2015 Oct Paydirt

Formative funding a concern
for Africa: Nedbank

The state of African min- seeing that it is very tough to do that On a brighter note, Tyler said the debt mar-
ing finance is no worse development stuff, particularly in Af- ket had strengthened in 2015.

in 2015 than last year, but a rica with the risks involved. It is a big He said mining companies had borrowed
more this year than last, however, he was con-
lack of investment threatens concern.” vinced most of the money was going to China-
based companies from the Chinese markets.
exploration throughout the Back on the funding front, Tyler said
“The total African market is down a bit, but
continent, according to Ned- poor stock performance had resulted the total market for world mining debt has in-
creased dramatically,” Tyler said.
bank Capital’s Mark Tyler. in a litany of equity funds disappearing
“Our view is that there have been a lot of
Nedbank’s head of re- from the market. bigger companies borrowing money and the
amount of money being raised for African pro-
sources said while Africa While there were still some compa- jects has certainly increased.”

was sweating on its access Mark Tyler nies buying equity with an intention to Of all the forms of finance, Tyler said M&A
to equity and debt funding, trade it, he said those that had exited activity took the biggest “hammering” in 2015.

he was most concerned the market were unlikely to return. “There was a view that there would be an
enormous amount of M&A this year for com-
about the continent’s mining future due to an “I think the equity markets are tough and I panies disposing assets they couldn’t man-
age and less of that has happened,” he said.
absence of early stage development invest- think the guys who got out when the gold price
“In fact, M&A numbers are down considera-
ment. collapsed and lost patience with gold stocks bly. A lot of people thought the only way out of
this thing was to merge and acquire funding,
“When the commodity markets do tick up have got out of the industry in general and it’s but it doesn’t look like that’s been happening.”

the fact that there hasn’t been the necessary not easy for them to come back,” Tyler said. – Rhys Dickinson

money invested in exploration puts a whole “It is possible to raise equity…but it takes

heap of frost back into the market,” Tyler said. a lot of hard work and dilutions are quite ex-

“The industry is facing a problem in that I treme. The traditional equity investors, the

don’t know if there is enough money going funds who invest for construction returns are

into the earlier stage development projects in still there, but they are looking for good invest-

order to be able to satisfy the need for new ments and where they exist we find that they

projects in a couple of years’ time. We are are quite competitive with each other.”

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 51

AFRICA DOWN UNDER REVIEW

Cradle rocked by Panda Hill

Cradle Resources Ltd managing di- resource for the project was produce 5-10% of the world’s niobium de-
rector Grant Davey reckons he’s mand.
on to a winner with the company’s released earlier this year. The
Panda Hill niobium project. As an added bonus, it would be the first and
updated resource completely only producer outside the Americas.
An enthusiastic Davey told Africa
Down Under delegates Panda Hill dwarfed the project’s previous “What end-users and traders want to see is
was set for a long future due to nio- diversification of supply,” he said.
bium’s growing demand and the Tan- 96mt @ 0.52% niobium figure
zanian project’s whopping resource. “I think with us coming on board, they are
and provides the company with very keen to speak to us and get that diver-
Niobium, which is used to strength- sification.”
en steel products, was set for a de- a platform to mine the deposit for
mand step change not because of an increas- The Tanzanian Government recently is-
ing want for steel, but rather an increasing more than 20 years. sued Cradle with an ESIA certificate for min-
desire for better quality steel, according to ing operations at Panda Hill, as well as renew-
Davey. Grant Davey The resource also increased ing the project’s mining licence for a further 10
the project’s endowment of pri- years to November 2026.
“The low intensity use (of niobium) in
emerging countries, especially China and In- mary carbonatite mineralisation Major fieldwork, including geotechnical in-
dia, underpins the long-term growth,” he said. vestigations and hydrological drilling, has also
to 166.8mt @ 0.5% niobium for 828,000t nio- been completed. Davey couldn’t contain his
“China is the biggest steel manufacturer in excitement for the project.
the world and they use the least niobium in bium – an 80% increase on Cradle’s Decem-
their steels of any steel-producing country, “At the peak of the project it will be worth
about a fifth of what the rest of the world does. ber 2014 estimate. $US890 million, and that’s more or less four
But, with China, India and the developing years after we’ve started production, when
world moving towards higher grade steels and “Thirty-nine per cent of our resource is we’ve ramped up to full capacity,” he said.
higher quality steels this product will continue
growing.” measured and indicated; that gives us around “The DFS will be complete by, at the latest,
the first quarter of 2016. We will then go into a
There’s little doubt Panda Hill will be able 20 years of mining,” Davey said. decision to mine, front-end engineering and,
to keep up with demand after a new 178.2mt conservatively, by the second half of 2018 we
@ 0.5% for 891,000t of contained niobium “We’ve drilled it out and we are able to do will be in production.”

our DFS on a low-risk resource. We’ve got – Rhys Dickinson

about 100 years of mining in resource and our

DFS will be done on the first 30 years of that.

Our geologists are telling us that we’ve got at

least another 200-400mt at similar grades to

our orebody available for us to explore. We’ve

only explored about a third of this orebody.”

At present, more than 90% of the world’s

niobium is mined in Brazil – 85% of which is

produced by a single company, CBMM.

Davey said Panda Hill had the capacity to

PAGE 52 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Peak to defy rare earth cost curve

Peak Resources Ltd managing director Dar- source but the metallurgy “The magnet market
ren Townsend is confident the company’s for that zone is very favour-
flagship rare earths project has the one ingre- able due to the lack of car- drives about 53% of the
dient more essential than any other to suc- bonates and phosphates
cess; low cash costs. in the ore; they have been market value for light rare
leached out. That means
“It is a low-cost operation and you have to we don’t have to use as earths and neodymium
be low-cost to be competitive with the Chi- much acid as most rare
nese,” Townsend told Africa Down Under del- earth projects do.” and praseodymium are the
egates.
The reduction in reagent key, non-substitutable in-
Townsend was referring to the company’s use means lower operat-
Ngualla rare earths project in south-west Tan- ing costs but the simpler puts for the industry.”
zania. Despite only discovering the deposit in metallurgy also means
August 2010, Peak recently launched a BFS reduced capex as Peak Super-strength mag-
on Ngualla which is among the highest grade will be able to use plastic
rare earths projects currently being consid- pipes, pumps and filters in the leaching pro- nets have been used in the
ered for development. cess.
standard automotive and
The project has a total resource of 195mt A 2014 PFS flagged a $US367 million price
@ 2.25% rare earths, but the company has tag for the project’s development, significantly electronic sectors for dec-
chosen to focus only on the weathered bast- lower than those Peak’s peers have faced in
naesite portion of the deposit, defining a re- recent years. ades where they are key to
serve of 20.7mt @ 4.45% rare earths.
Ngualla’s mineralogy also has advantages Darren Townsend weight reduction. Howev-
Townsend said the weathered bastnaesite from a marketing front with its rare earth grade er, demand is increasing in
zone had been chosen because it offered made up largely of neodymium and praseo-
both operational and marketing advantages dymium, often called the “magnet metals” due the area of green technolo-
over other rare earths development projects. to their application in super-strength magnets.
gies including wind turbines, electric bikes
On the operational front, the mineralogy of “Our focus has been on the magnet metals
the weathered bastnaesite offers opportunity and their application in green technologies,” and electric and hybrid vehicles.
for lower capex and opex numbers. Townsend said.
Townsend said the low-cost nature of
“The reserve is only 22% of the total re-
Ngualla had allowed Peak to attract the finan-

cial support of London-based private equity

group Appian Natural Resources Fund and

the International Finance Corporation.

The two funds’ investment will see Peak

through the BFS process and Townsend said

they had also opened the door to new funding

opportunities for the company.

