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Published by Paydirt Media, 2020-02-05 00:54:02


February 2020 Volume 1. Issue 279 $11.95

Exploring South East Asia’s

premier nickel sulfide district

Ta Khoa Project (Nickel-Coper-Cobalt-PGE),

• Ban Phuc Mine operated from 2013 to 2016,
mining 975kt @ 2.4% Ni & 1.0% Cu for 20.7kt
Ni & 10.1kt Cu;
• Existing infrastructure built to Australian
Standards includes a 450ktpa concentrator
and a modern mechanised underground mine
located within a premier nickel sulfide district;
• Invested capital in excess of US$136m
generated US$213m in revenue and paid total
contributions to government of US$65m
during a 3.5 year period of falling nickel
• Alliance with Korea’s largest electric vehicle
battery cathode producer, Ecopro BM Co
Limited Australia’s Paydirt February 2020
• Drilling is ongoing with four rigs on site;
upcoming exploration will include both
infill drilling, targeting the known Ban Phuc
disseminated sulfide zone, as well as step out
drilling, testing newly identified targets;
• New, near surface King Cobra nickel sulfide
discovery bearing semi-massive sulfide veins,
assays pending with near surface downhole
intervals of up to 60m and visual estimates of
up to 20% sulfide mineralisation
• EM and IP surveys underway
• Previously unrecognised PGE grades
Dream Team:ream Team:
suggest a potential by-product credit could
significantly enhance the future economics of
the project; D
• Blackstone is fully funded to deliver a maiden
resource and a scoping study by mid 2020
Australia & US map power playustralia & US map power play

Battery Minerals Conference preview 01

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Published by 14
Paydirt Media Pty Ltd. Rio Tinto has confirmed the famed Argyle
A.C.N. 063 985 133 diamond mine will close later this year, bringing

Head Office: an end to almost 40 years of production history
Suite 9, 1297 Hay St, West Perth and leaving Australia without a recognised
Western Australia 6005 diamond producer. That is unless Gibb River
P.O. Box 1589, West Perth Diamonds can raise the required funds to start
Western Australia 6872 producing at the Blina alluvial diamond project,
Phone: (+61 8) 9321 0355 West Kimberley. Mark Andrews travelled to
Facsimile: (+61 8) 9321 0426 site with Gibb River executive chairman Jim
[email protected] Richards to see how the company plans to cut and shape its own piece of diamond history

Editorial: 20 COVER
Editor: Dominic Piper A new agreement between Australia and the US
Deputy editor: Mark Andrews regarding critical minerals supply and demand is 14
Journalist: Michael Washbourne already shaping as a potentially decade-defining
Art director: Nick Brown theme for Australian mining. Ahead of the next
Contributors: Brendan Ryan meeting of the Australia-US Critical Minerals
(Johannesburg) Dialogue, Federal Minister for Resources Hon
Matt Canavan spoke to Mark Andrews about
Advertising: the role Australia will have in supplying critical
Advertising manager: Richa Fuller minerals to other western countries and how it
Subscriptions: Kate Blanchard could help the US curb China’s dominance of the
Phone: (+61 8) 9321 0355 global rare earths sector
Facsimile: (+61 8) 9321 0426

Pre-press and printing: 28 BATTERY MINERALS
Vanguard Press, 26 John St, CONFERENCE PREVIEW
Northbridge WA 6003
Member of: It has been a strange time for the battery
minerals sector with prices and interest in most
of the related commodities retracting after the
initial wave of excitement. Investors are cautious,
developers are struggling to raise funds and
major car manufacturers are anxious about 20
Paydirt Media future supplies of key inputs for EVs. All this and
Executive chairman: Bill Repard more will be on the agenda at Paydirt’s Battery
Finance manager: Giovanny Jefferson Minerals Conference on March 4-5 at Pan
Accounts/administration: Pacific Perth
Lana Luketic
Conferences: Melita Fogarty, 50 SKILLS
Namukale Nakazwe, Several recruitment firms are experiencing
Christine Oelschlaeger, their busiest period in years as mining
Mitchelle Matambo companies ramp up their search for qualified
candidates amid positive job forecasts
for the next five years. Yet there is a skills
shortage following a downturn which saw few
graduates pursue a career in mining. Michael
Washbourne reports on how recruiters plan to
fill these vacancies
58 IPOs
Cover image: Federal Resources Minister Only six new floats hit the ASX last year as
Hon Matt Canavan
investors lost their appetite for early stage 50
exploration stories, instead choosing to stick
with the tried-and-tested gold and base metals
Member of:
production stories. Paydirt takes a look at
each of the half-dozen new listings prepared to
Registered by Australia Post PP 643938/0071. voyage across the choppy IPO waters
No pages or articles in this publication may be re-
produced in any form without the consent of the
publisher. This includes photographs either taken
by Paydirt Media staff or provided by other parties.

What’s in store

for the new decade?

The arrival of a new decade has price will ever again breach the $US100/t mark.”
brought plenty of reflections about Outcome: The Gold Index continues its upward trajectory to this
the 2010s and forecasts for the 2020s day but iron ore did breach that $US100/t mark.
throughout the mainstream and social 2016 on… specialty metals
media universe. For those in the re- Prediction: “It appears 2016 could be the year of non-traditional
sources sector, it has meant any num- metals with graphite, mineral sands and rare earths projects enjoying
ber of positive projections for the years good support. Partly this is due to growing demand for their appli-
ahead. I must admit to believing many of them. After perhaps the most cation in new technologies but also because demand and pricing in
eventful period in the industry’s history, there are signs the 2020s these products are so opaque. It takes great effort to find reliable price
could be a new start for mining companies, particularly juniors. information for many of these commodities and investors are more
However, before doing my Nostrodamus impression for a whole 10 likely to take a punt on companies in this space.”
years, I thought it wise to check how my previous new year predictions Outcome: The battery revolution was just beginning (although I
fared. Given this is also the 10th time I’ve been forced to make my forgot to mention lithium) but has subsequently faltered as developers
new year predictions public, it might be best I share them with readers struggle to convince financiers about the stability in their respective
before you make judgement on my guesses [estimates] for this year. markets.
In 2011 on… the skills shortage In 2017 on… a sense of optimism
Prediction: “If the bulls are right, Australia’s labour demands will Prediction: “There will, inevitably, be bumps during the course of
continue for at least the next decade and with an increasingly glo- 2017 and while the downturn of the last few years was largely a re-
balised world, those trained and groomed in Australia may be able sponse to the shifting supply/demand dynamics in commodities, it is
to move with their companies to foreign climes when the inevitable likely geopolitics will play a greater role in shaping prices and market
downturn in Australia does eventuate.” sentiment through the year.”
Outcome: Thousands of redundancies over the next five years as Outcome: Mining and metals were dominated by geopolitics, from
the construction boom ended and labour shifted to other industries, Trump and Brexit to Chinese emission standards and Indonesian
perhaps never to return. nickel export bans.
In 2012 on… ESG In 2018 on… the rebound holding
Prediction: “Ethical investment is a rising sub-sector of the invest- Prediction: “Following a number of false dawns over the last five
ment industry and if miners can show the benefits of their invest- years, the Australian mining industry enters 2018 with a fully-fledged
ment… this could prove another valuable source of funding. Tracking sense of optimism. Share prices are finally following commodity prices
corporate social responsibility performance of companies is no longer and moving upwards. Companies are becoming more emboldened
only for boutique investors.” by the depth of the rally; as evidenced by the number of junior com-
Outcome: The majors have come under increasing pressure to pany capital raisings and IPOs witnessed in the latter part of 2017.”
decarbonise from major shareholders. Outcome: The majors and mid-tiers enjoyed a good year but jun-
In 2013 on… red tape iors and IPOs found it much tougher going as geopolitical risk made
Prediction: “It is clear that regulation and red tape are looming as investors nervous and high-risk players chose to focus on other asset
a major problem for the resources industry in 2013 as companies who classes.
are desperate to push ahead with their business plans become frus- In 2019 on… gold’s return to avarice
trated by the regulatory labyrinth Australia has tied itself up in.” Prediction: “It is an indication of just how wrong the gold majors are
Outcome: More red tape and not just from governments but in- still getting their growth strategies. Bolting on assets such as Newmont
creasingly from the corporate regulators. is doing with Goldcorp does not necessarily solve the questions over
In 2014 on… green shoots where growth is coming from. The current growth issue for the majors
Prediction: “There is certainly a sense around the Perth-based stems from their attempts to satisfy disgruntled investors for the past
resources community that things may be about to improve in 2014. 7-8 years. Then, investors were demanding gold miners improve their
It may take another six or 12 months but hopefully those first green margins after frittering away the best gold price environment in history.
shoots are set to be joined by a wealth of others. Outcome: Too early to tell as Newmont Corp and Barrick Gold
Outcome: A terrible year for resources as the post-GFC stimulus Corp bed down their acquisitions. Rumours continue to swirl around
finally waned and metals demand fell off a cliff. Australia’s emerging mid-tiers with more M&A on the cards.
In 2015 on… gold’s rebound So, a mixed result for my soothsaying in the 2010s. Unfortunately,
Prediction: “The recent upturn in the gold price, particularly the I’ve run out of space to commit any of my predictions for the coming
Australian gold price, has been a boon for Australia’s gold producers decade to paper.
with the All Ordinaries Gold Index up 13.37% in the last 12 months
while in iron ore, the dominance of the Big Three – Rio Tinto Ltd, BHP
Billiton Ltd and Vale SA – is such that it is almost unthinkable the spot [email protected] @DominicPiper

Page 4 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT


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PGMs go supernova

on’t tell anyone Guv…but it seems the
DSouth African platinum sector may/
just might/could/perhaps/finally be turn-
ing around despite the fact that the plati-
num price itself is still at depressed levels
around $US1,000/oz compared with highs
above $US2,000/oz back in December
Certainly, a number of the platinum
stocks have recovered big time with the
outstanding example being Impala Plati-
num Ltd (Implats). The Implats share price
is up nearly eight-fold from R20 in mid-
2018 to levels just below R160 in early
Since 2010 platinum has been on a one-
way ride south from then levels around Impala Platinum is one of several South African PGM miners to enjoy a renaissance in the
$US1,800/oz and the SA platinum industry last 12 months thanks to strong palladium and rhodium prices
has been hammered into the ground de-
spite various experts calling any number of largely dependent on platinum for their It’s worth recalling another notable quote
imminent “recoveries” during that period. bottom-line profits because they are pri- from the early 2000s when the platinum
One of the more authoritative turna- mary producers of that metal. Palladium sector was booming and it seemed noth-
round calls came in November 2017 from and rhodium are secondary by-products ing could go wrong...go wrong…go wrong.
Northam Platinum plc chief executive Paul along with the large quantities of copper, Asked what his contingency plans were in
Dunne whom commented that he was nickel and chrome that the platinum min- the event of a setback to the platinum mar-
“getting excited” about recent develop- ers produce from the Merensky and UG2 kets – which have always been notoriously
ments in the platinum markets, adding he reefs they exploit. volatile – PTM chief executive Michael
was seeing “real evidence” that improve- But the soaring prices of palladium and Jones replied: “Adversity? Bring it on!”
ments were under way. rhodium, combined with a weakening of As the saying goes “be careful what you
Platinum at that stage was sitting around the rand against the US dollar, have re- wish for, you may just get it”. Jones sub-
$US940/oz but a year later it was back stored cash flow and profitability to an in- sequently commented in July 2018 that
down to around $US780/oz. Asked in ret- dustry which was in dire straits. JP Morgan “we’ve been through business hell and
rospect about his prediction, the down-to- Cazenove estimated in a research report back”.
earth Dunne’s reply was: “I should have published in April 2018 that some 60% of Lonmin – once the third largest platinum
kept my big mouth shut” but he was bang the SA platinum sector was cash negative producer in the world – disappeared last
on the money in one key respect. at then ruling PGM prices. year when it was taken over by Sibanye-
He commented that the markets would The SA platinum sector is now all back Stillwater Ltd.
see a phased recovery with “palladium in the black or rather what’s left of it is back This group – run by Neal Froneman –
running first, then rhodium and finally in the black because the past five years has so far been the dominant player in the
platinum”. That is exactly what has sub- have seen plenty of bloodshed as the ma- new platinum stakes. Froneman bought
sequently happened although the jury is jors restructured and a number of juniors the Rustenburg Platinum division from
still out on platinum which only managed fell by the wayside. Anglo American Platinum; then acquired
to struggle back above the $US1,000/oz About 15 years ago former Aquarius Aquarius Platinum and then – in a deal
mark in early January. Platinum chief executive Stuart Murray fa- which was widely criticised at the time
At the time Dunne made his call in 2017 mously described the SA platinum sector because of the amount of debt he had to
the palladium price was sitting around as consisting of “three 600lb gorillas and shoulder – he bought the Stillwater palla-
$US1,000/oz having risen from just over a whole lot of rats and mice and we like to dium mine in the US.
$US700/oz in January that year. As of think of Aquarius as being ‘King Rat’”. His gamble has paid off as the palla-
January this year, the palladium price was One of those 600lb gorillas no longer dium price has continued to soar. Implats
around $US2,300/oz. exists while a number of those “rats and last year followed Froneman’s example by
In November 2017 the rhodium price mice” – including Aquarius – have ended buying North American Palladium and, ac-
sat around $US1,300/oz. It is currently up as roadkill or been taken over by other cording to assessments by many analysts,
north of $US6,000/oz and let’s not forget companies; farewell to the likes of Atlatsa getting a better deal than Sibanye Stillwa-
this is the most volatile of the PGMs. It sat Resources, Platinum Australia, and East- ter into the bargain.
around $US500/oz in 2003 before spiking ern Platinum. So, the volatile platinum business could
to nearly $US10,000/oz in 2008 and then Yet others are hanging in there by the be poised for a dramatic recovery from its
collapsing back to around $US1,000/oz in skin of their teeth – such as Platinum worst-ever recession. I wonder how long
2009. Group Metals Ltd (PTM) which was forced the good times will last this time around.
So, is it finally platinum’s turn to shine? to sell its much-vaunted Maseve mine to
If it is then hang on to your hat. Tradition- Royal Bafokeng Platinum Ltd at a knock- Brendan Ryan is a Johannesburg-
ally, the SA platinum miners have been down price – and Wesizwe Platinum Ltd. based mining writer

