AFRIcA DoWn UnDeR
rivate sector organisations such as min- Islamic State is seeking a comeback in parts
Pers, explorers and METS companies in Af- of Africa. We’ve seen some events play out in
rica have been warned that violent extremists recent months…in places such as Somalia,
have ramped up threats for potential terror at- the DRC and Mozambique.”
tacks in the wake of the COVID-19 pandemic. In August, militants with links to Islamic ASPI’s Lisa Sharland spoke to Africa Down
Speaking via video link from Canberra, State captured the port of Mocimboa da Praia Under delegates via video link from Canberra
Australian Strategic Policy Institute (ASPI) in Mozambique’s Cabo Delgado province.
head of international program Lisa Sharland The port is considered the gateway to the enduring threat of terrorism, were highlighted
said security challenges had increased in country’s multi-billion dollar LNG industry. in a defence whitepaper published about four
parts of the African continent since March, Sharland noted concerning levels of food years ago and had been somewhat acceler-
particularly in regions where terrorist groups security and increased poverty in Mali due ated by COVID-19.
already have an established presence. to both COVID-19 and the growing threat of “Military modernisation is accelerating
“We have seen that terrorist activity has violent extremism. faster than envisaged, particularly in the Indo-
continued to shift from the Middle East to Af- “We’ve also seen misinformation cam- Pacific, and this includes the development of
rica, particularly in the Sahel,” Sharland told paigns and conspiracy theories which have cyber capabilities,” Sharland said. “The rules-
Africa Down Under. increased intercommunal tensions,” she said. based global order is also being undermined
“According to the UN, terrorist groups in “A number of these security developments and disrupted and the conduct of ‘grey zone’
Mali and the Sahel have actually taken ad- do have an impact on the way that mining activities has expanded.
vantage of COVID-19, and I quote: ‘to inten- companies are able to operate on the conti- “Not surprisingly, it noted that COVID-19
sify their attacks and to challenge state au- nent.” has altered many of these trajectories, with
thority throughout the sub-region with higher Sharland added that some of the likely some countries using the situation to seek
rates of civilian casualties’. future drivers of conflict, including the rela- greater influence.”
“Then there are, of course, concerns that tionship between the US and China and the
– Michael Washbourne
Toliara still top of Base thoughts
espite a slowdown in negotiations over fis- proved returns,” he said. “Negotiations are nificant cash generation.”
Dcal terms for the project, Base Resources progressing well and heading in the right di- Kwale’s future will depend on Base’s ex-
Ltd has no intention of walking away from its rection.” ploration success. The company plans to
Toliara mineral sands development in Mada- Base will require 26 months from an invest- release a PFS for the North Dune resource
gascar. ment decision to build Toliara, meaning the in the first quarter of 2021 and is also contem-
Base had intended to be reaching a final company’s foundational asset, Kwale, will plating exploration programmes at a regional
investment decision on Toliara by the end of continue to carry the cash generation respon- level.
this year but having already seen the Mala- sibilities in the company. “There are some areas of pretty significant
gasy Government suspend on-ground activ- Kwale, now in its eighth year of operation, interest to us and we are pushing on getting
ity while the investment terms were finalised, continues to meet those responsibilities, al- access to them. We think we have got some
progress was further impacted by the onset of beit at lower rates this year. options for extending the mine life.”
the coronavirus pandemic. “We made a big transition 18 months ago The company also holds the Kuranze min-
Base managing director Tim Carstens now at Kwale moving from the Central Dune down eral sands project, 70km west of Kwale.
expects the final investment decision to come to the South Dune,” Carstens said. “We are “We are pretty excited about unwrapping
no earlier than September 2021 but told Af- now in a new paradigm of low-grade, high- that opportunity over the next few years,”
rica Down Under Toliara was still a priority for value where our constraint is the mine and Carstens said.
the company. the concentrator. Kwale’s steady return and the delays at
“We remain completely committed to deliv- “We’ve seen our production volumes fall Toliara led Base towards a maiden dividend,
ery of Toliara,” Carstens said. away and we are in our lowest-grade year paid earlier this year.
The suspension of on-ground activity had for the South Dune, so we just need to get “With the open-ended delay to Toliara, we’d
been a blow to Base but Carstens said the through this.” broken the nexus between cash accumula-
company understood the Government’s con- Despite the lower-grade scenario, the mine tion and the need to deploy it at Toliara, so we
cerns around mining projects generating an – just south of Mombasa in southern Kenya – made the decision it was time to jump to the
adequate return for the country. is still producing cash for Base. dual track of cash returns and pursuing our
“Madagascar has been disappointed with “Kwale is still a significant cash generator,” development strategy,” Carstens said.
the outcomes at QMM and Ambatovy [the Carstens said. “Last year it produced just shy “That is the approach we are looking to
two existing operations in the country] and of $US100 million. We won’t be at quite the take forward; managing those two tracks.”
quite reasonably the Government wants im- same level this year but there will still be sig-
– Dominic Piper
Page 52 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
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AFRIcA DoWn UnDeR
Numbers keep rising for Gold Fields
old Fields Ltd is set to hit group
Gguidance for 2020 after posting a Gold Fields September Quarterly Production
7% increase on year-on-year gold pro-
duction in the September quarter. Region Production AISC
Gold Fields produced 557,000oz at Australia 250,000oz $A1,363/oz
$US1,070/oz AISC for the quarter, a Ghana 211,000oz $US1,030/oz
1% increase on the June quarter after
the company was able to return COV- South Africa 65,000oz $A1,055/oz
ID-restricted employees to operations Peru 51,000oz AuEq $US953/oz
in South Africa and Peru. Total 557,000oz $US1,070/oz
Speaking on the company’s quarterly
results call, chief executive Nick Hol-
land said the company’s only remain- “We are not necessarily behind in ny’s economic impact on Ghana.
ing South African asset, South Deep, South Africa but some of the OEMs “Tarkwa is the flagship asset within
had welcomed back 95% of its work- have not released their prototypes in the Gold Fields Group,” Baku said. “Our
force during the quarter after a strin- South Africa yet,” he said. “Battery- success story since 2012 has been to
gent lockdown in the country. powered underground vehicles for in- get 56 expat positions localised. We
“The impact at South Deep was stance will be available in the next 18 now have 13 expats; seven at Tarkwa,
not actually that severe, we have not months. We know what’s out there and four at Damang and two at Galiano.”
missed out on production,” Holland we have a clear roadmap in place for The Ghanaian Government is be-
said. it.” lieved to be considering increasing
South Deep has been Gold Fields’ The biggest technological advance localisation rates to 96% of the work-
most difficult asset over the last dec- at South Deep, according to Holland, force, but Baku is confident Gold Fields
ade as production guidance and devel- will be the introduction of renewable is already able to exceed requirements.
opment rates were consistently missed energy. Gold Fields has widely adopt- “Our average is 2.6% expats current-
in the deep-level (plus-3,000m) mine ed renewable energy on its Australian ly,” he said.
which was originally touted to produce operations, resulting in significant cost Baku put Gold Fields’ localisation
500,000 ozpa. savings. It is now preparing to roll out success down to its overarching ap-
However, the return of workers in similar programmes across its African proach to the strategy.
the September quarter coincided with portfolio. “There is support right from the top,”
the asset’s best recent performance South Africa has long been blighted he said. “There is confidence in nation-
with 65,000oz produced at $US1,055/ by energy issues, but Holland sees the als because Tarkwa has 100% local
oz AISC. Holland said he expected the introduction of renewables at South management and the executive vice
improvement at South Deep to be sus- Deep as a potential saviour. president role has been local since
tained. “Renewables will reduce our reliance 2014. That gives us confidence in Gha-
“South Deep’s costs have come on Eskom, bring down costs and re- naian talent.”
down a lot and South Deep is making duce security risk on energy,” he said. Baku also lauded the Ghanaian edu-
some good cash,” he said. “We are in a Gold Fields steadily withdrew from cation system, which provided Gold
really good position to achieve the re- South Africa last decade as the country Fields with a pipeline of talent but said
vised guidance for the year and we are fell from its place at the top of African the country still struggled with techni-
well set up for 2021.” gold production, but it has reinforced cal roles.
Asked about the introduction of auto- its standing in the continent’s new pre- “One area where we are weak is the
mation and mechanisation in the mine, mier gold producer, Ghana. technical side,” he said. “We have low
Holland said Gold Fields was pushing The company’s Tarkwa, Damang and emphasis on technical training, but
hard to implement new technology. Galiano Gold JV (50/50) operations we are seeing how we can navigate
“There are a number of projects we account for 37% of group production, through that challenge. We have a uni-
are looking at, the most important being delivering 211,000oz @ $US1,030/oz versity of mines next to Tarkwa who we
the control room where we are getting AISC in the September quarter. do a lot of collaboration with.”
more real-time information,” he said. The region’s flagship operation is The other challenge is in retaining
“We are trialling remote loaders con- Tarkwa where four open pit mines sup- staff as they reach senior roles with
trolled from surface and now have im- ply a 13.5 mtpa plant which produced many Ghanaians choosing to head
pact breakers operating underground 127,300oz in the quarter. abroad.
controlled remotely from surface. Speaking virtually at Africa Down “Once they are ready to take over
“We are also looking at putting sen- Under, Gold Fields executive vice pres- expat roles you see them landing jobs
sors on all equipment.” ident West Africa, Alfred Baku, said the outside of Ghana,” Baku said.
The take-up of automated technol- mine’s flagship status was about more – Dominic Piper
ogy has been slower in South Africa than simply production figures.
than other mining jurisdictions but Hol- Baku pointed to Gold Fields’ ability to
land said the situation would change in fill senior roles in the region with local
the coming year. talent as a key indicator of the compa-
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AFRIcA DoWn UnDeR
Nothing new about ESG
ase Resources Ltd manag- far removed from box checking.”
Bing director Tim Carstens can Davies also described ESG
vividly recall the exact moment requirements as now being a
he knew ESG needed to be cen- “performance game rather than
tral to the way mining companies a compliance game”.
functioned. Lycopodium has a 26-year
“I knew that this had really history of building projects for
shifted when it became an enor- various clients across the Afri-
mous topic of conversation with can continent and has success-
PE firms and they wanted to talk fully imparted a number of ESG
about your approach [to ESG] legacies into the communities in
because their endowment funds which they have operated.
in the US were asking them lots Dawson said the main driv-
of questions about how were we ers for ESG will always depend
having a positive impact in the on the audience which is in the
places in which we’re operating,” spotlight.
he said. “At a corporate level we’ll have
“Once it’s starting to go compliance being driven to us;
through the more mercenary at an operational level, our audi-
side of finance, you know it’s ence would be the people on the
resonating.” ground, our true stakeholders
Speaking during a panel ses- on the ground,” Dawson said.
sion on ESG at Africa Down “I think the difference we have
Under, Carstens marvelled at seen as contractors over a pe-
the acceleration of the topic over riod of time demonstrates the
not just the past five years but way you need to be evolving
especially the last 12 months. At Lycopodium’s Peter Dawson and Base Resources managing director your ESG obligations. The ef-
the 2020 Mining Indaba in Cape Tim Carstens dissect ESG issues during a panel session on the final fort you put into the ESG based
Town, most companies had day of Africa Down Under. They were joined remotely by DLA Piper upon what’s good for the stake-
an ESG slide in their presenta- partner Rhys Davies holder will come back and pay
tion and were only too happy to you in the future.
discuss the latest buzzword in the sector in in the culture, to operationalise to a point “So, from a contractor’s point of view, our
great detail. where someone says ‘hey, this is all lawful, policy is to always leave good legacy, and
The emergence of ESG was further but it might not pass the pub test, maybe we that legacy has put us in good standing for
rammed home for Carstens during one of should just take a breath and revisit this with the next project we engage with in Africa.”
Base’s biannual meetings with its major a set of clearly articulated corporate values During his presentation preceding the
shareholder Fidelity Australia. and a real understanding of what our stake- panel session, Perseus Mining Ltd manag-
“Of an hour and 15 minutes, about 40 min- holders expect of us’, that’s the challenge,” ing director Jeff Quartermaine spent more
utes was spent on ESG topics,” Carstens Davies said. than half of his time at the lectern discussing
said. “They wanted to understand how we “Getting that into the culture and living that his company’s commitment to ESG princi-
thought about these things, how we linked on a day-to-day basis is really what this is all ples, particularly in light of the coronavirus
that into strategy, how it flowed through to about. It’s much easier said than done, but I outbreak.
the bottom line, why did we see it as making think that’s got to be the objective. And that’s “For some people, this is a new concept;
business sense.” you hear it wrapped up in a shiny bow and
ESG has become a major talking point people talk extensively about ESG, but for
through 2020 not just because of the global what we do and have done, this is not new;
COVID-19 pandemic but in light of Rio Tinto this is what we’ve been doing forever,” Quar-
Ltd’s wrongful destruction of the historic termaine said.
Juukan Gorge caves in the Pilbara region of “The recent COVID pandemic and our
Western Australia. response has been a good example of us
DLA Piper partner Rhys Davies, who walking the talk, so to speak, and trying to
joined Carstens and Lycopodium Ltd direc- bring about good health and wellbeing in our
tor of strategy and corporate development host communities.
Peter Dawson via video link for the ESG “We don’t seek to claim credit for any-
panel discussion, described the Juukan thing…but I must say we are very pleased
Gorge incident as an example of the “com- by the fact that through the efforts of all of
pliance trap”. the people we were able to keep infections
“You can make all the right policy state- at a minimum in the countries [where we
ments and you can say all the right things, operate].”
but if you haven’t found a way to embed that – Michael Washbourne
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AFRIcA DoWn UnDeR
Juwi has renewed availability of electricity remains the single big-
gest risk to the nation’s economic outlook.
South Africa is also experiencing its worst
loading shedding year on record, with the total
GWh shed in the first eight months of 2020 sur-
faith in Eskom passing the previously unwanted record set in
“Cumulative load shedding for 2020 is al-
ready 23% worse than 2019 and the new Es-
hile conceding Eskom still has some ma- kom CEO has warned that South Africa should
W jor issues to resolve, Juwi Renewable expect increased load shedding over the next
Energies Pty Ltd has welcomed recent changes 18 months as Eskom will no longer defer re-
made by the South African power utility, including quired maintenance and will aggressively move
a public commitment to embracing renewables. to prevent the deterioration of its power plants,”
Juwi global head of hybrid Dave Manning Manning said.
said Eskom’s “unbundling” of its activities into While coal remains the undisputed energy
three separate entities – generation, transmis- king in South Africa, renewables are steadily on
sion and distribution – over the past two years the rise. More broadly, renewables surpassed
was an important and positive step in the right coal in the US energy stakes for the first time
direction. earlier this year.
Manning said the utility’s recently published Dave Manning “Coal will continue to be impacted by the shift
2030 Transmission Development Plan in which power producers] as their projects’ full lifecycle towards renewables and natural gas genera-
it has committed to installing 6,000km of addi- cost and risk is fully factored into the tariff. tion, although it is expected natural gas prices
tional transmission lines and upgrading trans- “It does seem clear that as the energy sec- next year will increase coal’s relative competi-
formers to the magnitude of 30GW was also tor’s enabling environment is improving and po- tiveness,” Manning said.
being roundly welcomed in South Africa. litical barriers are being removed, there is little Juwi is also a business on the rise with more
“We’re also delighted to see there’s a clear doubt that the country is positioning itself to be than 3,500MW of renewable energy projects
acknowledgement from Eskom’s CEO [Andre a major ongoing up-taker of renewables and its announced globally last year. This includes Jo-
Marinus De Ruyter] as well as senior decision associated direct investments. This is not only a hannesburg-based miner Gold Fields Ltd which
makers that renewables are the lowest cost huge win for South Africa, but for the economy recently rolled out a major energy project at its
form of energy today and in the future,” Perth- and the environment.” Agnew mine, Western Australia, whereby 60%
based Manning told delegates at Africa Down Eskom’s ongoing struggles, including its debt of its energy is from solar and wind sources and
Under. blowing out to almost R500 billion, cannot be annual fuel savings are in the ilk of $5 million.
“In effect, there is no financial cost to Eskom overlooked in a South African economic con-
to procure energy from the IPPs [independent text. According to Bloomberg Economics, the – Michael Washbourne
Tietto stays aggressive at Abujar
ietto Minerals Ltd will leave no stone Speaking at Africa Down Under in we can drill a lot, lot cheaper than anyone
Tunturned in its quest to become West early November, Tietto executive direc- because we brought that drilling power
Africa’s next gold producer. tor Mark Strizek said the company was internally. It really is rewriting the rules of
Fresh from announcing an upgraded “rewriting the rules of exploration” by exploration.”
resource for its Abujar gold project in keeping the drill rigs turning while finalis- In the lead-up to Africa Down Under,
Cote d’Ivoire, Tietto has unveiled plans ing feasibility studies. Tietto announced a 40% uplift in the
to complete about 70,000m of drilling Tietto is expected to complete 7,000- Abujar resource to 81.2mt @ 1.2 g/t gold
over the next seven months to underpin 11,000m of drilling each month until the for 3.02 moz, including a high-grade 1.6
a DFS on a proposed large-scale open- end of Q2 2021, including 2,500m of moz @ 2.18 g/t at the AG deposit. It rep-
pit mining operation. geotechnical drilling for the DFS, about resents a 331% increase in total resourc-
Tietto remains on track to deliver a 28,000m of infill drilling for related mining es since the company listed on the ASX
PFS in Q1 2021 with the DFS to follow studies and more than 40,000m of explo- in early 2018.
about six months thereafter. ration drilling for further resource growth. Ivorian authorities also recently grant-
“We’ve got an eye on the prize to be ed environmental approval to Tietto, with
the next West African gold producer,” a mining licence the next major milestone
Strizek said. on the company’s development timeline,
“Very often when you run into the fea- coinciding with the release of the PFS.
sibility stage [the drilling stops], but we “We expect that in Q1 next year and
will continue with that high-tempo explo- the mining convention thereafter,”
ration. We’ve got a large land package Strizek said.
here at Abujar which one of the analysts “Importantly, it’s all been done before
said is severely unexplored, and that’s by others ahead of us. The Government
quite true. There’s lots and lots of targets. understands exactly what needs to be
Tietto executive director Mark Strizek “There’s a lot of drilling planned, there’s done. We’ve very, very pleased with the
with managing director Caigen Wang at still a lot of artisanal workings. The key support we’ve been getting.”
