December 2020 - January 2021 VOLUME 1. ISSUE 289 $11.95
ODYSSEUS
A new nickel mine on the horizon
Africa Down Under
Review
West African:
Against the odds
Australia’s Paydirt December 2020
Diggers & Dealers Review
l 11
Battery Minerals Spotlight
ISSN 1445-3436 343007
l
771445 9
westernareas.com.au
contents
PAYDIRT (ISSN 1445-3436) NEWS
Published by 8
Paydirt Media Pty Ltd. 2020 has seen the return of IPOs on the ASX and
A.C.N. 063 985 133 amid the fresh faces bringing something old and
something new to the market, there has been one
Head Office: company turning around its fortunes amid the
Suite 9, 1297 Hay St, West Perth gold hype – Gascoyne Resources.
Western Australia 6005 From market darling to the edge of extinction,
P.O. Box 1589, West Perth Richard Hay and Co. have got the ship back on
Western Australia 6872 course. Mark Andrews reports
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426
[email protected] 26 COVER
www.paydirt.com.au
From explorer, to developer and now gold
producer; West African Resources’ (WAF) rise in
Burkina Faso has been one of Australian mining’s
Editorial: most outstanding African stories. The company
Editor: Dominic Piper has reached producer status despite a series
Deputy editor: Mark Andrews of market and geopolitical events all capable of 26
Journalist: Michael Washbourne stopping progress of its Sanbrado gold project.
Art director: Nick Brown WAF managing director Richard Hyde speaks to
Contributors: Brendan Ryan Dominic Piper about how the company has ridden
(Johannesburg) the highs and lows of the last 10 years to become
a bona fide gold producer
Advertising:
Advertising manager: Richa Fuller
Subscriptions: Kate Blanchard 32 AFRICA DOWN UNDER
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426 Despite the lockdowns and hard borders, Africa
Down Under conference organiser – Paydirt
Pre-press and printing: Media – was determined to see the show go
Vanguard Press, 26 John St, ahead and, it did so from November 4-6 at the
Northbridge WA 6003 Pan Pacific Hotel in Perth. The mixed physical/
Member of: virtual offering allowed participation from all
key stakeholders from whichever time zone
they were in, as Africa Down Under once again
showcased the importance of Australia-Africa
relations. In this edition, 52 pages are dedicated
to a full review of Africa Down Under and a
prelude to the Mining Indaba virtual conference
Paydirt Media in February 2021 32
Executive chairman: Bill Repard
Finance manager: Giovanny Jefferson
Accounts/administration: 84 DIGGERS & DEALERS
Lana Luketic It was fitting that WA Premier Hon Mark
Conferences: Namukale Nakazwe, McGowan delivered the keynote presentation
Christine Oelschlaeger, at Diggers & Dealers in Kalgoorlie this year
Mitchelle Matambo, Melita Fogarty given the importance the State’s mining sector
has played in maintaining wealth and jobs for
the nation during 2020. It was testament to the
December 2020 - January 2021 VOLUME 1. ISSUE 289 $11.95
ODYSSEUS conference organisers that almost 2,000 people
A new nickel mine on the horizon
turned up to the three-day event and once again
Africa Down Under Paydirt was front and centre to report the key
Review
Cover image: trends shaping the mining sector
West African Resources
West African:
Against the odds managing director Richard
Australia’s Paydirt December 2020
Hyde outside the company’s 96 BATTERY MINERALS
l Diggers & Dealers Review
ISSN 1445-3436 771445 343007 office in Subiaco, Perth
l Battery Minerals Spotlight 11
Is the lithium sector primed to bounce back?
9
westernareas.com.au
Member of: Michael Washbourne talks to key players in
the sector as part of this month’s feature which
includes companies making their way in the 84
base metals space
Registered by Australia Post PP 643938/0071.
No pages or articles in this publication may be
reproduced in any form without the consent of the
publisher. This includes photographs either taken
by Paydirt Media staff or provided by other parties.
Australian mining’s guide
to pandemic survival
hile the rest of the world cannot get and the future of the industry as a whole.
W out of 2020 quick enough, the Aus- This is why WA miners have taken their responsibilities so seriously
tralian mining sector will be reflecting on a and points to another key trend of the year – the increasingly sophisti-
year in which it has rarely had it so good. cated approach miners take to their position in Australian society.
The pandemic has obviously changed The Juukan Gorge Caves incident aside, Australian mining has grown
many things in the industry but since the its position as a leading ESG performer and ethical supplier of commodi-
threats of March and April when it ap- ties in 2020. It is a position which is important not only for recent devel-
peared the entire industry and its key customer markets may shut, miners opments but also longer-term trends around international relations and
and explorers have enjoyed a record year. trade and supply chain integrity.
As the global economic ructions brought on by COVID-19 threatened The end of President Trump will not mean the end of diplomatic and
to derail the industry, there would have been few brave enough to predict trade tensions; indeed China and others may feel emboldened with the
Western Australia’s FY2020 figures would show records for total exports loose cannon of the White House out of the way.
($173 billion), iron ore exports ($103 billion) and gold exports ($16 billion). It is a difficult situation for Australia whereby it is attempting to be a good
Everything which has occurred since July 1 would suggest that record international citizen and maintain the rules-based order by pulling its larg-
could be broken again for FY2021 as governments look to stimulate their est trading partners into line.
economies in a – hopefully vaccinated – world but geopolitical instability The Australian mining industry obviously relies heavily on ongoing
and economic uncertainty ensure gold trade with China and the WA Govern-
remains an important asset class. ment has been quick to make its feel-
There are several factors allowing this ings known.
to occur. At the beginning of the pan- “I don’t think it is a good idea to shout
demic financial markets were spooked “ There may be chaos and at your biggest customer,” WA Minister
about the potential impact it would have confusion at every turn for Mines and Petroleum Bill Johnston
on the Chinese economy. When Beijing said at Africa Down Under.
placed the entire country into what at the in 2020 but in 2021 and beyond, It is tantamount to a free hit for a
time seemed a harsh lockdown, com- Australian mining could provide State Government when it can give its
modity prices tumbled. thoughts on foreign policy without hav-
However, as the virus spread inter- safe harbour for a new era of ing to take any of the responsibility (a bit
nationally, the demand side shock was international trade. like the Prime Minister and his cajoling
replaced by supply side uncertainties, of states on hard borders).
particularly in key export markets such As ever in the world of diplomacy, the
as Latin America where coronavirus path forward for Australia is not clear
was quickly running out of control. and the balancing act is likely to domi-
At the same time, WA’s mining industry and State Government had nate the national agenda in 2021.
struck an accord over how to handle the pandemic. Speaking at Diggers The growing diplomatic tensions between China and the West do em-
& Dealers, WA Premier Mark McGowan said he felt sick when the list of phasise the growing concerns globally over supply chains. This problem
industries likely to close during the lockdown was distributed to the na- has been bubbling away for several years – really since China pulled the
tional cabinet. plug on rare earths exports in 2012 – but Western countries and compa-
“WA refused to close the WA resources industry not only for the em- nies are increasingly concerned about where and how they source key
ployment it sustains but it would create turmoil across Australia and the commodities.
global economy and the country would lose the revenue it would gener- Australian mining’s reputation on ESG and other matters means do-
ate to respond to the pandemic itself,” he says on page 84 of this edition. mestic and even overseas operators are in a good place.
“That is, to fund the hospitals, police and support services and the income As McGowan said at Diggers, WA is the most ethical producer of min-
it would provide to the Commonwealth Government. erals in the world – no slavery or child labour, good environmental and
“When I saw it was suggested we close resources, I said: ‘No, what we safety standards and thanks to the widespread adoption of renewables,
need to do is manage through this.’” one of the lowest carbon footprints.
McGowan has taken considerable criticism for his strict decisions over At Africa Down Under we saw that Australians in Africa can also bene-
borders during the pandemic but his Government’s willingness to show fit from the country’s ESG credentials. When the manufactures inevitably
adaptability during the early stages helped stave off any negative eco- go to Africa for supply of key commodities, they will want to do so with a
nomic impacts. trusted partner and who is more trusted than Australian miners?
The Government and industry worked together to set protocols to en- There may be chaos and confusion at every turn in 2020 but in 2021
sure the industry could continue to operate and move people around, and beyond, Australian mining could provide safe harbour for a new era
even when the intrastate borders were in place. of international trade.
The industry took its role very seriously. Talking to many executives,
they know if an outbreak was to occur in WA, particularly at one of their [email protected] @DominicPiper
mine sites, it would have massive ramifications for the State, its economy
Page 4 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
A LEADING
MINERAL DRILLER
IN WEST AFRICA
AND THE AFRICAN
COPPER BELT
We understand drilling. We have staked our reputation on this and our
commitment to providing our clients with superior service. Backed by
decades of experience and staffed by highly trained employees, our
customers know that they can count on us to meet their highly specific
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PUBLIsHeR’s note
We at Paydirt Media have enjoyed many
proud moments throughout the course of our
26-year history and the Westrac Gala Dinner
to conclude Diggers & Dealers 2020 was
recently added to the fond collection
of memories for the company.
Diggers & Dealers chairman Jim
Walker, Paydirt’s Dominic Piper
and Perth Mint chief executive
Richard Hayes
he recognition came at the gala dinner on October 14 under sands of kilometres each year to cover and report on mining and
Tthe makeshift tent adorned on the perimeter of the Goldfields exploration projects. Our journalists have visited some of the
Art Centre with Paydirt editor, Dominic Piper, awarded the 2020 most remote projects in the world – from West Africa, through
Diggers & Dealers Media Award for his unrelenting commitment Latin America and across Asia, and even to the northern most
to both company and industry. parts of mainland Europe.
Dominic joined Paydirt Media 15 years ago and has been There would be few parts of Australia that Dominic and his
editor of Australia’s Paydirt and Gold Mining Journal magazines team have not visited – whether it has been a small exploration
since 2010. project in Tasmania or a major mine site in the north-west of
Tributes flowed for Dominic well into the night and thereafter Western Australia. Their approach in Australia and abroad is to
from friends, family and acquaintances, with none prouder than report the facts and tell a good story; warts and all.
Paydirt executive chairman Bill Repard. As both a publisher and businessman, I tend to think that there
are too many awards handed out around across the mining sec-
In my role as publisher of Paydirt and Gold Mining Journal I tor, and indeed many other industry groups. Having said that,
have to admit that I seldom have the time to contribute words or the Diggers & Dealers awards for best miner, dealer and emerg-
comments to our magazines. A break with tradition this month ing company, along with the media award, are the pinnacle of
as I would like to acknowledge our editor, Dominic Piper, whose the resources sector, and Dominic’s award is recognition, albeit
contribution to the mining sector was recognised at last month’s in my opinion, long overdue, of his professionalism as a journal-
Diggers & Dealers Gala Dinner in Kalgoorlie. ist, editor, leader and promoter of our industry.
Dominic was awarded the 2020 Media Award in recognition of
his work as a journalist and for his leadership of our magazines. See Diggers & Dealers 2020 event wrap and other award
In normal non-COVID times Dominic and his colleagues, Mark winners starting on page 84
Andrews and Michael Washbourne, travel hundreds of thou-
Page 6 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
tick tick
tick tick
tick tick
tick tick
tick tick
neWs
Gascoyne ready to make hay
ascoyne Resources Ltd’s second was appointed chief executive in April the future of the company.
Gcoming became official last month 2019 after a four-year stint as general “Throughout the whole period I
when it was reinstated on the ASX. manger of Evolution Mining Ltd’s Mt thought we’d see a massive turnover
Forced into voluntary administration Carlton operations in Queensland. of our technical staff and people, but
in June 2019 due to poor mine plan- Hay’s time at Mt Carlton saw him de- we have actually had an incredibly
ning and underperformance of the re- liver Evolution a mine operating under loyal team; that is very positive,” Hay
source at its Dalgaranga gold mine in a scenario of sustained low AISC and said.
Western Australia, Gascoyne plunged strong operational cash flows, while “They could all see this opportu-
from one-time market darling to the also extending mine life. nity and to be reinstated on the ASX
brink of collapse. Furthermore, Hay spent time as man- is a fantastic achievement; we have
Despite the nuances of being in ad- aging director of Dampier Gold Ltd fol- achieved something that is very, very,
ministration and the ensuing legal bat- lowing almost 15 years with Barrick Gold rare. Not only that, but we gave the
tle in the Federal Court of Australia Corp in various mine managerial posi- banks all their money back, we have
with Habrok (Dalgaranga Pty Ltd), tions across WA. given all the unsecured creditors 100c
which claimed “alleged deficiencies in With ample skin in the game, Hay in the dollar effectively and that is also
the administrators’ report to creditors”, will call on all his experience to contin- a very, very, rare outcome.
there was no deviating from the strat- ue Gascoyne’s revival at Dalgaranga “We are very proud of that and we
egy the new-look team was unrolling to and lead the company to realise its full want to continue to grow it for our
save Gascoyne. potential. stakeholders, and our shareholders
There was no stronger demonstra- A board composed of George Bauk have had the opportunity to come back
tion of support for Gascoyne’s new (non-executive chairman), Rowan John- in with the entitlement offer to keep
plan than the successful $125 million ston (non-executive director) and a man- themselves whole if they wanted to.”
recapitalisation effort, largely support- agement team including David Coyne Supporters who stuck with Gascoyne
ed by lead manager and full under- (chief financial officer), David Baumgar- can be reasonably pleased with the
writer of an $85 million equity raising tel (Dalgaranga general manager) and company’s resurgence underpinned
– Cannacord Genuity (Australia) Ltd – Shane McBride (joint company secre- by nine consecutive months of aver-
and a $40 million, three-year amortis- tary with Coyne) will ably assist Hay in age gold production from Dalgaranga
ing debt facility with Investec Bank plc, the Gascoyne turnaround. of 6,634oz.
completed in October. In the meantime, Hay has high “Even with the additional expenditure
Spearheading the changes at Gas- praise for the tight-knit bunch at Gas- we have incurred through administration
coyne has been Richard Hay who coyne, which share the same vision for and the Habrok proceedings we are still
Page 8 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
generating positive free cash generation Glenburgh), Mumbakine Well (near Kar- head grade has been,” Hay said.
and now with a far more manageable lawinda) and Beebyn (north of Cue). “The significance of Sly Fox is that if
debt balance, so the platform is there,” In the near term though, a concerted we can mine that at 2 g/t it will displace
Coyne said. effort to further add to the current sev- 100-200,000t of 0.7 g/t material and lift
About $5-6 million free cash flow is ex- en-year mine life at Dalgaranga is being our head grade and overall ounces re-
pected by Gascoyne this quarter, which made. covered.
is consistent with the previous two quar- Gilbeys Main Zone (GMZ), the produc- “That is the main aim of the game, I
ters. tion centre at Dalgaranga, is showing am not only targeting extra gold with this
Free cash generated by Gascoyne will signs of life below the current mine pit drilling I am also targeting higher grade –
be added to a tidy balance sheet under- design with an intersection in the south- grade is king, long live the king.”
lined by cash of $30 million and net debt ern end of 11m @ 4.2 g/t gold indicating Along strike back towards the Gilbeys
of less than $10 million as at October 26. the potential for higher-grade material at pit is Plymouth, which Hay says has al-
Subject to the facility with Investec, depth. ways been “challenged” and remains re-
40% of gold production from Dalgaranga Gascoyne will carry out follow-up drill- sourceless at this stage.
(November 2020 to April 2022 rolling) ing at Gilbeys in the December quarter, However, drilling – 20m @ 2.6 g/t gold,
has been hedged. while there appears to be significant mo- including 13m @ 3.8 g/t – is demonstrat-
“Our hedge price secured at $2,667/ mentum behind the Sly Fox and Plym- ing width and grade improvements with
oz is pretty high compared to what we outh deposits. depth.
were doing our initial planning on at the Both Sly Fox and Plymouth are within “We are very encouraged to put a
time we signed up with Investec, so we 1.5km of the 2.5 mtpa processing plant number of extra holes in there to see if
have already locked in more than suf- at Dalgaranga and are shaping as vital we can get enough grade and tonnes
ficient cash margin for the remainder of pieces of Gascoyne’s future. that the optimisation will pull down on.
the FY2021,” Coyne said. “They are two smaller deposits that We know the oxide simply isn’t going to
A geologist at heart, Hay is keen to have great potential and are really un- perform, we’ll get some low-grade out of
double the budgeted $3 million for explo- tested and starved of any exploration or it but it is not reliable, so we won’t spend
ration in FY2021 depending on the level resource definition drilling for the past too much time proving up the oxide
of success at Dalgaranga and Glenburgh five years. Sly Fox – 40m @ 2 g/t gold zone,” Hay said.
initially. – has been teasing me for quite some “We know the history of Dalgaranga,
Hay is confident it won’t be “hard find- time and we managed to get four holes all the problems occurred in the oxide
ing something” at Dalgaranga or Glen- in there. The significance of it in the core portion in the top 50-odd meters. We are
burgh, while regionally there is great po- is that we are seeing 15m true width or completely through that in the Gilbeys
tential seen at Mt Egerton (120km from wider at better grade than our average and Sly Fox pits.”
