2015 Oct Paydirt

EUROPE

EU banks bite into
Highfield

Four major banks in Europe have
overlooked sentiment in the re-
sources sector and backed in pot-

ash-hopeful Highfield Resources

Ltd.

A syndicate comprising BNP Pari-

bas S.A., ING Bank N.V., Societe

Generale Corporate & Investment

Banking and Banco Santander S.A.,

signed a mandate for project finance

facilities of $353 million on a debt-

to-equity ratio of 65% for the Muga

mine in Spain.

Detailed due diligence by the

banks was being conducted at the

time of print, which Highfield man-

aging director Anthony Hall expect-

ed to be completed this month.

“We are sufficiently confident we

will reach financial close which will

give us the ability to commence con-

struction in the December quarter,”

Hall told Paydirt.

“We still have to get the mine ap-

proved. We are working hard on Muga will be the first of Highfield’s potash projects in Spain

the approvals at the moment. Once

we get the mine approved we are essentially ronmental standpoint it is relatively [gentle],” Highfield hopes Muga will provide the tem-

ready to commence construction which puts Hall said. plate from which to leverage its wider potash

us on the path to being a producer. It is a re- “We have very positive community support, ambitions in Spain where it has a host of pro-

ally exciting position to be in because there but we have earned that support. We have jects in the pipeline.

hasn’t been any new potash mines, although taken the community on the journey with us. One of those projects – Sierra del Perdón,

there are a few presently being built. We have The reality is that getting any new mine ap- 10km from Pamplona – has already passed

great visibility today of becoming a potash proved anywhere around the world is not an the scoping study stage, with indications of a

producer and I think the market is also miss- easy process and it is a very deliberate pro- post-tax, unlevered NPV of $US527 million.

ing our visibility around projects three, four cess and we have given ourselves every pos- An exploration target of 41.8mt @ 10.7%
“and five. We keep saying our goal is to be- potash (indicated) and 40.3mt @ 10.5% pot-
sible chance.
come a significant potash producer and ash (inferred) has been targeted at Sier-
we think that the first mine starts making We are sufficiently ra del Perdón, which could be in produc-
that a reality.” confident we will tion mid-2018.

Muga will command capex of $US354 reach financial close which However, Vipasca, which Highfield
million to become a mine, as detailed in will give us the ability to believes could be the company’s best
a DFS earlier this year, with steady state project, may warrant development at that
production of 1.13 mtpa granular K60 time as well.
potash expected.
With Muga spinning good cash and

EBITDA in the first full year of produc- commence construction in the company’s ability to access capi-
tion has been estimated at $US296 mil- the December quarter. tal – Highfield raised $101 million via
lion. a placement 56.125 million shares at
$1.80/share in May to fund the equity
Production from a conventional under-

ground operation during phase one at component of the pre-production capital

Muga is scheduled for mid-2017, with phase “We have a team of 45 people in Spain and expenditure at Muga – it appears Highfield is

two coming online in late 2018. we’re basically running the process with lo- well positioned in an equity market currently

Muga, northern Spain, is in a well-known cals and in a very deliberate fashion with the not conducive to mining companies.

potash basin and it is expected to run for a community involved. But mines get approved In its June quarterly, the company reported

period of at least 24 years. everyday and they get approved in Spain as cash at bank of $118 million.

However, with an exploration target of 127- well, so we are optimistic [Muga will],” he said. “With commodity prices where they are at

255mt @ 12-16% potash set at the Muga pro- As the company approaches the produc- the moment, it definitely makes raising money

ject, which covers about 80sq km, Highfield tion milestone, it will look to bolster its board a lot more challenging. We are very fortunate

has designs on being a significant player in with the appointment of a chief financial of- that we have a very robust project that works

the region for a long time and it has the com- ficer with relevant finance and production under lots of different price scenarios,” Hall

munity support to do so. experience, while two independent directors said.

“We have tremendous community support, will be added as part of the longer term board – Mark Andrews
it is a relatively benign mine, so from an envi- structure.

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 101

SIGNED, SEALED AND DELIVERED

Watpac is already undertaking mining ser-
vices for Hanking Gold at the Cornishman pit,
about 5km from Axehandle. Both deposits are
part of the Chinese-backed company’s South-
ern Cross operations in Western Australia.