Africa Down Under differentiator about Tietto is the fact that – Michael Washbourne
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AFRIcA DoWn UnDeR
Avoid the dispute key sources in a lot of African states is in-
“When things go off the rails, one of the
vestment codes because often these codes
were drafted with World Bank support and
he landscape for international investment back at the origin, in compliance with local provide protections against expropriation
Tlaw is rapidly evolving and Africa has law.” and unfair treatment.”
been at the forefront of that sea change, ac- During the live Q&A with Perth-based Ostrove said it was on both parties, includ-
cording to DLA Piper global co-chair of inter- DLA Piper colleague Shane Murphy at Af- ing the state, to ensure no corners were cut
national arbitration Michael Ostrove. rica Down Under, Ostrove said the best pro- and details of the proposed investment ar-
Speaking via video link from Paris, Os- tection source for any investor was the rights rangement are thoroughly documented if
trove said many African states had wised they negotiate for themselves at the very be- they want to avoid a future dispute.
up to those investors who typically launched ginning of the investment process. “As the world is shifting to more environ-
protection claims when something went “Make sure everyone knows who is play- mental and social obligations, local content
awry with the initial investment. ing what role,” Ostrove said. obligations, and sometimes those
“For the first 20 or so years of obligations are not exactly clear un-
claims under investment law, it was der local law, it’s really on both sides
all about investors who had either – the state side and the investor side
been expropriated of felt they were – to make sure that the decrees have
unfairly treated, going after states been issued and the laws clarified so
as a matter of international law and that everyone is clear what the obliga-
seeking reparations,” he said. tions are,” he said.
“More and more today we’re see- “Make sure you’ve taken the time
ing states insist that investors also to paper, not just a broad statement
have obligations to respect local law, of what will be done, but really clear
to carry out environment and social statements so there’s no ambiguity.”
impact statements and to, in general, DLA Piper was last month recog-
be more transparent about their in- nised as the top international law firm
vestment. in Africa, with over 100 partners and
“States are much more wise to the 450 lawyers across 20 countries on
fact that when an investor comes in the continent.
and raises an investment protection DLA Piper’s Shane Murphy conducted a live Q&A with Paris-
claim, the state often has defences based global co-chair of international arbitration Michael – Michael Washbourne
if that investment was not made way Ostrove on investment disputes in the mining sector
The heroes of Yaoure
demic and beyond. “We supplemented the “This unit costs a fraction of those units
crew with fresh resources as required and found in a typical Australian hospital. We’re
carefully managed fatigue. We changed the in the process of applying to the Therapeutic
way we interacted with vendors, complied Goods Administration under the COVID-19
with strict isolation and distancing protocols emergency exemption for possible use in
on site, many of those laid out by our client Australia. We also intend to seek an appro-
Peter de Leo Perseus, and complied with testing require- priate listing to allow it to be used to support
ments. the local communities where Lycopodium
hat do Batman, Superman and the “We now remain on track for the stretch operates in Africa and elsewhere.”
Wsite team at the upcoming Yaoure gold target of first gold in DECEMBER 2020 - Lycopodium has been delivering projects
mine in Cote d’Ivoire have in common? Lyco- JANUARY 2021. I think that is testament to in Africa for more than 25 years and de Leo
podium Ltd managing director Peter de Leo the guys and ladies on site who have done a said strong partnerships had underpinned
will tell you they are all “heroes”. remarkable job.” the company’s long-term success on the
Lycopodium is overseeing the build of the Lycopodium has been one of the leaders continent.
3 mtpa operation at Yaoure for Perseus Min- in preparing not just the mining sector but “Strong partnerships are absolutely critical
ing Ltd. Full-scale construction activities at other industries for the global fight against when delivering projects thousands of miles
the project began in the September quarter COVID-19. away, and never more so than over the past
of 2019. Earlier this year the respected engineer- nine months with COVID-19,” he said.
However, by the end of first quarter of ing outfit designed a portable electrically- “Project success relies on the premise
this year the reality of the global COVID-19 operated ventilator, now known as LycoVent, that we’re in partnership with not only our
pandemic had hit home. Yet the Lycopodium which provides an independent and emer- clients, but our sub-contractors and contrac-
team has managed to keep the project on gency back-up supply of piped oxygen. tors, vendors, suppliers, local communities
time and on budget, with first gold set to be “As COVID emerged and the realisation and local governments. If we’re not work-
poured this month. dawned on us that there could be a shortage ing in sync, and sympathetically, you simply
“We needed to look at fewer crew of some of the key resources and key equip- can’t deliver these projects and meet these
changes…our site people were heroes,” ment to deal with the effects of COVID-19, metrics.”
de Leo said of how the Lycopodium team we embarked on using our engineering skills
navigated the initial stages of the pan- to develop the LycoVent,” de Leo said. – Michael Washbourne
Page 60 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
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AFRIcA DoWn UnDeR
Emerging economies bounce back
On the big screen: Australia’s High
Commissioner to South Africa, Gita
Kamath joined Africa Down Under
remotely from Pretoria
utside of South Africa, the impacts of at real GDP growth for this year, around sector again, which accounts normally for
Othe COVID-19 pandemic on the rest of 2%. around 11% of their GDP,” Cutts said.
the continent have barely rated a mention in “Despite the problems I think Egypt is Australian Ambassador to Zimbabwe
the Australian mainstream press. However, looking at the opportunities created by Bronte Moules said two of the country’s
that does not mean Australia has no role to COVID and looking to take advantage.” strongest assets – its natural wealth and its
play in the recoveries of some of Africa’s Ethiopia was another country enjoying an human capital – remained steadfast in the
emerging economies. improved economic outlook following the face the pandemic.
Ethiopia and Egypt were two countries election of Abiy Ahmed as Prime Minister Zimbabwe is also maintaining its ambi-
going from strength to strength prior to in early 2018. tion to be a net exporter of power by 2023.
the outbreak of the coronavirus in Janu- Australian Ambassador to Ethiopia Pe- “Despite a myriad of challenges, we
ary. Despite the pandemic and the finan- ter Doyle said the country remains in both have seen some encouraging signs at least
cial implications of lockdowns across the a political and economic transition, while in terms of the issues that potentially get
world, Egypt remains on track to be the only maintaining a steady level of growth. raised by potential investors,” she said.
country in the Middle East and North Africa “When Prime Minister Abiy came to pow- “The foreign auction system has brought
(MENA) region which will record positive er in April 2018, he really instituted for the some stability in terms of the currency and
economic growth in FY2021, according to first time reforms that are putting Ethiopia prices so there’s more predictability in terms
the IMF. on a path to being a true democracy and of access to currency and more predictabil-
This has been attributed to the economic he wants the country to become an open ity in prices. It’s looking a little bit better in
reform programme first rolled out in Egypt economy,” Doyle said. the last few months than it has before.”
four years ago and continuing today. “The Government and the Prime Minister South Africa entered one of the world’s
“Going into the pandemic…economic have a really high level of ambition of what strictest lockdown periods in March, but the
growth was around 5.5% and primary in- they want to achieve and so there’s plenty Ramaphosa Government also committed
flation for the first time in a long time had of activity at the moment. Obviously not to a significant stimulus package of R500
dropped down to single digits….and that’s everything is going to be smooth when you billion.
after many years of low growth following the want to make major rapid change, there’s While some economists have questioned
2011 revolution,” Australian Ambassador to going to be some hiccups along the way, how much of that stimulus is new money,
Egypt Glenn Miles said. but it’s really exciting transition journey that according to Australian High Commission-
“What it meant was that Egypt entered Ethiopia is on at the moment.” er to South Africa Gita Kamath, it appears
the pandemic in a good macroeconomic Morocco on the other hand is set to re- now to be a matter of when certain projects
position. Obviously like everyone, it’s been cord a 2% drop in its GDP given its close will be rolled out.
badly hit. Tourism has fallen considerably… links to Spain and France which have both “Some of those announcements are not
remittances have also fallen, revenue from been badly impacted by COVID-19. new and the target is to achieve 3% annual
the Suez Canal has dropped a bit and hy- However, Australian Ambassador-des- growth over the next decade,” she said.
drocarbons have also taken a bit of a hit. ignate to Morocco Michael Cutts expects “In South Africa, getting to this point in-
“The Government has responded well. the country to bounce back in 2021, with volves what they call social compacting, so
We never went into the lockdown that other the European Bank for Reconstruction and there’s a lot of discussion with organised
countries in the region have gone through Development (EBRD) forecasting 4% eco- business, the union movement and social
and the size of the informal economy nomic growth next year. partners who have all committed to sup-
helped keep it kicking over. Egypt signed “They’ve thrown money at investment porting the Government. But the key ques-
an $8 billion deal with IMF which has given projects that will seek to boost employ- tion on everyone’s mind will be about imple-
it a greater financial buffer and it’s the only ment, in the first instance, and they’ve really mentation and execution.”
country in the MENA region that is looking started to throw some money at the tourism
– Michael Washbourne
Page 62 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Walkabout stays on course
o amount of market disruption or in- and industry.
Ncountry policy shifts will throw Walka- “We think the process has gone full
bout Resources Ltd off the development cycle and it has settled down and foreign
path for its Lindi Jumbo graphite project in investment is starting to come back. The
Tanzania, according to executive director range of investment rules have now be-
Allan Mulligan. come palatable again.”
Like its peers in the East African coun- He believes Tanzania’s heavy gold en-
try, Walkabout has suffered setbacks on dowment will be of particular interest to
several fronts in the last five years as a foreign companies, Walkabout included.
result of poorly performing graphite fun- The company picked up the Amani gold
damentals and Tanzanian President John project in the country’s south-west earlier
Magafuli’s amendments to the Mining Act in 2020. A first round of soil sampling in
which frightened foreign investors. How- October produced gold-in-soil anomalies
ever, Mulligan believes the prize at Lindi up to 2.4km in strike and 900m in width.
Jumbo is large enough to withstand the The field programme also identified addi-
knocks. tional artisanal diggings up to 10km out-
“It is one of the highest grade graphite Allan Mulligan side known historical areas at Amani.
projects in the world and one of the best “This is a long-term gold producing, al-
flake size distributions in the world and it should also please debt providers, ac- luvial goldfield but it has never been prop-
has been verified by Benchmark Minerals cording to Mulligan. erly explored,” Mulligan said. “The Ger-
Intelligence as being the second highest The company has binding offtakes man Geological Survey recorded hard
margin graphite project in the world,” Mul- with two Chinese graphite companies for rock gold occurrences in the 1920s, but
ligan told Paydirt. 10,000 tpa and 10-20,000 tpa respec- that work was never followed up.”
Walkabout’s execution strategy has tively as well as a 10-30,000 tpa binding
been all about simplicity with capex kept offtake agreement with Hong Kong mar- – Dominic Piper
to $US29.7 million and production ini- keting company Wogen Pacific Ltd.
tially held at a relatively small 40,000 tpa “They prepay us
of graphite concentrate. The size was when the product
designed to make project financing an is loaded onto the
easier proposition, but the company con- ships,” Mulligan
tinues to seek willing funders. said. “This is of
Mulligan said the company was mind- huge benefit be-
ful of investor frustration with the lack of cause the invest- ACQUISITION OF THE
progress. ment market right MORILA GOLD MINE: A
“We are aware the process is taking a now is a little bit TRANSFORMATIONAL
long time,” he admitted. “The appetite in cautious about
the international bond market was not up graphite market TRANSACTION
to scratch because, we think, of Tanza- which they consid-
nia’s mining policies shifts and graphite is er to be opaque.”
an unknown entity. And there hasn’t been If the Wogen
a graphite project debt funded to date. deal adds clarity to
“So, we have shifted to debt funding the market equa-
from African development banks. We are tion, recent devel-
currently pursuing a very interesting deal opments in Tan-
and it is progressing well but can’t give zania have added
too much information to the market yet.” stability to the in-
Walkabout’s bid for African develop- vestment climate.
ment bank financing appears to fit well In October, Bar-
with its in-country approach where it has rick Gold Corp
given local content primacy over foreign announced it had
influence. applied for new
“We have structured Lindi Jumbo as licences in the
a wholly Tanzanian company,” Mulligan country after fi-
explained. “It will be operated out of Tan- nally settling its
zanian by Tanzanians with Tanzanians in- grievances with
volved in the construction and operation. the Tanzanian
The only involvement out of Australia will Government. Mul-
be the supply of funding, some technical ligan sees it as a
expertise and the reaping of its share of positive develop-
dividends when they come.” ment for country
Lindi Jumbo’s marketing arrangements
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 63
An ASX listing, an updated resource and the launch of
feasibility work; if everything goes to plan, Sarama Resources
Inc could become one of the West African gold stories of 2022
Sarama Resources Ltd
ASX: Proposed listing 2021 next gold district
Head office: Suite 8, 245 Churchill Avenue Subiaco WA 6008
Phone: +61 8 9363 7600
Fax: +61 8 9382 4309
Email: [email protected] An ASX listing, an updated resource and the launch of feasibility work;
Twitter: @SaramaResources if everything goes to plan, Sarama Resources could become one of
LinkedIn: Sarama Resources the West African gold stories of 2022 and beyond.
Key people: Simon Jackson (non-executive chairman); Sarama is a long-term participant in the West African exploration
Andrew Dinning (managing director); Adrian Byass scene, having delineated 2.5 moz gold on its Sanutura Project in south-
(non-executive director); Steve Zaninovich west Burkina Faso since listing on the TSX in 2010.
(non-executive director) However, having seen progress at Sanutura stall for several years due
Market cap: $C31 million to a poorly performing JV, the company managed to successfully re-
Share price: 34c/share gain control and has chosen to reinvigorate itself, refreshing the board
Projects: Sanutura – Houndé and Boromo Greenstone Belts, and subsequently choosing to dual list on the ASX.
south-west Burkina Faso
Resources: 9.4mt @ 1.9 g/t for 600,000oz (indicated) plus For chief executive Andrew Dinning, the move amounts to a resetting
43.6mt @ 1.4 g/t for 1.9 moz (inferred) reported at for the company.
cut-off grades ranging 0.2-1.6 g/t “There was a natural progression to a restructured board. Because of
Bondi: 4.1mt @ 2.1 g/t for 282,000oz gold (measured the global pandemic it was becoming increasingly difficult to operate
and indicated) plus 2.5mt @ 1.8 g/t Au for with a board split between Canada and Australia,” Dinning explains.
149,700oz (inferred), reported at a 0.5 g/t cut-off “Ultimately, it has proven a circuit breaker for the company. It has led
Koumandara: Banfora Belt, south-west Burkina Faso to a revising of the company strategy, a recent capital raising and an
Karankasso JV: Endeavour Mining Corp/ Sarama 20% participating update to the resource at Sanutura.”
Resources: 12.74mt @ 1.73 g/t for 709,000oz gold
resource update out.”
In parallel, the company will also begin
metallurgical work on transitional material in
anticipation of starting a feasibility study in
the latter part of 2021.
Sarama’s plan is to focus its project
economics on oxide ounces, allowing it to
simplify mining and processing and also
target a quick payback.
“With a 1 moz oxide starter resource, we
should be able to build and payback the
Adrian Byass and Steve Zaninovich have
joined the Sarama board this year. Both are mine with just the oxides which are free
Perth-based and well-versed in West Afri- digging and easy processing with high
can gold developments, experience which recoveries,” Dinning says. “It is a similar
Sanutura will benefit from. approach to what Perseus Mining has done
at its Sissingué gold mine in the Ivory Coast.
Sanutura – which means gold bull in the “We already have a good idea of what the
local Douala language – is the new name flowsheet would look like; it comes down
of Sarama’s combined projects in the highly to right-sizing it. It is always a trade-off North American investors have been
prospective southern Houndé Belt (formerly between throughput, capex and grade reluctant to back junior gold plays in West
the South Houndé and ThreeBee projects). and where you find the greatest value per Africa in recent years. Meanwhile the
Collectively they now boast a mining con- tonne.” ASX has displayed strong support for the
strained resource of 2.5 moz gold, up from region with established producers such as
the 2016 global resource of 2.1 moz gold. Once payback is achieved there will be a Perseus Mining Ltd and Resolute Mining
The upgrade also included an increase in natural transition point where it will make Ltd performing well, new arrivals such as
oxide and transitional material to 0.9 moz sense for Sarama to introduce the sulphide West African Resources Ltd posting big
gold. In addition to this, the Bondi Deposit is ore into the processing stream, however gains and a growing gang of junior explor-
waiting in the wings which has a historical depending on throughput settled on, the ers enjoying strong market support.
resource of over 0.4 moz gold. company does not see this transition hap-
With a further $C1.6 million raised in recent pening for at least 6-7 years. Dinning is already seeing signs of this senti-
months, Sarama is intent on lifting that “If you can get something paid off inside two
figure still further. years, it begins to open up your options for “The appetite for the IPO is good, the story
“The ultimate aim is to reach a combined 3 when you put sulphides through the circuit has been well received and we are sup-
ported by Euroz-Hartleys,” he says.
because you are no longer considering
moz gold resource in the next update, with payback, etc.
the aim to push well through 1 moz of ox- The company had planned to finalise the
ides and transitional which would easily be “The aim is to get at least six years of oxide IPO process by November but with the
enough to justify a CIL plant,” Dinning says. production before we have to upgrade the Christmas period looming, it has chosen
“From there we will do a feasibility study circuit.” to push the listing back to early in the new
with the first phase of production focussing Given the recent success of ASX-listed year. Dinning is confident the Australian
on the oxides and transitional.” West African gold plays, Dinning expects capital raising will provide Sarama with
The company has several options to realise the Australian market to quickly warm to the
that goal, all of which will focus on easy-to- Sarama story. “We are looking to raise $8-10 million which
win oxide ounces. “Our value, as a TSX-listed company, is will be put to work straight away on the
Sarama also has regional targets on its miles off that of our peers on the ASX,” he oxide targets as well as Bondi,” he says.