– Dominic Piper

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 53

AFRICA DOWN UNDER REVIEW

Numbers stack up for IMX

IMX Resources Ltd will re- last year and making the switch @ 10.7% TGC at Shimba into measured and
lease the first economics for indicated status later this quarter.
its Chilalo graphite project in to pure graphite explorer.
Tanzania later this month. “The deposit we’ve drilled out to date is rea-
“I stood here 12 months ago sonably modest, but it underpins the scale of
A PFS on an initial 50,000 the project we’re trying to develop,” Hoskins
tpa operation, along with a re- with nothing but rock chip sam- said.
source upgrade for the Shim-
ba deposit, is due before the ples and a story about a desktop “This proves that we have significant ton-
end of October. nage in the ground to match that of our more
review into graphite prospectiv- highly rated peers.”
A robust outcome will al-
most certainly strengthen ity on our tenure,” IMX chief ex- Hoskins tipped the project would deliver
IMX’s position as an emerging low capex and opex numbers when the PFS
graphite play. The company ecutive Phil Hoskins said. findings were released and expected the
already boasts the highest proximity of existing infrastructure would al-
grade JORC-compliant re- “Twelve months later we’re low his company to fast-track development of
source in Tanzania and the highest purity of the proposed small-scale operation at Chilalo.
all the ASX-listed graphite hopefuls. not looking back and we’re not
Discussions with potential off-take and fi-
Only Magnis Resources Ltd’s Nachu pro- treading water…and I think the nancing partners are ongoing and Hoskins
ject, 5km east of Chilalo, has a higher flake said initial feedback from Chinese investors
size distribution (large and jumbo flake clas- next 12 months are going to be had been “overwhelmingly positive” towards
sification) than IMX’s flagship asset. the project.
Phil Hoskins very exciting for the company.
Over the coming months, IMX also plans to We have a number of key mile- “China doesn’t have a lot of coarse flake
advance its off-take and financing talks into graphite and they see this project as poten-
binding agreements and should receive its stones coming up that I think tially being a long-term, stable supplier of
environmental certificate and mining licence something they don’t have,” Hoskins said.
later this quarter. will see Chilalo emerge as a world-class flake
IMX recently welcomed prominent Chinese
It continues the remarkable progress IMX graphite project.” businesswoman Madame Chen Yonglian to
has made in Tanzania since pulling the pin on its register.
its South Australian iron ore mining projects Following Africa Down Under, IMX an-
– Michael Washbourne
nounced metallurgical testwork had lifted

the flake size distribution at Chilalo from 47%

to 67.6%, behind Nachu (73%) but ahead

of Kibaran Resources Ltd’s Epanko project

(55.4%).

IMX believes it still holds scope to further

improve Chilalo’s flake size and has set an ex-

ploration target of 100-350mt @ 3-11% TGC

outside of the high-grade Shimba deposit.

The company also expects to convert a

high portion of the inferred resource of 7.4mt

PAGE 54 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Metals of Africa resurrects
Balama Central

Metals of Africa Ltd will long and several hundred grading between 5% and 15% VGE from
make a triumphant return 8.7m.
to its Balama Central graphite metres wide conductor
project in Mozam bique later That intercept also included a higher grade
this year. which coincided with out- zone grading more than 10% VGE from 38-
62m.
Managing director Cherie cropping high-grade graph-
Leeden said although Mon- Leeden said Elephant was also structurally
tepuez remained its priority ite and vanadium minerali- complex, which lent it to jumbo flake proper-
project, the company felt Bal- ties, but made it harder to track and chase.
ama Central warranted further sation.
investigation this year. At Lion, Metals of Africa drilled to define the
Montepuez’s early prom- northern limits of the prospect, with miner-
The project is along strike alisations remaining open at depth and along
and immediately adjacent to ise encouraged Metals of strike to the south.
Syrah Resources Ltd’s Balama
graphite project, which hosts Africa to initiate a follow-up Leeden hoped to have resources for Buf-
the world’s largest graphite re- falo and Lion delivered by November.
source of 1.15bt @ 10.2% total 5,000m, RC and diamond
graphitic carbon (TGC) and 0.23% vanadium “We feel there is a compelling case for a
oxide. drilling campaign at Buffalo, re-rating and our peers are capped at about
$600 million and $100 million and we believe
A recent VTEM survey flown over the pro- Lion and Elephant, which we have got a very similar product, if not a
ject unveiled a 3km long by 1km wide con- more unique product due to the flake size in
ductive anomaly coincident with the strike of commenced in early May. our tenure,” Leeden said.
stratigraphic conductors hosting mineralisa-
tion at Syrah’s project area. Buffalo continued to “We are only at $5 million and we’ve got a
JORC resource that’s due next month. Com-
Leeden told Africa Down Under delegates Cherie Leeden shine, with hole MN0018D mencing after our resource is the PFS and
Metals of Africa initiated a trenching pro- returning a 50m @ 9.86% then we can look at going into a pilot plant.”
gramme at the project recently.
TGC from surface intersec- – Rhys Dickinson
“Previously there was no outcropping
mineralisation known, so we have dug 1-2m tion which ended in mineralisation.
below sand cover and have proven that the
VTEM anomaly is due to the high-grade Metals of Africa rolled a diamond rig out to
graphite mineralisation,” she said.
Elephant during the latest campaign, drilling
“We are very much looking forward to drill-
ing this particular project and the plan is to four holes for 393m into the prospect target-
drill it circa October-November after we finish
work at our Montepuez project.” ing shallow, outcropping graphite mineralisa-

Montepuez has gone from strength to tion identified in the VTEM survey.
strength following a maiden 21-hole, 2,705m
drilling campaign in late December which Hole EL003D, testing a larger 30m zone
confirmed high-grade mineralisation at two of
the project’s identified targets – Buffalo and of outcropping graphitic schist, intersected
Lion.
a mineralised zone approximately 80m wide
The northern Buffalo prospect returned
a standout intercept of 145m @ 9.6 TGC Tanzania takes leading role at ADU
from 34m, while Lion, located in the project’s
southern section, produced a compelling hit Among the 14 African delegations in attend- ian junior explorers. Speaking on the main
of 45.72m @ 7.15% TGC, comprising 15.72m ance at this year’s Africa Down Under, the stage during the conference, Commissioner
@ 9% TGC in the oxide zone from 4.28m and Tanzanians were the most conspicuous. for Minerals Paul Masanja said a new online
30m @ 5.47% TGC in the primary zone from cadastral system and improved power avail-
15.72m. The East African nation has enjoyed an ex- ability made the country a more attractive ex-
ploration renaissance in recent years thanks ploration destination.
Drilling at Lion targeted a broad 300m to a series of discoveries, particularly graph-
VTEM response 400m along strike from a ite, made by a group of emerging Austral-
46m wide zone of graphitic schist intersected
in the project’s original water bore and re-
turned consistent hits of 5-10% visual graph-
ite estimate (VGE).

Metals of Africa actually discovered its
strongest VTEM anomaly – which would later
be dubbed the Elephant prospect – follow-
ing the completion of its maiden drilling pro-
gramme.