RC drilling of 4,000m will target the southern Gilbey’s, Sly Fox and Plymouth deposits, with resource extension drilling
to follow-up significant intersections, including 11m @ 4.2 g/t gold at southern Gilbey’s and 26m @ 1.8g/t at Sly Fox. An
aircore rig testing Dalgaranga regional exploration targets is expected to start later this quarter
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 9
neWs
Gascoyne is finding higher grade sweeteners to complement the existing mine life at Dalgaranga
If high-grade material continues at Sly nomic material. Our economic cut off is “That is more than likely moving to a
Fox “theoretically” the waste moved to 0.3 g/t gold at the moment. At this gold PFS and will involve a significant amount
access the ore may provide the opportu- price that is $80/g and we have one of of drilling, exactly how much we don’t
nity for a joint Sly Fox/Plymouth pit given the lowest cost processing plants less know but it will come out of this desktop
their close proximity. than $14/t, so there is quite a bit of mar- rework we are doing right now.”
“We may actually see a combined pit gin there at 0.3 g/t,” Hay said. Initial thoughts are that Glenburgh will
which will allow better economics to get “We are in different times, the gold host a couple decent size open pits where
down to the deeper portion of Plymouth,” price is different and it does give us base load tonnage will be sourced, with
Hay said. other opportunities but we are becoming the potential for high-grade gold to be ac-
It is likely that resources at both Sly much more focused and efficient on our cessed underground
Fox and Plymouth will fall into the natural costs and our processing plant. If we can “It needs more drilling but has the po-
business cycle at Gascoyne and will be achieve an uplift of 5% through our plant tential to give you 5,6,7 g/t underground
announced in April, unless greater po- that is worth a lot of money and we are feed which will be the grade sweetener.
tential is realised earlier. not short on tonnes.” That is what we will be looking at as a
Sly Fox and Plymouth are the type of Hay said Dalgaranga was a bulk gold possible project development at Glen-
organic opportunities Gascoyne is pur- mining play which meant “hunting down burgh,” Hay said.
suing for growth, while high-grade, plus- sweeteners” to increase the company’s Glenburgh could be in project develop-
2.5 g/t, stranded assets west of Mt Mag- grade profile would significantly impact ment in two years’ time and given solid,
net will also come under consideration the business. reliable production at Dalgaranga has
for the company in due course. Another fillip for Gascoyne would be been locked in, Hay is bullish on Gas-
“It will depend on how far the truck- making a fist of the Glenburgh project, coyne’s prospects in the market.
ing is,” Hay said. “There are also some some 400km north of Dalgaranga. “Going back to the $125 million re-
smaller deposits that could be grown out As a standalone project, an aspiration- capitalisation, the $85 million was pret-
that way.” al target would be for Glenburgh to be a ty much oversubscribed two times in a
The only plant west of Mt Magnet, Dal- potential replica of Dalgaranga. positive environment for gold,” Hay said.
garanga would welcome higher-grade Historically, Glenburgh in the southern “There is a huge amount of money
feed into the circuit, with the current life- Gascoyne region – was regarded a po- flying around trying to find good invest-
of-mine plan including four years of min- tential company-maker capable of run- ments and I think that leads into some of
ing and processing at about 0.5 g/t gold ning at a rate of 100,000 ozpa gold. our peers with similar production profiles
followed by processing of 0.3-0.5 g/t Hosted in a mineralised shear system and you look at their market cap and that
stockpiled ore for a further three years. similar to Tropicana, Glenburgh could be is almost double ours [$135 million]. So,
The seven-year life-of-mine targeted subject to a PFS in the near future. if you are looking for really good value
production scenario will see a total of “Can it be like a Dalgaranga – 60,70- and potential uplift just purely on a peer-
400,000oz gold extracted, based on the 80,000 ozpa producer – with a different to-peer basis we should in the near term
current 88% of proven and probable re- cost regime? We are looking at it through start to rerate just on that market com-
serve. that lens now and we are redoing the parative basis.”
“I think the message is slowly com- mineral resource estimate that is due – Mark Andrews
ing through that we are finding higher- late next month/early December, but cer-
grade material that will supplement and tainly in the December quarter. That will
displace and push out lower-grade eco- inform us of our next step,” Hay said.
Page 10 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
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Stevens shows steely
resolve for Coda
he sense of relief was obvious in Chris scribed within a matter of hours.
TStevens when Paydirt recently spoke with It was not uncommon for IPOs to close as
the Coda Minerals Ltd chief executive. quick as they opened in 2020 and the real
Stevens has worked tirelessly seeking to challenge for the wave of new shopfronts on
appease Gindalbie Metals Ltd shareholders the bourse is just beginning.
not interested in participating in a South Aus- Stevens believes Coda will now start to
tralian copper explorer after they had origi- flourish on the back of the work done behind
nally signed up for exposure to the iron ore the scenes prior to listing.
sector. “As a general industry comment, it is going
To make a tricky situation even more fickle to be an interesting challenge separating the Chris Stevens
for Stevens, the world had just started to come good projects, and really focusing on those hosted copper mineralisation at Elizabeth
to grips with the global COVID-19 pandemic. good projects, especially in gold,” Stevens Creek in the first instance, while Stevens said
“Nobody really knew where things were said. the IOCG potential across its tenure could not
going, the market reacted very strongly and “I think Coda has a huge advantage in hav- be ignored.
I remember coming back as the market start- ing already spent the best part of $6 million on “Emmie Bluff, which is already at potentially
ed to go and we were right in the middle of the tenure even before listing and then listing significant scale, is open to the north- east,
a voluntary share sale facility where we were with a solid cash balance. We came out of the north-west and to the south unconstrained by
looking to help those former Gindalbie share- IPO with an even better cash balance and an drilling for a good 5-6 km.
holders exit their holding and brokerage some exploration model based on geophysics and “We are definitely a group that likes to as-
fairly small holdings in the company,” Stevens advanced targeting; this is lower risk explora- sess the value of every next hole, we like to
said. tion in my opinion, it is not greenfields. I think understand why we are doing things, at what
“In some ways we couldn’t have picked we are getting better at explaining our explo- cost, what we expect from it; we do a lot of risk
worse timing to do that.” ration model, which I think will be reflected in assessment but not in an analysis-paralysis
Fast forward to October and Coda suc- the market.” type of way. We have had the opportunity to
cessfully completed an IPO and joined a Coda has assembled a land package at do that detailed work and now it is about get-
growing throng of new entities on the ASX. the Elizabeth Creek copper project in the ting the drill rigs turning,” Stevens said.
While part of the ASX IPO class of 2020 Gawler Craton covering some 700sq km in In addition to Emmie Bluff, targets such as
(see the February 2021 edition for a special the Olympic Dam copper province. the early stage Hannibal prospect are exciting
IPO feature), Coda is somewhat the alterna- Elizabeth Creek – 158,000t copper and Stevens with the chief executive backing in
tive kid in the playground with its copper ex- 9,400t cobalt indicated resource – is 100km his team’s systematic approach to exploration
ploration focus in SA. south of BHP Ltd’s Olympic Dam copper- in the region as opposed to the “haphazard/
West Australian gold floats have brought gold-uranium mine and 50km west of Oz Min- ad hoc” attention given to the area in the past.
sexy back to the IPO sector, however, Ste- erals Ltd’s Carrapateena copper-gold project. “We have done our exploration model, test-
vens isn’t fazed by the market attention af- Emmie Bluff – the flagship copper-cobalt- ed it and then taken that exploration model
forded to the cool kids in town. silver prospect at Elizabeth Creek – has been and applied it to other parts of the tenure we
Stevens’ confidence in Coda’s SA strategy subject of RC drilling and diamond drilling on believe is prospective for Zambian-style sedi-
appears well supported, given the $8.5 mil- a double shift basis recently. ment hosted copper deposits. We have also
lion IPO (before costs) was fulfilled oversub- Coda is chasing Zambian-style sediment-
been working on the IOCG potential, which
is much more expensive, deeper, higher risk
but higher reward. The three priority IOCG
targets [Emmie Bluff Deeps, Elizabeth North/
Chianti North and Elaine] are some of the
best I have ever seen and we are really ex-
cited by that,” Stevens said.
“Good solid mineral inventory from the me-
dium risk, high reward, Zambian-style sed-
iment-hosted copper is the No.1 aim for us
and then the much higher risk, higher reward
stuff is in our IOCG prospects.
“There is a lot of stuff on this tenure and it is
about trying to understand where to look; it is
the first time to my knowledge that someone
has got an exploration model together, espe-
cially the Zambian-style mineralisation, and
started to apply it.”
– Mark Andrews
Coda might be new to the ASX but it comes equipped with copper resources
in South Australia
Page 12 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
IPO party far from over
s the calendar rolled over into Octo- been working with new IPOs that are and uranium, an unprecedented global
Aber, Sherif Andrawes found himself only looking at getting listed in February/ health pandemic appears to be the main
asking if the rush of resources-based March, so from where I stand the pipe- underlying catalyst for the latest surge of
IPOs was capable of lasting beyond the line is looking pretty full for the next six new floats.
looming Christmas window. months.” Andrawes said the financial uncer-
Fast-forward one month to early No- Copper-gold play Native Mineral Re- tainty caused by the COVID-19 crisis
vember and BDO’s head of natural re- sources Ltd (NMR) is one of the newest and the associated government stimulus
sources was not only planning a suite of arrivals to the ASX at the time of print, packages aimed at keeping economies
new listings for the first quarter of next having raised an oversubscribed $6 mil- afloat during these trying times had cre-
year, but also anticipating the pipeline lion. The company started drilling its ated an unexpected pool of money look-
of mining-focused IPOs would continue Palmerville project, about 200km west- ing to find a suitable home.
well into the second half of 2021. northwest of Cairns, almost immediately “You’ve got all these things happening
“A month ago, I was thinking how long after its stock began trading. at the same time and so it’s resulted in
was this going to last, but a couple of NMR managing director Blake Can- this massive amount of money and mas-
things have happened since then,” An- navo said a detailed two-year explora- sive demand for these particular com-
drawes explained to Paydirt on the side- tion plan for its projects had been a key modities,” he said.
lines of Africa Down Under. point of difference with interested IPO “There’s a lot of money, particularly
“One is that Diggers & Dealers was investors. in Australia, in superannuation funds,
a very confident conference and I think “Usually most exploration companies PE funds, endowment funds, pension
quite a lot of transactions have come upon listing take anywhere from 3-9 funds…basically, institutional money
from that and will turn into things next months to start drilling because they that needs to justify itself and give a re-
year. I had the opportunity to catch up have to go and find their targets, where- turn to investors.
with quite a lot of the brokers and advi- as we have 10 drill-ready targets to hit “While COVID is around, the govern-
sors there and, without any exception, straight off the bat,” Cannavo said. ment policy is all about stimulus. And
they’re all saying [the pipeline of IPOs “Our chief financial officer Emma stimulus is generally about infrastruc-
will continue] at least until the middle of Dooley has done a brilliant job in map- ture and building things. So, if you’re go-
next year. Some were even saying to- ping out where all of that [IPO] money ing to build things – whether it’s bridges,
wards the end of next year; there’s no will go. We’ve got estimations for every airports, houses, whatever it might be
sign of this changing. cent of our expenditure. As a company – you’re going to need materials for that
“The reasons for that come back to in- we will be very transparent in how we and those materials, very simply, need to
terest rates being low for longer, COVID operate.” be dug out of the ground and that’s why
stimulus being there for longer…all of The ASX had 10 new resources floats a lot of mining and exploration stocks are
those things aren’t going to change for waiting to list before Christmas. An- in favour.”
at least the next 18 months and while drawes likened the current rush of IPOs Of the 10 new listings expected to join
they’re in place, the same situation will to a period two years before the GFC in the ASX before the end of the year, more
remain. late 2008 when he was typically working than half feature a connection to gold in
“For anyone wanting to get listed be- on one new float a fortnight. the prospectus.
fore Christmas, that window has now While that period coincided with a Andrawes said while new gold floats
closed. In the past couple of weeks, I’ve boom in commodities such as iron ore were typically the easiest to launch,
While most Victorians cannot wait to see the back of 2020, the “That charge has obviously been led by Fosterville making
team at North Stawell Minerals Ltd (NSM) have other ideas. that magnificent discovery in late 2015. It’s currently the
world’s highest grade and most profitable mine and I think it’s
Amid the longest lockdown period in an Australian state this
year due to a major outbreak of COVID-19, NSM listed on the made people realise there still might be a little bit of gold left
ASX following a $20 million IPO in late September. in Victoria after all.”
It was a milestone likely glossed over by many locals due NSM could not have asked for a better start to life on the
to their focus being elsewhere, but that failed to dampen ASX with its stock peaking at 55c/share within a month of its
the spirits of those at NSM, including chief executive Steve trading debut.
Tambanis. With $20 million in the kitty, the company has more than
“We had a phenomenal response to kicking off the IPO enough funds to complete an “aggressive” 75,000m
process,” Tambanis told Paydirt. “We basically stopped drilling campaign across its 550sq km tenement package,
doing presentations in the first week because we had more immediately adjacent to the 5 moz Stawell gold mine in north-
than enough support and interest to kick off a $20 million IPO. west Victoria, over the next two years.
“Victoria as a state is underexplored compared to the rest Drilling kicked off at the Wildwood prospect last month. It is
of Australia, it is actually one of the world’s most prolific one of about 40 priority targets identified by the company’s
orogenic gold belts and I think it’s fantastic to see so much geological team prior to listing.
interest in Victoria at the moment. There’s maybe 30 listed “The focus for us is going to be on Magdala-style domes
producers and explorers in Victoria now, whereas there and we have quite a few domes that we can see with the
wasn’t the fraction of that amount two years ago. geophysics in our tenure,” Tambanis said.
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 13
neWs North Stawell Minerals listed on the ASX in late September while Victoria
was in a second lockdown period due to a COVID-19 outbreak
“As we update the geophysics, the geochemistry and the
structural work, I think we’ll be getting more targets and some
of the lesser targets will fall away. It’s what happens when
you’re continually ranking and re-ranking prospects, but the
key point for us is getting through all the priority ones and see
what we come up with.”
NSM has also formed an alliance with the owners of the
Stawell gold mine, who along with the Victor Smorgan Group
held a 66.7% stake in the company following the IPO.
Experienced Victorian geologist Brad Robinson has also
joined NSM as exploration manager, having made several
discoveries around Stawell in recent years.
“In a 2.5-year period, Brad and his team have delivered over
600,000oz of new gold, which is pretty amazing given the mine
itself has churned out 5 moz since 1860,” Tambanis said.
“It was only a few weeks ago they drilled 98m @ 5.81 g/t, so I
really wouldn’t be surprised if they have claims over 1 moz of
discoveries by this time next year. Again, it just goes to show
that the Magdala mine keeps on keeping on.”
Upcoming resources floats ASX ticker IPO amount Focus Listing date
Akora Resources Ltd AKO $5 million iron ore Dec 11
Aurumin Ltd AUN $7 million gold Nov 30
Caspin Resources Ltd CPN $8 million nickel-copper-PGE Nov 25
Prospech Ltd PRS $5 million gold, silver Dec 1
Rincon Resources Ltd RCR $6 million gold, base metals Dec 10
WA Kaolin Ltd WAK $22 million kaolin Nov 27
Westar Resources Ltd WSR $5 million gold Dec 14
Desert Metals Ltd DM1 $5 million nickel, copper Dec 9
Kingfisher Mines Ltd KFM $6 million copper-gold Dec 17
Medallion Metals Ltd MM8 $20 million gold, base metals Dec 24
particularly at a time when prices for the
precious metal are at record highs, any
prospectus that is primed to take advan-
tage of an opening in the market will thrive.