1,500sq km land package at Sanutura, says. “We have a lot of ounces with plenty A bulging bank balance, growing resource
including the Bamako 2 Property – where a of upside and line-of-sight on development. and the start of feasibility work; Sarama
hit of 8m @ 18 g/t gold is yet to be followed They’re the things Australian investors like could look a very different company at the
up – and the Bondi Deposit which contains to see in a gold company.” beginning of 2022.
a historical resource in excess of 0.4 moz
gold that Dinning is eager to formalise and
“2021 is all about pulling in the high prob-
ability, high value ounces, upgrading the
resource and doing the technical work so
we can roll into a feasibility study,” he says.
While the company is yet to set a date for
the start of feasibility work, Dinning believes
the current exploration season will be long
enough to give the company the drilling data
“We expect to materially grow the total
resource and to convert a lot of the inferred saramaresources.com
material into indicated which will enable us
to get moving on feasibility work. So, it will
probably be Q3 2021 before we get the
AFRIcA DoWn UnDeR
Perenti boss proud mutually beneficial relationships with our cli-
ents, our employees, local governments, lo-
cal business and the communities in which
we operate,” Norwell said. “Relationships
have always been important for us and they
as punch are even more important in navigating the
world of today.”
Perenti operates six business units in Af-
rica, including Supply Direct (headquartered
here have been a lot of proud moments broader Africa. in Johannesburg, South Africa) and Logistics
Tfor Perenti Global Ltd managing director “When we train and develop people in Af- Direct (Accra, Ghana).
Mark Norwell over the last 12 months, many rica, we do so not just to enable mining to take “Whilst they’re two small businesses within
of which come back to how his company con- place, but more importantly to create value to our portfolio, they’re critical businesses that
tinues to successfully operate amid a global the people and the communities in which we support our logistics and supply chain net-
health crisis. operate.” works within Africa,” Norwell said.
However, it is a moment which preceded Perenti operates 21 projects across eight “Everyone knows that is critical to ensure
the pandemic that Norwell continues to look countries on the African continent, employ- continuity and deliver certainty of the opera-
back on most fondly, especially because it ing more than 5,000 people which represents tions.”
perhaps best illustrates the importance of 65% of the company’s global workforce.
Perenti’s presence in Africa. In 2021, the group will celebrate its 30th – Michael Washbourne
“Twelve months ago when I was in Bot- year since it started operating in Africa.
swana on my honeymoon with my wife, I was Perenti opened a state-of-the-art training
talking to a Botswana man about a company facility in Botswana in September, teaching
that had just started in Botswana called Bar- locals the requisite skills to ultimately be em-
minco,” Norwell told delegates at Africa Down ployed at one of the company’s underground
Under. or open pit mines in the country.
“He was telling us how, through Barminco, More than 200 locals have been trained
they were employing and training local peo- and employed by Perenti in Botswana and
ple in underground mining. It was such a the group is looking to grow that number be-
proud moment to have somebody talk about yond 500 as soon as possible.
one of the businesses that we own that is “Throughout our time in Africa, our focus
really making a difference in Botswana and has been on building and supporting strong Mark Norwell
MURRAY & ROBERTS CEMENTATION
Tel: (011) 422-1949
Produced by Coralynne & Associates www.cementation.murrob.com
SHAFT SINKING • RAISEBORING • DEVELOPMENT • CONTRACT MINING • MINE ENGINEERING
Page 66 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
African investment pause
hile travel to many African destinations
Wremains restricted due to the COVID-19
pandemic, investors will continue to favour the
more developed mining markets where there
is no shortage of trusted consultants capable
of running an independent ruler over a pro-
spective project, according to respected fund
manager Caroline Donally.
Speaking to Paydirt from her Houston
base, Donnally indicated that many investors
and funds would be reluctant to deploy big
licks of capital on projects in Africa due to ei-
ther physically not being able to do a site visit
themselves or the challenge of finding some-
one with the requisite skills and capabilities to
complete due diligence over the opportunity
“I think what we’ve seen this year is the con-
tinuation of a lot of deals and transactions that
were already in the pipeline, so where people
had already been to site and done quite a lot
of due diligence, those carried on,” Donally
“For new deals, that’s challenging…and I Caroline Donally
think unfortunately the fallout for Africa is that slightly different than the private equity where
it has become even more challenging, which typically that focus is all wrapped up with oth-
is not really anything to do with political risk er strategies,” she said. package,” she said. “Our deals are cash ba-
or jurisdiction, it’s just the travel restrictions “Where we sit in streams and royalties, we sis…so when we’re creating streams and roy-
and being able to get there has added to the have full commodity price exposure and that alties, we’re actually physically putting cash
complexity. we’ve seen is something that investors have into these businesses and we’re looking for
“In the developed mining markets, you been really interested in because in these returns based on that cash.
have a lot of consultants and you have a lot times of uncertainty, like we’re living in these “We’ve found with the much larger royalty
of people that you can tap for expertise, so it’s days, investors may not necessarily want to companies and streaming companies, they
less of an issue to find someone who knows be in the equity because they’re actually look- need to do much bigger deals than what we’re
the assets, who has been there recently, who ing for longer-term commodity exposure with talking about. We see a niche in the market
you can have a conversation with and figure a manager such as ourselves who is able to for where we’re playing, given the other mar-
out whether it makes sense for you or not. pick and choose which companies we’d like ket participants and we’re they’re focused.”
Whereas in some of the African countries, to back. Africa-raised Donally said while her fund
they don’t have that level of internal consult- “The opportunity we see in the space at the had no specific rules on where it can and
ants who live in country and who have been moment is in the development stage com- can’t invest, she indicated those jurisdictions
there recently. panies, so where there’s been substantial with stable governments and polices would
“Obviously you have pockets of countries progress made in permitting and feasibility always be favoured over those that don’t.
[in Africa] which are easier to invest, which studies and the company is considering their Following on from her comments at the
have more stability and a better reputation options as to how to get themselves into pro- Mining Indaba in Cape Town earlier this year,
for investing, so I think those will come back duction.” Donally again urged countries to “stick to the
sooner than the ones which frankly have just Deterra Royalties Ltd became the ASX’s rules” if they wish to continue attracting for-
been more challenging. But for the meantime, most significant royalties company in Octo- eign investment.
I think people will keep looking around in their ber following its successful demerger from “Going into a transaction, especially where
backyards where they can get a good read on mineral sands miner Iluka Resources Ltd. we’re doing something like a stream or a roy-
what the pandemic numbers look like, travel Underpinning the spinout was an iron ore roy- alty which could be a 10-12 year life of mine,
restrictions, lockdowns, etc.” alties stream from BHP Ltd’s South Flank op- in which case these are long-term financing
After almost a decade with Denham Capi- erations in Western Australia which netted the relationships that we’re setting up, we do look
tal, Donally recently joined Michael Harrison Iluka group $85 million in revenue last year. for stability in the rules and when the rules
as a managing partner in Sprott Inc’s newest Donally said the Sprott fund was more like- change overnight, that makes investors very
fund, Sprott Resource Streaming and Royalty ly to appeal to juniors with a sub-$US1 billion skittish,” she said.
Corp. market cap, especially those looking for an “We’re not seeking 20-year tax holidays
Established in late 2019, the fund is look- investment in the $US10-15 million bracket. and these outrageous deals that countries
ing to pull together about $US500 million and “What we see with a number of other used to do before. What we’re looking for is
then deploy that investor capital into various royalty companies, specifically on the listed stability. We can then figure out whether the
streams and royalties around the world. side, is that they tend to buy more royalties investment makes sense – and if it makes
Donally said streams and royalties were from others, so they’ll buy a package from sense, then let’s stick to what those rules are.”
ideal for investors seeking full commodity one of the mid-size mining companies and – Michael Washbourne
price exposure. then use their shares so that mining com-
“Our focus on streams and royalties is pany still gets some upside to the royalty
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 67
AFRIcA DoWn UnDeR
Party of two at Cardinal could get crowded
ead of Global Mining at the Toronto Stock for Cardinal. Namdini project to the benefit of sharehold-
HExchange and TSX Venture Exchange, Since then Shandong and Nordgold have ers, employees, the local community and all
Dean McPherson says money is starting to matched and exceeded each other’s offers constituencies, ” Nordgold chief executive
flow freely back into mining stocks. for Cardinal, with Shandong’s bids backed Nikolai Zelenski said in a statement.
“Notwithstanding COVID, it has been a by the Cardinal board. When contacted by Paydirt, Cardinal
bumper year; our best year in a long time,” managing director Archie Koimtsidis ad-
McPherson told Paydirt. vised he was not to comment on the Takeo-
Gold stories have attracted a lot of atten- vers Panel decision.
tion and investors appear agnostic on the However, in a statement to the market
jurisdictions in which they deploy capital. Cardinal expressed its disappointment
“Interest in Africa as an investment des- with the outcome and vowed to “explore all
tination for mining and exploration is quite possible contingencies for the benefit of its
high, but we haven’t really seen any jurisdic- shareholders”.
tional bias. I have seen support for projects “Having regard to Shandong Gold’s state-
in Asia, Africa, Latin America; but Africa ment of intention that should a higher com-
does have quite a high representation in our peting offer [to $1.00 per Cardinal share] be
market and a lot of our companies have pro- made or announced, that Shandong Gold
jects there,” McPherson said. intends to increase the cash consideration
Given the familiarity investors and com- under its offer to $1.05 per Cardinal share,
panies on the TSX and TSX-V have with the Cardinal notes that an opportunity exists for
African mining landscape and gold M&A a third party bidder [or a consortium of bid-
activity heating up in West Africa, it will be ders] to make a competing offer for Cardinal
interesting to see if a last minute bidder from at a price in excess of $1.00 per share which
Canada emerges for ASX and TSX-listed would have the effect of freeing Shandong
Cardinal Resources Ltd. Archie Koimtsidis and Nordgold of their respective ‘best and
Cardinal has been a participant on the final’ statements,” Cardinal stated on No-
TSX since mid-2017, with the additional list- In the latest development at the time of vember 18.
ing coming as the company was about to re- print, Russian outfit Nordgold’s on-market At the time of print, Engineers & Planners
lease a scoping study/PEA on the Namdini offer of $1/share was extended by seven Company Ltd made an unsolicited condi-
gold project in Ghana’s Upper East region. days and expected to close on December 7, tional off-market takeover offer for Cardinal
Namdini now hosts gold reserves in the coinciding with the 2020 Ghanaian general at $1.05c/share.
vicinity of 5.1 moz and is a development pro- election. Cardinal advised shareholders to take no
ject ready to produce 287,000 ozpa over at In light of Cardinal’s three applications action.
least 15 years, with an estimated 1.1 mozpa to the Australian Government’s Takeovers
expected in the initial three years of opera- Panel to have its affairs reviewed and con- – Mark Andrews
tions. trol of the company
A capital cost of $US390 million (includ- handled in court be-
ing $US42 million contingency) was guided ing rejected, Nord-
in the 2019 feasibility study, which was gold reemphasised
based on a $US1,550/oz gold price, and it’s standing as best
also included metrics of $US895/oz AISC fit for Namdini.
over 15 years, payback of nine months, pre- Nordgold’s strong
tax NPV of $US1.4 billion and pre-tax IRR presence and vast
of 57%. operating experi-
Sovereign Parliamentary Ratification for ence in West Africa
a mining licence at Namdini, which is valid plus its strong bal-
for a renewable term of 15 years starting in ance sheet are key
2020, has been received with FEED activi- points the company
ties expected to be completed in Q4. believes it has on its
A resettlement action plan (RAP) is tar- side.
geted for completion in Q1, with the possibil- “With both Nor-
ity of production from Namdini a very real dgold and Shan-
near-term possibility. dong’s offers best
However, since receipt of an indicative and final, we hope
non-binding proposal from Nordgold SE that the takeover can
came to light in March after it had upped its now be concluded
stake in Cardinal to 19.9%, a bidding war for successfully and
the dual-listed company has erupted. that Nordgold can
Shandong Gold Mining Co. Ltd entered provide all appropri-
the ring with an offer – 60c/share in June – ate support to the
opposing Nordgold’s initial 45c/share pitch development of the
Page 68 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Endeavour voyage takes in Teranga
ndeavour Mining Corp’s buying spree Burkina Faso and its Sa-
Ehas continued with the company agree- bodala-Massawa gold
ing to acquire fellow West African-focused mine in Senegal as well
miner Teranga Gold Corp in a $2 billion all- the development assets
scrip deal in November. of both companies.
The merger will create a top 10 global The deal is Endeav-
gold company capable of producing 1.5 our’s second of 2020,
mozpa with a market cap of $US6 billion. having previously paid
And, coming soon after Northern Star Re- $US1 billion for Se-
sources Ltd and Saracen Mineral Holdings mafo and its Mana and
Ltd announced an even larger marriage in Bongou mines in Burki-
Australia, all eyes have turned to the ASX- na Faso. Last year, it
listed West African producers for the next had failed to reach terms
move. with Egyptian-focused
Argonaut Securities analyst John Mac- gold miner Centamin plc
donald told Paydirt that while ASX-listed over a merger proposal.
gold miners Perseus Mining Ltd, Resolute Endeavour will pay
Mining Ltd and West African Resources Ltd 0.47 of its own shares
were not directly affected by the Endeavour- for each Teranga share,
Teranga deal, there were repercussions. a 5.1% premium based Through operations such as Ity in Burkina Faso, Endeavour has
“They will all be aware of it and the effect on the November 13 established itself as a successor to Randgold in West Africa
on the collective market psyche,” Macdon- closing prices – valuing
ald said. “It will reinforce what the market Teranga, whose shares are up 97% this producer. Ironically, the move for Teranga is
expects of them.” year, at $US1.99 billion. designed to pave the way for Endeavour to
The Australian market has already been “We’re not trying to buy cheap we’re just fill the space.
exposed to West African M&A through the trying to make the right deal that satisfies The company believes the combined
Shandong Gold/Norgold battle over Cardi- both sets of shareholders and that ensures group has high potential for a re-rating if
nal Resources Ltd. Macdonald said while the maximum support and maximum return it can prove attractive to a gold equities-
Cardinal’s Namdini asset was unique, there going forward,” Endeavour chief execu- starved London market. It plans to pursues
could be more activity on its way. tive Sébastien de Montessus said in a tel- a second listing on the London Stock Ex-
“There are not many assets like Namdini, ephone interview. change (LSE) in 2021 which would make it
it is the largest asset still in independent Barrick Gold Corp, an 11.44% share- the largest gold producer on the LSE.
hands,” he said. “But if you look at the ASX- holder in Teranga is supporting the deal. De Montessus said he had no further
listed West African producers, they are not Barrick chief executive Mark Bristow has acquisition plans, “no intention” of growing
marked the same as the domestic produc- championed consolidation in the gold sec- beyond 2 moz gold production and that the
ers when it comes to cost structures, etc. I tor, having led the process which saw Bar- company has organic growth potential.
don’t know if that is justified.” rick acquire Randgold Resources, the West Analysts at Berenberg said in a note the
It will bring together Endeavour’s suite of African miner he launched 20 years ago. merger would help to balance Burkina Faso
six gold mines in Burkina Faso and Cote Randgold’s sale opened an enticing gap risk with “long-term production from a low-
d’Ivoire with Teranga’s Wahgnion asset in on London’s FTSE100 for a dedicated gold er-risk jurisdiction [Senegal]”.
Burkina Faso is battling an Islamist insur-
gency in its eastern borderlands with Mali
and Niger. A militant attack a year ago on
a convoy of mineworkers killed at least 37
civilians near the Boungou mine – part of
Endeavour’s portfolio following the Semafo
De Montessus, who has overseen
Boungou’s restart and a security overhaul,
said support from France’s Barkhane forc-
es has improved the security situation.
La Mancha, Egyptian billionaire Naguib
Sawiris’ gold mining holding company and
Endeavour’s top shareholder, pledged a
$US200 million cash injection into the new
Endeavour and Teranga also negotiated
debt refinancing as part of the deal, which
they said would save the group around
$US40 million a year over the next several
– Dominic Piper
Bedding down production at Hounde, and then incorporating the new assets, will be key
to Endeavour’s post-Teranga success
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 69
AFRIcA DoWn UnDeR
Predictive primed to cash in at Bankan
redictive Discovery Ltd has entered a in January.
Pcrucial phase of drilling at it Bankan gold Deeper drilling is also on the company’s
project in Guinea ahead of next year’s maid- agenda over the coming six months.
en resource announcement. “We certainly believe we can drill this to
Having just boosted its cash position to a very significant depth, probably to 250m
$15 million following a recent $10.6 million vertical depth, and include that within an
institutional placement, Predictive has now economic resource,” Roberts said.
kicked off power auger drilling on a western Predictive is currently focusing on an un-
extension of the North East Bankan discov- tested area between the North East Ban-
ery to test for a possible new zone of gold kan and Bankan Creek prospects. Power
mineralisation. auger and aeromagnetics over the entire
About 15,000m of power auger drilling 358sq km land package the company holds
is planned, along with 10,000m of RC and Paul Roberts in Guinea is set to begin imminently.
diamond drilling, as the company targets listed resources group in the preceding Roberts said there was strong potential
a maiden resource estimate for Bankan in three years. to make further greenfields discoveries
mid-2021. The North East Bankan discovery came along the largely unexplored 35km strike
“A maiden resource from an absolute more than a decade after Predictive first length on the Bankan property.
standing start in 15 months is pretty fast by ventured into West Africa, but less than “There’s real potential to find more on
most people’s measure,” Predictive manag- a year since being granted its exploration Bankan Creek and really what this reinforc-
ing director Paul Roberts told Africa Down package in Guinea. es is that we’re at the very beginning of this
Under. “By sticking to the knitting, with a bit of story,” he said.
