibly can; this is going particularly in Burkina Faso at this point
guess that underscores the need for in- to be an international conference. This is in time,” Askew said.
dustry to come together and understand the first time that the Australian Govern-
the threat and put in place mitigation ment, to my knowledge, has done some- “In our view it is very important. It pro-
measures to deal with it,” Accra-based thing like this. This is a big undertaking vides a great platform for us to reach out
Australian deputy high commissioner to for a small post like Accra and we want to to industry and provides a platform for
Ghana Glen Askew told Paydirt. demonstrate how worthwhile these out- industry to share information amongst
reach programmes are,” Askew said. themselves. Most importantly, it is very
In response to the volatile security useful for juniors that don’t have great
situation in West Africa, the Australian While security remains a concern in security architecture to leverage off the
High Commission has hosted kidnap West Africa, AAMEG chief executive Wil- bigger guys who do have a better under-
and ransom-focused events in the past liam Witham said the region was abuzz standing of what is going on in the region.
and is now embarking on the West Africa with mining exploration and investment. It is those juniors who as explorers are
Mining Security Conference in Accra on out there in the bush that are most ex-
June 11-12. “Despite the security concerns there posed and maybe don’t understand the
seems to be an increase in exploration threat as well as others.”
In partnership with the Australia-Africa activity because of the high gold price
Minerals and Energy Group (AAMEG) and favourable fiscal environment in the For more information on the West Af-
and London-based security firm, MS Francophone countries,” Witham told rica Mining Security Conference, Accra,
Risk, the two-day conference promises Paydirt. June 11-12 contact glen.askew@dfat.
to bring together academics, security gov.au
practitioners, subject matter experts and “I’d encourage all AAMEG members
the mining industry to discuss strategic to join me at the conference where our – Mark Andrews
security trends in West Africa. networks will allow companies to collab-
orate and help provide mutual protection
Security concerns have heightened in
Burkina Faso after a Canadian ge-

ologist was kidnapped and murdered
earlier this year

Page 60 MARCH 2019 AUSTRALIA’S PAYDIRT

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INDABA REVIEW

B2Gold not fussed at M&A

Clive Johnson has ruled B2Gold Corp has been so much trouble in the past ing over 950,000oz from its five mines
out of any headline grabbing transac- from over-paying for companies and pro- around the world.
tions for the time being. jects,” Johnson said.
The company has guided production of
At the time of print, Newmont Mining “It is going to be more expensive and 935-975,000oz gold at AISC of $C835-
Corp was given clearance by the Cana- we are not going to get into a bidding 875/oz in 2019.
dian Competition Bureau to join forces war.”
with Goldcorp, with the combination to At the end of Q3 2018, the company
control the largest gold resource and re- In just over a decade, B2Gold has had $C355 million in cash.
serve base in the sector. gone from zero gold production to pour-
– Mark Andrews
The deal is poised to close in the
second quarter and comes hot on Paydirt editor Dominic Piper discusses M&A with B2Gold president
the heels of the Barrick/Randgold Clive Johnson on the main stage at Mining Indaba
merger which came into play in
January.

“There is a lot of speculation
about us in takeover bids or wheth-
er we are going to be acquirers. I
honestly don’t see us being vulner-
able to an opportunistic takeover by
someone else,” B2Gold president
Clive Johnson said.

Johnson said if the right opportu-
nity did come along and was value
accretive, B2Gold had the firepower
to become an acquirer, however, he
didn’t envision anyone paying a 30-
40% premium for his company.

“The Newmont/Goldcorp deal is
a 17% premium and it shows that
things are changing in the world,
huge premiums. However, there

Wheaton branches out

As equity markets remain tight, stream- with Sibanye Stillwater in Montana, US. the precious metals side.”
ing outfit Wheaton Precious Metals Smallwood said Wheaton had helped Smallwood said the company was
Corp’s influence on the global mining in-
dustry is becoming more profound. prop companies up in lean times and has selective with its investments, but was
a good eye for projects that may be bur- always keen to pursue win-win partner-
Of the cumulative $US19 billion invest- ied in companies starved of capital. ships in the sector.
ed via the streaming sector, Wheaton is
currently responsible for about $US10 bil- “The process is relatively quick as we “One of the challenges that we see in
lion. go through a streaming project analysis this industry is that if you’re a develop-
and we can quickly deliver a streaming ment company but not at the stage of a
“Every chief financial officer needs to transaction in 2-3 months, depending on feasibility study then the only source of
assess [us]. Whenever they are looking site visits and things like that. We have capital you really have is the equity mar-
for capital, streaming needs to be con- a very strong technical team, an internal kets and we all know how tough the eq-
sidered,” Wheaton chief executive Randy team that has got maximum flexibility and uity markets are and have been for a fair
Smallwood said. they only work for us,” Smallwood said. few years now,” he said.

Originally focused on silver invest- “Our model is relatively simple and “Once a company has got to a defined
ments, Wheaton started broadening its sometimes I say the simplicity of the resource, this is a way that they can actu-
scope of activity in 2013 and now hosts streaming model is a bit confusing. It’s ally get some capital that is non-dilutive.
33 years worth of gold reserves and 66 an upfront payment for a portion of the This is the way a portion of the funding
years of resources in its portfolio. metal from the mine and in our case we can be put in in advance ahead of the
focus on precious metals. We’re looking permitting and feasibility study to help
Furthermore, the company made its at copper assets that provide by-product them get there without the excessive di-
first foray into the battery minerals space gold, by-product silver or lead-zinc as- lution.”
in 2018 with an investment in cobalt and sets or nickel assets, but the focus is on
has recently taken an interest in palladium – Mark Andrews

Page 62 MARCH 2019 AUSTRALIA’S PAYDIRT

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INDABA REVIEW

Stripped back Barrick
ready to play

In one of the more unusual top-end gold M&A deals, Barrick Gold Corp chairman John
Thornton pursued Randgold Resources for three years, only to hand over the company
keys to the African miner’s management as soon as the deal was struck. So, now he’s had four
months to have a look under the bonnet, is new Barrick chief executive Mark Bristow about to

deliver his own stripped down, souped up version of a gold major?

Holding court in front of media in the rogance often scupper obvious M&A deals, “The responsibility never leaves you
Westin Hotel in downtown Cape Town, it showed rare insight on Thornton’s behalf. as an executive; a third party signing off
Bristow was his usual forthright self, pointing shouldn’t be abdication of duties,” Bristow
out the mistakes other gold companies con- “John was fascinated by the Randgold said. “Licence to operate, environmental
tinue to make and marking out where “his” way and culture… which we’d actually built management, sustainability all fall under
Barrick would be different. around the original Barrick model of being my responsibility. I report on these to the
entrepreneurial,” Bristow said. board because they are so important.”
“It is important to have someone in the
executive team that understands orebod- Bringing the Randgold spirit into a larger Bristow’s influence is already apparent.
ies,” the professionally trained geologist company appears an unenviable task but Last month the company struck an agree-
Bristow told the gathered industry media. Bristow said the two companies had spent ment with the Tanzanian government over
“In all of the disasters in the mining industry several months ensuring the two groups the future of subsidiary Acacia Mining plc
the cycle ends up catching up with the en- could be incorporated. (see over).
trepreneurs. Most of the leadership are not
technology people and don’t know how to “If you have multiple M&As in a compa- The company’s other major political chal-
dig themselves out of a hole.” ny and the culture doesn’t get cleaned up lenge comes in the DRC where Barrick
along the way, you end up with a schizo- now controls Randgold’s 45% interest in
Barrick was in as deep a hole as any phrenic company,” he said. “In November, the Kibali mine. Elections in January saw
of its peers when the great gold investor we had a meeting of the 30 top executives Opposition leader Felix Tshisekedi award-
backlash began in 2013. Incoming chair- from each company and we moved quickly ed the presidency, leaving the future of the
man Thornton tasked himself with rebuild- to clear up the head count. We are down to country’s new mining code up in the air.
ing the company from the balance sheet up 70 in Toronto, from 500 three years ago.”
and set about making structural changes Just as in Tanzania, Bristow is confident
throughout the organisation at corporate, Other changes have occurred, including solutions will be found, even if he is unpre-
operational and asset level. moving the innovation portfolio back into pared to set deadlines.
the operations department “where the engi-
The head office employee count was neers can get a hold of it” and reinvigorating “I have absolute confidence we will work
drastically reduced and a number of non- the company’s exploration outlook. out a solution because the DRC relies on
core assets were offloaded as the company capital and ask anyone in the new or old re-
tried to reposition itself as a smaller, more “There was a general shortage of geolo- gime and they’ll accept that,” he said. “You
dynamic company. gists because it has been a banking driven can’t negotiate anywhere, particularly Af-
business,” Bristow said. “There was a lot of rica, on a timetable.”
Bristow’s comments suggest he sees neglect of the geology, but now got lots of
his role as taking the company through the drilling programmes, we are busy filling up Regardless of the outcome of those ne-
next stage of its rebirth. on geologists. We have taken a lot of dead- gotiations, it appears unlikely Kibali would
wood out and are bringing in some young be put up for sale although a number of oth-
“John has recognised the inefficiency of people.” er assets in the Barrick portfolio will likely
the industry and started a process of clean- go.
ing up Barrick,” he said. “He brought in a Also gone is Barrick’s propensity for hav-
lot of young people and they sweated out ing authority without accountability. Bristow wouldn’t be drawn on whether
the debt by forcing cash flow out of the as- an asset divestment plan would be imple-
sets. The Barrick assets were run on an “Randgold survived because of its vicious mented this year.
optimised cash flow model. That is what we corporate structure which creates more ac-
are fixing. Now, they are being run to opti- countability,” Bristow said. “In Barrick, the “It is not a good strategy to say ‘I’m going
mise the orebody. The focus is on quality assets are so far away from the corporate to sell that asset’ and have to take a mas-
orebodies; you can’t dictate revenue any office, they kept getting bad surprises. It sive discount for it,” he said. “A lot of the
other way.” was a case of: ‘If you don’t perform, we’ll assets are short on geologists and the last
sell you’ instead of ‘if you don’t perform we thing you want to do is throw the baby out
Such beliefs played a large part in Thorn- will get someone in who will’.” with the bath water [but] we have no bleed-
ton’s pursuit of Bristow as his new chief ex- ers in the company.”
ecutive. While a number of the Randgold Bristow is famed for being a hands-on ex-
assets fit well into the Barrick portfolio, the ecutive, even calling individual project ge- The only asset Bristow did admit to con-
company’s attitude was just as compelling ologists to debate exploration programmes sidering offloading was the company’s 50%
a reason. In an industry where ego and ar- and strategies on individual projects. That stake in Kalgoorlie Super Pit.
Randgold accountability model will contin-
ue at Barrick. “Kalgoorlie is completely different,” he
said. “It is run by Newmont [Mining Corp]

Page 64 MARCH 2019 AUSTRALIA’S PAYDIRT

Mark Bristow The Barrick assets were
run on an optimised
and just doesn’t fit because we want to
have a say in management of assets.” “cash flow model. That is what
we are fixing. Now, they are
Newmont itself has followed Barrick’s being run to optimise the
lead in the M&A space, announcing a tie- orebody. The focus is on
up with Goldcorp Inc. Bristow hoped further quality orebodies; you can’t
corporate activity took place in the gold sec- dictate revenue any other way.
tor as the industry further restructured itself.
every year.” portfolios to bring other opportunities.
“I hope there is more M&A because there Bristow pointed to the success of mid- “The gold mining industry is at a point
are efficiencies [to be realised] in the indus-
try,” he said. “Look at the amount of new tiers such as Evolution Mining Ltd and where there are very other few options,” he
ounces coming on, it just keeps declining Northern Star Resources Ltd in Australia said. “It [the current round of M&A] may not
and B2Gold Corp and Endeavour Mining be optimal but it is a step in the right direc-
Inc in Africa as examples of successful tion. Whether those decisions are efficient
businesses based on delivering value for first time around or whether we need more
shareholders. consolidation [is not yet known].”

Evolution and Northern Star built their – Dominic Piper
success on the divestments of the majors
and Bristow expects further reshaping of

Tanzania truce on the way
Mark Bristow’s influence in negotiations made to resolve the outstanding tax claim. Acacia, which was not allowed to negotiate
over Acacia Mining plc’s Tanzanian in- Bristow said the proposal would allow all for itself, is yet to respond to the deal.
vestment has been almost immediate with
Barrick Gold Corp announcing on February stakeholders to focus on rebuilding the min- “While the original deal details have been
20 that it had reached a deal with the Tanza- ing operations in partnership. known for over a year now, we believe that
nian Government. the actual execution of the $US300 million
“Significant amounts of real value have payout ... will remove a major overhang for
Acacia’s position in Tanzania has been in been destroyed by this dispute,” he said. Barrick and Acacia,” Credit Suisse analysts
limbo since July 2017 when President John said in a note.
Magufuli announced a raft of changes to Speaking in Cape Town two weeks prior
mining legislation and the fiscal regime in the to the announcement Bristow, who had pre- The announcement will bring relief to the
country. The new code would see the Gov- viously been critical of Acacia’s approach in group of Australian junior companies with as-
ernment receive a 16% free-carried interest Tanzania, said he expected the issues re- sets in the East African country. There are a
in all mining projects (with the right to acquire garding fiscal terms and an outstanding tax dozen ASX-listed companies active in Tan-
a further 34%), royalty rates increased from claim to be resolved. zania but their project development efforts
4% to 6% and existing development agree- have been hampered by the uncertainty sur-
ments scrapped without any arbitration. “There is not one stakeholder not suffering rounding Acacia’s future.
from this impasse but it is a challenge that
The Government also slapped a $US190 has a solution because there is no way out,” “This is great news for the entire industry in
billion royalty bill on Acacia, after accusing he said. Tanzania as it eliminates the overhang which
it of exporting 250,000oz a month – as op- has been present for the last 18 months,”
posed to the company’s reports of 250,000 Bristow has always been vocal about what Walkabout Resources Ltd executive director
ozpa – via concentrates. governments, communities and companies Allan Mulligan told Paydirt.
should expect from mining investments. He
As Acacia’s 65% shareholder, Barrick en- said the Acacia-Tanzania situation was not Walkabout is developing the Lindi Jumbo
tered negotiations soon after the new terms a cash grab or attempt to nationalise the in- graphite project in the south of Tanzania but
were announced and the proposed deal dustry but a “genuine engagement on a real has found it difficult to finance the project
struck by Bristow and his team is similar to problem”. while Acacia’s situation was still in the air.
the one Barrick chairman John Thornton be-
gan working with Magufuli in August 2017. He said the issue was symptomatic of the “If you look at the terms of the agreement,
inability of mining companies to live up to ex- it is equitable for all parties. It takes away the
It has been agreed that a new local op- pectations. uncertainty over Acacia’s tax bill, gives clarity
erating company will be created to manage on future investment and allows exports cur-
Acacia’s operations in the country and that “Tanzania was a leader in the early 90s; it rently tied up in Dar es Salaam to be shipped.
economic benefits from Acacia’s operations had the most generous mining code in the
will be shared on a 50/50 basis. The Gov- emerging world but the industry didn’t deliver “The proposed 50/50 share of economic
ernment’s share of economic benefits would on its promises,” he said. “They’ve done a benefits is fair as it takes into consideration all
be in the form of royalties, taxes and a 16% good job of turning a large fortune into a small in-country investment. President Magufuli is
free-carried interest in the Tanzanian opera- one. People get aggravated when promises saying he wants to see 50% of the economic
tions as well as in-country spending by the don’t materialise. benefits stay in Tanzania, incorporating sala-
company. ries, contractors, taxes and royalties, that is
“The people of Tanzania must also benefit something all mining companies can readily
A payment of $US300 million will also be from development and an appropriate split adhere to.”
in economic terms is 50/50 after capital re-
coupment. Above 50% and you will lose the – Dominic Piper
investors.”