“These things usually don’t happen
overnight, but when you see an opening
in the market, suddenly things can be ac-
celerated,” he said.
“Some are just waiting for the right time,
whereas others are quite reactive and we
particularly see these in the mining ser-
vices where you’ve got owners who are
perhaps heading towards retirement or
selling out and haven’t been able to in the
last few years because the demand hasn’t
been there. These are often established
businesses and we’ve seen quite a few of
those come through like Dynamic Drill and
Blast [Holdings Ltd] and Duratec [Ltd].
“There’s quite a long list of those and this
is just the right window to do it.”
While lithium floats are few and far be-
tween due to depressed prices for the bat-
tery mineral, other key battery inputs such
as nickel and copper feature prominently
in the upcoming IPO pipeline. In fact, the
NMR team targeted a listing based ex-
clusively on its exposure to the red metal
Copper was integral to the prospectus of Native Mineral Resources
Page 14 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Sherif Andrawes
– with a gold sweetener – and the oppor- company director James Walker as the
tunity to tap into end uses such as solar non-executive independent chairman.
farms and electric vehicles. Cannavo said he was looking forward to
Copper was an opportunity which launching into drilling and other explora-
NMR’s Cannavo has laid claim to having tion work “the day after we list”.
recognised as far back as five years ago “We will drill the first 10 holes, find the
when commodity prices were on the slide. five best results out of that and we’ll then
However, he believes that foresight is ulti- do another five deeper holes down to
mately what led him to Palmerville and the about 200m,” he said. “That will give us
Mt Morgans project, also in Queensland. 2,000m in the month of November alone.
“There wasn’t a huge demand, but I We’ll then collate all of that information,
could see that changing and that’s what send it to the laboratories and we should
actually made me start researching for the have those results back early January.
tenements that had historical value in cop- “This is not a greenfields play, we’re ac-
per and gold,” Cannavo told Paydirt. tually going into something that we’re very,
“Palmerville has quite a history of cop- very established on. Everything is in place
per and gold and when I was introduced to for us to go post IPO.
the project, I thought straight away ‘we’re “For the three board members, our
on the money now’. We’ve been really shares are escrowed for two years so we
lucky to get 1,820sq km of tenements up won’t be going anywhere. We’re here to
in North Queensland and now we’ve got turn this into an operations company. This
Newcrest [Mining Ltd] basically surround- isn’t a slow exploration play, we want to be
ing us. an operator.”
“That tells us we’re not the only ones NMR also has a project in the Eastern
who did our homework in this area.” Goldfields of Western Australia which it
Joining Cannavo on the NMR board is plans to start exploring soon.
The Wests Group Australia chief executive – Michael Washbourne
Philip Gardner – also currently overseeing
management of the Newcastle Knights
rugby league team – and experienced
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 15
neWs
A new industry unlocked
Paydirt editor Dominic Piper posed all things potash to
Mark Savich (Agrimin), Tony Swiericzuk (SO4), Keren
Paterson (Trigg Mining), Matt Shackleton (Australian
Potash) and Rudolph van Niekerk (Kalium Lakes)
raditional commodity stories, particular- year (September 2021) with the success of came to the fore in Geoscience Australia’s
Tly in gold and nickel, have been hard to each project important in showcasing what Critical Minerals report (2018) whereby the
overlook in 2020 given the thematic driving the industry is about. brine potential of all the salt lakes in Aus-
positivity in each sector. “We are not mining hard rock, we are not tralia was highlighted.
It would have been remiss then for Pay- drilling and blasting, and we are not dig- “I think as part of that [report] also came
dirt Unlocked – Paydirt’s latest network- ging great holes in the ground; it is more the evolution of thinking of minerals and
ing initiative – not to have given the mov- about infrastructure and logistics. We are metals on rock to minerals in brine,” Trigg
ers and shakers in both sectors the floor at putting in short bores – 100m into an aqui- Mining Ltd managing director Keren Pat-
various times this year. But it was equally fer – bringing up brine, digging some quite erson said.
pertinent that the monthly lunch time gath- shallow trenches [5m],” SO4 managing di- “Going to university in WA, it was all
ering should acknowledge the burgeoning rector Tony Swiericzuk said. about hard rock miners who only think
sulphate of potash (SoP) sector. “The brine gets channelled by pumps about metals coming from rock – iron ore,
The richness of Australia’s mineral en- into large ponds [1.5-2m deep], so the gold, nickel – and it hasn’t really been until
dowment has long been celebrated and concept of mining the thing is not hard. It is recently finding minerals in water. There
now the select few aiming to pioneer the quite simple and once it is there, it is there; is also the whole good side of the story
industry believe SoP could emerge as a the infrastructure is fixed, and we are not where we’re talking about fertilisers, or-
significant and profitable sector, particu- moving diggers around the place. It is very ganics, the global mix of food security in
larly in Western Australia. different to a normal mine, but it is quite the international markets, so it is a new
A handful of companies are at various simple. I refer to it as basically – salt water thing for us.”
stages of exploration and development, plus sun makes fertiliser feed.” When setting out to find projects for
with Salt Lake Potash Ltd (SO4) on track It was agreed by all panellists there was Trigg, Paterson said involvement in a pro-
for commissioning at Lake Way in Q1. nothing complex about the nature of SoP ject that used solar evaporation to produce
After initially stuttering down the devel- operations, so why then is the industry a fertiliser ingredient suitable for organic
opment path at Beyondie, Kalium Lakes only starting to emerge now? food crops “ticked a few boxes” for her.
Ltd will follow SO4 into production next The significance of potash in Australia Trigg, with the infrastructure-assisted
Page 16 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Lake Throssell and Lake Rason SoP pro- is driving our investors’ interest.” from Wyndham port, Savich is certain that
jects, might just be starting its journey in Avid SoP followers expect the current the large, global fertiliser outfits are slowly
WA, however, the assets have the poten- 7 mtpa market to grow, with 3 mtpa set to realising that despite the remoteness of
tial to shape up in the ilk of Beyondie, Lake come online in Australia alone in the next some of the projects in WA logistics is not
Way, Mackay (Agrimin Ltd) and Lake Wells decade. a barrier to production.
(Australian Potash Ltd (APC)). Agrimin managing director Mark Savich “All the companies in WA have over-
“I think one of the primary drivers to the believes that over time a deeper SoP mar- come the logistics challenges. Certainly,
value equation with the WA SoP develop- ket will develop, and he expects seaborne that was one of the challenges in promoting
ment is that all of us here have projects trade to increase above the current 2-3 the projects to large fertiliser companies; I
that are all basically solar salt production; mtpa. think the key messaging to global partners
get the brine, evaporate it, get the excess Helping the industry mature will be a is around reliability, affordability and sus-
water off it, crystallise out the salts and standardised SoP price, Savich said. tainability of seaborne SoP,” Savich said.
separate the salts,” APC managing direc- “That would be great for industry, in my While there is great potential opportunity
tor Matt Shackleton said. opinion, and it will allow us to get the best to target WA SoP to markets overseas, the
“However, 55% of the world’s production price for our products in competition with opportunity to supply domestic users is not
is not produced that way, it is produced the rest of the world,” Savich said. being discounted.
through an industrial process; they are “In the last decade we have the accept- Meanwhile, developing skillsets within
much higher energy [intensive] projects. ance of SoP in China. Historically, SoP the WA SoP space will inevitably happen
“All of us here have solar salt projects, was a very niche form of fertiliser predomi- as the sector grows.
we do not require an industrial process nantly used in Europe and US and on the “I think we are all on the same page and
and that gives us a compelling cost of back of developing some very large SoP know that Australia uses 70,000 tpa SoP
production advantage. We will all sit in the projects in the early 2000s China went and 400,000 tpa of MoP and all of that is
lower quartile of production on the cost from no SoP production to 3.5 mtpa; half imported, so there has always been an op-
curve because Mannheim producers will the world’s supply today. portunity for a local producer,” Kalium chief
always be higher. That for me drives the “That drove a significant level of interest executive Rudolph van Niekerk said.
fundamental value behind this industry in that potentially demand for SoP could ex- “For us, one of the biggest challenges
WA which is why I can see it becoming sig- pand in other regions like India, Malaysia, has always been IP, it is not like you can
nificant in this state. Brazil but they all need reliable and afford- walk down St Georges Terrace and find-
“It is early stages in this state but you able supply. I guess WA being the best ing an engineer who knows how to design
can see it becoming globally significant exporting place on the planet we are very evaporation ponds and process plants.
because we are going to beat the biggest well positioned for mass seaborne supply Being able to find the right people, the right
producer – China – and is one of the rare into the market.” IP, the right benchmark is just critical.”
occasions where we can beat them on Having spent the best part of six years
costs. That is what is going to be driving and $40 million advancing and delivering – Mark Andrews
investor interest and that is certainly what a DFS on the Mackay SoP project, 840km
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 17
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Gibb flows into Eastern Goldfields
ctober brought another gold discovery in
OWestern Australia and another style of
mineralisation for the market to digest.
Three years ago, the presence of nuggetty-
style mineralisation in the State’s Pilbara cap-
tured worldwide attention as investors and
analysts scurried to the region to see whether
the conglomerate potential was akin to the
Witswatersrand Basin in South Africa.
A verdict on the conglomerate-style min-
eralisation in WA’s north-west remains in
progress, while the intrusive-related gold dis-
covered at Hemi by De Grey Mining Ltd, also
in the Pilbara, is being followed by the market
with more conviction.
Meanwhile, Gibb River Diamonds Ltd be-
lieves it has potentially unearthed something
new in the heart of the prolific Eastern Gold-
fields of WA at Neta lodes, part of the Edju-
dina gold project.
A maiden drilling campaign at Edjudina re-
sulted in “a major new shallow gold discovery
named Neta lodes”, the company reported in hadn’t been explored for before in the field Jim Richards’ Gibb River has an option to
October. where gold mineralisation is notoriously spot- acquire 100% of the Edjudina gold project
The announcement was made on the back ty in nature there. We had a few things come
of an intersection of 36m @ 4 g/t gold from together for this to happen and a geothermal lodes discovery was planned for the current
4m with the mineralisation – hosted in a soft model which hadn’t really been tested either. campaign, while Gibb would pursue other tar-
and friable argillic and hematite/limonite al- It was quite a powerful bit of project genera- gets if time allowed.
tered phyllite (no signs of sulphides) – open to tion we did, and we are good at that,” Rich- Cash has been some concern for the com-
the north, south and at depth. ards said. pany, which until the success at Edjudina had
An aircore programme of 1,250m aimed “There is a lot of noise out there at other been trying to land $2.5 million to conduct
at the Neta lodes extension target was being prospects and targets and I feel as though bulk sampling and trial mining of alluvial ma-
conducted when Paydirt spoke with Gibb ex- there are a lot of targets which are maybe not terial at Blina within the Ellendale diamond
ecutive chairman Jim Richards. top draw and I think that noise has diluted the project, West Kimberley.
“It is a new style of mineralisation and quality of our discoveries to some degree.” Richards believes that it has “major” dia-
Nevertheless, the success mond capabilities within its portfolio, however,
at Neta has driven Gibb to five- having reacquainted with Edjudina, where
year share price highs and Neta produced 16,710oz gold @ 47.4 g/t in
with the likes of the Gawler the early 1900s, the company’s path is cur-
prospect requiring follow-up rently being paved by a market in thrall of high
drilling and historic workings gold prices.
across 13km of strike, Rich- “Ultimately, the market is always right, and
ards sees potential for further the market is chasing gold,” Richards said.
discoveries at Edjudina. “We have about $1.7 million, the direc-
“The ability for us to contin- tors have just exercised $450,000 worth of
ue to build on the Neta lodes options and I have pumped a third of a mil-
discovery is considerable. I am lion dollars into the company in the last two
surprised that our share price months. Hopefully, that is a vote of confidence
isn’t higher given the shallow for shareholders that they have seen the di-
depth, grade and location; it rectors pushing their own money into the
ticks all the boxes really,” Rich- company.
ards said. “I think we are breaking new ground up
“The drilling is costing us there, finding new styles of mineralisation and
$150,000-200,000 and rea- doing things in slightly different ways to what
son for that is that the miner- others have done. Credit to the team here
alisation is so shallow. With at Gibb for acquiring the ground, making a
aircore drilling to get a feel for discovery and starting a second drilling pro-
Aircore drilling aimed at the Neta lodes extension target – a the strike, it is not like we are gramme and met test work all within a period
coincident gold-in-soils anomaly with calcrete cover that drilling 200-300m holes; we of three months.”
runs to the north and south of the Neta lodes prospect – are in mineralisation after 2m.” – Mark Andrews
started in November Deeper drilling at the Neta
Page 18 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Hits keep coming for nickel juniors
ickel exploration’s breakout year contin- The intercept confirmed Azure’s target, a from the nearby Silver Swan underground
Nued in November with Azure Minerals large EM conductor identified during a re- mine in order to drill Golden Swan from un-
Ltd and Poseidon Nickel Ltd announcing cent fixed loop EM campaign. The conduc- derground and test the rest of the Southern
new discoveries, and Estrella Resources tor is around 1,050m east-west, 150-200m Terrace for additional mineralised zones.
Ltd continuing its exploration success while vertical and remains unconstrained at depth, Given its proximity to the underground
Panoramic Resources Ltd is showing signs down-dip to the north. and surface infrastructure of Silver Swan
of operational revival. Rovira said the success of the first dia- and Black Swan, Golden Swan could be
Azure perhaps landed the best results mond holes at Andover meant the company quickly turned into a mining proposition.
with positive assays and further intersects was confident assays from ANDD0004 “We are also in a unique position to be
from its recently acquired Andover nickel- would show similar numbers. able to drill out the Golden Swan minerali-
copper project south-east of Karratha in “The strongly mineralised intersection in sation quickly and then determine the most
Western Australia. It shares were up 200% ANDD0004 leads us to believe that if the appropriate way to exploit this mineralisa-
in November to 96c at the time of print. 1km-long conductor plate is similarly miner- tion, should it prove economic,” Poseidon
On November 9, Azure reported hits from alised throughout, there is excellent potential managing director Peter Harold said.
drill hole ANDD0001 of 3.9m @ 2.85% here for a major new nickel-copper deposit.” Estrella is also treading historical ground
nickel and 0.47% copper and 5m @ 2.09% If Azure believes it is onto a new deposit in with its T5 discovery on the Carr Boyd Rocks
nickel and 1.14% copper, contained within a relatively new nickel province, Poseidon is project near Kalgoorlie.
an overall mineralised envelope of 39.7m @ confident it can get a new tune out of an old The T5 discovery hole, announced in Oc-
0.95% nickel and 0.52% copper from 81.6m. instrument. On November 20, the company tober, returned hits of 2.5m @ 3.66% nickel,
A second diamond hole, ANDD0002 announced it had intersected a “strongly 0.46% copper, 2.09 g/t silver and 0.78 g/t
returned a hit of 4.6m @ 2.41% nickel and mineralised” interval of 6.4m (3.7m true gold plus PGMs and 3.7m @ 2.85% nickel,
0.48% copper from 113m within a broader width) of massive/matrix nickel sulphides 0.65% copper, 0.13% cobalt, 2.58 g/t silver
interval of 13.6m @ 1.19% nickel and 0.38% in the latest hole drilled into its new Golden and 0.75 g/t gold plus PGMs.
copper from 104m. Swan nickel discovery, part of the Silver The latest hole, completed on November
The holes are the first to be drilled into An- Swan nickel project. 19, contained 25.7m of nickel-copper bear-
dover by Azure, but the company is already The first holes were drilled into Golden ing massive, matrix, disseminated and brec-
confident it will prove a genuine deposit. Swan in March to test a new EM plate on cia sulphides. The intercept was consistent
“While we’re still at an early stage of our what the company has called the South- with the EM plate conductor.
exploration, the intersection of good widths ern Terrace position. The first two holes hit Panoramic’s deep success had nothing
of nickel and copper sulphide mineralisation 23.1m @ 4% nickel and 0.4% copper (13.3m to do with exploration. Instead, the inves-
at shallow depths bodes well for further suc- true width), including 7.6m @ 8.8% nickel tors reacted positively to news the company
cess,” Azure managing director Tony Rovira (4.3m true width) and 9m @ 10.46% nickel was making better than expected progress
said. (4.5m true width), including 4.6m @ 13.8% on ventilation works at its Savannah North
The encouraging assay results were fol- nickel (2.3m true width). nickel orebody.
lowed three days later by visual interpreta- The newest hole confirms the continuity of Operations at Savannah were suspend-
tion of the fourth hole ANDD0004 showing the EM plate representing a 170m by 60m ed in April as the company battled seismic
38.1m of multiple zones of nickel-copper sul- orebody. events, equipment availability issues and
phide mineralisation from 336.1m. The company will now develop a drill drive ventilation problems. However, since re-
drawing the mine plan to focus on Savan-
nah North, the company’s fortunes have
improved.