A helicopter-flown survey identified a 5km

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 55

AFRICA DOWN UNDER REVIEW

Cabinda merger hopes dashed

Phosphate hopeful Minbos Resources Ltd Lindsay Reed would be a significant customer. The port is
has failed in its bid to acquire 100% of the not dependent on our project, but it would be
Cabinda project in Angola. ther exploration drilling is also in the frame for very grateful to have our business.”
early next year.
Minbos and JV partner Petril Phosphates The rock phosphate to be mined from Ca-
Ltd were locked in merger talks for several Minbos signed a letter of intent with Porto cata has been declared a premium product by
months, but the parties were unable to set- de Caio in late July to export no less than CRU Consulting Group and is tipped to attract
tle on terms. The difficulties associated with 800,000 tpa of rock phosphate from Cabinda a 9-10% premium on prevailing market prices.
combining a public and private company as port, about 60km by road from Cacata, from
well as different cultures proved to be the ma- mid-2017. “They determined it would be very attractive
jor sticking point. to a lot of the phosphate fertiliser manufactur-
“They’re currently doing geotech work with ers as a blending product that allows them to
Under the proposed merger, Minbos would a view to commencing the dredging of the port deal with the higher impurities or lower grades
have acquired full rights to the project while and they’re hopeful to be up and in operation from other rocks they import from around the
Petril claimed a 50% equity stake in the ASX- by late 2017,” Reed told Africa Down Under. world,” Reed said.
listed company.
“We are not a business that’s required “We’re probably only going to be 3-4% of
“Although it is disappointing not to proceed to make that port a viable business, but we the market when it comes online, so it’s not
with the merger, Minbos shareholders will still a big project that’s going to flood a market.
have a 50% interest in the very exciting Cab- There’s 40mt and we probably come on
inda project that includes the high-grade Ca- around 0.5 mtpa, so we’re not a big part of the
cata deposit,” Minbos chief executive Lindsay market and we won’t make a big dent, but we
Reed said. will be a premium product and be attractive.”

“Minbos will now focus on the commence- Meanwhile, Minbos has entered into a bind-
ment of the BFS for the Cacata deposit ing deed of offer and release with African
through the JV with Petril.” Phosphate Pty Ltd to dispose of its rights to
the Kanzi project in the DRC, with the latter
Only a scoping study has been completed to acquire all historical technical data and
on the project to date, but Reed said his com- study reports for a total consideration of
pany was making plans to start a PFS, includ- $US200,000.
ing a bulk sampling programme, in the next
few months. – Michael Washbourne

Securing an off-take agreement and fur-

Apollo Consolidated Ltd

ASX: AOP www.apolloconsolidated.com.au
www.apolloconsolidated.com.au

New Projects
First Programs
Cote d’Ivoire Gold

First-principles
gold exploration in

>1,000km2 highly-

prospective gold
terrains

At least 30km of untested

soil anomalies defined
in l2 months

Multiple bedrock targets emerging
Set for first stage fully-funded drilling H2 2015

+61 89 3204700  [email protected] 

PAGE 56 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Sipa’s double delight in Uganda

Sipa Resources Ltd’s Lynda Burnett was nickel and 0.2% copper. the past 2.5 years.”
eager to tell Africa Down Under delegates Akelikongo’s broader nickel Sipa’s second eureka moment
that her company was having “an absolute rip-
per of a year”. and copper sulphide interval at Akelikongo came in June when
within the magnesium oxide the company discovered a sec-
The jovial managing director said Sipa’s intrusion delivered another ond mineralised zone, Akelikongo
year to date was highlighted by not one, but standout hit of 24m @ 0.3% West.
two major discoveries at its Kitgum-Pader nickel and 0.08% copper from
project in Uganda. 58m and 5.1m @ 0.24% nickel The prospect was discovered
and 0.07% copper from 85.9m. by the way of RAB drill testing a
Sipa’s run of good news flow in 2015 strong 1,700 ppm nickel and 543
kicked-off in March when it announced a four- The real breakthrough for Lynda Burnett ppm copper in-soil anomaly dis-
hole diamond drilling programme at Kitgum- Sipa at Akelikongo was in Au- covered during a regional explo-
Pader’s Akelikongo prospect confirmed the gust when drilling confirmed the ration campaign initiated in May.
presence of a nickel-copper sulphide bearing prospect’s continuously mineralised intrusion The four-hole RAB programme defined a
mafic/ultramafic sequence. extended over 500m and was open in all di- body of 0.3% nickel and 0.08% copper, which
rections. appeared to dip to the south west, and sub-
Standout results from that programme in- sequent RAB work produced a best hit of 8m
cluded, 0.5m @ 1.77% nickel and 0.06% cop- Drill hole AKC001 produced 126m averag- @ 0.73% nickel and 0.12% copper from 32m..
per from 123.8m, 0.3m @ 0.23% nickel and ing 0.25% nickel and 0.07% copper from sur- Follow up diamond drilling in August pro-
3.43% copper from 127.3m and 0.24m @ face and four intervals within a broader 111m duced a best result of 41m @ 0.5% nickel and
1.15% nickel and 0.02% copper from 133.68m wide zone from 144m averaged 0.31% nickel 0.1% copper from 38m.
in breccia and footwall fragments and a 33m and 0.11% copper from hole AKD006. Burnett said Sipa intended to step up its
@ 0.36% nickel and 0.21% copper hit in a work at Akelikongo West at the time of print.
high magnesium oxide mafic/ultramafic intru- Now the prospect’s potential has been “We have a drill rig about to start at Ake-
sion up hole. proven with targeted drilling, Sipa is keen on likongo West,” she said.
developing a greater understanding of Ake- “We are going to conduct some down-hole
Further assays from the diamond campaign likongo’s geological model. EM on all the holes we have drilled and we will
in late March revealed a zone of brecciation probably do some moving loop EM as well.”
from 94.2m to 97.6m, below a second gran- “We need to really understand the potential
ite dyke from 91-94.2m, containing 3.4m @ of this field,” Burnett said. – Rhys Dickinson
0.93% nickel and 0.1% copper, 1.3m @ 0.93%
nickel and 0.11% copper and 0.4m @ 1.59% “We’ve embarked on a programme of infill
soils based on some prospectivity mapping of
this whole area that we have been doing over

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 57

AFRICA DOWN UNDER REVIEW

There are few events on the Australian mining calendar that can match the colour and vibrancy of Africa Down Under
and despite the tougher economic times, the 2015 conference delivered once again. Among the 1,000 delegates was the
usual diverse mix of company executives, service providers, investors, media, government officials, diplomats and VIPs
from Australia and Africa.

Australian Foreign Affairs Minister Julie Bishop proved the most popular attendee and she hosted an exclusive morning
tea with the 14 visiting African delegations during her appearance at the conference.

In a growing tradition, Africa Down Under also reached out to the African Diaspora in Perth with its hosting of the Africa
Down Under Football Cup for the fourth time. Events such as the football tournament and the performance of the Witoto
Children’s Choir at the VIP ministerial dinner were evidence of Africa Down Under’s embracing of wider cultural engage-
ment links between the two continents. What started out 13 years ago as a mining investment conference, is now growing
into the most important event for Australian-African relations across business, education and cultural exchange.

Our thanks to Bryan Charlton of Picture This photography for once again providing his services

PAGE 58 OCTOBER 2015 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 59

AFRICA DOWN UNDER REVIEW

Sale dictates African
Energy direction

African Energy Ltd is on the brink of a land- towards socioeconomic devel- A ROM operation of 4.4 mtpa
mark deal which could catapult the com-
pany into a new coal stratosphere. opment and sustainable growth, producing up to 3 mtpa of 6,200cal/

Managing director Frazer Tabeart told Af- and to start and stimulate the kg export quality thermal coal
rica Down Under delegates the sale of African
Energy’s Botswanan Mmamanstwe project participation of IPPs in South would run for more than 20 years at
would allow the company to wholeheartedly
pursue a future at its 2.4bt Mmamabula West Africa. an estimated ROM operating cost
project.
African Energy is set to pocket of $US17/t and product operating
On July 6 African Energy executed a bind-
ing term sheet agreement with an “experi- $US10 million if the project bid cost of $US25/t at the mine gate.
enced South African project developer” for
the sale of the coal and power project. is shortlisted by South Africa’s “We are about to commence the