Page 6 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

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Oz focused on Carrapateena ramp-up

outh Australian copper producer Oz up the mine,” Oz chief executive Andrew ed 4.25 mtpa can be achieved by year’s
SMinerals Ltd delivered on its promise Cole said. end. However, it remains the company’s
to produce the first saleable concentrate “The streamlined mine design with an long-term goal to transition to block cave
from its new Carrapateena underground expanded footprint will improve cave es- mining at Carrapateena.
mine before the end of last year. In 2020, tablishment, reduce risk during the ramp- Speaking at the SA Exploration & Min-
the company will embark on an aggres- up phase and may enable future annual ing Conference in late November, Oz
sive ramp-up of operations in a bid to throughput expansion opportunities as chief commercial officer Mark Irwin said
reach its desired run rate of 4.25 mtpa we continue to assess options to expand a PFS on various caving opportunities
within the next 12 months. capacity above 4.25mt annually.” would be finalised mid-year.
First concentrate was initially sched- Carrapateena’s output for 2020 is ex- “The opportunity is for us to convert
uled for delivery in November 2019 but pected to be 20,000-25,000t copper and from sub-level cave to block cave by
had to be pushed back a month after an 35,000-40,000oz gold at an estimated about 2026,” Irwin said.
incorrect part was supplied during the full-year C1 cost of $US1.80-2/lb. Oz also “Our assumptions at the moment are
construction of the processing plant. De- indicated unit costs will be higher in the – and we’re very comfortable with those
spite a few anxious moments for share- first half due to the fixed-cost nature of the assumptions – that we have the abil-
holders, Oz confirmed the milestone had mine, about 160km north of Port Augusta. ity to process upwards of 10-12 mtpa on
been achieved within the timeframe set A more detailed guidance was ex- that block cave, which will be upwards of
more than two years ago. pected to be released with the December the 4.25 mtpa that we’ll be processing
In an ASX release announcing the 2019 quarterly report at the time of print. through the sub-level cave.
milestone on December 20, Oz indicated Oz plans to continually test and op- “What’s been very helpful is we actually
“sufficient” saleable concentrate would timise plant works in the first half as it have high-grade bornite both in the sub-
be delivered to the filter feed tank to chases gradual increases in throughput level cave but also through the deposit
complete the first concentrate press on and recoveries which it hopes will lead itself, so by being able to go to the block
schedule. The company also said more to a higher output at the back end of the cave model, where you mine from the
than 280,000t of development ore has year. bottom up, we’re able to access the much
been stockpiled on the surface for the Sub-level cave mine production also higher grade bornite-hosted copper more
2020 ramp-up campaign. began late last year and Oz is confident readily than if we mined top-to-bottom
“Our key operational focus remains on its optimised mine design will allow for a over time.”
underground development as we ramp- more rapid ramp-up, ensuring the target- Irwin said the company wanted to have
completed all of its studies for block cave
mining scenarios by 2022 as that was the
crunch point for what it needed to do next
with its declines.
Meanwhile, mineral sands miner Iluka
Resources Ltd has hailed its shift in focus
from Jacinth to Ambrosia as a success.
The operational move was originally
slated for 2022, but Iluka opted to bring
that transition forward to last year in an at-
tempt to “smooth” the company’s overall
zircon production levels.
Iluka technical services manager Nick
Bartsch said the transition was completed
on time and on budget.
“It is expected we will be able to sustain
similar levels to what we were mining at
Jacinth for the first few years at Ambro-
sia and then in later years, when grades
do decline, they will be able to be supple-
mented with concentrate already stock-
piled on site from Jacinth,” Bartsch said.
Iluka is attempting to sustain zircon
production around 335,000 tpa at Ja-
cinth-Ambrosia for at least the next two
years. Additional feed could come from
the Atacama satellite deposit, about 5km
north-west of the existing mining centre,
The first saleable copper-gold concentrate from Carrapateena was produced on as early as 2022, pending a positive out-
December 20. Oz intends to aggressively ramp-up operations over the next 12 months to come from the upcoming PFS.
meet its target 4.25 mtpa run rate by year’s end – Michael Washbourne

Page 8 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

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Scoping out yesterday for tomorrow

aving decided that his corporate ceiling
Hhad been reached as managing direc-
tor of Scope Systems after nearly 12 years,
Troy Morrison has made the shift from
boardroom to shed to fulfill his ambitions in
the creative arts.
As Andre Smit, formerly chief operations
officer at Scope, settles into the managing
director’s position, Morrison’s pod will start
to expand with sculptures made up of re-
purposed old parts that were once used in
trains, planes, boats, cars and oddities.
Morrison’s style is marine-meets-steam-
punk – a genre of science fiction that incor-
porates technology and aesthetic designs
inspired by 19th-century industrial steam-
powered machinery – with creations crafted
in line with Fire and Time’s business mantra
of bringing back yesterday for tomorrow.
“Part of my frustration today is that I think
that we are losing a lot of the old school The Steampunk Whale, completed in 2016, measures 3.5m long, 1.8m tall, 2.8m wide and
skills and kids are handed everything at ei- weighs about 500kg
ther the end of a 3D printer or if you look
at something like the iPhone which is me- where he is currently happiest.
chanically perfect,” Morrison told Paydirt. “Through no other reason than I had had
“There is none of that human touch add- enough of being MD of a relatively big busi-
ed, so for me it is about trying to preserve ness here in town and I wanted to pursue
some old school bits and pieces, not in a creativity full time; I figured we don’t know
historian sense, but taking them and inter- how much time we have left and I wanted
preting them in my way which is to put them to give this a red hot crack,” Morrison said.
into sculptures.” “I have the passion to do something out-
An apprentice boiler maker/welder back side of corporate and that now becomes
in 1986, Morrison has the grounding to my purpose. I think one of the challenges
stoke his passion for creativity, with his ar- that I certainly see in a lot of people is that if
tistic flare catching on with long-time mates you haven’t found it, you should start look-
in the mining industry. ing for your purpose, whatever it may be.
While still a director/part owner of Scope, To have a creative purpose certainly cre-
Morrison remains connected with the min- ates a much nicer position from a stress Steampunk Seahorse in progress
ing industry, however, it is obvious to see point of view and it doesn’t have to be a for completion sometime this year is
full-time thing. I transitioned into this by do-
ing four days corporate work 1,800mm wide, 4,000mm tall, 2,300mm
and two days of arts. I have long and weighs around 1,000kg
been fortunate enough to
be able to afford to do what from places in the US and England.
I am doing, but ultimately However, most of the copper, brass and
you can do it and if you have mild steel Morrison collects to make his
something that you think you sculptures are found in scrap bins.
might be able to do then my “What I am trying to do is utilise the raw
coaching would be to have a materials from the mining industry because
crack.” I like the look and also the stuff that I recy-
Fire and Time was estab- cle; it’s repurposed into something that will
lished by Morrison in 2019 last forever,” he said.
and he hopes by the end of Morrison’s latest creation is a Steam-
this year to have created a punk Seahorse, which when completed,
destination, possibly in WA’s will stand an impressive 4m tall, 1.8m wide,
arts hotspot of Fremantle, 2.3m long and weigh 1,000kg.
where people can meet and While Fire and Time has captured marine
appreciate his art. life in such a unique way, don’t be surprised
Troy Morrison was integral in Scope Systems becoming Over the years Morrison to see the brand branch out into an e-bike
a leading business management software solution has sourced materials, some before too long.
specialist in the mining sector, but these days he is taking items are more than 100
his art to the world through Fire and Time years old, for his sculptures – Mark Andrews

Page 10 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

Gaines among champions

ortescue Metals Group Ltd chief execu- employers in WA.
Ftive Elizabeth Gaines is among the con- Employment in the resources sector is
tenders for this year’s Women in Resources at all-time highs in WA, with the State em-
Champion award. ploying a much higher proportion of workers
The Chamber of Minerals and Energy of (6.7%) than anywhere else in Australia (na-
WA’s (CME) Women in Resources Awards tional average 2%).
is now in its 11th year and continues to cel- Big ticket iron ore and oil and gas projects
ebrate the important role women play in the currently being developed will ensure op-
sector by actively promoting equal opportu- portunities for employment in both sectors Elizabeth Gaines has been nominated for
nities and championing gender diversity. remains strong. the CME’s Women in Resources Champion
While there were 19 finalists selected in In mid-2019, the Workplace Gender award. Winners will be announced at the
the various awards categories, there were Equality Agency (WGEA) reported that WA awards dinner on March 6 at the Perth
more than 100 nominees reflecting the sig- had the widest gender pay gap (21.8%) in Convention and Exhibition Centre
nificance the resources sector placed on the country.
gender diversity. “The differences in the gender pay gap has a lower gender pay gap and balanced
“A diverse workforce is one where em- can be partly explained by industry profiles gender representation.”
ployees feel more engaged. It’s a more cre- of each state and territory,” the WGEA re- St Barbara Ltd was the only Australian
ative and productive one. Diversity leads to ported. “For example, the full-time work- gold mining company to receive the Em-
better discussions, decisions and outcomes force in WA is concentrated in mining and ployer of Choice for Gender Equality citation
for everyone,” CME chief executive Paul construction sectors, industries with rela- from the WGEA last year.
Everingham said. tively high earnings and low representation St Barbara has maintained a nil gender
In FY2019, it was reported the resources of women. In contrast, the majority of the pay gap for like-for-like roles since 2013 and
sector employed an average of 124,010 full-time workforce in the Australian Capital through constant attention to data analysis
people, more than 12,000 people on the Territory is employed in the public adminis- managed to reduce its pay gap from 43% in
previous year, making it one of the largest tration and safety sector, which traditionally 2007 to 12% in December 2018.

CME Women in Resources 2020 finalists

Women in Resources Champion Kathryn Serjeantson
Development/Drill & Blast Superintendent, Rio Tinto
Brendon Brodie-Hall
General Manager, Dampier Salt, Rio Tinto Ltd Outstanding Operator/Technician/Trade
Nevinia Davenport Woman in Resources
Senior Advisor, Diversity, Inclusion & Community,
Thiess Pty Ltd Briohny Evans
Elizabeth Gaines Superintendent Fixed Plant Planning, Fortescue
Chief Executive, Fortescue Metals Group Ltd Allison Fuller
Supervisor Maintenance, BHP Ltd
Outstanding Woman in Resources Jennifer Ward
Haul Truck Operator, Newmont Australia
Ali Burston
Managing Director, Metisphere Outstanding Company Initiative
Ivy Chen – Small to Medium Company
Principal Consultant, CSA Global
Rishelle Hume BOAB Indigenous Engagement
Manager, Aboriginal Employment Strategy, Bis Industries Girls Rocking Resources
Chevron Australia Gold Fields Ltd St Ives Diversity & Inclusion Group
Keren Paterson (SIG DIV)
Chief Executive, Trigg Mining Ltd Outstanding Company Initiative

Outstanding Young Woman in Resources – Large Company

Vanessa Bullock BHP Indigenous Development Programme
System Engineer, Woodside Energy Ltd Compass Group Launch into Work
Polly Mahapatra Rio Tinto Busting the Myth of Merit
Completions Management System Coordinator,
Chevron Australia

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 11


State of the arts

he new Western Australian Museum will open in November this year. The first
T gallery visitors will encounter is Ngalang Koort Boodja Wirn – heart, country, spirit –
reflecting the spirit of the State’s people. The museum is being developed with a people-
first approach and will feature West Australians telling their stories in their own voices,
especially Aboriginal voices, throughout the museum. There are eight large galleries,
including the Stan Perron Treasures WA Gallery, while there is also space for international
exhibitions. While construction of the new museum started in early 2018, work behind
the scenes in preparing the galleries has been endless and will be showcased in the
Reflection gallery. “I think one of the unique selling points for the museum, apart from
the building, is that we have had this principle about people-first and we have now talked
to 50,000 people about opinions, views, stories and collected new stories. There will be
some old favourites in there, but of course there will be a lot of new material in there from
the new stories we have collected and the new and many voices we’ve heard,” Western
Australian Museum chief executive Alec Coles told Paydirt.

The refurbished WA Museum
is set to open in November

oogle will answer most questions, but where possible, we won’t speak for any- faster than the one presently at hand.
G“it is not the same as having the real one who can speak for themselves, par- “[It is about] safe places for unsafe ide-
thing”, according to Western Australian ticularly the Aboriginal communities. We as. That means you can have the type of
Museum chief executive Alec Coles. want to hear first-hand and that element of debates and discussions in a museum that
“What is really important to us is authen- authenticity is absolutely key.” you can’t have easily elsewhere in a re-
ticity. It is a trust thing; what do museums In an age driven by instant connectiv- sponsible, authoritative way; people trust
have that can’t be replicated elsewhere? ity manufactured by technology and digi- museums and that is our unique selling
We have real objects, real things, real sto- tal platforms, the need for history to be point,” Coles said.
ries and in many cases those stories will remembered, preserved and celebrated “Museums are great democratising
be told by the real people behind them is more vital than ever before the next in- spaces; they are great spaces where peo-
in their own voices. Our principle is that dustrial revolution sweeps through society ple can learn at their own pace and they

Page 12 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

world – refugees, asylum seekers, etc.
– all those stories will be in Connections.
Importantly, and not in a jingoistic way, but
we get to actually celebrate the fact that
we are not constantly looking to the east
coast, but north and west [of WA],” Coles
The expansive divide between Austral-
ia’s west and east coasts makes the coun-
try a biodiversity hotspot. There is believed
to be some 16,000 native species native
to WA alone (Wildlife gallery), which goes
some way to explaining the conscientious
effort required by mining companies in the
State when conducting flora and fauna
studies before any natural habitats or land-
scapes are disturbed.
“The world isn’t organised in a way that
curators organise galleries, but all these
things interlink. The Changes gallery is all
can learn without realising they are learn- population, which people forget. We can about how the planet has changed under
ing.” get to London, Singapore and Africa from human influence, while Origins [gallery] is
Coles spoke to Paydirt ahead of practi- Perth,” Foundation for the WA Museum again closely linked to the mining industry,
cal completion of the brand-new WA Mu- chief executive Jenny Allen told Paydirt. with everything from the big bang and for-
seum in Northbridge in late 2019. WA’s proximity to key markets, particu- mation of earth. The fact that we have the
Designed by globally revered architects larly in Asia, has also enabled the mining earth’s oldest rocks here means that will
Hassell+OMA and built by Multiplex, the sector to flourish and while the quality of be a fantastic gallery of minerals in Origins
heritage of the old building has been re- the minerals the State has sparked that which is about the universe, from the big
tained and blended with a contemporary interest, the relationships fostered over bang right up to things like SKA,” Coles
look which makes it three times the size of generations has inspired the many miner- said.
the former space. als booms. “That is also a good example of how
Official opening of the new WA Museum The Connections gallery, sponsored by Aboriginal voices will be represented
is scheduled for November and will feature Tianqi Lithium, will showcase WA’s en- throughout the whole of the museum. In
eight major galleries plus a 1,000 sqm spe- gagement with the rest of the world. addition to the contemporary scientific
cial exhibition gallery. Free general admis- “[Connections] will be about everything theories – we are looking at the wide field
sion to the WA Museum has been granted from the early diasporas coming here, array and the radio telescope and signals
for the first 18 months of operation. waves of migration over many years, trade from outer space – we will also be talking
Mining is an integral part of the State’s links – hence the Tianqi connection – and about the Seven Sisters story and aborigi-
DNA and the sector’s ever-evolving prac- the whole Indian Ocean relationship. Fur- nal views around creation.”
tices will be captured and showcased in thermore, our history and standing in de- – Mark Andrews
the Innovations gallery, of which Rio Tinto fence and how we relate to the rest of the
Ltd is the main sponsor.
“Everything from the earliest human
technologies right up to the driverless
trucks and trains is what we are working
with Rio Tinto to present at the museum.
There will be a realness to that gallery, you
won’t be just looking at things in a cabinet,
there will be quite a lot of activity,” Coles
Digital and multimedia platforms will be
available for visitors to use and it is hoped
the museum will be the gateway to WA for
domestic and international travellers.
Based on a free admission model, early
projections are that some 800,000 people
will pass through the museum in the first
12 months, adding it to the list of things to
do in WA, particularly for tourists.
“That is something that we should be
pushing; WA is close to 60% of the world’s

