pd270-Apr19-mag-web

APRIL 2019 Volume 1. Issue 270 $11.95

Renascor’s ISSN 1445-3436
battery catalyst 03

• Base Resources in Madagascar 9 771445 343007
• South Australian conference preview

• Battery Minerals review
• Queensland spotlight

Page 1 APRIL 2019 AUSTRALIA’S PAYDIRT

Exploring one of the world's highest grade Cobalt – Gold projects in British Columbia, Canada

BC Cobalt Project (Cobalt-Gold), Canada
First drill hole intersected 3% cobalt and 44 g/t gold, consistent with historic drilling and adit channel
sampling average grades of 3% cobalt and 20 g/t gold;
First ever cobalt focussed IP survey delivers multiple new targets along strike of Little Gem and at the
nearby Jewel prospect with signatures typical of a large scale sulfide bearing bodies;
48km of strike potential of geology analogous to the world class Bou-Azzer cobalt district still
remains untested;
The recent Erebor Cobalt-Gold discovery sees Blackstone's 335km² landholding around Little Gem rapidly

emerging into British Columbia's premier Cobalt Belt.

Silver Swan South Project (Gold & Nickel-Cobalt), Western Australia
Emerging gold discovery located 8 km along strike of the world class Kanowna Belle gold mine
(+5 Moz gold endowment);
Nickel-Cobalt sulfide targets located only 10 km south of the Silver Swan (655 kt @ 9.5% Ni) and
Black Swan (10 Mt @ 1% Ni) nickel mines (166 kt nickel endowment).

Middle Creek Project (Gold), Western Australia
Pilbara gold exploration adjacent Novo Resources (NVO.tsx-v) Beatons Creek Conglomerate Gold project
and Millennium Minerals (MOY.asx) Nullagine Gold project;
Visible gold in quartz veins at surface and an untested 1.3km long gold in soil anomaly.

BC Cobalt (Cobalt -Gold) Car er (Nickel-Cobalt)

Middle Creek (Gold)
Silver Swan South (Gold & Nickel-Cobalt)

@blackstone_BSX www.blackstoneminerals.com.au Blackstone Minerals
@blackstoneminerals

PAYDIRT (ISSN 1445-3436) contents
Published by
Paydirt Media Pty Ltd. 20 SITE VISIT
A.C.N. 063 985 133 Base Resources unveiled its newly acquired
Toliara mineral sands project in Madagascar
Head Office: to investors and media earlier this year and
Suite 9, 1297 Hay St, West Perth followed up shortly after with a PFS on the
Western Australia 6005 project. Base managing director Tim Carstens
P.O. Box 1589, West Perth tells Dominic Piper the company is looking to
Western Australia 6872 emulate its achievements at the flagship Kwale
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426 project, Kenya, at Toliara
[email protected]
www.paydirt.com.au 29 COVER 20
There have been few new projects to light
up South Australia’s resources sector in
the past decade. While not quite there yet,
Editorial: Renascor Resources hopes to buck the
Editor: Dominic Piper disappointing development trend and bring
Deputy editor: Mark Andrews the Siviour graphite project on stream in late
Journalist: Michael Washbourne 2020. Michael Washbourne toured the Eyre
Photography: Picture This Peninsula play alongside Renascor managing
Art director: Nick Brown
Contributors: director David Christensen
Keith Goode (Sydney), Brendan Ryan
(Johannesburg), Ross Louthean 32 SAREIC
Paydirt has ridden the highs and lows of South
Advertising: Australia’s resources and energy sector during
Advertising manager: Richa Fuller 15 years of SAREIC. Recent exploration
Subscriptions: Mitchelle Matambo success in the State has definitely rejuvenated
Phone: (+61 8) 9321 0355 the sector, particularly those at the junior end.
Facsimile: (+61 8) 9321 0426 Paydirt takes a look at some of the emerging
companies in SA ahead of this year’s SAREIC
Pre-press and printing:
Vanguard Press 26 John St,
Northbridge WA 6003
Member of:

Paydirt Media 50 BATTERY MINERALS 26
Executive chairman: Bill Repard The buzz around battery minerals is not going
Finance manager: Giovanny Jefferson away. While lithium and cobalt prices have
Accounts/administration: lagged in recent times, the growing demand
Heather Melling for electric vehicles and battery technologies
suggests manufacturers will be scurrying after
Conferences: Melita Fogarty, supply of battery minerals. Paydirt’s Battery
Namukale Nakazwe-Msiska, Minerals Conference covered all aspects of the
burgeoning sector
Christine Oelschlaeger
84 REGIONAL ROUNDUP
APRIL 2019 VOLUME 1. ISSUE 270 $11.95 While big ticket M&A has dominated mining
headlines, Australian juniors in Latin America
Renascor’sISSN 1445-3436 are working away in the background and
battery catalyst03 appear to be making value-accretive decisions
in the gold space. Michael Washbourne and
• Base Resources in Madagascar9 771445 343007 Mark Andrews checked in on Meteoric and
• South Australian conference preview Andes/Metminco, respectively, to see where
they are heading in 2019 32
• Battery Minerals review
• Queensland spotlight

PAGE 1 APRIL 2019 AUSTRALIA’S PAYDIRT

Cover image: Renascor managing
director David Christensen at Siviour

Member of:

Registered by Australia Post PP 643938/0071.
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.

Backing the miners
by accident

It may be by accident but both It may come as a surprise to any investor who finds her in-
major Australian political parties box flooded with junior company announcements about lithium,
have happened upon Australia’s re- cobalt, graphite, nickel, vanadium or rare earths but it may be
sources future as an election policy that Australia’s resources sector is actually underestimating its
theme. potential in the critical minerals space.

Both the Liberals and Labor have I admit to being fascinated with the presentation by Geosci-
announced new spending initiatives ence Australia’s Dr. Karol Czarnota at our own Battery Minerals
in recent weeks, offering up money for training, exploration and Conference in Perth last month.
downstream battery minerals development.
Labor has said it will establish an Australian Future Mines Czarnota is the co-author of a report into the potential role
Centre, to co-ordinate exploration work and lead the scientific Australia could play in the supply of critical minerals used exten-
research and development necessary to explore under deep sively in modern technology.
cover.
It will tip in $23 million Australian Research Council Special While most of us know Australia is a major player in lithium,
Research Initiative, with input from the Australian Academy of nickel and copper, Czarnota’s work also investigated the coun-
Sciences and the sector. A further $2 million will be committed to try’s reserves of, among others, indium, germanium and gallium.
funding 100 scholarships to arrest the dramatic decline in mining
engineering course take up. All three minerals are vital to modern technology industry
The Federal Government has already pledged $100 million such as renewables, specialty alloys, touch screens and fibre
to its own Exploring for the Future fund and both parties were optics. Australia doesn’t currently report any domestic produc-
quick to jump on the battery minerals bandwagon while visiting tion of indium, germanium and gallium but they are known to
Perth in March. occur in zinc and bauxite ores.
With the announcement about the Future Battery Minerals
CRC set to occur any day, it appears both parties are going out In zinc, these critical minerals are being exported with no val-
of their way to show their support for the mining sector. ue in zinc concentrates.
I remain highly cynical about how much of this funding will
eventually materialise and even more doubtful about how much “Japan, Belgium and France are significant producers, in ad-
either party understands what they are throwing money at but dition to China, of indium but do not have mines producing zinc
let’s face it; it makes a nice change from the usual mining as a concentrates,” Czarnota said. “The sources of the ores and con-
political football narrative during election campaigns (although centrates are, in fact, the major zinc-mining countries such as
Queenslanders may wonder whether things have changed at Australia who export the ores and concentrates to processing
all). facilities in Europe and Asia.”
Any financial commitment can only be a good thing but more
encouraging is the fact that both major political parties are be- It is a rare case of Australia underreporting its own importance
ginning to view the resources sector as part of Australia’s future, to global supply chains. Czarnota and Geoscience Australia is
not just its dirty, shameful past that is an embarrassment to the arguing for more work to be done on evaluating the critical min-
inner-city cool kids of Melbourne and Sydney. eral reserve in Australian concentrates, smelters, refineries and
It has taken Canberra a long time but there is finally recogni- even tailings to more clearly define exactly what we have hidden
tion of the position Australia can leverage for itself in a sustain- among our bulk, base and precious metals exports.
able future using its vast natural resources; a position which it
can be proud of. The Geoscience Australia report goes further, calling on fur-
We are not completely there yet. The current lack of policy ther investigation into new search spaces likely to host econom-
clarity is stunting growth in all sectors associated with energy, ic reserves of other critical minerals including PGEs, vanadium,
whether they are new coal mines or coal-fired power stations or nickel and copper.
renewable energy, EV or battery storage related investments.
What is certain is that Australia stands almost alone in being Such exploration initiatives feed into both major parties’ desire
able to provide the world with stable, secure, sustainable sup- to push the country’s battery minerals potential and could attract
plies of the critical raw materials needed for the technological greater funding in future budgets.
world.
It may all be election speak which amounts to nothing but im-
agine a scenario where a Labor Government is actively pushing
Australian miners and explorers to make discoveries which will
improve its standing as a green, clean, low carbon emitting na-
tion.

Imagine what the West Australian EPA would try to make of
that!

[email protected] @DominicPiper

Page 4 APRIL 2019 AUSTRALIA’S PAYDIRT

Canavan backs batteries
in energy mix

Federal Minister for Resources and Northern Australia Hon Matt Canavan
believes Australia is on track to become a significant player in the global
battery minerals space.

There are few convinced Australia will State is some of the cleanest in the world, over 100,000 tpa [carbon dioxide eq.]
be a supplier of the actual batteries the energy that comes from this State projects should have zero net emissions.
My electorate of O’Connor is the world
that power electric vehicles and energy and used overseas helps displace high epicentre of the emerging lithium indus-
try from Greenbushes to the Mt Marion
systems, however, there is an undeniable carbon intense forms of energy and that mine and Bald Hill; we have a lot of pro-
spective projects,” Wilson told Paydirt.
opportunity for the country to take the bat- helps the world reduce its carbon emis-
“We are looking at opportunities for
tery minerals sector one step further than sions. And, at a time when we are com- downstream processing and this recom-
mendation by the EPA, if accepted by
other industries have in done in the past. peting against, particularly American gas some future minister, would kill the pro-
gress of these projects absolutely dead.”
Canavan told Paydirt that capturing coming from the Gulf of Mexico, it is the
As more consideration and consulta-
maximum value from the battery miner- wrong time to impose these new require- tion takes place between industry and
the EPA, Canavan said the Government
als sector was within reach for Australia. ments on a sector that can contribute to remained focus on reducing emissions
by 26-28% by 2030.
“This is still a massively growing mar- greater jobs growth, greater prosperity in
To do so, he said a mix of energy
ket; to put this in context we have tripled this State.” sources would be the way of the future
and lamented the impact of closing the
our production of lithium and this has Since revealing its guidelines, the EPA Hazelwood coal-fired power station had
on electricity prices in Victoria.
happened very recently. Growth is prob- has conducted further consultation with
Since Hazelwood shutdown, power
ably only going to continue if the projec- industry and companies and concluded prices in Victoria have risen 173%.

tions are to be believed,” Canavan said. that there is “uncertainty within industry “We are open to all sources of ener-
gy. We’re looking at a range of different
“There is enormous need for additional on the technical aspects and the prac- proposals and certainly those seeking to
use renewables or other power sources
processing capacity around the world, tical implementation of the guidelines, to back up a battery provided they can
provide reliable power; we will support
obviously we are competing with other particularly with respect to offsets”. and back those when they stack up,” Ca-
navan said.
countries around the world and we do The EPA has withdrawn its guidelines
“My view is that we are not completely
have obvious challenges. We have very and will undertake further consultation in a position where we can move to that
right now; that would be economic de-
strict environmental regulations here in with industry, however, stated that it: “... struction across our community. We con-
tinue to need a mix of energy sources.
Australia which are right and appropriate does not resile from the need to reduce We continue to rely on coal for about
70% of our electricity in the east and 60%
and robust.” Western Australia’s greenhouse gas across the nation when you include the
West. It is a major source of power and
Canavan was in Perth to campaign emissions. Nor do we resile from our we don’t need to precipitously close pow-
er stations like we did with Hazelwood
against West Australia’s EPA recom- absolute right and obligation to provide because that has had the impact it has.”

mendations for cutting greenhouse gas advice to the Government on these mat- Canavan said the broader issues relat-
ed to a battery-charged future in Austral-
emissions in the State. ters. However, it is important that the ia was not intrinsically linked to electricity
back-up or storage, but tapping into the
“There are concerns about the brain detail of such advice is more fully devel- global market and increasing demand for
batteries for vehicles and mobile phone
explosion by the Western Australian EPA oped and the practical applications are technologies.

to impose a dead zero emission target on well understood”. In February, Canavan along with Sena-
tors Linda Reynolds and Dean Smith
the oil and gas sector,” Canavan said. The revised guidance provide the EPA
AUSTRALIA’S PAYDIRT APRIL 2019 Page 5
“The energy that comes from this great recommended offsets for proposals with

direct emissions

above 100,000

tpa carbon diox-

ide equivalent,

which was not

explicit to the oil

and gas sector.

Federal Mem-

ber for O’Connor

Rick Wilson MP

said if the recom-

mendations were

implemented,

industries in his

electorate would

have been bur-

ied.

“It is an across-

industry recom-

mendation for

Federal member for O’Connor, Rick Wilson MP, flanks Federal

Resources Minister Matt Canavan in Perth last month

NEWS

announced priority status for funding Smarter, safer and cleaner...
applications related to critical minerals
projects under the $20 million Round 7 of Election mode is in full swing, with the Chamber of
the Cooperative Research Centres pro- Minerals and Energy of Western Australia (CMEWA)
ject, which was followed by the release of welcoming a pledge from Federal Labor to establish the
Geoscience Australia’s Critical Minerals in Australian Future Mines Centre in Perth if elected.
Australia report.
The centre will be created to lead the scientific research,
“This funding is in place for research development and co-ordination needed to discover the
and development to ensure we can get two-thirds of mineral deposits across Australia that
the best ways to process lithium into high- remain unexplored and require cutting-edge technology
value-add battery supply chain elements, to be uncovered.
while still meeting our strict environmen-
tal conditions. The current processes are Additionally, Labor has also proposed to provide 50
very chemically intense. Other countries mining engineering scholarships to Australian students
perhaps don’t have the type of regulation attending WA universities, each worth $20,000, with half
on that use that we do, so it is really im- of them for women.
portant that we get the best cutting-edge
technologies that can help us,” Canavan CMEWA chief executive Paul Everingham said the
said. commitment by Federal Opposition Leader Bill Shorten
was due recognition for WA’s status as Australia’s mining
“I am confident we can find ways to do powerhouse.
this with our primary environmental regu-
lations. We have done this in other indus- “The report by the Resources 2030 Taskforce released last
tries and we have access to the best ore year clearly stated that the future success of Australia’s
in the world.” resources sector relies largely on working smarter,
safer, cleaner and more efficiently, with a key enabler of
– Mark Andrews success being the ability to harness new innovations
and technologies, such as the automation of drilling,
Linda Reynolds excavation and truck and rail networks,” Everingham said.

“CME’s own research in its 2018-2028 Resources Sector
Outlook found the increased use of automation, artificial
intelligence and the deployment of advanced extraction
techniques had the potential to improve the safety,
productivity and competitiveness of the sector over the
coming decade.”