The company agreed to sell the project on Department of Energy, at which Frazer Tabeart amendment of the EIA process to
the condition the developer would form a bid point it would transfer ownership add two stages, phase one and
consortium to solely fund the preparation and
submission of a bid into South Africa’s coal of its shares to the developer. phase two, each 300MW, that we
fired base load independent power producer
(IPP) procurement programme using the A second payment of $US10 million will be will ready for either submission into the sec-
Mmamantswe project.
received by the company from the developer if ond big window of cross-border projects with
The IPP aims to procure 2,500MW of elec-
tricity from coal fired power stations with in- the project reaches financial close. South Africa or potentially develop that just to
dividual bids capped at 600MW per project.
“Those funds can be used to allow African sell into the region,” Tabeart said.
The programme is designed to contribute
Energy to then concentrate on the Mmama- “We are engaged with a number of large

bula West project and allow us to take that industrial users and some of the large min-

project all the way through to a final develop- ing houses. We are having discussions with

ment decision and retain a much higher equity them about the potential for a direct industry

position ourselves,” Tabeart said. or mine IPP. Finally, that project ultimately

A PFS for an underground coal mine based does have coal export potential, but that’s not

on a 200mt portion of Mmamabula West in something we are evaluating in the short to

early 2014 encouraged African Energy to pur- medium term.”

sue the project. – Rhys Dickinson

PAGE 60 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Reviews to benefit all in Botswana

Already regarded as one of the premier Mogaetsho said the re- science knowledge, to pro-
mining jurisdictions in Africa, Botswana is vide up-to-date geoscience
on a mission to enhance its credentials in the view should be completed in information to all the differ-
sector. ent types of stakeholders,
early 2016. especially the investors,”
Ministry of Mineral Energy and Water Re- she said.
sources minerals officer Khumo Mogaetsho Simultaneously, Bot-
said a review of Botswana’s mineral policy Botswana’s Government
sought to maximise the country’s economic swana’s Government was is also determined to im-
benefit from the mining industry and help in- prove the nation’s water in-
vestors achieve greater return. tabling amendments to its frastructure.

“Currently, the Government is revisiting its Mines and Minerals Act, Mogaetsho said there
minerals policy with a view to modernising were at least 12 projects
the policy to take account of emerging issues, mostly to cater for its emerg- under way with a view to in-
internationally and locally, to strengthen the crease water supply, access
Government’s role in mineral resource man- ing natural gas industry, and cleanliness.
agement and to foster effective partnerships Khumo Mogaetsho “The Government is em-
to pave the way for the development of ap- which was not factored into barking on an aggressive
propriate institutional framework,” Mogaetsho programme to develop water infrastructure
said. previous legislation. to meet demand in several demand centres,”
she said.
“We recognise that it is important that the It was also making chang- “The infrastructure involves the develop-
nation gets as much as possible from the min- ment of pipelines, the development of power
erals development and we also recognise at es to its Diamond Cutting plants, development of water plants and
the same time investors get some competitive waste water treatment plants.”
returns from those investments. The second Act and Precious and Semi-
objective is to create a competitive environ- – Rhys Dickinson
ment to stimulate mineral prospecting and ex- Precious Stones Act to facil-
ploitation. This is done through development
of policy framework and legislative framework itate diamond beneficiation,
that promotes or encourages investment.”
according to Mogaetsho.

Reviews and amendments aside, Botswa-

na was increasing its exploration appeal by

commissioning an airborne magnetic survey

of the country.

At the time of print, the survey was 80%

complete.

Mogaetsho said the Ministry of Mineral En-

ergy and Water Resources recently approved

the establishment of a Botswana Geoscience

Institute, which it expected to be up-and-run-

ning by year’s end.

“The institute is expected to advance geo-

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 61

AFRICA DOWN UNDER REVIEW

Senegal places trust in mining

Senegal has put mining at the forefront of Aly Ngouille Ndiaye The new mining code will be sent to Sen-
an ambitious plan to boost the country’s egalese parliament for consideration and,
economic profile. wealth through the implication of the nation- pending a favourable vote, it will be enacted
al private sector in the exploitation and the once it is signed off by President Macky Sall.
Mining is one of six “priority” sectors the implementation of contracts and a regula-
stable West African nation is banking on to tory framework protecting the interests of the A recent review of the new code by Aus-
deliver an annual growth rate of at least 7% State.” tralian law firm DLA Piper found the changes
over the next decade. to be in line with other West African countries
Senegal unveiled a new mining code ear- with either newly reformed mining legislation
Senegalese authorities have forecast fu- lier this year, headlined by the absence of any or proposed resources sector reforms.
ture production of 15-20 mtpa of iron ore, 2.5 major tax measures. Most tax provisions now
mtpa of phosphates, 3 mtpa of phosphoric fall under the country’s general tax code leg- DLA Piper also stated Senegal remained
acid, 17 tpa of gold (triple the amount of cur- islation. an “investor-friendly mining regime” and, cou-
rent production) and 90,000 tpa of zircon. pled with political stability and mineral pro-
spectivity, the country should “continue to be
Other key ambitions of the development a very attractive environment for investors”.
plan for the country’s mining sector include
becoming one of Africa’s top three phosphate Several Australian companies are looking
producers and a world-leading zircon export- to develop projects in Senegal, including Min-
er by 2025. eral Deposits Ltd, Minemakers Ltd and Bas-
sari Resources Ltd.
Senegal Industry and Mines Minister Aly
Ngouille Ndiaye said his country believed ex- Minemakers is the most advanced of the
ploitation of its mining potential would be ben- three companies and production from its Bao-
eficial to its other emerging industries. bab rock phosphate project could begin early
next year.
“Senegal is trying to strengthen the contri-
bution of the mining sector in the State econ- Bassari was awaiting the arrival of new
omy in order to boost sustainable economic permits for further exploration activities at the
growth, contribute significantly to the poverty time of print.
reduction and give a bigger readability to in-
comes generated by the mining industry,” – Michael Washbourne
Ndiaye said.

“Its option is to favour a better sharing of

Minemakers prepares to dig

Minemakers Ltd is and as a board and I “The small mine permit allows a conces-
expected to confirm expect we’ll make a sion of 5sq km and you can put that wherever
a decision to mine its decision to mine during you believe to be your ultimate or desired min-
Baobab rock phosphate that period,” Lawren- eralisation,” Lawrenson said.
project in Senegal later son said.
this month. “It’s a stepping stone to a proper mine per-
“We think Minemak- mit – which we recognise – but it does mean
The company contin- ers is funded for this we can get into mining and cash flow a whole
ues to advance the pro- next phase and what lot quicker than we would without a small mine
ject it acquired only six we’re working at now is permit.
months ago at a rapid exactly what we need
rate and remains on and whether we need “It took us just over two months from appli-
track to turn first dirt be- any additional funding. cation to grant. That’s remarkable and I think
fore the end of the year. It’s all coming together that’s something all mining companies and
nicely. It’s probably countries should think about for the future.”
First production is one of the few projects
planned for the first half in West Africa where Lawrenson said expectations global food
of 2016. Cliff Lawrenson things are happening production will double by 2050 also made
at the moment.” phosphate an attractive commodity to be in-
At the time of print, Minemakers received shareholder approv- volved in.
Minemakers was await- al to acquire 100% rights to Baobab in late
ing final approvals on its EIS and community August. It followed an extensive 18-month Minemakers completed a DFS on its Wona-
relocation agreement. The finishing touches search for a near-term production asset and rah phosphate project in the Northern Terri-
are also being applied to its PEA on Baobab. one that could incorporate use of its IHP tech- tory in 2012, but further development remains
nology licence. on hold until the IHP technology is commer-
Large scale bulk sampling programmes are Baobab’s previous owner spent more than cialised.
expected to begin sometime this quarter as $7 million on building up the project’s re-
the company opens discussions with potential source to 68mt @ 22% P2O5, but what ex- The company is expected to implement the
off-take partners. cited the team at Minemakers most was the technology on Baobab under the terms of the
ability to access a small mine permit and start IHP licence agreement.
Minemakers managing director Cliff Law- generating cash flow from early production at
renson said his company was poised to an- a specified area within the 1,553sq km permit. – Michael Washbourne
nounce some major project development de-
cisions.