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 13


Gibb River to keep the

diamonds flowing

ust as the stars sprinkle the sky in West- Ellendale’s recent history has been sto- Gibb River Diamonds Ltd executive chair-
Jern Australia’s far north, the sparkle in ried and the mine gates at Rio Tinto Ltd’s man Jim Richards told Paydirt.
the dirt has been provided by the precious Argyle will shut later this year, bringing an Subject to raising $2.5 million or more,
stones scattered through the region. end to a chapter of diamond mining in Aus- Gibb will be ready to start producing at the
Diamonds from Argyle and Ellendale tralia. Blina alluvial diamond project in West Kim-
are revered the world over for their rare “I believe when they are gone, they are berley.
cuts and colours unlike any other. gone and there is not even another pro- Funding will allow Gibb four months of
For almost 40 years Argyle has been the ducer on the horizon apart from us. We bulk sampling ahead of trial mining.
world’s only source of rare pink diamonds, are the only producer I am aware of that is “From that point we can be cash posi-
while fancy yellow diamonds from Ellen- permitted and capable of production and tive within four months of setting up a plant
dale were once the stones of choice for providing that we get our capital, we will be and machinery. We are not trying to be the
Tiffany & Co. Australia’s only producing diamond mine,” biggest diamond miner, but we are trying

Seth Blume with Gibb executive chairman Jim Richards at
Ellendale. A haul ramp to the water still exists which could provide
access for a future dredging operation target

Page 14 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

Gibb has all permitting and Aboriginal agreements in place at
Blina. The project is not subject to any gross royalties
to be very profitable. We don’t have to be
the biggest, we are a micro-cap company
and we can add a huge amount of value
to the shareholders of our company,” Rich-
ards said.
Sir Ron Brierley and his related entities
are no longer part of Gibb’s shareholder
base after the remaining shares he held
were sold on market in December.
Brierley initiated a hostile takeover of
Gibb back in 2015 and has been present
on the company’s registry since that un-
successful attempt.
The company stated that Brierley’s de-
parture was an “excellent outcome” for
shareholders and “one which will enhance
our ability to more effectively promote
the Blina diamond project through either
a strategic partner or financing via JV or
the asset sale of the Highland Plains phos-
phate project [the latter two being poten-
tially non-dilutive]”.
Brierley’s exit was among a series of
positive announcements made by Gibb in
late 2019 which sets the company on path
for a better 2020.
The WA State Government invited Gibb
to apply for exclusive mining and explora-
tion leases covering the Ellendale diamond
mine under the Government’s Expression
of Interest process.
By acquiring the Ellendale leases, Gibb
will have ground that complements the
nearby Blina project giving it a strong foot-
ing in the Kimberley diamond fields.
E9 and E4 at Ellendale were two hard
rock mines previously in production be-
fore Kimberley Diamond Company (KDC)
floundered and the operation closed in
Before then the Ellendale project ac-
counted for about half the world’s annual
supply of fancy yellow diamonds, sought
after by Tiffany & Co via a marketing ar-
Gibb has two exploration licences grant-
ed over E4 and E9 plus the alluvial mines
and prospects, while lease applications for
other ground considered prospective by
the company were pending at the time of
Gibb’s leases at Ellendale come with no
environmental or other liabilities, with the
Department of Mines, Industry Regulation
and Safety (DMIRS) having committed
$230,000 from the Mining Rehabilitation
Fund to safeguard the site for new opera-
A restart to operations at Ellendale,
which produced 1.3 mct of gem and indus-
trial quality diamonds between 2002 and
2015, will hopefully rejuvenate the Kim-
berley diamond field through mining and
Richards believes there is potential for
new discoveries in the region and he is

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 15


urging the WA Government to rally behind the pending bulk sampling programme. has coincided with Gibb’s attempts to
it to help the diamond sector along. “The material is in the alluvials, it is free raise money and proved to be unhelp-
“The current royalty rate on diamonds dig and close to surface. We have gravel ful as the market became disrupted.
is 7.5%, the royalty review in 2013 recom- about a third of a metre below the surface Richards said there were signs the
mended that be dropped to 5%. We are which we then truck a few hundred metres synthetic diamond sector, particularly
lobbying the State to do that and I think the to the sampling plant,” Richards said. on a commercial basis in Malaysia,
State needs to come to the party,” Rich- “You disaggregate it, there is no blast- was settling back down.
ards said. ing, the material is screened and put “Younger people seem to like to buy
“More proactive state support for the in- through the flow sort machine and it then [synthetic] diamonds for themselves,
dustry would be terrific to see and I think ends up being hand sorted in the sealed they don’t mind buying this blingy-type
when we start producing it will be easier tray at the end of the day. It is about as jewellery with a lot of smaller type
to lobby for that as we will be able to lobby easy as it gets, very cheap to process and diamonds on it. Indeed, it is to some
with a bit more authority. It is an active is- it is a very simple and straightforward pro- degree a new market that has been
sue for this company to lobby the State for cess that requires no chemicals.” created. It is commercially more dif-
support and I think they believe they are Sampling equipment required for Blina ficult to produce larger diamonds and
sympathetic, but we need some action on is being held in a warehouse in Perth’s to produce diamonds with the same
it.” south-eastern suburb of Welshpool, ready colour Ellendale has got, my under-
Gibb’s dream of being a diamond pro- to be mobilised to site when Gibb has standing is that it is not yet possible,”
ducer is gaining momentum, with the El- funds in place. Richards said.
lendale acquisition beefing up its value Though conditions for juniors trying to “The [synthetic diamond] yellows
proposition from the humble beginnings raise capital remain challenging, 2020 come out browny yellow, they don’t
planned at Blina. promises to be a better year and Gibb come out as a nice Ellendale yellow.
Phase two trenching work at Blina has hopes to have $2.5 million in place soon. So, I think they are not really compet-
confirmed diamondiferous gravel targets If navigating market sentiment hasn’t ing with the high-end we are living in
starting from 0.4m depth on the granted been onerous enough, the vibrant dia- and we are not even trying to recover
M04/467 mining lease. mond sector of yesteryear has dissipated the smaller Malay-type stuff through
At the time of print, Gibb was working on and growth in synthetic diamond produc- the plant, that’s not where our value
producing more information on the high- tion increased in the last 18 months. is.”
grade trap sites that would be targeted for The popularity of synthetic diamonds Instead, Richards said, Gibb would
look to create value from the 0.4 to
plus-4ct stones with good colours,
styles and shapes which have histori-
cally been in high demand, as demon-
strated by Tiffany & Co’s deal to take
all of the Ellendale yellow stones pro-
duced by KDC.
Therefore, it is reasonable to assume
synthetic diamonds may follow the path as
the synthetic ruby/sapphire market where-
by the “blingy”, cheap-end costume type of
jewellery ends up being synthetic.
“But, if you walk into any high-end jewel-
lery store in the world they are all mined ru-
bies, sapphires and emeralds; they are all
from mines and not synthetics and it looks
like it is going the same way as diamonds,”
Richards said.
“It is hard to imagine top-end jewellery
stores selling top-end engagement rings
with synthetics. There is a market but it’s
more of a complimentary market. Now that
those changes have happened there is
more interest in what we have got because
we have a story behind what we do and it
is a pretty interesting story.”
Branding will be an important part of
the marketing process for Gibb and the
historic attachment of diamonds sourced
from the Ellendale fields is an advantage
Richards intends to maximise.
“For diamonds to sell it is becoming
Gibb is looking to raise in the order of $2.5 million

Page 16 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

The WA Government has also invited India Bore Diamond
Holdings to apply for other tenements at Ellendale

Phase two trenching work at Blina has confirmed diamondiferous
gravel targets starting from 0.4m depth on the granted M04/467
mining lease

more and more about branded diamonds.
We have got that; we have a Tier 1 juris-
diction, the diamonds are conflict free,
very high quality, good large coloured
stones and are unique Ellendale stones
and colours,” Richards said.
“There’s clearly a demand. When you
go to Broome, a lot of the pearlers have
created a story. I think there is most defi-
nitely a market for our stones through that
type of marketing and bespoke high-end
jewellery throughout Australia and a nice
story to sell overseas as well.
“We have a way to go though, we are
a small micro-cap company. We’ll need
some help along the way, there is poten-
tial for corporate deals. We do have some-
thing that is completely unique and there
is always interest in what we have got and
what we are doing from all kinds of differ-
ent groups,” he said.
– Mark Andrews

Gibb’s diamonds are generating keen interest from potential investors in Asia

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 17


Sad diamond day looming

uch a niche space as it is, the antici- The global demand for the rare dia- it was sold in its entirety to Hong Kong
Spated closure of Rio Tinto Ltd’s Argyle monds was best reflected in the fact that fancy coloured diamond specialist, Kun-
diamond mine in Western Australia later successful bidders came from nine dif- ming Diamonds.
this year will be felt industrywide. ferent countries. “This is a dream come true, a rare op-
“It will be a shame for Australia when “No other diamonds on earth match portunity to acquire a once in a lifetime
that mine comes to an end. It is such a the rarity and provenance of Argyle pink collection of pink and red Argyle dia-
strong brand and it will probably have a diamonds. To have acquired two of the monds. With the imminent closure of the
positive impact for some time to come,” last Argyle pink diamonds to ever be un- Argyle mine, a collection such as this
Lucapa Diamond Company Ltd manag- earthed, and one of the few Fancy Red deserves to be showcased to the world
ing director Stephen Wetherall told Pay- Argyle diamonds in existence is the ul- and we look forward to announcing our
dirt. timate privilege,” Ron Kiven, director of plans at a later date.” Harsh Maheshwari,
Almost the entire world supply of rare Blue Star & Kiven Diamonds, part of the director of Kunming Diamonds, said.
pink, red and violet diamonds comes Aurostar Group, said.
from Argyle and over the past 19 years The 2019 Argyle pink diamonds tender
the value of Argyle pink diamonds sold at collection was accompanied for the first
tender has appreciated more than 500%, time by an exclusive selection of smaller
outperforming all major equity markets. Argyle pink and red diamonds. Known as
In 2018, an auction house sold a Pink the Argyle Pink Everlastings™ Collection
Legacy diamond for nearly $70 million, and comprising 64 lots of carefully cu-
setting a world record price. rated diamonds, weighing in total 211ct,
The Argyle pink diamond’s val-
ue comes from its uniqueness; it
is one of the rarest in the world,
believed to represent less than
0.1% of all diamonds.
Annual production of pink dia-
monds is said to fit in the palm
of a hand, with Argyle diamonds
accounting for 90% of the world’s
pink output.
The 2019 Argyle pink dia-
monds tender collection of 64
rare pink and red diamonds de-
livered strong results, with the
35th tender since production
started attracting double-digit
growth in the number of bids.

SOURCE: GlobalData, Mining Intelligence Center

Page 18 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 19


Critical thinking for

mining’s next trend

lthough the decade is still in its formative months, a new agreement between
A Australia and the United States regarding critical minerals supply and demand
is already shaping as a potentially decade-defining theme for Australian mining.
The last few years have seen recognition dawning among US political leaders that
the country’s defence and hi-tech industries are increasingly reliant on Chinese-
centric supply chains for a host of critical minerals.

Page 20 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

Federal Minister for Resources and
Northern Australia Hon Matt Canavan with
US Commerce Secretary Wilbur Ross and
US Ambassador to Australia Arthur B.
Culvahouse Jnr

n late 2017, US President Donald Trump It is likely that Canavan will be serv- total funding to opportunities in the criti-
Iissued Executive Order 13817, identify- ing parliamentary duties during that time cal minerals space and it will be a great
ing that the “dependency of the United with Australia to be represented in the opportunity for EFA to also work with US
States on foreign sources creates a stra- US by the head of Australia’s new Critical finance authorities to try and support
tegic vulnerability for both its economy Minerals Facilitation Office, which was some of these projects over the line.”
and military to adverse foreign govern- launched in January. Outside of China, Australia is the
ment action, natural disaster, and other Around the time of Canavan’s last visit world’s largest producer of rare earths,
events that can disrupt supply of these to the US in late 2019, it was announced however, processing the minerals is pre-
key minerals”. that low-interest loans from the $4.4 bil- dominantly tied to countries in Asia.
This was followed by the establishment lion Defence Export Facility would be The US has designs on developing in-
of a Federal Strategy to Ensure Secure available to rare earth miners in an effort house processing capacity and Australia
and Reliable Supplies of Critical Minerals to remove the monopoly China has on is in the queue to help drive that ambi-
with Australia one of four countries ear- the global rare earths sector. tion.
marked to play a pivotal role in achiev- To emphasise how eager Australia “We’re supportive of various proposals
ing this initially through the Australia-US and the US are to curb China’s influ- to do so. We’re hopeful for more focus
Critical Minerals Dialogue, initiated last ence on the rare earths market, access on that and the tender for that process
year. to dual funding would also be opened up closed before Christmas; I think we have
Federal Minister for Resources and through Export Finance Australia (EFA) a very good opportunity for our country
Northern Australia Hon Matt Canavan as well as the Northern Australia Infra- to help secure the relationship,” Canavan
cemented Australia’s standing in the bi- structure Facility (NAIF). said.
lateral cooperation on critical minerals “More generally, longer term there are “Not only the US, but other countries
with the US after several meetings with more bigger projects that we’re looking to are now alert to the issue of securing
US Commerce Secretary Wilbur Ross work with the US on and we’re commit- a reliable supply of these minerals. It
and other US government officials over ted to our export finance arms working is understandable that things like rare
the past two years. The Australia-US together and cooperating on any oppor- earths, cobalt and other commodities
Critical Minerals Dialogue was created tunities that arise,” Canavan told Paydirt. have flown under the radar for some time
last year and will have its next meeting “Before I left for the US last year, we because they are not large markets. The
on February 26. announced that we’d open up $4 billion in global market for rare earths is nomi-