Predictive set market tongues wagging persistence, we’ve actually found some- “We’ve got a very large area of strike
in April when it announced a breakthrough thing that certainly looks quite interesting,” length to go and explore, and we know its
intersection of 46m @ 6.58 g/t gold from Roberts said. blind mineralisation, which is a really impor-
4m (including 10m @ 26.52 g/t from 34m) The recent $10.6 million placement en- tant element to the future potential here.”
at North East Bankan which triggered a sures Predictive is funded to complete its
1,000% share price rise, including the big- upcoming work programmes, including – Michael Washbourne
gest single-day surge (733%) by an ASX- metallurgical studies which are set to begin
Flagship Prieska Copper-
Zinc Project – Northern Cape
Province, South Africa
Updated BFS completed
optimisation & value
FINDING AND BUILDING Substantial increase in
THE MINES OF production, mine life and
THE FUTURE cash ﬂ ow achieved:
• Cash ﬂ ow of A$1.6B
• NPV to A$779M
One of the few long-life,
development ready base
metal assets globally:
• 12-year mine life at
~22ktpa Cu and ~70ktpa Zn
Project ﬁ nancing
and strategic partner
discussions well advanced
Well placed to play key role in
local economic recovery plan
for Northern Cape Region
Signiﬁ cant exposure to
> BANKABLE in Fraser Range, WA (IGO-JV)
> FULLY PERMITTED Key Ni-Cu targets directly
> READY TO BUILD along trend from recent
Legend Mining discovery
ASX: ORN | JSE: ORN Air-core drilling underway ahead
www.orionminerals.com.au of planned diamond drilling
Page 70 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
BlackEarth rounds up Maniry BFS
head of completing a BFS on the related to geopolitics, product sizing, quali- simple and well proven metallurgy, with
AManiry graphite project in Madagas- fication periods and basic project econom- even the mid-sized material “far exceed-
car in 2021, BlackEarth Minerals NL has ics will not see the multitude of new pro- ing” normal coarse flake expandable re-
boosted its capacity with the appointment jects coming online as first expected.” sults to the surprise of end-users in both
of David Round to the board as finance di- Australian companies rushed towards Asia and Europe.
rector. graphite projects five years ago as the “The board remains confident in its pur-
In a sector the investment market still role of graphite as an anode in lithium- suit to produce higher end downstream
hasn’t fully grasped, according to Black- ion batteries became better understood, products for the market both in the short
Earth managing director Tom Revy, however, the complexity of developing and and long term with enough [demand] for
Round’s inclusion at BlackEarth is timely financing such projects has seen market a staple supply of various graphite related
as off-take discussions continue and pro- attention drop-off. products,” Revy said.
ject development scenarios for Maniry can While there is more known about the – Mark Andrews
start to be envisioned. graphite sector today, explaining graphite
Round’s previous experience as chief market dynamics to the investors was still
financial officer and head of sales with a a challenge, Revy said.
fellow ASX-listed graphite player in Mada- “Many potential developers have moved
gascar – Bass Metals Ltd – means Black- onto new projects already. Pricing is not
Earth now has a wealth of graphite smarts standardised, there is no general graph-
to tap into. ite price and the different lines of graphite
“Market knowledge and networks are product vary in price and often have no di-
the key to maximising revenue. It is a criti- rect correlation to each other,” Revy said.
cal commodity for a reason and the EU “From a client perspective, our key differ-
statistics from a consumer’s perspective is entiator is not only the quantum and quality
that achieving resource security requires of material being produced but the fact that
action to diversify supply,” Revy said. we have had positive test work completed
“A lot of market commentary tends to be by independent laboratories and all three
incorrectly calculated and/or one dimen- key product lines deemed qualified by Tier
sional in its view. The market is dynamic 1 end-users.”
with competing interest for the same prod- Revy said graphite material from Maniry
uct. The assumptions for near-term sta- had always exceeded end-user minimum
tistics are fundamentally flawed, issues requirements through the application of
Borshoff thinks deep
aving lost his notes, John Borshoff as ever to the sector and is keenly work- The PFS on Tumas 3 was expected in
Hhad to wing his presentation at Africa ing away on the 36.8 mlb uranium @ 328 November/December and while enhanc-
Down Under. ppm Tumas 3 yellowcake project PFS in ing its Namibian-based projects is a key
However, such an avid believer in the Namibia. focus, capitalising on consolidation oppor-
uranium sector is the Deep Yellow Ltd Highlights from a previously completed tunities in the sector is also a priority.
managing director that his presentation scoping study on the 20-year Tumas 3 pro- “We think we might get something done
lines are well-rehearsed and his delivery ject included opex of about $US30/lb for a late this year,” Borshoff said.
always on point. 2.5-3 mlbpa operation with an IRR of 25% He added that “it was the beginnings
On this occasion at Africa Down Under, with 50% debt on a capex of $US100 mil- of a uranium boom” and believed it was
Borshoff took the opportunity to weigh in lion designed on a 1 mpta plant. the right time for the Deep Yellow team –
on the global energy debate. majority of which are formerly of Paladin
“In a world that is taking its issue with Energy Ltd stock – to be proactive in the
global warming and in a world that tries space.
to aspire to zero emissions and a world “It is an outstanding team and the only
that is oversold on renewables; we need one that delivered in the pre-Fukushima
something to partner that so you can have period and got new operations going and
energy stably, consistently and on a sus- we are well funded,” Borshoff said.
tainable basis,” Borshoff said. “The building blocks for that strategy is
“And the world is starting to realise that around the cohesive team that has oper-
with fossil fuels disappearing, they will ated together and the markets believe this
start going down from 2050.” group can deliver product on a sustainable
Borshoff has a long-held belief that ura- basis. We have that proven track record,
nium can suitably be used as an energy we have the vision, leadership, strategy
source, however, incidents such as Cher- and funding support.”
nobyl and Fukushima have stifled any trust – Mark Andrews
the industry has built within society.
Nevertheless, Borshoff is as committed John Borshoff
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 71
AFRIcA DoWn UnDeR
through to companies with $20 million mar-
One focus of the Agate Project is to es-
The Agate project tablish research grants and scholarships to
support individual projects.
“We are setting up a named scholarship
with Roxgold [Inc, the TSX-listed West Afri-
ustralian mining’s participation in the de- charge industry for participation, using the can miner] for a masters student to work on
Avelopment of a new generation of African funds to subsidise or pay for university stu- a Roxgold project,” Jessell said. “We think
professionals has been made easier thanks dents and staff from African geological sur- that is a great model whereby companies
to the formation of the Agate Project, created veys. can come to us and discuss their needs in
by a group of international researchers and The Agate Project will also use funds to terms of research appropriate for graduate
academics. send students and geological survey staff on students and we can organise that sort of
Western Australian Fellow at the Centre the “huge array” of online courses sprouting relationship.”
for Exploration Targeting at The University of up throughout the academic world. He said opening a connection between
Western Australia Professor Mark Jessell is The project has adopted a similar funding industry and research was a key part of the
one of the founders of the scheme. He told model to the West African Exploration Initia- Agate Project agenda.
Africa Down Under the Agate Project – a tive (WAXI) – of which Jessell is also a direc- “We can act as a bridge to universities to
genuine not-for-profit group – was designed tor – forgoing single large donors in favour organise named scholarships,” he said. “We
to promote the development of African geo- of support and sponsorship from all facets of can help the industry by training the next
sciences on the continent. industry. generation of staff and the next generation of
“We support African education and re- “One of the reasons we’ve been able to people who will train your staff; we are train-
search opportunities in the field of earth and continuously work in the region for such a ing the trainers.
planetary sciences,” Jessell said. “We offer a long time is because we haven’t gone to one “We can also provide in-house or shared
range of education opportunities for profes- large donor,” he said. “Since we started at training for individual companies.”
sionals, researchers and students based in WAXI 15 years ago, there has always been As well as financial contributions, Jessell
Africa.” someone interested in developing explora- is eager to tap the industry for its knowledge.
Although relatively new, the Project has tion sciences or wanting their staff trained. “You know a lot about exploring in Africa,
already undertaken several short courses in The model allows us to continually develop we can then use that knowledge to train peo-
technical geoscience, including courses on our research projects, our students and our ple.”
structural geology and geophysics. staff within the companies. At WAXI, we For more information on the Agate Project,
Jessell said the group’s model was to have had support from BHP Ltd all the way visit tectonique.net/agate/
Developing the Maniry
Graphite Project - Madagascar
Resolute is an
African gold miner
Level 1, 675 Murray Street
West Perth WA 6005 Australia
ASX/LSE:RSG | www.rml.com.au
Page 72 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
AAMEG stands proud
n times of crisis, it is the ingenuity of or- team during that time and it really came larly those who had spent considerable
Iganisations like the Australia-Africa Min- to the fore that people who weren’t mem- time at underground operations, return-
erals & Energy Group (AAMEG) and its bers realised that you needed to be part ing to Perth and in some instances hav-
members that truly shine. of a group, you needed to be aware of ing to quarantine in hotels with closed
On the domestic front, the Chamber of what was going on, remembering that windows.
Minerals & Energy WA and Association we were all at home or office on laptops “We continue to work closely with the
of Mining and Exploration Companies and all those relationships over the years [WA] State Government and they are
(AMEC) in Australia has been widely ap- count,” AAMEG chief executive William very aware of our situation,” Witham said.
plauded for its efforts in guiding industry Witham said. “As many of you would know, it is
through the ins and outs of COVID-19 Witham said it was also particularly quite tricky getting out of Australia, but
restrictions; an exemplary feat replicated pleasing that the Australian mining con- we were quite supportive of getting our
by AAMEG in Africa. tingent in Africa banded together, with members to get people out of Australia
At the height of the pandemic the mas- “people looking after everyone’s interest; claiming it essential to leave became a
sive logistical challenge of moving peo- I find there’s no competition”. bit of a speciality of AAMEG. As far as I
ple in and out of Africa was successfully While industry collaboration has been know, pretty much everyone that wanted
navigated by AAMEG and its member- a highlight, AAMEG also continues to en- or had to get out of Australia for work pur-
ship, while sourcing COVID testing kits gage with both State and Federal Gov- poses did and have returned so we really
from around the world for delivery to sites ernments. thank the Federal Government for that.”
in Africa was also handled with aplomb. A big concern for AAMEG was the – Mark Andrews
“I’m proud of our members and our mental health of mining people, particu-
Minbos ready for food bowl kick-start
inbos Resources Ltd managing direc- security. At a social level, if we can provide
Mtor Lindsay Reed largely assuaged fertilisers which improve yields it means
corporate discussions during his presenta- families will be able to farm more on less
tion to Africa Down Under, choosing instead land, using less hours. That will allow them
to focus on the likely benefits his company’s more time and resource available for their
phosphate project would bring Angola, and own families and own communities.”
the wider African continent. Reed said in addition to providing vital
It is indicative of the changing mood of phosphate fertiliser for plant growth, Minbos
international investors that even one of the was working on ways of including micronu-
most junior companies on the Africa Down trients – including iron, iodine, selenium,
Under programme would focus on its ESG zinc, vitamin A – in the fertiliser product.
merits instead of its technical ones. As well as the social, health and environ-
Promoting a project’s social credentials mental advantages, Minbos believes Cab-
has become, for many investors, as impor- inda’s resources could help launch new lo-
tant as the economic projections of mining cal economic opportunities.
projects, particularly in Africa. On both ac- “It is a small project, but the big opportu-
counts, Minbos can provide attractive dy- nity is providing the kick-starting nutrient for
namics. farming; phosphate,” he said.
The company is in the middle of an updat- “Phosphate is only 5% of inputs into a
ed DFS for its 13Mt @ 26% P2O5 Cabinda Lindsay Reed typical farming situation. So, we will pro-
phosphate project in Angola. The company land, rainfall and people, it is still a net im- duce $US1.5 billion of inputs over 30 years.
is confident it can replicate the outcomes porter of food,” Reed said. “The key missing That means someone else has to provide
of a 2019 scoping study which identified a ingredient to unlock the potential is fertiliser. $US30 billion of other inputs, whether that
project capable of producing 150,000 tpa of Sub Saharan Africa utilises a fraction of the is transportation, other nutrients, land, in-
P2O5, fetching $US222-290/t for a capex fertiliser the rest of the world does, and Mid- surance, etc. There’s going to be a myriad
of $US22.4-27.9 million. dle Africa only a fraction of that. There is no of opportunities around the agriculture that
The study is expected to be completed in primary fertiliser manufacturing in Middle develops on the back of this project.
the March quarter next year with construc- Africa, it is all imported.” “If you look at the downstream I can’t
tion – if a positive final investment decision Reed’s argument is a simple one, fertilis- even calculate how it’s going to change the
is reached – to begin in mid-2021. ers will improve the condition of soil, allow- region.
Reed said Minbos’ investment in a ing for higher yields and the opportunity to “There are two markets; people who
150,000 tpa fertiliser project on Angolan alleviate much of the hunger seen in Sub- grow to eat and people who grow to sell and
had the potential to open new opportunities Saharan Africa today. if we grow those markets together that will
for the country and its neighbours. “If we can improve it at a regional level be a huge advantage for this country and
“Middle Africa has a population of 170 we will go a long way to improving food se- this region.”
million and agriculture is the dominant em- curity and the problems which go with food – Dominic Piper
ployer but despite all the advantages of
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 73
AFRIcA DoWn UnDeR
Kefi at the starting block
efi Gold and Copper plc tium,” Anagnostaras-Adams
Kexecutive chairman Harry told Africa Down Under via
Anagnostaras-Adams is con- video link.
fident it will be a case of third “Obviously with the wonder-
time lucky for his company in ful, overwhelming transforma-
tying up the required funding to tion that’s taken place in Ethio-
develop the Tulu Kapi gold pro- pia since 2018 with the new
ject in Ethiopia. government leadership, it all
Subject to final due diligence augers well now for continua-
to be completed later this tion of a very progressive and
quarter, Kefi was expecting its positive atmosphere for us to
funding consortium of major in- proceed.
dustrial and commodity groups “There are some people in
and African banks to imminent- Africa, some banks in Africa,
ly sign off on a $US221 million Harry Anagnostaras-Adams some investors in Africa who
funding package to give life to care about Ethiopia, who are
an initial 140,000 ozpa mining operation at Tulu Kapi. not scared about Ethiopia and want to be part of Ethiopia with its
Full development activities are scheduled to start early in the new push. I think there’s no substitution for being on the ground
new year. and pushing hard and I’m very pleased and honoured to be part of
Kefi has twice before had its plans to finance the project scup- a team who has been doing the work all these years tenaciously to
pered by ongoing political unrest in Ethiopia, but Anagnostaras- make this happen.”
Adams believes his company now has the right parties involved to Kefi has mapped out a two-year construction and development
overcome any unforeseen challenges that may arise in the country. plan that will see Tulu Kapi being commissioned in late 2022. Final
“I suppose what you could say we’ve done to redress the false contracts for the mine and plant are set to be awarded before the
starts that we suffered with volatility locally…was to solidify the end of this year.
consortium around Ethiopian experienced members of the consor- The DFS has conceptualised a conventional 2 mtpa CIL opera-
tion based around an open pit at Tulu Kapi which Anagnostaras-
Adams compared to gold projects typically found in Western Aus-
tralia’s Eastern Goldfields.
Anagnostaras-Adams is also confident of growing the project’s
resource beyond the current 1.7 moz (indicated).
“It’s easy to visualise 3 moz at Tulu Kapi, but we have to do the
work by following the deposit underground,” he said.
“We don’t see Tulu Kapi as standalone, given the style of miner-
alisation [in the district]. We’ve already had hits at surface where
other Tulu Kapis could be. At the very least I think we’re going to
ASX:WKT end up with a few small pits to supplement Tulu Kapi and we may
well end up with one or two more Tulu Kapis, but we’ll see.
“If you assume just a few small pits, then the combination with
Walkabout Resources Ltd Tulu Kapi I would imagine will have 300,000 ozpa coming out of
is fast tracking the that.”
development of the Lindi While there is almost zero gold production in Ethiopia at present,
Jumbo Project to take Anagnostaras-Adams expects that to grow rapidly towards 1 mo-
advantage of forecast zpa over the next five years.
market conditions for quality Other Ethiopian gold aspirants include Allied Gold Corp, which is
Flake Graphite deposits. developing a project near the border with South Sudan, and recent
In meeting its ongoing ASX listing Megado Gold Ltd.
exploration strategy, the “I’ve spent most of my last six years in Ethiopia and it’s certainly
Company has acquired an exciting, challenging and I believe a country which will be a seri-
exciting portfolio targeting ous player in the minerals sector, because whenever Ethiopia gets
gold, base metals and serious about something it usually works very well,” Anagnostaras-
energy metals in Northern Adams said.
Ireland and Scotland.
“I think the Government is now well and truly coming to grips with
the fact that it takes a lot of proactive effort to facilitate exploration
so that people will take the risk with their capital and their time to
hopefully find an economic deposit.”
– Michael Washbourne
CAPITALISING ON RESOURCE OPPORTUNITIES
Page 74 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
East Africa also the land of
On the big screen: Paydirt Media’s Jeff Hart was joined at DFAT offices in Canberra by African heads of mission Dr Joyce Kikafunda (Uganda),
Beryihun Temesgen (Ethiopia), Isaiya Kabira (Kenya) for a discussion on the investment climate in their countries
s Ugandans celebrated the country’s Kikafunda said. the need to implement modern frameworks
A58th anniversary of independence, the Uganda boasts a population of some 44 and policies to entice companies to look to-
country’s High Commissioner to Australia million people, with the country’s unemploy- wards Kenya as a preferred destination for
HE Dr Joyce Kikafunda encouraged more ment rate estimated at about 14%, while al- mining activities.
Australian mining companies to consider most 22% of people live below the poverty “We are fully aware that there is a lot of
the nation as a potential destination for in- line. competition for investors around the world.
vestment. The mining sector has been identified as So, we want to make Kenya a very competi-
Sipa Resources Ltd has led the Austral- a key part of the strategy to help transform tive mining investment destination. We are
ian contingent with the prospective Uganda the country’s poverty situation around. fully aware that we need to reduce the time
nickel-copper project, which until May was “Uganda has put in place policies and of exploration and discovery of minerals
subject to JV interest from Rio Tinto Ltd. legislation that creates a conducive envi- and then to show the true potential,” Kabira
Sipa retains 100% of the project which is ronment for international mining companies said.
currently on care-and-maintenance. to come and invest in the Ugandan mining “We want to ensure investors that we
Nevertheless, the presence of Sipa in sector; the country is safe and stable,” Ki- are fully aware that we need to reduce the
country and the interest shown by Rio Tinto kafunda said. turnaround time [for approvals].”
is indicative of the Government’s endeavor Kilembe – the historic high-grade copper Kenya has an ambitious target of increas-
to provide a platform conducive to attracting and cobalt mine shuttered in the 1980s – is ing mining’s contribution to total GDP from
mining investment. one area the Ugandan Government hopes 4% to 10% and Kabira said the Govern-
With more than 80% of the country sub- to generate some interest. ment had a system in place to achieve that
ject to geophysical surveying activities, “The Government intends to develop its objective.