Paul Everingham

Page 6 APRIL 2019 AUSTRALIA’S PAYDIRT

BUSH TELEGRAPH

Gemfields not so rosy

Much was expected from the radical Brian Gilbertson value loss of $47.6 million for the period”.
restructuring of the former Palling- This comes at a time when the South
hurst Resources into Gemfields Group But, he said that was all now sorted out
Ltd in March last year but the latest trad- with the shift to Gemfields which was a African platinum industry is – at long
ing update from Gemfields for the year “perpetual life mining company” and an last – starting to turn around. Although
to end December 2018 indicates that the operating company rather than an invest- the platinum price has remained stuck at
group’s troubles are far from over. ment fund, which would focus on gem- levels around $800/oz for much of the
stone mining. In his opinion that should past year the rand basket price received
Gemfields said its net loss after tax for make the operation “a heck of a lot clear- by the SA platinum mines has improved
the year was likely to be around $60.4 er and much more understandable”. dramatically.
million compared with a net profit after
tax of $45.1 million for the 2017 financial Sean Gilbertson added: “I do think the The rand basket price takes into ac-
year and the group reported a string of 50% discount to NAV will come down count all revenues earned by the plati-
impairments against key investments in over time. If we do not see an improve- num producers from platinum as well
the Kagem emerald mine; the Sedibelo ment by the year-end then I am certainly as numerous by-products such as pal-
platinum operation and its stake in ASX- going to be one depressed fellow.” ladium, rhodium, gold, copper and nickel.
listed Jupiter Mines Ltd.
That means he has to be pretty mis- The strength of the rand against the
Gemfields is quoted on the JSE and erable right now because the Gemfields US dollar can have a big impact on those
the share price promptly tanked 15.5% to share price which was trading in July at dollar revenues and the rand has weak-
a year low of 152c on the day of publica- around 250c was down to 155c at the ened substantially against the dollar over
tion of the trading update before recover- end of December, the level it plunged the past year boosting foreign revenues
ing to close at 175c. back to after release of the trading state- earned by the platinum miners.
ment. As of end-June Gemfields’s NAV
These developments are despite all was 653c/share. The result has been dramatic in the
the optimistic statements made by for- case of Impala Platinum which reported
mer Pallinghurst chief executive Arne One really worrying aspect of the in- an interim profit of R2.1 billion for the six
Frandsen and his replacement Sean Gil- formation provided is the comment that months to end-December compared with
bertson – son of mining industry legend “a review of our shareholding in Sedibelo a loss of R150 million for the previous
Brian – that things were about to change Platinum Mines has resulted in a fair comparable period. The Impala Platinum
for the better with the switch to the Gem- share price has more than trebled since
fields corporate structure. November last year.

In his “swansong” statement for the Sedibelo – an operation previously
2017 financial year Frandsen comment- highly-touted by the former Pallinghurst
ed that: “I am confident that the new management – is now a “held for sale as-
management will continue to unlock the set” because Gemfields wants out.
value of the company for the benefit of all
our shareholders.” When Frandsen handed over to Sean
Gilbertson last year he was apparently
In that same annual review chairman “kicked upstairs” and given the task of
Brian Gilbertson referred to “complexi- selling Sedibelo.
ties in our structure” which had prevent-
ed value “from being fully reflected in the There’s an obvious question: So what’s
Pallinghurst share price”. going on at Sedibelo?

That was a reference to the former Gemfields’ key operating assets are
complex Pallinghurst corporate struc- now the Kagem emerald mine in Zambia
ture. It was a closed-end investment trust and the MRM ruby mine in Mozambique.
with a 10-year life holding a range of in- Gemfields also wholly-owns luxury jew-
vestments and investors clearly never re- ellery retailer Faberge and a minority
ally understood it. stake in Jupiter Mines.

The result was a persistent discount to Kagem got hit with an impairment
net asset value – at times up to 50% – charge of $22.6 million after Zambia im-
which was the bane of Brian Gilbertson’s plemented a 15% export duty on sales of
life. He vowed to get rid of it but never emeralds and beryl.
managed to do so and it clearly irked him
judging by his reaction to questions on it Bottom line is that leaving the excep-
at investor presentations. tional items aside, Gemfields will still re-
port a headline loss – representing core
In September last year, after he had earnings – for the year of $US0.03c/
taken up the reins at Gemfields, Sean share compared with a headline loss of
Gilbertson agreed that the closed-end $US0.06c/share in 2017.
investment trust structure was “rather a
strange thing and not easy for some in- So Gemfields’ key operations are still
vestors to get comfortable with”. in the red. Not good.

Brendan Ryan is a Johannesburg-
based mining writer

AUSTRALIA’S PAYDIRT APRIL 2019 Page 7

25NEWS Celebrating
Years

Est.1994

In the latest of our new series of retrospectives to celebrate Paydirt’s
25th anniversary this year, we look in the April archives and find
stories of diamond and uranium booms, Indonesian exploration
collapses, Toronto shindigs and South Australian misfires.

1995 Elsewhere, the West Australian gold sector was reeling
from Premier Richard Court’s decision to introduce a gold
Today, Paydirt’s coverage of royalty. In his editor’s note, Ross Louthean berated Court for
the diamond sector extends to slapping down a royalty which “can hit the bottom line by as
a few pages a year but back in much as 30% and at a time when the gold price is flat”.
its first year it could commit 20
pages to a review of the recent Louthean also turned his ire to the unfolding native title
World Diamond Conference, debate, urging industry to tell Court and Prime Minister John
held in Perth. Indeed, the Howard “about the problems they face with naked threats
magazine could thank the of having to find a solution to a land claim that may have no
conference for its own genesis, genuine status in historic terms”.
publisher Ross Louthean
telling readers the event In the news, we reported that ASX-listed Aquarius
was “a feather in the cap of Exploration was planning to bring its Kroondal PGM project
Paydirt magazine, which Louthean Publishing purposefully in South Africa into production in 1998, having defined a 2.6
launched in the normally dead magazine marketing period moz platinum resource. Aquarius eventually grew into one of
of November last year to promote the conference”. the largest platinum producers in the world before the GFC
set it on a rapid downhill descent.
Among the speakers at the conference were Miles Kennedy and
Tom Reddicliffe, both of who are still active in the diamond space. 1998

The edition also looked at Zimbabwe’s first diamond rush and the Having received barely a mention in the first three years of
role Australian company Auridiam Resources was playing in it. Paydirt’s history, iron ore began to generate copy in 1998.
Journalist Tania Winter may have been ahead of the curve
Diamonds were everywhere it seemed in 1995, even when by several years when she identified Portman Mining and its
they weren’t. Paydirt reported that it was a diamond exploration Koolyanobbing iron ore operation as one to watch. Portman
campaign which had led to an encouraging base metals discovery had just secured a five-year contract to supply lump iron ore
in Canada’s remote north. Today, that discovery – Voisey’s Bay – into China. The contract came just 12 months after Portman
now produces 6,000 tpd of nickel… so not a bad outcome then. had considered selling the loss-making asset.

1997 Over in Toronto, the mood of PDAC had been severely
dampened by the unfolding Bre-X scandal. Since
A few years on and the Paydirt immortalised in the Hollywood film Gold Bre-X had a
team itself was braving the debilitating effect on confidence in the global exploration
Canadian spring, landing sector. However, the North American market was still
in Toronto for PDAC where showing its depth. Normandy Mining chief Robert
Australian companies were Champion de Crespigny telling Paydirt that while mining
thick on the ground. Red Back companies represented 22% of the TSX’s trading volume,
Mining managing director Ross the Australian gold industry accounted for only 1% of ASX
Ashton told Paydirt “making trades.
deals was the reason” behind
the then-nickel explorer’s Michael Quinn picked up on the Voisey’s Bay story, as
presence in Toronto. It must’ve environmental hurdles had many observers doubting
been successful because just a whether Inco – which had paid $4.5 billion for the project –
few years later the company was a parading around PDAC would ever get it into production.
as a genuine West African gold producer.

Page 8 APRIL 2019 AUSTRALIA’S PAYDIRT

2002 sartorial elegance – was attracting attention for its exploration
attack on the old WMC nickel assets it had acquired around
By 2002, the new-look Paydirt was declaring cover star Kambalda and dot com stock WebOz was reimaging itself as
Miles Kennedy as “Australia’s new diamond prince” for the a nickel explorer.
work he, Karl Simich and the rest of the Kimberley Diamond
Company team had done in building the Ellendale project into 2007
Australia’s second diamond mine.
On the gold front, incoming Gold Fields Ltd chief executive By 2007, South Australia was
told Paydirt’s Gold Conference in Perth that with demand dominating Paydirt’s April
outstripping supply, a spot price of $US300/oz would be coverage thanks to the booming
needed to incentivise new project developments. growth of its South Australian
Resources & Energy Investment
Also in the news was Sons of Gwalia, which had “cemented Conference (SAREIC).
its dominant position in the global tantalum market by
expanding its Greenbushes and Wodgina operations in They were heady times for
WA. Managing director Mark Cutifani said the expansion South Australia’s resources
at Greenbushes had cost $65 million. Paydirt columnist sector with BHP Ltd considering
Observer also looked at the investment, saying it would expansion at Olympic Dam,
position Greenbushes to supply the strong demand for Oxiana preparing to start its
tantalum from the electronics industry. The mine’s by- Prominent Hill mine up and the Challenger gold mine still
product was the less exciting lithium, “which is used in the going strong for Dominion Mining.
manufacture of specialised glass”. How times and trends
change; today, the still-operating mine is at the centre of WA’s Paydirt, however, doesn’t always back a winner and chose
lithium and associated battery minerals rush. as its cover story Australian Zircon and its Mindarie mineral
sands project which was under construction in 2007.
2003
The $65 million project had experienced a difficult gestation
Paydirt’s globetrotting credentials but with construction under way, it looked like things were
were well and truly established about to turn for the zircon-rich project. Two years later the
by 2003 with the magazine company was in administration after mineral sands prices
heading to Uruguay with faltered and the company struggled to turn a profit.
Australian geologists Chris Clark,
Mike Schwabe and Alan Bray. Brighter news came further forward in the edition with news
that Fortescue Metals Group Ltd had secured two major
Unfortunately, their TSX-listed offtake deals for its fledgling Pilbara iron ore operations,
Uruguay Mineral Exploration worth $10 billion a piece according to reports.
Inc (UME) couldn’t reverse the
exploration trend and the country 2008
remains more synonymous with
beef and football than it does mineral exploration. A year later, and while new
Dominion boss Jonathan
Back in WA, Paydirt headed off to a more fruitful exploration Shellabear was on the cover,
adventure, dropping in on Western Areas and its reimagining South Australia’s thoughts had
of the Forrestania nickel project. turned firmly to uranium.

Joining managing director Julian Hanna and chairman In its report of its own Uranium
Terry Streeter on site, young reporter Paul Garvey found Conference – held in Adelaide
a company and project ready to flourish with the Cosmic the previous month – Paydirt
Boy deposit being targeted for initial redevelopment. Some highlighted a sector beginning
15 years later, Western Areas continues to mine profitable, to get shaky, right before the
high-grade nickel from Forrestania while Garvey has also impending hammer blows of,
had a good run, he is now resources correspondent for The first the GFC, then Fukushima
Australian newspaper. two years later, sent the uranium sector spiralling out of
control.
2004
Far East Capital chairman Warwick Grigor – a long-term
Nickel was taking a grip on uranium bull but also a no-bull speaker – summed up the
Paydirt’s editorial coverage by situation facing the global uranium industry.
April 2005, with BHP Nickel chief
Ken Hellsten talking about the “Last year [2007] at this conference we all sat here and
lessons his group had learned slapped each other on the back, congratulating one and
about nickel laterites from the other about how smart we all were… uranium prices had
struggles at Murrin Murrin, catapulted to $US91/lb…and I think I suggested [it would hit]
Cawse and Bulong and how $US120/lb,” Grigor said. “Within two months the price had
that would inform its thinking at burst through $US135/lb but that’s where it all went wrong.
Ravensthorpe. By the end of the year it had all unravelled and the price was
sitting at $US90/lb, on its way down to $US73/lb.”
Elsewhere, new float Mincor
Resources managing director David Moore – he of the What uranium producers and developers wouldn’t give for a
$US73/lb price now!

AUSTRALIA’S PAYDIRT APRIL 2019 Page 9

NEWS

London calling for exchange

The exit of Rand- In total, there are
gold Resources 169 mining com-

from the London panies on the LSE

Stock Exchange could of which 38 are

be the opportunity for classified as gold

similar sized compa- mining companies,

nies to grab the atten- with around a third

tion of gold bugs. of those having

Barrick Gold Corp’s African assets or

cash takeover of are fully African-

Randgold has meant focused.

a key part of the Lon- While Kazakh-

don index is now gone stan uranium

and investors on the player Kazataprom

LSE could be looking “ Tom Attenborough raised more than
to deploy cash back I think the sector has come into focus $450 million and
into the space. again generally, and in terms of investors espoused a mar-
looking for potential consolidations. Companies ket cap of $3 billion
Australia’s Resolute upon completion of
Mining Ltd could be can potentially benefit in the London market the IPO on the LSE
one of the early ben- from the fact that investors have additional last year, there was
eficiaries of the void cash to deploy back into the sector for the right also plenty of ap-
left by Randgold as it petite of African
intends to start trad- sort of opportunities. plays.
ing on London’s main
board in the next cou- “The vast major-
ple of months, subject ity of that [Kaza-
to regulatory approv- taprom] IPO capital
als. was raised through

Following Resolute the London listed

could well be Anglo- tional business development and primary line. About 85%
Gold Ashanti Ltd, which Bloomberg re- markets Tom Attenborough told Paydirt. was raised through the GDR listed here
ports is considering a return to the LSE and they also listed locally in Astana. It
after delisting in 2014. Alternatively, it “Secondly, there is clearly an M&A was the biggest IPO in the mining sector
could seek a listing in Toronto. overlay from the end of last year, Bar- in EMEA last year. Another of the large
rick consummating the acquisition of ones was an African phosphate/agri-
Bloomberg reported late last year that Randgold and the obvious excitement company – Kropz plc – which listed last
action by AngloGold was unlikely before this year. I think the sector has come into year raising $35 million through its IPO.
2020, meaning it has ample time to as- focus again generally, and in terms of It was certainly a positive year with those
sess the impact of Randgold’s departure investors looking for potential consolida- transactions coming through,” Attenbor-
and the success of companies filling the tions, companies can potentially benefit ough said.
void. in the London market from the fact that
investors have additional cash to deploy “As well, a number of companies which
After a topsy-turvy 2018 in the global back into the sector for the right sort of have decided to list in London, but not
gold sector, AngloGold will no doubt be opportunities. yet raised capital, have already been
watching closely as to whether the cur- building a profile here. We have seen a
rent rebound and market appetite for “I think there are a number of mining number of miners do that last year – Da-
gold stocks is sustainable. companies who are looking at the Lon- nakali Ltd, Mod Resources Ltd – both of
don market to potentially add a listing or which have traded well and have a good
“We saw a decent rally towards the come to the market for the first time. following in London despite not having
end of 2018, which coincided with global raised capital here. For example, Dan-
trade issues and market volatility. Gold “Gold is global and investors can move akali added its London listing at the end
as an asset usually does better in those across borders. Equally, there are clear of July and already has greater liquidity in
times. If we look at gold miners gener- market-by-market dynamics and I think its London line [than on the ASX].”
ally, it [2018] was a somewhat challeng- London has a very strong story.”
ing year, but this was not a purely London Mining is recognised as a big sector
phenomenon; 2019 has started stronger Given time zones and distance, Lon- on the LSE and while about 100 of the
with the commodity prices having a bet- don has often been referred as a natu- LSE-listed mining companies have mar-
ter outlook and those companies have ral home for companies with interests ket caps of £50 million or less, 18% of
picked up as you’d expect,” London in Africa, and while there are differing the world’s mining market capitalisation
Stock Exchange Group head of interna- opinions on that, there is no doubting the
African flavour on the London market.