AUSTRALIA’S PAYDIRT MARCH 2019 Page 65

INDABA REVIEW

Congo code debate reheated

Mark Bristow has staunchly
rejected claims from a senior
ministerial official in the DRC that

the debate surrounding the coun-

try’s controversial mining code

has been satisfied.

During a panel session on the

second day of Mining Indaba, the

new head of Barrick Gold Corp

was quick to rebuff a comment

from DRC secretary-general of

mines Joseph Ikodi regarding

the supposedly “closed” status of

discussions on the mining code,

which was promulgated into law

last year.

“The law is already promul-

gated, everything has been ex-

plained,” Ikodi said. “We worked

in a co-operative way with the

Government, industry and civil

society.”

Bristow, who has constantly ex-

pressed his displeasure with the

code since it was first proposed DRC secretary-general of mines Joseph Ikodi joined Barrick Gold chief executive Mark Bristow on

in early 2018, said the Congolese the main stage for a debate over the country’s mining code

Government – both new and old –

would be foolish to think the mat- new government. We have to now wait “It’s more a conversation than a debate
ter has been resolved. for the new parliament because that is the because we all have the same objectives,”
process…we have to make sure that we Bristow said.
“When Joseph says the debate is fin- maintain the fundamentals of the actual
ished and we need move forward, the de- law.” “This is an evolving situation and the dif-
bate never started,” Bristow said. ference between Congo and many other
Despite the uproar from the mining com- countries in Africa is there’s always an
“Back in 2015 when the copper price munity in the DRC, Bristow said links be- open dialogue and you can have a really
collapsed, the Government of the time tween the industry and the Government energetic debate and you don’t have to
stopped the negotiations on the mining had never been stronger and he hoped feel your voice is not respected or not wel-
code because the mines were closing. that would continue under Tschisekedi’s comed. I have enormous confidence in us
Then, when the copper price went up, the leadership. finding the right solution because the prize
new code was forced on the mining indus- is just too great.
try without conversation. “We’re excited, as we’ve always said,
to work with the Congolese people and “Congo is the heart of Africa in many
“The conversation is still ongoing. And whichever government is in power,” Bris- ways. It’s got an abundance of potential
what’s overlooked is that the only contribu- tow said. energy, it’s got fantastic people and it’s en-
tor to the Congolese economy is the min- dowed with mineral wealth. It’s got a lot to
ing industry.” “We’ve met with the new Government, offer and I believe that in 15-20 years time,
we’ve continued to meet with the previous sub-Saharan Africa will be the engine of
Companies operating in the DRC, such authorities and we look forward to con- the world economy.”
as Bristow’s Randgold Resources – prior tinuing our conversation on what is good
to its $US18 billion merger with Barrick – for Congo, because as I said to [former] Bristow also pointed to the fact civil
last year bandied together to oppose im- President Kabila, ‘if it’s good for Congo, it’s society was mostly aligned with the min-
plementation of the revised mining code, good for everyone’.” ing industry against the new mining code
claiming the increased royalties and the because of an acknowledged desire to at-
removal of the 10-year stability clause Asked on a scale of 1-10 where he tract more foreign capital into the country.
would jeopardise operations. thought both sides of the debate were
currently positioned, Ikodi said ‘5’, claim- “Civil society understands the value
The debate over the mining code has in- ing that “some companies are still not on of the investments and the mining indus-
tensified in the past month since the elec- board, but some relationships are very try in the DRC,” he said. “I don’t think for
tion of new President Felix Tschisekedi. strong”. one minute the mining industry intends to
However, Ikodi said the matter was un- break the law. We are law abiding, we are
likely to be reviewed or discussed by the Bristow told Ikodi he was being “too pes- very committed partners to Congo and we
new Government until after it had properly simistic” and said the debate ranking was are there to stay.”
settled in office. closer to ‘7.5’, pointing to the mining indus-
try’s willingness to find a resolution which – Michael Washbourne
“When there is a law that is voted we all parties would be satisfied with.
have to respect it,” Ikodi said.

“We have now voted [in] peacefully a

Page 66 MARCH 2019 AUSTRALIA’S PAYDIRT

Will uranium rebound in 2019?

After almost a decade of depressed The positive outlook from Numis will be which have effectively put the market into
prices, uranium is finally poised for a welcome news for one-time market dar- a deficit. What you actually have created
comeback, according to a panel of experts. ling Paladin Energy Ltd. While its Langer with those two guys now is a duopoly.
Heinrich mine in Namibia was placed on
Yellowcake prices jumped from $US22/ care-and-maintenance last year, financial “Kazatomprom can come in and out as
lb to $US29/lb in 2018 and while spot levels services group Euroz Ltd is backing the often as they want; they’re a very flexible
are probably still too low to incentivise new company to be a “frontrunner in the race company [whereas] Cameco need a long-
production, it was enough of an increase to restart under the right uranium price en- term contracting price based on ‘these’
to restore some much-needed confidence vironment”. resources.”
to the sector.
Euroz has maintained a “speculative Global Atomic executive vice-president
Boutique investment firm Numis Secu- buy” recommendation for Paladin with a Merlin Marr-Johnson said his company’s
rities plc is one advocate confident of a target price of 36c, effectively double what studies indicated current spot pricing was
further uptick in uranium pricing in 2019. the ASX-listed company has been trading almost at a level to incentivise bringing its
During a panel session at Mining Indaba, at in recent months. DASA project online, pending a positive
the company’s director of research Jona- feasibility outcome.
than Guy detailed a positive forecast African-focused uranium hopefuls such
based on a tightened supply in the wake as TSX-listed pair GoviEx Uranium Inc However, he said the company, like
of last year’s voluntary production cuts by and Global Atomic Corp are also optimistic many others, would prefer to see prices
the likes of Kazatomprom plc and Cameco about their chances of becoming produc- rise to much higher levels before pulling
Corp. ers in the near term. the trigger.

“We expect a gradually improving ura- GoviEx has projects in Niger (Madaoue- “There is potential for some supply to
nium market with a conservative long-term la), Zambia (Mutanga) and Mali (Falea), come back on at the $US35-45/lb range,
contract price of $US60/lb and a spot price with all but the latter fully permitted for de- which is the McArthur Rivers of the world,
of $US50/lb,” Guy said. velopment. Global Atomic also has a pro- Kazatomprom and Kazakhstan,” he said.
ject in Niger currently subject to a feasibil-
“The main drivers of that should be, in ity programme. “When we look at the incentivised prices
our view, contracting rates falling off over for the rest of the industry, it’s generally
the next couple of years in both Europe For GoviEx chief executive Daniel Ma- higher…but we are comfortable that there
and the US…and obviously demand from jor, the supply-demand fundamentals for are upward pressures on the uranium
China and Japan restarts. uranium are the best they have been since price.
2011.
“We expect prices to be driven upwards “What we’re really focused on is making
as producers will not enter into new major “Nuclear generation is now at the same sure that our project is going to make mon-
contracts at around this price. level that it was pre-Fukushima,” Major ey at the bottom end of the cost curve. In
said. fact, thanks to grade and scale, our poten-
“It’s been a fairly long and challenging tial capex options, or development choic-
period for uranium, but 2018 was better “On the supply side you have a lot of es, at $US30/lb we can provide a good
than previous years and we expect 2019 projects closing down [and] you have the return for our shareholders, but $US40/lb
and 2020 to be better than that.” Kazatomprom and Cameco shutdowns looks much better.”

Marr-Johnson said con-
stant debate around cli-
mate change ensured nu-
clear power – and uranium
– would remain “front and
centre” of the conversation
amid rapid growth of the EV/
battery industry.

“There’s a general agree-
ment that a shift to low car-
bon energy is vital, even if
you perhaps don’t believe
in the causality of climate
change,” he said.

“Within that context there
is a generally positive nu-
clear power generation story
and although the electrifica-
tion story is very quantitative,
there’s a still a great push to
low carbon energy on an air
quality and pollution basis.”

Numis Securities director of research Jonathan Guy hosted a discussion on the future of the uranium – Michael Washbourne
sector with GoviEx chief executive Daniel Major and Global Atomic’s Merlin Marr-Johnson

AUSTRALIA’S PAYDIRT MARCH 2019 Page 67

IMDEX:

Seamlessly connecting drill-bit to office

Amid a period of rapid technological change in the a-service solution for the collection, storage and
mining sector, IMDEX has established itself as a reporting of critical data from the field. The analytics
leading global mining equipment, technology and within IMDEXHUB-IQ™ converts the significant amount
services company. of data collected by IMDEX’s instruments into relevant
information, which can be accessed anywhere and at
Throughout its technological advances, however, any time.
IMDEX continues to adhere to its principal goal
– the delivery of easy-to-use and more accurate It means geologists in the field or exploration managers
quality solutions for drillers and mining companies. in the corporate office can interact with drilling data in
real-time, streamlining the decision-making process.
“We want people to acquire as much information Carey says the transparency built across multiple
as they can while the drilling is happening, or streams of data also allows clients to plan their drilling
immediately afterwards, but we must remember the programmes with a level of confidence and accuracy
most important thing is that our tools can’t impact that was not possible previously.
drilling productivity,” IMDEX General Manager Product
Development, Michelle Carey, says. “It is about accurate information, not just data
collection,” she says. “There has always been a love/
Through its REFLEX and AMC brands, IMDEX provides hate relationship between the geologist and the driller
the full spectrum of drilling intelligence solutions, but IMDEXHUB-IQ™ is a tool that can help them
including down-hole navigation, drilling optimisation, communicate more clearly with each other,” added
driller operable geophysics, in-field geoanalysis and Carey.
structural geology.
“It takes away that data-handling security issue and
As the amount of data being produced increases gives companies chain-of-custody over their data,
exponentially, mining companies must determine using a model they can trust.
what information is relevant and how it can be best
interpreted. To assist rather than overwhelm clients, “This paperless system eliminates human error and
IMDEX’s tools and software packages are fully associated inefficiencies from the workflow. With
integrated, to allow for rapid interpretation and analysis. access to survey and in-field rock property data in
real-time, decisions can be made while the rig remains
No product better reflects IMDEX’s pursuit of seamless operational on site.”
integration than its cloud-based IMDEXHUB-IQ™
software system. The ability to make decisions based on live data is
becoming imperative to miners and explorers, a trend
IMDEXHUB-IQ™ provides a complete software-as-

Page 68 MARCH 2019 AUSTRALIA’S PAYDIRT

IMDEX has been keen to incorporate into and give structural geologists accurate data. We think
IMDEXHUB-IQ™. it will encourage people to want to acquire more
oriented drill core to get structural information as soon
Thanks to a new collaboration with Seequent, as possible.”
IMDEXHUB-IQ™ can now provide real-time 3D
visualisation of drill-hole data. The integration of the It is a similar situation with IMDEX’s fleet of down-
two systems will allow live 3D data collected in the hole navigation solutions. The Company has been at
field and synced to IMDEXHUB-IQ™, to be linked in the forefront of downhole navigation tools for four
real-time to the same project in Seequent’s Central decades and continues to produce instruments which
geological data management solution. This will enable provide accurate, reliable information in all ground
3D visualisation of downhole survey and structural conditions, including both magnetic and non-magnetic
geology data. ground. Its latest product releases are driller-operable,
eliminating the need for additional costs of third-party
“Geologists are in a situation where they have to make gyro services providers and technicians.
real-time decisions without access to data; currently
they don’t even always have the surveying data to “Down-hole surveying has been a very core part of the
know where the hole is going,” Carey says. “We need business historically,” Carey says.
to make better, quicker decisions and we need the data
to allow us to do that.” “We have developed new north seeking gyro
technology [including REFLEX EZ-GYRO™ and
IMDEX’s partnership with Seequent is an example REFLEX GYRO SPRINT-IQ™] as the industry is moving
of the Company’s willingness to partner with other away from magnetic based technology and we want to
METS companies to ensure it can provide end-to-end say to clients whatever survey tool you need, we have
solutions. the solution. And whatever tool you choose we wrap it
in our solution.
“I think companies expect METS providers to work
together to provide solutions that add up to more “Our downhole navigation solution has delivered
than the sum of their parts,” Carey says. “Most people demonstrable productivity benefits and increased
hate software that locks them in and most companies accuracy, giving the geologist continual trace of holes
have been burnt by equipment suppliers who can only and more accurate data which can then be moved
deliver one component of the solution. But, people through IMDEXHUB-IQ™,” Carey says.
embrace change when they can think of it end-to-end.
By collaborating with other providers, we ensure our The integration between IMDEXHUB-IQ™, the
solutions remain relevant and useable. Company’s range of drilling solutions and third-party
software providers is the culmination of several years
“Integration is very important to IMDEX and has been of development within IMDEX. Carey believes now is
in our minds from the start,” Carey says. the time to roll such capabilities out into the industry
and see how geologists and drillers use and interpret
“An open ecosystem where data is securely shared is it.
vital, allowing clients to transfer data from IMDEXHUB-
IQ™ into their geological software programmes.” “We think we know what geologists need and the
uptake has been really good, but we recognise how
The power of IMDEXHUB-IQ™ is growing as users long it takes technology to be fully embraced, not just
extract ever more data from IMDEX’s wide-ranging taken up by the early adopters,” she says.
suite of down-hole instruments and tools. The
Company has released a series of new products “We are taking these solutions to companies as best
in recent years with tools such as the REFLEX IQ- practice and I think you’ll see much wider adoption in
LOGGER™ already being widely adopted in the coming years.
industry.
“For the last 4-5 years we have been building the
The REFLEX IQ-LOGGER™ is a hand-held structural plumbing, now we can put the platform on top.”
logging device, which simply runs along the orientation
line on diamond core. Depth is recorded at all times imdexlimited.com
and structural measurements taken at a press of a
button.