The ventilation raise – being undertaken
by RUC Mining – is taking place in parallel
with a seven-month capital development
programme designed to open up a mini-
mum of four levels at Savannnah North. Un-
derground mining contractor Barminco has
opened the 1401, 1381 and 1361 levels while
the 1341 level was expected to be intersect-
ed before the end of November.
Panoramic managing director Victor Ra-
jasooriar said the programme was within
budget and “well ahead of plan”.
“Completion of the ventilation shaft is a
critical piece of work which will enable Sa-
vannah to be in a position where the com-
pany can consider the resumption of mining
and processing operations in mid-2021,” he
said.
The massive nickel-copper sulphides, including this core from Azure, have been coming out – Dominic Piper
of the ground thick and fast across WA recently
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 19
neWs
Bucket loads more on sees their role in that, that is exciting.”
Starting as chief executive at Schlam
in October, Thomas has settled in quick
and engaged with corporate advisors to
the cards for Schlam start planning the next stages of growth for
Schlam.
Having spent time with SGS based in
North America, Thomas’ familiarity with
att Thomas has entered the fray at nancial officer Ron Kurniadi who is well the region means he would be comfortable
MSchlam at the tail-end of a company- equipped to act as company secretary with enhancing the Schlam brand in the US
defining period. across all of Schlam’s entities given his and Canada, however, he is fully aware of
Four years ago Ryan Schlam pitched for experience in similar roles in Australia and the competition to be faced there.
Ausdrill’s DT HiLoad dump truck tray man- South East Asia at companies such as Despite the difficulties of travel during a
ufacturing business – a purchase which Clough, AGC and UGL. pandemic, Thomas is bullish on Schlam’s
proved the catalyst for exponential growth Key appointments are often brought into expansion prospects in the next 12 months.
for the company on the back of three other companies to save sinking ships, however, “Travel will be a restriction to a degree,
acquisitions and expansion into Western Thomas and Kurniadi start at Schlam in but not insurmountable,” he said. “I think
Australia’s Pilbara mining scene. much better circumstances. that there is a real possibility to expand
Acquiring DT HiLoad, which was estab- “What has been challenging is coming over the next 12 months. We are very open
lished in 2003, was aligned with Schlam’s into a business that was already travelling to expansion into different product lines,
existing suite of services and greatly boost- very well and wondering ‘how much longer different services, different geographies,
ed its manufacturing capabilities. is this going to go on for and how do we different partnerships; we are open to all
By bringing DT HiLoad under the Schlam sustain it?’,” Thomas told Paydirt. this.
banner, which has forged a reputation Thomas brings a “nothing is too tough” “We have a very proactive board, and
our strategic plan is guiding us in that direc-
tion. So, I do think we will have something
lined up in 12 months, whether it will be an
agency, dealership or will we have our own
manufacturing facility somewhere; that is
all being considered.”
Thomas said there was currently work
being conducted by Schlam in Kazakh-
stan, while opportunities in South Africa
were also under consideration.
“At the end of the day, we would like
to follow and support our clients on their
growth trajectory, but also remembering
that we are not producing widgets that can
be bagged and put on a plane. So, we have
to consider how we go about building and
constructing these trays, buckets and oth-
er products to the desired quality in other
countries,” Thomas said.
Matt Thomas joined Schlam as chief executive in October to lead a 330-strong workforce “We are working through these things,
and international expansion is high on my
through its flagship Hercules trays, Barra- attitude to Schlam and with his broad in- agenda. We are working with our corporate
cuda buckets and other ancillary products, ternational experience in similar roles with advisors, and part of their remit is market
the company essentially went from a busi- Coffey International, ASCO Group and entry strategies; what do they look like, how
ness producing 22 trays per year to servic- more recently HiSeis, he appears a good do we enter a new market and how to navi-
ing the major mining houses in WA with match to deliver a heightened level of or- gate all the complications that go with it.
many more annually. ganisational governance and operational “In terms of Africa, my experience at
“We are excited to have increased discipline to a team looking at broader ex- HiSeis is that there are many countries
our manufacturing capability in this area posure in the six continents where its prod- across that continent, which poses sig-
through the addition of a respected com- ucts are already present. nificant difficulties. West Africa has some
pany; DT HiLoad offers a unique product, With an emphasis on team and send- huge opportunities in places like Cote
offering large productivity and reliability ing everyone home safely day-in-day-out, d’Ivoire, while there are opportunities in
gains for our customers,” Schlam manag- Thomas is confident of achieving Schlam’s Egypt on the East Coast of the continent.
ing director Ryan Schlam said in 2016. ambition of being on every mine site in the Parts of Africa are difficult to get in and out
Ryan Schlam (executive director) has world. of, but we need to consider all those op-
continued the family legacy established “I truly believe that if we work as a team tions. We need to make sure that any in-
by his father, Barry, who started Schlam – bringing the collective wisdom and expe- ternational expansion is done so in a very
Welding in 1996, and now Thomas has riences of our people together – then that strategic manner. We don’t turn up and
been appointed chief executive to drive the is worth so much more than the sum of the think we are going to play like we do in Aus-
company’s next phase of growth. parts,” Thomas said. tralia because it is just not like that.”
Joining Thomas to steer Schlam’s three- “If everyone has bought into our vision, – Mark Andrews
year strategic growth plan is new chief fi- ideologies and principles and everyone
Page 20 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Mining operations at Century
are ramping up towards its
projected capacity of 12 mtpa
Century-centric
focus
ew Century Resources Ltd has no plans three-month period, net sales increased 38% could be brought into the mine plan as early
Nto add another producing asset to its port- to $74 million and the company reported a as next year, pending the outcome of ongoing
folio after walking away from an opportunity to healthy operating cash margin of $12.8 mil- optimisation studies.
acquire the troubled Goro nickel-cobalt mine lion and an adjusted EBITDA of $13.2 million. Last month the company took the opportu-
in New Caledonia. Those results were aided by the zinc price nity to reduce its debt by more than 50% after
Despite being comfortable with the techni- climbing 19% during the quarter to $US1.06/ raising circa $US25 million, underpinned by a
cal aspects of the mine and having a suitable lb. It was continuing to steadily rise at the time $US15 million placement to two existing insti-
financial package in hand to assume op- of print. tutional shareholders and an incoming inves-
erational control from Vale SA, New Century “We’ve seen a much stronger improve- tor, US hedge fund Luxor Capital.
elected not to proceed with a transaction due ment in the macro, albeit coming off a very “Our near-term debt repayment profile is
to concerns over the social licence to operate. low base obviously with COVID causing all really the single biggest risk on the business,”
While the temptation might have been to base metals to take a big price hit,” Walta said. Walta said. “We thought if we could remove
chase something else to fill the void that was “Treatment charges are dropping quite some of that debt, smooth it out nicely, that
created in the portfolio for Goro, the company rapidly and the zinc price is higher again, so just puts us in a very strong position to enjoy
will instead pour all its time and resources into assuming we can keep our production climb- 2021 and these benefits we see coming.”
driving further production improvements at ing, it’s setting up for a really good December Asked if he regretted not finding a way to
the Century zinc operation in Queensland. quarter. What I’m really excited about is the land Goro – a top 10 nickel and cobalt produc-
New Century managing director Patrick March quarter and beyond because we have er in its own right – Walta said it would have
Walta said the in-situ and regional exploration a number of internal projects to improve pro- been an easier decision for the company to
potential around Century currently supersed- duction and they really only start to kick into agree to imperfect terms than to exit in the
ed any asset his company could potentially gear in that March quarter.” best interest of New Century shareholders.
acquire. Treatment charges have been New Cen- “It was actually harder to stop and say
“You go through the motions of looking at tury’s main enemy since restarting the former there’s too much risk here,” Walta said. “It was
big projects and other assets and it does also MMG Ltd operation in August 2018, having definitely the right decision, we’re very happy
make you reflect and realise what you’ve got jumped from $US20/t at the time to more with that decision and very happy with the
as well,” Walta told Paydirt. than $US300/t in March 2020 amid the onset process we ran. We’re a much smarter busi-
“We had, to a degree, stopped looking at of the global COVID-19 pandemic. ness, much more sophisticated business, for
the in-situ potential and the broader explora- By the end of the September quarter, treat- doing that work.
tion potential [at Century], whereas the real- ment charges had dropped to $US110/t which “We have a good asset at Century we have
ity is we have these brilliant assets all in and is critical for New Century given it represents to protect. It’s not incumbent on the New Cen-
around our existing operating infrastructure. about 35% of the company’s C1 costs. tury board to ask its shareholders to go all-in
And with the zinc price on the rise, all that stuff “New Century, quite simply, it’s the single on another project. They’ve fought hard and
suddenly becomes economic and quite near- biggest leverage play you can get to zinc, supported the Century asset and they must
term for production. pretty much anywhere in the world, but cer- continue to generate rewards from that.
“The focus and the eyes are very much tainly on the ASX, and so that’s absolutely “In saying that, I think this has demonstrat-
lowered onto the assets that we’ve got and brutal when the macro is working against you, ed what New Century can do. We can have
the opportunities we’ve got well beyond the but it also works exactly the same way when conversations with the third largest resource
tailings [operation]. So now it’s very much the macro starts to work for you,” Walta said. company in the world, we can acquire their
a Century-centric focus and that will be the With Century now fully refurbished, New assets for nothing, or be paid to take them. Ul-
case for a while.” Century will look to deploy available capital timately, there’s going to be another Goro out
New Century’s decision to focus exclusively into other areas such as exploration. The there somewhere, but we’ll stick to our knitting
on Century appears to be the right one based company boasts in-situ resources of 9.4mt and deliver on Century first.”
on the September quarter results. While zinc @ 10.7% zinc-lead – an inventory that would
metal production was flat at 33,633t for the rival most junior miners in the space – which – Michael Washbourne
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 21
neWs
Podium steps up pandemic. Other factors outside of the pan-
demic impacting supply on top of physical in-
vestment demand, meant “platinum’s market
balance are far less negative than previously
to the plate expected”.
“Forecasts of platinum’s supply/demand
balance have moved from surplus to a deficit
of minus 336,000oz this year. Changes will
depend on the timing of, and extent to which,
lockdown measures are wound back, the
likelihood and implication of second waves
of infections, progress towards effective vac-
cines, and lastly, the longer-term implications
of governments economic policy responses
to the pandemic,” WPIC chief executive Paul
Wilson said in the September quarterly.
“Since the platinum and gold price lows
of March 19, 2020, at $US599/oz and
$US1,474/oz respectively, platinum has sig-
nificantly outperformed gold, rising 55% ver-
sus gold’s rise of 33% by the end of August.
At times of crisis this is no anomaly. In the
two years subsequent to the price lows of
the Global Financial Crisis in late 2008, plati-
num’s weekly returns outperformed those of
gold by between 30% and 65%. With invest-
ment demand and platinum’s fundamental
outlook up in 2020, this significantly enhanc-
es the outlook for platinum.”
Russia, the Great Dyke in Zimbabwe
and South Africa’s Bushveld Complex are
the great platinum producing regions of the
Building a high-tonnage PGM operation is Podium’s intention at Parks Reef world, however, all pose an element of juris-
dictional risk for investors and end users.
Dodd believes this jurisdictional risk, cou-
cash balance of $230,000 and the onset Interest in the PGM sector is amplifying pled with geological challenges in South Af-
A of COVID-19 made for a testing start to as the shift towards an emissions-free future rica, could benefit Australian projects such
2020 for Podium Minerals Ltd. around the world intensifies. Platinum’s role as Park Reefs.
But then a discovery with serious PGM in diesel engine emissions controls and as “It doesn’t look as though the big three will
potential near Perth helped Podium on its an electrode material for hydrogen fuel cells be expanding supply and the mines in South
way at the Parks Reef platinum-palladium- make it a potential game-changer. Africa are quite deep and require a lot of
gold-copper project, within the Weld Range Meanwhile, palladium is also an important people,” he said.
Complex in Western Australia’s Mid West. component in emission controls in petrol ve- “Our exploration target is between 3-6
An oversubscribed SPP in June injected hicles, including hybrids. moz [3E PGM] depending on whether we
over $1.5 million into Podium’s coffers, which Recent reports suggest China expects EV concentrate on the top 100m or go down to
now has $2.8 million in the bank. sales to represent 20% of new vehicle sales 200m, but we know [mineralisation] contin-
“We have had enormous support from by 2025 and while the uptake of EVs world- ues on forever and we have a very active 12
shareholders, backed up by Cannacord in wide is also anticipated to accelerate, hybrid months ahead of us.”
Perth and we have done a few corporate vehicles will continue to have a presence on Podium listed in 2018 with the Park Reefs
deals. We have adequate funds to do eve- the roads. project near Meekatharra in tow and up until
rything we want to do from here on. There’s “The EV story is all about Tesla and what now has had to deal with market vagaries,
no need for us to think about our next capital they have done has been excellent. Howev- while other metals of the future and gold
raising at present, we’re fully funded and fully er, the platinum sector is still front and centre have taken the spotlight.
budgeted,” Podium chairman Clayton Dodd and at the end of the day climate change is Nevertheless, the company’s corporate
told Paydirt. all part of it and the ultimate clean metals are advisors upon listing – Cannacord/Pater-
“Chalice [Gold Mines Ltd] waved the flag in PGMs,” Dodd said. sons – have strongly supported the story at
for the PGM sector and it is reflected in their Most of the world’s platinum ends up in Parks Reef, which could become Australia’s
share price with a healthy market capitalisa- the automotive sector followed by industrial first PGM-producing mine.
tion. They have institutions investing in the sector demand (21-26%), jewellery (26-35%) “It is all under mining leases, we have
PGMs space, which hasn’t been seen for and investments (up to 15%), according signed a Native Title agreement. Everything
years and years. to figures reported by the World Platinum is set, we don’t have to go through any of
“Chalice’s discovery has been an abso- Investment Council (WPIC) for the period that. We did all of that when we were a pri-
lute breath of fresh air and demonstrated the 2015-2019. vate company,” Dodd said.
PGM market is alive and well. The market is In September, the WPIC reported the Podium’s $2.8 million cash means it won’t
now turning around and saying PGMs are demand/supply balance had been signifi- have to enter the market for funding in 2021
worth looking at.” cantly reduced year-on-year because of the and can carry on with drilling at Park Reefs
Page 22 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
West where a resource upgrade in the vicin- initial mining inventory for scoping study pur- directly to a refiner. We don’t want to go
ity of 1.5-2.6 moz 3E PGM is targeted for Q2 poses is planned for the second half of 2021. down the smelting path as the capex will get
2021. It is not Podium’s intention to pursue an blown out for a small company like us,” Dodd
Current resources at Park Reefs West energy intense, high labour South African said.
total 1.14 moz platinum-palladium and gold platinum operating scenario in WA, with the “There has been a lot of migration with
plus 37,300t copper within 100m of surface company instead keen on producing a high- very talented and skilled metallurgists and
and across 6.9km of strike. quality concentrate to sell on to potential re- engineers from South Africa [in Perth] so we
Following the resource upgrade, drill- finers in Korea, Japan and or Europe. have been lucky enough to meet a number
ing will continue across the full 15km strike While opting to pursue an Australian-style of those people. But you can never go past
length in addition to resource extension drill- of operation at Parks Reef – high-tonnage, the quality of the Australian mining sector,
ing down to 200m, focused on the broader low-grade – Podium has been fortunate there are some seriously smart people here
exploration target of 3.1-5.8 moz 3E PGM at enough to harness skills from overseas at its that find an answer to the problem.”