Hughes, Downer deploy
rigs at Blackwater

Hughes Drilling Ltd has entered into a long-
term agreement with Downer EDI Ltd for the
provision of overburden and coal drilling ser-
vices at the Blackwater coal mine, owned by
BHP Billiton Mitsubishi Alliance.

The three-year services contract carries a
two-year extension option and is available to
both parties.

Six REICHdrill production drill rigs will be
deployed on site from a mixture of new and
existing fleet.

CPC Engineering will complete metallurgy and process plant cost and Curtin joins forces with
schedule estimations for the Macraes feasibility study Indian School of Mines

CPC awarded key of the Mount Morgan mine during the 1970s. Curtin University and the Indian School of
Macraes study contracts Earlier this year, Gladstone Ports an- Mines have agreed to establish and operate
an Australia-India joint research centre for
CPC Engineering will complete the metal- nounced its existing coal operations at Barney coal and energy technology.
lurgy and process plant component of the fea- Port would cease by August 2016 to focus on
sibility study for OceanaGold Corp’s Macraes other dry bulk export opportunities. The site The centre will provide joint PhD training,
gold-tungsten project in New Zealand. will be cleaned and prepared over the next 10 technology development, student and staff
months to fit Carbine’s current mine develop- exchange, shared use of research facilities,
The scope of CPC’s feasibility contract ment timeline. joint research projects and publications as
work includes study management, cost and well as workshops and symposia.
schedule estimation for new standalone gold Watpac continues to
and tungsten processing facilities. deliver for Hanking It was developed on the back of a joint
Gold statement made last November by former
Macraes, 100km north of Dunedin, is the Australian Prime Minister Tony Abbott and
largest gold mine in New Zealand. The pro- Watpac Ltd has been awarded an $80 Indian Prime Minister Narendra Modi, wel-
ject comprises two mines, an open pit which million contract to deliver mining services at coming opportunities to explore partnerships
has been operating since 1990 and an un- Hanking Gold Pty Ltd’s new Axehandle gold between Australian institutions and the Indian
derground mine which was commissioned in mine. School of Mines in Dhanbad.
early 2008.
The scope of work includes the removal Curtin University vice-chancellor Deborah
CPC has previously executed other con- and stockpiling of topsoil as well as bulk ex- Terry signed the agreement during a recent
tracts at Macraes. The company recently cavation of overburden and ore. Watpac will trip to India.
completed engineering and design services use equipment sourced from its own fleet to
for First Quantum Minerals Ltd’s Enterprise complete its contract obligations. “This is a very important step for co-oper-
nickel plant in Zambia and key project work ation in energy technology development be-
at Sandfire Resources NL’s DeGrussa copper More than 100 new jobs are expected to be tween the two countries, especially in light
mine, as well as construction of the crusher created as a result of the contract. of the urgent global priority to secure cheap
circuit and mill building at the Tropicana gold energy supply and reduce greenhouse gas
mine. emissions,” Terry said.

Gladstone set to restart Watpac will deliver mining services for Hanking Gold at the new Axehandle mine near Southern Cross
pyrite exports in 2016

Carbine Resources Ltd has signed a letter
of intent (LOI) with Gladstone Ports Corpora-
tion to export Mount Morgan pyrite through
the Barney Point terminal in north-east
Queensland.

The LOI provides a pathway for both parties
to develop a formal agreement and ultimately
undertake the proposed storage and loading
of pyrite through Barney Point. It also pro-
vides indicative terms for port access, includ-
ing storage and loading allotments, harbour
dues and handling costs.

Gladstone port has a long history of pyrite
storage and handling, having previously been
used for pyrite export by the original owners

PAGE 102 OCTOBER 2015 AUSTRALIA’S PAYDIRT

SubZero contracted to
rehabilitate Bulga

SubZero Group Ltd has been awarded a
mine rehabilitation works contract at Glen-
core’s Bulga open cut coal mine in the Hunter
Valley region of New South Wales.

The total contract value is estimated at
more than $10 million, depending on the final
rehabilitation area and the materials supplied.

All mine rehabilitation work is due for com-
pletion by December 2017.