“The idea of taking days or even weeks to collect and
interpret structural geology data just isn’t feasible
anymore,” Carey says. “We wanted to provide a tool
which could speed up the structural logging process

AUSTRALIA’S PAYDIRT MARCH 2019 Page 69

INDABA REVIEW

Zimbabwe on course,
but long road ahead

The World Bank has endorsed Zimba- Mining Indaba.
bwe’s efforts in reintegrating with the “I do not want to cut Zimbabwe as

global community and welcoming foreign being particularly unique in that way,

investment into the country. so what is the spanner in the works?

In the aftermath of Robert Mugabe’s The spanner in the works is the invest-

resignation in November 2017, there was ment in the precise nature of the risk.

great optimism around Zimbabwe return- That’s what the Government needs to

ing to prosperity. However, violence dur- articulate and put in the public domain.

ing the course of last year’s elections left Then, I think investors say ‘yes I am

question marks on the country’s status. comfortable wading in these waters

Anti-government protests continue to because I know the temperature and

simmer in the country, with Reuters re- I know that there are fish that swim Hon. Winston Chitando
porting that police had enforced a “brutal here’; that is where the World Bank is

crackdown” on citizens partaking in such coming from.”

demonstrations. Khama said the Government made a “The Government is coming up with

President Emmerson Mnangagwa of wise decision in announcing intentions to minerals specific development policies,”

the ZANU-PF party has indicated those be a member country of the Extractives Chitando said.

police officers responsible for the heavy- Industry Transparency Initiative (EITI). “What we have done is encouraged

handed control of protesters would be “We think this is vitally important be- players in the various minerals to stimu-

dealt with accordingly. Mnangagwa has cause it will deliver in terms of trans- late that particular sector, for instance we

requested a meeting with opposition parency, assurance to investors and fi- have encouraged players in the chrome

leaders to thrash out terms for national nanciers, but in truth there is a tactical field to come up with a chrome develop-

dialogue on the country’s future. element to it; it is a powerful statement to ment policy. The players in the lithium

At the time of print, it was unclear if all the world that we are open to business,” field, where we do have one operation-

opposition leaders had agreed to accept Khama said. al and one in pilot plant stage, again to

the invite, as Mnangagwa’s decision to “One of the things worth doing is for come together to form a lithium devel-

jack fuel prices by 150% in January and Zimbabwe to fast-track that process of opment policy and lithium development

the nationwide teachers strike in Febru- being members of the EITI and because committee.

ary over better pay added to the growing we like to put our money where our “All of this will come under the armpit

instability Zimbabweans face. mouth is, we will support the Zimbabwe of the Chamber of Mines and a sub-com-

While some commentators see Zim- Government in that endeavour.” mittee in the Chamber of Mines and simi-

babwe’s challenges as insurmountable, Zimbabwe’s rich minerals history and larly there is a proposal for the platinum

there are influential voices on the band- unlocked potential is seen as a gateway development policy. We have encour-
“wagon of great hope for the country.
to future economic prosperity and the aged the players in the private sector to

recommend and come up with the

Investors want to know consistency of regulation, recommended development policy;
often they say bad legislation is better than we believe that this is an important
consistently changing legislation. intervention,” he said.

One directive for the Chamber of

Mines to fulfil by the end of the year

is to implement an easier framework

of fiscal policy to follow.

“We have no doubt that we think Zim- country’s Minister of Mines and Mining As the Chamber of Mines starts to

babwe is serious and that Zimbabwe Development, Hon. Winston Chitando, get busy and the Government pushes to

must be taken seriously, so let me put reiterated his stance to deliver “policy computerise the mining title administra-

that there upfront. Let me say that the consistency and clarity” for the industry. tion system, which is currently manual,

World Bank views every country to the “The Government is absolutely com- the biggest moment in Zimbabwe’s his-

lengths of what we call sovereign risk mitted to achieving that,” Chitando said. tory will be introducing monetary policy.

and drivers of risk. Every country we Chitando pointed to the Government’s “Over the next week or two the Gov-

do business in there is sovereign risk; work in restructuring indigenisation re- ernment will come up with a monetary

it is just the nature and magnitude of it,” quirements of 51% ownership across policy, our minister of finance has also

World Bank Group lead mining specialist mining projects to now only apply to the announced that the country is working

Sheila Khama told an audience gathered platinum and diamond industries. towards a new currency. We are aware

for a special panel discussion focused Policy intervention in the mining sector the current situation is not sustainable.

on Zimbabwe, hosted by africapractice is something investors can expect more The Minister of Finance will shed light,”

and Webber Wentzel, on the fringes of of, according to Chitando. Chitando said in early February.

Page 70 MARCH 2019 AUSTRALIA’S PAYDIRT

“The issue of currency is an issue now, of regulation; of- Sheila Khama
but we want to assure the mining industry ten they say bad
that it continues to evolve.” legislation is better nies, put across their views. Companies
than consistently won’t necessarily accept everything, but
Despite a cloud lingering over the changing legisla- the Government must explain what im-
country’s parlous economic state, there tion. Consistency in pact it is trying to achieve,” Chbafa said.
was strong interest in the six state- legislation is key as
owned assets offered up for privatisation is foreign currency; “Indigenisation, for example, asking
by the Zimbabwe Mining Development it is very difficult to an investor to be a minority shareholder
Corporation (ZMDC) last year. progress any dis- and to take all the risk and put in all the
cussions around in- capital, that doesn’t work. Having the op-
A total of 151 respondents registered vesting in Zimbabwe portunity to engage and raise issues in
interests, however, those that made the when you cannot private is where you get a lot more lis-
short-list fell well short of Government address when inves- tening. That is the way we have tried to
expectations. tors are going to be navigate Zimbabwe.”
able to have access
Nevertheless, Chitando said the Gov- to the foreign cur-
ernment would formally respond to the rency income. It will
bids in due course as it continues to open be very interesting
up opportunities in the mining sector. to know more once
the monetary policy
Khama said it was important the Gov- has been released
ernment articulated exactly what it meant as to comfort inves-
by privatisation to give potential suitors tors.”
for projects a clear understanding of any
transaction entered into. Anglo American
plc is one company
Despite overtures from government to have enjoyed a
to welcome foreign investment, Michael fruitful history in
Denenga, partner in the Funds Practice Zimbabwe for over
at Webber Wentzel, said talk of nationali- 90 years.
sation of mines in other African jurisdic-
tions meant Zimbabwe was also part of Unki, Anglo Amer-
that conversation. ican’s underground
platinum mine along the Great Dyke for-
“It is very much welcome at this point mation, has been in operation since 2011
in time that investors can own 100% of and its chief executive, Colin Chbafa, said
equity in mining ventures. I think one the Zimbabwean Government should use
thing that we are finding and one of the the experience of its dealings with Anglo
burning questions that we hear over and American as a means of encouraging
over again is talk around nationalisation more participation in its mining sector.
in different African jurisdictions. And, the
burning issue for Zimbabwe is to what “I think they need to engage compa-
extent will their current thinking remain,”
Denenga said.

“Investors want to know consistency

– Mark Andrews

“Unki has been
operating since 2011,
but Anglo American’s
history in Zimbabwe
extends over 90 years
and in the recent past it is
africapractice and Webber Wentzel put the spotlight on Zimbabwe’s resources notable that Zimbabwe is a
sector during a panel discussion on the sidelines of Mining Indaba lot more bark and less bite.

AUSTRALIA’S PAYDIRT MARCH 2019 Page 71

INDABA REVIEW

Zimbabwe has effectively been quarantined from “Certainly there is a discussion and dialogue that we
exploration since the 1960s, meaning there is can begin and it is something we are undertaking in
potentially a large endowment of minerals which Kenya at the moment and likewise Sierra Leone.”
remain unexploited.
Mankelow said geological surveys in country had
The Government has indicated a willingness to open a critical role in identifying the mineral endowment
up its resources sector, however, it is behind the eight- so that government ministers had the firepower to
ball in communicating exactly what commodities it is promote industry the right way.
prospective for.
“You need take a look at historic records, historic
British Geological Society, mineral resources and datasets; a lot of it might be hard copy formats and in
policy team leader, Joseph Mankelow, welcomed the these large African countries they may be old reports
opportunity to help Zimbabwe discover its mineral from the 1950s or 60s. They may be the only reports in
potential. particular areas of the country, but some information
is better than no information to help inform these
“Absolutely we’d like to engage, we have historic decisions,” Mankelow said.
links to Zimbabwe having undertaken projects in the
1980s up to the mid-1990s. Something our director “Then once you have not just maps and reports, but
advocates is creating links with the geological surveys also some of the physical things collected in the past
and facilitating and identifying what we hold that the – core, rock samples, core stores – you need to see if
geological surveys no longer hold and scanning it and they can be assessed or reviewed.”
returning to those countries,” Mankelow said.

Anglo American chief executive of Unki Colin Chbafa, British
Geological Society, mineral resources and policy team leader, Joseph
Mankelow and africapractice mining leader Rishon Chimboza

Page 72 MARCH 2019 AUSTRALIA’S PAYDIRT

Best prospect
for investors

Prospect Resources Ltd executive di- and a $US457/t petalite
rector Harry Greaves is confident the
company will land the financing needed price. Operating costs are
to develop the Arcadia lithium project in
Zimbabwe, but he urged investors to tem- estimated at $US285/t,
per expectations on how long it will take to
complete that process. with project payback oc-

Speaking to Paydirt on the sidelines of curring within 2.5 years of
Mining Indaba after Prospect was crowned
winner of the 2019 Junior Investment Bat- first production.
tlefield, Greaves said the company would
target financiers with previous investment Other key financials from
experience in Zimbabwe in a bid to bring a
mine at Arcadia online over the next 12-18 the DFS included a pre-tax
months.
NPV of $US511 million,
Investor sentiment has been progres-
sively returning to Zimbabwe since late IRR of 44% and life-of-
2017 following the fall of the Mugabe Gov-
ernment. However, Greaves conceded mine EBITDA of $US106
companies such as Prospect still had
plenty of work to do to convince outsiders million per annum.
to invest foreign capital in the country.
Greaves said the com-
“We are at heart a Zimbabwean mining
company listed on the ASX, but the thing pany’s ideal financing
we’ve always battled with is access to for-
eign capital, so that’s why the listing on the package for Arcadia would
ASX has been so useful to us,” Greaves
said. contain a mix of debt and

“Operating in Zim is remarkably user- equity, with those involved
friendly for miners. We’ve got a great min-
ing code, we’ve got a new Minister of Mines looking to establish a foun-
who comes from the industry, understands
the issues, he’s very approachable, very dation for future invest- Prospect Resources executive director Harry Greaves
sensible and his team are like that. ments in Zimbabwe’s reju- with the trophy for taking out the 2019 Junior
venated mining sector. Investment Battlefield
“The logistics are easy, the bureaucracy
is smooth and it’s remarkably efficient. All “They all have links to
in all, we have few complaints on that side.
Obviously the issue people are worried the country, they all would
about is the financial crisis, but the Gov-
ernment are well aware of that and they’re like to make a difference,
working to mitigate it.
so it’s not just a financial investment, they “Hopefully we’re going to make a big dif-
“I think all these issues are manage-
able and if you’ve got a government that is also see it as a contribution to the country ference to the country. And the fact we can
working in the same direction as you it’s all
doable. We’re really confident we’re going as it were, or a show of confidence in the supply both the spodumene and petalite
to get this away. It will take a bit of time, but
I think we’ll get there.” country,” Greaves said. industries makes us pretty unique world-

Prospect capped a busy 2018 with the “There’s a really nice side to that. Some wide.”
release of a robust DFS on Arcadia which
found a 2.4 mtpa operation producing people have a mandate to try help Zim Prospect emerged victorious over fel-
212,000 tpa of 6% spodumene, 216,000
tpa of 4% petalite and 188,000 tpa of 25% come out of the position it’s been in. And I low ASX-listed juniors Orion Minerals Ltd,
tantalum could be developed for an up-
front capex of $US165 million. think our timing is really good. Avenira Ltd and Theta Gold Mines Ltd in

Revenue of $US2.93 billion is expected “Despite the perceptions, the reality a heated Investment Battlefield finals pitch
to be generated over the 12-year mine life,
assuming a $US689/t spodumene price is we have good interest and we have a to a panel of judges from the investment

very robust project. This project is very and analytical communities.

advanced and the most advanced of most Greaves said it was heartening to have

projects in Zim.” several independent experts deem Arca-

Greaves said he expected the financ- dia to be the best junior development pro-

ing process to attract interest from end- ject in Africa.

users keen to get their hands on both spo- “It was an interesting process, it keeps

dumene and petalite. you on your toes and certainly sharpens

Development of Arcadia could also the delivery of your pitch,” he said.

entice several Zimbabwean expats back “You certainly make sure you know all

home, including some who have spent the the facts because it’s an interesting con-

last few years in Western Australia work- cept presenting and then having the judg-

ing on lithium-based projects. es fire questions at you out there in front of

“Where we sit in Zim, our infrastruc- other people, but I enjoyed that.

ture is good and our people are fantastic; “It’s nice when you have a very, very

they’re well educated and they have lots of robust project and you’re able to answer

skills,” Greaves said. the questions with the ease. We know the

“Interestingly we’re bringing some of project really well and we’re very confident

the Zim diaspora guys who are well quali- about it. I think that’s the big difference

fied, some out of Western Australia, some with where we’re sitting in the cycle at the

of them have been working on the lithium moment.”

mines in WA and are really keen to come – Michael Washbourne
home. That’s a massive transfer of skills

back to Zim.