Page 10 APRIL 2019 AUSTRALIA’S PAYDIRT

Resolute managing director John Welborn
believes a gold dividend-paying business is
a compelling offering to the London market

is listed on the London market. a lot of buzz around battery minerals – sell-side research analysts who under-
Therefore, London is an outlet for jun- lithium, cobalt and stocks that play into stand the sector well,” Attenborough
that. The price of the commodity is a big said.
iors to also thrive in a space offering factor, which can be influenced by geo-
good exposure to a spread of interna- politics, and for gold in particular where “We are a market that is very interna-
tional investors. you sit on the cost curve [is important],” tional in nature; 37% of all the companies
Attenborough said. listed on our market are non-UK busi-
“London has a very diverse and inter- nesses. This is unique in comparison to
national investor base. The time zone Nevertheless, battery minerals com- other markets which are more domestic.
is also very convenient. In the morning panies looking for support in London London has always been an internation-
in London, Asia is still open and by the could potentially benefit from an invest- al, outward facing market and the min-
time our markets close there is exposure ment community attuned to the mining ing sector is particularly international.
to the US trading day. If you look at the sector. London is a very international market,
ownership overall of the London market, so for issuers, listing here offers an op-
a little under 50% of the market is owned “Companies can benefit from a very portunity to benchmark against a global
by UK investors and about 30% in North global investor base in London and get- peer group.”
America, around 14% in continental Eu- ting support from the ecosystem, includ-
rope and 5-6% in the Middle East and ing the advisory community here and – Mark Andrews
Asia,” Attenborough said.
AngloGold chief executive Kevin Dushnisky may
Attenborough said the reach of the lead the company back to the London market
London market offered companies op-
tionality, while the ability to trade across
a longer trading day with a broader foot-
print of investors was a trend he expect-
ed companies to be in tune with more
throughout 2019.

While gold consolidation and better
commodity prices has provided a spark
in the sector in the early part of 2019,
the growing thematic around the battery
minerals sector is also an interesting
space.

However, prices for lithium and cobalt
in particular have cooled recently, de-
spite a clear rise in demand for EVs and
associated battery technologies
around the world.

“I think there has certainly been

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AUSTRALIA’S PAYDIRT APRIL 2019 Page 11

NEWS

Tanzanian disputes just beginning

The Tanzanian Government may have pany Tanesco was ordered to pay $US148 Tanzanian president John Magufuli
struck agreement over the future of million to Standard Chartered Bank after
Acacia Mining plc but international miners losing an appeal against an International “This distrust is limited to Tanzania or
should still be wary about the country’s new Centre for Settlement of Investment Dis- Venezuela. All over the world there has
resources legislation. putes (ICSID) award in a long-running case. been pushback on international treaties as
Tanesco is also tied up in a dispute with US being somehow unfair; that decisions are
Barrick Gold Corp – Acacia’s 64% share- group Symbion Power over a $US561 mil- made behind closed doors, leaving coun-
holder – announced in February that it lion contract and in 2008 an ICSID tribunal tries to spend large amounts of money on
had struck agreement with John Magu- ruled against Tanzania regarding a claim disputes around often controversial pro-
fuli’s Government over Acacia’s investment by Anglo-German water company Biwater jects.”
in the country, settling a dispute over a Gauff, although no damages were award-
$US190 billion royalty bill. ed. The notion is particularly strong in emerg-
ing countries where political and commu-
Under the agreement, economic benefits While the Acacia dispute appears re- nity leaders increasingly perceive uneven
from Acacia’s operations will be shared on solved, Saunders believes it almost in- playing fields in matters of arbitration.
a 50/50 basis. The Government’s share of evitable that Tanzania’s new legislation will
economic benefits would be in the form of eventually be tested. “In emerging countries, there is the no-
royalties, taxes and a 16% free-carried in- tion that the playing field is not even be-
terest in the Tanzanian operations as well “I expect at some stage there will be cause they don’t have access to the big
as in-country spending by the company. claims against Tanzania under bilateral international law firms their investors do,”
A payment of $US300 million will also be investment treaties and expect the legis- Saunders said.
made to resolve the outstanding tax claim. lation to come into force then,” he said. “It
will be interesting to see what happens. It Speaking at the Mining Indaba in Feb-
The agreement came as relief to Tanza- can’t change treaties it has entered into in ruary, Ghanaian President Nana Akufo-
nia’s ailing mining industry which had seen the near future and it is hard to see how the Addo said many of the dispute problems
a freeze on investment since the Govern- legislation, if put into practice, would survive stemmed from inexperience within African
ment announced a new mining code in July international treaties.” governments.
2017.
Critics have pointed to Magufuli’s strident “Africa needs its own smart, tough law-
The new code – which has passed parlia- populist rhetoric as the source of the new yers, accountants and engineers to nego-
ment but is yet to be implemented – would mining legislation. Saunders said just be- tiate business deals in a transparent and
see the Government receive a 16% free- cause a policy is populist, it didn’t make it honest manner,” President Akufo-Addo
carried interest in all mining projects (with inherently “wrong”. said. “We must strike deals that are fair to
the right to acquire a further 34%), royalty both sides and ensure the African people
rates increased from 4% to 6% and existing The legislation seeks to eliminate treaties that they are no longer being unfairly treat-
development agreements scrapped without and agreements struck on ‘unconscionable ed.
any arbitration. terms’, a principle anchored in a UN resolu-
tion which asserts that all nations have the “Governments and companies have to
Many of the country’s miners and pro- right to permanent sovereignty over their work hard to gain the trust of the people.
spective developers are now pressing natural resources. Communities should be able to examine
ahead with their investment plans but ac- mining contracts, find out how much rev-
cording to Matthew Saunders, partner at “It is a case of resource nationalism be- enue has been generated and see what it
global law firm Ashurst, the final clause in ing anchored in a statement of principle,” he is being spent on.”
the new act could still cause miners plenty said. “Tanzania has sought to give the leg-
of pain. islation respectability by tying it in with the Saunders agreed, saying making the
UN. It’s not illegitimate in that sense, how- international treaty process and arbitration
“The reality is it is too soon to tell how the ever, the track record of countries who act mechanisms more transparent could re-
new legislation and what happens when in this way is not one of success.” duce such distrust.
investors are prepared to challenge the
effectiveness of that legislation outside of Tanzanian Attorney General Adelardus “This is not to suggest either cancelling
Tanzania, whether before international arbi- Kilangi has led the Government’s efforts or annulling or making treaties toothless be-
tration under contract or under investment to pass the legislation. He has claimed the cause ultimately treaties reflect the rule of
treaties,” Saunders told Paydirt. Tanzanian judicial system was best placed law that is actually supposed to encourage
to hear disputes from international investors investment in a country that needs it.”
Saunders said Tanzania’s attempt to given the inherent “bias” of international ar-
limit recourse to international arbitration ap- bitration institutions. Saunders advised miners caught up in
peared a response to its poor track record such disputes to use legal avenues as the
in such disputes. Saunders said Tanzania’s stance should last course of action.
be understood in a global context in which
“It’s not dealing with the problem by not international arbitration mechanisms and
doing the things it has previously done but institutions are increasingly mistrusted.
by limiting access to arbitration,” he said.
“There are not many instances of states “It is a mistake to see economic nation-
responding in this way. It is quite worry- alism as an emerging economy thing,” he
ing, Tanzania is saying: ‘we’re going to take said. “We see it with President Trump and
steps that limit access to international tribu- his China tariffs, in Australia with the do-
nals’.” mestic gas policy and through a chunk of
what sits behind Brexit.
In August 2018, state-owned power com-

Page 12 APRIL 2019 AUSTRALIA’S PAYDIRT

“I don’t think any lawyer would say the
only answer is the law,” he said. “An out-
come is more likely to be reached through
negotiation, diplomacy, good relations and
understanding the culture of the host coun-
try. They are probably far more important
than law; you don’t have to bring in the nu-
clear option straightaway.”

In the case of Australian companies, the
risk of falling foul of expropriation could be
more acute due to a lack of coverage in in-
ternational treaties.

““Australian mining companies have
been a huge success story for Australia
and the countries they operate in and they
understand how to navigate the challenges
of resource nationalism,” Saunders said.
“Australia only has 16 bilateral investment
treaties, which is a very small number for
such an economically advanced country. If
Australian companies are operating in Af-
rica, they need to think carefully about how
the route their investment because they
have less protection than UK investors for
instance.

“It is very common for African-focused
companies to route their investments
through the UK or Mauritius which has de-
liberately established bilateral investment
and taxation treaties to set itself up as a
route into Africa.”

– Dominic Piper

Ghanaian President
Nana Akufo-Addo

Trading centres ordered in Tanzania

Tanzania has ordered all mineral pro- jaliwa as saying while commissioning the ly and onerous. Among other things, the
ducing regions in the East African centre in Geita. laws hike taxes on mineral exports, man-
nation to set up government-controlled date a higher government stake in some
trading centres by the end of June, accel- The Geita centre would serve as a model mining operations and force the construc-
erating efforts to curb illegal exports of gold for others, the statement said, adding the tion of local smelters, a move some compa-
and other precious minerals. centres were aimed at controlling smug- nies said was uneconomic.
gling of gold and other minerals.
The trading centres will give small-scale Magufuli also ordered the central bank in
miners direct access to a formal, regulated Small-scale miners produce around 20 January to start buying the country’s gold to
market where they can go and directly tpa gold in Tanzania, but an estimated 90% curb smuggling and build reserves to stabi-
trade their gold. They currently struggle of the output is illegally exported, according lise the local currency.
to access formal gold dealers who mostly to a report by a parliamentary committee.
based in the capital Dar es Salam and ma- Tanzania has also been locked in a pro-
jor towns. Tanzania is Africa’s fourth-biggest gold longed conflict with London-listed Acacia
producer after South Africa, Ghana and Mining plc after authorities banned exports
A statement from the Prime Minister’s Mali and gold exports are a key source of of gold and copper concentrates and ac-
office said the first mineral trading centre foreign exchange. cused the miner of tax evasion, which it
was inaugurated in the north-western town denies.
of Geita on March 17, close to the coun- It exported gold worth $US1.549 billion
try’s biggest gold mine owned by South last year, up slightly from $US1.541 billion in Majaliwa said the trading centres will be
Africa’s AngloGold Ashanti Ltd. 2017, central bank data shows. jointly supervised by officials from a state-
run mining commission and the state rev-
“All mineral producing regions should President John Magufuli, who took office enue service. They will also have banks
set up these trading centres as soon as in late 2015, is pushing for more revenues to provide financial services to the dealers
possible to serve small miners,” the state- from the mining sector, which is a relatively and miners.
ment quoted Prime Minister Kassim Ma- small contributor to national output.
– Fumbuka Ng’wanakilala, Reuters
In 2017, the Government passed laws
that the industry complained would be cost-

AUSTRALIA’S PAYDIRT APRIL 2019 Page 13

NEWS

Ramelius to reveal
growth strategy

With a couple of key acquisitions bedded down, Ramelius Resources Ltd was on the cusp
of wrapping up a strategic review at the time of print. One of the focuses of the review is
to determine how best to integrate the Tampia deposit into a portfolio boasting the Mt Magnet,

Edna May and Vivien mines in Western Australia.

Ramelius has consolidated 130km of contiguous strike over
the Westonia and Holleston greenstone belts. Regional

exploration and deeper RC and regional aircore traverses
have returned 8m @ 43.25 g/t gold and 16m @ 3.59 g/t

Tampia was the flagship asset Ramel- with Black Oak Minerals’ administrators which sets Ramelius up to hit 190,000-
ius chased hard throughout its takeo- in February. 210,000oz at AISC of $1,150-1,250/oz
ver of Explaurum. this financial year.
Marda ore will be carted to Edna May,
The off-market offer – one Ramelius with production scheduled for FY2020. The company reported delays in the
share for every four Explaurum shares approvals process at Greenfinch, as un-
plus 2c/share cash – closed in February, “It has been a transformational [12 derground production from Edna May
with Ramelius relying on the compulsory months]. We have grown the company was brought forward allowing Ramelius
acquisition powers under the Corpora- from $250 million to just over $450 mil- to hit guidance.
tions Act to acquire the remaining shares lion in that period. Needless to say that
in Explaurum. it has been quite busy bedding down the After accounting for acquisition costs,
Edna May, Marda and Tampia assets capital development and exploration,
“Obviously it didn’t start off so well, which are more recent acquisitions. It Ramelius had cash and gold of $109.8
but once we had the Explaurum board has been busier than ever in the last 12 million (no corporate debt), which paves
recommend the deal and obviously with months,” Zeptner said. the way for the company to now execute
shareholders keen to make it happen its growth strategy.
then it fell into line quite quickly and the “Our strategic review will take us to the
market reaction has been quite positive,” end of April, with the work we are doing Estimated production for FY2020 is
Ramelius managing director Mark Zept- in that period of time ensuring we have 230,000-250,000oz gold.
ner told Paydirt. all the information to make the right deci-
sions.” Exactly when Tampia enters the pro-
“The reality is that the market informa- duction mix will be known soon, with
tion we were getting even right at the Currently, stockpiles from Edna May Ramelius weighing up two scenarios
start was quite positive and that the deal are being treated at a plant adjacent to to process reserves currently totalling
made sense, it was just a matter of con- the mine, while the Edna May under- 7.23mt @ 2.09 g/t gold for 485,000oz.
vincing the Explaurum board and their ground and Greenfinch open pits are be-
shareholders of that.” ing developed. Tampia – resources of 11.7mt @ 1.79
g/t gold for 675,000oz – is located on
In a less complex transaction, Ramel- In the first half of FY2019, consistent a granted mining lease in Narembeen,
ius acquired the Marda gold project pur- production from Edna May, the Vivien 148km by sealed road from Edna May.
suant to a deed of company arrangement underground and Mt Magnet mine saw
group production total 104,051oz gold, “The decision will be whether we mill
on site [at Tampia] or go through the mill

Page 14 APRIL 2019 AUSTRALIA’S PAYDIRT

modification at Edna May, which will en- Back in 2014, Ramelius teetered at investment, it also gives us the longevity
able us to truck to Edna May. If we went mine life scenarios of just two years; a that our employees are looking for.”
down the haul-route to Edna May sce- situation it can now avoid.
nario we could be in production in about While it has near-term producing as-
12 months of a decision. If we do the mill “The key focus for us going forward sets in the pipeline, exploration success
build on site, you probably need to add is securing the longer mine life so that has driven the company to beef up its
another 12 months on that given con- we can demonstrate that we are here for budget.
struction, so they are the timeframes we five-plus years, which is the magic num-
are working to,” Zeptner said. ber,” Zeptner said. Ramelius has reported mine site ex-
ploration success at Mt Magnet and
Having gone down the acquisitive During the tough years of 2014 we got is embarking on deeper drilling, while
path, Ramelius hopes to now deliver down to two years life which is obviously deeper exploration underground is part
both shareholders and employees some pretty hard to convince people to invest of the strategy at Edna May.
sort of certainty around the longevity of at that level. If we can kick off on a five-
operations. year-plus mine life and go to the next “For the current financial year
stage in terms of attracting institutional we had a budget of $15 million, but
we are going to blow that in a good

The Vivien underground currently hosts
a resource of 127,000oz gold

Mark Zeptner With the company spending more than However, the company is also under-
ever on exploration and an upcoming taking exploration in North America at
sense and we are going to spend more. capital commitment at the Edna May mill the moment, “so we are not adverse to
Next [financial] year the total exploration or facility at Tampia, Zeptner would pre- that part of the globe”, Zeptner said.
budget is set at $20 million and that’s fer that any potential M&A opportunities
pretty much equally split between the fitting the Ramelius make-up stay at bay “Northern Star [Resources Ltd] at
Mt Magnet and Edna May areas; record for the time being. Pogo has potentially paved the way, but
levels for Ramelius. At the moment, we you only have to look at some of our big-
think it is about the right amount of ex- “You always have to be open to it, be- ger peers and the fact that they probably
penditure for our profile and capability, cause one thing you can never have con- need a 200,000oz asset with a decent
so it is a significant investment especially trol over is the timing of something really life to make sense for them and there
when you look back historically,” Zeptner good coming across the table,” he said. aren’t really many of them in Australia.
said. Therefore, they are probably forced to
“But, I think it is fair to say the focus be looking at stuff offshore so I wouldn’t
in the next three months will be bedding be surprised if one of our larger peers
down Tampia and Marda, so we’ll prob- makes a move on something like that in
ably prefer that nothing really great be- the next six months,” Zeptner said.
comes available until more like the mid-
dle of the year. We’ll look at things more “M&A is a good thing and it is some-
seriously once these things are bedded thing that we may benefit from down the
down and the shareholders would prob- track. The trickle-down effect of the ma-
ably prefer us to come out with a more jors doing deals is potentially where we
robust plan in about May/June and then may see some assets becoming availa-
look to other things after that.” ble that may fit our profile. But, that might
be more like 6-12 months away, but there
The wave of M&A activity happening is a real possibility that we could be a
across the domestic and global gold sec- beneficiary down the track for some of
tor means opportunities will arise, with that stuff.”
Zeptner saying Australia and New Zea-
land were priorities for Ramelius. – Mark Andrews

AUSTRALIA’S PAYDIRT APRIL 2019 Page 15

NEWS

What a time
to be in mining

The mining sector’s battle to nurture the next generation of sector Hatch Australia-Asia regional
leaders has never been more challenging given the declining managing director Jan Kwak
uptake in core subjects.
Undergraduate student, Tayla
“Iwas at a UWA forum and I was telling and while Kwak admits the aspirational Corbett, participated in the Hatch
people that this is one of the most ex- targets set by Hatch are probably unre- summer vacation programme
citing times in decades to be an engineer. alistic, he believes setting the bar high experience. Hatch is leading the way
The kind of challenges industry faces; is the only way to make high achieve- in gender diversity in STEM sectors
our forefathers never saw. Carbon re- ments on this front. across the country.
duction, tailings management, declining “I strongly believe that no one
grades, more precise mining; that is the Interestingly, he said, gender equality should feel limited in their choice
way mining is heading and there are so in Hatch’s China and Russia offices is of career by outdated expectations
many new technologies and new toys to not much of an issue with the workforce or stereotypes. At Hatch, the drive
help that process,” Hatch Australia-Asia basically split 50/50. for positive change is a really
regional managing director Jan Kwak told important value. I felt confident
Paydirt. Rather than gender balance being an that I was a valuable member of
issue, language, cultural diversity, will- my team and was making real
Kwak’s promotion of industry and the ingness to embrace other cultures and contributions to the projects I was
opportunities within it is having a mean- commercial mechanisms are issues involved in, which is something I
ingful impact, particularly among the fe- which arise in China and Russia, ac- hope to continue to experience as
male contingent at Hatch. cording to Kwak. I further my career in engineering,”
Corbett said.
The global consulting firm reported “The discussion is different again in
achieving 52% female participation in our offices in Abu Dhabi and Oman; that
its Australian summer vacation pro- is a whole different world in the Gulf and
gramme. Middle East,” Kwak said.