Monadelphous to 3D-P will deploy a wireless network for MMG at the Las Bambas copper project in Peru
maintain Chevron
assets control drills as well as a new hydrogeological as the preferred EPCM contractor for the
drill to carry out the contract services. long-term tailings facility at a BHP Billiton Mit-
Monadelphous Group Ltd has been award- subishi Alliance (BMA) coal mine in central
ed a new three-year facilities maintenance The contract carries a one-year extension Queensland.
services contract for work on Chevron Aus- option.
tralia Pty Ltd’s Barrow Island operating as- The contract is for an 18km long tailings
sets. Services will be completed across FMG’s and return pipeline between the coal handling
Pilbara operations, including Christmas process plant and an in-pit storage facility.
The contract is for the operation and main- Creek, Cloudbreak and Solomon. The pipeline is to be completed by late 2016.
tenance of support facilities and associated
utilities, including water and wastewater treat- JSW recently completed a grade control Ausenco is working with BMA to finalise
ment plants, power generation and distribu- drilling services contract for FMG with JV pricing terms so the final contract value is no
tion systems, management and maintenance partner Eastern Guruma Pty Ltd at the Solo- more than $33 million.
of various buildings, vehicles, plant and mon and Chichester mining hubs.
equipment.
Ausenco wins North Energold starts drilling
About 500 people are expected to be em- African EPCM contract at Juma East
ployed to perform the work under the contract.
Ausenco Ltd has been awarded a $C12 mil- BBX Minerals Ltd has selected Energold
JSW set to resume lion contract to provide engineering, procure- Drilling Corp to drill the Guida and Plato pros-
drilling in Pilbara ment and construction management (EPCM) pects at its Juma East copper-gold-silver pro-
services for the refurbishment, upgrade and ject in Brazil.
Fortescue Metals Group Ltd has awarded maintenance of an existing gold processing
JSW Australia Pty Ltd a two-year contract for facility in North Africa. Drilling began late last month following
RC grade control drilling and hydrogeological completion of an IP programme, base camp
borefield drilling services. The scope of work includes the refurbish- construction and mobilisation of the rig to site.
ment of existing equipment and optimisation
JSW, a subsidiary of Hughes Drilling Ltd, of the processing facility to increase produc- Under the term of the contract, BBX will is-
will use specialised and purpose-built grade tion capacity. sue 117,187 shares to Energold for mobilisa-
tion and the same number of shares for de-
Work began early last month and is expect- mobilisation.
ed to be completed in mid-2017.
Energold is also entitled to 914 shares in
Meanwhile, Ausenco has been nominated BBX for each metre drilled.

All shares will be issued upon completion of
the drilling programme.

3D-P begins wiring up
Las Bambas

Telecommunications provider 3D-P has
been awarded the contract to deploy a wire-
less network at MMG Ltd’s Las Bambas cop-
per project in Peru.

3D-P began installing the wireless network
in late August. When completed, the network
will provide mine-wide wireless coverage for
communication of data and video from all mo-
bile equipment.

A feature of the wireless infrastructure is
the Rajant InstaMesh technology, which will
allow each radio to participate in the mesh
and maximise wireless performance through-
out the mine.

Las Bambas is expected to become one of
the world’s biggest copper-producing mines
when operational. The first shipment of con-
centrate is due in the first quarter of 2016.

JSW Australia will complete RC grade control and hydrogeological
borefield drilling services for FMG in the Pilbara