Canavan with New Century Resources Ltd managing director
Patrick Walta at the Century zinc mine in Queensland
aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 21


nally around $US1 billion rarity in the global context where China
a year but are now critical dominates the supply chain and raw ma-
Australia-US geological for many modern technolo- terial is often sourced from unstable ju-
gies. Making sure there
risdictions in the developing world.
survey agreement is a reliable, diverse and “It is an exciting time and the intensity
competitive supply of these of the meetings and discussions has il-
In November, Geoscience Australia minerals is really important lustrated the commitment and sense of
and the US Geological Survey to the world economy.” urgency in both governments to work on
formalised a partnership on US Consul General Perth the issue,” Gainer said. “There has been
developing each country’s critical David J. Gainer told Paydirt an emphasis on creating and diversifying
the supply chain via responsible, sustain-
he had been impressed by
mineral assets. According to the level of engagement on able practices. That is a big emphasis
Geoscience Australia, knowledge the issue from Washington. and with the governance initiative the US
gained from the collaboration will: “There is deep interest on is trying to build framework where these
all sides to try to help solve topics are considered.”
• Improve both countries’ this issue,” Gainer said. While defence and trade issues domi-
understanding of their “There has been meetings nate US President Donald Trump’s elec-
geological resource potential between the US Defense tion year agenda, in Australia Prime
for critical minerals, Department, Australian De- Minister Scott Morrison and his Federal
including rare earth partment of Foreign Affairs Government is more concerned with es-
and Trade and the Secre-
tablishing a defining strategy for future
elements, and contribute to a tary of State where critical bushfire policy. The establishment of a
robust evidence base for minerals was on the agen- royal commission into the recent bushfire
global supply potential da and during his visit to the season has been floated by both sides
• Better identify and close US in September, Prime of politics. Canavan said it was a subject
under consideration.
Minister Scott Morrison
critical minerals knowledge discussed critical minerals “That will be a matter of discussion
gaps in Australia’s critical with President Trump. between the Federal Government, state
minerals understanding “In October, Secretary governments and territories. There will
• Help Australia understand of Commerce came to obviously be a major review of some
Australia and met with the
kind in terms of that and we will work out
future trends and match Prime Minister and Minis- ways to make sure we get to the bottom
resource potential to ters Canavan and Birming- of what happened and what we can do to
international demand ham and talked about criti- better protect Australians in the future,”
• Fast track innovation in cal minerals and the need Canavan said.
to create stability, transpar-
“We are never going to remove bush-
the critical minerals sector, ency in the supply chain. fire as a threat, it is something that we
including development of “The US Ambassador to will always live with, but we can always
online decision support Australia also took a del- do things better. With any event like this
tools with full data and egation of Australian min- we should review it and see what practi-
decision process transparency ers to Bangkok for the US cally we can do to make these problems
Indo-Pacific Business Fo- smaller.”
rum, where they met with Australia is reportedly on track to meet
Secretary of Commerce its 26% carbon emissions reduction tar-
Wilbur Ross.” get by 2030, with Morrison suggesting
In addition, Geoscience Australia could up the ante and lift its
Australia and the US Geological Survey target.
have signed an agreement focused on Governments around the world are
joint research into critical minerals, in- embracing ideas and inventions that will
cluding mapping, geological distribution play a role in a cleaner, greener future, by
and supply/demand chain dynamics. initiating policies geared towards lower-
“This is a multi-year research project ing carbon emissions.
which will see the agencies work closer Some countries have had to act faster
together to understand geological re- than others on this front and identified
search potential for critical minerals the transition to e-mobility as good a fix
mapping and mineral assessment and as any.
develop data analytics capabilities for China and select countries in Europe
supply/demand scenarios for the critical have set targets to have internal combus-
minerals pipeline,” Gainer said. tion engine vehicles removed from their
For the US, Australia looms as a reli- roads in favour of electric vehicles within
able partner for critical mineral supply, a timeframes of 10-20 years.

Matt Canavan

Page 22 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

The Government will commit $4.5 million to fund critical minerals
research by key Commonwealth scientific agencies

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 23


Australia does not currently have any issue of carbon emissions, not arbitrary electric car industry and I think that any
such policies in place, however, expecta- targets or individual technologies,” Cana- industry that relies too heavily on govern-
tions are for the rate of EV adoption in van said. ment support is almost inherently volatile
Australia to mirror the uptake in markets “I think to build a sustainable industry it and unsustainable,” he said.
of similar size. has to be consumer-led not government- Electric Vehicle Council chief executive
In the meantime, Canavan believes led, I am confident in the future growth Behyad Jafari told Paydirt Australia was
there will inevitably be an uptick in EVs of electric vehicles because they provide definitely behind in the global EV revolu-
on Australian roads but not the volume an alternative, not just for environmental tion and hoped to drive change in that
expected in places like China and India characteristics, for those in congested regard through “research and industry en-
where air pollution is a major problem. larger developing countries will be criti- gagement to develop a strong understand-
He said criticism that Australia was cal in their uptake. ing of the barriers preventing mass market
lagging the rest of the world in EV adop- “Really, Australia’s role, a nation of 25 uptake of EVs in Australia”.
tion was unfair and the e-mobility revolu- million people, we’re not going to drive The Electric Vehicle Council is the na-
tion down under would be determined by the development of an entire industry. tional body representing the industry in
consumers. That is going to be driven by consumer Australia and includes member compa-
“We are focused on reducing carbon demand in larger countries to get the nies involved in providing, powering and
emissions. Keeping in mind if all we scale required to build electric car fac- supporting EVs. Its members include the
were doing to replace our diesel or petrol tories. Obviously, there is an important world’s biggest car manufacturers; Tesla,
fuelled fleet to EVs, then they will effec- role to play in the provision of the fun- Porsche, Audi, BMW, Mitsubishi, Hyundai
tively be coal-fired EVs at the moment, damental minerals that build those cars, and VW, with the group determined to ac-
so the focus has to be on the broader but what I want to see is a sustainable celerate the electrification of road trans-

Page 24 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

A project agreement has been signed by Geoscience Australia and the United
States Geological Survey (USGS) paving the way for both nations to work more
closely on understanding each country’s geological resource potential for critical
minerals and developing a pathway to supply arrangements

port in Australia. Certainly, at state level we are seeing in- our main message out but this should have
“If we look around the world, we can creasing ambitions in terms of the policy really happened five years ago. There is a
expect to see markets comparable to Aus- approach they want to take as the world sense of urgency in these things now and
tralia having 30-50% of new vehicles be- transitions to EVs.” the reality is that Australia is often noted
ing electric by 2030. The question mark The most significant step for the Electric as a country with a competitive advantage
is still there in terms of what is a realistic Vehicle Council, according to Jafari, was because we are there at the first step;
projection for Australia; I think what is real- starting a national conversation on the we have the rocks in the ground to begin
istic for our ambitions is to at least be in line transition to EVs, with its desirable mem- with so it makes a lot of sense to central-
with other developed nations that are like bership base an indication of how Aus- ise operations where that side of things
us around the world,” Jafari said. tralia can have an influence on the market. already exist.”
“There is certainly an acknowledgment “I have certainly noted there is yet to be Australia is awake to the opportunities
that Australia is well and truly behind [in an international investor that we have spo- emanating from participation in the bat-
the uptake of EVs] and that is an issue ken to that doesn’t see a role for Australia tery-related technology sector and has
that needs to be addressed. We need to right down the value chain and they are in- acted to capitalise on an industry slated
see that translating into more significant terested in things like vehicle manufactur- to be worth trillions of dollars within the
actions and state governments taking on ing in Australia,” Jafari said. decade.
that responsibility. That is an area that “There is a lot more coordination by A Federal Government-backed Future
requires federal government action to be governments trying to capture that oppor- Battery Industries CRC has been set up
taken. There have been ongoing discus- tunity around the rest of the world, so that in Perth to help boost Australia’s pros-
sions with federal government for a few we are now working with the Federal Gov- pects of being more competitive and in-
years, but not any meaningful action yet. ernment on the EV industry strategy to get novative in meeting the needs of the EV

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 25


Reducing red tape that “bedevils”
new projects from getting off
the ground and a productivity
commission review into
regulations specifically for the
resource sector are among high
priorities for Federal Minister for
Resources and Northern Australia
Hon Matt Canavan in 2020.

“Also, a review of the Environmental
Law and Act at the federal level is also
planned, while it is really important that
we maintain our strength as an investment
destination,” Canavan told Paydirt in mid-

“There has been a bit of hit to that
reputation in the last few years and we
have to make sure we get back onto
making sure we have robust environmental
laws and ones that don’t necessarily hold
up the beginning of major projects that can
create thousands of jobs for Australians.”

Also among the Government’s priorities;
opening up new resource basins for the
wider benefits of larger economic activity.
“A focus of mine is the Adani coal mine,
which opens up a new coal basin in central
Queensland for the first time in 50 years,”
Canavan said.
“There are couple of others that are
important to the west also like Browse
Basin; it is coming to crunch time for
decisions, and we are pushing the JV there
to proceed with that $30 billion project in
Western Australia.”

Canavan added that he was also excited
about the prospects for developing
Beetaloo Basin – potentially Australia’s
first ever shale gas basin – which could
demonstrate how crucial the shale gas
basin is to the renaissance of the factories.
“There’s no reason why we can’t tap that
here to support jobs not only in the mining
sector but also in factories and small
businesses right across Australia,” he
The US has identified 35 critical minerals it needs reliable sources for uses
in new technology and defence, many of which Australia has in abundance

Page 26 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

and energy storage markets. could be on the way. tionship with the world’s political and
Meanwhile, Canavan hoped that the “We will be looking soon at what we economic powerhouse to bring oppor-
$5 billion Northern Australia Infrastruc- do next in that space to help continue to tunities in the critical minerals sphere to
ture Facility (NAIF) would be used con- support, particularly the smaller explora- the fore can only enhance the status of
structively to break new ground in prov- tion companies in hard rock minerals,” the companies pioneering these niche
inces prospective for battery-related Canavan said. fields.
commodities. Attracting financial support continues “I don’t think there is a great under-
“We have invested in a number of in- to be a conundrum for junior companies standing across the public about these
frastructure projects which help support in the early part of 2020, particularly things which is completely understand-
opportunities in this broader space, es- those connected with battery minerals. able. But, I think there is a level of aware-
pecially the Mt Tom Price to Karratha Opaque markets in lithium and graph- ness increasing and it is important to re-
road which will also open up opportuni- ite and the extreme highs and lows of mind people how important mining is to
ties in that province – a lot of which are cobalt pricing in recent times have not all modern technologies – a smart phone
battery minerals based. NAIF remains helped players in those sectors, while starts with a shovel; every time it vibrates
open as an investment vehicle as well for there continues to be a general lack of in your hands it is thanks to rare earths,”
opportunities in northern Australia in this understanding among investors of the Canavan said.
space,” Canavan said. importance of such minerals. “Obviously we are not going to have
Across all commodities it is often jun- However, reports such as the Outlook electric cars without the big expansion of
ior companies taking the initiative and for selected critical minerals: Australia lithium, nickel and cobalt industries, so
putting their boots on the ground first, 2019, in which the Department of Indus- the mining sector is absolutely essential
however, many are incapable of with- try, Innovation and Science reviewed the to the modern economy and it has been
standing the cyclical ups and downs of current market dynamics for niobium, a key driver of the industrial revolution as
pricing that inevitably occur. rare earth elements, cobalt, antimony, well as being just as important to the in-
Canavan said the tax credit scheme magnesium and tungsten are helpful in formation revolution as well.”
supporting juniors at exploration phase highlighting the importance of non-tradi- – Mark Andrews
was one way government supports in- tional minerals.
dustry and signalled that more help And, by fostering a meaningful rela-

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 27


LME to add much-needed

lithium price clarity

aydirt’s Battery Minerals Conference returns to the Pan Pacific Perth on
P March 4-5. In many ways, it is a strange time for the battery minerals sector.
Prices and interest in most of the battery-related commodities have retracted
after initial excitement. Investors are now cautious about future supply and
demand scenarios for lithium, cobalt, graphite and other related minerals.
Developers are finding it difficult to raise project finance, particularly as marketing
and pricing for the commodities can be unpredictable and opaque.

eanwhile, the world’s major car man- is broken but there were actually some tial investors who keep looking at lithium
Mufacturers are becoming increas- good, speculative reasons why the lithi- investment – both in equities and direct
ingly anxious about future supplies of um and cobalt prices ran when they did project investment,” Lowry said. “Un-
key inputs for EVs. It is estimated that by and they had little to do with longer term certainty over what the lithium price is,
2025 Tesla, Volkswagen and Nissan will battery demand,” he said. “I think they the supply and demand situation and, in
be selling a combined 3 million EVs with totally missed the real growth story for some cases, how fast EVs will grow has
BMW, Ford and others set to follow suit battery minerals; the mega trend is still never been greater.
by the end of the decade. However, most going flat out.” “Lithium is a small market, conflicting
of the battery component parts will come Lithium market expert Joe Lowry of information regarding supply and de-
from Asia, and China in particular, thanks Global Lithium LLC told Paydirt confu- mand as well as price is rampant. Risk
to its dominance of graphite, lithium and sion in the lithium market had grown over is a measure of uncertainty. Until there
cobalt downstream production. the last 12 months. is more certainty regarding EV demand,
Western car manufacturers are re- “I do several calls a month with poten- whether high quality lithium chemical
sponding by heading further upstream in
the supply chain.
“We are working directly with custom-
ers because the big OEMs like to control
their supply chain,” Talga Resources Ltd
managing director Mark Thompson said.
“We continue to meet these companies
and they continue to shock us with their
demand projects; how much they want
and when they want it.”
For Thompson, the investor notion that
the battery minerals boom was a flash-
in-the-pan is misguided.
“As the battery-related commodities
have come off those all-time highs, in-
vestors assume the battery narrative
EV charging stations are sprouting around the world with Europe leading the rate of
Page 28 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT adoption for the technology

The Tesla 3 continues to make inroads into
the traditional combustion engine market