Inspired by other companies in the Nevertheless, Hatch retains an active
mining sector, four years ago Hatch em- diversity policy wherever it operates de-
barked on a strategy to actively attract spite the challenges.
and recruit women for the programme,
as just one of many initiatives underpin- “We have assignments in Saudi Ara-
ning an organisation-wide strategy to bia and Qatar and it is not always easy
drive diversity and inclusion. to get a diverse workforce into projects
there,” Kwak said.
In the last two years, 40-50% of grad-
uates hired by Hatch have been female, Diverse workforces are known to
with the next major ambitions being to breed creativity, productivity and ef-
keep talent within the company and en- ficiency, while the attributes women
gaged in industry and building a pipeline alone bring to companies are slowly be-
of females coming through the system. ing recognised, particularly in the still-
male dominated resources sector.
Kwak said key to achieving the de-
sired outcomes was creating the right “Men and women have different paths
cultural setting and environment to through the first 10 years of their career
encourage women participation in the and we have to form a company that al-
mining sector. lows people to balance their lives and
ambitions with the work-style, which
“We have worked hard to ensure we is something we are continuing to do,”
have a flexible and inclusive culture in- Kwak said.
side the company where women can
feel like they belong and that they can “I reckon by continuing to feed the
see this is a place where they can be- pipeline, we’ll have really high quality/
long,” Kwak said. diverse talent with 5-10 years industry
experience we can use up. The hard
“You have to have inspiring stories part, and what gender equality is really
and examples of where you have been about, is getting women to be a part of
able to make a positive difference and our leadership group and those peo-
you collect these up and talk about ple that don’t work for us yet, they are
them; that is how you create a culture. somewhere out there in the industry. It
You have to be out there and visible.” is about having a genuine culture where
women can feel like they belong.”
Striking a perfect gender balance
appears some way off for the industry – Mark Andrews

Page 16 APRIL 2019 AUSTRALIA’S PAYDIRT

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NEWS

Gordon Bros expands into WA

Ben Gibson

Global advisory, restructuring and investment firm, Gordon Brothers,
has spread its wings far and wide in Australia in recent times.

The Boston-based company has Gibson has deep relationships within with their debt,” Gibson said.
opened three offices in Australia in the mining, construction and transport “There are quite a lot of smaller min-
the past two years, with equipment valua- sectors, while his time at Tiger Asset
tion and action industry veteran Ben Gib- Group serving as executive director, ers and mining services businesses that
son leading the charge as director in the restructuring and finance, has him well have come out of the downturn with a lot
new Perth office. placed to drive that area of business for of ATO debt. Unfortunately, there is not
Gordon Brothers as the resources sector a lot of capital out there for companies
With offices on the East Coast estab- starts to gain momentum. like these, therefore, they can’t take on
lished as part of the Gordon Brothers the contracts that are out there. Some
strategy to expand their international To this end, Perth remains an impor- of these companies don’t qualify for tra-
operations, the wave of opportunities tant location for Gordon Brothers to offer ditional finance and lending is often not
arising in Western Australia motivated the Australian market with liquidity solu- available to them, so we see this as an
the company’s presence on St Georges tions businesses need in order to thrive. area we can operate in and often com-
Terrace. panies aren’t aware of the alternative
“The lending side of the business can funding solutions out there that we can
“Since coming to Australia 18 months really help some of these struggling help with.”
ago we’ve found that about 50% of our companies restructure and helping them
work was coming from WA. In mid-2018 to the next stage and we can help them – Mark Andrews
we bought all the mining equipment from
Cleveland Cliffs [Inc] which was closing WA’s surging resource sector compelled US company
the Koolyanobbing [iron ore] mine,” Gib- Gordon Brothers to establish an office in Perth
son told Paydirt.

Identifying the shortage of available
mining equipment in the market prompt-
ed Gordon Brothers to swoop on the
Koolyanobbing assets with the aim to
on-sell the readymade, fit for purpose
gear to interested parties.

Gibson, a former general manager for
the WA operations of Graysonline, is well
versed in the mining sector having solely
managed over 3,000 valuation and as-
set disposition projects, both in Australia
and internationally.

Page 18 APRIL 2019 AUSTRALIA’S PAYDIRT

Keeping Families CloseTM

Since 1990, Ronald McDonald • Cook a hot meal for up to 47 Get in touch with RMHC WA today
families staying at the House and demonstrate your
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get on-board;

*Source: G. Daniel, C.E. Wakefield, B. Ryan, C.A.K Fleming, N. Levett and R.J. Cohn Rural and Remote Health (2013)

SITE VISIT

Toliara the kicker to
Base’s race for the mid-tier

Base Resources Ltd has taken a major step
towards becoming a multi-asset mineral
sands miner with the release of a PFS on its
recently acquired Toliara project in Madagascar.

The PFS results, announced on March structuring of the mineral sands sector. Kwale but latterly a renewed vigour
21, pointed to a project NPV of Price falls for rutile, zircon and il- for expansion.
$US671 million for Toliara, an enticing menite created ructions throughout the
prospect for Base which currently boasts market, resulting in several corporate In 2018 it satisfied its growth
a market cap of $360 million. moves which removed most of the plans through the $US75 million (with
mid-tier mineral sands players. an additional $US17 million in mile-
Successful development of Toliara will stone payments) acquisition of Toliara.
significantly lift Base’s standing in a Prices have steadily rebounded over
mineral sands market opening up to the last 12 months thanks to projec- Located on the south-west coast of
new entrants. Since switching on its tions of imminent supply deficits in tita- Madagascar, Toliara was first identified
Kwale mine near Mombasa, Kenya nium feedstocks. For Base, this resulted by ASX-listed junior Madagascar Re-
in 2013, Base has witnessed a re- firstly in strong cash flows from sources in 1995. Exxaro Resources Ltd
drilled out a resource and completed a

Page 20 APRIL 2019 AUSTRALIA’S PAYDIRT

“That was one of the key Toliara PFS 588mt @ 6.6% heavy mineral content
lessons from Kwale; the need Stage 1 $US439 million; Stage 2 $US67 million
to be at the top of the cost curve. Resource: Stage 1 13 mtpa; Stage 2 19 mtpa
So, we needed to see in Toliara a Capex: 33 years
project capable of being in the same Throughput: 806,000 tpa ilmenite (sulphate, slag and
Life-of-mine: chloride), 54,000 tpa zircon, 8,000 tpa rutile
part of the cost curve as Kwale. Production: $US254 million p.a.
$US77-82 million p.a.
Revenue: $US165 million
Operating costs: $US671 million
EBTIDA:
NPV:

PFS on the project in 2005 but eventu- lowed Base to consider a very different because technology has improved a lot,
ally walked away, returning ownership to proposition for Toliara. even since Kwale was built.”
Madagascar Resources, now rebadged
World Titanium Resources. “It is a different scale,” he said. “It is big- Base’s plan is for a staged approach
ger in terms of resources and processing which will see throughput initially set at
Base had already made one attempt size. We didn’t pick up any of the previ- 13 mtpa before installation of a second
to secure Toliara in 2016 when it made ous design apart from the haulage road. dozer mining unit and wet concentrator
a full takeover offer for World Titanium The previous study wasn’t inherently in Year 4 allows for expansion to 18-19
Resources Ltd. When that bid failed to wrong but the design had been a product mtpa.
get over the line, Base went back to the of circumstance and time. World Titani-
business of laying out Kwale’s Phase 2 um had a desire to shrink the project for The more ambitious scale is also
expansion but Toliara remained on its funding purposes but our circumstances informed by Base’s early experiences
radar. are different. It is largely an infrastructure at Kwale where a drop in mineral
project and so all of those costs are fixed sands pricing saw a number of op-
“We continued to look around but kept anyway. It therefore lends itself to a more erations around the world put on ice.
coming back to Toliara,” Carstens told optimised approach and we will still have
Paydirt at the time of the acquisition. “It’s expansion potential as well.” “That was one of the key lessons
a big, [near] 40-year mine life and that is from Kwale; the need to be at the
just the beginning of the resource.” Base’s Kenyan experience has also top of the cost curve. So, we needed
informed the PFS with the company set to see in Toliara a project capable
The PFS was based on a 588mt @ to implement a number of the lessons of being in the same part of the
6.6% heavy mineral resource, only 46% learnt at Kwale. cost curve as Kwale.”
of the global resource and Base sees
plenty of scope for expansion and exten- “It looks more like Kwale than it did in One of the major differences between
sions. previous studies because we know what Toliara and Kwale is the infrastructure
works well,” Carstens said. “We will apply requirements. While Base had to build a
The company has essentially redrawn the dozer trap mining method because new ship loading facility near Mombasa,
the project from what was envisioned in we are familiar with it and will use more the $310 million capex price tag included
World Titanium’s original scoping study. modern techniques in the processing only $52 million for infrastructure require-
Carstens said circumstances had al- ments. In contrast, Toliara’s $US439 mil-

Base has won numerous plaudits for its employment and training strategies in Kenya and is aiming to repeat that success in Madagascar.
During a recent visit by Paydirt, locals in Toliara queued for hours to register their interest in working on the project

AUSTRALIA’S PAYDIRT APRIL 2019 Page 21

SITE VISIT

lion build includes $US124 million for the For the recently completed half-year, struction strategy was based around
55km haul road and product storage and Kwale produced 226,730t of ilmenite, meeting such supply gaps.
export facilities. 49,630t of rutile and 17,935t of zircon,
leading to a 7% increase in EBITDA of “We want to get to a decision point as
Such infrastructure requirements $57.5 million. Kwale’s performance has quickly as we can because it is who we
could be more complex when built in allowed Base to pay down debt and are as a company but also because the
Madagascar, one of the poorest coun- establish a net cash position which will market is opening up from 2022 and there
tries in the world in both the economic serve it well in considering Toliara’s de- is a real opportunity to be the first mover
and infrastructure senses. velopment options. into that gap. Whoever gets through the
door first can make it hard for the other
Carstens acknowledges the increased Base is aiming to complete the Toliara market entrants who follow.”
infrastructure necessities but is comfort- DFS by the end of this year and has set
able they will not prove a hurdle to de- itself a March 2020 date for a final invest- Balanced against the need to be
velopment. ment decision but the company is giving “through the door first” is Base’s own
itself room to manoeuvre. Much could circumstances. While a brand new de-
“The project does require 55km of depend on what unfolds in mineral sands veloper may be pushing hard to finalise
road, bridge and port to be built but it markets. feasibility studies, complete financing
is no more difficult in Madagascar than and get construction started, Base has
what it was in Kenya. Sure, it means The last 18 months have seen a con- the luxury of adopting a more considered
more starting capex is required than at siderable tightening in both titanium approach.
Kwale but beyond that it is analogous sulphate and titanium chloride markets,
with Kwale.” leading to price increases. The trend is “The longer you leave construction,
expected to continue with major supply the better that supply gap is going to be
The references to Kwale are under- deficits predicted in both markets from and the more cash we will have coming
standable given the success Base has 2022. from Kwale,” Carstens said. “It is about
enjoyed in Kenya. getting to a point of making a decision
The supply deficits are particularly rel- and seeing what the circumstances look
After a shaky start when the bottom evant to Toliara given its high ilmenite like then.”
dropped out of the mineral sands mar- content compared to Kwale.
ket soon after the mine was switched on, It sounds like a strategy straight out of
Base has enjoyed three years of uninter- Carstens said the entire Toliara con- a Kenyan marathon runner’s repertoire –
rupted success at Kwale.

Base is required to build a new bridge
across this causeway as part of its 55km

haulage road connecting site to port

Page 22 APRIL 2019 AUSTRALIA’S PAYDIRT

Toliara boasts an existing port facility
however, as in Kenya, Base will build
its own infrastructure

“We want to get to a decision Madagascar
point as quickly as we can
because it is who we are as a Population: 25.6 million
company but also because the
market is opening up from 2022 GDP: $US11.5 billion, 4.2% growth rate (2017), GDP
and there is a real opportunity to per capita $US421 – 70% of the population live
be the first mover into that gap. on less than $US1/day
Whoever gets through the door
first can make it hard for the other Industries: Agriculture (29% of GDP), manufacturing (15%),
tourism, mining
market entrants who follow.
Mining operations: Ambatovy nickel-cobalt operation (Sherritt
International), QMM mineral sands operation
(Rio Tinto Ltd)

AUSTRALIA’S PAYDIRT APRIL 2019 Page 23

SITE VISIT

leave your winning kick till as

late as possible – but makes

eminent sense when meas-

ured against Base’s financial

position.

The company had a near-

death experience in 2016/17

as several years of de-

pressed mineral sands pric-

es left it struggling to bring

down its debt burdens. Now,

thanks to the prolific perfor-

mance of Kwale, the compa-

ny is net debt clear and has

optionality within its balance

sheet.

“We are not a single as-

set company anymore, so a

year’s delay would only mean

more cash from operations at

Kwale,” Carstens said.

Of all the financing options,

only equity raisings appear

off the table.

“The objective is to do

it without raising money,”

Carstens said. “But, if the

share price ran then maybe

even that would make sense.”