“In the next 6-8 weeks [from early Septem-
ber] we have to be very brave as a company

PAGE 62 OCTOBER 2015 AUSTRALIA’S PAYDIRT

DRC needs Inga power

The Democratic Republic of Congo is bank- On the mining front, Simon Tuma Waku
ing on the burgeoning Grand Inga hy- Waku said 2015 had mostly
droelectric project to save the nation from its been a productive year for have a new mining code. It won’t change
emerging energy crisis and attract more min- DRC. much, but it will still be very much attractive,”
ing investment to the country. he said.
Randgold Resources
Simon Tuma Waku, the DRC Chamber of Ltd’s Kibali project was ex- “The DRC has many opportunities for in-
Mines chairman, admitted energy was a “big pected to increase gold pro- vestment, so if you are looking for a good
problem” for his country and Africa and he duction by at least 33% this return on investment we are very pleased to
hoped the ambitious $80 billion project could year and, for the first time, welcome you to the DRC.”
kick-start a mining boom in the mineral rich the country produced more
nation. than 1mt copper. – Rhys Dickinson

The Grand Inga project is the biggest pro- Waku said there was also
posed hydropower scheme in the world and promise shown in DRC’s
is viewed as a priority project for a number emerging coltan industry,
of African development bodies, including the which had produced more
New Partnership for Africa’s Development, than 1.5mt in 2015 at the
the Southern Africa Development Commu- time of print.
nity, East African Power Pool (EAPP) and
ESKOM. “[Production] is going up
and the price is good, but
The project is expected to generate coltan faces many chal-
40,000MW and will be constructed in six lenges,” he said.
stages, of which the Inga Three dam will be
the first stage. “The production is mainly artisanal. Hope-
fully we can get a good company in that sector
At its proposed size, the Grand Inga will be and it will improve.”
double the capacity of China’s Three Gorges
Dam, currently the world’s biggest operating Waku said DRC had improved its invest-
dam. ment appeal in recent years by signing on to
comply with the Extractive Industries Trans-
Waku said should Inga Three go ahead, it parency Initiative (EITI) and joining the Or-
could produce 4,800MW in its first phase. ganisation for the Harmonisation of Business
Law in Africa (OHADA).
“The second phase could go up to
7,000MW,” Waku said. The Government was also in the process of
updating its mining law, Waku said.
“This is an important project for Africa and
we are expecting to get it up and running.” “We hope by September next year we will

Tiger eyes Kipoi upgrade

Tiger Resources Ltd interim chief executive could increase production at Kipoi by 30-40%.
Michael Griffiths admitted the DRC miner “The debottlenecking process…is clearly
was experiencing a case of tunnel vision at this
year’s Africa Down Under conference. the focus of the company right now,” Griffiths
said.
He told delegates Tiger was 100% focused
on completing a debottlenecking programme “We want to bring it up to 32,500 tpa and
at its Kipoi copper project’s plant, which would that has a projected cash operating cost of
increase its output to 32,500 tpa. $1.87/lb, so clearly that’s an advantage for us.
That part of the financing package is not un-
On July 1, Tiger agreed to terms with Tau- derwritten and it is subject to an independent
rus Mining Finance Fund for the refinancing report, which is under way.”
of its existing secured debt facilities and ar-
ranged a new facility to fund its debottleneck- If Tiger was to skew its view from Kipoi’s
ing vision. plant this year, it will be to investigate the pro-
ject’s exploration upside, Griffiths said.
Under the terms of the agreement, Taurus
would provide Tiger with two tranches totalling The former Sub-Sahara Resources NL
up to $US162.5 million, with the first tranche chief executive said his passion lay in explo-
of $US137.5 million intended to term out Ti- ration, and believed Kipoi had boundless po-
ger’s existing secured facilities to December tential.
2021 and the second tranche, totalling $US25
million, was earmarked for the debottleneck- “If you look at an aerial view you’ll notice
ing of Kipoi’s SXEW plant. that most of the deposits that have been found
sitting on tops of hills and being the explora-
An investigation into Kipoi’s efficiency ear- tion guy I am, I’m adamant there will be addi-
lier this year revealed the plant’s average con- tional resources to be found in between those
sumption of electricity at nameplate produc- hills,” he said.
tion was 28,000 amps – 12,000 amps shy of
its total capacity of 40,000 amps. “I think that the message to take home from
this is that Kipoi and Tiger will be in the DRC
Tiger calculated it could power at least 14 for many, many years to come.”
more tank cells with the excess power, which
Michael Griffiths – Rhys Dickinson

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 63

AFRICA DOWN UNDER REVIEW

WA’s input in African mineral policy

The West Australian Government will play a A Tripartite Agreement was ured taxation mechanisms. The
key role in framing COMESA’s harmonised
mineral policy. signed by COMESA, the East regional taxation framework,

COMESA (Common Market for Eastern African Community (EAC) and ideally based on resource rent
and Southern Africa) entered a MoU with the
WA Government in 2014, with the primary ob- the Southern African Develop- taxation allowing for the ef-
jective of improving the management of natu-
ral resources. ment Community (SADC) and ficient capture of the benefits

It is hoped that sustainable socio-economic Tripartite Free Trade Area, en- commodity price booms, would
growth and development and transformation
within the region will emerge from better man- compassing 26 member states allow the region to collect opti-
agement of the resources sector.
of the Africa Union, which sets mal revenues for deployment
COMESA secretary general Sindiso
Ngwenya said Australia’s effectiveness in us- out to broaden trade between towards other developmental
ing its mining industry as a springboard for
socio-economic transformation continued to the tripartite from intermediate objectives, including investment
attract African delegations to events such as
Africa Down Under, as countries looked to and manufactured goods. in infrastructure and the creation
optimise their mineral resources to underpin
development. “The Tripartite FTA can serve Sindiso Ngwenya of sovereign wealth funds and
as a basis for industrialisation community development funds
“One of the priority areas of focus under the
MoU is the development of a harmonised min- anchored on beneficiation and and trusts,” Ngwenya said.
eral policy, legal and regulatory framework in
COMESA to address the current differences value addition of natural resources. The sin- “Although much more difficult to administer
so as to level the operating environment for
mineral resources exploitation,” Ngwenya gle market of the Tripartite will create a bor- compared to royalties, resource rent taxes are
said in his speech at Africa Down Under.
derless economy where trade, investment non-distortionary (sic) as they will apply over
“Guided by the directions provided by the
Africa Mining Vision, the regional minerals and services will move more freely,” Ngwenya and above the required return on investment.
policy framework would, among others, em-
phasise mining for development and socio- said. “It will be important to build capacity to
economic transformation and would centre
on expanding the role of forward, backward, For WA, the Tripartite FTA, scheduled to audit the mineral value chain as a key sup-
lateral, and knowledge linkages in COMESA
member States. This resonates very well with come into play in 2017, means increased vol- port framework to support the resource rent
aspirations under the tripartite where an inte-
grated minerals sector would be a key compo- ume and diversity of exports from the Tripar- tax framework. This is where the expertise
nent of the tripartite industrialisation strategy.”
tite to the State. from Western Australia will be required. Fur-

“The Tripartite is therefore expected to mu- thermore, among other important innova-

tually benefit Western Australia as well as the tions, the regional policy, legal and regulatory