The LME is working on implementing a cash-settled lithium contract
supply will be adequate
or oversupplied and what
reasonable range of price
is, most banks are going
to avoid lithium.”
A possible solution to
this impasse could be
emerging. In August, the
London Metals Exchange
selected Fastmarkets as
the preferred price report-
ing agency to provide a
lithium price for a proposed
cash-settled lithium futures
contract to be traded on
the LME.
Robin Martin, LME Head
of Market Development,
told Paydirt the LME’s
experience with other bat-
tery minerals had led it to
investigate the possibility
of creating a lithium trading because they can’t link future production introducing some much-needed transpar-
platform. to end-to-end pricing and financiers can’t ency into the market.”
“We were already active mitigate risk,” Martin explained. “The big The LME hasn’t set deadlines for the
in the EV space through car manufacturers are also finding their launch of the lithium contract but Martin
nickel and cobalt and it input sourcing is compromised because said the technical aspects would be ready
became clear there was a of the volatility in lithium prices. If they can in 2020.
growing appetite for a risk control price risk more effectively, they’ll
management vehicle for be much happier. “In partnership with Fastmarkets we aim
lithium,” Martin said. “We “It goes all the way through to countries to drive the industrywide adoption to their
started discussions with in- not being able to maximise their tax take lithium carbonate and lithium hydroxide
dustry partners – car man- because producers are paying tax on of- prices, eventually opening the door to a
ufacturers, battery suppli- ten arbitrary prices. Some governments cash-settled contract. The settled price
ers, miners, etc. and it was believe exports are being under-priced.” will be the monthly average of the Fast-
clear there was growing To inform the process, the LME has markets price,” Martin said.
appetite for a cash-settled lithium futures formed a lithium committee, including the “Once the technical side is ready the
contract.” likes of BASF, Tesla and Jaguar Land Rov- committee will then look at what the timing
Martin said stakeholders on all sides of er as well as miners such as Albemarle will look like which will be subject to market
the supply/demand chain were eager to and Australian junior Pilbara Minerals Ltd. readiness.”
bring more transparency to lithium pricing. “They’ve all taken a real interest in the Martin pointed to the example of other
“As it is a fairly nascent and small market topic,” Martin said. “The introduction of the metals on both the LME and elsewhere
with an historic absence of a universally lithium futures contract would mean eve- of how a cash-settled contract could be
recognised reference price, junior lithium ryone is linked to a reference price, thus adopted in the market.
miners can find it difficult to get financing “Iron ore is an interesting precedent, as
is aluminium,” he said. “Everyone accepts
trading of aluminium, but it took a lot of
years from the 70s onwards to develop the
liquidity and shift pricing on exchange.
“We also launched the steel scrap and
rebar contracts in 2015 and they are grow-
ing healthily but still have a long way to go.
It’ll undoubtedly take time, but we want
to work with the lithium industry to drive
“The market has to be supported by risk
management; it will lead to better financ-
ing and growth and we think it is healthy
for the lithium market’s development. Over
5-10 years, it is going to be an exciting
growth sector and we are keen to continue
engaging with market participants.”
– Dominic Piper

Joe Lowry
aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 29


Talga heads downstream

in graphite dream

ears of piloting and marketing of its
Ygraphene products has Talga Re-
sources Ltd confident it can meet cus-
tomer expectations when it comes to
producing a marketable graphite product
this year.
The difficulty of meeting customer de-
mands around consistency and reliability
of product specifications has proven an
obstacle for a string of graphite and other
industrial mineral-type developers in re-
cent years, but Talga managing director
Mark Thompson believes his company’s
experience in graphene gives it a natural
“It can be a real challenge for min-
ing companies to take graphite from
one state to another which customers
can use,” Thompson told Paydirt. “But
we have a gained a lot of experience in
downstream processing and marketing
from our graphene work. We have used
a lot of the technology, people and pro-
cessing we developed for the graphene
business to inform us on graphite and the
pathway to an anode product.”
In May last year, Talga announced an
NPV of $US1.05 billion for its Vittangi
graphite project in northern Sweden. The
PFS envisaged Talga producing a fully
purified, shaped and coated graphite
anode product suitable for direct use in
lithium-ion batteries.
Talga’s pursuit of downstream pro-
cessing contrasts with ASX-listed graph-
ite peers who have largely preferred to
stick to concentrate production and steer
clear of higher risk refined products.
Thompson said experience in the gra-
phene space meant value-addition held
no fears for Talga.
“The conversion of the uncoated spher-
ical graphite to the final product is the
part of the chain with the largest margin;
that’s why we are investing in it,” he said.
“We are an advanced materials producer
already. We have our test facility in Ger-
many, and we have a team which works
on advanced materials every day and we
have worked closely with customers so
our understanding is extensive.”
The PFS was based on a staged ap-
proach at Vittangi. Conventional open
pit mining of the 1.9mt @ 23.5% TGC
reserve (part of a wider 10.7mt @ 25.7%
TGC resource) would be followed by on-
site processing before a concentrate is
Talga is beginning to field inquiries from end-users
eager to secure future supplies of anode material
Page 30 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT



4 - 5 March – Pan Pacific Perth

copper graphite tin cobalt lithium manganese vanadium rare earths


John Prineas Joe Belladonna Scott Williamson
Executive Chairman CFO and Company Secretary Managing Director
St George Mining Ltd Western Areas Ltd Blackstone Minerals Ltd

Andrew Radonjic Allan Mulligan Mark Thompson
Managing Director Director Managing Director
Venture Minerals Ltd Walkabout Resources Ltd Talga Resources Ltd

To present, exhibit or attend as a delegate please contact Namukale Nakazwe

on (+61) 8 9321 0355 or email [email protected]

BATTERY MINERALS PREVIEW registered anode material, Talnode-C, to the
Talga’s intention is to produce and sell a

emerging battery market

trucked to an anode refinery on the coast location in northern Europe should also carbon footprint is lithium-ion battery’s
where capacity will be 19,000 tpa of the prove attractive to customers eager to dirty, black secret.”
company’s registered Talnode-C anode find alternatives to China’s dominance of In contrast, Vittangi’s graphite has a
product. battery ingredient supply. low carbon footprint.
The initial stage will see mined mate- Thompson said the decision to pro- “Our project represents a clean alter-
rial toll-treated at a nearby facility for two duce an anode product had placed Talga native, because the graphite is made by
years to feed Stage 1 of the anode re- in direct contact with end-users in the the earth and is processed using hydro
finery to produce 2,500 tpa of Talnode-C European automotive industry who had power, meaning our emissions are close
before full-scale ramp-up for a capex of already shown interest in its production. to zero,” Thompson said.
$US27 million. Stage 2 capex is estimat- “Our product is very attractive to cus- Talga has opened discussions with
ed at $US147 million. tomers that are seeking alternatives to major carmakers and is busy building its
The PFS forecast production cash China,” he said. “China will continue to marketing network ahead of a decision
costs of $US1,852/t with independent dominate material on the global market to mine this year. Although it is too early
price assessment of the Talnode-C prod- but now it is becoming a net importer to announce any offtake arrangements,
uct estimated at $US11,250/t. and there is every chance it will consume Thompson said interest was strong.
“The current plan is to have an invest- all increased production, increasing the “The material will find a home with
ment decision on Stage 1 by the middle chances of supply chain shocks.” many customers depending on the char-
of 2020,” Thompson said. “Stage 1 will Questionable environmental outcomes acteristics required; i.e. energy, power,
be on a trial mining basis with toll pro- from Chinese anode production – both charge, temperature, etc,” he said. “We
cessing to a concentrate which is then from natural and synthetic sources – are talking to larger companies that
turned into anode material at the anode could also prove beneficial to Talga’s could underwrite bulk production but
refinery which will be commissioned in marketing of Talnode-C. want availability for different customers
Sweden in 2021. European carmakers are beginning to at different pricing structures. The large
“Before then, we have got a stockpile pick apart the EV supply chain to identify customers are capable of exerting a lot
on site from previous trial mining and will security and ethical soft spots. Thomp- of price influence on you because of the
look at toll-treating that to start producing son said anode material from Vittangi size and terms of their contracts.”
material for customers this year.” could satisfy on both points. Offtake contracts could bleed directly
Thompson said the simplicity of the “Some of the largest end-users, the into project financing arrangements.
mining operation allowed Talga to focus OEMs, have never been this far up- “We will have discussions with end-
much of its attention on the notoriously stream and some have only recently be- users on project finance but also traders
difficult activity of processing and mar- gun investigating the supply chain. They and bankers and EU-type funding utili-
keting. identified that 52% of CO2 emissions in ties,” Thompson said. “Investment banks
“The orebody is extremely consistent, an EV car is from battery and anode pro- such as Macquarie have also shown in-
there really isn’t much variability and it is duction is almost all of that. terest. However, it is not the most tradi-
consistently high grade,” he said. “There “They have only just discovered that tional project so may require novel ways
is no doubt about the project working at synthetic graphite is made from a pe- of funding.”
certain scales.” troleum product, and then shipped and
Predictability is also a positive in geo- processed using coal-fired power and – Dominic Piper
political terms. Not only is Sweden a they are only just realising the massive
Tier 1 mining jurisdiction but Vittangi’s carbon blow-out that’s giving them. The

Page 32 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT


A new nickel mine on the horizon to feed the
growing Electric Vehicle demand for Nickel.

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 33


EV sector all revved up

A common misconception about EVs is the
range capacity of the engines. Nowadays, a
range of 5-600km per charge is standard
nvestors continue to warm to the idea of ing and refining metals here in Australia scale-up investment in this sector. I think
IAustralia playing a big role in the battery and looking at opportunities right across this is really where we have already seen
minerals sector beyond the realms of just the battery value chain; building plants a number of Australian entrepreneurs
mineral extraction. and facilities domestically to things like and businesses really take on a world
Australia’s endowment and all-con- getting closer to the vehicle itself through leading role, particularly on the charging
suming responsible practices in mining componentry and vehicle manufactur- infrastructure side right across e-mobili-
is world leading, however, taking its re- ing. Things on the energy side like charg- ty,” Jafari said.
sources downstream has been prob- ing infrastructure, domain management “I think that has been really well recog-
lematic and the manufacturing sector software or hardware tools to support nised by investors across the world; that
remains lacklustre. consumer charging behaviour is of par- Australia is a pretty prime site for them to
Nevertheless, Electric Vehicle Council ticular interest, too.” come and find new opportunities.”
chief executive Behyad Jafari told Pay- Understanding of the EV sector is ma- The Electric Vehicle Council is Aus-
dirt there was mounting interest from in- turing around the world and Jafari had tralia’s national body for industry partici-
vestors to support the broader e-mobility noted the industry environment had shift- pants, which includes a broad range of
sector in Australia. ed in the past 12 months from research companies providing, powering and sup-
“There’s investor appetite to invest,” and business case building to invest- porting EVs.
Jafari said. “There’s interest in every- ment decisions in the EV chain. Tesla and BMW are just two of the
thing from mineral extraction to process- “There is significant appetite to really world leading car manufacturers in-

unior companies exploring and developing projects in to make investments rather than just trying to understand
Jthe battery minerals sector can start to feel enthusiastic the market,” Jafari said.
about attracting investment, according to Electric Vehicle The next challenge for Australia is demonstrating viable
Council chief executive Behyad Jafari. means of refining and processing materials essential for
Jafari said the council’s ongoing work was starting to battery-related technologies.
show the investment community – superannuation funds “At the very least, we need to see the pieces of the pie
and banks – were thoroughly engaged in opportunities right we can play a role in or pieces of the pie we can siphon
through the chain. ourselves and again that has been an area of very active
“I think we’ve certainly seen a massive shift from an en- interest,” Jafari said.
vironment where they said: ‘Come and talk to us about this “I think it is really up to us, I have certainly noted there
thing that we hear about”, to an actual appreciation and ef- is yet to be an international investor that we have spoken
fort out there for an increase in investment. What we have to that doesn’t see a role for Australia right down the value
seen is a trend turning from just interest to much more sig- chain and are interested in things like vehicle manufactur-
nificant, detailed investigation from people actually looking ing in Australia.”

Page 34 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

volved in the group, while some of the computers which allows for the manu-
energy providers included in the mem- facturers to keep improving things and
bership are AGL, Synergy and Origin. updating software to make your vehicle
While the Council boasts an impres- better. That is a huge shift from where
sive band of companies looking to we were where things get worse and the
bring Australia up to speed with electric next model comes out and you hate the
transportation for a more sustainable fact that you bought the last one.”
future, Jafari said the country trailed
other countries in the uptake of EVs and – Mark Andrews
urged greater government intervention Behyad Jafari
to help the process.
“We’re in a fantastic spot here, but
when it comes to market uptake, a lot
more of that depends on government
policies in our transport sector and that
is an area where Australia has lagged
behind,” Jafari said.
Some countries have introduced poli-
cies outlawing internal combustion en-
gine vehicles from being on the road in
the coming decades but Australia is still
some way from implementing its own
However, disseminating up-to-date
information on the sector should result
in more EVs on Australian roads. Such
is the pace of technological advances in
the EV space, information is often out-
dated, leading to common misconcep-
tions about EVs.
“There are often things that are out
there that were true 3-4 years ago, as
far as range and how long batteries last.
Nowadays, all those things have dou-
bled or tripled. You can go 5-600km per
charge, batteries last over 20 years,”
Jafari said.
“It is easier to think of EVs like your
mobile phone or computer – they get
better very, very quickly. Car, truck,
bus companies are all doing things like
over-the-air updates, so you don’t have
to buy a new vehicle you just need all
the latest tech.
“It puts us in an environment where,
fascinatingly, the car is probably at its
worst the day you buy it because it is
what EVs allow for. They are more like

The conference proceedings of the 2019
Australian Nickel Conference

is available

$60 (inc.GST)
15 October 2019
Perth, Western Australia Phone (+61) 8 9321 0355 or email [email protected]