Debt can often be expen-

sive for projects in emerging

economies but Carstens has

been surprised by the levels

of interest and the potential Base has already launched training schemes at
terms on offer.
“ Toliara, including truck driving simulations
“There has been really There has been really strong interest from
strong interest from a few a few different directions. We are looking at
different directions,” he said. using the existing revolving credit facility or adding
“We are looking at using the
existing revolving credit facil-
ity or adding new debt at ei-
ther the business or project

level. Then there are various new debt at either the business or project level.
JV options available to us for

participation at the project

level. Approvals will also have a major ef- new President was installed in January
“There is a level of appetite fect on financing and despite a pro- and he formed a cabinet and Base has
longed election campaign in the country, met with seven ministers. The Minister
for political risk insurance and pricing is Carstens is confident the Malagasy Gov- of Mines has stated his support and the
surprisingly cheap, in particular because ernment, led by newly elected President President said during the election cam-
a number of development agencies are Andry Rajoelina will deliver on time. paign that Toliara was a priority project.”
keen to get into Madagascar but have
few options.” “We are into the final bits of government While optimistic Carstens also remains
interaction, key to which is the large min- realistic about mining’s place in emerging
Release of the PFS has allowed Base ing investment certification [the invest- economies.
to start those discussions in earnest. ment stability contract],” he said. “We can
apply for that after the PFS is completed “Mining can always become a politi-
“The PFS is the catalyst for that pro- and once that is certified all the financial cal football and most new governments
cess to start and it was a really impor- parameters are locked down.” around the world want to revisit their min-
tant precursor to final debt negotiations,” ing sector policies,” he said. “But things
Carstens said. “Our PFS is of a higher A change in power is always a fraught so far have been encouraging and it is
standard than most because we want as situation in Africa, as Base experienced a question of how long it takes to work
little movement as possible in numbers in Kenya in 2017, but Madagascar’s hand- through the process.”
between PFS and DFS. That will mean over appears to have gone smoothly.
we can progress finance from now and Adding to Carsten’s confidence is the
the DFS will be the final tick for the fi- “It has been good,” Carstens said. The reputation Base has carved out for itself
nance.”

Page 24 APRIL 2019 AUSTRALIA’S PAYDIRT

on the continent. The success of not only the ones best placed “Mining can always become
operations but also government relations to execute on and un- a political football and most
and community engagement at Kwale wrap the value over new governments around the
have seen it held up as a poster child for the next few years.” world want to revisit their mining
new mining investment in Africa.
Neither is Carstens
He believes that reputation – and its too distracted by out-
operational capabilities – places Base in
a unique position in the market. ward bound M&A talk. sector policies. But things so far
“We are always have been encouraging and it is
“Put altogether, it produces a unique
minerals sands company,” he said. “We alert to new projects
have a position of strategic relevance.
If you are active in the mineral sands but they would have a question of how long it takes to
space, you have to have a view on Base.” to be value-accretive,” work through the process.
he said. “There are a
Such comments may sound like a
“come and buy us” plea but Carstens few corporate activi-
sees more value in Base remaining inde-
pendent for now. ties going on but we’re

“I don’t know if there’s a chance of us focused on what we’re
being taken out,” he said. “On some of
the key risks our project execution and doing and realising full value from our the banks. After having a debt position
growth at both Toliara and Kwale, we’re
existing assets is a bigger priority for us. of $US235 million, to be in a position of

“We have got through some big mile- flexibility towards Toliara and the future is

stones recently, the fact are now net a good position to be in.”

cash being the biggest. It means we are – Dominic Piper
now working for our shareholders not for

While the existing road between site and the city of Toliara is new and in good condition, the presence of local traffic would present
challenges for haulage

A small sample stockpile from
the Ranobe deposit at Toliara

Base managing director Tim Carstens with Jean
Bruno Ramahefarivo, general manager – external
affairs for Base in-country

AUSTRALIA’S PAYDIRT APRIL 2019 Page 25

COVER

Siviour the saviour
for South Australia

It has been a long time between drinks
for South Australia in terms of new
mine developments, especially successful
ones. However, one of the industry’s quiet
achievers has unexpectedly emerged as
the State’s best chance of ending that

disappointing drought.

With then-new developments Promi- ers Havilah Resources Ltd and WPG in exploration of IOCG systems around
nent Hill and Jacinth-Ambrosia Resources Ltd, with the former looking to Olympic Dam before taking a chance on
lighting up South Australia’s resources offload its asset to focus on other inter- what can only be described as a very
sector towards the end of last decade, ests and the latter calling in the admin- green graphite play.
expectations were high for a handful istrators.
of greenfields projects to come online. Like its entry into the uranium space
These included Hillgrove Resources Ltd’s Expectations were also high for mul- five years prior, Renascor was also a
Kanmantoo copper operations, the Four tiple graphite developments across the latecomer to the graphite party and its
Mile uranium deposit and the Cairn Hill Eyre Peninsula, headlined by the restart project acquisition correlated with what
and Peculiar Knob iron ore mines. of the Uley mine, about 20km south-west many consider to be the end of a “boom”
of Port Lincoln. period for the carbon-based mineral.
Success among those operations has
varied. While Cairn Hill and Kanmantoo Uley closed just nine months after re- However, managing director David
both survived near-death experiences suming production in late 2014, while Christensen sensed something differ-
and Four Mile has been a resilient per- the progress of Lincoln Minerals Ltd and ent about the deposit his company now
former amid a prolonged period of deflat- Archer Exploration Ltd has seemingly had in its possession and immediately
ed uranium prices, Peculiar Knob is now stalled due to corporate and regulatory ordered drill rigs to the site, about 15km
on care-and-maintenance. hurdles. west of the quiet coastal town of Arno
Bay.
And despite near-record Australian Enter Renascor Resources Ltd. List-
dollar gold prices in recent years, small- ing in late 2010 as effectively the last Almost 3.5 years on, the deposit now
scale mining at Portia and Tarcoola new uranium explorer on the ASX before referred to as Siviour – named after the
proved challenging for respective own- the Fukushima incident saw yellowcake family which owns the farm on Renas-
prices nosedive, the company dabbled cor’s tenements – hosts

Page 26 APRIL 2019 AUSTRALIA’S PAYDIRT

by far and away the largest graphite re- lion ($121 million). David Christensen
source (80.6mt @ 7.9% TGC for 6.4mt) Both scenarios are based on a 30-year
in Australia and the world’s fifth biggest tralia in what is perhaps the biggest coup
reported graphite reserve (45.2mt @ mine life at Siviour. The operating costs the company has landed since the initial
7.9% TGC for 3.6mt). are slightly higher ($US577/t) for the ini- project acquisition.
tial three years under the staged devel-
With a mining lease imminent and a opment option before coming down to Royal IHC recently acquired an Aus-
DFS due this quarter, the potential signif- $US335/t for the remaining life of mine, tralian-based EPC contractor and is
icance of Siviour to South Australia’s re- positioning Renascor among the lowest keen to expand its presence down un-
sources sector is not lost on Christensen cost graphite producers globally. der, with Siviour identified by the Dutch-
and the team at Renascor. based group as the ideal stepping stone
“Graphite had its time in the sun may- in that pursuit.
“We haven’t had a significant number be 5-6 years ago and we came in late
of new projects in South Australia, but at the end of that. The reason why we Christensen said Royal IHC was also
we certainly believe this deposit could be still came in was we saw the potential to assisting with the DFS in a bid to reduce
the next cab off the rank,” Christensen turn this [project] into a lowest quartile the inevitable time lag that often exists
told Paydirt. producer,” Christensen said. between study completion and the pro-
posed start of construction.
“This has all been very rapid. We put “When we first drilled it out, this looked
our foothold on the project in 2015, then like something we could offer the market “We brought an EPC contractor into
in 2016 we started drilling it out and de- in terms of diversity of supply, but then as the DFS planning to essentially squeeze
lineated our first resource. By the next we drilled it out even further, it became our timetable, so by the time we have
year we had a scoping study and then clear pretty quickly that we had the po- our DFS we can then, hopefully, move
in 2018 we did our PFS and now here tential to be not only a low-cost Austral-
we are in 2019 and we’re already pretty ian supplier, but one that could compete “into accepting an EPC proposal and turn
deep into DFS planning. with some of the larger developments We haven’t had
coming out of East Africa and the current a significant
“If we’re successful at putting together production in China. number of new projects
a financing package, we could be in a
position to really accelerate even further “We think we actually have the added in South Australia, but
and become not just a development com- bonus of being a low-cost producer in a we certainly believe this

Renascor general manager, projects, Andrew Reeves deposit could be the
explains the proposed layout of the Siviour graphite mine next cab off the rank.

pany, but go into construction as early as low sovereign risk jurisdiction.” it from a DFS into a BFS,” Christensen
the end of this year, and that could see Like most graphite projects around the said.
us producing graphite concentrates by
sometime near the end of 2020.” world, Renascor’s biggest hurdle to de- “Royal IHC are trying to expand their
veloping Siviour will be securing project business into Australia and what they
The upcoming DFS is expected to finance from non-traditional sources. want to do is build multi-billion dollar
provide clarity on the best development mines. We’re the first company that they
option for Siviour. The 2018 PFS con- To give the company the best chance could potentially build a mine for.
sidered two options; full-scale devel- of bringing Siviour to life, Renascor has
opment of a 142,000 tpa operation for appointed independent advisory group “They’ve also contributed $1 million
$US99 million ($132 million), or staged BurnVoir Corporate Finance Ltd to assist towards early project works and for an
development beginning with production with pulling together the optimal funding early stage company like us, to essen-
of 22,800 tpa for $US29 million ($39 package for the project. tially get a $1 million cash infusion is
million) ramping up to 156,000 tpa after quite critical. But maybe the most im-
three years for an additional $US91 mil- BurnVoir and Renascor will work on
that solution in conjunction with pro-
posed EPC contractor Royal IHC Aus-

AUSTRALIA’S PAYDIRT APRIL 2019 Page 27

COVER “If we can tap into the Royal IHC
financing network, in particular
Since being acquired by Renascor in late 2015, Siviour has in Europe, that really increases our
grown into Australia’s largest graphite resource and the fifth chances of doing the most difficult
biggest reported graphite reserve in the world thing and that’s financing this project.

material in a way African-based projects developed into
mines.
that we can get
“The stumbling block to graphite has
this financed from always been financing large construction
capital requirements and this has been
a debt perspec- difficult for the African projects to do be-
cause you’re dealing with an industrial
tive.” mineral,” he said.

Renascor’s “We don’t really see ourselves compet-
ing against the Africans. In fact, it’s better
main competitors for us if we see some successes out of
Africa. If they’re successful in doing that,
in the graphite they’ll de-risk the whole sector and that
will drive the whole sector up.”
game are a pleth-
East Africa emerged as the world’s
ora of fellow ASX- potential new centre for graphite produc-
tion earlier this decade amid fears lead-
listed companies ing producer China would become a net
importer of the material. When that an-
with development ticipated undersupply did not eventuate,
interest in the sector began to tail off.
projects in East
However, Christensen pointed to new
Africa, particular- figures which suggest a looming shortfall
in China is once again on the horizon,
ly Tanzania and ensuring many near-term developers
such as Renascor are poised for a big
Mozambique. pay day if they can get their projects off
the ground in the next few years.
Syrah Re-
“We’ve really just come back down to
sources Ltd is where we were before and we haven’t yet
adequately resolved this question of how
portant thing about working with a very the only company we’re going to deal with the undersupply,”
respected western EPC contractor like he said.
Royal IHC is we think this is going to help to date to develop a mine – Balama in
open up finance avenues.
Mozambique – with project neighbour
“If we can tap into the Royal IHC fi-
nancing network, in particular in Europe, Battery Minerals Ltd hopeful of joining
that really increases our chances of do-
ing the most difficult thing and that’s fi- them in the graphite producers club later
nancing this project.”
this year. Others such as Sovereign Met-
Linking offtake agreements to the fi-
nancing strategy will also be critical for als Ltd in Malawi and Tanzanian quartet
Renascor as its quest for project funding
ramps up over the next six months. To Kibaran Resources Ltd, Graphex Mining
date the company has signed just one
MoU – with China’s Quindao Chenyang Ltd, Black Rock Mining Ltd and Walka-
Graphite – for the proposed offtake of
up to 10,000 tpa from Stage 1 and up to bout Resources Ltd have advanced
30,000 tpa from Stage 2.
projects also chasing the same develop-
For Christensen, this is where he sees
an advantage for Renascor in being ment funding as Renascor.
fashionably late to the graphite party.
Christensen believes his company and
“What we’ve seen from some of the
more advanced developers is you can the entire graphite sector would ben-
get offtake obligations, primarily from a
Chinese customer base, but to date that efit from seeing one or more of those
hasn’t been good enough to finance any
mine,” he said. Siviour is named after the family which owns the land on which the deposit sits

“Our strategy is to include our financ-
ing, as we start to de-risk it, in our offtake
strategy. And as we continue to de-risk
the project, as we continue to have clos-
er line of sight on production, it puts us in
a position to move up the value chain and
to deal with better credit risk customers.

“At that stage we’d be ready to commit,
but again everything we do on offtake
has to be focused on not trying to satisfy
the urge we all have for signing an agree-
ment to sell material. We need to sell our

Page 28 APRIL 2019 AUSTRALIA’S PAYDIRT

Geotechnical drilling was ongoing when
Paydirt visited site last month, ahead of the

completion of the DFS later this quarter

“What we’ve seen from some of
the more advanced developers
is you can get offtake obligations,
primarily from a Chinese customer
base, but to date that hasn’t been
good enough to finance any mine.

Siviour’s location in a low sovereign risk jurisdiction makes it an
attraction investment option for graphite end-users

AUSTRALIA’S PAYDIRT APRIL 2019 Page 29

COVER BurnVoir Corporate Finance director
John Ciganek with Hartleys analyst
“There doesn’t seem to be a Paul Howard on site at Siviour
similarly advantaged resource
really anywhere outside of Africa and
it just so happens that we’ve stumbled

upon this one in South Australia,
which is a jurisdiction we know well.

“I think we should be able to push our- cal prospector David Clarke. not eventuated, along with plans to de-
selves back to the same set of condi- Clarke then joined forces with South velop several deposits discovered dec-
tions that gave rise to that initial graphite ades before Siviour. Such history does
boom. So, the bottom line is it looks as if Australian mining identity Dick Keevers not favour Renascor, but Christensen
the best days in graphite are yet to come.” (now Renascor’s chairman) and geo- insists the outcome will be different this
physicist Chris Anderson, who played a time around.
With security of supply still a major is- key role in the discovery of Carrapateena
sue for the African-based projects, par- only a few years earlier. Together they “Fundamentally what makes Siviour
ticularly in light of Tanzania suddenly re- began investigating potential links be- special is the resource,” he said. “It’s
vamping its mining laws in 2017, Siviour tween graphite and uranium occurrences large, it’s flat, it’s near surface, it trans-
shapes as a reliable alternative for some on the Eyre Peninsula. lates into very low mining costs, and that
end-users. translates into a very low operating cost.
A director of Renascor at the time, An-
Christensen is keen for Renascor to derson encouraged the listed company to “There doesn’t seem to be a similarly
take advantage of the already estab- get involved in the project after unearthing advantaged resource really anywhere
lished strong export ties between Aus- historical data from Cameco which point- outside of Africa and it just so happens
tralia and China where many of those ed to a small graphite anomaly at what is that we’ve stumbled upon this one in
end-users are based, with the estab- now the Siviour project. South Australia, which is a jurisdiction
lished infrastructure in South Australia we know well.
also giving Siviour an edge over other “This was not just a new discovery, but a
developments. world-class discovery,” Christensen said. “We’ve always been a South Austral-
“It was only passed over during the boom ian-focused company. We’re based in
“The Chinese have dominated this because nobody knew it was there.”
[graphite] space for years and are 0still
dominant in terms of not only supplying Graphite production is not a new con-
it, but buying it,” he said. “But this is also cept for South Australians with the mate-
a traditional route that we in Australia are rial first discovered in the State more than
also quite good at, and that’s tapping into a century ago. Uley was the last mine to
the Chinese market and satisfying their produce graphite for a brief period during
resource requirements.” 2014/15, but the restart was plagued by
technical challenges with operator Va-
Siviour was originally gazetted as lence Industries soon collapsing under
a uranium prospect by Cameco Corp financial pressure and entering voluntary
during the yellowcake boom of the late administration.
2000s. When the price collapsed, the
company began to shed ground and the For various reasons, proposed restarts
unwanted tenements were picked by lo- of other mothballed graphite mines on
South Australia’s Eyre Peninsula have

Siviour graphite concentrate PFS

Full scale development option: Two-stage development option:

Production 142,000 tpa (first 10 years) Production 22,800 tpa (years 1-3)

117,000 tpa (LOM) 156,000 tpa (years 4-13) 129,000 tpa (LOM)

Capex $US99 million ($132 million) Capex $US29 million ($39 million)