COMESA, SADC and EAC member states,” framework should provide COMESA member

Ngwenya said. states with common principles on the award

Market integration, infrastructure develop- of exploration and mining permits, including,

ment and industrial development are the key for example, the introduction of auctioning of

pillars of the Tripartite FTA, with mineral ben- terrain of known geological potential.”

eficiation and value addition an integral eco- Ngwenya added the harmonised regional

nomic driver of industrial development. framework needed to maximise local con-

Ngewyna said fast tracking the harmonisa- tent and regional economic diversification

tion of policies and programmes for deeper “through capturing all economically viable up-

integration was being worked on. stream, downstream, side-stream and lateral

“An important aspect of the harmonised linkages along the mining value chain”.

environment would be on optimising the fis- – Mark Andrews
cal frameworks through appropriately config-

Azumah goes for concentrated approach

Azumah Resources Ltd operation, producing 90,000 Azumah is also in discussions with the
managing director Steve ozpa, to be built for around Ghanaian Government over royalty defer-
Stone is fully aware of the $168 million with cash costs ment in the formative years of operation.
Catch 22 scenario his com- of $697/oz over a seven-year
pany faces in the current com- mine life. “Wa is in a remote area which is desperate
modities downtrend. for development,” Stone said.
Those numbers are now
Azumah is in the middle of being reviewed with the hope If Azumah is successful in its cost-reduc-
recalibrating the economics of of reducing capex by as much tion campaign, Wa could generate as much
its Wa gold project in Ghana as 20-30%. as $30-40 million a year in post-tax free cash.
and believes it can make con-
siderable savings on capex “You can’t do anything with However, to get there the company would
and opex due to the avail- Steve Stone the gold price so you have still have to find funding and Stone admitted
ability of unwanted plant and this remained Azumah’s greatest challenge
equipment. The problem remains, however, to work with stakeholders to given the attitude of equity markets towards
funding the entire exercise. bring the costs down,” Stone resources stories.
said. “And, we think we can bring the cost
“There has never been a better time to de- down. Capex prices are coming down with “Traditional debt is still there but the eq-
velop a project like this but there has also nev- plant and equipment for sale at very cheap uity component isn’t,” he said. “So, we need
er been a more difficult time to fund a project prices. a partner to build the project, which means
like this,” Stone said at Africa Down Under. “We are also in discussions with the Gov- giving equity away. We are talking to various
ernment over $15 million in VAT we would be groups in the Middle East and Asia now and
Azumah completed a feasibility study on due to pay. We are discussing how we can re- I am confident a deal will be put in place in
Wa – in north-west Ghana – in early 2015, move that upfront and are getting a very posi- coming months.”
identifying the potential for a 1.2 mtpa CIL tive indication that it can be achieved.”
– Dominic Piper

PAGE 64 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Ariti sees things differently

Genmin Pty Ltd executive chairman Joe Ari- Joe Ariti ALS’ Iron Ore Technical Centre for washing,
ti managed to achieve something no one screening and dense media separation test
else at this year’s Africa Down Under confer- By August 17, 174 holes had been completed work.
ence could lay claim to – he put a positive spin for an advance of 2,000m with 1,611 samples
on the global iron ore crisis. collected.” “Simple washing and screening at
-35ml/+1ml results in mass yield of 76-79%
Iron ore’s demise is a tale well told, but few Genmin chose auger drilling over destruc- and a resulting grade of 60-62% iron, with an
have managed to spot a silver lining on the tive drilling because it wanted to get a feel for approximate split of 50% lump and 50% fines.
sector’s ominous clouds. the prospect’s lump and fine split. There is nothing to do other than wash and
screen,” Ariti said.
But Ariti sees things differently and he reck- Ariti said October would be an interest-
ons Genmin’s burgeoning Baniaka project in ing month for Genmin as it started a 2,000m “Only 10% of the iron with 20-25% of the
Gabon is perfectly poised to capitalise on an diamond/RC programme to test Bingaba’s in- mass reports to the -1ml fraction and is not
incipient opportunity. ferred hard cap and canga mineralisation that viewed as valuable at this stage. Baniaka
underlies its detrital zone. fines is there for a coarser fines product than
“A new-look iron ore market is emerging you’d be used to because it has no -1ml frac-
around quality and grade,” Ariti said. Ariti said up to 17t of bulk samples had tion and a typical fines has a 1ml fraction plus
been excavated from Bingaba and shipped to 75 micron component. If we tap the washed
“The key criteria for new projects in the and screened product and put them into a
new iron ore market will be high-grade DSO DMS we can upgrade to 62-65% iron.
with significant lump yield. Lump is important,
because you receive a premium for it; it goes “The detrital for us is quite spread and has
straight into the blast furnace without any potential to provide a low-capital intensity,
costly treatments such as sintering and fines.” simple washing and screening DMS starter
operation producing quality lump and fines
At present, Genmin is focusing on Bania- products.”
ka’s Bingaba prospect.
Ariti said about 60kg of the project’s mate-
The company initiated a 15 test pit and rial had been provided to large trading houses
trenching programme at Bingaba in 2013 tar- for value and use assessment and pilot test-
geting shallow detrital on the deposits. ing in European markets.

“The detrital eye deposits at Baniaka pre- He expected Genmin to publish a resource
sent unconsolidated gravels and are found on for Bingaba by Q1 2016.
top of and down slope of underlying banded
iron formations, where they are eroding and – Rhys Dickinson
shedding from,” Ariti said.

“In January 2015, a shallow (up to 28m)
auger drilling programme commenced to as-
sess the extent of the detrital mineralisation.

Gabon takes control of code

Gabon Minister of Mines, Industry and Tour- Christophe Akagha “They will need to contribute to the devel-
ism, Christophe Akagha, says the coun- opment of social, economic and industrial
try’s new mining code aims to restore some would have to lodge an EIS with the Govern- projects identified by the State and they will
dignity to the central African nation. ment in addition to industrial unrest and emer- be subject to various rehabilitation obligations
gency management plans. on termination of their permit.”
Akagha said Gabon’s previous legislation
left the country exposed to exploitation. Com- “In terms of industrial and social risks, com- Akagha said the laws would be enforced
panies and investors of the past had identified panies will be liable for the damages that they on three levels, by the elected Minister, an
a variety of legal “loopholes and gaps” in the cause to the environment and people,” Aka- incoming regulatory authority – a separate
code, allowing them to take advantage of the gha said. body ensuring principles regarding transpar-
country. ency and non-dispensation – and the National
Mining Company of Gabon.
“There was little revenue derived for the
state from mining operations,” Akagha said. The Minister said although he had deliv-
ered a somewhat grim outline of the code, it
“There were issues with the corporate be- was not entirely focused on compliance.
haviour of a number of mining companies.
The tax regime was inadequate for the de- “There are also some advantages and ben-
velopment of the mining sector. There was efits that will be granted, such as a tax holiday
a lengthy procedure in order to maintain ex- for (a company’s) exploration phase and an
ploration and mining permits, little local trans- additional three-to-five year (exemption) for
formation and added value and issues with major projects.
international best practice. The goals of this
new mining code are the implementation of “Those particular exemptions will take into
modern legal frameworks that will be attrac- account the project’s business model and fi-
tive to investors and we will ensure that the nancial model…to assess the validity of some
State gets a fair share of national resources.” of those tax benefits that may be granted to
mining companies.”
Environmental sustainability and social
welfare are at the forefront of the new laws. – Rhys Dickinson