Uganda’s potential to host economic cop- mineral resources in partnership with the “We feel we have created an enabling en-
per, gold, iron ore, lithium, tin, tungsten and private sector,” Kikafunda said. vironment to attract investors in this sector.
other valuable materials, was promoted by “The licensing system has been upgrad- We have a very business friendly environ-
Kikafunda at Africa Down Under. ed to allow online applications for mineral ment that guarantees investors get a good
Furthermore, frameworks are now in rights which was launched in 2019.” return,” Kabira said.
place to allow companies to help Uganda The ease of access for companies can “We want to work together with inves-
realise its mineral wealth. assess mining and exploration rights is an tors and local communities, so that people
“Uganda’s new mining and minerals pol- important development in Uganda, given in the local communities can feel part and
icy  aims to increase investment and the level of competition for investor atten- parcel of the project.”
value addition in the minerals sector, so tion.
as to contribute significantly to the social, HE Isaiya Kabira, Kenya’s High Com- – Mark Andrews
economic transformation of the country,” missioner to Australia, said he understood
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 75
AFRIcA DoWn UnDeR
T3 countdown on
decision is looming on the develop- swana is widely considered one of the
A ment of the T3 copper-silver project in best all-round mining jurisdictions in the
Botswana, Sandfire Resources Ltd man- world.
aging director Karl Simich said at Africa Furthermore, Sandfire is proving that
Down Under. T3 – 60mt @ 0.98% copper and 14 g/t
A feasibility study on T3 and a maiden silver – may just be an entrée to the buf-
resource estimate on the A4 Dome dis- fet of opportunities opening up in the
covery was expected in the December Kalahari Copper Belt.
quarter, as Sandfire enters a period of Just 8km away from T3 is the poten-
organic and inorganic growth. tially higher-grade A4 Dome prospect,
“Firstly, it is about getting Botswana which Simich believes could materially
Stage 1 into production and we’ll be impact the company’s production profile
making some decisions on that by the in Botswana.
end of this year at board level. We expect “It wouldn’t surprise us if the area ends Karl Simich
to make those and then be developing up with multiple production profiles and
and in construction through the course maybe 50-100,000 tpa copper produc- it has been well prepared,” Simich said.
of next year and essentially producing tion over an extended period of time, but “The Department of Minerals and En-
clean copper concentrate in early 2023 we need to get the first one started,” he ergy continue to call us seeking to under-
is our target,” Simich said. said. stand when we will be lodging our permit;
Multiple banks have shown interest An EIS for T3 has been approved and they are very much waiting for it. They
in being part of the T3 project financ- Sandfire will soon apply for a mining per- are excited to receive that. That has been
ing scenario, with Sandfire working on a mit. very positive, and we couldn’t be more
shortlist of parties in southern Africa, the “Our expectations are that we will soon delighted with our interaction with the
UK and Europe. submit our mining permit application and Government in Botswana.”
It is no surprise there is keen interest the statutory approval period is essen-
in T3 from several banks, given copper tially 30 days; we think it might take a little – Mark Andrews
is poised to appreciate in price and Bot- longer, but we don’t expect any delays as
Perth, Western Australia
The USB of Conference
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Page 76 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Perth, Western Australia 21
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AFRIcA DoWn UnDeR
Roxgold is on track to hit the upper end
of its production guidance for 2020 at the
Yaramoko mine in Burkina Faso
Roxgold marches on
hat was potentially looming as a “lost” the first nine months of 2020 to 98,749oz. positive results. The company has also
Wyear when the pandemic hit in March An EBITDA of $US20.6 million was also made an exciting new discovery at Bous-
is now set to be remembered as a defining recorded for the three-month period, while soura, about 190km south of Yaramoko.
year for Roxgold Inc. cash flow generated from operations to- Dorward said Seguela – acquired from
Following another strong quarter of pro- talled $US28.2 million. Newcrest Mining Ltd in April 2019 with
duction from the Yaramoko gold mine in Roxgold’s cash and dore on hand in- only a 400,000oz inferred resource – was
Burkina Faso – headlined by a record op- creased by $US11.4 million over the tracking ahead of Yaramoko in its develop-
erating margin of $US1,152/oz – Roxgold quarter, even after growth expenditure of ment.
remains firmly on track to hit the upper $US7.9 million. “We think it’s a relatively straightforward
end of its 120,000-130,000oz guidance for Despite a small number of positive project with a team there that has been do-
2020. cases of COVID-19 being recorded at ing this for a while now and has had plenty
The TSX-listed company is also poised Yaramoko during the early stages of the of experience in a country that is keen to
to unveil a feasibility study for its Seguela pandemic, Roxgold has so far managed have that foreign direct investment made,”
gold project in Cote d’Ivoire within the next the health crisis with aplomb with Dorward he said.
six months and officially begin the pathway singling out the likes of Paul Criddle (chief “We recently that we had been awarded
towards development of a second West operating officer) and Paul Weedon (gen- our EIS…and now we’re just waiting for the
African gold mine in the past five years. eral manager exploration) for the way in final phase of our mining permit delibera-
It was certainly not a position Roxgold which the movement of site personnel has tions before that’s awarded. We see that
president John Dorward thought the com- been managed. coming in the next couple months.”
pany would be in nine months ago when Although Yaramako remains isolated With M&A continuing to heat up in West
the realities of the global coronavirus out- from the rest of the world with restricted Africa following Endeavour Mining Corp’s
break started to hit home. access to the mine site still in place, Dor- recent combination with Teranga Gold
“I was in Toronto for PDAC in early ward said he could not overlook the role Corp, the likes of Roxgold and West Afri-
March and starting to look at changing my the people of Burkina Faso had played in can Resources Ltd will be in the spotlight
flights back to avoid going through Hong managing the pandemic. for potential corporate activity.
Kong because that’s when it was really “The people of Burkina are pretty resil- Dorward said while he believed his
starting to kick off,” Melbourne-based Dor- ient and every year they have to deal with company would appeal to a larger suitor,
ward told Paydirt. things like malaria, etc so I think they’ve re- he was adamant any takeover offer would
“If you’d told me back in March/April, ally just got on with life and haven’t let it get have to be in best interests of Roxgold
with all the trouble that was brewing, that over the top of them,” he said. shareholders.
we would have a year where we’re well on “The country has done a pretty good job, “I think we have worked hard to estab-
track in November to meet our guidance they had their borders closed for a relative- lish ourselves as a compelling go-it-alone
and also had a pretty reasonable cost per- ly short period of time but have been able strategy and that’s what our investors have
formance, etc I would have been pretty to prioritise businesses like ours as impor- invested for,” he said.
happy to take it. tant businesses so our people could move “For us to not follow that path and to
“It’s been an important year for us and to around and our supply chain stayed open. throw our lot in with someone else, it would
not have had to put that on hold has been So, kudos to the Government of Burkina have to be a compelling offer. We would
really, really pleasing. It could have easily Faso in being able to do that in a sensible assess that on its merits, but we’re very
been a bit of a lost year and I’m sure for fashion and maintain a sensible balance happy working on what we’ve got. We’ve
a lot of people and a lot of companies it between economic activity and safety of got an open mind to other ideas, but it
certainly will be.” their population.” would have to be pretty attractive to get
Yaramoko churned out 33,557oz at an Roxgold has not just excelled on the pro- off the path that we’ve carved out for our-
average grade of 7.7 g/t for the September duction front with exploration at both Yar- selves.”
quarter, lifting Roxgold’s total output over amoko and Seguela continuing to deliver
– Michael Washbourne
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Africa still open for trade opportunities
ustralia’s commitment to facilitating new So given the challenges, we’re working more worked up to five months on some projects,
Atrade and investment opportunities in closely with those who are already placed in so our policy is that we will continue to move
Africa remains, even if it is confined to taking the market to help them deepen their market people around to support them and their
place behind a computer screen for the time penetration as opposed to those who are new families and to drive continuity of operations
being. to export. as well.
Hard borders and travel restrictions im- “Having said that, with those that are new “Over the last eight months, our people
posed by governments since March have to export, we still run a number of webinars across the business have done a fantastic
made it challenging for foreign investors to un- to give them a sense of what that particular job to keep the mines operating and keep
dertake their usual due diligence on projects market may look like – whether that be in Af- our people employed. We’ve worked with
in emerging markets such as Africa, where a rica, the Middle East or elsewhere – to actu- our people, our clients, our suppliers and lo-
physical site visit is typically required before ally give them a good understanding in terms cal governments to ensure people are looked
money exchanges hands. of the opportunities and the risks.” after. It really has been living our principle of
Speaking via video link on the opening day The pandemic has also presented chal- smarter together to enable tomorrow.”
of Africa Down Under, Austrade acting chief lenges for international companies with pro- According to Beresford, Australia’s trade
executive Tim Beresford indicated that while jects and operations in multiple jurisdictions interests have fallen 10% since the start of the
much of his organisation’s focus had shifted which may require personnel to be able to pandemic while investments are down 40%.
towards supporting existing customers in move freely from one country to the next. A number of key supply chains have also
maintaining ongoing trade relationships, par- Perenti Global Ltd is one company which been disrupted, causing many businesses
ticularly on the African continent, the door appears to have overcome that hurdle. Since and governments to approach trade relation-
was far from closed for those seeking new the onset of the pandemic in March, the group ships differently for an indefinite period.
investment opportunities. has orchestrated more than 70 charter flights, Beresford praised the mining sector for
“There’s no doubt that with travel restric- including to and from nine African destina- leading by example in showcasing to other
tions in place, the main focus of where we’re tions. industries how best to navigate their way
working is more with those who are already Although he acknowledged the health risks through high-risk environments.
existing customers and existing clients [be- associated with transporting large numbers of “Miners are all about managing risk, it’s part
cause] they already know the market, they people, Perenti managing director Mark Nor- of a miner’s DNA,” he said. “As we know, the
already understand the market and therefore well said his company also had an obligation Australian mining industry operates in some
they have an appreciation of the relevant due to look after the interests and wellbeing of its of the most remote and harshest conditions
diligence,” Beresford said. people. found anywhere in the world. Our mining sec-
“At the moment we’re spending probably “We’ve got a lot of people who live in broad- tor has developed and perfected technologies
more time, in a COVID-19 sense, with either er Africa but work in different countries from in safety, sustainability and supply chains to
investors re-investing into those markets or where they live, and they need to get home to cope with these tough and risky conditions.”
investors re-investing into Australia, depend- their families,” Norwell said.
ing on which side of the coin you’re looking at. “Some of our regional expatriates actually – Michael Washbourne
Link in with @aurumexploration
urum Exploration chairman Wilson from young geologists from South Ameri- Since 2002, Aurum has been delivering
ARobb says there is a healthy pool ca and Africa predominantly,” Robb said. a full spectrum of exploration services in
of geologists to choose from around the “There are some high-quality graduates Europe, Africa and the Middle East.
world. out there and very experienced people, The company has been successful in
Aurum – a renowned mineral explora- too. I find that South American and African sinking its teeth into historical and legacy
tion consultancy company – is headquar- graduate geologists are very proactive on data, which Robb referred to as “literal
tered in Ireland and therefore it is natural LinkedIn looking for experience.” gold mines” from an information perspec-
that tabs are kept on the talent stream While impressed with the enthusiasm tive.
flowing from the geological societies in Ire- and capabilities of the up and coming ge- Meanwhile, the company also has a fo-
land and UK. ologists around the world, Robb said he cus on being innovative.
Robb said the quality of graduates with recognised that there was one particular “Deploying the right people allows us to
geological backgrounds was good, while skillset that needed to be sharpened. get to the right places and conduct fair ex-
the experienced heads in the market were “People tend to come out with fairly poor ploration programmes,” he said.
also top notch. report writing skills, which absorbs a vast “But we are also constantly looking to
“Access to talent is always a bit of a chal- amount of time from the senior level to innovate and deploy more advanced geo-
lenge, but I think the younger generation make things right before presenting to the chem and cutting-edge geophysics and
we are not finding it too difficult. LinkedIn is client,” Robb said. geophysical techniques to give us extra
absolutely brilliant – I have become a con- “That is an on-the-job training thing strings to our bow.”
vert in the past 18 months – I like to keep a though, I was probably a bit like that, with – Mark Andrews
high profile for the company more than for a slight lack of focus and something that
myself. I get on average 3-4 [new contacts] needs attention.”
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aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 83
DIGGeRs & DeALeRs ReVIeW
WA mining: Ethical,
record-breaking and COVID-free
t may have taken a global pandemic for him to close the WA resources industry not only “I think we can all agree the hard work
Ito receive an invitation but West Australian for the employment it sustains but it would and sacrifice will be truly worth it,” McGow-
Premier Mark McGowan’s appearance at create turmoil across Australia and the an said.
the annual Diggers & Dealers Mining Forum global economy and the country would lose The rest of the Diggers & Dealers con-
was roundly welcomed. the revenue it would generate to respond ference reinforced the exultant position the
McGowan being present in Kalgoorlie to the pandemic itself. That is, to fund the WA sector finds itself in.
was perhaps the clearest demonstration of hospitals, police and support services and Headlined by the proposed $16 billion
what WA has achieved in 2020. A total of the income it would provide to the Com- merger of Northern Star Resources Ltd
1,968 delegates gathered together for an monwealth Government. and Saracen Minerals Holdings Ltd, the fo-
event, kickstarted by the State Premier talk- “When I saw it was suggested we close rum showcased the vibrancy of the industry
ing about record output from its largest in- resources, I said: ‘No, what we need to do with presentations from highly profitable
dustrial sector. It is a situation which would is manage through this.’” producers and rapidly
be unfathomable almost anywhere else in Navigating a way through it involved strik- evolving explorers.
the world. ing accords with industry about how people Even the lack of inter-
While McGowan’s stocks couldn’t be and logistics would be moved throughout state and international
higher – he has regularly posted 91% ap- the State and across borders while mini- delegates did little to
proval ratings during the crisis – he used mising the COVID risk. stem the flow of deal-
the Diggers podium to praise and thank the “We needed to take action to ensure we making with juniors and
resources sector for the part it has played in didn’t get outbreaks. Any outbreak would mid-tiers cutting out the
the State’s remarkable performance. have been devastating, so we worked co- financiers to strike JVs,
“2020 has been volatile, challenging and operatively with industry, especially the combine projects into
exhausting,” he said. “I want to thank the Chamber of Minerals & Energy, to ensure new vehicles and trade
resources industry for the way it has con- that everyone could continue to operate assets.
ducted itself. There has been no shortage safely.” McGowan said the
of threats to projects and worksites. All On any measure, the strategy has been performance would en-
through this crisis, the industry has han- a successful one for the WA mining sector. sure WA would rebound
dled it well and worked with Government The industry posted record production fig- strongly from the coro-
to continue operating safely and keep the ures in FY2020 with total revenues of $172 navirus-induced global
economic lifeline intact.” billion in exports, including a record $103 recession.
McGowan said his Government had billion from iron ore and $16 billion from “Despite all the uncer-
taken the decision to keep the resources gold – another record. tainty and unpredictabil-
sector open despite receiving advice to the Exploration expenditure was also up – ity, WA represents one
contrary in early National Cabinet briefings. $1.7 billion against $1.4 billion in 2019 – and of the best places in the
“I looked at the list of industries to be investment rose from $17 billion to $19 bil- world to mine, to set up,
closed and I felt sick,” he said. “WA refused lion, the first increase since 2013. to hire and to invest. If I
Page 84 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Comprehensive Supply Chain Solutions
Holding Ltd managing
Star Resources Ltd
chief executive Stuart
Tonkin and Northern
chairman Bill Beament
outside the Super Pit
Beyond the immediate recovery,
McGowan has already set his sights on
future developments based on WA’s re-
sources sector advantages.
He championed the METS sector, point-
ing to the 22 of the world’s top 100 METS
companies which are based in the State,
and said this expertise in resources tech-
nology – particularly autonomous opera-
tions gave WA a head-start in growing its
influence in other industries.
“It gives us a reputation in a whole in-
dustry, independent of the influence of
resource prices. Even NASA has come
knocking on our down when it comes to au-
Paydirt in its traditional home – Booth 8 – at Diggers & Dealers tonomous technology. They partnered with
Woodside to train one of its ‘robonauts’ in
were a betting man, I’d be betting big on bound. Among the priorities for the Govern- their oil and gas operations. It has the po-
WA. WA represents one of the best oppor- ment are removal of barriers to investment, tential to centre WA in the rapidly growing
tunities on the planet.” support for exploration, new technologies, space industry.”
The WA Government announced its renewable energy and industry develop- While the space industry may still be
post-COVID economic recovery plan in ment. theoretical, the electrification of transport
is rapidly evolving. McGowan said WA
was set to benefit from a shift in customer
Mark McGowan took a tour through booth land with Diggers attitudes which saw end-users demand
organisers Myles Ertzen and Sharon Giorgetta manufacturers promote ethical practices
throughout their supply chains.
July, with mining at the heart of the “Customers around the world want to en-
planned re- sure the product they buy will not do any
harm to the world,” he said. “Manufacturers
are hearing them loud and clear and secur-
ing their supply chains.
“WA is one of the most ethical jurisdic-
tions in the world. I understand BMW has
already identified WA as an ethical pro-
ducer of lithium and cobalt and you’ll have
seen the story in the newspapers that Tesla
is pursuing contracts in WA to lock in ethi-
cally supplied nickel.
“This is a fundamental shift and because
of our reputable operators and reliable and
verifiable regulatory regimes, WA is in the
box seat to capitalise.”
– Dominic Piper
aUSTRaLIa’S PaYDIRT DeC 2020 - JaN 2021 Page 85
DIGGeRs & DeALeRs ReVIeW
The teams at Saracen and Northern Star will
get a lot closer after a $16 billion merger that
And the winners are... will place the Golden Mile into a single entity
for the first time in its 127-year history
iggers & Dealers 2020 will go down Western Australia’s Pilbara, which pro-
Das one of the most memorable in vides employment for a workforce in
history. excess of 2,000 people.