Opex $US335/t ($446/t) + $US91 million ($121 million)

Life of mine 30 years Opex $US576/t (years 1-3) $US333/t (LOM)

Average feed grade 9.1% TGC (first 10 years) Life of mine 30 years

7.5% TGC (LOM) Average feed grade 12.4% TGC (years 1-3)

NPV (after tax) $US500 million ($666 million) 9% TGC (years 4-13)

IRR 62% 7.6% TGC (LOM)

Payback 1.8 years NPV (after tax) $US407 million ($542 million)

IRR 47%

Payback 4.6 years

Page 30 APRIL 2019 AUSTRALIA’S PAYDIRT

Renascor chairman Dick Keevers is a well- South Australia and we became aware of an integrated operation that produces
known South Australian mining identity this project because we’re in South Aus- 117,000 tpa of graphite concentrate, with
tralia.” about 61,500 tpa then processed into
spherical graphite and the balance to be
For Christensen, the former managing sold as graphite concentrate, would re-
director of Heathgate Resources Pty Ltd, quire $221.5 million ($US166 million) of
operator of the Beverley uranium mine development capital.
in the State, the opportunity to bring a
new industry to the Eyre Peninsula would “The prize here is too good to ignore,”
mark an exciting new chapter for his own Christensen said. “We think on a stan-
career which began as a practising law- dalone basis the graphite concentrate
yer in his native US. makes a lot of sense, but if we can add
a downstream process to it at some time,
“One my first management jobs was either concurrently with the development
overseeing the Heathgate operation and of the mine or shortly thereafter, then that
it was there I saw what a mine could do to us looks like sensible business.
to a community in a small state like South
Australia,” he said. “If we can move downstream and pro-
duce a downstream product, that really
“Being able to develop a mine and cre- opens up a significantly new kind of op-
ate a whole industry out of seemingly portunity. Not only does it mean more
nothing is a particularly special thing. jobs, it’s more good jobs and more good
We don’t get a lot of new mines in South jobs in a new industry.
Australia and I feel quite fortunate that we
now have a project that’s in development “Traditionally [in Australia] we’ve always
phase. exported our material as quickly as we’ve
got it out of the ground, but if we could
“We’re sort of in a position where if take that material and value-add to it, that
we’re successful at bringing this thing to- just adds a whole new aspect to what we
gether, this isn’t just a profitable position can produce here in Australia.”
for our shareholders, it’s going to develop
a whole new industry for the Eyre Penin- Having raised a little more than $7 mil-
sula. lion last year, Renascor is funded through
to a decision to mine at Siviour, and
“If we can get a mine up and operating, Christensen expects more attention to
we’re talking about 100 full-time jobs just be thrown the way of his company as key
at the mine and many more elsewhere milestones such as the imminent mining
in the community. It would keep people lease award and completion of the DFS
within the area instead of having to go in- are ticked off.
terstate to find jobs.”
For Christensen and his team, arriving
Christensen’s vision also includes the late on the scene was the opportunity to
potential downstream option his compa- be noticed. And with South Australia cry-
ny is now evaluating. A PFS released in ing out for successful new mine develop-
February supported production of almost ment stories, Renascor is shaping as the
30,000 tpa of spherical graphite suitable vehicle in the right place at the right time,
for input into lithium-ion batteries. in an emerging mineral and an emerging
industry.
Development of a standalone spherical
graphite operation would attract a capex – Michael Washbourne
of $89.9 million ($US67.4 million) while

Siviour spherical graphite PFS “Being able to develop a mine
and create a whole industry out
Production of spherical graphite 29,085 tpa of seemingly nothing is a particularly
special thing. We don’t get a lot of new
Life of mine 30 years
mines in South Australia and I feel
Capex standalone spherical operation $US67.4 million quite fortunate that we now have a
project that’s in development phase.
Capex integrated concentrate-spherical operation $US166 million

NPV (after tax) of spherical operation $US365 million

NPV (after tax) of integrated operation $US667 million

IRR 53%

Opex $US1,412/t

Projected spherical graphite sales price $US3,600/t

*Both studies assume a basket price of $US1,056/t ($1,408/t)

AUSTRALIA’S PAYDIRT APRIL 2019 Page 31

SAREIC PREVIEW

SA’s platform ready
for success

The South Australian Resources & Energy Investment Conference (SAREIC) returns to the Adelaide Hilton
on April 9-10. Now in its 16th year, SAREIC has ridden and reflected a full cycle within the SA resources
industry, from mining backwater, to exploration hotspot and back again. The period has seen highs such as the
development of the Prominent Hill copper mine, the discovery of the Carrapateena copper deposit and a boom
in exploration spending. However, there have also been lows, from BHP Ltd’s slowing of the Olympic Dam
expansion to the bursting of the global uranium bubble and the continuing debate over energy security. Ahead
of the conference, Paydirt spoke with influential policymaker and current chief executive of the SA Department

for Energy and Mining, Paul Heithersay, about the State’s journey through the 16 years of SAREIC.

Paydirt: SAREIC has been running for 16 years now. During that time What would you identify as the key achievements by industry and the
the SA resources sector has undergone plenty of change. Is it in a department over the last 16 years?
fundamentally better state than it was in 2003?
PH: Establishing the Department for Energy and Mining as a standalone
Paul Heithersay: South Australia’s operating mines have grown agency is a significant statement of intent for the South Australian
significantly since 2003 and the existing operators are constantly looking Government. It builds on the pioneering initiatives South Australia has
to expand and extend the mine life of their projects. South Australia has initiated such as the PACE, the South Australian Resource Information
a healthy pipeline of projects and prospects and recent announcements Gateway, and the modernisation of the Mining Act in 2010 and the
such as BHP Ltd’s copper discovery at Oak Dam West and OZ Minerals comprehensive review conducted since to identify further opportunities
Ltd’s decision to outsource exploratory work at its Mt Woods target are for legislative reform. Since I joined the South Australian public
generating quite a lot of talk at the international level. Royalties, jobs service, new projects have begun production at Prominent Hill, Jacinth
and exports have all grown since 2003 and the quality and quantity of Ambrosia, Four Mile, Beverley North, Cairn Hill, Portia and throughout
geological data held by the State has grown exponentially thanks of the the Middleback Ranges, just to name a few. Soon, Carrapateena will go
Plan for Accelerating Exploration (PACE). into production, a copper-gold deposit discovered with the support of

PACE. We now have a suite of high resolution
geological data including magnetotellurics
that were never before available and we
have drilled core from new provinces such as Campoona. But there is
much more we can do and that is probably our greatest achievement,
the platform we have created for further success.

Paul Heithersay

Page 32 APRIL 2019 AUSTRALIA’S PAYDIRT

What gives you cause for optimism regarding the State’s resources How do international investors look at the State? Is there more
industry? Where will the next generation of mines come from? interest than a decade ago?

PH: Company after company has forecast increased market demand for PH: All indications from the most recent PDAC conference in Toronto
the commodities that South Australia possesses. We have copper, gold, are that South Australia is well and truly on the radar for international
graphite, magnetite, zircon and rutile and these commodities continue to be investors. Discoveries such as Oak Dam West and the announcements of
sought after by downstream processors and spark the interest of explorers. possible further investment in Olympic Dam and Carrapateena continue to
Our supportive business environment, our trusted regulators and the track maintain interest in this State. But also we are working behind the scenes
record of our major producers makes me extremely optimistic about the to promote South Australia’s potential as a supplier of hydrogen, battery
future for South Australia’s resources industry. New discoveries such as materials such as graphite, zinc and cobalt. The recently released Joyce
Oak Dam and new production such as Carrapateena and the proposed report recommends strategies for improving our ability to promote the
investment in Olympic Dam to increase its production capacity continue to State and encourage international investment. With a target of sustaining
underline the strength of our local industry. GFG Alliance, through SIMEC 3% annual economic growth, the Government will need investment in the
Mining, also has big plans for South Australia that can be potentially resources sector to underpin economic expansion, exports and jobs.
transformative for a regional community such as Whyalla.
How is the department approaching the battery and technology
Exploration expenditure continues to drag, what can be/is being metals space? Are there specific policies and programmes in place
done to reinvigorate exploration in the state? to define SA’s position in this emerging sector?

PH: New discoveries are the best advertisement a jurisdiction can have. PH: South Australia is well-positioned to take advantage of the battery
With the drilling now under way, the programmes under consideration materials market. We have graphite and cobalt resources and we are
and the targets that no doubt will be generated by new aeromagnetics luring battery manufacturers here to South Australia through the world’s
and magnetotellurics will inspire exploration. largest per capita rollout of home battery storage systems linked to solar
We are also supporting a unique online
crowdsourcing competition that asks PV. With that in mind, the Department
geologists and data scientists from across is looking to roll out a strategy, as we
the globe to develop ground-breaking have done with copper, magnetite and
approaches to discover new exploration hydrogen, to guide the development of
targets at Oz Minerals’ Mount Woods this sector.
site in South Australia. Commodity prices
moving in the right direction will also
provide global support for new
exploration and South Australia is
an attractive, stable destination
for investment.

South Australia’s mineral production and exports

AUSTRALIA’S PAYDIRT APRIL 2019 Page 33

DON’T MISS OUT!

9 - 10 April 2019

Hilton Adelaide

saresourcesconf.com

Page 34 APRIL 2019 AUSTRALIA’S PAYDIRT

Presenters to date:

Hon Dan van Holst Steve Johnston Kyra Reznikov David Christensen
Pellekaan MP Managing Director, Special Counsel, Managing Director,
Alliance Resources Ltd Finlaysons Lawyers
Minister for Energy & Mining, Renascor Resources Ltd
Government of South
Australia

Dr Paul Heithersay Richard Taylor Steven McClare Quentin Hill
Chief Executive Chief Executive Officer Chief Executive Officer Managing Director,
Terramin Australia Ltd & Managing Director, Carpentaria Resources Ltd
Department for Energy Hillgrove Resources Ltd
& Mining, Government

of South Australia

Warren Pearce Tony Belperio Chris Stevens Matthew Morgan
Chief Executive Officer, Executive Director, Chief Executive Officer, Managing Director,
Association of Mining & Minotaur Exploration Ltd Gindalbie Metals Ltd Ausmex Mining
Exploration Companies Group Ltd

(AMEC)

Nicole Galloway Warland Kevin Wills Hon Tom Terry Kallis
Project Manager SA, Executive Director Koutsantonis MP Principal,
Ausmex Mining Shadow Minister for Mining
Group Ltd Exploration, Kallis & Co
Marmota Ltd and Energy

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

SAREIC PREVIEW

Gindalbie launches scheme
and demerger

Gindalbie Metals Ltd’s demerger of A PFS at Mt Gunson, near Carrapateena and Olympic Dam, is in progress
Coda Minerals and Ansteel’s cash
acquisition of Gindalbie is expected to be on hold; to the contrary, work continues,” sheet for life on the ASX.
tied up sometime in June, subject to all Stevens said. Mt Gunson, near Carrapateena and
due processes being satisfied.
He said the intention was to list Coda Olympic Dam, has a completed pre-
The recommended transaction was at some time after the transaction was liminary mine scoping study on it, which
announced last month, with Gindalbie satisfied, with Gindalbie’s non-executive was underpinned by two deposits; MG14
shareholders set to receive 2.6c/share chairman Keith Jones designate chair- (1.83mt @ 1.24% copper, 334 ppm co-
cash for each of their shares in Gindal- man of Coda and Stevens managing balt and 14 g/t silver) and Windabout
bie – 90% premium to Gindalbie’s 30- director-designate. (17.67mt @ 0.77% copper, 492 ppm co-
day VWAP – and a pro rata distribution balt and 8 g/t silver, cut-off grade 0.5%
of Coda shares at a ratio to be confirmed. Gindalbie’s independent non-exec- copper equivalent).
utive directors Paul Hallam and Robin
Should both transactions be imple- Marshall are also proposed to join Coda, Coda is in stage two of the farm-in,
mented, the end of the Karara iron ore while Ansteel intends to nominate a di- which requires a PFS to be completed on
project JV between Gindalbie and Chi- rector to serve at Coda. expenditure of about $2.5 million. Upon
na’s Ansteel in Western Australia’s Mid PFS completion, Coda can more than
West will be triggered. Chris Stevens double its ownership of Mt Gunson to
51%, with the company potentially able
It has been a rough ride for Gindal- Coda will host the Mt Gunson copper- to earn a total 75% by taking the project
bie shareholders throughout the life of cobalt project in its portfolio, where it has further down the development chain.
the Karara JV, something current chief achieved stage one farm-in particulars
executive Chris Stevens paid homage with a wholly-owned subsidiary of Tor- Meanwhile, the company is encour-
to when speaking to Paydirt about the rens Mining Ltd. aged by the value-add opportunity it has
demerger and acquisition schemes pro- identified at Emmie Bluff on the northern
posed. The company will have about $10.6 boundary of Mt Gunson.
million cash on hand, with fundraising
“The reality is Gindalbie wrote down activities to be carried out in the short to Concept studies on the Emmie Bluff
the value of its Karara stake to nil dollars medium term to strengthen its balance copper-cobalt-silver prospect led Coda
in 2014. All expenditure and capital sunk to investigate further, with a scoping
is valued at nil. The iron ore market col- study now in progress.
lapsed as Karara started commissioning
and while the operation was being ironed “There is genuine excitement about
out, the iron ore price was heading to- what Coda can do and although the Mt
wards the mid-$US30/t,” Stevens said. Gunson asset is at a PFS stage, we are
excited at what we have seen so far. As
“The decision to develop Karara in joint we go through the scheme arrangement
venture with Ansteel was taken at a time and demerger we are continuing to effi-
of drastically higher iron ore prices, and ciently advance the PFS at Mt Gunson,
drastically higher general market fore- while the scoping study at Emmie Bluff is
casts of future iron ore prices, which – as also progressing,” Stevens said.
we know – proved to be misguided fore-
casts and had a significant detrimental – Mark Andrews
impact on Karara’s project economics.”

As at the end of 2018, Gindalbie had
contingent liabilities amounting to $231
million in relation to bank guarantees pro-
vided to suppliers of Karara Mining Ltd,
the JV enterprise operating the Karara
iron ore project.

The debt is so great that it is unlikely
that, on current margins, Karara would
make enough profits to be able to return
dividends to Gindalbie.

“Our immediate focus is to complete
the scheme booklets for the Coda de-
merger and Ansteel acquisition, com-
plete with independent expert’s reports,
so that we can update shareholders on
these significant transactions. But, that
doesn’t mean Coda work has to be put

Page 36 APRIL 2019 AUSTRALIA’S PAYDIRT

A processing facility on site makes
Bird in Hand a much wanted project

Terramin has it all in hand
in South Australia

The re-emergence of Terramin Australia Ltd as a key player
in South Australia’s resources sector continues.

In the preceding 18 months, Terramin’s to be completed in one year, with a NPV cant interest in the project. We have also
assets have been subject to the State (8% discount rate) of $101 million and had a lot of interest out of WA given the
approvals process but now clear of red 96% IRR. AISC for life-of-mine average fact that there aren’t a lot of high-grade
tape, projects such as the high-grade was $841/oz. projects coming on.
gold Bird in Hand play, just 30km east of
Adelaide, are starting to get traction. Given the current gold price environ- “Grade is king and we have a lot of ex-
ment – $US1,322/oz at the time of print ploration potential associated with Bird
In October, a scoping study on Bird in – Bird in Hand has piqued interest far and in Hand and it already has a processing
Hand indicated the potential for 46,000 wide, Terramin chief executive Richard plant to be utilised. It does make a lot of
ozpa gold (in metal) and 21,500oz silver Taylor told Paydirt. sense for people and it is not something
(metal) to be produced over five years we have embarked on, but we have been
from processed material of 595,000t @ “We’ve had a lot of unsolicited interest entertaining a lot of approaches from a
11 g/t gold and 5 g/t silver. in the project given where the gold price lot of people,” he said.
is at the moment and the high-grade
With an existing processing facility to nature of it. I guess a lot of gold compa- Sweetening the Bird in Hand study for
consider as part of its plans, Terramin nies have been making good while gold Terramin is the acquisition of the nearby
estimated start-up capital of $34 million is above $1,300/oz, so we have been Kitticoola mine.
would be required for a project returning getting a lot of attention, particularly as
free cash flow (post tax) of $135 million we have announced we are going to Historical mine production from Kitti-
from a mine production rate of 150,000 demerge the base and precious metals coola included 30,000t at an average 5.4
tpa. businesses,” Taylor said. g/t gold and 7,000t copper an average
2.25% copper.
Economic returns assumed in the Bird “We put out some pretty great numbers
in Hand scoping study was based on in our scoping study, which is pretty ex- “Kitticoola is a mine nearby, which is a
$1,700/oz gold and $22/oz silver, which citing for us. It’s natural that operating in very similar story to Bird in Hand – high
were prices at or below spot price at the South Australia and Victoria with similar grade, mined at surface – which will be
time of the study. high- grade operations with historic high- a pretty good combination for us, so we
grade workings, there has been signifi- are pretty happy with where that is go-
Payback on the project was estimated ing,” Taylor said.