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 35



2020s vision

Mining at Forrestania continues to flourish
he new decade looms as a defining peri- with BHP and Chinese stainless steel pro- for Western Areas with a strong December
Tod for the West Australian nickel industry ducer Jinchuan. quarter performance
with its role in the EV revolution expected to The decision could be interpreted as
take centre stage. the abandonment of the nickel sector’s EV
Demand slumps, supply gluts and geo- dream, but Western Areas chief financial
political shocks meant the nickel price was officer Joe Belladonna told Paydirt the op- If the future of nickel sulphate demand is
buffeted around throughout the 2010s but posite was true. so bright, why then did Western Areas and
as the 2020s start the sector is set for re- “During the offtake discussions we spoke IGO drop their studies into sulphate produc-
structuring with stainless steel’s hegemony with downstream users and even OEMs di- tion? For Belladonna, it is a simple risk-ver-
on demand (currently 75%) to be disrupted rectly but the feeling was it was still a little sus-reward equation.
by the emergence of the EV market. early at this stage for them to be locking in “Strategically, it is important to keep an
The battery sector currently accounts new sources of nickel sulphate,” he said. eye on your product and where you derive
for less than 5% of nickel demand but with A lot of the OEMs are still taking product most benefit from it,” he said. “We do cap-
EV adoption gathering momentum and the in its ready-to-use form and there is avail- ture a lot of value at the mine gate so to go
new generation of EV batteries requiring ability in the market. any further downstream, you would want to
greater nickel intensity, it could pull in as “However, the groundwork is being laid see the enhanced value quite clearly.
much as 30% of nickel product by the end now. They have a longer outlook than our “The uplift in value from downstream
of the decade. current three-year offtake contracts. We processing of lithium is quite clear but in
WA nickel miners are paying heed to the believe that from 2025 you will start to see nickel it isn’t. There is currently a 15-20%
predictions. BHP Ltd reacted first, dropping demand for production tightening and users premium on the LME price for nickel sul-
the “For Sale” sign on its Nickel West divi- will be looking to secure supply.” phate but the important question for us is
sion in favour of investing heavily in new re- The plans of Western Areas’ offtake part- how long that premium can last given large
fining and smelting capacity which will see ners bear witness to the structural change groups are integrating sulphate into their
it capable of producing the nickel sulphate coming. complexes and getting better at it. Will the
product which goes directly into EV batter- “We are already aligning with that nickel premium disappear?
ies. sulphate/EV market,” Belladonna said. “So, it is important to not invest too heavi-
In the mid-tier segment, both IGO Ltd “Both BHP and Jinchuan run traditional ly on downstream capacity when there is no
and Western Areas Ltd have investigated smelting complexes but both are moving clarity on that premium for the longer term.”
the potential for adding downstream pro- towards increasing sulphate production Instead, the company is willing to allow
cessing to their traditional nickel concen- capacity rather than increasing briquettes the competitive tension in the offtake pro-
trate output. Both companies have parked for stainless steel; BHP is building a sul- cess drive improved value.
those investigations, instead locking in new, phate refinery at Kwinana while Jinchuan “It was a very competitive tender and the
traditional three-year offtake agreements is already the biggest sulphate producer in groups involved were serious about trying
for their nickel concentrate production. China and is looking to expand its sulphate to secure their supply lines,” Belladonna
IGO penned agreements with BHP and capacity and is already feeding our concen- said. “They see China as a market they can
Glencore while Western Areas signed up trate into that.” penetrate with better quality concentrate

Page 36 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

like ours.” breathing space to ensure Odysseus’ de-
The increased interest led directly to im- velopment and decide where it fits best in
proved terms for Western Areas. the market.
“Payability [the percentage offtakers pay “We have ring-fenced it as we do think the
for the total nickel content of concentrate] is market will tighten and we prefer to maintain
obviously key and in that regard, we were the optionality for now,” Belladonna said.
very happy with the outcomes of the offtake “We could include financing in offtake or
negotiations. We will capture an increased introduce partners. It is best to explore all
proportion of value via improved payabili- options before locking in that production.”
ties. Ultimately it means our revenue line is Given the bullish nature of nickel produc-
enhanced without additional cost.” ers, talk has inevitably turned to consolida-
The payabilities are commercial-in-con- tion of the WA sector. IGO kicked off pro-
fidence but the terms of the deals are for ceedings by launching and then cancelling
each company to take 10,000 tpa nickel-in- a hostile bid for Panoramic but there is ex-
concentrate, Nickel West over three years pectation among analysts that further M&A
and Jinchuan over two. activity will occur.
The offtake agreements cover Western What part will Western Areas play?
Areas’ flagship Forrestania operation, but “There is some logic to it, but M&A isn’t
the next round of discussions will likely in- usually about the industrial logic, it is more
volve deals over the company’s newest about the personalities involved,” Bella-
development, the Odysseus project, also donna said. “The reality of closing a deal is
in WA. harder than believed to be. We keep an eye
Belladonna said while Odysseus offtake and you shouldn’t expect Western Areas to
was not on the table, many groups wanted sit on the sidelines. We want to control our
to discuss its future. Joe Belladonna own destiny and we sit with a strong bal-
WA nickel peers Mincor Resources NL ance sheet if we need it.”
and Panoramic Resources Ltd are already “Odysseus was not covered in the latest
tackling production restarts but Odysseus’ round of negotiations, it is still a little too far – Dominic Piper
size and longer mine life could make it the off with first production at the end of 2022,”
most attractive of the new plays. he said. “Everyone was very interested in it
“It has a 10-year mine life with 10,000 though, as it is one of the few projects com-
tpa of nickel sulphide production; that is ing online in that period out to 2025 when
very rare,” Belladonna said. “It equates to we expect supply to tighten and the down-
80,000 tpa of nickel sulphate production stream operators becoming involved.”
which makes it a significant asset, espe- Those projections give Western Areas
cially because it is uncontracted.”

Western Areas has chosen
to stick to nickel concentrate
production rather than pursuing
nickel sulphate value-addition

The underground mining skills
developed at Spotted Quoll will be
put to use at the company’s next
development, Odysseus

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 37

Making its mark in stone

Blackstone Minerals Ltd managing director Scott Williamson
was certain nickel was the space for the company to be in
when 2019 started.

Twelve months ago, the Blackstone portfolio spanned the steel production and while that sector still drives demand, the
early-stage Silver Swan South gold-nickel project, Kalgoorlie battery revolution has provided dormant nickel companies with a
and Middle Creek (gold) and cobalt-gold assets in BC, Canada. heart starter and given projects like Ta Khoa another chance.
However, the entwined grapevine that is the Australian mining Given Ta Khoa’s location, 160km west of Hanoi in the Son La
sector turned a casual conversation with a former colleague province, and the fact that it was previously housed in the
– Evan Spencer, who was behind Asian Mineral Resources Canadian-domiciled AMR, Australian interest in the project has
(AMR) – into an opportunity the ever-alert Williamson hadn’t only been piqued since Blackstone’s acquisition in mid-2019.
previously considered.
Enthusiasm in Ban Phuc has since quickly grown with eight
“At the start of the year we were looking at moving into nickel, but different broking firms visiting site since June and Williamson
we definitely weren’t focused on Asia. It wasn’t until I had a chat returning for a sixth time since then at the time of print.
with Evan that I started having a particular focus on this asset,” Upon arrival, Williamson will be met with four drill rigs at Ban Phuc
Williamson said.
where a maiden resource, followed by a reserve, is the aim in the
The asset in question is Ta Khoa, northern Vietnam, which was next six months.
last run by Spencer’s AMR as a modern mechanised operation
Confidence in the disseminated material appears to be growing
producing 975,000t @ 2.4% nickel and 1% copper for 20,700t
with every drill metre for Blackstone, with highlights from maiden
nickel and 10,100t copper between 2013-2016 from a narrow vein
drilling including: 22m @ 0.76% nickel, 0.13% copper, 0.01% cobalt
massive sulphide deposit at Ban Phuc.
and 0.4 g/t PGE from 138m; 17.8m @ 1% nickel, 0.09% copper,
Nickel followers would know that the industry was on its knees 0.01% cobalt and 0.74 g/t PGE from 106.6m; 45.5m @ 1.2% nickel,
during Ban Phuc’s previous existence, with few companies 0.17% copper, 0.01% cobalt and 0.35 g/t PGE from 56.5m; 27.7m
prevailing from that period unscathed. @ 0.88% nickel, 0.09% copper, 0.01% cobalt and 0.74 g/t PGE from
Back then the industry was consumed by nickel’s use in stainless 101m; 29.4m @ 1% nickel, 0.12% copper, 0.02% cobalt and 0.6
Blackstone Minerals Ltd (ASX:BSX)
Suite 3, L3 24 Outram Street,
West Perth WA 6005
Phone: +61 8 9425 5217
Fax:+61 8 6500 9982

Key personnel:
Hamish Halliday (non-executive
chairman), Scott Williamson
(managing director), Andrew
Radonjic (technical director), Steve
Parsons (non-executive director),
Michael Naylor and Jamie Byrde
(joint company secretaries), Dr Stuart
Owen (exploration manager)

Blackstone Minerals

g/t PGE from 140.6m; 11.9m @ 1.35% nickel, 0.15% copper, 0.02% King Cobra is the latest near surface, nickel sulphide
cobalt and 1.09 g/t PGE from 107m; 33.3m @ 0.8% nickel, 0.09%
copper, 0.01% cobalt and 0.36 g/t PGE from 138m. zone bearing semi-massive sulphide veins (SMSV)
announced by Blackstone.
The focus of previous mining activity had been on a narrow
2m-wide massive sulphide vein at Ban Phuc and while there are Assays were pending at the time of print, with near
potentially a further 25 deposits of similar nature, Blackstone’s surface down-hole intervals of up to 60m and visual
priority is defining a large-scale, bulk tonnage, lower grade estimates of up to 20%.
disseminated resource conducive to open pit or bulk underground The King Cobra discovery includes the first-ever
mining. intersection of massive sulphide vein and breccia
Impressed with drilling outcomes so far on the nickel content, styles of sulphide mineralisation within the Ban Phuc
further excitement is building within the Blackstone camp on the intrusion, which may provide vectors towards the
back of platinum-palladium-gold credits evident at Ban Phuc. high-grade feeder zone mineralisation.
Spurred by demand for usage in catalytic converters, palladium The latest assays available at the time of print from
prices started to surge in October.
Ban Phuc received during the period from the Ban
Continued strength in PGE pricing would be a sweetener for
Phuc DSS drilling programme, included the broadest
Blackstone at Ban Phuc if enough material proves to be economic.
downhole intersections of nickel mineralisation seen
“Nickel will deliver 80-90% of the project revenue and the nickel to date: 106m @ 0.45% nickel and 51m @ 0.73%, with
numbers are strong enough without those credits. However, if they higher grade zones of 15.6m @ 1.08% and 18.1m @
are economic, the mining and processing costs could be covered 1.37%.
by the PGEs,” Williamson said.
All nickel intersections are associated with copper,
“We think that has a lot of potential to be monetised over a lot of
the operating costs. For an open pit mining scenario, we’re looking cobalt and significant platinum, palladium and gold,
at 0.7-1 g/t platinum plus palladium plus gold credits.” that combined have returned assays of up to 51 m @
0.44 g/t platinum-palladium-gold, including 18.1m @
Historic comparisons between total site operating costs at Ban
Phuc versus a similar mine operating in a western destination 1.01 g/t platinum-palladium-gold.
indicated costs in Vietnam were 25% lower at all-in costs of Meanwhile, Ecopro BM Co Ltd – South Korea’s largest
$US136/t for narrow vein underground mining, including tariffs EV battery cathode manufacturer – has entered a
and royalties. The 20% Vietnam Government tariff on concentrates non-binding MoU with Blackstone, in a potential
is perhaps one reason why companies have abstained from partnership to develop a downstream processing
involvement in the project. But, with almost $US140 million having facility in association with Ta Khoa.
been spent on infrastructure at Ban Phuc, including a 450,000 tpa
plant, Blackstone has a head start. Additionally, the company’s
masterplan for Ta Khoa is to eventually circumvent the concentrate
tariff by taking processing further downstream and delivering a Vietnam is regarded as one of the fastest growing markets in
product suitable for the lithium-ion battery industry.
Asia and the fundamentals of investing in the country are well
Potential capex to bring the downstream dream alive would be understood by generalist funds.
about $US100 million, manageable for a junior, but even more Blackstone is revelling in low labour and power costs and an
realistic with a partner.
investor-friendly approach from government, while access to a
A pressure oxidation (Pox) processing option, similar to the flow skilled workforce and diamond drilling for $80/m compared to
sheet IGO Ltd is assessing for nickel sulphate production, is the $500/m in Canada is providing Williamson with some relief in what
model Blackstone would look to replicate at Ban Phuc. has been another challenging year for the junior mining fraternity.
In line with resource/reserve drilling as well as testing geophysical “We get these 3-6 months windows where it looks like a bull
targets for new discoveries at Ban Phuc, a scoping study on market, but then we get smashed back down again. We knew
downstream options is also in the pipeline for the next six months. that supply was going to get tight and the Indonesian ban coming
“We could potentially be one of the first companies delivering quicker than expected has certainly been very helpful,” Williamson
nickel sulphate to the industry and will look to a JV scenario said.
through the downstream side of the business, while retaining full “We hope that the last little fall in nickel stockpiles is real, there is
exposure at mine level,” Williamson said. speculation that it has been manipulated. We do know there is a
“We’ve only had the asset for six months and we’ve already hosted very strong underlying demand and that over the medium to long-
end-users to site, so clearly we have what they need and they will term there is not going to be enough nickel to supply the battery
be looking for us to drill this out.” industry.”
The growing demand for nickel sulphate has encouraged sulphide A nickel price in the vicinity of $US17,000/t would be something
miners to research and develop new technologies and flow sheet that makes Ban Phuc very profitable for Blackstone, however,
to meet the tight specifications of battery manufacturers. Several Williamson has more on his plate than to be watching daily price
companies are already collaborating on research and Williamson is fluctuations.
happy for Blackstone to participate. “When LME stockpiles have gone low like this before, we saw
As industry embraces cooperation in developing an emerging significant prices spikes and in 12 months’ time there might not
segment of the market, there are few companies on the doorstep even be a stockpile, which isn’t necessarily good as you won’t be
of China, Japan and Korea in a position to offer nickel sulphate like able to track where the nickel is going,” he said.
Blackstone is planning. “Our five-year view is that nickel will be at these levels or much
“We didn’t go looking at Asia, but once we realised how well- higher and being in nickel sulphide we make money as low as
suited this particular destination is to the battery market and $US14,000-15,000/t. If anything, we don’t want the price to run too
end-users in Asia, which are looking at securing 10-20 years of fast because that then brings laterites into their own. We’d be
supply, and the strength of this particular orebody, we went all in,” happy with a price anywhere between here and $US20,000/t.”
Williamson said.