Few events of the size of Diggers While iron ore is going gangbusters,
have taken place since COVID-19 Australian gold production is just as
gripped the world and while there re- strong and there were no surprises that
mains much uncertainty and turbulent Dealer of the Year Award went to Ra-
times ahead for many, the 1,200 peo- leigh Finlayson’s Saracen Mineral Hold-
ple gathered for the traditional Westrac ings Ltd and Northern Star Resources
Gala Dinner to conclude the three-day Ltd for their purchase of the Super Pit
forum would have pleased to have at- gold mine in Kalgoorlie.
tended the Kalgoorlie event. Meanwhile, after delivering a 420%
Even more pleased would have been increase in net profit across its WA gold
the companies and individuals recog- Diggers & Dealers chairman Jim Walker presents De Grey mines, Ramelius Resources Ltd was
nised for their outstanding achievements chairman Simon Lill with the Best Emerging Company the Digger of the Year.
in the mining sector since Diggers 2019, Award alongside Perth Mint’s Richard Hayes Continuing the gold theme was De
while for others a life time dedicated to Grey Mining Ltd taking out the Best
the industry was duly applauded. Emerging Company Award after the
This year, Paydirt editor Dominic Piper that has made an exceptional lifetime contri- Hemi discovery in the Pilbara has seen its
broke commercial media’s recent hold on bution to the Australian mining industry. share price rocket from 5c to $1.34c/share
the media award, while also against the The Hancock Prospecting owner’s wealth and a market cap of $1.7 billion.
grain was Gina Rinehart’s acknowledgment is estimated at over $21 billion after taking WA School of Mines mining engineering
with the GJ Stokes Memorial Award. over the chair at her father Lang Hancock’s student Georgia Kerr won the Ray Finlayson
Rinehart became the first female recipient company in 1992 following his death. Award for Leadership and Academic Excel-
of the award, named after late forum founder Rinehart is now the primary owner of the lence.
Geoffrey Stokes, which singles out a person privately owned 55 mtpa Roy Hill mine, in
Ray Finlayson Award for Leadership and Hancock executive director Tad Watroba Ramelius managing director Mark Zeptner
Academic Excellence winner Georgia Kerr received the GJ Stokes Memorial Award accepting the Digger of the Year award
from Kate Stokes on behalf of
Page 86 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT Gina Rinehart
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12535 MLG Paydirt Ad.indd 1 7/6/18 1:43 pm
DIGGeRs & DeALeRs ReVIeW
Flying Fox falling
but Odysseus soaring
he importance of Western Areas Ltd’s new ted Quoll. The September quarter mine plan The company’s newest project is its scats
T Odysseus nickel development was brought had anticipated greater ore development work heap leach operation which is set to be com-
into sharp relief following an underwhelming for Spotted Quoll, but a pegmatite intrusive unit missioned by the end of the year.
September quarterly performance by the com- was also intercepted in scheduled mining ar- The project will take stockpiled mill scats
pany. eas. (estimated to be 285,000t @ 1.5% nickel) and
The West Australian nickel miner is cur- “A very large amount of ore from Spotted process it via the company’s patented BioHeap
rently building Odysseus – part of the Cosmos Quoll was out of mine development with some bacteria leaching flowsheet. The pregnant liq-
nickel complex near Leinster in WA – ready for intrusive geological features which diluted the uor solution will be collected and pumped into
14,500 tpa nickel-in-concentrate production ore further,” Lougher explained. “When you Forrestania’s mill recovery enhance project
from 2023. Its arrival will provide a much-need- are mining ore drives it is generally more dilu- (MREP) plant which will produce a high-grade
ed production boost as the company concentrate not currently included in
adjusts to the maturity of its flagship 15- offtake contracts.
year old Forrestania nickel operations. The company also has several new
Western Areas posted mined produc- orebodies further up the development
tion of 4,147t nickel and concentrate pro- pipeline.
duction of 3,756t nickel-in-concentrate “Forrestania as a cash generator has
from Forrestania for the September a good few years ahead of it,” Lougher
quarter, down from 5,841t and 5,114t said. “We have the engineers working
respectively in the June quarter. Cash hard on the New Morning project, which
costs also headed in the wrong direction, will also go to backfilling production
up to $4.46/lb in September from $3.17/ when Flying Fox ends. We also have
lb in June. Diggers South, a much larger project
The production slip led the company which is still a few years down the line.”
to downgrade its FY2021 guidance from The arrival of Odysseus will further
19-21,000t to 17-19,000t with costs re- bolster Western Areas production pro-
vised from $3.25-3.75/lb to $3.50-4.00/ file with first ore set to be mined in Au-
lb. gust 2021.
The shortfall came after seismicity is- “Things are progressing extremely
sues in the company’s Flying Fox under- well,” Lougher said of the project’s con-
ground mine as well as increased devel- struction. “We are pouring the founda-
opment work in the Spotted Quoll mine. tions for the winder house and RUC are
Speaking to Paydirt TV after the two-thirds of the way down with a pilot
quarterly results were announced, hole for the main shaft excavation. Bar-
Western Areas managing director Dan minco is pulling up to four cuts per day
Lougher admitted it had been a tough on the main decline.”
quarter at Forrestania. Western Areas has chosen to oper-
“Down at the bottom of Flying Fox we ate via shaft hoisting at Odysseus and
did suffer a seismic event,” Lougher said. has secured a second-hand system
“We do have seismicity and we do cater Dan Lougher from a South African platinum opera-
for that in how we mine and what ground tion.
support we use.” tive. Some 40% of ore won in the September “We have information from Richards Bay
He said variability would likely continue at quarter from Spotted Quoll was from ore driv- that all the shaft hoisting and winder house are
Flying Fox as the mine continued to head into ing, so you see the affect of dilution is greater at port and we should have that arriving in WA
lower grade areas. than if you had a much larger stoping produc- in December,” Lougher said.
“Because of the age of Flying Fox and its tion front.” While construction has begun, Odysseus
maturity, we don’t have a lot of optionality in While the problems at Flying Fox had led to continues to grow with Western Areas recently
terms of being able to jump into extra areas. the production downgrade, Western Areas is bringing 47,100t nickel from the AM6 deposit
In the past that is what we used to do [move less reliant on the mine than it once was. Spot- into the reserve.
to other production areas] and go in and re- ted Quoll is now the dominant producer at For- “We are now running optimisation studies
support that area. restania, providing almost two-thirds of nickel on how we will bring AM6 into the Odysseus
“We don’t lose this area and we don’t lose tonnes mined. The company is also preparing schedule,” Lougher said. “There are lots of
the nickel tonnes; they basically get postponed to start several new projects which will add va- moving parts; we are optimising whether we
into later in FY21. That can take one or two riety to Forrestania’s production profile. increase the mill capacity from 900,000 tpa,
months of work and is a cost on top of normal “Flying Fox is actually the lowest of the pro- optimising the shaft and looking at the power
operating costs.” duction fronts,” Lougher said. “There is still lots requirements.”
The seismicity issues in Flying Fox were of nickel at Forrestania and we have got great
compounded by the mine scheduling at Spot- infrastructure in place.” – Dominic Piper
Page 88 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Comprehensive Supply Chain Solutions
Gaines drops FMG’s
er comments on the suitability of play to ensure the world can meet the Par-
Hskimpy barmaids may have garnered is 2050 targets,” Gaines said in announc-
the mainstream media headlines but it was ing the project.
the positioning of Fortescue Metals Group “Subject to detailed feasibility analysis,
Ltd (FMG) as a diversified metals and en- the Tasmania project will be an important
ergy producer which stood out most from step in demonstrating our intention to posi-
Elizabeth Gaines’ appearance at Diggers tion Australia at the forefront of the estab-
& Dealers. lishment of a bulk export market for green
As the highest profile of just three female hydrogen.”
presenters at the forum, Gaines made the The move towards renewables may be
point during her presentation that the num- ambitious but FMG can do so with knowl-
ber of women reaching senior positions in edge its foundations are secure.
ASX200 companies was flatlining. The company’s Pilbara operations en-
“We believe our diverse workforce [19% joyed their best ever performance, ship-
across the board and 26% at management ping 178.2mt of iron ore in FY2020, a 6%
level] is integral to our success,” Gaines increase on FY2019. This led to revenues
said. “Research from Curtin University and of $12.8 billion (up 29% on FY2019) and
Women’s Gender Equality agency shows with C1 costs at $12.94/wmt, the company
diverse leadership results in the increased posted EBITDA of $8.4 billion and NPAT of
likelihood of better performance.” $4.7 billion.
Her comments on gender equality and Gaines said at Diggers & Dealers Chi- Elizabeth Gaines
diversity meant it was always likely Gaines na’s post-COVID recovery meant iron ore
would be pressed on her thoughts about demand had held up in the face of the pan-
Kalgoorlie’s traditional nightlife attrac- demic. gas hybrid project and the Pilbara Energy
tions and she didn’t disappoint with her “We’ve seen strong ongoing demand for Connect project will result in 25-30% of
response. all our products [from China] and pleas- our stationary energy across mining op-
“I don’t get it; I don’t get why somebody ingly this has continued into the new finan- erations being powered by solar,” Gaines
wants to go and do that. I just don’t un- cial year which has underpinned a very said.
derstand it. That’s a female perspective,” strong start to FY2021,” she said. “China Its energy capabilities are extending
Gaines told media following her presen- has largely absorbed the iron ore which into transport with an MoU signed with
tation. “I don’t know of many women who has been diverted from weaker steel mar- Hyundai and the CSIRO over hydrogen
want to walk into that environment. You’ve kets and both iron ore stocks at Chinese fuel technology for domestic transport and
got to have venues that are far more ap- ports and stocks held by steel mills remain the Christmas Creek bus fleet is set to be
propriate. But it is particular to Kalgoorlie at lower levels.” transformed to hydrogen fuel cells next
and some people like it so, who knows? The company’s confidence is reflected year.
Maybe it’s a big tourism thing.” in its investment outlook which is seeing it These moves are part of the company’s
The skimpy comments were merely a build two new mines in the Pilbara – Eliwa- repositioning as a greener miner. Gaines
distraction from the main story of not only na and Iron Bridge – as well as new energy said at Diggers & Dealers that society’s
a record year for production and finances projects for the region. greatest challenge was climate change
at FMG but also the company’s transfor- Eliwana is the most advanced project with FMG positioned to provide solutions.
mation into a multi-commodity resources with first ore expected to be on train this “We can’t lose sight of the broader is-
house. month. sues we must address and at the top of
Renowned for its arrival as an iron ore At the 22 mtpa Iron Bridge magnetite that list is climate change,” she said. “Re-
player, the company is now turning its at- mine, bulk earthworks are complete ahead newables will play an important part in any
tention to energy, with several projects of construction of the dry processing plant. future energy mix and we should capital-
designed to tap into the decarbonisation First ore is scheduled to be on ship in mid- ise on solar technology and explore hy-
of the global economy. Hydrogen is the 2022 for a project Gaines said would give drogen as an energy opportunity. Japan,
priority with the company announcing in the company greater blending flexibility. Korea and China have been identified as
November it was investigating the devel- At the Herb Elliott port facility, FMG has key prospective markets for hydrogen ex-
opment of a “green” ammonia plant in Bell received approval to increase capacity ports. And by building on our existing sup-
Bay, Tasmania. from 175mt to 201mt. ply chain capabilities and market access
“Working with our wholly owned subsidi- The company is also investing heavily we believe Fortescue and WA can be at
ary Fortescue Future Industries, we are in new energy projects, including the $800 the forefront of the establishment of a bulk
assessing clean energy opportunities lo- million Pilbara Energy Connect project and export market for hydrogen.
cally and internationally to capitalise on further renewables projects. – Dominic Piper
the important role that green hydrogen will “The integration of the Chichester solar
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 89
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SO4 Ltd managing director Tony Swiericzuk with Paydirt deputy editor Mark Andrews
at the Lake Way SoP project, Wiluna, Western Australia 2020
Comprehensive Supply Chain Solutions
Donning the HardHat
t was a no-brainer that Tim Smith, chief ple to be really better informed through
Iexecutive of software outfit, HardHat, the availability of dashboards that provide
attended Diggers & Dealers this year. alerts to any issues within the business is
“Having everyone in one place al- what people are liking,” Smith said.
lowed us to talk to and hear what the in- “Having everything at your fingertips
dustry requires of the software we pro- regardless of what role you have within
vide and make sure the software meets a company from executive level to sub-
the needs of our clients. In a time like contractors; we feel we have the right
this, how you communicate with your product to enable companies to go to the
subcontractors, suppliers is critically next level. We have invested very heav-
important and we need to be aware of ily in our software to meet the demands
the things we need to address. Going of our clients, but we are also investing
to Diggers – at whatever cost – was a heavily in industry experts allowing us to
no-brainer for our business,” Smith, shape solutions to really meet the clients’
the sole attendee at Diggers & Dealers needs.”
from overseas to have quarantined and Smith said his team had experience in
attended the forum, told Paydirt. servicing the top-end of town and mid-
Smith leads a team of 30 staffers tier sector, which would be the focus for
at HardHat from his Singapore base, HardHat.
meaning getting to Kalgoorlie in Oc- “The top-end of the market sees value
tober required some sort of effort; two such as productivity and visibility gains in
weeks hotel quarantine in Perth on a centralised platform such as HardHat,
route to the Goldfields and a two-day whereas the lower-end of the market
home isolation order upon return to Sin- more often than not do not have access
gapore. to the same resources to introduce tech-
Daily 6:30am YouTube gym workouts nologies to streamline their processes”
in his Perth hotel room before starting he said.
his virtual workday had Smith in good Tim Smith “Right now, we are 100% focused on
stead by the time West Australian Pre- the Australian market. We know this mar-
mier Hon Mark McGowan opened the ket, many of us are from Perth, mining is
29th Diggers & Dealers forum. base, as Smith and Co. start to ramp up ef- booming in Australia, and Aussie companies
“It was definitely worth it,” he said. forts to align with well-suited clients in the have an interest in using tech to be more pro-
“If I wasn’t there, I wouldn’t have been able mining sector. ductive. You’ve just got to look at the number
to hear what the industry needs and make In addition to HardHat, Smith is also man- of autonomous trucks Australia has; 400 are
sure that our solutions are fit-for-purpose for aging director of private equity group Gold now autonomous, which represents 75% of
the industry.” Rhino, which helps fund early-stage tech the total autonomous vehicle numbers glob-
What Smith gleaned from the conference companies in Australia and New Zealand. ally.
was the significance of the top-end deals in Through Gold Rhino – the name reflects “We heard a lot from the speakers [at
the sector and the wave of discovery suc- Smith’s passion for contributing to and fund- Diggers] about how technology is changing
cess to HardHat’s business, which is prem- ing projects that help protect and populate jobs; they want to invest and keep those em-
ised on using best-in-class cloud technology rhinoceroses in Australia and South Africa – ployees. We are arming them with the equip-
to assist companies manage safety, people, there is potential to bring other tech start-ups ment to allow them to do that and allow them
operations and projects on a single platform. into the HardHat fold. to use tech and be better skilled so we have
HardHat was launched by Smith in Octo- Smith said HardHat’s appeal of providing a more technology-driven successful indus-
ber 2019 after the sale of OnePlace – a client “whole of project centricity” to companies try in Australia to compete with other regions
management cycle software tailored to the was resonating with industry. like Brazil, Asia and Africa.”
professional services sector – in May 2019. “Allowing people to see everything that is
HardHat starts from a financially sound going on with their project and allowing peo- – Mark Andrews
he dearth of dial-moving nickel opportunities available hand the opportunities in the nickel space. We are not nar-
Taround the world means there is unlikely to be any headline rowly focused on nickel, we talk to clean energy metals and
grabbing deals of significance in the space any time soon. we talk all the time on a primary focus on nickel and copper;
“I don’t know, I can’t comment on that; are there enough there’s a much wider universe of potential copper assets but
companies big enough to create a big headline deal?” IGO equally there is a much greater amount of competition for
Ltd managing director Peter Bradford said on the sidelines of copper assets,” he said.
Diggers & Dealers. “We have nibbled around the edges of other clean energy
IGO is involved in a number of JVs and holds interests in metals to try and understand it, so we have talked about
several companies targeting “high value rock representa- a secondary focus on lithium and rare earths. If you look
tion”, that is; Nova-style nickel-copper magmatic rocks, as it across our exploration space that is a good way to think
ramps up alignment with the clean energy sector. about where’s our real focus – half our exploration projects
“Everything is about value. Globally you can count on one are nickel, half are copper.’
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 91
DIGGeRs & DeALeRs ReVIeW
Dealing with Tropicana
&A was the hot topic for discussion at istic view that we could maybe buy the other the known extensions of the mineralisation
MDiggers & Dealers and much chatter 70%; it is a two-way street and at any stage we need for Tropicana and the Havana open
was on the future of Tropicana. along the journey we would have enter- pit, as well as the extensions at depth of the
A two-stage process is under way for tained the opportunity to own more of what Boston Shaker underground. The open pits
AngloGold Ashanti Ltd (70%) and IGO Ltd is a first-class asset. contain a remaining mineral resource of 2.95
(30%) to determine what exactly is fair value “When you look around the gold space moz to be mined over the life of the mine.
for Tropicana, 330km east of Kalgoorlie. in Western Australia, many of them [mines] The underground mineral resource outside
A review of Tropicana, which was one of have been running a long time and they the open pit mineralisation totals 2.85 moz, of
Australia’s few world-class greenfields dis- must be getting ready to run for their pension this Boston Shaker accounts for 732,000oz
covery successes in the 2000s, has been whereas Tropicana is a new discovery, in a gold,” AngloGold general manager at Sun-
prompted by IGO’s intention to realise full new belt; it has only been running since 2013 rise Dam Richard McLeod said at Diggers.
value for its 30% stake in the asset. and the upside opportunity through explora- Commercial production at Boston Shaker
“The first stage is purely technical collabo- tion could be awesome.” was achieved in timely fashion and within
rating with AngloGold and the aim is to draw Tropicana was discovered by Gold Road budget ($105.7 million) during September
the strategic view of Tropicana and agree Resources Ltd managing director Duncan and is poised to run at a rate of 1.1 mtpa @
that and be able to communicate that value Gibb, who declined to comment on any spe- 3.5 g/t gold delivering 100,000 ozpa over
proposition to the market,” IGO managing cific M&A opportunities when contacted by seven years.
director Peter Bradford said. Paydirt. Underground production from Boston
“First prize for us quite frankly would be Shaker is expected to reach full produc-
seeing that reflected in the stock price and tion rate of 100,000 ozpa gold by the end
continuing to hold the asset. But the overall of 2020, with capital payback on the under-
aim is to realise value for shareholders, and ground mine expected to take just over three
we would see any market traction from that years.
compelling story then that second phase With the Boston Shaker orebody continu-
would be to pursue potential divestment or ing at depth, mine infrastructure has been
demerger.” set up to cater for future growth.