SAREIC 2019
Proceedings out soon

9 - 10 April 2019 $60 (inc.GST)
Phone (+61) 8 9321 0355 or email [email protected]
Hilton Adelaide

AUSTRALIA’S PAYDIRT APRIL 2019 Page 37

SAREIC PREVIEW

Richard Taylor

The future of Kitticoola and Bird in the end of 2021 given the looming short- was working through the community con-
Hand could become clearer in the near fall of zinc supply sultation process with the committees of
future, with Terramin indicating a deci- Strathalbyn and Woodside.
sion on splitting the portfolio was immi- The 2018 Tala Hamza DFS indicated
nent. life-of-mine zinc and lead metal in con- “We have now to get their input into the
centrate of 1.8 mtpa from 1.4 mtpa treat- ML process itself, so we hope to finish
“We have announced we are going to ed at unit operating costs of $US63.5/t that mid-year and have that submitted
demerge the base and precious metals and C1 cash costs of $US0.52/lb. to the Government to be able to kick off
business and if that becomes a catalyst the ML application process. We are go-
for a demerger and capital restructuring Pre-production capital costs for the ing 110% on that because that is a key
we can do it at that point. That is some- 21-year project have been estimated at to the development of the project at the
thing we need to consider pretty closely $US341 million. moment,” Taylor said.
because we hadn’t expected the level
of interest in the project as early as we The company’s decision on the fate of “The assets have been going through
have,” Taylor said. Tala Hamza and Angas has been given that approvals process and are now
financial support from Asipac Group Pty coming out of the other side, so we are
“We definitely said we were going to getting a lot of that study work complet-
make a decision before the end of Q1. Ltd. ed. We have been pushing ahead on a
I guess the level of interest has required Asipac, a ma- variety of fronts and one thing we haven’t
us to think about the best approach for talked a lot about is the regional potential
doing that, whether we look at bringing jor shareholder in for exploration there.
on board some new parties in that de- Terramin, recently
merged entity or how we structure that agreed to restruc- “There has been a lot of interest from
in the future.” ture a standby the majors in South Australia particularly
term facility, es- after some new discoveries in copper
Splitting the asset base will mean sentially increas- around Australia. We have been talking
its zinc projects – Angas in SA and its ing its total debt to some parties about our large land-
65%-owned Tala Hamza, Algeria – will facility to Terramin holding up at our Gawler Craton package
fly under a separate banner. to $19.25 million. as well as some of the other big targets
where you can have exposure to a port-
At Africa Down Under in Perth last The facil- folio of 13,000sq km with a lot of deep
year, Taylor said Tala Hamza could po- ity gives Terramin targets. If you are company larger than
tentially be funded and brought on line by the opportunity to us, that resurgence in exploration will be
execute its cor- a real benefit and we hope to be able to
porate strategy talk about some really exciting develop-
and assess its ments there in the future,” he said.
long-term finan-
cial plan, while – Mark Andrews
carrying on with
activities at Bird in
Hand.

At the time of
print, Terramin

Terramin’s acquisition of Kitticoola earlier this year
compliments its Bird in Hand gold project

Page 38 APRIL 2019 AUSTRALIA’S PAYDIRT

All pellets point to Hawsons

Demand for iron ore pellets from Carpentaria Resources
Ltd’s Hawsons project near Broken Hill is set to amplify
as the fallout from the fatal tailings dam collapse at Vale SA’s

Corrego do Feijao mine in Brazil continues.

Analysts estimate 50-80 mtpa of iron pellet feed and pellet production of the ready there and were already driving our
ore supply has been disrupted in the seaborne market, so of course that will development.”
wake of the incident which killed 308 peo- have huge implications to the pellet feed
ple in the Brazilian state of Minas Gerais. supply chain and to the customers that The January tailings dam collapse at
rely on the pellets and pellet feed coming Corrego do Feijao came a little more
Of that 50-80 mtpa, about 17-35 mtpa out of that area,” he said. than three years after a similar incident at
services the pellet feed markets, includ- the Vale-BHP Ltd Samarco JV operation
ing about 4 mtpa for the direct reduction “We targeted these markets because in the same state. Nineteen people were
iron (DRI) markets. we knew they were the growth markets killed in what was described at the time
in iron ore because of the structural shift as Brazil’s worst environmental disaster.
Minas Gerais is said to supply at of the Chinese production. All of that is
least one-third, if not half, of the world’s playing out as forecast and has played Hill said the latest collapse would
seaborne pellet feed industry and a simi- out over the last few years. prompt affected stakeholders in both
lar share of the seaborne DRI market. Brazil and the wider iron ore industry to
“The pellet rates in China have gone seek significant changes to operating
Carpentaria managing director Quen- up over the last couple of years, from practices before such mines were per-
tin Hill told Paydirt he had been con- 11% to 15%, including 1% since January. mitted to resume operations.
tacted by pellet feed customers affected Now that’s 1% when even the stocks of
by the supply disruptions and sensed the pellets on ports are increasing. “We think it is such a serious event that
full impact of the tailings dam tragedy it needs to cause change in the operat-
was yet to be felt in the market. “What this terrible accident in Brazil ing practices and that will take significant
has done has amplified the excellent time,” he said.
“To have such disruption in Minas fundamentals for pellet feed that were al-
Gerais state affects up to half of the “This area is the single largest produc-

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AUSTRALIA’S PAYDIRT APRIL 2019 Page 39

SAREIC PREVIEW

er of pellet feed, but they use water to do of the project. We’re moving through the tivity. We really think that’s a fundamental
it and they will need to change their prac- internal processes of those counterpar- difference and that’s based on the geol-
tices to be allowed to operate again. So, ties,” he said. ogy and our other key advantage, infra-
they’re going to need to decommission old structure. That’s why we’re capturing the
dams, they’re going to need to transition “The market fundamentals are very attention of more and more industry par-
to dry stacking of tailings and even com- strong and have been amplified by the ticipants every day.”
plete dry processing, which will severely Vale accident, so again we’re confident we
impact the quality coming out of the area, will secure the funding. Large companies – Michael Washbourne
which again threatens the DR market. and large projects take time to deliver, but
ultimately the patience will be rewarded.” Quentin Hill
“The DR market and the pellet feed
market combined are bigger than the A PFS released in July 2017 found Haw-
whole nickel market. Now it might be a sons will generate an annual profit margin
niche market, but it’s a niche market in a of $US401 million over its 20-year mine
very big sector.” life if developed into a 10 mtpa operation.

Carpentaria’s attention over this quarter Lowest-quartile operating costs of
will be focused on landing the remaining $US48/t CFR China are estimated for pro-
funds to complete a BFS on Hawsons, duction of a 70% Fe product.
about 60km south-west of Broken Hill.
Carpentaria has signed non-binding
Japanese trading house Mitsui & Co is agreements with eight interested parties
contributing $5.4 million to the total $22 for up to 14 mtpa – 40% oversubscribed –
million BFS funding requirement as part of future Hawsons production.
of a non-binding LOI to secure at least 2
mtpa of future Hawsons production. “All of the parties have a vested interest
to make this project work,” Hill said.
Hill said the BFS could be completed
within 12-15 months of Carpentaria secur- “We won’t have the same sorts of prob-
ing funding. lems as happened in Western Australia
because our ore is fundamentally differ-
“We’re having ongoing negotiations with ent. There is a relative lack of complexity
multiple parties interested in the offtake to what we are trying to do.
and who recognise the quality and value
“Our miners and plant engineers can
focus on volumes, not blending, not selec-

1gold 1base metals 1exploration

The Emerging Wilcherry Gold Camp
A High Grade, Shallow, SA Gold System

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ASX Code: AGS Suite 3, 51-55 City Road, Southbank Victoria 3006 T (+61 3) 9697 9090 F (+61 3) 9697 9091 E [email protected]
www.allianceresources.com.au

Page 40 APRIL 2019 AUSTRALIA’S PAYDIRT

A 2017 PFS found Hawsons will generate an annual profit margin of $US401
million over its 20-year mine life if developed into a 10 mtpa operation

Australian graphite

RNU_Paydirt_ad_SAREIC_190315.indd 1 www.renascor.com.au
ASX:RNU

15/3/19 10:33 am

AUSTRALIA’S PAYDIRT APRIL 2019 Page 41

SAREIC PREVIEW

Marmota talks to the trees
Reading leaves may be fanciful fortune telling for most but
Marmota Ltd’s scientific approach to leaf analysis is far
removed from gypsy traditions.

The South Australian gold explorer has Marmota launched the programme last do tree sampling over a much wider area,”
been applying biogeochemical sam- year, taking samples from acacia and Rose said.
pling to define new targets on its Aurora senna trees on top of the main Goshawk
Tank gold project. The process involves deposit at Aurora Tank. The December survey is the most ambi-
the collection of tree leaves which are then tious tree sampling effort to date and com-
chemically analysed for gold and other in- “It lit up like a lightbulb over the previous prised collection of 329 samples over 2km
dicator minerals in much the same manner drilling results,” Rose said. by 1km area with Goshawk at its centre.
as geochemical sampling occurs.
The validation survey was quickly fol- Marmota identified five new targets
The company has undertaken three pro- lowed up by programmes stepping out based on the December tree sampling
grammes over a 12-month period, starting from identified mineralised areas with the campaign and is now planning a recon-
with areas of known mineralisation before results handing Marmota even more en- naissance drilling programme to test these
graduating to previously untested zones. couragement. as well as complete extensional drilling at
Goshawk based on the biogeochmical re-
Marmota chairman Colin Rose told Pay- “The results started showing elevated sults.
dirt the company had been delighted with levels in areas where the calcrete anomaly
results of its sampling breakthrough. was only low level,” Rose said. “The next two programmes will be in-
formed by tree sampling,” Rose said.
“Gold-in-calcrete sampling is a proven Confirming the potential of the tree sam-
geochemical sampling strategy in this re- pling technique was a January drilling re- Stepping out from known mineralisation
gion, it was the way the Challenger gold sult which returned a hit of 5m @ 24 g/t has become a regular theme of Marmota’s
deposit was identified,” Rose said. “We gold (including 1m @ 88 g/t) from a new work at Goshawk since it was first discov-
have completed extensive calcrete sam- target partially identified through the sec- ered in late 2016.
pling but then wanted to look at whether ond tree sampling campaign.
the tree sampling could provide further The company is keen to build a maiden
targets.” “These samples were hundreds of me- resource and begin economic assessment
tres away from the previous best drilling of the deposit but Rose said the timing of
results so in December we went back in to both would be dependent on drilling results.

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Page 42 APRIL 2019 AUSTRALIA’S PAYDIRT

Marmota is finding biogeochemical
sampling of acacia and senna tree leaves
is proving a strong indicator of gold
mineralisation on its Aurora Tank project

“We don’t know how large it is. Every allurgy we are getting 94-97% recover- “The first time we did any drilling was in
time we have done drilling at Aurora Tank ies. Bottle-roll tests using coarse crushed late 2016 so to be 2.5 years in and be talk-
we have been successful in expanding samples [12.5-25mm] were also positive ing about a gold discovery is remarkable,”
the size of the prospect so it’s worth con- [89.2% and 81.5% respectively] showing it Rose said. “The company has changed
tinuing that,” Rose said. “There will come a is potentially open to heap leaching which, from one that was focused on uranium and
point when the step-out drilling won’t yield of course, would dramatically reduce had stopped drilling to being a gold explor-
new results but that won’t be a bad thing capex requirements.” er doing three or four drilling programmes
because the next stage is to transition the a year.”
project into production.” To be speaking of capex requirements
reflects the transformation Marmota has Rose said shareholders had responded
Despite yet defining a resource at Auro- undergone in a little over two years. Previ- well to Marmota’s commodity switch and
ra Tank, Marmota has begun the econom- ously, the company was a dedicated ura- he indicated they may still see some value
ic assessment process, completing early- nium explorer but, hamstrung by the floun- from their interest in uranium.
stage metallurgical testing and beginning dering yellowcake market, it had done little
other scoping study work. work on its assets over a period of three “The shareholders have absolutely
years. come along on the journey,” he said. “And,
“We have already been looking at poten- for those still interested in uranium, the
tial sizes of operation but it is a bit early to Since Aurora Tank and the rest of the uranium price has gone up in the last six
lock things down,” Rose said. “Everything gold portfolio were brought into the fold, months and we do have a larger resource
we have found is within 50m of surface so the company has been on a non-stop ex- next to Honeymoon. Boss [Resources Ltd,
it all looks open-pittable and on the met- ploration push. owner of the Honeymoon uranium mine] is
looking for more resources so we are fol-
lowing that.

“But, we will continue to spend money on
gold exploration because it works immedi-
ately. And, the historically high Australian
gold price means it is a good space to be
in, especially because this project has po-
tential as a low-cost, low capex operation.”