Under the new code, prospective miners

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 65

AFRICA DOWN UNDER REVIEW

Aurora committed to Burkina

Aurora Minerals Ltd has no Martin Pyle seems to have a sort of schizo-
plans to back down from its in- phrenic view about risk in Africa,”
vestment in two fellow ASX-listed tries they’re operating in and this means we Pyle said.
juniors which have fallen on tough avoid the large start-up costs and lead times
times in Burkina Faso. in commencing exploration in these foreign “It’s either risk on or risk off and
jurisdictions.” clearly it’s all risk off at the mo-
Poor sentiment towards West ment.”
Africa has made life tough for Pyle said his company still remained a fan
Golden Rim Resources Ltd and of Burkina Faso where seven new gold mines Meanwhile, Predictive has es-
Predictive Discovery Ltd, but Au- have been built in the past decade. tablished a new exploration target
rora remains committed to keep- of 9.4-10.4mt @ 1.5-1.7 g/t for
ing both companies active at their Common myths such as the country only 460,000-560,000oz gold outside
respective projects. hosted low-grade gold mineralisation and of the flagship Bongou deposit.
Australian companies were doomed to fail
Aurora currently holds 13% of were untrue, according to Pyle, pointing to Bongou hosts an inferred re-
Golden Rim and 44% of Predic- Roxgold Inc’s recent high-grade exploration source of 2.2mt @ 2.6 g/t for
tive. Both companies were trad- success and SEMAFO’s takeover of Orbis 184,000oz gold, including 1.1mt
ing below 1c/share at the time of Gold Ltd at a premium price. @ 3.8 g/t for 136,000oz gold, and
print. Paul Roberts Predictive is keen to add ounces
“We do find it challenging at the moment from nearby prospects such as
However, it is an arrangement that seems when talking to the investment community Dave, Target 92 and Prospect 71.
to be benefitting all concerned. Golden Rim about investing in Africa because Australia Predictive managing director Paul Roberts
and Predictive both continue to taste explo- said all new targets were within a 10km radius
ration success, while Aurora’s total invest- of Bongou.
ment portfolio is valued at $7.4 million at 6-7c/ “We’ve been testing them, but obviously the
share, well above the 2.2c/share it is trading scale of the exploration activity has slowed
at on the bourse. down somewhat given the difficulty in raising
money, but nonetheless we’ve been active all
Aurora managing director Martin Pyle said the way through,” Roberts said.
his company would continue to back both gold Metallurgical testwork on RC chips col-
hopefuls. lected from Dave have suggested 89% gold
recoveries and the potential for future heap
“We liked the fact they were focused on leach processing.
precious metals, they had drill-tested miner-
alisation, the projects were in areas where we – Michael Washbourne
felt there was potential for low capital intensity
development and the exploration upside also
looked particularly attractive,” Pyle said.

“They’ve established footprints in the coun-

Gryphon upscales to perfect mix

Gryphon Minerals Ltd be- Banfora, including rapid pay- Gryphon has a financing mandate of up to
lieves it has blended the back of 2.4 years for production $US60 million with Macquarie as well as just
under $20 million of its own cash to spend on
perfect mix of study outcomes of 930,000oz gold and generat- any development.

to finally get its long-awaited ing $US1.1 billion in revenue. “We’re de-risked, we’re ready, we’ve got a
path to production and we’re working on our
Banfora gold project off the Gryphon chief operating of- mandate with Macquarie,” Zaninovich said.

ground. ficer Steve Zaninovich said co- “We’ve shown how the NPV can improve
by adding a CIL circuit to the heap leach start
An upscaled scoping study production from the heap leach project, which is low capital cost and low
AISC.”
released in July was the third and CIL operations would have
Gryphon is targeting an average mine plan
economic assessment the a faster payback than a stan- grade of 1.4 g/t gold – one of the highest grad-
ing gold projects in the region – for the heap
Burkina Faso-focused com- dalone heap leach operation. leach operation.

pany has undertaken on the “We’ve done a number of Recent grade control drilling, including hits
of 17m @ 8.2 g/t gold and 14m @ 64.6 g/t
3.6 moz project in as many Steve Zaninovich studies and we’ve looked at a gold, was also factored into the recent stud-
years. number of combinations, but ies.

The findings of the latest what we’ve seen in the last eight “Our grade de-risks our project a little bit,”
Zaninovich said.
study looking at the simultaneous build of a months…is a bit of a sweet spot for Banfora
“A lot of the bigger projects are mining lower
2 mtpa heap leach and 1 mtpa CIL operation in terms of getting the heap leach up and run- grade, so we do have a bit of flexibility where
the gold price is a bit lower in these times to
presented compelling economics, including ning,” Zaninovich said. survive and get the project up and running.”

an NPV of $210 million, up from $90 million in “We’ve got a good amount of low-grade – Michael Washbourne

the 2014 DFS. material that recovers well and [this co-pro-

Other key outcomes from the most recent duction scenario] will get us into the higher

study included a revised capex of $130 mil- grade, speciality coarse vein material below

lion, an IRR of 42%, LOM revenue of $US1.16 the heap leach material as well.”

billion, C1 cash costs of $US707/oz and AISC A long-awaited decision to mine could be

of $US800/oz. made before the end of the year, pending the

Comparisons with other West African gold outcome of Macquarie Bank’s due diligence

projects point to a very favourable rating for assessment of the project.

PAGE 66 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Perceived risk hurting Africa

One of the world’s leading political risk Mark Gubbins North America (26%) and Asia-Pacific (11%).
insurance brokers continues to be per- “I think that sums up a perception and not
plexed by the lack of positive sentiment to- COMESA because it’s a very positive story.”
wards investment in Sub-Saharan Africa. Gubbins showed Africa Down Under del- necessarily a reality because there have been
a lot of positive developments over that pe-
Mark Gubbins, managing director of global egates a list of common concerns investors riod,” Gubbins said.
insurance firm Arthur J Gallagher’s credit and typically had about Sub-Saharan Africa.
political risks division, has almost 35 years of These included low confidence in judiciary “In my 15 years coming [to Africa] and work-
experience in his field of expertise and is a and regulatory framework, poor governance, ing with mining companies and their financi-
strong advocate for African investment. corruption, political and macroeconomic sta- ers, there have been some fantastic success
bility, limited rule of law and lack of contract stories in a number of challenging countries
However, perceived political risk around enforcement. throughout Sub-Saharan Africa, and Australia
the continent as a whole has stymied his at- has provided critical humanitarian assistance
tempts to promote Africa as an investment But the London-based broker pointed to in Sub-Saharan Africa and done a really fan-
destination, particularly at a time when inves- figures which showed Sub-Saharan Africa tastic job.”
tors are wary of splashing cash on any mining accounted for just 6% of all paid political risk
projects. insurance claims between 1997 and 2014, Gubbins also drew attention to a “heat
well behind Latin America/Caribbean (38%), map”, designed and released by IHS Global
Gubbins attempted to dispel many mis- Insight, which illustrated a relatively low politi-
conceptions around Africa, producing data to cal risk associated with most of Sub-Saharan
show why the continent last year moved up to Africa.
second on Arthur J Gallagher’s scale for “per-
ceived investor attractiveness”. Only Somalia, South Sudan and Central
African Republic were at the high end of the
“We publish a political risk report market spectrum while Zimbabwe, Sudan and the
update every six months and when I look at DRC carried medium risk.
the most recent one which we published in
July, we talk about Libya, we talk about Syr- “We’re very positive about Africa and we
ia, we talk about Russia and we talk about look forward to the opportunity of supporting
Ukraine,” Gubbins said. – and continuing to support – investment in
Sub-Saharan Africa by the provision of being
“Do we talk about Africa? No, we don’t. a country and political risk mitigation service,”
In fact, what we reference is a very positive Gubbins said.
story about the signing of the tripartite free
trade agreement between SADC, EAC and – Michael Washbourne