Parks Reef. flagship asset. – Mark Andrews
Metallurgical test work and process de- “It is all about the metallurgy and we want
sign work will be happening in parallel, as an to produce a high-value concentrate to sell
Revving up PGM prices
ising auto production as vehicle mak- in deficit and one said the market would be end of next year.”
Rers tentatively recover from the corona- balanced. A similar Reuters poll three months ago
virus shock will lift prices of platinum and Around 80% of palladium in consumed returned forecasts for palladium to aver-
palladium, but both metals used in vehicle in vehicle exhausts, where it neutralises age $US2,050/oz in 2020 and $US2,138/
exhausts will struggle to score significant harmful emissions. Platinum is also used oz in 2021.
gains, a recent Reuters poll showed. for this, although more for diesel vehicles, For platinum the averages were $US832/
Palladium, which hit a record high of which have lost market share. oz in 2020 and $US913/oz in 2021.
$US2,875.50/oz in February and now Platinum is also used in jewellery and – Brijesh Patel and Peter Hobson,
trades around $US2,300, will average bought as an investment. Reuters
$US2,188 in 2020 and $US2,317 in 2021, Three analysts forecast platinum would
supported by supply shortages, according remain in surplus
to the median responses of 32 analysts and two predicted
and traders. deficits. The tight-
Platinum, which in March touched ening so far has
$US558/oz, its lowest since 2002, now mainly been due
trades at around $US870, and could to investors buying
flip into deficit. It is expected to average ETFs backed with
$US876 in 2020 and $US950/oz in 2021. platinum bars.
That means platinum could this year “The supply-
snap an eight-year run of falling average demand balance
prices and palladium will see its fourth and needs to tighten
fifth consecutive annual gains without ETF inflows
“Rebounding auto sales, tight mine sup- to recapture the
ply and little indication of new sources of $US1000/oz [level]
supply have helped palladium rise,” ETFS on a sustained ba-
Capital analyst Nitesh Shah said. “Con- sis,” Standard Char-
tinued tightness could see record prices tered analyst Suki
regained.” Cooper said.
Of the analysts who forecast supply and “We believe [this]
demand, four said palladium would remain is likely towards the
The conference proceedings
of the 2020 Australian
Nickel Conference is available
$60 (inc.GST)
Phone (+61) 8 9321 0355
6 October 2020 or email [email protected]
Perth, Western Australia
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 23
neWs
Africa in
Australia
goes another
level
he University of Western Australia
T(UWA) recently hosted an exhibition of
previously unseen photographs of the for-
mer Uganda dictator Idi Amin. The images
were part of a trove of more than 75,000
photographic negatives that were un-
earthed in the stores of the Uganda Broad-
casting Corporation, in Kampala, along with
a library of radio reels, and more than 100
films.
Since 2018, UWA, in partnership with the
University of Michigan, have been working Australian newspaper. UWA’s new platform is launching with a
to digitise such material, and to research UWA used the occasion of hosting this range of projects throughout Africa. Howev-
its provenance. In May 2019, the team exhibition to launch its new ‘Africa in Aus- er, they are also seeking new partnerships,
launched the first in a series of exhibitions tralia’ research and exhibition platform. This with companies and organisations working
to bring the material to wider publics, both in platform is developing an Australia-based, across the continent.
Uganda, and internationally. and globally connected, infrastructure for Companies are being asked to help the
The exhibition is accompanied by a richly digitising and researching African heritage, UWA team to identify relevant heritage ma-
illustrated new book: The Unseen Archive both in-country and in museums across terials in their African countries of opera-
of Idi Amin: Photographs from the Ugan- Australia. tion, and to sponsor pilot research projects
da Broadcasting Corporation which was It has the capability to identify relevant to look into these. The UWA team is espe-
pieced together by Derek R. Peterson and collections, to digitise and research these, cially interested in heritage collections and
Richard Vokes, Munich, Prestel. and to mount exhibitions, both in Africa, objects which might tell interesting new sto-
The Idi Amin project has helped UWA and internationally. The platform is also ex- ries about Africa-Australia relations.
achieve the ranking of Australia’s No. 1 uni- porting Australia’s world-leading heritage There is an opportunity for companies to
versity for research in African Studies and and museums expertise to Africa, and it is sponsor pilot studies in their country of in-
History, according to a 2020 survey in The helping African-Australian communities to terest, which can effectively raise their pro-
reconnect with their countries of heritage. file in-country through the media and other
streams and thereby enhancing their social
licence to operate credentials.
Companies can also generate network-
ing opportunities at the highest levels of
government, as exhibitions draw dignitar-
ies, from the Head of State down.
By sponsoring a pilot study, companies
can also benefit from building knowledge of
in-country heritage contexts, which is cru-
cial, given that legislative frameworks and
compliance are changing all the time, as
are public engagements with heritage.
Furthermore, a pilot study can help to
mitigate heritage-based risks, by helping
companies forge links with leading heritage
institutions, and individuals, which can be
drawn upon in the event of a subsequent
heritage-based crisis.
For more information, contact:
[email protected];
[email protected];
Page 24 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Opening opportunities for Australian investment and leadership in Africa
ADVOCACY More than just an industry body, AAMEG opens
opportunities for Australian investment and
leadership in Africa. AAMEG has facilitated $40
billion in exploration, extraction, processing and
INSIGHTS potential investment.
AAMEG includes more than one hundred members
CONNECTIONS from various sectors including exploration, mineral
and energy development; professional services;
and, resources services. It is a key conduit to
connect members with each other. Further,
AAMEG connects with Australian government
officials, African governments and international
organisations including NGOs.
Enquire about membership today at aameg.org
aameg.org
Meet AAMEG at Mining Indaba
Junior Mining Showcase Booth
# JM50
coVeR
Done by the forces
of nature
ood timing is usually a crucial ingredient for any mining success
G story but in West African Resources Ltd’s case, serendipity has
been notable by its absence.
ince its inception in 2010, the com- WAF arrived on the ASX in June 2010 on the Boulsa gold project and Sartenga
Spany has been hampered by a global at the height of the Australian market’s copper prospect in Burkina Faso.
gold sector crash, shifting investor senti- obsession with West African gold sto- “I had been working for RSG Global,
ment towards exploration as well as se- ries. Current executive chairman Richard doing lots of independent geologist re-
curity and public health issues in Burkina Hyde was the brainchild, putting together ports and valuations in that 2006-07 pe-
Faso. a team and portfolio based on the exten- riod when the market was red hot. I just
However, those obstacles have not sive knowledge he had gained running thought to myself: ‘I could do this’,” Hyde
prevented West African (WAF) elevating RSG Global’s (the forerunner of Coffey explained to Paydirt recently.
itself from greenfields junior to estab- International) West African geological “I looked in northern Ghana but could
lished producer in less than a decade. consulting business. only get bits and pieces of ground – noth-
Now, with a high-grade, high-margin West Africa was the hottest gold explo- ing of scale. I began looking at the geo-
mine at Sanbrado set to pump out more ration region in the world at the time and physics and old survey maps of Burkina
than 300,000oz in 2021, and the West ASX-listed juniors such as Ampella Min- Faso and despite the perception that all
African M&A rumour mill turning again, ing, Gryphon Minerals and Adamus Re- the deposits of size were in Ghana and
WAF may finally be on the right side of sources were catching fire. It was more Mali, it looked very promising.”
history. of a low-key start for WAF with the focus The company enjoyed some modest
Page 26 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Hyde, however, saw op- “
success but the falling gold We have kept the team together in March 2016, continued
price from mid-2012 extin- to return ultra high-grade
guished the West African and we are keen to build more intercepts, even the new
flame, leaving WAF and its projects, but they have to be the right study was quickly super-
peers in the region drifting. projects for us. We are not going to seded.
“M1 South changed our
portunity in the malaise, overplay our hand, put our balance whole approach to the pro-
securing the acquisition of ject because suddenly you
dormant TSX-listed explor- sheet at risk or do a project because are getting hundreds of
er Channel Resources and grams per tonne and vis-
its Tanlouka (now renamed we think we have to. ible gold right through the
Sanbrado) gold project in orebody,” Hyde said. “We
Burkina Faso in 2014. already knew M5 was big
The issue of timing again enough to fill the plant for
raised its head. Channel had defined a “We believed we could get $US50 mil- 10 years but M1 South quickly became
resource of around 750,000oz at the M5 lion, so we decided that based on the the difference for the project – the real
deposit but WAF’s own review reduced 300,000oz we had in pits over M5, that sweetener.”
that number to 300,000oz, inadequate we would build a heap leach operation. The high-grade orebody is the cor-
for full-scale production. However, the We bought a heap leach plant off Per- nerstone of Sanbrado, with the under-
company’s options were constrained by seus [Mining Ltd] for $200,000.” ground expected to deliver 650,000oz
the conditions of the licence. WAF returned to the drill bit in an effort @ 10.2 g/t gold over an initial six years.
“On acquisition, we only had 18 to improve the economics, a final roll of It provided the high-grade ballast of
months to convert to a mining licence,” the dice coming in December 2015 via WAF’s June 2018 DFS which identified
Hyde said. “So, we had to drill it out and a $2 million capital raising intended to a project capable of producing 211,000
complete a feasibility study to justify a fund drilling at M5 and two new targets; ozpa at $US551/oz AISC for five years
mining licence.” M1 and M3 and despite initially mixed and 133,000 ozpa at $US640/oz over a
The economics were underwhelming; results, an intercept of 12m @ 53.11 g/t full 11-year mine life.
an oxide heap leach starter project ca- gold, including 1m @ 534.45 g/t, from M1 Such numbers from Sanbrado placed
pable of producing 69,000oz in the first in February 2016 dramatically changed WAF in a similar class to the likes of Or-
three years with an NPV of $US86 mil- the complexion of Sanbrado. bis Gold and Papillon Resources; Aus-
lion, hardly inspiring to a market which The heap leach concept was aban- tralian juniors in West Africa which had
had fallen out of love with West African doned, replaced in February 2017 by a been snapped up by international play-
junior gold stories. nine-year, 150,000 ozpa open pit/CIL ers at big premiums.
“It was predicated on what we thought feasibility study model. However, as drill- Hyde had never set his sights on
we could raise in the market,” Hyde said. ing of the M1 South orebody, discovered becoming a miner but as Sanbrado
Sanbrado is corner-stoned by a high-
grade underground orebody, which is
expected to deliver 650,000oz @ 10.2
g/t gold over an initial six years
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 27
coVeR
bers. “The irony is today,
only two years later,
companies such as De
Grey [Mining Ltd], Chal-
ice [Gold Mines Ltd] and
Bellevue [Gold Ltd] are
able to raise hundreds
of millions without hav-
ing completed a study.”
After clocking up the
frequent flyer points,
the WAF team finalised
both debt and equity in
December 2018. Tau-
rus Funds Management
committed to a $US200
million debt facility and
the company raised
$US43.17 million on eq-
uity markets.
The decision had al-
ready been taken not to
cut any corners and by
the time construction
started in late 2018 it
was apparent Sanbrado
wasn’t being dressed
for sale, WAF was tak-
ing it all the way through
WAF has been in Burkina Faso for the best part of a decade and its community housing programme is just one itself. Lycopodium Ltd
initiative the company is involved in outside the mine gate was appointed EPCM
contractor, and Byrnecut
and Perenti were hand-
continued to grow, the company found raise funds to continue development,” ed the underground and open pit min-
the takeover window narrowed. WAF’s Hyde said. “I probably travelled around ing contracts respectively, hinting at the
predecessors had all been acquired by the world three times in 2018, from seriousness with which WAF was taking
North American firms but with the TSX in Sydney and Melbourne, to Toronto and development.
freefall, gold M&A activity was restricted New York, London, Singapore and Hong “You are a reluctant miner but not once
to North American and Australian port- Kong.” you hire the project team,” Hyde told
folios. Despite the compelling economics, Paydirt at the time. “Once you have the
“At that stage we assumed a takeover the WAF team received a tough recep- experience of people like [now former
offer would come and like any explorer tion wherever they went. This was 2018, chairman] Mark Connelly and [chief de-
who makes a discovery, the ideal sce- a period when risk profiles were so tight velopment officer] Matt Wilcox, your con-
nario for us was to accept a premium single asset developers, regardless of fidence grows.”
offer,” Hyde said. “But again, things potential, were largely deemed a step Financing and the move into construc-
began conspiring against us. The gold too far. tion were again clouded by external forc-
price was spiralling downwards, and the “The appetite wasn’t strong, we had to es, this time altogether more tragic as the
North American market was leaving gold force-feed them the story,” Hyde remem- security situation in Burkina Faso began
for marijuana stocks. All rapidly deteriorating.
the big miners were going Canadian geologist Kirk
“We had the tragedy of
the $US185 million capex “ The irony is today, only two east of Burkina Faso which
down in value and no one
wants to deal with a share
Woodman being killed in the
price in retreat.”
Somewhat
reluctantly,
really knocked the market’s
years later, companies such as
WAF was left to go it alone
confidence in the security
and head into develop-
of the country,” Hyde said.
De Grey [Mining Ltd], Chalice [Gold
ment. That meant raising
were attacked twice, includ-
on equity and debt markets. Mines Ltd] and Bellevue [Gold Ltd] “Then Semafo operations
ing the November 2019 at-
“We didn’t receive an of- are able to raise hundreds of millions tack on a convoy of work-
fer that was worth taking to without having completed a study. ers travelling to its Bongou
shareholders, so we had to mine, also in the east of the
knuckle down and get back country.”
on the marketing circuit to Thirty seven civilians were
Page 28 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
killed and more than 60 people out.”
wounded when gunmen There was a marked
ambushed the convoy effect on operations.
transporting workers to Sanbrado produced
Bongou. 45,000oz in the Sep-
“It did create prob- tember quarter, a 40%
lems regards the fi- increase on the June
nancing,” Hyde said. quarter. Hyde said with
“Macquarie, the lead the staffing problems ad-
Australian lender, dressed, he expects pro-
couldn’t get clear- duction to continue to in-
ance to go to site and crease in the December
it makes you question quarter.
whether you can com- WAF has a team in place eager to build more mines “We expect Novem-
plete the deal.” ber/December to be
WAF adjusted to the night we were flying out of Ouagadougou closer to full production
new realities, updating protocols to en- on our way to Brussels. By the time we [220,000 ozpa at $US650/oz],” he said.
sure the safety of staff, contractors and got to Brussels, the pandemic was very “That is with cash costs of $US1,200/oz
visitors alike. real.” in the June quarter and $US1,000/oz last
The security issues didn’t halt con- Hyde and the management team may quarter and expect under that in the De-
struction at Sanbrado, which continued have managed to scramble back home cember quarter and onto $US650/oz late
serenely throughout 2019. Hyde puts the but key personnel working on the mine next year.”
immaculate execution down to the own- were forced to make unexpected com- With the path to nameplate production
er’s team, led by Wilcox, and the com- mitments to the operation. clear, WAF has found time to begin con-
pany’s decision to surround itself with the Hyde is quick to celebrate and thank sidering its next moves. The exploration
best contractors and consultants. the WAF team for the dedication during drill rigs began turning for the first time in
“We completed the build ahead of time the unsettling period. four years earlier this year as the com-
and below budget because of Matt and “COVID made it very difficult to hire pany targets extensions to M1 South and
his team,” he said. “They’ve built three people, particularly for the underground other targets capable of filling out the
mines before in Burkina Faso and we did mine,” he said. “We had to give Byrnecut back end of Sanbrado’s 10-year produc-
all the early work ourselves – the con- approval to have more people, particu- tion profile.
crete, the early civils. So, by the time Ly- larly for development rigs. Current reserves from M1 South are
copodium got to site, things were already “We had some people on site for six set to be depleted by Year 4 of operations
running smoothly. but Hyde is confident the ore-
“We put together a team of body will be extended.
good, high-quality consult- “It is unusual to have an
ants and professionals, most underground mine with more
of whom I’ve known for 10 than four or five years of re-
or even 20 years. Then you serves,” he said. “We are not
have the quality of groups going to start infill drilling from
like Lycopodium and the surface, so we are currently
plant equipment we used pushing the outline to get the
– mills from Outokumpo, deeper mineralisation at M1
crushers from Metso; it is all South into the mine plan.
top-quality gear.” “That back end will be filled
The mine was delivered out by a bit of everything; M1
ahead of schedule and un- South at depth, Toega [the
der budget in the first half company’s latest acquisition]
of 2020. On March 18, the and even M5 at depth where
company poured first gold there is potential for under-
at Sanbrado, well ahead of ground.”
original schedule. But even The restarted exploration
this momentous occasion is already delivering results,
proved once again WAF’s with hits underneath the cur-
ability to shake off unfortu- Visible gold was identified at 858.5m in TAN20-DD236 rent M1 South reserve, includ-
nate timing. ing 15.5m @ 20 g/t. Several
“The first gold pour was set assays were still being pro-
for March but even that we had to bring months straight. It became very tricky cessed at the time of print, but Hyde was
forward by three or four days because and we did have some people who were confident a new reserve/resource update
we had been told the border was about to not coping well. We had to get them off- would be provided before the end of the
close as the pandemic took hold,” Hyde site and we managed to get people out. year.
said. “So, we poured first gold, went and We had really good support from the “One of these pleasing things is there
had a few celebratory drinks and by that Federal Government and we were one of is still visible gold at 831m, so there is no
the first companies to get approval to get
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 29
coVeR
reason the system won’t keep going,”
Hyde said at Africa Down Under. “We will So, we poured first gold, went and had a few
be mining here for 10 years to match un- celebratory drinks and by that night we were flying
derground with open pits.”