– Dominic Piper

EMMIE BLUFF CODA METALS LTD a subsidiary of Gindalbie Metals,
has the right to earn up to 75% interest in the
WINDABOUT Mt Gunson Copper-Cobalt Project by way of farm-in.
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shareholders as a separate entity as part of a scheme
of arrangement with Ansteel

Coda intends to apply for listing on ASX (with listing
subject to all necessary regulatory approvals). Coda’s
focus will be on progressing the Mt Gunson Copper-
Cobalt Project

Mt Gunson is situated approx. 145km NNW of Port
Augusta in the world class Olympic Copper province
and contains JORC compliant indicated resources with
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AUSTRALIA’S PAYDIRT APRIL 2019 Page 43

SAREIC PREVIEW

Alliance has Weednanna funded
and growing

The impending release of a scoping Steve Johnston two years of work culminated in release of
study and closure of a capital raising a scoping study as Paydirt went to print.
point to a busy year ahead for Alliance Re- deeper targets at Weednanna effectively.” The study is the first economic assessment
sources Ltd. A recent $4.95 million capital raising – of Weednanna but Johnston said it would
be largely used to inform Alliance’s plans
Alliance has been actively exploring the underwritten for $4 million by Patersons for the next stage of Weednanna’s story.
Wilcherry gold camp on the northern Eyre – will ensure it also has the funds to under-
Peninsula for two years and with a scoping take the next phase of drilling. “While we haven’t received the scoping
study due for release at the time of print, study as yet, we expect it will show it is eco-
managing director Steve Johnston is ex- It will represent a new chapter in Weed- nomic and give us confidence to take it to
cited about the next phase of the project’s nanna’s development after the previous the next drill-out phase. It will hopefully de-
development. risk the project before we go into the next
major drill-out,” Johnston said. “Then it is
“We have got a much better handle on a question of whether we should push to
this project after two years working on it,” get into production as quickly as possible
Johnston said. “There had been plenty of or continue to drill in order to build the re-
historic drilling already but most of it had source still further.
been for iron ore. We have captured all the
gold data from that historical drilling and “It is really high-grade but modest ounc-
can incorporate it into our work. es and therefore, hopefully the next 12
months will be a combination of drilling it
“We have also drilled 119 RC holes our- out further and building it up. We don’t want
selves as well as completing gravity, air- to miss the bandwagon of the current gold
borne mag and IP surveys. So, we now price.”
have all the information needed to test

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Page 44 APRIL 2019 AUSTRALIA’S PAYDIRT

The scoping study is focused on Weed- The IP targets will be tested during a Drilling and geophysical work
nanna’s current resource of 1.097mt @ 5.1 step-out RC programme which was set to has set Alliance up for a big year at the
g/t for 181,000oz gold. Of the 181,000oz, start at the end of March. Weednanna deposit on the Eyre Peninsula
103,000oz sit below the previously mod-
elled pit shells, suggesting a major under- In early March, the company announced ted Alliance had received a few admiring
ground component to any mining scenario. results from extensional drilling outside the glances for its work at Weednanna.
Weednanna resource, including hits of 8m
“While we must wait to see the results of @ 5.3 g/t gold from 75m, 3m @ 12.1 g/t “Whenever we go to conferences,
the scoping study, it is likely to be a com- from 133m and 2m @ 16.1 g/t from 126m. the majors are keeping an eye on us be-
bination of open pit and underground with cause it’s not an area they’ve looked at in
the majority via underground,” Johnston The company also has other step-out the past,” he said. “There are a couple of
said. “At Weednanna, the majority of the targets, including Weednanna North and larger companies keeping an eye on us,
top 50m is depleted of gold – which is why Weednanna East. particularly because this skarn mineralisa-
the old-timers never found it – so even the tion is part of a continuum of deposit styles
potential open pit resources are starting at The Weednanna North target was gen- associated with large IOCG systems. So,
45-50m below surface.” erated from Alliance’s re-analysis of the where you have high-grade skarn depos-
historical iron ore drilling in the area. The its like Weednanna, you could have a large
Alliance’s next step will be to add further re-analysis showed broad low-grade gold source driving the whole system.”
tonnes to Weednanna’s impressive grade. intersections – best result 22m @ 0.34 g/t
The company has plenty of options in front gold – over more than 650m, similar to hits Johnston, however, will not be distracted
of it. A recent 3D IP survey identified nine adjacent to the main Weednanna deposit. by corporate discussions.
new targets at Weednanna. Johnston said
IP had proven an effective tool on the pros- At Weednanna East, a 3,101m aircore “For us, it is about sticking to our knitting,”
pect where gold mineralisation was closely drilling programme extended plus-100 ppb he said.
associated with high chargeability bodies. gold anomalism over 1,000km with a best
result of 2m @ 1.31 g/t gold. – Dominic Piper
The nine targets were defined by corre-
lations between chargeability, density and Both prospects are expected to be fur-
proximity to known high-grade gold shoots. ther tested throughout 2019.

“I think the results of the 3D IP survey Alliance has been among the standout
was one of the best announcements we’ve explorers in what has been a quiet junior
had at Weednana,” Johnston said. “The space in South Australia in the last two
next drilling programme will see us start years. While it isn’t the first company to drill
testing those targets and infill the existing Wilcherry, it is the first to put a coherent
areas of the deposit.” picture of the ground together. Larger gold
players are increasingly hungry to find new
exploration projects and Johnston admit-

The Company continues to focus on the From Au to Zn
exploration, evaluation and development
of base and precious metal projects in Exploring and Developing Projects
Australia and Algeria.
From Australia to Algeria…
Fresh Management to build on proven
operational experience. Ulooloo Gold to Tala Hamza Zinc
Kapunda Copper to Kitticoola Copper-Gold
Our new team represented the Adelaide Hills to South Gawler Ranges
company at domestic and international Bird In Hand Gold to Wild Horse Copper
mining conferences and presented to Angas Processing Facility, Strathalbyn
investors throughout Australia, in Hong We are Terramin Australia Ltd.
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AUSTRALIA’S PAYDIRT APRIL 2019 Page 45

SAREIC PREVIEW

New vehicle for Thor’s
ISR strategy

Newly incorporate Enviro Copper Ltd da’s inferred resource of 47.4mt @ 0.25% Drilling at Wombat has returned hits of
is set to take the lead on Thor Mining for 119,000t copper. 174m @ 0.2% copper and 115m @ 0.53%
copper while intersections at Bruce includ-
plc’s ambitions to build an in situ recovery The Stage 1 proof-of-concept work in- ed 115m @ 0.27% copper and 168m @
0.28% copper.
copper operation in South Australia. volved positive hydrogeological assess-
Thor said preliminary copper solubility
In March, Thor announced it would vend ment and water sampling, construction of test work had provided “substantial initial
support” for the potential to apply ISR to
its interest in the Kapunda copper project technical models for geology, grades, cop- Bruce and Wombat. At Bruce, the percent-
age of the total copper leach from each of
90km north of Adelaide into Enviro Cop- per species distribution and fracture den- 24 samples was 41-56% while at Wombat
the range was 0-65%.
per. Kapunda will be joined by the Moonta sity, computer modelling to show that the
Under the revised terms of Enviro Cop-
copper project – 160km north-east of Ade- geology is amenable to ISR and lab work per’s creation, Thor must spend $600,000
to earn a 25% interest and an additional
laide – with Enviro Copper holding earn-in to determine that the copper species pre- $400,000 to take it to 30% ownership of
Enviro Copper.
rights for up to 75% of both projects. Thor sent were recoverable.
The Kapunda ISR project is further sup-
will retain up to 30% equity in Enviro Cop- “The proof-of-concept stage has been ported by a CRC-P Commonwealth Re-
search Programme Grant for $2.85 million,
per prior to a proposed listing. successful in demonstrating that, from giving it funding clarity through the feasibil-
ity study process.
The announcement represents Thor’s both a technical and social viewpoint we
Billing said the introduction of Moonta
most decisive move yet in establishing En- should proceed to the next stage of work,” and the creation of Enviro Copper repre-
sented a “very exciting development” for
viro Copper as an ISR copper producer in Thor chairman Mick Billing said. “This next Thor’s copper strategy.

South Australia. stage [Stage 2] will include approvals pro- “[It is] potentially adding significant
scale to our copper interest by bringing
Thor had initially farmed into Kapunda in cesses, pump and environmental testing, the Moonta copper project together with
our existing interest in the Kapunda project
July 2017 with the intention of testing the and will incorporate a field recovery trial into a potentially large ISR-focused cop-
per business,” Billing said. “While Kapun-
deposit’s amenability to ISR. to generate solution and test a variety of da is comparatively more advanced, the
Moonta project, albeit at an earlier stage,
In December, the company announced metal recovery options.” provides potential for a much larger, and
longer term copper production entity.”
it had established proof-of-concept for in The Kapunda proof-of-concept work will
ISR processing has been prevalent in
situ recovery (ISR) of copper from Kapun- now be taken into the second stage with the US since the 1960s but, outside of ura-
nium, has rarely been used in Australia.
work on the larger Thor believes its application could prove
attractive in South Australia where opposi-
Moonta project to tion to mining development in agricultural
areas has grown particularly strong in re-
begin with refining cent years.

of the exploration “The non-invasive production technique
of ISR has the potential to co-exist with-
target of 238-310mt out significant disruption to farming and
once completed, have little to no impact on
@ 0.18-0.23% cop- future agricultural land use,” Billing said.
“ISR is an extension of proven technol-
per. ogy and has been in use since the 1960s.
With recent technical advances ISR can
Owned by An- now offer a lower footprint and is likely to
find further application in mineral recovery
dromeda Metals fields because it can coexist with other
land use activities.”
Ltd, Moonta project

comprises steeply

dipping zones of

copper oxide min-

eralisation hosted

within a deep

weathering trough

interpreted over at

least 11km of strike.

Thor has ranked

Moonta’s explora-

tion targets into

three tiers, each

requiring work to

define both JORC-

compliant resourc-

es and their ame-

nability to ISR. The

most advanced

targets are the

Wombat and Bruce

mineralised zones,

discovered in the

www.hillgroveresources.com.au Alford West pros-
pect area.

Page 46 APRIL 2019 AUSTRALIA’S PAYDIRT



SAREIC PREVIEW

Ausmex in the spirit
of finding IOCGs

Identifying world-class IOCG orebodies ed IOCG-style mineralisation. get a drill rig,” Morgan said.
is not easy, however, it does help to be Assay results reported by BHP showed “The next six months will actually be

looking in the right areas, as Ausmex Min- down-hole mineralisation intercepts company changing. We have some shal-

ing Group Ltd believes it is in Australia. ranging from 0.5% to 6% copper, with as- low gold resources in Cloncurry and

However, simply pegging land does sociated gold, uranium and silver metals. there are several CIP plants with capac-

not guarantee success, but applying new “BHP’s discovery confirmation late ity for toll treating. They are on granted

age technology and scientific smarts last year has given confidence that there mining leases so toll treatment for short-

may well help the process. are still world-class projects in SA to be term cash flow is a great story. But, within

That is the hope for Ausmex, which is defined. Technology is changing and we the next six months we expect some very

starting to get busy in the IOCG-bearing are using some of that latest technology positive drilling results out of these two

terrains of South Australia and Queens- which is related to geophysics and mag- conductive targets in SA and Queens-

land. netotelluric/audio-magnetic tools. There land.”

Last month, the company started a is still quite a lot to be found in SA for a The near-term opportunity Ausmex be-

higher resolution audio-magnetotelluric very long time yet,” Morgan said. lieves it has in Queensland is to monetise

(AMT) survey aimed at increasing data Along with Rio Tinto Ltd’s recently resources from the Golden Mile project,

resolution from an initial regional 10km identified Winu copper prospect in West- within the Mt Freda Complex, via poten-

spaced MT survey completed towards ern Australia’s Paterson province, BHP’s tially toll treating ore at nearby, under-

the back end of 2018 at the Burra pro- discovery has reinvigorated base metal utilised plants in Cloncurry.

ject, South Australia. exploration in Australia’s more remote Meanwhile, geophysical modelling

“We expect a lot more exciting results provinces and Ausmex is one company has identified a 2,000m-long by 400m

coming out of Burra. Not a lot of people looking to share some of the limelight. wide conductor on Ausmex’s tenements

understand magnetotelluric. Oz Minerals “I think there is a general market re- including Golden Mile, which plunges

[Ltd], BHP [Ltd] and Glencore are pretty covery which is happening right now for south towards Newcrest Mining Ltd’s

much the main ones that have used it genuine projects. There is somewhat of Canteen prospect.

and it works well. They get it, the pub- an exploration boom right now; you can’t Morgan believes Newcrest is onto

lic doesn’t get it, but we are start- a Tier 1 IOCG target at Canteen,

ing to get traction using it,” Ausmex however, the latter is staying quiet

managing director Matt Morgan told on the discovery.

Paydirt. “In the last couple of months we

“We can use the same techniques have doubled our share price so

in SA and Queensland; Glencore the market does understand the

has previously used MT underneath prospectivity and we are still a very

the Eloise copper mine, retrospec- cheap entry point in two big pro-

tively after it was defined.” jects. And, having Newcrest drilling

Work conducted by Ausmex in next door to us is fantastic. They

conjunction with the University of have spent a fortune and they are

Adelaide’s Institute of Mineral & En- back there again. They are doing a

ergy Resources revealed that future Rio Tinto and not telling anyone and

discoveries around Burra would be we may have a third of it [extending

made under cover. into our ground] if not more.”

Meanwhile, an AusLAMP MT Ausmex is planning a 10,000m

anomaly identified by Geoscience RC/diamond drilling programme to

Australia indicated that the hydro- depths of 250m to 650m to test the

thermal fluid compositions at Burra 2,000m-long conductive structure.

were in line with those of Olympic It appears Ausmex isn’t deterred

Dam and the Idaho cobalt belt, US. by the depths of exploration it will

Burra, 160km north-east of Ad- need to go to in both Queensland

elaide, is some distance from Olym- and SA with Morgan being driven

pic Dam, however, BHP’s potential by the growing thematic around de-

new IOCG mineralised system, mand for battery minerals.

65km south-east of Olympic Dam, “It’s what everyone knows; the

has nonetheless spurred Ausmex global demand for battery miner-

and other companies into action. als, but there is also a growing so-

Late in 2018, BHP reported that cial demand for copper. It is coming

a four-hole diamond drilling pro- Ausmex has a tenement suite covering about 7,000km from the likes of Ford wanting to se-

gramme totalling 5,346m intersect- under its control in South Australia cure their own copper supply; Korea

Page 48 APRIL 2019 AUSTRALIA’S PAYDIRT

is very bullish for copper for EVs, while coal and copper and we have been ap-
there is also demand for thermal coal be- proached by two or three parties already.
cause they can see a huge demand to The likes of lithium have come and gone,
power all these EVs,” Morgan said. but big copper projects, IOCG, porphy-
ries – everybody wants them. When you
“Copper is not only for the EVs, this is get a phone call from someone like LG
something not everyone has got; copper saying ‘please tell us when you start min-
for the infrastructure to power EVs. A lot ing’, out of the blue, that is great and it’s
of the Korean and Chinese trading hous- all about copper.”
es have mandates and they have been
quite active since. They were keen on – Mark Andrews
coal, they wanted to get back in thermal

YTGOOEUDTRASY An AMT survey was conducted
over Burra in March

Ausmex has a busy exploration programme
lined up in 2019

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AUSTRALIA’S PAYDIRT APRIL 2019 Page 49

BATTERY MINERALS REVIEW

EV adoption sends Europe
scrambling for supply

An impending tipping point for EV adoption has sent the
world’s major economies scrambling to secure access to
the critical raw material inputs required for batteries and Australia

is now firmly on their radar.

The uncertainty surrounding future EV CRM4EV) Bert Witkamp visited Aus- significant,” Witkamp said. “Now, many
uptake is so acute the International tralia last month hoping to build con- countries and companies see it as the
Energy Agency has established a task- nections between all EV stakeholders way forward. Tesla is the No.1 luxury
force specifically focused on assessing – from mine gate to car showroom. brand in the US by far and in Norway
the impact of EV mass development on 60% of new cars in 2018 were EVs.
critical raw material needs globally. “We are looking for mining industry VW plans to stop combustion engine
participants because it will be a very production after 2026. Volvo has made
The taskforce – Task 40 of the Hybrid intimate relationship [across the sup- similar announcements.”
and Electric Vehicle Technology Collab- ply chain],” Witkamp said at Paydirt’s
oration Programme of the International Battery Minerals Conference. “Australia However, even that rate of adoption
Energy Agency – has 18 member coun- is an important supplier for lithium and is set to be superseded in the coming
tries, and has been mandated to identify other minerals such as nickel and the decade as EVs reach price parity with
the trends likely to emerge from mass potential for Australia to supply these traditional combustion engine cars.
EV development. It will assess the im- critical minerals is huge.”
pact of EVs on critical raw material “People won’t buy old technology
needs and report back to policymakers Forecasting battery material needs is when there is new technology avail-
and industry leaders on likely scenarios made more complicated by the moving able and it is cheaper,” Witkamp said.
in coming decades. feast which is EV development. There “When we get to that tipping point, it will
are now 5 million EVs on the world’s go very fast; more than analysts think.
Of particular concern is the impact roads, a figure which just a few years It’s not a case of if it is going to happen
on critical raw material needs and their ago would have been seen as fanciful. but when.”
associated supply chains. Programme
director for the taskforce (known as the “Even three years ago, at a political That will undoubtedly put pressure
level no one believed EVs would be that on the supply of key lithium-ion battery
inputs such as lithium, cobalt, nickel,
graphite and rare earths. Witkamp said
accessing these commodities is of in-
creasing concern to Europe, the UK,
Japan, Korea and the US as China cur-
rently dominates the supply chains.

How security of supply can be
achieved will be a key task of CRM4EV.

“European countries wish to have the
important part of the EV value chain –
manufacturing of the batteries and the
battery materials – located in Europe,”
Witkamp said. “So, there will be a focus
in CRM4EV on potential bottlenecks in
raw materials,” Witkamp said. “There
are many opinions and forecasts on
what material volumes will be needed.
Three or four years ago, European poli-
ticians were concerned about lithium,
last year it was cobalt, next year it will
be nickel.”

Witkamp said complicating critical
mineral demand forecasts were envi-
ronmental and social issues stemming

Page 50 APRIL 2019 AUSTRALIA’S PAYDIRT