At the time of print, the Tropicana data- “Boston Shaker will contribute higher
room remained closed to outsiders, as Brad- grade mill feed to improve the gold produc-
ford explained the reasoning behind IGO’s tion profile and enhance cash flow from
move. 2021-23 when the mine plan includes peri-
“We look across the nickel space, our- ods of higher waste stripping in the Havana
selves and Western Areas [Ltd] and depend- open pit,” McLeod said.
ing on which sell side research you buy you “The next stage of the Havana 1 cutback
have us and Western Areas neck and neck is now under way, Tropicana, Havana, Ha-
about 0.8-0.85 whereas the gold peers are vana South and Boston Shaker open pits
running 1.4 to two times or something stu- have been mined as a series of cutbacks
pid [over value]; we are not seeing that value and sequenced and scheduled to maximise
for Tropicana to give us some headwind value at a mining rate that delivers the best
against Western Areas, which theoretically all round mining unit cost for the scale of the
we should. operation.”
“We think that is the gap and we have to McLeod also reported that development
communicate that gap to the market, get it of the underground drill drive from the Bos-
realised and if we can’t realise that, we’ll ton Shaker decline towards the Tropicana
have to potentially demerge it to realise it.” orebody had advanced about 500m, with
Talk under the big tent at Diggers had Peter Bradford the first diamond drill rig firing up in the week
some analysts estimating IGO’s 30% stake of Diggers.
in Tropicana could be worth anywhere be- “A drill drive is also well positioned and
tween $750 million to $1 billion, however, Meanwhile, AngloGold senior vice presi- provides us production access to the Tropi-
Bradford was mute on that matter. dent, Australia, Mike Erickson said while the cana underground should the drilling be suc-
He did rule out the possibility of making process with IGO was ongoing, there was lit- cessful. We continue to confirm the down-
a pitch for full ownership of Tropicana and tle more he could add to the story. dip extents of the Boston Shaker lodes and
maintained that AngloGold’s greater portion “There is a process currently underway have a study under way to assess open pit
of the mine was not up for sale. and I am actually not in a position to com- and underground trade-off options for the
“AngloGold are not going to sell. If you ment on it. It is early days, it is a great asset development of the Havana Deeps and Ha-
own a good piece of something good, you and extremely well managed if I do say so vana South lodes,” McLeod said.
always want to own a little bit more of some- myself,” Erickson said. “Exploration work continues on under-
thing good,” Bradford said. On a 100% basis, Tropicana is poised standing the complex geology north and
“There has always been formal or informal to deliver 400,000-450,000oz in 2020 and south of Tropicana, looking for the down-dip
interest in the asset since I’ve been a part of 2021 before lifting to 450,000-500,000 ozpa extension on those orebodies.”
IGO. It has not been a one way street, but from 2022 onwards. – Mark Andrews
we have always had a desire and opportun- “Significant potential remains to unlock
Page 92 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Comprehensive Supply Chain Solutions
ast year saw 70% of the nickel metal
Lproduced by Nickel West sold to battery
manufacturers, making BHP Ltd one of the
world’s leading suppliers of nickel to the bat-
And with demand for nickel only set to
increase in the next decade, Nickel West
– owner of the Mt Keith and Leinster opera-
tions – has the wheels in motion to ensure
it has ample material to feed a hungry mar-
Over the past three years, Nickel West
has delivered a 90% increase in nickel
reserves to 1.74mt in Western Australia’s
Northern Goldfields, a figure which ex-
cludes Honeymoon Well.
“Honeymoon Well is one the first in-
vestments that we have started making to
create scale and realise Nickel West’s full
potential. Honeymoon Well significantly
enhances our position in one of the world’s
major nickel sulphide provinces. Several
deposits are already under consideration
with the Wedgetail deposit likely to be first
to be developed,” Nickel West asset presi-
dent Eddy Haegel said.
“There are also several disseminated sul-
phide deposits in the style of Mt Keith and Eddy Haegel
Yakabindie ore types being considered in-
cluding Corella, Hannibals and Harrier. Ad- batteries, making cars and other electrifica- in the 2030s. At Tesla’s recent battery day,
ditionally, we acquired the remaining 50% tion possible. Not surprisingly we expect Elon Musk flagged the enormous demand
share in Albion Downs JV giving us 100% nickel in battery demand to surge from that will come for nickel as this decade un-
ownership and providing us exploration ac- around the mid to late 2020s. We are at the folds. His call for nickel miners to grow and
cess to these tenements.” beginning of a revolution that will transform grow quickly offers real evidence of the
Haegel said updates on reserve and re- our world and truly increase demand for place that nickel has as a strategic battery
sources at Honeymoon Well would be pro- nickel. It will however not just be any nickel.” metal going forward.
vided in due course, while giving delegates Of the 2.4 mtpa nickel produced globally, “A few years ago, we were introduced to
at Diggers an insight into BHP’s thinking about 1.4mt is Class 2 nickel – NPI or fer- the Tesla Gigafactory – 30GW/hr battery
around the nickel sector. ronickel – material that won’t be converted plant, now the conversation at Tesla is on
“In our central energy view, we expect to to battery grade on the basis of conversion the urgency of reaching terawatt hours of
see the cumulative demand over the next costs, Haegel said. production.”
30 years at 250% of that of the past 30 Meanwhile, the 630,000 tpa of Class 1 Nickel West’s reaction to the nickel sector
years. Should the global response accel- nickel produced around the world cannot in the past three years has been almost as
erate, and warming be kept to 1.5 degrees be readily dissolved to form nickel sulphate. quick and sharp as the rise in price for the
centigrade then nickel again outperforms “So, the growth we speak to will come commodity every time Musk mentions the
with a cumulative demand reaching 350%,” from either nickel powder producers metal.
he said. like BHP Nickel West, which is already Nickel West’s rejuvenation in the BHP
“Nickel is a standout mineral for decar- the world’s largest powder producer, or group is set to take another course as com-
bonising the world. It is a secure position from cathode producers adjusting their missioning of its nickel sulphate plant in
because no matter what metals or com- flowsheets to produce powder or liquid sul- Kwinana ramps up.
bination of minerals are tested in lithium- phate or from an expansion of HPAL, most Stage four commissioning, which entails
ion battery cathodes, nickel produces the likely in Indonesia with its incumbent chal- adding liquor to the process, is set to start in
highest energy density. This is a powerful lenges,” Haegel said. early 2021 with first crystals to follow within
insight as to why nickel has such a positive “This will require significant investment the first half of the calendar year.
future. and we expect that it will induce prices of
“It [nickel] is the workhorse for lithium-ion Class 1 nickel later in this decade or early – Mark Andrews
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 93
DIGGeRs & DeALeRs ReVIeW
Renewing the energy debate
ydrogen as a source of energy for the Hackett was speaking at the tradi- port stated.
Hfuture continues to be embraced and tional Gold Industry Group and Deloitte On that premise, it was pertinent to
accepted within the broader community. breakfast at Diggers & Dealers which ad- have Pilbara Minerals participating in the
However, Northern Star Resources Ltd dressed decarbonisation and the action discussion given its connectedness to
non-executive director Mary Hackett said mining companies were taking in contrib- the global battery business and its place
it was prudent to remember that the new uting to a low carbon world. as a mid-market player in Australia’s re-
wave of alternate energy options would Joining Hackett in the discussion was sources sector.
take time to mature. Pilbara Minerals Ltd chief operating of- It has been a challenging 24 months for
“We have such a long way to go and ficer Dale Henderson, IGO Ltd head of Pilbara since it started production from
writing off any industry today is really corporate affairs and company secretary the Pilgangoora lithium-tantalum project
dangerous but taking ourselves on that Joanne McDonald and Deloitte director in WA’s Pilbara region with the lithium
journey is really important. How do we of sustainability and climate change ser- market softening during that period.
take this massive scale, LNG export in- vices Michael Wood. Ensuring an operation in its infancy is
dustry to hydrogen into the future? I can West Australian mining leader for performing at optimal level, while fulfill-
tell you the answer is not that clear and is Deloitte Nicki Ivory moderated the ses- ing wider obligations now demanded by
probably one of the most difficult energy sion, which was hosted shortly after the investors and customers has been a bal-
equations that we face into the future,” release of Deloitte’s The next great eco- ancing act for Pilbara.
Hackett said. nomic opportunity for WA: Transitioning “We’re very much young and just in our
“But we need to start making that jour- to low-carbon mining report. second year of operation. We have debt
ney today. Gas is a really important stor- “Climate change is already impact- on the balance sheet and there has been
age mechanism and having our public ing the mining and metals sector across pricing pressure for the past two years.
understand it is a really important fuel for companies of all sizes, regions and com- I mention that as an important backdrop
at least maybe 20-30 years, then we ac- modities. 2020 has seen this shift with as that speaks to the challenges. The
tually have a very clear pathway in Aus- climate change not only impacting global battery business is a big deal and cus-
tralia.” miners but also the mid-market,” the re- tomers want clean product, they want to
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Comprehensive Supply Chain Solutions
know it is low carbon ment. Deloitte reported that “as the transition
and we see that com- “In this new world, to understand car- to a low carbon future accelerates, finan-
ing through in the form bon flow you really need to have a deep ciers are moving away from 20th century
of VW, Tesla and OEMs understanding of your partners to a level business models, technologies and infra-
flowing through,” Hen- that we have never had to do before. structure towards increased investment
derson said. That is happening up and down the sup- in clean energy, transport, and smart in-
“We actually deal ply chain, it is a whole new relationship frastructure – [and] the commodities that
with that pressure, and we are getting into that mode pretty will underpin them”.
but frankly it is a great quickly,” Henderson said. This was an opportunity for industry to
space to be involved in How the mining industry transitions to capitalise on, according to Wood.
and we should do eve- a low-carbon future is just one of the big “When you see institutional lenders us-
rything we can to em- questions individual companies need to ing concessional loans for example, the
brace it and integrate it answer. Ivory asked how that challenge CEO of BlackRock [Larry Fink] looking at
into our core business. related to myriad other issues faced by investment risk and they are putting sus-
“As a young company industry. tainability at the top; that is sending the
we have to make deci- “I think we have to be careful what is market a signal,” Wood said.
sions on how far we the focus. We are now moving on emis- “Supply chain pressure is incredibly
go, and what type [of sions and targets, the climate change important. Customers are putting pres-
technology is used]. strategy I think they are managing ac- sure on producers, saying that we want
We think long and deep tions that are part of the bigger picture low or zero carbon product through our
about that. As much as and what we are doing in the ESG space supply chain. There are opportunities
we want to go solar to- already,” McDonald said. then for the sector, a whole range of op-
morrow, it costs a lot, “I am a firm believer in corporate portunities.”
so it is about balance.” governance being the foundation of a – Mark Andrews
Pilbara’s commitment company and a diverse board – skills,
to a low-carbon foot- experience, age, gender, culture – is re-
print at Pilgangoora is ally important. Without a diverse board I
through increasing the think you are really going to struggle to Northern Star non-executive director Mary
2MW solar power pen- implement an ambitious climate change Hackett, Pilbara Minerals chief operating
etration at site to 5MW, strategy. Then there is the social side, officer Dale Henderson, IGO head of
which it is busy install- companies that transition to a low car- corporate affairs and company secretary
ing now, as it gets a bon future are going to change the way Joanne McDonald and Deloitte director of
handle on understand- we work and that is going to impact our sustainability and climate change services
ing supply chain dy- future employees and our current em- Michael Wood addressed the topic of
namics and integration ployees; this in turn is going to have an transitioning to a low carbon mining future.
in the current environ- impact on society.” West Australian mining leader for Deloitte,
Nicki Ivory, moderated the discussion
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 95
N N N
Next tier sees ext tier sees ext tier sees ext tier sees
hope through dark e through dark e through dark e through dark
l l l
lithium cloudsithium cloudsithium cloudsithium clouds
he collapse of Altura Mining Ltd in late October cast
T another dark cloud over the struggling lithium sector.
What was once the pacesetter in the battery minerals
revolution is now lagging at the back of the pack. However,
those companies which remain committed to developing
lithium projects are taking on board all the lessons learned
in a bid to ensure mistakes are not repeated when prices
have recovered enough to justify starting production.
ordaMentha was appointed receivers of
KAltura on October 26 after the company
conceded it could not attract enough support
for its $150 million recapitalisation effort aimed
at wiping away most of its climbing debt. Vol-
untary administrators were called in the next
Receivership comes a little more than two proposal offered. economy.”
years after Altura officially opened its name- Pilbara Minerals was the obvious buyer for The collapse of two lithium companies so
sake lithium operations in the Pilbara and Altura given its Pilgangoora operations sit im- soon after entering production has cast doubt
only 14 months after fellow spodumene pro- mediately to the west. Both mines have been over the ability of other hopefuls in the space
ducer Alita Resources also entered voluntary producing spodumene for roughly the same to make it to market, especially while prices
administration. Mineral Resources Ltd has period. remain depressed and not forecast to hit their
also mothballed its Wodgina project, while “This potential acquisition represents a straps again for at least two more years.
the likes of Pilbara Minerals Ltd and Galaxy logical consolidation of two neighbouring op- Liontown Resources Ltd is one such devel-
Resources Ltd have had anything but smooth erations to unite the greater Pilgangoora ore- oper. The Tim Goyder-chaired company is fo-
rides since starting up their respective mines body, unlocking tangible synergies in both the cused on the Kathleen Valley lithium project,
in Western Australia. short and long term,” Pilbara Minerals man- about 350km north-northwest of Kalgoorlie,
Pilbara Minerals has put its hand up to aging director Ken Brinsden said in an ASX and recently published both an updated PFS
take control of the Altura operations, having announcement. for a standalone 2.5 mtpa mining and pro-
entered into an implementation deed with “If successful, the acquisition will cement cessing operation there, as well as a scoping
the senior secured loan noteholders of Altura Pilbara Minerals’ position as the largest pure- study for a potentially lucrative downstream
just two days after receivers were appointed. play ASX-listed lithium company by enter- option.
The conditional deal for the shares in Altura’s prise value and will provide strong leverage to Based on indicative timetables, Liontown is
operating subsidiary, valued at about $US175 the expected recovery in lithium prices, driven still four years away from commissioning an
million, is subject to completion of the receiv- by the increasing demand for electric vehi- operation at Kathleen Valley that is forecast to
ership process. cles and energy storage applications evident produce an average 350,000 tpa spodumene
Altura loan noteholders have reportedly across the world. concentrate and 430,000 tpa tantalum con-
agreed to vote in favour of Pilbara Minerals “We believe this will help safeguard jobs in centrate over a 40-year mine life.
taking control of the operations should the ac- the WA lithium sector and ultimately create Liontown managing director David Rich-
quisition proceed. Pilbara Minerals has also some exciting new growth opportunities that ards said his company had the luxury of time
procured the right to match any competing will deliver a range of benefits for the local on its side given spodumene prices were
Page 96 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
Pilbara Minerals has emerged as the frontrunner to acquire the neighbouring
Altura lithium operations from the administrators of Altura Mining
tipped to recover by 2024. in Nevada.
“We’re not in a hurry to rush into production The DFS on Rhyolite Ridge highlighted a
now and the board is quite firm on the princi- lowest-quartile AISC of $US2,510/t for pro-
ple that we will not go into production unless duction of 20,600 tpa lithium carbonate and
the price of lithium [spodumene] improves,” 174,400 tpa boric acid over a 26-year mine
Richards told Paydirt. life. This is a huge point of difference for
“I think the key is we’ve got time. We don’t ioneer chairman James Calaway, who held
want to be a miner for the honour and glory of the same position at established producer
it. We want to be a profitable miner and the Orocobre Ltd for eight years until the com-
key is to make sure that the price recovers, pany became a producer in 2016.
is sustainable and we see the increasing de- “Like any other material that we produce, it
mand that people are predicting around the has the tendency to be cruel to those at the
place. top part of the cost curve and the companies
“We’ve got the opportunity to learn from that do well are the ones at the lower part of Steve Promnitz
other groups and be disciplined when it the cost curve because they can withstand
comes to making that decision to mine.” the downturns,” Calaway told Paydirt. and it was “only a matter of time” before that
Liontown updated its original PFS pub- “Now they may not be happy about it, they filtered down to the next group of developers.
lished in 2019 following this year’s twofold may not be joyous, but they don’t run the risk “As we learnt last time, although that may
increase in the resource base at Kathleen of being taken out. Nobody at Orocobre is lift the sector, there’s always going to be parts
Valley to 156mt @ 1.4% lithium and 130 ppm running around dancing in the streets about of the sector that are going to do better than
tantalum. The updated PFS released in Oc- the price they’re receiving today for their lithi- others and it’s been our view for a couple of
tober is based on a new reserve of 71mt @ um, but they’re also not worrying about falling years now that those who are going to do well
1.4% lithium and 130 ppm tantalum. apart. And they know better days are coming are the ones that produce a consistently high
Key financial outcomes for the updated and they’re coming soon. quality product,” Promnitz told Paydirt.