WAF is building optionality into its quest out of Ouagadougou on our way to Brussels. By the time
to fill the back end of the mine life. In April, “ we got to Brussels, the pandemic was very real.
WAF paid B2Gold Corp $US45 million
for the 1.1 moz gold Toega project. At just
14km from Sanbrado, Toega is a natural deals – including Endeavour Mining Corp’s eralised at 300m, 500m, 900m it will be a
bolt-on for the operation. recent acquisitions of Semafo ($US1 bil- mine for more than a decade.
“That distance is easily truck-able in lion) and Teranga Mining ($US1.86 billion) “There are very few companies like that
Burkina Faso and we expect a low capex – WAF’s position as an unhedged producer which have not already been acquired. And
to bring Toega into production,” he said. could prove attractive to other players. there are less projects around. The battle
“As well as the main deposit there are a “Endeavour’s move for Teranga does for Cardinal [Resources Ltd, a fellow ASX-
few other targets that we hadn’t thought a mean there is one less operator in Burkina listed company in West Africa] points to that
lot about when we acquired the project. We Faso and West Africa more widely,” Hyde and I think it is good for the industry.”
are working on a feasibility study now and said. “We are one of the only single asset Having missed out during the develop-
are hopeful of getting that in the production company with potential to produce more ment period, Hyde would not be drawn on
profile within three years to meet that drop than 200,000 ozpa gold over a 10-year whether the company was ready to do a
off in the schedule. We will start drilling that mine life. deal.
before the end of the year.” “I think a few of the bigger companies “We are always in discussions with other
The purchase of Toega was WAF’s first wanted to see some proof-of-concept companies, but we are not really focused
foray into corporate activity since it acquired stuff around the underground before they on that,” he said. “Our focus has to be on
Sanbrado. However, with M&A activity in showed their hand. But, as a geologist, you getting value out of our existing asset and
the region heightened by several recent know that if you drill something and it is min- getting more out of the exploration.
Page 30 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Sanbrado produced 45,000oz in the September
quarter, a 40% increase on the June quarter
“We also keep a good eye on what the
juniors are doing. But certainly we are look-
ing internally in the next 12 months and
getting maximum value for the assets we
have. We can only do that by filling out the
10-year mine plan on the underground and
10-year mining on the open pits.
“We have kept the team together and we
are keen to build more projects, but they
have to be the right projects for us. We are
not going to overplay our hand, put our bal-
ance sheet at risk or do a project because
we think we have to. We have already got
our growth project in Toega. We will focus
on maximising the value of the asset we al-
ready have.”
With its market cap touching $1 billion
earlier in the year (it had retracted to around
$905 million at the time of print) and sev-
eral larger players beginning to redraw their
West Africa risk profile, WAF’s timing in hit-
ting full production could prove, for once,
to be just right.
- Dominic Piper
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 31
AFRIcA DoWn UnDeR
COVID does little to dampen the
West Africa M&A excitement
Page 32 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
order restrictions and lockdown measures ensured this year’s Africa Down
B Under would be vastly different to previous renditions but with more than 30
company presentations and in excess of 600 online delegates, the 2020 event still
managed to showcase the best of the Australian-African mining relationship.
he conference has established itself as
Tthe premier Australian-African forum
over the past 17 years and despite the lack
of international attendees, Africa Down Un-
der had its usual combination of govern-
ment relations, investor discussions and
industry insight.
As part of the reformed programme line-
up, opening session chair Liam Twigger
asked the opening session speakers about
the future of Australian mining’s investment
in Africa.
Base Resources Ltd managing director
Tim Carstens was the first to respond, tell-
ing Twigger it was important to communi-
cate what mining projects could deliver to
communities and governments.
“Expectations start high and just get
higher. We have learnt to be transparent as
much as possible,” Carstens said.
On the issue of COVID, Resolute Min-
ing Ltd’s interim chief executive Stuart Gale
said it wasn’t the first time West Africa had
dealt with pandemic-related public health corporate activity. change in management have left it vulnera-
crises. The situation is being led by Cardinal ble to predators while Perseus Mining Ltd is
“We’ve had Ebola and the seasonal ma- Resources Ltd. A long-term participant in preparing to start commissioning on its third
laria issue we need to deal with,” he said. Africa Down Under, Cardinal had to pull West African mine, Yaoure in Cote d’Ivoire,
“So, in many respects it was a dusting off out of this year’s event due to the ongoing which will free up time and resources for
the old playbook and implementing those corporate saga which has turned into a bid- other ventures.
measures. And it has been a continual ding war for the ASX-listed company at its West African Resources Ltd has travelled
thing. The important thing is to ensure it 5.1 moz Namdini gold project in northern through several investment windows with-
doesn’t get onto site.” Ghana. out fielding any serious takeover offers but
On the corporate front, it was gold M&A Chinese group Shandong Gold Ltd and even its executive chairman Richard Hyde
activity which dominated proceedings. Russian firm Norgold are engaged in an is conscious of the possible scenarios.
After recent movements among Austral- auction which has seen the bid price rise “There’s always a lot of interest from oth-
ian domestic gold players and then TSX from 60c/share in June to $1.05 by Novem- er companies but there is nothing we can
companies in West Africa (see page 68), ber. update the market on at the moment. I like
investors eyes are focusing sharply on Aus- The question remaining is who is next? what I see from the juniors,” he said.
tralian companies for the next round of Resolute’s operational problems and Firefinch Ltd has proven the ample op-
portunities that lie in wait for ambitious jun-
iors in the current environment. Last month
it finalised the acquisition of an 80% inter-
est in Morila, one of the region’s biggest his-
torical mines, from Barrick Gold Corp and
AngloGold Ashanti Ltd in November. For
executive chairman Alistair Cowden, the
deal should be just the start of Firefinch’s
journey.
“If you are a single mine company there
are two things you should be thinking about:
who am I going to buy and who is going to
buy me,” he said. “Single mine companies
don’t really have a future but there is op-
portunity [for Australian companies]. Let’s
get out there ahead of the Chinese and the
Russians.”
– Dominic Piper
aUSTRaLIa’S PaYDIRT DeC 2020 - JaN 2021 Page 33
AFRIcA DoWn UnDeR
ESG leaders in Africa recognised
s the only awards ceremony recognising
Aleadership in environmental, social and
governance (ESG) practices by Australian
explorers, miners and industry service organi-
sations working in Africa, the AAMEG Africa
Awards is a prestigious affair celebrated at
Africa Down Under.
As the peak body representing Australian
companies undertaking mining, development
and exploration activities across Africa, the
Australia-Africa Minerals & Energy Group
(AAMEG) has facilitated more than $40 bil-
lion in exploration, extraction, processing and
potential investment by Australian miners in
Africa since its inception a decade ago.
AAMEG chief executive William Witham
said all companies nominated for awards in
2020 demonstrated “exemplary” investment Base Resources Ltd executive director, operations and development Colin Bwye
in good ESG principles showing leadership accepted the Award for Best Innovation in Corporate Social Development. An Australian-
not only as Australians in Africa, but as wel- based, African focused, mineral sands producer and developer, Base was recognised for
come and trusted members of their host com- their COVID-19 community support programmes in Kenya and Madagascar
munities.
“Every nominee should be extremely proud
of their work on the continent, especially in a 2020 AAMEG Africa Awards judges
year where there is no longer a ‘business as included Hon Consul – Consulate of the
usual’, travel restrictions, a new deadly dis- Republic of Ghana in Perth Fred Soale,
ease and fast-changing global conditions,” Project Manager – Association of Women in
Witham said. Mining in Africa Dr Muza Gondwe, AAMEG
“Our Australian miners in Africa have sto- chief executive William Witham (pictured),
ries that deserve to be told, stories of deter- Minerals Council of Australia chief
mination, commitment and doing what we executive Tania Constable and AAMEG vice
are known for as Australian’s – acting with chairman Ben Gargett
resilience.”
Minerals Council of Australia chief execu-
tive Tania Constable, one of the 2020 awards
judges, applauded the work Australian mining
companies beyond the mine gate down un-
der and abroad.
“ESG principles transcend borders. Our
2020 winners have shown a strong commit-
ment and pro-active approach to addressing
ESG principles in their everyday work and Ashley Morrison accepted the Best
are actively making a difference to the socio- Workforce and Industry Development
economic development of the communities in Initiative Award on behalf of Geodrill
which they operate in Africa,” Constable said. Ghana Ltd. The drilling company, which
“These principles and practices are equally has a fleet of 67 drill rigs operating across
relevant to Australian mining companies op- Ghana, Burkina Faso, Cote d’Ivoire, Mali,
erating in Australia and operating overseas, and Zambia won the award for their
because our companies have a responsibil- Ghana-based drill rig manufacturing
ity to demonstrate best practice and transfer programme designed for the African
knowledge wherever they operate.” terrain and manufactured with local labour
Orion Minerals Ltd won the inaugural Emerging ESG Leader
Award, sponsored by the Minerals Council of Australia. Orion
is breathing new life into the town of Prieska in South Africa’s
Northern Cape. By applying imagination and innovation
to community development programmes and workforce
identification efforts the company is recognising the priority
for economic and regional development as it looks to revive
the historic Prieska copper-zinc mine. Orion chairman Denis
Waddell was delighted to accept the award on behalf of the
company
AFRIcA DoWn UnDeR discussion on women in mining featuring Primero’s Kristie
Curtin University’s Muza Gondwe convened a panel
Young, former AAMEG chief executive Trish O’Reilly and
Sipa Resources chief financial officer Tara Robson
Change for
the better
hile the global COVID-19 pandemic
Wcontinues to have major health and
financial consequences that are expected
to be felt for years to come, it may have trig-
gered an important cultural change in peo-
ple’s working behaviours.
Speaking as part of a panel session on
women in mining at Africa Down Under,
Primero Group Ltd non-executive director
Kristie Young suggested the period through
March to May this year when the majority of
people were working from home had dem-
onstrated to most employers the benefits of
flexible work hours and arrangements.
Young, who is also an advisor and direc-
tor of client development for software pro-
vider HardHat, said up until recently only
large companies had offered their employ-
ees such arrangements, although they had
not necessarily been able to pull it off.
“It was down to the culture of large com- mother or as someone in the industry, that and I think sometimes we forget that,” she
panies…they really wanted to be able to COVID was going to set us back because said.
allow their employees to work in a flexible never before have we had an opportunity to “I hate it when we’re collecting data and
way, but the culture of these companies say ‘guess what, we can work from home’,” it’s ‘50% of the women have to be in these
really didn’t enable them to do that, even she said. sort of positions’. No, if they’re not actually
though they wanted to,” she said. “We’ve been doing it for years…but you qualified then they shouldn’t be doing it.
“So I think one of the real advantages always had to earn that [option to work from “What we should be doing is encourag-
from COVID, if we look at the silver lining or home]. Now, when everybody’s doing it, ap- ing and mentoring and pushing women, be-
some of those positives, has been the abil- parently you can do it.” cause I actually think men and women are
ity of those companies to now allow their Gender diversity and respect towards equal, but I think women lack confidence
people to work in a flexible way and to work women was again in the spotlight recently and it’s about how we build that so that they
from home, which is something that had following comments by Fortescue Met- can do whatever they want to do.”
not really occurred in the past. Some of the als Group Ltd chief executive Elizabeth O’Reilly also wanted to address what she
companies now are looking at permanently Gaines about the skimpy barmaid culture referred to as the “elephant in the room” –
reducing the number of offices that they around the Diggers & Dealers conference women who get to the top but also “eat”
have in the city and allowing their people to in Kalgoorlie (see page 89). other women along the way.
work in a more flexible way. Gaines was also one of only three wom- “It’s shocking,” she said. “I think whatever
“The oil and gas companies like Wood- en on the main stage at Diggers, raising role you’re doing, pull women along with
side and Shell have made their people go further concerns about the lack of opportu- you; they’ve got the skills, they just need
back to work, which I found quite interest- nities for females in the sector. the confidence, and they need mentoring. If
ing, but for the mining companies it’s actu- Her comments were soon followed by the we do that, we’ll have a lot more women in
ally improved the way that they work. And news that upcoming float Monaghetti Min- [senior management] roles.”
it’s for both males and females…that’s the erals Ltd would be the first all-female-led Asked what could be done to encourage
important thing. You would think that will resources company when it debuts on the more women and more people of colour
have a positive effect on the diversity of the ASX in mid-2021. into technical roles, Young said it was up to
workforce as we move further into the fu- While Monaghetti’s efforts to set a new the industry to become better promotors of
ture.” benchmark for the industry were roundly the role it plays in diversity and inclusion.
Flexible working arrangements for future applauded by the panel, former Australia- “Getting females into technical roles in
generations was not something that Sipa Africa Minerals and Energy Group Ltd the first place is difficult, let alone the colour
Resources Ltd chief financial officer and (AAMEG) chief executive Trish O’Reilly of someone’s skin,” she said. “That’s some-
company secretary Tara Robson thought cautioned against appointing a person to a thing I think ties into the image of mining
would be possible in post-lockdown life. In role based on their gender. and something the mining industry needs
fact, she feared things could have gone fur- “You can have 100% of women on a to do a lot better in promoting.”
ther the other way once workforces started board, but you don’t just have a person on a
returning to the office. board because they’re a woman; you have – Michael Washbourne
“I had this great sense, whether it’s as a
a person on a board because of their skills
Page 36 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
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AFRIcA DoWn UnDeR
A view of Africa
through the
investment lens
auritius Ambassador to Australia HE Marie Monty has called on inves- On the big screen: Senior diplomats Marie Monty (Mauritius), Joe
M tors to have a deeper think about the lands of opportunities across Af- Tapera Mhishi (Zimbabwe) and Marthinus Van Schalkwyk (South
rica. Africa) discussed the investment landscape in southern Africa with
“I wish to invite Australian companies to look at Africa with new eyes, with Paydirt Media’s Jeff Hart
new lenses and project [our] vision of the African continent,” Monty said.
Of her own country, Monty said opportunities for miners in Mauritius
were more corporate-related than resource specific.
“Though we don’t have such mining activities, we do have strong finan- in the past decade.
cial facilities which we offer companies. We have transfer facilities for invest- A target for the mining sector to generate $US12 billion in wealth for Zim-
ments and one thing I’d like to stress is the recent institution of the mining babwe by 2023 has been set.
and energy club which offers a platform for emerging mining industries.” “Since 2009, the sector has been producing $US2 billion; this is just a
Monty added that junior mining companies could access Mauritius’ tenth of the country’s potential,” Zimbabwean Ambassador to Australia HE
banking facilities, while the country’s law, policy and educational services Joe Tapera Mhishi said.
should be tapped into by entities looking for entry into Africa. Mhishi congratulated the companies that had taken the lead and chosen
It is around the areas of mining policy and investment frameworks that to invest in Zimbabwe’s mining industry and encouraged more people to
countries like Zimbabwe are working to make themselves more appealing follow suit.
to foreign investors. “We have so far been adopting policy reforms to answer the needs of
Zimbabwe’s mineral endowment is well-known, however, just 10 of the investors and adopt an investment regime that is the best in the world. But
country’s 60 resources are currently being mined. this is a process and this is why recently this mechanism of consultation
It has been estimated that at full potential Zimbabwe’s mineral wealth every two weeks [has been established] because we don’t want to upset
could be worth $US20 billion p.a., however, the sector has underperformed any investors or an industry that is critical to the economy,” Mhishi said.