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 103

COMINGS AND GOINGS

Peter Nightingale Auzex Resources Ltd, Billabong directors of the company. Thom- Broken Hill Prospecting Ltd
International Ltd, China Steel as was an executive director of has appointed Geoff Hill as
Argent Minerals Ltd has ap- Australia Ltd, Geodynamics Ltd Macquarie Bank for 11 years until a non-executive director of the
pointed Peter Nightingale and Ross Mining NL. his retirement late last year. Jack- company. Hill has extensive ex-
and Peter Michael as non-exec- son was the vice president corpo- perience in the identification and
utive directors of the company. Highfield Resources Ltd has rate development and chief finan- implementation of mergers and
Nightingale is currently a director appointed Mike Norris as cial officer of Red Back Mining takeovers and has acted for a
of ASX-listed Augur Resources chief financial officer. Norris was Inc before its takeover by Kinross range of corporate clients in Aus-
and Planet Gas Ltd, as well as most recently finance director for Gold Corporation in 2010. He is tralia and abroad.
unlisted public companies Nickel London-listed Avocet Mining and currently a non-executive director
Mines Ltd and Prospech Ltd. prior to that was head of business of Sarama Resources Ltd and di- Constantino Markopoulos has
Michael joins the board follow- performance for Anglo American rector of Orca Gold Inc. resigned as a non-executive
ing the unexpected death of his plc’s industrial minerals division. director of FairStar Resources
brother and company non-execu- Simon Jackson Ltd. Markopoulos stepped down
tive director Marcus Michael. He CRC ORE has appointed Ben from his role for personal rea-
has more than 20 years’ experi- Adair as managing director EMED Mining Public Ltd has sons.
ence in real estate. Sarah Ship- and chief executive officer. Adair appointed Hussein Barma
way recently resigned as a non- was most recently a director of and Stephen Scott, Jonathan Constantino Markopoulos
executive director of Argent, but the University of Queensland’s Lamb and Damon Barber as
will continue her role as company WH Bryan Mining and Geol- non-executive directors of the Aus Asia Minerals Ltd has ap-
secretary. ogy Research Centre and Julius company. Barma, a chartered pointed Robert Swarbrick as
Kruttschnitt Mineral Research accountant, is currently the prin- company manager. Swarbrick
Nathan Carbone and Hao Centre. Prior to that he was a cipal of Barma Advisory, Scott is replaces Ben Donovan follow-
Ming Peng have resigned director of the Rio Tinto Centre president and chief executive of ing his resignation from the role.
as a non-executive directors of for Advanced Mineral Separation Minenet Advisors, Barber is the Swarbrick will also continue his
Siburan Resources Ltd. Peng and deputy director of the Sus- senior managing partner of Liber- position as Aus Asia Minerals’
was a director of the company tainable Minerals Institute. ty Metals and Mining and Lamb is managing director.
since August, 2012. an investment manager at Orion
Ben Adair Mine Finance. Attrum Coal NL has appointed
Waratah Resources Ltd has Bob Bell and John Wasik to
appointed Sir Warwick An- Centaurus Metals Ltd has pro- Stephen Scott its board as non-executive direc-
drew as a non-executive chair- moted Bruno Scarpelli to the tors. Both Bell and Wasik will as-
man of the company. Andrew position of Brazil country manag- Mastermyne Group Ltd has sist the board’s exisiting directors
has had a distinguished career er and to its board as an execu- appointed Gabriel Meena and management with the com-
serving as a judge in New South tive director. Scarpelli was most as a non-executive director of the pany’s sell-down process.
Wales, Papua New Guinea and recently the company’s commer- company. Meena has more than
the Kingdom of Tonga over the cial and administration general 30 years’ experience in the steel, Investigator Resources Ltd has
past 25 years. Andrew is a sub- manager. Prior to joining Cen- mining and stevedoring industry appointed Peter Harding-Smith
stantial shareholder of Waratah. taurus Scarpelli held a number of and is currently general manager as the companies new chief fi-
senior positions with Vale S.A. operations with Patrick Termi- nancial officer and company sec-
Paul Frederiks nals. He was previously general retary. Harding-Smith was most
Bruno Scarpelli manager mills and coating at recently chief financial officer
Axiom Mining Ltd has appoint- Bluescope steel, president China and company secretary for ASX-
ed Paul Frederiks as com- Cardinal Resources Ltd has coated for Bluescope Steel China listed Orbis Gold Ltd. He replaces
pany secretary. Frederiks was appointed Mark Thomas and and general manager of a num- Garry Gill, who resigned from the
previously company secretary for Simon Jackson as non-executive ber of BHP Billiton’s coal mines. company after eight years of ser-
vice.

Andrew Kerr has resigned as
a non-executive director of
Consolidated Tin Mines Ltd. Kerr
served the company as a non-
executive director for more than
seven years.