Boots on


now for



attery demand has not had a big im-
Bpact on nickel sulphide supply yet but
when the time does arrive miners may not
have to look far from Western Australia to
secure the base metal.
While stainless steel remains the pri-
mary market for nickel, Neometals Ltd
managing director Chris Reed is already
preparing for a change in dynamics.
“We’re in nickel but it is for exposure
in a couple years’ time when a signifi-
cant part of it is driven by the growth in
batteries. It is a bit like lithium 10 years
ago; we were in at Mt Marion but battery
production was probably about 30% of Chris Reed
demand,” reed told Paydirt.
“I am thinking battery demand for build a plant, there are options there for
nickel is about 10-20%, but now battery third-party treatment so you can develop
demand for lithium will be 60%. You still them as the market justifies it,” Reed dirt in most mineral commodities; it is
have those base world applications and said. mined, can be treated and you can make
that is great because it soaks up units. It Equally as measured and patient in the a profit,” Wilson told Paydirt. “It certainly
is the same thing with cobalt; it is a non- nickel space is Legend Mining Ltd. doesn’t surprise or disappoint me be-
magnetic mineral, so you have the tradi- While it may be some time before cause it is what it is.”
tional applications in aerospace and it is Legend proves it has the next best thing The climatic conditions in the Fraser
pretty much non-substitutable and you to IGO Ltd’s Nova, managing director Range at the time of print meant there
have more of it demanded in the batter- Mark Wilson has the backing to stay the was no pressure on Legend to keep on
ies.” course at the Rockford project in the drilling, giving the company time to build
Neometals drilled at the Mt Edwards Fraser Range. a 3D model from findings in the structural
nickel project, 90km south of Kalgoorlie, The recently renamed Mawson dis- report carried out on Mawson.
up until Christmas and was expecting as- covery, previously known as Area D, has “After 6-7 weeks we still don’t know the
says to filter through at the time of print. been confirmed with Legend reporting answer as to what we’ve got until we do
Results from RC drilling at the Widg- assays of 70.15m @ 0.52% nickel, 0.36% that 3D model and then go out and test it,
ie South Trend received late last year copper, 0.03% cobalt from 88.2m, includ- that’s the nature of the game. You have
included 16m @ 1.45% nickel, includ- ing 14.9m @ 1.07% nickel, 0.75% copper, to go step by step in a very structured
ing 2m @ 4.79%, 5m @ 1.81%, 21m @ 0.06% cobalt from 114m, including 2.1m manner and maintain your discipline be-
1.05%, including 4m @ 2.42% and 7m @ @ 2.03% nickel, 1.34% copper, 0.11% cause that is the way you get it right and
1.37%, including 3m @ 2.39%. cobalt from 115.5m in hole KDD007 in avoid chasing red herrings,” Wilson said.
“The nickel is pretty good and we have January. “That 3D model will use a lot of this
a good resource base there with 11 re- “The naysayers will be saying they are structural information and it will become
sources. We are just starting the pre- a bit skinny because Nova goes 1.9% pretty obvious to us where we drill our
liminary evaluation on a couple of those nickel and 1% copper and this grade with next holes and that drilling campaign will
deposits, all of them will work at certain the disseminated is only 0.5% and 0.3% be scheduled to kick off later this quar-
prices. We are getting it ready for a cou- copper. What I point out to people is that ter.”
ple of years’ time but we don’t have a if you multiply the metals values out you In the meantime, Wilson accepts that
gun against our head, in terms of when end up with an intercept that across the day traders will float in and out of the
it needs to be on-line. We don’t need to 70m is going $US105/t and that is pay- stock, but knows that true believers – IGO

Page 40 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

and Creasy Group are among the major also being heavily involved
shareholders – will interpret the structural in battery recycling, running
information at hand and stay the course pilot plant activities.
with the company for the journey. “We have almost finished
“Day traders are an integral part of the the lithium recycling pilot
market because they provide the liquidity and we’ve finished the ti-
on which the market relies,” Wilson said. tanium pilot. We will have
“The day traders look at those grades a fair few results out in the
and say: ‘Is that all?’ The true believers next couple of months, a
look at some of the structural stuff, coupled couple of pilot plant results,
with higher grade that we have already got drill results from the nickel
there and say: ‘These blokes could really and we’ll have a Class 4
be onto something and I’m happy to keep engineering study for the
playing this game’.” zeolites,” Reed said.
While the market is hard to please, Leg- Neometals recently an-
end has peers in the field that are sympa- nounced the Innovative
thetic to its ambitions. Manufacturing CRC (IM-
“Who else is finding the big new nickel CRC) agreed to co-fund
sulphide deposits?” Neometals’ Reed a $2.57 million collabora-
asked. tive research project with
“I think we are still at the bottom of the J Queensland University of
curve in demand for batteries. In five years Technology to set up a syn-
we could be sitting here having a conversa- thetic zeolite manufacturing
tion and those minerals could have a com- plant.
pletely different demand make up. It is a bit The pilot plant is aimed
like gold; you are getting a lot of consolida- at zeolite production from
tion, but who is making the massive green- waste products of Austral-
fields discoveries? We were used to 10-30 ian lithium production, with
moz gold deposits being found every cou- the potential for zeolite
ple of years by the majors, not anymore.” manufacture from lithium
Discovering nickel sulphide deposits is refinery residue to eliminate Mark Wilson
tougher than ever and while Reed is bullish waste disposal challenges from lithium re-
on Neometals’ prospects at Mt Edwards, fining.
his company isn’t totally leveraged to the A successful process could generate
nickel sector. significant co-product revenue, Neometals
Neometals is assessing opportunities to stated.
participate in India’s lithium sector, while – Mark Andrews Will Legend unearth the next world
class Tier 1 nickel sulphide deposit?

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 41


Mineral Commodities is working towards production of a purified
product (99.95% TGC) from its Munglinup graphite project, Western Australia

MRC’s downstream dream

n paper, there is a lot to like about with a downstream strategy.” by potential downstream customers.”
Othe DFS which Mineral Commodi- Upon completing the DFS, MRC was To that end, MRC sees Skaland and
ties Ltd (MRC) released last month for its able to increase its ownership of Mung- Munglinup working hand-in-hand. With
90%-owned Munglinup graphite project, linup from 51% to 90% with an $800,000 the company now regularly liaising with
about 100km west of Esperance. payment and 30 million fully paid ordi- European-based customers over graph-
Among the highlights are a low capex nary shares issued to JV partner Gold ite products from the Norway operation,
of $US61 million, payback within three Terrace Pty Ltd. it will be at the front of the queue to rec-
years of first production and strong cash It was the second major milestone for ognise any increase in demand for po-
flow of $US240 million over an initial MRC in the past three months, having fi- tential material from Australia.
mine life of 14 years. nalised its acquisition of the 102-year-old MRC continues to work collabora-
The robust DFS outcomes were in line Skaland graphite mine in Norway at the tively with the CSIRO and Doral Fused
with MRC’s expectations following those beginning of October. Materials on the first Australian-based
outlined in a previously published PFS. Skaland – the largest flake graphite op- purification process using Munglinup
However, the company has long main- eration in Europe and the fourth biggest concentrate. The company also recently
tained the real opportunity for Munglinup outside of China – is the other crucial as- partnered with Norway-based battery
is best viewed as one side of a dual-as- set in MRC’s overall ambition to become cell developer FREYR over the supply
set downstream strategy. a key supplier of natural graphite to the and manufacture of anode material from
“Munglinup is essentially where we world’s emerging battery anode markets. Skaland.
started our journey in graphite,” MRC “For us, Skaland was the perfect segue Fox said the implementation of environ-
corporate development manager Peter given the fact it’s already in production, mental regulations in China was opening
Fox told Paydirt. and has well defined, well understood the door for production from non-tradi-
“Since we’ve taken on this project, markets for its production,” Fox said. tional graphite jurisdictions such as Aus-
we’ve learnt a lot about the market and “Our ambition is to use Skaland to de- tralia where a primary source is yet to be
we recognised there was going to be a velop our market profile and from there established.
lot of challenges in bringing a pure con- we can complete our strategy of optimis- “The Chinese have really focused on
centrate-only project into development in ing our concentrate and increasing our a lot of environmental practices around
the existing market as it sits today. production, then allocate that production mining and processing, so the playing
“The real opportunity for this project to our downstream processes and get field is becoming a lot more even now
will come when it’s looked at in concert our material into the market and have it and it’s creating a lot more opportunities
qualified. for countries like Australia,” he said.
Munglinup DFS “The big chal- “Add to that the murmurs of economic
lenge for new cold war and you’ve now got a number
Post-tax NPV: $US111 million ($160 million) concentrate pro- of western countries realising how highly
IRR: 30% ducers looking to reliant they are on Chinese supply for
Capex: $US61 million ($88 million) establish a down- crucial advanced materials and looking
Opex: $US491/t ($720/t) stream business at ways to diversify their supply.
“I think end-users are going to be very
is trying to sus-
Life-of-mine: 14 years tain cash flows welcoming of Tier 1 mining jurisdictions
Payback: 2.7 years to support your like Australia, where we have very high
Net cash flow: $US240 million ($352 million) operation [from standards of technical skills and sustain-
Processing: 400,000 tpa (years 1-6), traditional mar- able processes that ensure we’re reliably
500,000 tpa (years 7-14) kets], while also delivering high quality products.”
Production: 52,000 tpa needing to have – Michael Washbourne
Concentrate grade: >95% TGC your downstream
Reserve: 4.24mt @ 12.8% TGC production and
process qualified

Page 42 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

6 October 2020 SAVE THE DATE

Perth, Western Australia


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

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 43


AVL ready for big 2020

AVL recently completed two 2,000m RC
t may not have gained traction in its we have been pushing hard on VSUN,” drilling programmes designed to upgrade
Ihome market yet but Australian Vana- Algar said. “We have brought a new per- more than 50mt of inferred resources
dium Ltd (AVL) is finding plenty of interest son aboard to push that market and he
for its steel additive-cum-battery storage has already brought in two projects.”
proposition in Europe. The vanadium redox flow battery sec-
AVL made advances on several fronts tor is still in its infancy but continues to
in 2019 with the terms of its DFS for the grow. There is currently 1 GWh of new
Australian vanadium project (previously vanadium energy storage technologies
Gabanintha) defined and metallurgical established, requiring 10,000t of high-
test work and drilling confirming earlier purity vanadium pentoxide.
robust numbers. However, the compa- “The driver for vanadium has always
ny’s progress on the energy storage front been Chinese rebar and as long as that
– its VSUN Energy subsidiary sold two is growing, vanadium will grow,” Algar
vanadium redox flow batteries to farms in said. “It is about 3% currently which
Victoria during the year – has added an- means there is room for one or two more
other layer of intrigue to the investment mines of our size over the next decade.
case. That is why we have the active strategy
“It is a new market and a new set of around marketing and selling vanadium
demands and in Europe they loved that redox flow batteries. China currently has
angle of primary production and new a vanadium flow battery under construc-
uses,” AVL managing director Vince Al- tion with another three in the planning.
gar told Paydirt. “I’m not sure Australian They are twice the size of the Hornsdale
investors get that yet but Europe, and battery [the Tesla-installed battery in
Germany in particular, is proving fertile South Australia] at 1GWh, which equates
for investors.” to a year of production from our project.
The strategy around VSUN is simple; “From a volume increase play, batter-
create a market for vanadium redox flow ies are the best upside we could get.”
batteries in order to lessen vanadium’s To meet such battery-related predic-
reliance on the steel sector. tions, AVL must have a viable mine oper-
“I believe you make your own luck and ation and the company will spend much
Vince Algar

Page 44 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

of 2020 deciding exactly iron and there are a few options we are being addressed. In January, the com-
what that will look like. looking to bring online. We would love to pany announced completion of a second
The 2018 PFS gave a tick partner with a company with a high sili- 2,000m RC programme in two months.
of approval for development ca, alumina iron ore project that we can “Potential financiers were saying that
and work since has focused blend with our product and then sell.” such a capex would require a long mine
on refining capex and opex In addition to improving “There have life,” Algar said. “So, we have returned to
numbers to build a more ro- been a few delays on piloting, but we areas of the resource where previously
bust economic case. want to get the piloting right,” he said. we didn’t have the time or money to drill.
In October, AVL an- “We wanted to make sure the material Three blocks in the south-east have a
nounced a revised pro- is sustainable for the entire orebody. We combined 50mt of inferred resources so
cessing plan for the project looked at the pre-feasibility studies in we are targeting them for conversion to
which will see ore mined other minerals and found that if you rush indicated which would extend the mine
and beneficiated on site be-
fore 850,000t of material is
trucked to a location near
the Port of Geraldton for
back-end processing.
“We’ve been looking
at moving the plant since
January 2018. Gas has al-
ways been a primary driver
of processing economics
and leaving the plant on
site came with a $40 mil-
lion capex component. We
began an optimisation study
and said if we moved closer
to the Bunbury-Dampier
gas pipeline it would result
in cheaper capital costs and
less gas so therefore lower
operating costs because we
would be paying almost no
transmission fee.
“The pipeline capex is
now less than $15 million
with gas costing $2-3 against $8 previ-
ous, so it has been a big step.”
The exact make-up of the Geraldton
processing plant is yet to be established
with AVL continuing to refine the flow
The company is pursuing a pelletis-
ing and roasting path to production of
primary vanadium with the most recent
bench-scale testing by Metso Corpora- A sample of the vanadium ore on the Australian vanadium project. AVL believes it has one
tion producing vanadium extraction rates of the highest quality vanadium ores available globally
averaging 95.4% from pelletised roasting
compared to 85-88% from rotary kiln ex- that part of the process you will mess life to plus-20 years [up from 17 years in
traction. it up, whether it’s vanadium, lithium or the PFS].”
Algar said while AVL was the first west- gold.” The company is currently building the
ern company to use pelletised roasting, it The ongoing piloting work has meant results into an updated resource state-
was far from a new technology. DFS work has been slower than antici- ment, due for release this quarter.
“It is not new technology, it is new in- pated but Algar is unconcerned. He said With DFS work set to be complete and
novations of proven technology,” he said. the delays had allowed AVL time to delve financing discussions beginning, Algar is
“It is proving more efficient from an en- further into the orebody to tighten the expecting 2020 to be “a big year’ for AVL.
ergy point-of-view and dust and recov- flow sheet. “Funding is critical but we want a pro-
ery points-of-view and reduces the CO2 “Geometallurgy is the key driver of ject that is not going to suffer in the due
because we are reducing gas consump- this project so if the geology team and diligence process,” he said. “We need to
tion.” the processing teams haven’t reconciled have done the best job by the time the
AVL is also pursuing options for the their views around the orebody, there is banks come in as we want limited time
iron and titanium-rich calcine by-product going to be trouble,” Algar said. “We have between getting a partner in and making
at Gabanintha. taken our time and are using all the un- a decision to mine.”
“The pelletised roasting creates the derstanding of consultants and the vana- – Dominic Piper
opportunity for an iron ore by-product,” dium team to do that.”
Algar said. “The concentrate is 55-57% The size of the global resource is also

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 45


Where are they now?

ithium burst onto the Australian resources scene in 2015 with a host of ASX-listed companies spruiking
Lwhat they thought would be the next big thing in the space. Some of these projects are now in production,
some are still in development and some have disappeared from the spotlight entirely. Paydirt takes a look at
the status of these assets five years on from when air was first blown into the lithium bubble.

Location: Catamarca, Argentina Location: Atacama, Chile Location: DRC
Company: Galaxy Resources Ltd Company: Lithium Power International Ltd Company: Force Commodities Ltd
Status: FID in Q2/Q3 2020 (51%), Minera Salar Blanco SpA (31%), Status: Limited early stage exploration
Comment: With Mt Cattlin in WA seemingly Bearing Lithium (18%) Comment: Identified in late 2017 as a
settled after churning out a record volume of Status: DFS completed January 2019 potential Manono lookalike. Force holds
low-cost spodumene last year, investors are Comment: With a final decision on the three licences and has struck multiple
keen to find out whether Galaxy can repeat project’s EIA due this quarter, Maricunga JV agreements with local partners to
the trick in the lithium brine space. Stage has a pre-tax NPV of $US1.3 billion and advance exploration. However, despite
1 development is expected to be primarily IRR of 29.8%, based on production of positive initial results during 2018, work
funded from the company’s balance sheet. 20,000 tpa LCE over its 20-year mine life. has been scaled back significantly due to
First production is scheduled for 2022. unfavourable market conditions.