Consultation and communication with industry and investors is some-
thing that was lacking in South Africa until recently with the relationship
between industry and government during Mosebenzi Zwane’s spell as
Minister for Mineral Resources fractured to say the least.
Despite the ill-feeling between government and industry when Zwane
was in charge, the SA mining sector appears to have bounced back since
Gwede Mantashe was appointed Minister in 2018.
And with the official unemployment rate in SA nearing 42% (there are
Burkina
Faso suggestions the figure could be as high as 60%), the mateship between
mining sector and government is critical to SA’s future.
“Mining contributes about 9% to GDP in SA, so clearly it is a key com-
ponent [of the economy], with 500,000 jobs being created by the mining
industry in South Africa,” SA High Commissioner to Australia HE Marthinus
West Africa’s Newest Van Schalkwyk said.
“We understand how important it is to nurture this industry encouraging
Unhedged Gold Producer investments and to invite people to invest in mining in SA.”
SA’s mining history is undisputed, however, with operations going deeper
West African Resources (ASX: WAF) and becoming increasingly unsafe to mine, Van Schalkwyk said there were
is the region’s newest unhedged gold a number of exciting initiatives to do with artificial intelligence and remote
producer after pouring first gold at the mining applications to enhance the prospects of safe mining in SA.
Sanbrado Gold Project, Burkina Faso, on “We understand that if we really want to unlock the mineral potential in
18 March 2020. Sanbrado is ramping up our country, we have to look at new developments like artificial intelligence,”
to full production in Q4 2020. Van Schalkwyk said.
“In terms of encouraging investment, our president started an investment
Sanbrado is expected to produce more drive three years ago and a number of Australia mining companies and
than 300,000oz gold over the first non-mining companies invested in SA and they are still on the potential in-
12 months of production at AISC vestor list. From our point of view, we go out of our way to ensure that we
of less than US$600/oz. suit them as best as we can, and we have Invest South Africa; the one stop
facility that assists investors.
West African Resources Ltd ACN 121 539 375 “We are now entering the phase of about 42% unemployment in SA. As
Phone: +61 8 9481 7344 the Government and major companies in the private sector, we understand
[email protected] that we must put in an extra effort to ensure people have jobs.”
www.westafricanresources.com – Mark Andrews
Page 38 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
AFRIcA DoWn UnDeR
South Africa on the move
t is hard to believe one of Af-
Irica’s proudest mining coun-
tries functions on a shoe-
string exploration budget of
$180 million per year.
Then again, for almost
two decades that jurisdic-
tion, South Africa, has hardly
been welcoming of investors
and explorers. But it is a situ-
ation which is clearly on the
mend.
“At the moment, the SA
exploration budget is about
$180 million; a pittance but it
is very easy to double that,”
Orion Minerals Ltd managing
director Errol Smart said dur-
ing the closing panel discus-
sion at Africa Down Under.
“The impact from explo-
ration on jobs, the supply Paydirt editor Dominic Piper convened a panel discussion on the state of South Africa’s mining sector
chain and through employee and was joined on stage by Juwi’s Dave Manning, while Orion managing director Errol Smart and SA
taxes, VAT, that money all Minerals Council chief executive Roger Baxter joined via livestream
channels back – exploration
has an immediate impact on
the economy. The Minister sees it, the mining sector. Furthermore, Mantashe’s the country’s exploration strategy and
DMRE sees it and we have been work- enthusiasm to see the resources sec- shift towards online licencing systems
ing in the past to try and come out with tor flourish is a vision shared within the would be revealed in early 2021.
a way to clean up some of these other highest ranks of government, including “One critical factor that we need to get
hurdles but it is becoming quite attrac- President Cyril Ramaphosa who estab- government continually working on is
tive to work in SA and quite manageable lished the National Union of Minework- reducing red tape and moving towards
to work in SA.” ers (NUM). smart-based systems, administering
Vast improvements in the relation- Despite the current love-in between rights and reducing licencing times for
ship between industry and government industry and government, there are still both exploration and for mining,” Baxter
since Gwede Mantashe was appointed challenges to be addressed, according said.
SA Minister of Mineral Resources in to Minerals Council South Africa chief “We also need to make sure that the
February 2018 is a major reason behind executive Roger Baxter. systems are easy to administer and gov-
renewed confidence in the country’s Baxter hoped that more clarity around ernment can do it on a seamless basis.”
Making the country easier to access
for mining and exploration will go some
way into elevating SA back into the top
quartile of places to do business in Afri-
ca and aiding that ambition will be offer-
ing companies reliable and sustainable
power solutions.
Speaking at the Junior Mining Indaba
prior to Africa Down Under, Mantashe
said the Government was moving with
the “necessary speed” to address the
high costs of electricity and unreliability
of energy supply that adversely impacts
industry in SA.
“The expansion of the country’s en-
ergy generation capacity is a priority in-
tervention to support a rapid economic
rebound as outlined in the Economic
Reconstruction and Recovery Plan,”
Mantashe said.
“In this regard, we continue to imple-
ment the Integrated Resource Plan [IRP
Page 40 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
2019] with our target being to deliver a Manning said it had been a challeng- Manning said.
total of 16,313MW, from a mix of all en- ing few years for Juwi in SA, with dif- “Certainly for an off-grid mining and
ergy sources.” ficulties in obtaining generational and energy solution you are looking for a
The merger of SA’s minerals and en- transmission licences the brunt of frus- long-term forecast and it is very hard to
ergy departments to form the Depart- trations. evaluate your options not knowing what
ment of Minerals and Energy (DMRE) “The Minister made an announce- the tariffs are going to be, what the re-
has meant “a ment at Inda- strictions are going to be and what your
more enabling ba earlier this energy security is. It has been challeng-
environment for year which was ing for us.
the mining and The SA ground-breaking “But the recent announcement by
energy sectors to for us, opening Minister Mantashe about where the in-
thrive”, according exploration up the licencing dustry is headed is getting better. We
to Mantashe, and budget is about $180 and allowing us think there is a real good opportunity to
is something Juwi to generate; that start getting these permits through and
milli
Renewable Ener- “on; a pittance made a big differ- licensing a few of these off-grid energy
gies Pty Ltd global but it is very easy to ence. We haven’t solutions and I think that will go a long
head of hybrid seen the fruits of way to giving investors some security.”
Dave Manning has double that. that yet, but we – Mark Andrews
warmly welcomed. are working on it,”
Smart money on exploration in SA
rrol Smart’s Orion Minerals Ltd may ties are now being realised and it is not ago and having prospecting rights for
Ebe on the cusp of closing a financ- just the juniors or the Aussies. I think exploration removed from the Mining
ing deal to see the historic Prieska some of the South Africans are doing Charter is the single biggest move,”
copper-zinc mine revived, however, the a little bit of introspective work and re- Smart said.
managing director’s enthusiasm for the alising that they missed an opportunity. “You don’t have to have a BEE part-
exploration prospects in South Africa’s That is why you see statements made ner now to be exploring. You don’t have
Northern Cape is clearly evident. by Anglo American [plc] about going to have local procurement obligations
And, shortly after his virtual pres- back into exploration because maybe to be exploring. Now there is a level
entation to delegates at Africa Down industry has reminded them of what playing field. We see the DMRE ab-
Under, Smart revealed that Orion had the opportunity is,” Smart said. solutely trying to engage with us and
intersected massive copper and zinc “Remember those [Anglo American] work with us to find a way to make this
sulphide mineralisation at the Kielder geologists aren’t a bunch of fools, they happen.”
project, 15km from the mill at Prieska. are very smart fellows but that was 30- In addition to setting the standard for
The near-surface intersections re- 40 years ago, and they didn’t have the exploration in SA, Orion hopes to start
sulted from testing for outcropping technology back then. The greenfields a new era of base metals production
VMS-style mineralisation from historic exploration opportunity is just amaz- not only in country but more broadly,
results, including 4.8m @ 0.46% cop- ing. There are some of the most prolific given the planned Prieska copper-zinc
per, 6.18% zinc and 15 g/t silver, pro- copper-producing fields in the whole mine is one of the few fully permitted
duced by Newmont SA in the 1970s. world, which have never had airborne and development-ready assets of its
Buoyed by striking base metal mas- EM flown over them, there has never type worldwide.
sive sulphides at two different pros- been big moving loop EM over them; A BFS released in May, indicated
pects in initial drilling at Kielder, Orion that is standard practice anywhere in the initial 12-year operation at Prieska
hopes to continue the exploration suc- the world for copper. The technology would require peak funding of $413 mil-
cess at the Jacomynspan nickel-cop- has never been used, so you don’t lion to get started at a rate of 22,000
per-cobalt-PGE prospect at Areachap. need to be a rocket scientist; there are tpa copper and 70,000 tpa zinc.
The company is targeting shallow, clear step-up opportunities.” A NPV (8% discount rate) of $779
high-grade, nickel-copper mineralisa- The application of technology in million was another highlight at Pries-
tion at Jacomynspan, with the objective parts of SA is proving fruitful for willing ka, in SA’s Northern Cape.
being to provide samples for metallur- explorers as is the removal of regula- Orion hoped to appoint a preferred
gical testing. tory roadblocks previously in place. EPCM contractor by the end of 2020,
Orion’s success has been well re- Smart said the single biggest chal- with an early-work programme under-
ceived, however, as Smart explained, lenge industry faced was the impedi- way in preparation for the project being
the company is far from a lone ranger ment of requirements under the old fully funded.
in SA’s exploration scene. Mining Charter related to exploration, – Mark Andrews
“I think there are now seven or eight which he labelled a “disaster”.
of us [ASX-listed companies] that are “The DMRE sorted that when we
exploring in SA. I think the opportuni- renegotiated the Charter two years
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 41
AFRIcA DoWn UnDeR
Firefinch starting
to buzz at Morila
he headline deal is complete but now the real work begins for
Tnewly energised African gold miner Firefinch Ltd.
Firefinch (previously Mali Lithium) announced on November 11
that it had completed the acquisition of the Morila gold mine in Mali
from Barrick Gold Corp and AngloGold Ashanti Ltd. The deal delivers
Firefinch an asset which has produced more than 7 moz gold over
the last two decades however, executive chairman Alistair Cowden
is more interested in what it could offer up in the next two decades.
Speaking at Africa Down Under ahead of acquisition completion,
Cowden said “Morila the Gorilla” as it is affectionately known, offered
an opportunity like few others in the world. Alistair Cowden
“This mine is the reason Mark Bristow is running Barrick today,”
Cowden said of the Barrick chief executive who launched the highly and it has not had a proper geology team on it since the late-2000s.”
successful Randgold Resources on the back of Morila’s develop- Firefinch is already changing that situation. It has bolstered the ex-
ment. ploration and mining teams with several key appointments and on
The $US27.67 million deal delivers Firefinch a 4.5 mtpa processing November 12 launched its first exploration campaign at the Morila
plant as well as other infrastructure, a functioning tailings retreatment mine site; a programme comprising 45 aircore holes for 675m to test
operation and an inferred open pit resource of 1.3 moz gold. How- potential extensions of the tailings resource which currently stands at
ever, according to Cowden, the wider prospects around Morila are 4.8mt @ 0.5 g/t for 76,000oz gold.
what makes the purchase so exciting. Drilling tailings may not sound the most ambitious start but Cowden
“Morila produced 7.4 moz gold in past production but it has been is adamant keeping the existing retreatment operation going could
neglected for many years,” he explained. “The 40/40 ownership [the have significant benefits for the company.
Malian Government retains 20%] meant there was no real incentive “The first task post-acquisition is ‘don’t break anything’,” he said.
“Let’s keep the cash flow going and put it to work extending the tail-
ings. The stockpiles and tailings have been operating for 10 years
and it’s cashflow positive. Hopefully, we can extend that life but that
will give $US17-20 million cashflow.”
Cowden said that programme would be quickly followed by further
drilling of nearby satellite deposits which were only shallowly mined.
“Hopefully, we will restart that in the early part of next year,” he said.
“We are doing all the work now and will release costs in due course.
Then we move onto the satellite pits and hopefully move up from 40-
50,000 ozpa to something much larger.”
The ultimate aim is to restart mining in the massive Morila pit itself.
Cowden sees ample opportunity.
“The model we are working on is an old AngloGold one,” he said.
“It shows some of the hits they were mining at the bottom of the pit –
44m @ 17 g/t gold and 84m @ 11 g/t – that doesn’t just happen once,
there is more gold there. Even outside the current pit there are hits
such as 56m @ 4.97 g/t.
“We are currently modelling all that and will come up with a new
DELIVERING number soon and then get in there and start drilling. I don’t see us
ever not having rigs here.”
While immediate exploration will be focused on restarting Morila
RETURNS via extensions or satellite deposits, Firefinch sees a much wider op-
portunity on its 700sq km land package.
“We will go straight in and drill the satellite deposits and then infill
Base Resources is an African-focused mineral sands Morila but in the long term, we are looking for big extensions at Morila
producer and developer with an outstanding portfolio. and then new discoveries regionally.”
The Firefinch team is unperturbed by Barrick and AngloGold’s will-
The Kwale Operation in Kenya is an efficient high which to deliver returns to shareholders through both
margin business with extensional potential and the dividends and growth, and a track record of excellence ingness to sell Morila. In fact, Cowden sees similarities with Austral-
Toliara Project in Madagascar is one of the best in safety, community engagement and environmental ian gold’s recent success stories such as Evolution Mining Ltd and
mineral sands development opportunities in the world. stewardship in Africa, Base Resources is truly a
With this portfolio, a robust financial position from unique mineral sands company. Northern Star Resources Ltd.
“The best buying you can do is from a receiver or a major,” he said.
“There are a lot of people in this town [Perth] who have made a lot of
@baseresources Base Resources
baseresources.com.au money out of buying assets from the majors.”
– Dominic Piper
Page 42 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
AFRIcA DoWn UnDeR
Resolute refocus at Syama
fter a dramatic few weeks for the com- pany said group production would be at is eager to fill out the back end of a pro-
Apany, Resolute Mining Ltd’s acting the lower end of full calendar year guid- duction profile which currently estimates
chief executive Stuart Gale used the Africa ance of 400-430,000oz while AISC would 140,000 ozpa gold production over the
Down Under platform to tell investors the be at the upper end of $US980-1,080/oz. next five years.
company would be focused on delivering While the sulphide circuit continues to “It is important we capitalise on the as-
the production profile at its two long-life present issues, Gale said the smaller ox- set by extending the mine life,” Gale said.
gold assets. ide plant continued to perform well. Mining At the company’s third West African as-
Gale found himself speaking in the open- of the Tabakaroni oxide pit is nearing com- set, Bibiani in Ghana, potential buyers are
ing session of Africa Down Under following pletion, but Resolute will continue its hunt being welcomed to site after COVID re-
the abrupt departure of managing director for small oxide pits along the Syama belt. strictions were lifted in the country.
John Welborn at the end of October. Ru- “The oxide circuit has been terrific,” Gale “We have had it under strategic review
mours continue to fly around the reasons said. “There are a number of satellite op- looking at options for how someone else
and circumstances surrounding Welborn’s portunities for oxides; Bruce [Mowat, ex- might be better placed to deliver Bibiani,”
removal with Resolute chairman Martin ploration manager] and the team continue Gale said. “COVID precluded us from get-
Botha giving the briefest of comments in to identify oxide pits, so we are looking to ting potential investors to site but Ghana
the associated ASX announcement. keep it up and running for a while. Our suc- has lifted the hard border and had an op-
“John has worked hard to reposition and cess on that will determine the timing of the portunity recently to get people there.”
transform the business over the last five Tabakaroni underground development.” – Dominic Piper
years, and the time is right to introduce New opportunities are also the target
a new CEO to take Resolute forward, to at Mako, in Senegal, where the company
deliver improvements in operational out-
comes and resilience, and to deliver the
next phase of sustainable value for the
company,” Botha said in the announce-
ment.