AUSTRALIA’S PAYDIRT MARCH 2019 Page 73

INDABA REVIEW

Orion finds
timing on its side

While there is little evidence of the surface
infrastructure which once processed Prieska
ore, the headframe is still in good condition
Page 74 MARCH 2019 AUSTRALIA’S PAYDIRT

Errol Smart

Sometimes a junior miner captures the on a global JORC-compliant resource the company.
mood of an entire sector, catapulting of 28.7mt @ 3.8% zinc and 1.2% copper “The question for the company was
it from the main field into an unquestion- and indicated resources of 18.51mt @
able front-runner. With commodity prices 3.6% zinc and 1.2% copper. always around how we would finance a
and political climate converging for the project like this; zinc-copper in South Af-
company, Orion Minerals Ltd managing The scoping study and resource rica,” Smart admitted. “Six months ago,
director Errol Smart is hoping his com- in hand, Orion set itself an ambitious we were looking at having to raise mul-
pany finds itself similarly placed by the schedule for the BFS. tiples of our market cap but as we see
end of 2019. interest in base metals increase and as
“We had that sort of ridiculous situa- people become more comfortable with
Speaking to Paydirt after a busy Min- tion with the scoping study that we had the political situation in South Africa, op-
ing Indaba week of meetings and site been comfortable with the first 15-16mt portunities are opening up.”
visits, Smart felt confident the Orion of resource but because we couldn’t tick
story was beginning to penetrate invest- a couple of boxes we couldn’t declare Smart believes that having been re-
ment markets. a JORC-compliant resource, thus pre- sponsible for a discount on the share
venting us from putting out any forward price for some time, Prieska’s location
“I think it shows the story is getting looking statements,” Smart explained. “It could offer advantages as the project
through,” Smart said. “The market was meant we couldn’t release any studies enters the financing stage.
in denial about how far this project had but it didn’t stop us continuing to oper-
been taken but now it is beginning to un- ate so by the time we had a JORC-com- South Africa’s investment climate ap-
derstand. That realisation has coincided plaint resource we had nearly finished pears much warmer at the start of 2019
with improved outlooks for South Africa’s the BFS.” as new President Cyril Ramaphosa con-
political climate and for base metal pric- tinues his attempts to provide a more
es.” Making Orion’s task easier still is the welcoming environment than his prede-
presence of infrastructure inside the his- cessor Jacob Zuma (see page 50).
The Orion story is cemented in the torical Prieska mine. While the concen-
Prieska copper-zinc project in South Af- trator and other surface infrastructure Investors are switching back on to op-
rica’s remote Northern Cape. The mine was pulled down following its closure, portunities in Africa’s largest economy
was successfully operated for 20 years underground the mine is still in work- and Smart is keen to tap into the prevail-
until its closure in 1991 but despite a able condition with strong rock integrity ing mood.
couple of half-hearted attempts to rein- throughout the decline and a hoisting
vigorate it, it has lain dormant since. shaft that needs only minimal refurbish- “In the South African context there is
ment. a large sophisticated financial market
Smart picked up the asset in 2015 af- and there are commercial banks and de-
ter a worldwide hunt for base metals op- Orion estimates that the surface and velopment funding institutions who are
portunities and has since moved quickly underground infrastructure left behind falling over themselves to be involved in
to define a case for redevelopment. has given it a $200 million and two-year this kind of project,” he said. “Because
head start in development with the scop- of this, we think debt funding will be rela-
“In two years and for less than $30 mil- ing study posting a likely capex of $300- tively easy and we believe we can take
lion we have drilled the project, put a re- 330 million. 65-70% debt on this project.”
source on it, completed a scoping study
and will now have a BFS out in the next Such savings will be crucial when it Coinciding with a return of positive
three months,” Smart said. comes to funding Prieska’s redevelop- sentiment towards the country is a grow-
ment with Orion attempting to finance a ing bullishness around base metal pric-
The Prieska scoping study, released capital cost which is larger than its cur-
in December, showed a project capa- rent market cap ($60 million).
ble of producing 70-80,000 tpa zinc and
22,000 tpa copper at AISC of $1,701/t However, Smart begins to see the
zinc equivalent. The study was based clouds parting at just the right time for

Much has changed in the 28 years since Prieska was last in production. Orion expects
modern mining methods, including underground drilling (left), will prove safer, cheaper

and more efficient than previously used technology

AUSTRALIA’S PAYDIRT MARCH 2019 Page 75

INDABA REVIEW

Heading underground via the Prieska decline

es. The closure of major zinc mines such growing urgency to secure sources of high- ister due to the political instability in South
Africa. The price has rebounded 50% since
as Lisheen and Century in the last two quality concentrates. the turn of the year but Smart still senses a
markdown is being applied in the Austral-
years punched a large hole in future supply “Everybody knows Prieska has pro- ian market.

forecasts for the galvanising metal and a duced a high-quality concentrate in the “Yesterday (February 19), we traded at
an all-time high on the JSE equivalent to
lack of major discoveries over the last dec- past and we know metals traders are pre- 5c/share while we are struggling to break
3.2c on the ASX. I think that is the discount
ade has analysts anticipating similar short- pared to pay a premium and even advance being applied because of a lack of under-
standing around South Africa.”
falls in copper. finance related to offtake,” Smart said.
The company will be eager for the 2019
LME prices for both metals are up 10% “All of those things bring down the num- trend to be maintained as it edges closer to
beginning financing discussions in earnest.
since the start of the year and there is a ber required from our shareholders and it
It expects the BFS to be released in the
is now likely we will next six weeks and will then start finalising
project finance from the middle of the year.
Orion chief operating officer Walter Shamu explains Orion’s need to raise less
“Financing discussions are an ongoing
long-hole stoping methodology underground at Prieska equity than our cur- process at the moment,” Smart said. “We
have appointed an advisor and we are at
rent market cap. the second stage of negotiations. There
are a lot of offtake groups putting finance
That’ll eventually packages on the table and we’ve been
bowled over with opportunities, particularly
dawn on the market from Japan and Korea and other down-
stream smelters.”
and when it does,
One alternative under consideration
I expect our share comes in the form of neighbour Vedanta
Zinc International plc.
price will move very
The Indian miner achieved first produc-
quickly. We are not tion from its Gamsberg mine – also in the

going to blow our-

selves out at a re-

duced share price.”

On-market per-

formance has been

a source of frus-

tration for Smart.

Orion shares on the

ASX are down 37%

over a 12-month pe-

riod after losing two

funds from the reg-

Page 76 MARCH 2019 AUSTRALIA’S PAYDIRT

Orion has returned to exploration drilling this year, announcing a hit of 9.5m
@ 0.93% zinc and 0.63% copper (including 1.5m @ 4.98% zinc and 0.89%
copper) from the Ayoba prospect in January

South Africa but for embold- sulphides with our first hole and it remains

ened juniors, the time is now, open along strike and down dip. This is an

according to Smart. exceptional VMS system and we are be-

“I think the changes we are ginning to turn our attention to exploring it,”

Northern Cape – late last year and is on seeing politically are already Smart said.
track to produce 250,000t of zinc-in-con-
centrate in 2019. having an effect,” he said. “We have proven The company completed a 148sq km

Vedanta is already committed to a sec- it is possible to put together a large, attrac- high-powered SkyTEM survey late last
ond phase at Gamsberg which will increase
production to 450,000 tpa and is consider- tive portfolio and the new Mining Char- year with Smart expecting final results this
ing an underground option to increase zinc
production to 650,000 tpa. ter will put more pressure on freeing up month with a view to follow-up work this

Its ultimate plan is to build an integrated ground. year.
smelter/refinery complex in the Northern
Cape, providing obvious syneries with “The Department of Mineral The Prieska decline is also in good condition with
Orion. rock integrity sound throughout the mine
Resources offices we deal with
“At the moment we are in early discus- have been exemplary and are
sions with Vedanta but it all depends on
their plans for building a refinery,” Smart doing a great job. Our mining
said. “A lot of people are saying that we
should align ourselves with Vedanta but I right approval seems to be go-
think it is more a case of metal traders see-
ing an opportunity to blend our high-qual- ing through in a timely manner
ity concentrate with Vedanta’s to increase
their quality.” and the DMR’s head office has

Vedanta’s investment is in line with the gone out of its way to ensure
new sense of optimism being generated by
Ramaphosa. Minister for Mineral Resourc- projects are advanced.”
es, Gwede Mantashe, is a close Ramapho-
sa ally and has been tasked with ensuring The last 18 months have
mining investment begins to flow back into
the country. seen several Australian junior

The junior sector is of particular interest companies – both public and
to the Minister and Orion’s progress is be-
ing keenly watched from inside the Minis- private – move into South Africa
ter’s office.
in an effort to get ahead of the
“Minister Mantashe actually used to work
at Prieska so he’s been very interested in curve. Smart sees it as a clever
its progress and gives it as an example of
future mining in South Africa,” Smart said. move.

A longer period of stability will be needed “The people who have taken
if major mining investment is to return to
the time to educate themselves

are starting to move; Tando,

Stonewall, etc. and they are proving there On a regional scale, the belt is also show-

are good projects available in South Africa,” ing analogies to the Fraser Range in West-

Smart said. ern Australia, home to the Nova-Bollinger

The common perception in mining circles nickel intrusive discovery, now being mined

is that South Africa’s maturity means there by Independence Group NL (IGO).

are few exploration opportunities left in the “It is very similar to the Fraser Range;

country but Smart believes Orion and oth- it just hasn’t been explored for 30 years,”

ers are beginning to prove this as fallacy. Smart said.

“There is one a large, well-known pros- Orion has ground itself on the Fraser

pector applying for 130 prospecting rights Range and has now brought IGO into

in the country and the ground White Rivers Prieska to see what it makes of the analo-

Exploration Pty Ltd [a Mark Creasy private gies.

vehicle] has got hold of has goldfield-sized “We believe there is a VMS in the Fraser

targets; not just millions of ounces but tens Range which predates the nickel intrusive,

Louw Van Schalkwyk (left) leads the exploration team, of millions.” just as we have here,” Smart said. “In the
including Clive Benhura (right), in finding further VMS Orion has 1,500sq km in Fraser Range, it has been the nickel which
deposits potentially clustering around Prieska has been discovered and developed first
prospecting rights applications but in Prieska there was interest in the nick-
in the approvals system now

and is preparing for a major ex- el but it was never developed.”

ploration push in coming years. Orion has one nickel prospect, Jaco-

“The focus in the last 12 mynspan, identified but with IGO increas-

months has been on the min- ing its interaction with the junior, more could

ing, now we are beginning to soon turn up.

look at other opportunities,” “We’ve just spent a few days with Inde-

Smart said. pendence Group and they were very im-

The Areachap belt on which pressed by what they saw; both the quality

Orion holds a dominant land of the work we have been doing and the

position has 22 identified VMS nickel targets we have identified,” Smart

occurrences and in 2016 Orion said.

made a new VMS discovery With nickel showing more signs of life

at Ayoba, 5.3km south-west of than any other base metal, Orion’s timing

Prieska. could be about to get even better.

“There has been little drill- – Dominic Piper
ing into Ayoba. We hit massive

AUSTRALIA’S PAYDIRT MARCH 2019 Page 77

INDABA REVIEW

London calling:
The natural home for African

mining investment

Resolute Mining Ltd managing director know we’re a dividend-paying gold com- for African mining stories than any of the
John Welborn insists his company’s pany and we believe a growing, respon- other major global markets which run
impending listing on the London Stock sible, honest, gold dividend-paying busi- their eye over the continent.
Exchange (LSE) is about tapping into a ness listed on the LSE is a compelling
more “natural” investor base for the Afri- offering to the London market.” “I’ve been involved in companies fo-
can-focused gold producer. cused in Africa for more than 10 years
Resolute has opted to pursue a Stand- and I’ve always seen London as a natural
As part of a wide-ranging panel dis- ard listing on the LSE over a Premium investor base for those companies,” he
cussion on the advantages of trading on registration despite being large enough said.
the London market, Welborn detailed the to trade on the latter market. It is the
reasons behind Resolute’s recent de- same bourse both MOD Resources Ltd “I do think that there’s an opportunity
cision to pursue a secondary listing to and Danakali Ltd successfully dual-listed to have broader impact on more than
complement its home of more than 30 on last year. just commodity-focused investors who
years on the ASX. in many cases are agnostic about which
Both MOD and Danakali – two of the exchange a company may be listed on.
Subject to the required regulatory ap- five new African-focused floats on the I’m surprised there has, for a variety of
provals, Resolute hopes to begin trading LSE in 2018 – believe a London listing reasons, been an absence recently in
on the LSE before the end of the half- has enhanced their chances of landing available investment opportunities for
year. development funding for their respective London-focused investors who are retail,
projects in Botswana and Eritrea. high net worth or institutional.
Resolute – which operates the Syama
gold mine in Mali and is reviving the Bibi- Welborn supported the view that Lon- “Certainly our decision to initially dual
ani gold project in Ghana – has strug- don investors have higher appreciation list into London is around providing ac-
gled for traction on the Australian bourse cess to those investors. It’s not around
since its share price peaked at $2.27 in Dual-listed LSE/ASX companies our access to capital – we can raise
September 2016, while many of its gold money in North America and we can
peers have experienced notable increas- Aura Energy Ltd* raise money out of the London market
es in the value of their stock. Base Resources Ltd* based on an ASX listing – it’s around
Berkeley Energia Ltd broadening our investor base.”
Welborn has previously bemoaned BHP Billiton plc*
the figurative cold shoulder Australian Crusader Resources Ltd Five of the past six new metals and
investors have given companies such as Danakali Ltd* mining entrants to the London market
Resolute which have projects overseas, Europa Metals Ltd have an African flavour, with the exemp-
particularly on the African continent. European Metal Holdings Ltd tion being the long-awaited float of lead-
Kore Potash plc* ing uranium producer Kazatomprom.
However, when the question of wheth- MC Mining Ltd*
er London is the natural home for Afri- MOD Resources Ltd* The most recent was UK-based phos-
can-focused mining companies was put Prairie Mining Ltd phate company Kropz plc, which has
on the table for debate, Welborn quickly Rio Tinto plc* projects in South Africa, Ghana and the
shut down any suggestion his company’s South32 Ltd* Republic of Congo, ranging in develop-
planned listing was for reasons other Thor Mining plc ment status from near-term production to
than growth. Wolf Minerals Ltd early stage exploration.

“From Resolute’s point of view, we’re Bolded companies have higher liquidity on LSE It was the fourth public float Kropz chief
not listing in London thinking that we’re *denotes company has projects in Africa executive Ian Harebottle has undertaken
going to get some sort of panacea solu- and he had no hesitation in taking his
tion to trading at a significant discount to current company to the London market
our peer group, but we do think the ac- based on his previous experiences.
cess [to capital in London] will be more
relevant to us,” Welborn said. “If you have a commodity that’s not
standard/not main bourse – previously
“The listing will allow us to have an gemstones and now phosphate [in Hare-
increased presence and a more regular bottle’s case] – I cannot think of any mar-
and sustained presence in the London ket that is more receptive to something
market and to interact with all sectors of new and something different than the
the market. LSE,” Harebottle said.