PAGE 104 OCTOBER 2015 AUSTRALIA’S PAYDIRT

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LEFTFIELD

UWA finds Swan’s hidden riches

The University of Western Australia (UWA) Andrew Lucas retrieving devices used trace metals are averaged out, improving the
is sweeping the depths of Perth’s Swan to measure gold traces reliability of our data,” he said.
River for gold and other precious metals.
methods for measuring gold in river water, be- Lead author of the study, Andrew Lucas,
A world first study into the concentrations of cause it averages concentrations over time,” said the use of Diffuse Gradients in Thin
gold in urban waterways has revealed Perth is he said. Films Technique (DGT) could potentially be
contributing valuable metals to its main tribu- used more widely in the environmental and
tary. “This means that short-term spikes or fluc- geological sciences.
tuations in the concentration of gold and other
Scientists from UWA’s School of Earth and “We’ve now shown that DGT can measure
Environment have used a ground-breaking gold as well as other trace metals in rivers and
technique – developed by an international groundwater and the greater measurement
team led by the university’s Andrew Rate – to precision means that we should be better
measure gold in the Swan River. able to understand trace element dynamics
in estuaries and other natural environments,”
Results to date have shown that concen- Lucas said.
trations of gold and a host of other trace ele-
ments were higher at sites downstream of the “Additionally, since we are now able to
Perth metropolitan area. measure gold, DGT also provides a promising
new technique for mineral exploration.”
Rate said gold was usually present at ex-
tremely low concentrations in natural water, The research formed part of Lucas’s PhD
but recent continental scale data from Europe programme and was funded by the Australian
on trace elements in soils revealed other ma- Research Council and Newmont Australia-
jor cities are also sources of gold, silver and Pacific.
other metals.

“Our new technique improves on previous

INDEX 12 Cleveland 96 Kogi 70 Randgold 5, 63
11 Coeur 94 Red River 90
A1 Consolidated 5, 49 Consolidated Tin 104 Laneway 16 Resolute
AAMC 60 Coventry 82 Resolve 5, 36, 71
Acacia 56 Cradle 52 Legend 91 Rio Tinto 92
African Energy 97 Rox
African Phosphate 7 Lonmin 7 Roxgold 8, 94, 104
Alicanto 104 89
Amplats 36, 91 Danakali 40 Magnis 54 42
Anglo American 87 De Grey 16
AngloGold Ashanti 104 Marindi 89
Antofagasta 47
Argent 104 Matsa 99 Sandfire 82, 102
Atlas Iron 104
Atrum Coal 66 Encounter 87 Mawson West 68 Sarama 104
Augur 104 Evolution 16
Aurora 104 Metals of Africa 55 Segue 91
Aus Asia 104
Auzex 104 Middle Island 26 SEMAFO 5
Avocet 64
Axiom 94 FairStar 104 Minbos 56 Sibanye 7
Azumah First Quantum 102
Azure FMG 9, 11, 103 Minemakers 62 Siburan 104
Freeport 68, 98
Mineral Deposits 62 Silver City 86

MinQuest 93 Sipa 57

MMG 68, 89, 90, 91, 103 Squadron 12

Genmin 65 Molycorp 18 Stellar 84
Glencore 68, 100, 103
Golden Predator Sub-Sahara 63
Golden Rim 93
Gryphon 66 Newcrest 5, 16, 50 Sundance 26-27, 46, 47
66 Newmont 16
New Talisman 16 Syrah 55
Nickel Mines
Base 30, 71 Noble 104 Taruga 5
Northern Minerals 36, 50
Bassari 62 Hanking 102 Nyota Teck 89
Heron 76-81 18
Bathurst 17 Highfield 101, 104 35 Tedi 98

BBX 103 Tiger 63, 68

Beadell 96 Toho 88

Bellzone 69 Impact 12 OceanaGold 16, 102 TopTung 92
Orinoco 96
BHP 8, 102, 103, 104 Implats 7 Orion Gold 91 Trans-Tasman 17
Orca Gold
Bolnisi 94 IMX 54 OZ Minerals 104
6
Broken Hill Prospecting 104 Independence 91 Vale 104

Investigator 104

Carbine 102 Ironbark 100 Walkabout 44
Caribou Copper 82
Cardinal Iron Road 10 Peak 53 Waratah 104
CBG 104 Peel 88
CBH 69 Petril 56 Windwood 91
Centaurus Planet Gas 104
Chatham Rock 86, 88 Jien Mining 18 Poseidon 12 Wolf 100
China Non-Ferrous 104 Predictive 66
17 Prospech 104 Woodside 21, 23, 38
100
Kefi 35 World Titanium 30
Kibaran 44, 54
Kinross Yukon Zinc 93
104

PAGE 106 OCTOBER 2015 AUSTRALIA’S PAYDIRT



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