Resolute’s performance in the last 12
months had been underwhelming in com-
parison to peers on both the ASX and in
West Africa. Its share price was down 23%
for the year to date at the time of Welborn’s
departure, due largely to operational and
labour issues at its Syama gold mine in
Mali. In comparison, fellow West African
gold miners Perseus Mining Ltd (22%) and
West African Resources Ltd (143%) had
posted significant gains.
Speaking at Africa Down Under, Gale
said the company was confident it could
find consistency from Syama’s notoriously
tricky refractory ore.
“It is important to get back onto deliv-
ering the production profile and hitting
the 2.4 mtpa run rate from underground
at Syama,” he said. “It is producing well
at the moment. It takes time to work but
we’re getting there and we are pleased.
We need to match the mill throughput with
the mining. We had a few challenges in the
last period but we are getting comfortable
with the circuit and we are getting to the
80% recoveries we need.”
Syama has experienced several disrup-
tions to its roasting circuit in the last 18
months, a problem exacerbated by indus-
trial labour disputes in the middle of this
year. While agreement has been struck
with unions, the interruptions led to reduc-
tions for the September quarter with gold
production down 19% to 87,303oz and
AISC up 24% to $US1,284/oz. The com-
Stuart Gale
Page 44 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
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AFRIcA DoWn UnDeR
Don’t shout at your
biggest customer: Johnston
est Australian Minister for Mines and Pe- educational opportunities. WA’s internationally- Bill Johnston
W troleum Bill Johnston has vowed to con- renowned tertiary education, vocational edu-
tinue working with African counterparts to en- cation and training sector can play an impor- able resources industry.”
sure investment opportunities on the continent tant role in supporting these goals. Also critical to WA’s resources sector is
are realised for the benefit of all parties. “Our university sector has expertise in min- foreign investment. Asked by Liam Twigger
WA’s trade and investment relationship erals and petroleum geoscience and engi- of PCF Capital about the increasingly fraught
with the continent is stronger than any other neering, environmental science, resource eco- diplomatic and trade relationship between
Australian state, with the resources sector the nomics and finance, and resource law. Australia and China, Johnston said his Gov-
backbone of that relationship. “Our education and training sector has high- ernment had requested more clarity from the
“WA has increased its exports to Africa quality expertise in resource processing, drill- Federal Government.
by $315 million, 25%, since 2009-10,” John- ing, mineral exploration, mining, engineering, “It is an unusual approach to shout and
ston said. “The State’s total exports to Africa and surveying.” scream to your biggest customer,” he said.
reached $1.59 billion in 2019-20 – more than WA’s economy is the envy of many re- “Foreign investment has built Australia’s econ-
any other Australian state.” source-rich African countries with its strong omy and foreign investment.
However, the relationship runs much deeper reliance on commodity exports. “If the Commonwealth Government is go-
thanks to the WA Government’s longstanding The State exported $103 billion of iron ore, ing to draw rules around foreign investment,
MoU with the Common Market of East and $27 billion of LNG and $16 billion of gold in it needs not just to explain what’s not allowed,
Southern Africa (COMESA) which Johnston FY2020, a record Johnston said was achiev- but be prepared to explain what is allowed.
said highlighted WA’s commitment to being a able because of the robust nature of the State’s “And, it needs to be consistent in the appli-
genuine partner of African jurisdictions. regulatory environment. cation of those rules. We invite the Common-
“We can further support each other by con- “Our success is underpinned by a strong wealth Government – which I have done in a
tinuing to develop and share our scientific and legal framework; a proven mineral and petro- letter to the Treasurer – to set out what the pa-
regulatory knowledge, and systems of respon- leum tenement system; a stable and welcom- rameters are for managing foreign investment
sible and sustainable resources development,” ing investment environment; and a world-class from China or other countries.
he said. services sector,” he said. “I accept state-owned enterprises are in a
Education and training is at the heart of the “WA’s clear and consistent regulatory frame- different category but direct investment bene-
MoU with WA providing access to its high- work is essential for providing industry with the fits recipient as well as donor countries and we
quality institutions. certainty required to make investment deci- would therefore expect the Commonwealth
“This important agreement [COMESA sions. Our mining approvals process, which Government to support inbound foreign invest-
MoU] continues to provide a framework of co- takes into account the impact on the environ- ment.”
operation for capacity building. A key feature ment, occupational health and safety and oth- – Dominic Piper
of our MoU is the development of training and er land users, is critical for ensuring a sustain-
Mako primed for 2021 If its not INVAL, it’s not Invincible
ako Gold Ltd’s success at the Napie told delegates at Africa Down Under via “The plan right now is that the first target
Mproject in Cote d’Ivoire continues with livestream from Brisbane. will be Tchaga East where we will put three
the company confirming another shallow, Following Ledwidge’s presentation, the [RC] holes in and 1,500m of drilling into that.
high-grade gold zone at the Tchaga prospect. company reported results from Tchaga, in- We are currently doing an IP programme
Assays released at the time of print includ- cluding; NARC184: 9m @ 1.17 g/t gold from on Gogbala so as soon as we have that fin-
ed one result grading up to 143.6 g/t gold. 13m, 5m @ 2.16 g/t from 27m, 9m @ 22.73 ished, we will be doing another 5,000m [RC]
The assays were from a further four holes g/t from 36m, including 2m @ 92.95 g/t from drill programme on that.”
drilled as part of a 10,000m drilling pro- 36m (including 1m @ 143.6 g/t), with aver- Mako hasn’t followed up on the previous
gramme at Tchaga, which is focused on ex- ages of 32m @ 7.1 g/t Au from 13m to 45m; wide-spaced drilling completed at the “blue-
tensions to an intercept of 13m @ 20.82 g/t. NARC182: 15m @ 3.59 g/t from 16m, includ- sky” Gogbala, Tchaga East and Tchaga
“This is a nice intercept we announced ing 1m @ 31.66 g/t from 26m; NARC185: North prospects, and ever the geologist,
a couple of months ago – 13m @ 20.82 4m @ 14.26 g/t from 33m, including 1m @ Ledwidge is eager to test them out.
g/t gold – and under that 13m there is 9m 51.11 g/t from 33m. “We are very excited about going back
at significant mineralisation, so it is not one Drilling remains ongoing to extend the there, we haven’t drilled that since 2018 but
of those one-hit wonders where you hit 1m strike length of the new high-grade zone at still got very good results before we had the
and the rest is a little bit less. There are actu- Tchaga, while a second rig was due to start IP interpreted. The 5,000m drill programme
ally nice, wide intercepts and we are getting drilling the highly prospective regional tar- is going to be a good benefit to us in addition
that consistency in all our drill programmes,” gets – Gogbala, Tchaga East and Tchaga to Tchaga,” he said.
Mako managing director Peter Ledwidge North.
– Mark Andrews
Page 46 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
If its not INVAL, it’s not Invincible
AFRIcA DoWn UnDeR
Sentinel the new copper king
of Africa
irst Quantum Minerals Ltd’s Kansanshi almost half of the revenue generated each why one would go and invest in explora-
Fmine has been Africa’s largest copper year has been redirected to capital works tion for something that might be a decade
producer for many years running, but it’s on the smelter, mine, process plant or into away.
about to be overtaken…by the company’s expansion projects. “But we’re there playing the long game,
other Zambian operation. “That’s the bit governments tend to for- as are one or two other players; Anglo
While Kansanshi remains on track to de- get in terms of the requirement you need to [American plc] and Rio [Tinto plc] have
liver 220,000-230,000t of copper in 2020, reinvest in an operation to make sure that it established programmes there, but just a
the company’s Sentinel mine is “roaring”, has a long future,” Christie said. handful of juniors. I think if you hang on
according to First Quantum exploration di- “We’ve already extended the original long-term in Zambia, we will see the sort
rector Mike Christie, having just returned lifetime of Kansanshi and it looks like it’s of discoveries that we’ve seen on the other
a record quarter of production (70,829t) still got another 24-25 years to go, based side of the border in the [Democratic Re-
and costs ($US1.77/lb AISC and $US1.25/ on the current reserve, but if you don’t put public of] Congo.”
lb C1). that investment in then it will gradually be First Quantum has not recorded a posi-
Record output for the September quar- on the slippery slope of declining grades tive case of COVID-19 at its Zambian op-
ter (up 25% on the corresponding period and economics. erations since April during the early days
in 2019) prompted First Quantum to lift its of the global pandemic. Christie said one
full-year guidance for Sentinel to 240,000- of the positives to come out of this year’s
250,000t of copper. unfortunate events was stronger ties with
Speaking at Africa Down Under, Christie government authorities.
said Sentinel – part of the Trident copper- In 2019, the company paid $US774 mil-
nickel complex – was a “complicated and lion in taxes to the Zambian Government
quite hard” orebody which had taken the (First Quantum’s global contribution was
TSX-listed company the best part of five $US1.049 billion), providing a stark re-
years to understand. minder about the benefits mining can bring
“It’s taken us a little while to get the site to the host country and community directly
to ramp up to full nameplate production, impacted.
but it’s now roaring and it’s really going “We’ve had our ups and downs over the
well,” he said. years, as most companies do, but this year
Kansanshi’s output of 54,430t copper I think the extreme pressure of the pan-
at an AISC of $US1.61/lb and C1 cost of demic has been well managed in Zambia,”
$US1.04/lb for the September quarter was he said.
down 8% on the corresponding period in “It’s been a measured approach by the
2019, with First Quantum citing lower ore Government and most companies have
grades through the oxide circuit for the de- worked well together to try and mitigate
cline in production. the effects of the pandemic. And that’s
Some 2.1mt of copper was added to Mike Christie certainly worked well for us at Kansanshi.
the Kansanshi reserve base in the last 12 We’ve had really negligible impact there
months, however, Christie said the com- “It’s really important that that reinvest- and at Sentinel, but not without a lot of
pany was yet to fully map out a future plan ment goes back into operations. That’s work to make that happen.”
for the mine. certainly happened and will keep happen- In Mauritania, the company’s Guelb
“It’s been a fairly consistent producer ing at Kansanshi.” Moghrein copper mine is coming to the
but as the oxide ore gradually gets used First Quantum was also busy with the end of its natural life with a reserve of just
up, we’re heading into a deeper and lower drill bit during the September quarter, with 11mt @ 0.65% copper and 0.59 g/t gold re-
grade part of the system…it’s what you three rigs turning across its Zambian op- maining. Operations will transition to pro-
see in porphyries and so forth around the erations. cessing of existing stockpiles from 2021,
world, and also in the African deposits,” Zambia has largely dropped off the ra- although Christie did flag the possibility of
Christie said. dar as a prospective destination for for- future retreatment of tailings.
“This is a situation where if we want to eign explorers over the last decade and Despite its largest operation – Cobre
continue producing copper at the same Christie, whose background is in geology, Panama – being shuttered for four months
rate that we have in the past, then we need yearns for those days to eventually return. due to the pandemic, First Quantum’s
to increase the milling circuit to basically “It’s strange how few players there are group copper production is up 10% year-
mill more tonnes to get the same of cop- working in exploration in Zambia,” he said. on-year in 2020 and the company had
per.” “The drilling companies are always ask- recorded revenue of $US3.6 billion and a
One thing that is certain is First Quantum ing me why this is and I guess it has to do gross profit of $US634 million in the nine
will reinvest some of its annual profits back with the fiscal regime, in that if it’s hard to months to September 30.
into maintaining operations at Kansanshi. justify expansions on your existing opera- – Michael Washbourne
Since the mine was switched on in 2005, tions, then it’s even harder to understand
Page 48 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Global Reach,
African Specialists
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AFRIcA DoWn UnDeR
Business not usual
in Africa
Phil McKeiver
e might have been preaching to the con- ly found things become very problematic.
Hverted, but the underlying message of Phil “We’re all aware that it can take longer
McKeiver’s presentation to Africa Down Under to get things done in Africa, so applying an back end when they’ll say ‘no’ to something
was as clear as day. Australian-type prism can be problematic and that you need or getting in the way,” he said.
“We ignore African politics, African tribal- can certainly hurt your business and cost you “Anyone who has worked on a large project
ism, African history at our peril,” the Gilbert + a lot of money,” he said. understands that you cannot get everything
Tobin projects counsel told delegates. “You need people who understand the that you ask for. If you’ve got limited time, you’ll
“It’s wrong for us to apply completely west- African environment, the African context probably find the cost will be higher and the
ern concepts and Australian expectations and have some experience dealing with and quality will be less.
uniformly, without understanding the history managing these pitfalls. Effectively you need “You need to understand the risk profile
and the local dynamics and all the issues that to take a holistic and integrated approach to and you need to work within that framework.
come into play. managing risk on major projects. Just deal- You can’t get more for less. Often it will take
“We shouldn’t be looking down on Afri- ing with one issue and not taking into account what it takes, it will cost what it costs and to
cans, we should be looking to build a bridge another one will lead to problems in the future take shortcuts, you’ll need to make compro-
of knowledge and understanding and share that you need to deal with.” mises.”
the expectations so that we can all move for- McKeiver stressed that it was imperative McKeiver added that risks on African re-
ward.” for miners and explorers to deal with stake- sources projects are usually “magnified” and
Gilbert + Tobin has been providing legal holders at the front-end of project lifecycle, need to be dealt with “differently, for different
counsel to clients with African connections for especially in Africa where they are often first reasons”.
more than 30 years. Looking back on some of movers to local communities. “It’s simple stuff, but ignore it at your peril,”
those experiences, McKeiver said those who “If you avoid dealing with a stakeholder at he said.
attempted to apply the Australian “business the front end and understand their require-
as usual” approach on African projects quick- ments, you will have to deal with them at the – Michael Washbourne
Lucapa’s all-weather will allow it to sell diamonds at full and transpar-
ent rough market value direct into offtake agree-
ments.
Wetherall said the introduction of a cutting and
strategy polishing marketing agreement would underpin
the returns and value of Mothae over several
years of mining.
“The Minister of Mines has approved this
ucapa Diamonds Ltd has defied market condi- so the margins are increased as well,” Wetherall marketing channel which will allow us to partner
L tions, putting away a $10 million capital raising said. with a select high-end diamantaire, put it in for a
which will allow it to expand its Mothae diamond The expansion is expected generate $US14 number of years and ensure they pay a minimum
operation in Lesotho. million cash in the first year of operation with cash flow price in the first year, guaranteeing our
The $10 million placement, completed in early $US67 million cash forecast over the six-year margins in the first year,” he said.
November, was cornerstoned by Flannery family plan. Guaranteeing margins could prove a vital
office investment vehicle Ilwella Pty Ltd and Graff “The six-year plan only takes into account the boost for Lucapa at a time of high volatility in the
International diamond company Safdico Interna- indicated resource [9.2mt], that excludes 40mt of diamond sector. Diamond prices softened signifi-
tional. our inferred resource we will upgrade as we go cantly through early 2019 before diamond majors
The placement paves the way for Lucapa to deeper. The margin generated per carat is in- De Beers and Alrosa changed strategy from vol-
expand Mothae with the company already pre- creased to $US250/ct.” ume-focused to price-focused. The subsequent
paring to implement a $US6 million capital works As well as the plant modification, Lucapa is recovery in prices was sustained through the
programme which will see Mothae’s 1.1 mtpa also preparing to take Mothae’s output further remainder of 2019 before the onset of COVID af-
capacity increased to 1.6 mtpa by installation of downstream. Diamond miners in Lesotho face fected the market almost immediately.
a jaw crusher and secondary bypass conveyor. restricted marketing channels for their product “With the e-commerce trading, China coming
Mothae has been on care-and-maintenance but Lucapa’s agreement with the Government back earlier, polished trading continued to hap-
since the beginning of the COVID lockdown but pen, and those high polished inventory levels are
was switched back on in September as infection Stephen Wetherall being eaten up. With the rest of the world com-
rates in Southern Africa eased. ing back you’ve seen a significant ramp up and a
Lucapa managing director Stephen Wetherall return of demand. Gem Diamonds [Ltd] recently
said the expansion will deliver a 45% increase said their diamond prices are above pre-COVID
to throughput, carats recovered (31,000 ctpa levels,” Wetherall said,
to 44,000 ctpa) and revenue ($US21 million to “And, with Argyle taking its last shovel from
$US30 million p.a.) at Mothae. underground, that is some 13% of the global dia-
“Most importantly, with additional throughput mond supply.”
there are improvements in economies-of-scale,
– Dominic Piper
Page 50 DeC 2020 - JaN 2021 aUSTRaLIa’S PaYDIRT
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