“I think one of the aspects of listing in “As you start becoming success-
London is that we won’t just be talking ful and you start generating profits, the
to people we’re already talking to. There other markets will obviously start taking
will be some people out there that won’t note, but I think London is great. There is

Page 78 MARCH 2019 AUSTRALIA’S PAYDIRT

Resolute managing director John Welborn (right) explains why his company
plans to list on the LSE, as part of a panel discussion alongside Kropz chief

executive Ian Harebottle and Memery Crystal’s Nick Davis

cash, there are people that are prepared they will see you through and so then remains the most liquid of those listings,
to take an element of risk, more than any when things come back you will all ap- demonstrating that depth of investor ac-
other markets I see. As a starting point, I preciate the upside.” cess that can be generated from the Lon-
couldn’t think of a better place.” don market,” Attenborough said
Speaking to delegates prior to the
Harebottle said while listing in London panel discussion on the opening morn- “We’re very proud to have developed
carried with it many rules and regulations ing of Mining Indaba, Tom Attenborough a market over many, many years which
to adhere to, he believes resources com- – head of international business devel- caters for companies of all shapes and
panies should use those in their favour to opment, primary markets, at the LSE sizes and stages of development. Nearly
drive success. – presented a series of statistics which 100 of our 170 companies have a market
showed dual-listed companies typically capitalisation of £50 million or below. So
He also urged companies considering had better liquidity on the London mar- for those of you thinking, ‘am I too small
a London listing to embrace open com- kets than other exchanges such as the for the London market?’ or ‘can I still get
munication with everyone, from investors ASX, TSX or JSE. recognised?’; absolutely you can. It’s a
and regulators, to brokers and advisors. thriving market for juniors.”
Of the 16 mining companies with dual
“If you keep communication as open listings on the LSE and ASX, nine boast- Attenborough also highlighted re-
as possible, both in the good times and ed greater liquidity on the former, com- search which indicated the LSE had en-
the bad times, you build a very good rela- pared to only two of the 12 companies joyed 1.2 times more average daily value
tionship with the market, and the market dual-listed on the JSE and none on the trade in the metals and mining sector
appreciates that,” Harebottle said. TSX. than the ASX over the past six months.

“I have definitely found that if you’re “In the vast majority of cases where – Michael Washbourne
honest when sometimes things aren’t there are more than one listing, London
going to plan, but you tell your investors,

AUSTRALIA’S PAYDIRT MARCH 2019 Page 79

INDABA REVIEW

Lucapa: Smile, sparkle, shine

Few people had wider grins at this managing director since late 2014, a po- note with commercial production at
year’s Mining Indaba conference in sition of quality in the diamond industry is Mothae declared on January 1, less
Cape Town than Stephen Wetherall and far better than one of quantity. than two years after acquiring a 70%
the team behind Lucapa Diamond Com- stake in the project from Lucara Dia-
pany Ltd. “The objective and strategy that we’re mond Corp for $US9 million.
running as a company is we’re not here
The Lucapa crew had plenty to be to make waves in the industry; what we’re What is particularly impressive about
chirpy about, be it either the successful here to do is find our niche in the indus- Lucapa’s development of Mothae over
commissioning of its new Mothae mine try and our niche is high-end production,” the past two years is that it was achieved
in Lesotho or the historic sale of $22.9 Wetherall told Paydirt. for just $US25 million, a fraction of the
million worth of Lulo diamonds in Angola, circa $US260 million capex estimated by
among other milestones to come which “We are a growing producer and we Lucara before the London-listed group
suggest 2019 is going to be another big want to become a bigger producer – not walked away from the project in favour of
year for the company. the biggest, but a bigger producer of developing another high-end diamond
these very special stones – that’s the mine in Karowe, Botswana.
Global diamond enthusiasts are now strategy we are predominantly following
keeping more than a watchful eye on Lu- as a company. As can often be the case with acqui-
capa as a bona fide high-end producer of sitions of unwanted assets, sections
quality stones. Analysts from both Lon- “We’ve got a very special mine in An- of the market were critical of Lucapa’s
don and Australia recently gave glowing gola and the start we’ve made at Mothae purchase, especially with production at
endorsements of the company’s outlook, has been incredible. We are now the Lulo still firing up. However, Wetherall
particularly for the budding operations at owners of two of the top five dollar-per- believed otherwise, having become well
Mothae. carat mines in the world; that is an ex- acquainted with the project’s potential
traordinary position to be in.” from his time at Gem Diamonds Ltd,
For Wetherall, who has been Lucapa’s
Lucapa began 2019 on a positive

Page 80 MARCH 2019 AUSTRALIA’S PAYDIRT

which owns and operates the nearby of full production before

Letseng mine. formally moving to the

“There was never anything wrong with next phase.

Mothae,” Wetherall said. “It came down “From a board per-

to Lucara simply choosing one great as- spective and from an

set over another. It was not because they internal management

didn’t believe in the project.” perspective, we have

Lucapa initiated a bulk sampling been surprised in the

campaign at Mothae in mid-February positive with the perfor-

2018 with diamonds recovered via the mance of the plant and

existing treatment facility until early we have been surprised

November when first ore was deliv- in the positive with the

ered to the newly minted 1.1 mtpa plant additional grade that

which houses two large XRT diamond we have been getting

circuits (Tomra and DEBEX) capable through additional lib-

of recovering Type IIa and fluorescent eration,” Wetherall said.

stones. “That said, it may not Lucapa managing director Stephen Wetherall
More than 4,000ct were recovered only be additional libera-

from Mothae’s maiden run, including a tion…so that’s why we

78ct white diamond and 89ct yellow dia- need to operate through the new plant, on top of recovering
many more white specials, certainly
mond. The recovered grade of 2.61 cpht Q1 to see if there are additional as- gives us great excitement.”

also exceeded both the resource (1.92 pects there. Being seasoned diamond Expansion is also on the cards at
Lulo – the world’s highest dollar per
cpht) and forecast (1.83 cpht) grades. experts, perhaps our expectations of carat alluvial diamond mine – with
Lucapa’s plans bolstered by the suc-
The first sale of Mothae’s commercial- assets and what we see in the ground cess of January’s historic first tender
under Angola’s new diamond market-
run diamonds was set for late February is far more detailed than most. But we ing policy.

in Antwerp. The most recent diamonds are very, very excited by what’s hap- Seven large diamonds weighing 498ct
from Lulo were sold via an electronic ten-
put up for tender fetched about $US1.5 pening and we look forward to bringing der for $US16.7 million ($22.9 million). It
was the first sale offered via competitive
“million, with individual sale prices of those revenue flows and cash genera- tender, with Angolan regulations previ-
We are now the owners of two of the top ously limiting the number of buyers.
five dollar-per-carat mines in the world;
that is an extraordinary position to be in. More than 30 international diaman-

$US15,000/ct achieved. tion to the market in due course.” taires participated in the inaugural ten-
der, with Wetherall hailing what he de-
Lucapa expects the plant to be op- Plans are also under way to double scribed as a “new era of investment” for
Angola’s diamond industry.
erating at the 90,000 tpm nameplate Mothae’s production to 2.2 mtpa earlier
“There is no doubting that the results
capacity this month, having already than the previously announced target of the tender have demonstrated to the
Government how they can open up the
achieved and exceeded the targeted date of 2021. Initial studies indicated industry to create more direct foreign in-
vestment,” Wetherall said.
treatment rate for extended periods about $US50 million would be needed
“I really think it will create a much eas-
since December. A revised production for the plant upgrade, although the com- ier business environment to operate in.
I mean, for instance, we have to import
guidance is slated for release during pany is confident of identifying and im- most products – spares, etc – from South
Africa for our mines, but what you might
the June quarter, with Wetherall and plementing various cost savings. find now is because the policy changes
are going to attract many more players,
his team opting to wait for three months “The ramp-up phase of the plant those suppliers will open up their own
agencies, etc in country so that those
highlighted to us spare parts are readily available for the
mine. So, for many of those reasons we
the fact that we are exceptionally excited about Angola.”

actually need to The inaugural tender in Angola
pushed total sales of Lulo diamonds to
re-look at our mine $US141 million, representing an average
price of $US2,105/ct, since the mine was
plan and our guid- switched on in 2015.

ance because we The next tender is likely to feature a
128ct Type IIa top-colour white diamond
started to recover recovered from Lulo last month, along

diamonds far more

efficiently through

this new process

than was originally

planned,” Wetherall

said.

“Recovering an

89ct during the bulk

Improved water and tailings storage facilities are expected sampling phase
to be in operation by the end of this year and then recover-
ing a 78ct through

AUSTRALIA’S PAYDIRT MARCH 2019 Page 81

INDABA REVIEW

with a 7.5ct fancy purple-pink gem. It was “If you’re a local investor and you’re and the boxes that we’ve ticked over the
the 12th plus-100ct diamond recovered looking at diamonds, you’re looking un- last two years.”
from the mine to date. der Rio Tinto [Ltd], which is Argyle, and
they really don’t say much on what’s hap- Wetherall added the top 45% of Luca-
Lulo production is forecast to grow pening up there, so investment fund man- pa’s share register, headed by the likes
by 25% in 2019 with a third shift to be agers, analysts from the various houses, of respected mining identity Ross Stan-
added to the 150 tph operation. Explo- etc. haven’t really looked at diamonds ley and company founder and chairman
ration work is also continuing with three because they’re not exposed enough to Miles Kennedy, were very supportive and
drill rigs on site at the time of print as the the industry here in Australia. their investments remain fairly stagnant.
company reviews the potential of multiple However, he conceded the remaining
diamondiferous pipes discovered on the “Internationally we get great recogni- 55% were more retail-focused, specula-
licence. tion for what we’ve done, unfortunately tive investors who were influencing the
we don’t get as much recognition here share price fluctuations.
While Lucapa is seemingly kicking locally. The rest of the world is watching
both operational and sales goals from us. London, in particular, is a very knowl- “If you’re investing in Lucapa, you’re
all angles, the company is yet to see that edgeable diamond market and they are investing in the long game,” he said.
success translate to its home market in watching us closely, as are a lot of other “The diamond industry is very differ-
Australia. At the time of print, its shares mining companies. Unfortunately, I think ent to these new energy metals coming
were trading just below 20c, contrasting because the Australian market isn’t as through and even to the gold sector; you
price targets of 50c from Panmure Gor- educated in the diamond space as per- need to be patient with your outlook.
don and 61c from Euroz. haps the UK market is, we’re probably
not getting a fair reflection of the goals
Wetherall attributed the lack of love for
Lucapa to the limited local knowledge of
the diamond sector.

“The Australian investor hasn’t been
able to look at and understand diamond
investment since Kimberley Diamond
Company privatised,” he said.

Lucapa chief technical officer Ian Kaner
explains how the company plans to
exploit the Neck lobe which currently sits
outside of the Mothae resource

Ross Stanley is a great example of capa portfolio. main game is growing production and
someone who has come to grips with “Certainly the Brooking programme working those hard to generate returns
that and it’s why he has invested in us in for our shareholders.”
a big way.” that we’re running, being a local pro-
gramme, brings the interest from the For Lucapa, the biggest growth oppor-
With Argyle – which accounts for about Australian investors to Lucapa,” he said. tunity could come from beyond the mine
10% of the world’s diamond supply – set gates at Lulo and Mothae. Having had
to close later this year, it could signal “It’s very early days at Brooking. We’ve a taste of the downstream sector from
the end of Western Australia’s diamond identified a body that we recovered micro establishing Gem’s diamond marketing
industry unless Lucapa, via its Brooking diamonds from in high concentration, but and manufacturing division, coupled with
project, or Gibb River Diamonds Ltd at there are many steps to go before we can input during the recent e-tender in Ango-
Blina can land a major find to maintain determine that we’ve got a mine there. la, Wetherall believes Lucapa is ideally
local interest. placed to add polishing, jewellery manu-
“Of course, a local programme brings facturing and branded sales services to
Such a scenario is not lost on Wether- local eyes, but if you have a look at all its existing income stream.
all, but he reiterated that Lulo and Moth- the assets we have across our group,
ae were the clear frontrunners in the Lu- Lulo and Mothae are the ones investors “This isn’t something new to me, I’ve
should really be focusing on because our

Page 82 MARCH 2019 AUSTRALIA’S PAYDIRT

Mothae sorters check for diamonds as
Wetherall eagerly watches on

The first sale of commercial-run
diamonds from Mothae was
scheduled for late February

“Recovering an 89ct during the bulk sampling phase and then
recovering a 78ct through the new plant, on top of recovering
many more white specials, certainly gives us great excitement.

seen the value that was derived from the pressure being felt by those spitting out the industry and therefore every other
Letseng production that Gem sold and I smaller, lower quality stones. jurisdiction that has tried to compete with
believe those margins are something we the Indian cutters has generally not suc-
should be chasing in our own produc- According to Wetherall, high-end pro- ceeded.
tion,” he said. duction is Lucapa’s best chance of en-
tering the downstream sector – and will “There’s significant margins to be
“The nice thing about this is we don’t ensure he and his fellow directors and made as a large stone producer. Whilst,
have to spend a cent on facilities, we will shareholders retain their wide summer we don’t want to cut all of our production,
do it on an outsource basis.” grins for a little while longer. we want to have a look at those stones
which we believe can accrete additional
In the meantime, Lucapa will stay fo- “It is far easier for us to compete in the value. That is the strategy that we are
cused on becoming a leading high-end sector with large stones than it is to com- building in this company.”
diamond producer. While there remains pete with low value, high volume,” Weth-
some softness in the pricing for qual- erall said. – Michael Washbourne
ity stones, high-end producers are not
experiencing anywhere near the same “The Indian diamantaires cut and pol-
ish at costs which are unparalleled in

AUSTRALIA’S PAYDIRT MARCH 2019 Page 83

regional roundup

Hot Chili goes through
the roof

Hot Chili arranged a $3.2 million at 1c/share
placement and rights issue in February

The market has reacted overwhelm- copper players to get excited. “The Cortadera discovery was being
ingly in favour of Hot Chili Ltd’s latest “The spring board is there for a [bullish] made at the same time we were mak-
acquisition – Cortadera – in Chile. ing the Productora discovery. Cortadera
copper price environment. The scene is was being drilled by a Chilean billionaire
Following execution of a binding MoU set for the next 12-24 months for good not linked with the mining industry who
with private Chilean mining group SCM copper pricing fuelled by supply be- optioned the property off the very promi-
Carola to secure 100% of the Cortadera ing difficult; supply is getting very tight,” nent and well-known SCM Carola family.
copper-gold porphyry project, Hot Chili Easterday said. They are probably the only private family
was issued with a speeding ticket by the business owning a Tier 1 copper project
ASX to explain why its share price had Therefore, it is an opportune time for – Punta del Cobre. A 1.3bt @ 1.3% cop-
rocketed from 1.9c/share to 3.6c/share Hot Chili to really take its restart strategy per project sets them apart from every-
from February 19 to February 21. up another gear in a market starved of one else,” Easterday said.
genuine world-class copper assets.
“We’ve been up 200-230% over the “We didn’t know about Cortadera until
last week, albeit off a low base,” Hot Chili Hot Chili will always be known for the about 2016 after about $15 million was
managing director Christian Easterday potential at Productora – 66,000 tpa put into the ground and nearly all of that
told Paydirt at the time of print. copper and 25,000 ozpa gold (over an was drilling. They did about 23,000m of
initial eight years) in Chile’s Region III, HQ diamond drilling into a major discov-
Perhaps, after a challenging five years, which has attracted Minera del Pacíico ery 14km from Productora.”
investors are starting to take to the Hot S.A. (CMP) as a 20% partner at project
Chili story once more as copper stock- level – however, the legacy is poised to Easterday said in addition to the sul-
piles test 10-year lows on both the LME be much greater. phide potential, a chalcocite blanket over
and COMEX. the top of the deposit could potentially
“We got caught with our pants halfway host 30mt copper and be a significant
After starting the year at $US2.68/lb, down when the tide went out in 2014. We cash generator for the company.
copper was trading at almost $US2.90/ understood that we needed the grade
lb, as BHP Ltd reported a fall in copper to be higher for it to work and alterna- Intersections of 90m @ 1% copper and
production in the second half of 2018 tively we needed a much larger project 0.4 g/t gold and repeated in other hits at
(year-on-year) and concentrate output because we only had half the mine life Cortadera are indicative of the chalcocite
from Freeport McMoRan Inc’s Grasberg needed,” Easterday said of Productora, potential, Easterday said.
operation, Indonesia, is expected to de- which hosts a resource of 237mt @
cline this year as the world’s second larg- 0.48% copper, 0.1 g/t gold and 135 ppm “To put that into perspective, if there
est copper mine transitions from open pit molybdenum. is a 30mt @ 1% copper and 0.4 g/t gold
to underground. chalcocite blanket over the top of this
Coincidentally, as Hot Chili was real- thing, which can be processed through
Furthermore, China’s clampdown on ising the potential of Productora, 14km a sulphide mill or oxide plant – and if we
the use of scrap metal now and into the away the Cortadera discovery was flying borrow the capacity of 14 mtpa at Pro-
future (see page 88) is the backdrop for under the radar.