South America Africa

Location: Catamarca, Argentina Location: Salta, Argentina Location: DRC
Company: Galan Lithium Ltd Company: Argosy Minerals Ltd Company: AVZ Minerals Ltd
Status: Maiden resource October 2019 Status: PEA published November 2018 Status: DFS due Q1 2020
Comment: A relative latecomer to the Comment: Argosy continues to strengthen Comment: On December 31, the one-
space, Galan shares soared more than ties with Mitsubishi Corp following the time market darling of the lithium
200% in early 2019 after returning a Japanese conglomerate’s initial site visit sector reported a DFS on Manono was
mouth-watering intercept from the first to Rincon in November 2017. A preliminary 82% complete and remained on track
hole ever drilled into the project, which sales agreement for up to 100t of lithium for delivery this quarter. It comes as
shares a border with Sal de Vida. However, carbonate produced from the on-site shareholders approved a $14.1 million
the come down was hard when the pilot plant over 12 months was followed placement from new strategic investor
results of the second hole fell short of in August by a non-binding heads of Yibin Tianyi Lithium Industry Co Ltd.
expectations. Nonetheless, Galan pushed agreement for the supply of up to 2,000 tpa
ahead and announced a maiden resource lithium carbonate product for three years, ARCADIA
of 684,850t @ 672 mg/L lithium. with the option of a further two years.
Location: Zimbabwe
KACHI OLORAZ Company: Prospect Resources Ltd
Status: Updated DFS published December ‘19
Location: Catamarca, Argentina Location: Jujuy, Argentina Comment: Prospect pounced on Arcadia
Company: Lake Resources NL Company: Orocobre Ltd in mid-2016, some 18 months before
Status: PFS due Q1 2020 Status: In production the late Robert Mugabe was ousted as
Comment: Lake ended 2018 on a high after Comment: The first of the new wave Zimbabwe President. A $US162 million
unveiling a maiden resource of 4.4mt LCE of ASX-listed lithium players to enter capex is estimated for a base case
for Kachi. Investors will be keen to see production in early 2016, Oloraz continues 2.4 mtpa operation which is forecast
the effectiveness of the direct extraction to set the benchmark. Orocobre expects to generate a pre-tax NPV of $US710
ion exchange process the company has its FY2020 production to be at least 5% million.LOM revenue of $US3.42 billion
formulated with Lilac Solutions Inc in higher than FY2019, although sales prices and an IRR of 71%. In December, African
a pilot plant production set-up which will be down due to the current softness Export-Import Bank was appointed to
was taking shape at the time of print. in the market. Construction of the $US295 arrange and manage of a $US143 million
Initial results indicate Kachi is capable of million Stage 2 facility, including the project finance debt facility, of which it is
producing battery-grade lithium carbonate 10,000 tpa Naraha lithium hydroxide plant, proposing to fund up $US75 million.
with 99.9% purity. is under way.

Page 46 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

Location: Pilbara, Western Australia Location: Pilbara, Western Australia Location: Pilbara, Western Australia
Company: Pilbara Minerals Ltd Company: Altura Mining Ltd Company: Mineral Resources Ltd/
Status: In production, processing but Status: In production Albemarle
mining suspended Comment: Mine next door to Pilgangoora Status: On care-and-maintenance
Comment: Operating since mid-2018. officially opened in September 2018. Comment: Upon completing a JV and sale
Curtailed production in June due to Plant performance failed to meet agreement with Albemarle in November,
lower than expected customer demand. expectations in the early stages of Mineral Resources stunned the market by
Delivered first shipment to China’s Great operations but finished 2019 on a high announcing it was mothballing operations
Wall Motor Company last August, pursuant following record production in October in the wake of challenging conditions for
to the new offtake agreement for 20,000 and record shipments in November. lithium globally. Only 30 of the 270-strong
mtpa over six years. JV with POSCO for workforce was retained for care-and-
participation in South Korea’s lithium ion maintenance activities. JV is now focused
battery market in the coming months. on the Kemerton hydroxide facility, south
of Perth.


Location: Mali Location: Goldfields, Western Australia Location: Goldfields, Western Australia
Company: Mali Lithium Ltd Company: Alita Resources Ltd Company: Mineral Resources Ltd/Ganfeng
Status: DFS due Q1 2020 Status: On care-and-maintenance Lithium Co Ltd
Comment: A new-look board and Comment: Fell from grace as quickly as Status: In production
management team, led by former Altura it rose to prominence. Alita – the product Comment: Chris Reed’s Neometals Ltd
Mining Ltd chief operating officer of a merger between former iron ore progressively sold down its stake in the
Chris Evans, arrived at Mali Lithium explorer Tawana Resources and Singapore- project to give life to an operation now
in early 2019 with a clear mandate to listed Alliance Mineral Assets – entered producing about 350,000 tpa spodumene
see the project through to production. administration 13 months after commercial concentrate. In December 2018, the
Chinese state-owned construction and production was achieved at Bald Hill. China company sold its remaining 13.8%
engineering company China Henan Hydrogen Energy Ltd has emerged as the interest to its JV partners which now have
International Cooperation Group Co likely buyer, having entered into a binding an even share of the asset. Neometals
(CHICO) and Changsha/Minmetals $70 million loan facility agreement. pocketed a handy $104 million from the
Corporation of China are in the frame sale but remains in the lithium game as a
potential EPC, offtake and project MT HOLLAND prospective downstream player.
funding partners. Location: Goldfields, Western Australia
Company: Wesfarmers Ltd/Kidman KATHLEEN VALLEY
Resources Ltd Location: Western Australia
Status: DFS completed November 2019 Company: Liontown Resources Ltd
Comment: One of the country’s largest Status: PFS released December 2019
undeveloped hard rock lithium deposits Comment: DFS work under way following
helped Kidman secure two of the biggest confirmation the maiden reserve of 50.4mt
lithium deals of the past three years. @ 1.2% lithium oxide would support 26
Chile’s SQM was first to the party with years of open-pit mining operations.
a lucrative 50:50 JV in 2017 before Underground opportunities also currently
conglomerate Wesfarmers sealed a $776 being assessed. Key financials from the
million takeover of Kidman last September. recent PFS include LOM free cash flow of
A final investment decision on an $1.94 billion, post-tax NPV of $507 million,
integrated mine and concentrator is IRR of 25% and payback within four years.
expected in Q1 2021. Capex is estimated at $240.5 million.

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 47


Location: Quebec, Canada Location: Manitoba, Canada
Company: Sayona Mining Ltd Company: Nova Minerals Ltd
Status: Revised DFS published November 2019 Status: Undeveloped resource
Comment: Despite recently reaffirming Authier as a Comment: Although not its main game,
viable standalone operation, Sayona is determined Nova is poised to make the most of having
to get its hands on the mothballed North American the only defined lithium resource (8mt @
Lithium Inc (NAL) concentrator just 50km down the 1.4%) in Manitoba. As the majority owner
road. Sayona believes it has the expertise to mine the of Snow Flake Resources Ltd, which holds
“spaghetti-like” NAL orebody, as well as the capacity the Thompson Brothers licence, Nova is
to eventually blend it with feed from Authier for the negotiating with Chinese-backed Tanco
optimal product. Bids for the NAL operation – majority Mining Corporation of Canada Ltd to process
owned by Chinese battery manufacturer CATL – are material through its mothballed concentrator
due to close at the end of the month. and flotation plant, about 100km from the
deposit. Cash flow from Thompson Brothers
would then be directed towards advancing
SEYMOUR LAKE Nova’s Estelle gold project in Alaska.
Location: Ontario, Canada
Company: Ardiden Ltd
Status: Resource upgrade March 2019
Comment: Shortly after announcing a 400% resource upgrade (4.8mt @ 1.2% lithium oxide), Ardiden
put the project on the backburner in light of the current landscape for lithium concentrate supply and
demand. Identifying potential strategic partners to help take the project forward remains ongoing in the
background to the company’s renewed focus on the Pickle Lake gold project, also in Ontario.

North America

Location: North Carolina, US Location: Utah, US
Company: Piedmont Lithium Ltd Company: Anson Resources Ltd
Status: PFS due Q2 2020 Status: Resource upgrade November 2019
Comment: The only federal permit required for Comment: Anson began its battery minerals journey exploring for
development of a mine was awarded in November, graphite in Western Australia before settling on a more advanced
just 11 months after the application was submitted lithium brine opportunity in the US. Ended 2019 with a 287% resource
to US authorities. Hatch Ltd was appointed to oversee increase, including 186,400t of recoverable lithium and 1.174mt of
a PFS on a lithium hydroxide plant which is slated recoverable bromine, and confirmation it could produce battery grade
for completion during Q2 2020, with a DFS to also lithium carbonate directly from concentrate lithium chloride brine via a
be turned around on an integrated lithium project lithium hydroxide electrolysis process.
before the end of the calendar year. According to
last year’s scoping study update, Piedmont will RHYOLITE RIDGE
target production of 22,700 tpa lithium hydroxide,
comprising two years of concentrate-only sales and Location: Nevada, US
23 years of integrated operations, for an average AISC Company: ioneer Ltd
of $US3,565/t. Status: DFS due Q1 2020
Comment: Proceeds from a recent $40 million placement will see the
company (formerly known as Global Geoscience) funded through to a
final investment decision on the Rhyolite Ridge lithium-boron project. In
December, the company signed a binding offtake agreement with Dalian
Jinma Boron Technology for supply of boric acid for five years from Q1
2023, as well as a non-binding letter of intent with Shell Canada Energy to
purchase up to 250,000 tpa of sulphur for input into the acid plant.

Page 48 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

Where are they now?...

Location: Czech Republic
Company: European Metals Holdings Ltd
Status: Updated PFS published June 2019
Comment: While a hung parliament following the October 2017 Czech
election placed a cloud over the future of the project for an extended period,
it has been largely positive news for the Keith Coughlan-led company for
more than 12 months now. Last year’s update to the original PFS confirmed
Cinovec was capable of producing battery-grade lithium hydroxide, while
a potential strategic partnership with European power utility CEZ Group is
poised to deliver a €$55 million investment that would see the project fully
funded through to a construction decision.

Location: Spain
Company: Infinity Lithium Corp
Status: PFS completed August 2019
Comment: Originally a tin explorer, Infinity’s presence in Spain helped
the company land a stake in one of Europe’s largest lithium deposits. A
long-awaited PFS released last August confirmed the project capable of
producing 15,000 tpa of lithium hydroxide at $US5,434/t for the first 10 years
of operations. San Jose is quickly emerging as one of Europe’s favoured
battery minerals projects, with Infinity director Vincent Ledoux-Pedailles
recently appointed as the European Commission’s designated lithium expert
for critical raw materials assessment.


Location: Portugal Location: Austria
Company: Dakota Minerals/Novo Litio Company: European Lithium Ltd
Status: Unknown Status: DFS work in progress
Comment: After selling its Lynas Find project to neighbour Comment: Despite the headwinds which have confronted
Pilbara Minerals Ltd for a cool $8 million in late 2016, Dakota the lithium industry in recent times, the Tony Sage-chaired
Minerals turned its attention to Portugal and rebranded as company has remained steadfast in its plans to become
Novo Litio. However, after failing to secure access to the a supplier of lithium hydroxide to nascent lithium battery
Sepeda project following a legal stoush with the privately- plants throughout Europe. On the second last trading day of
owned explorer it was attempting to buy the asset off, the 2019, the company announced it had secured a long-term
company walked away from lithium entirely. Now known as debt facility of $7.5 million with a Swiss-based sophisticated
Exore Resources Ltd, the company is attracting attention investor, effectively replacing an existing $10 million
from exploration success across its suite of early-stage gold convertible note facility, to finalise a DFS. The Austrian
projects in Cote d’Ivoire. Mining Authority also recently extended the terms of 11
mining and 54 exploration licences out to December 2021.

aUSTRaLIa’S PaYDIRT FeBRUaRY 2020 Page 49


Recruitment rush favour of the candidate. He said this was
evident across a range of operational roles
in the open pit, underground and process-
ing sectors, as well as for trades staff in the
fixed and mobile plant industries.
ecruitment firms are experiencing their ia’s commodity exports are on track to hit a According to MPI, trades-based staff cur-
Rbusiest period in years as mines go record $281 billion in FY2020, according to rently have 2-3 offers on the table at any
deeper, skills shortages become more evi- the Office of the Chief Economist, and there one time, with a similar number of options
dent and companies start raising the stakes is a strong case mounting that the country’s available to those professional/technical
in a bid to attract the best available talent. resources industry has never been in better candidates on the lookout for the same po-
Demand for mining engineers, particu- shape. sition type.
larly those possessing strong technical With a myriad of job opportunities on the “There is certainly a lot more positions
qualifications for underground operations, horizon, recruitment firms such as Hays, available across most areas and this is
remains as high as ever due to the number Acacia and Mining People International causing a tightening of candidate availabil-
of suitable candidates being in increasingly (MPI) have been kept busy working out how ity,” Moore said. “Employers that are not
short supply. to fill the already high number of vacancies paying at least average wages are finding it
And that demand is only expected to in the sector. hard to attract and retain quality staff.”
grow, according to Australian resources “In my 12 years in the industry, I’ve never MPI general manager professional tech-
and energy group AMMA, which has really been this busy at this time of year,” nical Tony Turton added: “In the areas
forecast the country’s mining industry will Acacia director Abbi Vermey told Paydirt. where skills shortages exist, we are starting
require almost 21,000 new on-site opera- “Things never really used to kick off until to see some upward pressure on salaries.”
tional employees by 2024. after we got back from Indaba [conference In its January-June 2020 job report, Hays
AMMA’s forecast is based on a report by in Cape Town in early February]. This year noted high demand for RC and diamond
the Australian Government’s Department of my staff worked pretty much through the drillers and field assistants in Western Aus-
Industry which found 57 undeveloped min- Christmas period because we had just so
ing projects – carrying a combined value much work on. Surely that’s a sign of good Abbi Vermey
of $41 billion – were either “committed” or things to come.”
“likely” to be in production within the next MPI general manager workforce and la-
five years. bour hire Shane Moore described the cur-
Couple that with the expectation Austral- rent job market as “very buoyant” and in

As more mines head deeper, the demand for underground
mining engineers is increasing but recruiters currently have
only a small pool of candidates to choose from

Page 50 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT

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