PFS included life-of-mine free cash flow of “In our case, we have the benefit and we “There is quite a bit of lithium out there, but
$4.8 billion, post-tax NPV of $1.12 billion and do truly believe that we will be the lowest-cost one of the reasons that the price is depressed
IRR of 37%. Capex is estimated at $325 mil- producer on the planet…so if our company is there was a lot of poor-quality material that
lion with payback in three years, underpinned goes into receivership, there’s going to be a had to get reprocessed in China. We wanted
by cash operating costs of $US283/dmt. whole lot of blood on the floor because we are to leapfrog that step and produce a high-
Unlike other lithium mines in WA, Kathleen at the very bottom of the curve and a substan- quality battery product consistently and then
Valley will be both an underground and open tial part of our operating costs, about 70%, is secondly to do that with a sustainable and
pit operation, with processing via whole of ore covered by a very low volatility material in the responsibly sourced benefit.
flotation to produce spodumene and tantalum boric acid.” “We’re fortunate we’ve got a project that
concentrates. According to ioneer’s DFS, the company can be scaled up to pretty much whatever
Richards said while whole of ore flotation will need $US785 million to build the proposed size the market wants, with a process [direct
was not a conventional process for lithium 2.5 mtpa mining and processing operation at extraction] which is quite simple and doesn’t
production, it provided a greater degree of Rhyolite Ridge. Managing director Bernard use much water and produces a quality prod-
certainty in making spodumene. Rowe said high capital costs in the construc- uct.”
“We were cognisant of the fact all the other tion of other lithium projects had proven their And while it may seem counterintuitive to
developers and processors at the moment downfall and he did not want his company to be thinking about downstream options for
have been struggling with their grades and suffer the same fate. lithium projects when concentrate producers
recoveries in the concentrate,” he said. “Not only did they have to battle the high in Australia are yet to have mastered their
“Everyone has got to remember the whole cost [of operations]…the fundamental issue craft, Liontown has put forward a strong case
lithium space is pretty new and there’s a lot here was that they used incredibly expen- for future production of a battery-grade lithium
of learning going on. We wanted to take ad- sive capital to build the projects,” Rowe said. hydroxide monohydrate or lithium sulphate
vantage, but learn from those guys that have “There was very little-to-nil margin for error monohydrate.
gone before us in the last couple of years and and that’s something our board is adamant Richards said the company’s recent down-
work out how we can approach it differently to that we just won’t do.” stream scoping study had received an “over-
ensure we do our best to avoid the issues that While his company is less advanced in the whelming positive” reaction from investors
the others have had.” development cycle as Liontown and ioneer, which he put down to Liontown acknowledg-
Liontown chief operating officer Adam Lake Resources Ltd managing director Steve ing this was not its skillset and a partner with
Smits said a predominantly underground Promnitz believes the support is there for the requisite expertise would be needed to
mining operation allowed the company to be lithium companies which show early promis- assist with such a development.
more selective about which ore could be pro- ing signs for production of a consistent high- “The financial metrics are such that if we
cessed first. grade product. could do it, then it’s a no brainer, but we have
“The key was to get higher grade and lower Lake has done just that in 2020 and recently to acknowledge our expertise,” Richards said.
costs earlier in the mine life as opposed to teamed with the likes of Hazen Research Inc “We’re confident that we can mine a de-
later and make the project hum from day one and Novonix Battery Technology Solutions to posit and confident we can produce a spo-
rather than wait to the end to make a lot of finalise test work on production of a 99.97% dumene concentrate, but obviously the next
money,” Smits said. battery-quality lithium carbonate product from step of turning it into battery chemicals, that’s
Low-cost production is the signature fea- the Kachi brines project in Argentina. something where we probably need some
ture of another ASX-listed hopeful in ioneer Promnitz said end-user support from key help.”
Ltd which has the most advanced lithium markets in China, Europe and the US had
play in the US with its Rhyolite Ridge project already lifted for existing lithium producers – Michael Washbourne
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 97
Blackstone sees green at Ta Khoa
here is no doubt in Scott Williamson’s
Tmind that 2020 will go down as the start
of one of the great bull markets for resources.
“I am confident of that,” the Blackstone Min-
erals Ltd managing director told Paydirt.
A frenzied response from investors to-
wards gold and iron ore has sparked much
interest in the resources sector and there are
signs that base metals will begin to run in the
next 12 months.
“We are seeing it [positivity] in copper, nick-
el will be next and then maybe even zinc. It is
a good time to be a junior; it’s what the sec-
tor has been waiting 10 years for,” Williamson
“There have been a lot of false starts in bull
markets before, but I think it is here now.”
If Williamson is right, Blackstone will head
into a glittering period for the resources sector
cashed-up with $28 million to deliver a PFS
on the Ta Khoa nickel-copper project in Viet-
nam in Q1 2021.
In October, a maiden indicated disseminat- Scott Williamson
ed sulphide resource at Ban Phuc – 44.3mt @
0.52% nickel for 229,000t nickel and inferred
resource of 14.3mt @ 0.35% for 50,000t – un- price and permitting. We don’t see any issues with our idea being to use the PFS to build the
derpinned a scoping study at Ta Khoa. with funding, we see the commodity price partnership,” he said.
Despite a solid scoping study on Ta Khoa being strong over the next 3-5 years and we A JV agreement related to a downstream
– 12,700 tpa nickel production over 8.5 years, have begun the permitting process. The ben- processing solution at Ta Khoa would see the
gross revenue of $US2.95 billion to $US3.6 efit of having a brownfields project is that it estimated $US150 million funding require-
billion plus the potential for downstream pro- is already permitted; there is an amendment ment split equally between Blackstone and
duction of nickel, cobalt and manganese process to that but we are de-risked by the EcoPro.
(NCM) products for the lithium-ion battery fact it is a brownfields project on an existing The potential NCM downstream precursor
industry – Williamson was at odds to explain mining licence.” product (25,000 tpa) applicable to the lithium-
why Blackstone was only valued at a 38c/ Also running in Blackstone’s favour is a re- ion battery industry accentuates the payability
share and market capped at $121 of nickel from 70-80% to 125-135%
million. of LME prices, the main incentive
It is typical for some of the lustre for both Blackstone and EcoPro to
a company generates during the We have seen the lowest of pursue a JV at Ta Khoa.
exploration phase to rub off once “ lows and highest of highs The scoping study at Ta Khoa
development scenarios and fund- was done on a base case through-
ing requirements are publicised, in our share price within three put scenario of 4 mtpa, with dissem-
therefore the $US314 million pre- months during 2020, which I think inated sulphide material sourced
production capital cost potentially from one large open pit at Ban
incurred to kick-start Ta Khoa may will go down as the start of one of Phuc.
have impacted Blackstone’s mo- the bull markets for resources. Estimated net pre-tax cashflow
mentum. of $US1.2 billion, pre-tax NPV of
Williamson said not being able to $US665 million and IRR of 45%
conduct site visits for investors due were guided in the October study,
to COVID-19 restrictions may also be ham- lationship with EcoPro Co. Ltd – the world’s with Blackstone signalling potential to stage
pering Blackstone’s value proposition. second largest and Korea’s largest nickel-rich capex requirements and further upside in by-
“Maybe it is the funding or the perception cathode materials manufacturer – which sub- product credits in copper, gold, platinum, pal-
that we are not going to announce every drill scribed for almost $7 million worth of Black- ladium and rhodium.
hole going forward, maybe it is understanding stone shares in April. A PFS on Ta Khoa is imminent, and Black-
around that staged capex as well, which we Blackstone’s deal with EcoPro has been stone plans to have a DFS wrapped up by the
have the ability to halve to circa $US150 mil- somewhat underrated, however, there is a end of 2021 and a decision to mine soon after.
lion just for the downstream component while chance for a more material outcome, William- According to the current timeline, Blackstone is
leveraging from the existing upstream mine son said. positioned to restart operations at Ta Khoa with
infrastructure,” Williamson said. “Hopefully, we’ll have some more corpo- an integrated downstream refinery in Q2 2022.
“Whenever you look at any project the key rate success with EcoPro looking to sign a JV The company is financially strong and has ac-
risks are always around funding, commodity agreement around the same time as the PFS, quired the requisite skillset to meet its timelines.
Page 98 DeCeMBeR 2020 - JaNUaRY 2021 aUSTRaLIa’S PaYDIRT
with Ban Chang, “We may even aim for zero [emissions] be-
Ta Cuong plus cause we have the hydropower and we could
the other 25 un- even become the first to develop a green
tested massive nickel mine,” Williamson said.
sulphide vein tar- With much of Blackstone’s focus in Vi-
gets identified at etnam – a country included in the Regional
Ta Khoa. Comprehensive Economic Partnership free
Following the appointment of former Me- “We will only announce drill holes that ma- trade agreement with Australia – Williamson
dusa Mining Ltd corporate development of- terially change the economics of the project. said the company had to consider how to ex-
ficer Patrick Chang in July, Blackstone has When you have a $US1 billion project it takes tract value from the other assets in its port-
since added Andrew Strickland (head of pro- a fairly significant hole to change the econom- folio.
ject development), who Williamson worked ics,” Williamson said. Blackstone’s West Australian projects in-
alongside at Perseus Mining Ltd, and Richard “We don’t want the market to focus on each clude the Silver Swan South (gold and nickel
Kitchener (general manager of operations), drill hole as they come. That is probably one near Kalgoorlie), Middle Creek (gold near
while Steve Ennor (project development) and of the reasons why some people left us, we Nullagine) and Red Gate gold project, 140km
Vu Hong Cam Van (commercial) have taken aren’t going to pump and dump, we were nev- north-east of Kalgoorlie, all of which carry no
the leap into general manager roles. er that stock but early on we obviously wanted value with the market at a time exploration
“We have a pretty strong, young executive to show the excitement that we saw. With a plays in the State are thriving.
team, with most of us under 40. When you market cap of $120 million it takes a signifi- “We are getting zero value for our non-core
have a good asset like this people begin to cant hole to change our future.” assets, so we are considering what to do with
come out of the woodwork and they still are,” Resources updates will be provided by them. It will be a big year  for not only
Williamson said. Blackstone in due course, as Williamson Blackstone but a lot of junior mining stocks.
No doubt the newcomers to Blackstone touted the possibility of developing the world’s We have seen the lowest of lows and highest
not only see what is immediately in front of first green nickel mine. of highs in our share price within three months
the company, but also the potential ahead in With access to hydropower, the company during 2020, which I think will go down as the
Vietnam. will also look to reduce its overall footprint at start of one of the bull markets for resources,”
At the time of print, nine drill rigs were in op- Ta Khoa by looking at potential smaller under- Williamson said.
eration, as Blackstone looks to follow on from ground mines and using electric equipment – Mark Andrews
the discovery success at King Cobra starting as much as possible.
Decision on FYI/Alcoa JV looming
he potential for ASX junior FYI Resourc- integrated Cadoux/Kwinana HPA project
Tes Ltd to strike a JV agreement with Al- ($US189 million capex), has been validated
coa of Australia Ltd to strategically develop by Alcoa’s interest and an earlier commit-
the former’s HPA project in Western Austral- ment by Luxembourg private equity group
ia was growing at the time of print. – GEM Global Yield LLC SCS (GEM) – to
As the two companies progressed the provide FYI with an equity financing facility
finer details of a potential JV, outlined in of up to $80 million to support development
an MoU signed in September, it was an- of the HPA project.
nounced that a leading European HPA “Alcoa doesn’t do JVs all that often, it is
player had confirmed that detailed testing of not part of their normal day-to-day busi-
FYI’s HPA product was suitable for market ness. I think they have realised that to expe-
applications. dite their entry into this exceptional industry IMO general manager Alex Borger with FYI
Furthermore, the tests highlighted “ad- they need certain help and us being a little managing director Roland Hill at the pilot plant
ditional commercial advantages for FYI’s company is an advantage in this case,” FYI facility in Welshpool. IMO has been involved
HPA”. managing director Roland Hill told Paydirt. with pilot plant trials
For the last 2.5 years, FYI has success- “Thankfully, after a significant amount of “About 50% of our business is traditional
fully developed a mineable kaolin resource due diligence on the market and a number LEDs and other industries and applications
at Cadoux, 220km north-east of Perth, and of other factors Alcoa decided to join us in but certainly the upside of our business
mapped out a scenario whereby it can mine a MoU moving towards a JV on the project. model is through battery applications. Te-
to a schedule to match supply requirements I think both parties bring significant positive sla and other development groups like that
of a proposed refinery at Kwinana. attributes to make this thing a success. We means we will be dragged along in that vor-
Now it has conducted extensive pilot have a bit of work to do under the JV um- tex,” Hill said.
plant trials consistently producing premium brella culminating in a decision in Decem- “We just completed our third detailed
HPA product, with ultra-low impurities bear- ber to move to an [official] JV. The equity study trial and we are keen to see the out-
ing “exceptional quality and characteristics”. arrangement between the two parties is not come of that and the designed product
Samples from the pilot have been inde- yet established, we are still working through requested by a number of clients. We are
pendently analysed in the US, as FYI has that.” looking to further develop our offtake ar-
always proved it can tailor end-product spe- LEDs represent one area of the market rangements, while we will be completing
cific to potential customer requirements. HPA is traditionally used in, however, it is more detailed work with Alcoa along with
The leg work completed by FYI to date, the battery sector where there is growing permitting work at Kwinana.”
including a DFS in March on the 8,000 tpa demand.
aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 99
emerges for TMT
roduction of a premium iron-vanadium a potentially economic non-magnetic tails
Pproduct which has already caught the eye stream, TMT will look at incorporating dense
of one of China’s largest state-owned enter- media separation to achieve early rejection of
prises has opened a potential low-cost path to gangue and the mineralogy which led to the
development for Technology Metals Australia recent metallurgical findings.
Ltd (TMT) at its flagship Gabanintha vana- Drilling campaigns to provide open pit geo-
dium project in Western Australia. technical data and infill the current inferred
TMT has quickly turned its attention to resource at Yarrabubba, as well generating
fast-tracking development of the Yarrabubba additional samples for potential mini pilot test Gabanintha hosts a total resource of 137.2mt
satellite project (formerly known as Southern work, is also on the company’s near-term @ 0.9% vanadium pentoxide, including a high-
Tenement) after magnetic separation test agenda. grade portion of 75.1mt @ 1.1%
work confirmed the ability to produce a high- Sinosteel is expected to keep a close eye
grade, high-purity concentrate with weighted on the upcoming work programmes as TMT vanadium electrolyte production and a vana-
average grades of 64.3% iron and 1.71% va- looks to advance offtake and EPC negotia- dium redox flow battery manufacturing base
nadium pentoxide. tions with its new Chinese-backed partner to- in Australia.
On the back of those initial results – in- wards binding conditions. “It was a really key breakthrough announce-
cluding reported low levels of deleterious “It’s a really big tick from a validation point of ment for us because it demonstrates the pos-
elements which indicate scope for the Yarra- view when you have a group like that [Sinos- sibility to move into actual battery production,”
bubba material to be considered a Platts 65 teel] who recognises the potential quality of he said. “What ownership we have in that
premium product – Sinosteel Australia Pty Ltd the product you’re looking at generating…and chain we don’t quite know yet, but they’ve got
has entered into a non-binding LOI with TMT obviously the scope around potentially getting the IP around the battery side and we’ve got
to negotiate potential life-of-mine offtake and some EPC with them really helps to de-risk a fantastic high quality, high purity product so
an EPC contract. the build phase for the project,” Prentice said. we said let’s bring those two together.
Formal development studies on Yarrabub- “For us in the longer term, forming this “We’re targeting the Australian stationary
ba, about 10km south of the area at Gaban- relationship with Sinosteel Australia means storage market and it’s really a case of just
intha where TMT is looking to develop a 27.9 there’s probably some other options, as we watch this space.”
mlbpa vanadium operation, are now under progress into the vanadium project, that More recently, TMT was granted mining
way. haven’t really been fully explored as of yet. leases by the WA Department of Mines, In-
TMT has already flagged development of a We think that this is an excellent starting point dustry Regulation and Safety for the tene-
simple open pit at Yarrabubba with mined ore from which to launch.” ments concerning Gabanintha and Yarra-
to be fed into a proposed crushing, milling and Shares in TMT have quadrupled since bot- bubba. Both have initial terms of 21 years and
beneficiation circuit which would be located at toming out in April, beginning with news of a are supported by miscellaneous licences for
the Gabanintha site. maiden offtake deal which represented about the bore field and camp and general-purpose
According to TMT managing director Ian 16% of the forecast average annual produc- leases for mining infrastructure.
Prentice, such a concept reduces both the tion from Gabanintha, about 40km south-east Prentice said the award of those leases in
funding and development risk for the broader of Meekatharra. late August was a critical de-risking factor for
Gabanintha operation which currently has a CNMNC – a vanadium-focused subsidiary offshore investors, including potential offtake
$US318 million price tag. of China Nonferrous Metal Mining (Group) Co partners and project financiers.
“We’re looking at this as essentially being a Ltd – has committed to a three-year take-or- “There’s now a lot more comfort and cer-
starter project where we can get Yarrabubba pay minimum offtake quantity of 2,000 tpa tainty we can offer around the next steps,”
up for a relatively lower capital number versus (4.4 mlbpa) vanadium pentoxide. The agree- he said. “Whenever we’re talking to custom-
the vanadium project and start generating ment includes a possible three-year renewal ers and funders – whether it’s European,
some cash flow which really gives us a bit of option and scope to increase the offtake American or Chinese – they want to see the
leg up as far as developing the bigger vana- quantity, at CNMNC’s request. mining leases granted so it was a really key
dium project,” Prentice told Paydirt. TMT then signed a MoU with Big Pawer milestone for us.
“It’s relatively early days as far as the de- Electrical Technology Xiangyang Inc Co Ltd “The other key plank we’re working on post
velopment of this new project, but that initial for potential offtake within a range of 1,000- DFS is the environmental approvals. We
test work has certainly shown we’ve got op- 5,000 tpa on a take-or-pay basis. This and self-referred the project to the EPA back in
portunity to produce a very high grade, high the CNMNC deal are on top of a previously November 2018 based on the PFS…we’re
purity iron magnetite concentrate product. It’s announced MoU with Shaanxi Fengyuan now in the final stages of putting together the
something we’ve looked at previously and it’s Vanadium Technology Development Co Ltd document around the ERD and we’re aiming
only really down in this area where we can ac- for 3,000 tpa based on a five-year term with a to have that lodged with the EPA very early on
tually achieve those outstanding metallurgical five-year extension option. in the new year.”
results.” Prentice is particularly excited about the Culminating the plethora of work TMT has
Alongside the development studies on partnership with Big Pawer given it also sets put into the Gabanintha project over the last
Yarrabubba, including investigation around the foundation for a potential JV around future 12 months since the release of the DFS was a
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