Page 84 MARCH 2019 AUSTRALIA’S PAYDIRT

LATIN AMERICA

ductora, that’s roughly $US850 million of Christian Easterday Cortadera has produced some of the
revenue a year for two years. In simple most significant set of copper-gold por-
terms, that pays off an $US800 million development plays embedded within jun- phyry discovery results since Cascabel
project in two years. Something like that iors on the ASX.
on its own is a company-maker not just Australia does,” Easterday said.
the icing on the cake,” he said. “This deal will undoubtedly make us “It is very exciting times in country and
the No.1 copper developer on the ASX.
There is potential for Cortadera to be The last time the ASX had something for our major shareholders who have
bigger than Productora, however, Hot like this was when Equinox was on the been supporting the company for the
Chili will wait on making any determina- screen before it was taken over by Bar- past five years. We are one of the few to
tions until a lot more extensional drilling rick [Gold Corp],” Easterday said. be left standing and this was the game
and infill drilling is completed over the plan all along. We have been finally able
chalcocite zone. At the time of print, the Mark Bristow- to secure a deal with a very tough part-
led Barrick had just met with Chile’s ner to deliver a transformative/game-
Adding Cortadera to the portfolio fol- Minister of Mining Baldo Prokurica and changing deal. I think what we have done
lows the suite of assets – San Antonio outlined plans to review “a range of new is turning the company around and we
(historic production 2mt @ 2% copper, exploration opportunities and re-evaluat- are enjoying a lot of interest from major
0.3 g/t gold), Lulu and Valentina (12m @ ing its existing operations and projects in groups now.”
1.5% copper – comprising the El Fuego Chile”.
project which Hot Chili acquired last year. – Mark Andrews
In the past decade Barrick has spent
“If you put two Tier 2 deposits together $US8 billion down the mining chain in
and you develop something special it is Chile and recently approved an invest-
likely that we could be sitting on some- ment to increase productivity at its jointly
thing that is pushing towards a Tier 1 dis- owned Zaldívar copper mine.
covery,” Easterday said.
Studies on the Norte Abierto copper-
“We don’t know at this stage, but as a gold JV project are advancing and the
combined development certainly at Pro- Alturas project was “making good pro-
ductora and Cortadera and all the high gress”, Barrick reported.
grade assets we have brought in over the
last 12-18 months, the camp itself is cer- Meanwhile, Barrick’s focus at Pascua-
tainly heading towards Tier 1 category.” Lama remains on resolving legal, envi-
ronmental and other issues along with
Given the value proposition Hot Chili a technical review of the project param-
is building, Easterday said it was unlikely eters and future potential.
the company would be market capped at
$10 million for much longer. “Barrick has given another tick to Chile
and it all goes back to Murray Black 10
Time will tell, however, he could be years ago backing me to come here
on the money given the lack of sizeable and make discoveries. Chile is still a top
three mining jurisdiction and provides as
safe a long-term investment as Western

Hot Chili managing director Christian Easterday
says the company “pulled a rabbit out of the hat” by
executing a binding MoU to acquire 100% Cortad-
era copper-gold discovery, 14km from Productora

AUSTRALIA’S PAYDIRT MARCH 2019 Page 85

LATIN AMERICA

Galan is gallant at Candelas

Galan Lithium Ltd could not have Juan Pablo Vargas de la Vega “Candelas could be a large resource
asked for a better start to its maiden too. We have one tick with very few im-
drilling campaign at the Candelas lithium to-lithium ratio of less than three – re- purities, now we need to make sure this
brine project in Argentina’s acclaimed ported from the maiden hole at Can- is a viable project and we can do some-
Hombre Muerto salar. delas, which compares favourably with thing with it.”
other projects currently being mined in
Lithium-bearing brines were encoun- the Hombre Muerto salar. Galan is permitted to drill five holes in
tered for 166m from a depth of 235m to its maiden programme but has applied
the end of the very first hole drilled into Hombre Muerto is home to Livent to complete more in order to calculate a
Candelas. Corp’s El Fenix operation, as well as the resource for Candelas, possibly as early
Galaxy Resources Ltd and POSCO-con- as Q3 2019.
Initial assays taken from the maiden trolled Sal de Vida project.
drill hole also returned strong lithium Vargas de la Vega likened his com-
grades, including 65m @ 862 mg/L from “The make-up of our brines is very pany’s approach to drilling at the 15km
235m, 20m @ 771 mg/L from 310m and similar – and could even be slightly better long Candelas target to how a petroleum
1m @ 806 mg/L from 353m. – to what we found at Hombre Muerto,” explorer would seek out a reservoir, add-
Vargas de la Vega said. ing that geophysics played a crucial role
Speaking to Paydirt upon his return to in the discovery process.
Australia after five weeks on the ground “Hombre Meurto is well known for hav-
in Argentina, including three on site sup- ing a strong combination of high grade “We’ve seen a correlation with what
porting the drilling crew, Galan managing and low impurities and that’s what we’ve the geophysics was telling us with the
director Juan Pablo Vargas de la Vega found in our lab results. end of hole, which is conductivity with
had a spring in his step with his company brines, so we’re very excited,” he said.
on the cusp of a major discovery at Can-
delas. “Geophysics is pointing us in the right
direction to where the lithium brines are.
“We are really happy that we have a If our second hole comes good, then the
discovery and we have good intersec- geophysics will be proven and we can
tions with good grades,” he said. have more finesse in what we’re doing
with the drilling and how we can go about
“The next thing is to move south and things.”
test the continuity of the ground. Most
importantly, the second hole that we’re It is almost 12 months since Vargas
doing is going to make or break us in de la Vega vended his private company
terms of our project. We believe our geo- Blue Sky Lithium – holder of the Cande-
physics is telling us something very im- las tenements – into Nathan McMahon’s
portant and if we can demonstrate that Dempsey Minerals to form Galan.
the brine continues to the south, several
kilometres from where we are now, then “In hindsight, we’ve done all the right
we have a strong case for a potential re- things,” he said. “We did the sampling,
source down the track. we did the geophysics, we applied for the
drilling permits, we started drilling and
“It’s a work in progress, but we’re very now we’re getting the results.
encouraged and very excited to go and
test this new area.” “The reflection of all that is in our share
price. Today we are close to 38c, a year
Galan has also been encouraged by ago we were 8-9c. That all speaks for it-
the low impurity levels – a magnesium- self.”

A former resources analyst specialis-
ing in the battery minerals sector, Chile-
an-born Vargas de la Vega remains opti-
mistic about the future of lithium despite
some recent softness in pricing.

“I think there’s something much bigger
going on that we don’t understand yet, so
I’m still positive about the lithium industry
for the future,” he said.

“There could be a bad month ahead, or
a bad year ahead, but it’s not going to last
forever as long as we keep using cars
and technologies that require lithium, so I
think we still have got 5-10 years of good
pricing ahead of us.”

– Michael Washbourne

Galan has enjoyed a great start to drilling at Candelas, part of Argentina’s famed
Hombre Muerto salar

Page 86 MARCH 2019 AUSTRALIA’S PAYDIRT

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regional roundup ASIA

Scrap remains the wild card
in China’s copper imports

China set a new record last year in terms often a lot less than that. Most analysts expect a pre-emptive surge
of how much copper it sucked in from Although the ban kicked in only at the end of Category 6 scrap to enter China ahead
of the July deadline. This is what happened
the rest of the world. of the year, import restrictions and tighter with Category 7 material, imports from coun-
tries such as the Philippines and Thailand
Imports of refined metal reached 3.75mt, regulatory oversight began with the first accelerating in 2017 as importers rushed to
beat the clock.
up 16% from 2017 and eclipsing the previ- round of 2018 import licenses.
Not everyone agrees, however.
ous high of 3.68mt registered in 2015. A step-change in the sort of scrap enter- Analysts at research house Roskill argue
that such a surge is “unlikely”.
The strength of China’s import appetite is ing China quickly became evident. Average Firstly, there is the problem of the extra tar-
iffs on copper scrap from the US, the single
surprising given the country’s own refined copper content jumped from 42% in 2017 to biggest source of high-purity material in the
first half of 2018.
copper production surged by 8% to just over around 60% last year, according to analysts Imports from the US unsurprisingly
slumped over the second half of the year
9mt in 2018. at Refinitiv. and despite a small bounce in December
seem unlikely to recover to pre-tariff levels
New smelting and refining capacity con- On paper, last year’s year-on-year change any time soon.
Moreover, Roskill argues that Chinese
tinues to be built and there was no short- in terms of how much copper was contained customs’ current inspection focus on trans
shipments reduces the potential for US scrap
age of mined concentrates to feed it last in China’s scrap imports was marginal. to enter China indirectly via Hong Kong.
Secondly, the global recycling industry
year thanks to a robust performance by the In the real world, however, the clampdown is still reacting to last year’s Category 7 re-
strictions by building new shredding and
world’s copper mines. on Category 7 flows caused significant sup- granulation capacity. The lead time on such
investment, typically 2-4 years, “means that
China also imported more copper con- ply-chain disruption, which was compound- the international recycling industry has no
chance of being ready for the start of [new]
centrates than ever before, close to 20mt in ed by China’s imposition of tariffs on imports restrictions in July 2019”.
The pace of Chinese scrap regulation, in
gross weight terms. of scrap from the US, a key source of higher- other words, is running ahead of the rest of
the world’s ability to adapt.
In part, the explanation for China’s in- purity material. Scrap has a double impact Scrap is once again the known unknown
in the bigger Chinese copper import picture.
creased call on units from the rest of the on the refined metal segment of the copper If the consensus about a pre-emptive rush
to get scrap into China ahead of July is right,
world is one of simple restocking after rela- market. It is used both to make new metal it implies a softening in demand for copper in
other forms, whether concentrates as feed
“tively weak imports in 2017. via secondary refining and as a direct-melt for refineries, or refined copper at the semi-
manufacturing stage of the supply chain.
In part, however, it’s also down to scrap, input into first-stage processing into copper However, if Roskill is right, Chinese de-
mand for both concentrates and refined
products. metal will be stronger than expected.
Only time will tell.
And, with more rule changes Analysts at And, talking of timing, China’s crackdown
Barclays Capi- on “foreign waste” isn’t stopping any time
soon. Beijing is proposing a ban on all scrap
coming this year, scrap will remain tal, citing re- of less than 99% purity at the end of 2020.
the wild card in China’s copper import search by Wood No one in the recycling industry thinks
Mackenzie, that is realistic. However, given the speed
and scale of rule changes over the last two
picture. Imports of copper scrap fell by note that while years, no one should doubt Beijing’s ability
32% to 2.4mt gross weight in 2018, the total copper to disrupt further global copper scrap flows.
consumption
– Andy Home, Reuters
lowest headline figure this century. increased by
2% last year in

China, demand

the often overlooked component of the cop- for refined metal rose by 5%.

per supply chain. “This implies a decline in scrap con-

Copper scrap imports slumped last year sumption in the semis industry of close to

as Beijing tightened purity rules on the type 300,000t,” Barclays noted in January.

of material it is prepared to accept, part of a The follow-through inference is that Chi-

broader campaign against “foreign waste”. nese consumers built stocks of both refined

And, with more rule changes coming this and scrap copper to cushion the impact of

year, scrap will remain the wild card in Chi- the scrap rule changes.

na’s copper import picture. That accentuated broader cyclical stocks

Imports of copper scrap fell by 32% to build that followed a year of destock in 2017.

2.4mt gross weight in 2018, the lowest head- Imports of 3.2mt of refined copper that year

line figure this century. were the lowest since 2013.

This was by no means unexpected. The scrap disruption effect is only going to

China had flagged in advance its intention intensify this year.

to ban imports of what it calls Category 7 Beijing has moved imports of higher-quali-

scrap at the end of last year. ty Category 6 copper scrap to the “restricted”

Category 7 scrap covers a broad spec- list of commodity imports effective July 2019.

trum of materials. Much of it, such as radia- They are not yet banned, and there are

tors and engine motors, needs to be physi- even hopes that the highest-quality material

cally disassembled before the metal can might still be exempted, but quotas, restric-

be extracted. All of it is relatively low-grade, tions and tougher inspections start applying

typically containing below 70% copper and in six months’ time.

Page 88 MARCH 2019 AUSTRALIA’S PAYDIRT

Wherever we are.. trend with us

#paydirtmedia #magazines #conferences

Geopacific Resources Ltd’s Woodlark gold project in
Papua New Guinea, 2018

regional roundup

Norway gives go-ahead
to disputed Arctic copper mine

Norway’s government has approved a plan to dump tailings in the fjord would dic nations, Russia, Canada and Alaska,
the building of a copper mine near destroy spawning grounds for the coastal echo the Norwegian Sami concerns,
Europe’s northernmost point despite cod. citing threats from climate change, min-
years of opposition from indigenous Sami ing, oil spills and poaching as well as
herders and fishermen. Nussir says the area contains an es- thoughtless behaviour from townspeople
timated 72mt of copper ore – Norway’s and tourists.
“The mining project will strengthen largest reserve – and plans to invest
the industrial base in the north,” Indus- more than 1 billion crowns ($US115.8 Global majors, including Eni, Equinor,
try Minister Torbjoern Roe Isaksen of the million) in the mine while making only Gazprom, Glencore, Lukoil and Rio Tinto
centre-right coalition government said in minimal intrusion in the local way of life. Ltd, are all grappling with how to square
a statement on February 14. their prospecting plans with the interests
Local officials gave a green light in of people whose views count more than
“It will contribute positively to the local 2012, but the project has since been in the past.
community, with new jobs and skills.” stuck awaiting an operating license, with
big industry players paying close atten- Average temperatures in the Arctic
Norway’s decision on the copper mine tion to the process, the International regions of the world, where some four
has been viewed as a litmus test for the Centre for Reindeer Husbandry has said. million people live, have risen more than
Arctic, where climate change and tech- 2°C since pre-industrial times, twice as
nology are enabling mineral and energy Kvalsund, a village of painted wooden fast as the world average, according to
extraction, shipping and tourism, but houses on the Repparfjord with 1,027 research for the intergovernmental Arctic
threatening traditional ways of life. inhabitants, said the mine would boost Council.
a municipality which spends 40% of its
The Nussir ASA project is expected to income caring for the elderly as young – Terje Solsvik, Gwladys Fouche,
bring jobs and investment to the Kvals- people move away. Reuters
und municipality, but the digging could
damage reindeer summer pastures and Herders around the Arctic in other Nor-

As ice melts, Greenland could
become big sand exporter: study

Greenland could start to export sand enough water to raise global sea levels by who was not involved in the study, said
in a rare positive spin-off from global about 7m (23ft) if it ever all thawed, and there was already some local mining of
warming that is melting the island’s vast ice carrying ever more sand and gravel into sand for the domestic construction indus-
sheet and washing large amounts of sedi- coastal fjords. try in Greenland.
ment into the sea, scientists said.
“You can think of it [the melting ice] as a Drawbacks for Greenland, common to
Mining of sand and gravel, widely used tap that pours out sediment to the coast,” other mining projects on the island rang-
in the construction industry, could boost lead author Mette Bendixen, a researcher ing from uranium to rare earth minerals,
the economy for Greenland’s 56,000 pop- at the University of Colorado’s Institute of include the distance to markets in Europe
ulation who have wide powers of self-rule Arctic and Alpine Research, said. and North America, he said.
within Denmark but rely heavily on subsi-
dies from Copenhagen. Worldwide demand for sand totalled Still, Bendixen said sand was already of-
about 9.55bt in 2017 with a market value of ten transported long distances, such as to
By mining sand, “Greenland could ben- $US99.5 billion and is projected to reach Los Angeles from Vancouver or from Aus-
efit from the challenges brought by climate almost $US481 billion in 2100, driven by tralia to Dubai.
change,” a team of scientists in Denmark rising demand and likely shortages, the
and the US wrote in the journal Nature study said. “At the moment it is an inexpensive re-
Sustainability. source but it will become more expensive,”
That meant a rare opportunity for the she said.
The study, headlined “Promises and island.
perils of sand exploitation in Greenland”, The study said that sand and gravel
said the Arctic island would have to as- “Normally the Arctic peoples are among might also be used in future to reinforce
sess risks of coastal mining, especially to those who really feel climate change – the beaches and coastlines at risk of rising
fisheries. eroding coast, less permafrost,” Bendixen sea levels, caused in part by Greenland’s
said. “This is a unique situation because of thaw.
Rising global temperatures are melting the melting ice sheet.”
the Greenland ice sheet, which locks up – Alister Doyle, Reuters
David Boertmann of Aarhus University,

Page 90 MARCH 2019 AUSTRALIA’S PAYDIRT

EUROPE

Fireside chat underpins PEA

Black Dragon Gold Ltd managing direc- Black Dragon is on a path to construction of its Salave gold project, northern Spain
tor Paul Cronin believes opening an
early dialogue with the Spanish Govern- face for temporary storage of plant tailings, print, the company announced plans to del-
ment and the local community in Asturias with paste and backfill of the mine planned ist from the TSX.
proved critical to the success of a PEA on to minimise the amount of tailings stored at
the company’s Salave gold project. surface. Cronin said Australian investors under-
stood the gold market and had warmed
And Cronin is equally confident those The tailings management facility will to the concept of developing a high-grade
efforts have put his company on the right involve water recovery in the processing mine in Spain.
path to complete an ESIA over the course plant and transportation to a geomem-
of this year to allow construction of the Sa- brane-lined facility designed to eliminate “We’re getting a lot of calls and emails
lave mine to begin in mid-2020. any risk for potential surface and ground- through at the moment from various Aus-
water contamination. tralian financial institutions and brokers
Released last month, the PEA found an wanting to know more about the story,” he
underground operation at Salave could be Previous owners of Salave had plans to said.
developed for $US95 million. Payback is develop an open pit mine rejected or ran
expected to occur within 3.8 years of first out of funding to complete the required per- “It’s also incredibly advanced for a project
production. mitting for underground operations. Cronin that formally is at the PEA stage, but the
can see no such issues for his company. reality is we’re a lot further along than that,
The initial discussions with the Span- given the historical work that’s been done
ish authorities and impacted communi- “We’ve now got the funding [$15.5 million on it.
ties near the project were a critical part raised over the last two years] to take this
of drawing up the PEA. With most of the right through permitting,” Cronin said. “We’re confident we’re going to have
key concerns already addressed, Black some pretty exciting announcements over
Dragon was aiming to submit its project “In addition to that, we’re still looking at the next 3-4 months. I think it will really ce-
description for the ESIA late last month doing some more exploration. We’ve just ment how we’re taking this project forward
and begin the process to obtain formal en- done a big structural review of the deposit to in terms of potential offtake deals, etc. and
vironmental approval to develop Salave, understand why these higher-grade zones potential financing as well.”
northern Spain. exist and we’ll be putting in an application to
do some more drilling later this year. Cronin added Spain was an often mis-
“We’re already miles ahead of where we understood jurisdiction from a mining and
would normally be on the ESIA, so we’re “We’re also going to be flying some more resources viewpoint and it would only be a
hoping to submit that rather quickly,” Cronin geophysics because we just had our last matter of time before the rest of the world
told Paydirt. exploration permit extended by another cottoned on to the opportunities there.
three years. We’re hoping we can still add
“We now know through discussions with more ounces to the mine; more importantly, “In 2017, Spanish mining investment
government what their issues are or are higher grade ounces.” grew by 20% and I don’t see that slowing
likely to be and we’ve managed to put solu- down,” he said.
tions around those and assessed that eco- Black Dragon has pencilled in October
nomically through the PEA. for the completion of a feasibility study on “There are a number of smaller base
Salave, with the company looking to update metals projects on the Iberian mineral belt
“We’re confident that the process will be some of the estimated costs following new making good progress and going into pro-
relatively quick for us. Under Spanish law, geotechnical work to be undertaken in the duction. It may not be hitting the headlines
there’s a few defined steps in the ESIA pro- coming months. in the traditional jurisdictions, but in Spain it
cess which we’ve got to go through – cer- very much is.”
tain review periods, etc. – but we’re pretty It has been a big six months for Black
confident we’re going to get this done in Dragon since listing on the ASX in late – Michael Washbourne
about 12 months.” August via a $6 million IPO. At the time of

Other key inputs from the PEA were a
pre-tax NPV of $US239-353 million, IRR
of 23-35%, life-of-mine cash costs of $675-
783/oz and life-of-mine AISC of $699-807/
oz.

Production is based on a life-of-mine
plant throughput of 9.19mt, churning 79,200
ozpa gold. The current measured and indi-
cated resource of 8.21mt @ 4.58 g/t gold
for 1.2 moz supports an initial mine life of
14 years.

Black Dragon had a specific mandate to
design a project which released no water
from the tailings. As such, a tailings man-
agement storage facility will be built at sur-

AUSTRALIA’S PAYDIRT MARCH 2019 Page 91

SIGNED, SEALED AND DELIVERED www.nucleussc.co.za

SGS Canada will build and operate a new lithium-
ion battery recycling pilot plant for Neometals

Neometals flicks the worldwide for housing pre-eminent ex- Barminco back for
switch on recycling plant pertise in the development, optimisation more in India
and piloting of mineral processing and
SGS Canada Inc has been awarded chemical extraction processes. Ausdrill Ltd’s recently acquired sub-
the contracts to construct and operate sidiary Barminco Holdings Ltd has been
a lithium-ion battery recycling pilot plant Geotech chasing mas- awarded a new underground mining ser-
for Neometals Ltd at its fully accredited sive sulphides at Zeus vices contract at Hindustan Zinc Ltd’s
Lakefield facility. Rampura Agucha mine in India.
Ontario-based Geotech Ltd has been
To be completed over two stages, SGS contracted by Chase Mining Corp Ltd Barminco has operated at Rampura
will undertake front-end feed prepara- to fly an airborne EM survey using its for Hindustan, a subsidiary of Vedanta
tion (shredding, removal of metal cas- helicopter-borne VTEM Max system Resources Ltd, since late 2016. The new
ings and plastics) and the subsequent over two areas within its Zeus project in contract – valued at about $100 million –
hydrometallurgical processing and refin- south-west Quebec, Canada. is for a 3.5-year term, subject to review
ing stage to deliver high-purity battery and mutual agreement of rates after the
materials for market qualification. Geotech was mobilising to site at the first year.
time of print with preliminary data col-
Neometals announced last month the lected from the Lorraine and Alotta-Del- The scope of work includes the exten-
successful commissioning of Stage 1 of phi-Zullo project areas due in late March. sion of development works that were be-
the recycling pilot plant. The programme ing provided under a recently completed
aims to verify assumptions made at The 100m line-spaced survey will contract, plus the addition of production
bench scale, generate marketing sam- cover the entire area of the Lorraine work in the Barminco-developed area of
ples and provide essential data required and Alotta-Delphi claim blocks targeting the mine.
for a FEED study which would support a nickel-copper massive sulphide miner-
subsequent feasibility study and enable alisation. A total of 718 line-kilometres Under the contract, Hindustan will pro-
consideration of an investment decision are slated to be flown. vide capital equipment and consuma-
on a commercial plant. bles. Barminco will begin work immedi-
ately.
SGS’s Lakefield facility is recognised

NUCLEUS

Nucleus Mining Logistics

Providing turn-key logistics and supply chain solutions into Africa

Page 92 MARCH 2019 AUSTRALIA’S PAYDIRT

www.nucleussc.co.za

Sheffield secures 15-year NRW bulks up at Primero is the preferred EPC and
LNG supply Koodaideri FEED contractor for Core Lithium’s
Finniss project, Northern Territory
Sheffield Resources Ltd has secured a NRW Holdings Ltd will provide $65 mil-
15-year agreement with Woodside Ener- lion worth of bulk earthworks for Rio Tinto Primed for new lithium
gy Ltd and Energy Developments Pty Ltd Ltd’s Koodaideri mine in the East Pilbara, mine build
for the annual supply and delivery of 1,950 Western Australia.
terajoules of LNG to the Thunderbird min- Primero Group has been unveiled as
eral sands project, near Derby, Western Koodaideri, 35km north-west from Yan- the preferred EPC and FEED contractor
Australia. dicoogina, will deliver a new production for Core Lithium Ltd’s Finniss project in
hub for Rio Tinto’s iron ore business. Ser- the Northern Territory.
LNG will be supplied from Woodside’s vices to be provided by NRW include bulk
Pluto LNG truck loading facility near Kar- earthworks and drainage, with the con- Core is targeting first production of spo-
ratha and transported to Thunderbird’s tract expected to run for 11 months. dumene concentrate by the end of the
LNG storage facility by a newly formed JV year after receiving a mining licence in
between Woodside and Energy Develop- NRW is expected on site in April, with January.
ments. The JV will own and operate a pur- over 175 workers required for the project.
pose-built road tanker fleet to safely and Primero has been engaged to improve
reliably deliver the LNG to Thunderbird. Meanwhile, NRW has completed its the accuracy of the 1 mtpa processing
acquisition of the RCR Mining and Heat plant and associated infrastructure at
Sheffield said the advantage of using Treatment businesses from the adminis- Finniss.
LNG at Thunderbird was three-fold as it trators of RCR Tomlinson Ltd.
provides the company with a low cost, low Meanwhile, Lucas Total Contract Solu-
emission fuel source ideally suited to the The RCR Mining and Heat Treatment tions and Qube Holdings Ltd have been
ilmenite low temperature roast process businesses which operate from primary selected as the preferred contractors for
proposed for Thunderbird. locations at Welshpool and the regional mining services and transport solutions
centre of Bunbury, together with a facility respectively.
Part of Sheffield’s $95 million financing in Victoria, will continue to be supported
support package from the Northern Aus- by the 300-odd employees who have re-
tralia Infrastructure Fund (NAIF) will be ceived offers of employment with NRW.
allocated to the proposed LNG storage
and power station facilities, which will be NRW’s acquisition is earnings accre-
constructed and operated under separate tive with the purchase consideration of
agreements with third parties. $10 million (subject to certain completion
adjustments) funded from the company’s
existing cash reserves.

Sheffield has partnered with Woodside Energy and Energy Developments for LNG
supply to the upcoming Thunderbird mineral sands mine in WA’s Kimberley region

Nucleus Mining Logistics pNrUoCviLdEesUhSigh levels

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AUSTRALIA’S PAYDIRT MARCH 2019 Page 93

DrReIgLLioBInTSal roundupExploring together for success bostech.com.au

Xanadu strikes bornite assemblage averaging 63% Ilmenite, 6.4% WA opens coffers
at Kharmagtai rutile. 5.4% zircon and 0.5% leucoxene. to explorers

Xanadu Mines Ltd reported that diamond Dacian shows growth Round 19 of WA’s EIS was
drilling at the Kharmagtai copper-gold potential Mt Morgans opened last month
deposit, south Gobi, Mongolia, has inter-
sected a significant zone of visible bornite- Drilling in previously untested areas be- Round 19 of Western Australia’s Exploration
chalcopyrite copper mineralisation. tween the Beresford and Allanson ore re- Incentive Scheme’s (EIS) co-funded explo-
serves, and north of Allanson ore reserve, ration drilling programme was opened last
In hole KHDDH488, porphyry-style vein- has confirmed high-grade extensions to the month by Mines and Petroleum Minister Hon
ing and visible chalcopyrite-bornite mineral- Westralia mineralisation, Dacian Gold Ltd Bill Johnston.
isation from 178m to current depth of 891m has reported.
was reported, with drilling continuing at the The EIS programme provides $5 million a
time of print. The first diamond hole at the new Basin year to encourage drilling in greenfields and
Margin prospect hit high-grade minerali- under-explored areas of the State. Explorers
A good shift in sands sation, with the results reflecting the early can receive a refund of up to 50% for innova-
at Tajiri success of the accelerated exploration pro-
gramme launched last year.
Strandline reported a high-value mineral
assemblage averaging 63% Ilmenite, 6.4% Dacian executive chairman Rohan Wil-
rutile. 5.4% zircon and 0.5% leucoxene from liams said there was more strong evidence
that the company was on track to establish
resource drilling at Taijiri a plus-10-year mine life at Mt Morgans at a
production rate of 200,000 ozpa gold.

“The results include outstanding intersec-
tions from several areas at Mt Morgans, all
within 15km of the processing plant, and
highlight the huge scope for organic growth,”
Williams said.

Latest assays from resource drilling has Rohan Williams
provided Strandline Resources Ltd with
more evidence that Tajiri, Tanzania, is trend-
ing towards Tier 1 mineral sands status with
a highly valuable mineral assemblage.

First results from resource drilling at Tajiri
highlight strong potential for a large increase
in the current resource of 147mt @ 3.1%
THM.

Significant intersections included 39m @
3.5% THM from surface to the end of hole
(EOH), 42m @ 4% THM from surface to
EOH (including 19.5m @ 5.71% THM from
13.5m), 42m @ 7.9% THM from surface (in-
cluding 22.5m @ 11.5% THM from 13.5m)
and 42m @ 4.5% THM from surface to EOH.

The titanium-dominated domain identified
from surface comprised a high-value mineral

Exploring together for success

Page 94 MARCH 2019 AUSTRALIA’S PAYDIRT

Exploring together for success bostech.com.au

tive drilling projects, with caps of $150,000 Drilling at Fairbridge – the first ever con- ly improves the project’s potential for gold
(multi-hole project), $200,000 (single deep ducted on the interpreted mineralised con- and copper mineralisation,” Hinner said.
hole), and $30,000 for prospectors. tact between the high-grade Stricklands
and Cathedrals prospects – will follow. No Stawell-ing for
Archer hits Hood Navarre
“The RC drill programme will be testing
Archer Exploration Ltd has received final for continuations of the known high-grade Navarre Minerals Ltd has intersected
results from shallow RC drilling at the Hood mineralisation as well as testing for ad- further significant gold mineralisation from
copper-gold prospect, part of the Archer ditional occurrences in areas where there a recently completed 33-hole, 4,146m RC
Blue Hills copper-gold project in South has been no or very little previous drill- drilling programme at the Adventure Lode
Australia. ing,” St George executive chairman John within the company’s Irvine gold project,
Prineas said. near Stawell, Victoria.
The company reported strong intrusive-
style copper-gold mineralisation had been Freehill to drill in Chile Drilling targeted depth extensions to a
intersected throughout drilling at Hood, with 1.3km-long zone of shallow oxide gold at
the latest intercepts including 10m @ 0.1% Upon completion of an IP survey at Ye- Adventure Lode to a vertical depth of ap-
copper from surface in HDRC19-04. rbas Buenas in Chile’s Region IV, Freehill proximately 120m below surface, and was
Mining Ltd has identified an anomaly for successful in delivering multiple intersec-
Drilling at Blue Hills is completed, with drilling. tions of gold mineralisation within four high-
further assay results from Hawkeye and er grade shoots.
Katniss expected at the time of print. “The completion of the IP survey is a sig-
nificant step forward in verifying the pres- Highlight results included: 6m @ 4.2 g/t
ence of what we believe is a large sulphide gold from 67m (including 4m @ 6.1 g/t), 5m
structure that may host the copper and gold @ 4 g/t from 41m (within a broader intersec-
mineralisation typically found at surface in tion of 11m @ 2.1 g/t from 38m), 3m @ 5.2
the area. A drilling programme is already g/t from 85m (within a broader intersection
being planned for the second quarter that of 11m @ 2.5 g/t from 78m), 4m @ 3.7 g/t
will target the anomaly,” Freehill chief ex- from 96m, 9m @ 2.6 g/t from 130m (includ-
ecutive Peter Hinner said. ing 1m @ 6.1 g/t).

“Discovering this large IP anomaly so
close to other copper and gold mineralisa-
tion is a great development and substantial-

John Prineas Freehill will drill Yerbas Buenas, Chile, in Q2

St George gets going

One of the ASX’s most active drillers – St
George Mining Ltd – is firing up for 2019.

At the time of print, the company had
started a 5,500m RC drilling programme
with the first target tested the new West
End prospect, which will test for a continu-
ation of the highly mineralised Cathedrals
Belt towards the Ida fault.

Industry leaders in Aircore
Deep hole Reverse Circulation
Experienced in complex remote exploration drilling

29a Clayton St, Bellevue WA 6056

www.bostech.com.au 08 9250 4252

AUSTRALIA’S PAYDIRT MARCH 2019 Page 95

comings and goings

Bryah Resources Ltd has ap- Lindsay Ward has resigned as Ltd. Hall is an experienced His Highness Sheikh Mak-
pointed Ian Stuart as non- a non-executive director of geologist who also sits on the toum Hasher al Maktoum
executive chairman. Stuart was bauxite miner Metro Mining Ltd. boards of Auris Minerals Ltd, has been appointed non-ex-
managing director of Laconia Ward initially joined the compa- Redbank Copper Ltd and Tar- ecutive chairman of Artemis
Resources Ltd from 2009 until ny’s predecessor Metro Coal in get Energy Ltd. Resources Ltd. A member of
2014 following several years October 2011. Dubai’s ruling family, he is also
with Macquarie Group Ltd. His Alex Passmore has been ap- president of Al Fajer Group and
appointment coincides with the Stephanie Unwin has pointed chief executive of chairman of Dubai International
retirement of Stuart Hill as a di- stepped down as a non-ex- Rox Resources Ltd. Passmore Holdings. He replaces David
rector of the company. ecutive director of Zenith Ener- was previously managing direc- Lenigas who has resigned as
gy Ltd to take up the role of chief tor of Cockatoo Iron and chief executive chairman due to the
Adrian Byass has joined executive at Horizon Power. executive of Draig Resources demands on his time from fam-
Orinoco Gold Ltd as chair- following a 10-year stint with ily and his other business activi-
man, replacing Joseph Pinto. Tom Eadie Patersons Securities Ltd, in- ties.
Byass is a director of Galena cluding director of corporate
Mining Ltd and previously sat Tom Eadie has been appoint- finance. His appointment coin- John Elkington has joined
at the helm of Plymouth Miner- ed executive chairman of cides with the impending retire- TNG Ltd as non-executive
als (now Infinity Lithium Corp Alderan Resources Ltd follow- ment of long-serving managing director and chairman. Elking-
Ltd). Nicholas Revell has also ing the resignation of chief ex- director Ian Mulholland. ton’s extensive technical and
stepped down from the com- ecutive Chris Wanless. Former project development back-
pany’s board. chairman Nicolaus Heinen will Ian Mulholland ground plus vast board experi-
continue as a non-executive di- ence will serve TNG well as it
E2 Metals Ltd has appointed rector, with company secretary Technology Metals Australia continues to build the depth and
Alastair Morrison as a non- Brett Tucker also promoted to a Ltd has appointed David capability of its team ahead of
executive director. Morrison is non-executive director role. English as project director to the financing and development
an exploration geologist cred- oversee the progression of the of its Mount Peake vanadium-
ited with helping develop the 5 Andrew McMillan has re- Gabanintha vanadium project, titanium-iron project, Northern
moz Callie gold deposit in the signed as a director of including the ongoing DFS. Eng- Territory.
Northern Territory, as well as Malachite Resources Ltd after lish was a key player behind the
the North Mara gold project in seven years with the company. development of Independence DGO Gold Ltd has accepted
Tanzania. More recently, he has Group NL’s Nova nickel mine. the resignation of Darryl
acted as consultant to Circum Mal Randall Clark, with his roles to be filled
Pacific Pty Ltd which helped AIC Resources Ltd has ap- by executive chairman Ed Es-
assemble E2’s projects in Ar- Hastings Technology Metals pointed Aaron Colleran as huys and general manager
gentina. Ltd has added experienced managing director and chief exploration David Hamlyn until
company director Mal Randall executive. Colleran, who also further notice.
Scott Waddell has been ap- to its board. Having served the recently joined the board of
pointed interim chief ex- Rio Tinto Ltd group of compa- Riversgold Ltd, was a found- EY has appointed Paul Mitch-
ecutive of Metallica Minerals nies for more than 25 years, he ing member of the leadership ell as its new global sector
Ltd following the suspension of now assists the likes of Kalium team at Evolution Mining Ltd and leader for mining and metals,
managing director Simon Sle- Lakes Ltd, Argosy Minerals Ltd, oversaw its business develop- succeeding the retiring Miguel
sarewich from his employment Magnetite Mines Ltd and Thun- ment and investor relations pro- Zweig. Mitchell was previously
while the company undertakes delarra Ltd in non-executive gramme until the end of last year. EY’s global advisory leader for
an extensive review of its ad- board roles. He replaces Brett Montgomery mining and metals where he fo-
ministration, management and who will remain as a non-execu- cused on driving digital transfor-
corporate costs. Craig Hall has replaced Neil tive director of the company. mation, building capability and
Porter as non-executive leading the alliance strategy for
Anthony Hall has been ap- director of Scorpion Metals Paul Jago has resigned as the sector.
pointed executive chairman managing director of King-
of Austrian-focused explorer srose Mining Ltd for personal Simon Gray has joined
High Grade Metals Ltd on an reasons, with a new chief ex- Havilah Resources Ltd as
interim basis while the com- ecutive to be appointed im- company secretary. Gray will
pany undertakes a search to minently, along with another be assisted by co-company
find a new chief executive and independent non-executive di- secretary Claire Redman, while
managing director following the rector.ExplorationgeologistJohn chief executive Walter Richards
resignation of Torey Marshall. Carlile recently joined the com- will step back from his company
Hall was previously chief execu- pany’s board as a non-executive secretary duties to focus on
tive of Spanish potash devel- director. Havilah’s corporate strategies.
oper Highfield Resources Ltd.
Meanwhile, Simon Francis and Jason Teoh is the new chief
Hayden Locke have stepped executive of China Magne-
down from the company’s sium Corp Ltd after Tom Black-
board as part of a corporate re- hurst stood down as managing
structure. director citing personal rea-
sons.

Page 96 MARCH 2019 AUSTRALIA’S PAYDIRT

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leftfield

Oliver Award “I am absolutely blown
humbles
Mod over, I am very moved by this

Botswana copper hopeful Mod Resources award,” he said.
Ltd has added the coveted Craig Oliver
Award to its growing list of achievements. “I think it is a great credit

Presented to the company at last month’s not just to the Mod team in
RIU Explorers Conference in Fremantle,
Mod emerged victorious from a competitive Western Australia but also in
field that also included Bellevue Gold Ltd,
Breaker Resources Ltd, DGR Global Ltd Botswana. We have a won-
and Western Areas Ltd.
derfully skilled team of peo-
Mod managing director Julian Hanna was
particularly humbled to receive the award, ple developing our first mine
having worked with the late Craig Oliver dur-
ing their time together at Western Areas. and exploring a copper belt.

“From all the work that

comes from those people,

our supporters, our share- Mod Resources managing director Julian Hanna accepts the
holders who are very much 2019 Craig Oliver Award from Shanelle Oliver and RIU Explor-
behind what we are trying to
achieve here in Botswana, ers Conference managing director Stewart McDonald

I would like to accept this

award and thank you very Last month, the company was the sub-
much for considering us.” ject of a takeover approach by WA copper
producer Sandfire Resources NL.
Mod is completing a feasibility study for
the 60mt T3 copper project due for release Now in its ninth year, the Craig Oliver
this quarter. A PFS previously estimated a Award was established in memory of the
2.5 mtpa base-case operation in Botswana late mining executive who passed away in
would yield pre-tax net cash flow of $697 a plane crash in 2010.
million.



INDEX

Acacia 4, 44, 65, 64 Deep Yellow 7 Kalium Lakes 96 Prospect 42-43, 73
Acupulco 9 DGO 96 Kazatomprom 7, 67, 78 Pursuit 29
AIC Doray 14 Kibaran
Albemarle 96 Kingsrose 44-45
Alderan 40 E2 Metals 96 Kinross 96 Red Metal 9-10
Alliance 96 Endeavour 65 Kore 15 Red River 8
Altura 40 Europa 78 Kropz 78 Redbank
Anglo American 12, 40, 42 European Cobalt 29 Resolute 96
AngloGold 8, 34, 52, 71 European Lithium 29 78-79 Rio Tinto 14, 78-79
Arafura 15, 57, 58 European Metals 29, 78 4, 5, 15, 46, 78,
Archer 47 Evolution 18, 65, 96 Laconia 96 Riversgold 82, 90, 93, 96
Argosy 95 Lithium Australia 29 Rox
Artemis 96 Livent 38, 86 96
Aura 96 Lucapa 80-83 96
Auris 78 Lucara 80, 81
Avenira 96 First Quantum 14 Scorpion 96
AVZ 73 Force 42-43 Magnetite Mines 96 Sheffield 93
43 Freehill Malachite 96 Sibanye 62
Freeport 95 MC Mining 78 Silver Lake 14
84 Metallica 96 South32 5, 53, 78
Metals X 15 St George 95
B2Gold 62 Galan 86 Metro 96 Strandline 94
Galaxy 4, 40, 86 Mincor 15, 18-19 Syrah 16, 22, 44
Barrick 4, 44, 58, 62, 64-65, Galena Mineral Resources 40
Gangfeng 8, 96 Minotaur
66, 85 Gem 12, 46 Mithril 9
Gibb River 80, 82-83 MMG 9
Base 78 Glencore MOD 8, 9, 15 Talga 29
Global Atomic 82 78 Target 96
Battery Minerals 16, 20-26 Gold Fields 90 Theta 73
Goldcorp 67 Thor 78
Berkeley 78 GoviEx 18, 52 Thundelarra 96
Graphex 62, 65 Tianqi 40, 46
BHP 4, 5, 14, 15, 40, 46, 7, 67 Toho Zinc
44-45 TNG 8
78, 84 96

Birimian 42

Black Dragon 91 Navarre 95

Blackstone 32 Nemaska 38

Bryah 96 Neometals 92

Hastings 96 New Century 8 Vale 5, 6, 34, 46
Havilah 96 Vedanta 8, 76, 92
Cameco 7, 67 Heron Newmont 5, 15, 44, 62, 65
Cassini 9 High Grade 8
Centamin Highfield 96 Northern Star 18, 65
Chase 14, 15 Hindustan 96
China Moly 92 Hot Chili 92 Orinoco 96 Walkabout 45, 65
China Magnesium 46 84-85 Orion 73, 74-77 Western Areas 4, 16, 18-19
Chinova 96 Orocobre Westgold
CITIC 9 Oz 38 White Rivers 18
Codelco 46 9-10 Winmar 77
Core 38 Wolf 43
Covalent 93 Independence 4, 15, 16, 18, Paladin 7, 14, 15, 67 Woodside 78
Crusader 40 77, 96 Panoramic 15 Woomera 93
Dacian 78 Infinity 29, 96 Pilbara Minerals
Danakali 94 Ivanhoe 54, 96 Prairie 42, 38-40 9
78 Predictive 78
Progress 60 Xanadu 94
60
Jadar 29

Page 98 MARCH 2019 AUSTRALIA’S PAYDIRT

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