Zimbabwe thinks outside the box

Zimbabwe’s new mining law intends to look Fred Moyo the rise of the minerals industry could lead to
out for the little guy, according to Deputy potential farmer-miner conflict.
Minister of Mines and Mining Industry Fred “But it is important that wealth in Africa is
Moyo. shared with local indigenous people and this He said the Government was working on
is of course an issue for debate.” strategies to ensure the two industries could
With an update to its 1964 Mines and Min- coexist peacefully.
erals Act, Zimbabwe plans to do what few be- In almost the same breath, Moyo said the
fore it have and formally acknowledge the role new laws had a goal of establishing security “We need to find ways of making sure that
small-scale, artisanal miners play in a nation’s of tenure for explorers. we benefit from both agriculture as well as our
mining industry. minerals by creating laws that allow mutual
Explorers would be encouraged by Zimba- existence and mutual exploitation of land for
“We…have a global phenomenon in the bwe’s commitment to establishing a national agriculture and land for minerals,” he said.
form of small-scale mining,” Moyo said. cadastral system which would allow investors
to “access areas of interest remotely…without “Our responses to the challenge that we
“It’s prevalent in South America and Asia overlapping”. have is that we are going to automate the
and it is prevalent in Africa. Millions of people management of title in our government sys-
(do it); most of whom have been termed ille- “They are able to do that and be sure that tems.”
gals. I think it’s important for governments to once they’ve been given authority and access
be able to question themselves to say, ‘Can to that piece of land then it belongs to them Conflict is not the only challenge for Zim-
so many people depend on illegalities when and nobody else,” Moyo said. babwe and a forthright Moyo admitted his
there are millions and they are surviving on country needed to improve its infrastructure
what they are doing?’ With that being said, Moyo acknowledged to ports and power.

“We want our act to address the issue of He also admitted Zimbabwe’s national im-
recognising, formalising and capacitating for age was sometimes a barrier to mining invest-
small scale miners.” ment.

Moyo said Zimbabwe also sought to blaze a “Once you have a national image issue
trail in regards to resource nationalism, which then capital tends to be expensive because
he believed was a threat to mining investment. factors are built in there which are called risk
factors,” he said.
“It is an issue of empowering local people
and we believe that as companies come in to “I agree with some; I don’t agree with oth-
invest they are not given partners by govern- ers. I request that we all leave yesterday to
ment; they must choose their own partners on yesterday and let’s engage the future.”
their own terms,” he said.
– Rhys Dickinson

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 67

AFRICA DOWN UNDER REVIEW

Lessons to be learnt from
Ebola epidemic

Despite declaring the “Ebola epidem- pability for that management team to
ic effectively over”, USAID director
Dennis Carroll expressed concerns move very quickly.”
about how society reacts to the situa-
tion now. USAID has been instrumental in

Speaking to Paydirt on the sidelines funding a lot of the work under the
of Africa Down Under, Carroll said he
feared the same mistakes would be IDRAM Initiative, but now it was up to
made again in response to other dead-
ly viruses. the mining companies to take the next

“My big concern is that we repeat, step and demonstrate their ability to
in a post-Ebola world, what we have
already shown ourselves as doing in provide safe working environments
a post-H1N1 [swine flu], post the avian
flu, post-SARS [outbreak] and that is a for their people and the communities,
lack of preparedness,” Carroll said.
Turner said.
“Each time [an outbreak has oc-
curred] we have learnt the critical im- Programmes and practices run
portance of preparedness; the need to be
more proactive than reactive and to think through the IDRAM Initiative in Ka-
more multi-sectorially. That is not simply
about the health system’s ability to treat a tanga are transferrable and Turner ex-
person; a person who becomes sick after the
virus has essentially gone through a fairly pects the World Health Organisation
predictable evolutionary process within an
animal population. (WHO) to replicate similar initiatives

“We need to pay more attention to what’s in other parts of the world susceptible
happening with these dangerous viruses be-
fore they become dangerous as a way of pre- Dennis Carroll Francesca Viliani to outbreaks of emerging infectious
empting their impact on people. Each time,
we have learned through H1N1, SARS, MERS diseases in tropical hotspots, such as
and Ebola but my big fear is that we are re-
sponsive in times of emergency but when the of Lubumbashi and the medical team in Ka- India, South East Asia and West Africa.
emergency fades our attention span goes
with it. We know what to do, we know how to tanga. The West African countries of Liberia, Sier-
do it, but the question is do we have the politi-
cal will to execute?” Carroll asked. The Centre for Global Health Security leads ra Leone and Guinea suffered most from the

It is inevitable that another outbreak of an the project while International SOS is coordi- Ebola epidemic, with an estimated 30-40,000
emerging infectious disease will occur, and
Carroll, the avian and pandemic influenza nating the field work and providing the inter- people, predominantly from these countries,
preparedness and response unit director at
USAID, has called for the public and private face for project participants, including Tiger affected by the virus.
sectors to strengthen their ties and bind strat-
egies to prevent the severity of the next fatal Resources Ltd, Freeport-McMoran Copper & According to WHO’s September statistics,
virus.
Gold, MMG Ltd and Mawson West NL, while 11,291 people have died from Ebola since the
He said it was right to expect the public
sector to perform at a high level during crisis Glencore has recently come to the party. outbreak in March 2014, with the latest case
times, however, it cannot assume sole re-
sponsibility for providing solutions. Australia-Africa Mining Industry Group being the death of a woman in Sierra Leone in

“We really need to invigorate the private chairman Bill Turner applauded USAID for its late August 2015.
partnerships to fully take advantage of all
kinds of capabilities that are out there in the efforts in developing an emerging infectious The loss of life has been the ultimate con-
private and public sectors to the collective
benefit of everyone,” Carroll said. disease tool for mining companies to use to sequence, while the economic impact to the

USAID, a provider of economic, develop- improve risk assessments on site. developing nations of Guinea, Sierra Leone
ment and humanitarian assistance around
the world, has been instrumental in driving Turner said it was critically important to and Liberia has been astronomical.
the IDRAM Initiative in the Katanga Province,
DRC. have both a definitive management structure GDP growth in the three African states had

The IDRAM Initiative is an emerging infec- in place and the capacity to respond immedi- been projected at 7-9% for 2014.
tious disease project aimed at mining compa-
nies, provincial health authorities, University ately to any threat of an emerging infectious “In fact during the epidemic it [growth] was

disease. negative, something like minus one or two

“It is missing in West Africa, which is why percent,” Carroll said.

the Ebola outbreak got out of hand,” Turner The World Bank estimates the economies

said. of Guinea, Liberia and Sierra Leone will lose

“We want to have a system where there is about $US2.2 billion in economic growth in

real management capability; a team of people 2015 as a result of the epidemic.

with representatives from each of the mining Meanwhile, International SOS Head of

companies, the provincial health authorities Public Health Consulting Services and Com-

and the university supported by groups such munity Health Programmes, Francesca Vil-

as International SOS to put in place the ca- iani, said a study would be conducted to as-

sess what the impact of a deadly outbreak

would be on a mining company.

“We are going to conduct a study this year

about what the economic cost in terms of

direct and indirect costs on a single mining

company that has been operating in Liberia

throughout the crisis,” Viliani said.

“It intends to identify not only what the fi-

nancial consequence is, but what does it

change for a mining company operating in an

outbreak situation. We are also conducting a

review of the existing collaboration between

the mining company and national health sys-

tem in a health emergency.”

Bill Turner – Mark Andrews

PAGE 68 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Ebola pushes change

Toni Aubynn, chief executive of the Gha- its own people, however, Australia’s re-
na Minerals Commission, has urged
his African counterparts to be prepared for sponse in this instance was slow.
potentially lethal outbreaks of infectious
diseases. “It probably did take the [Australian]

The 2014 Ebola crisis highlighted many Government a little while [to respond] with
deficiencies in coping mechanisms and
management strategies, which has lead its own task force and inter-departmental
to more than 11,000 deaths in West Af-
rica. committee meetings to realise that the

Global health organisations and inter- response had to be broader than simply
national governments weighed in with
varied levels of support to condemn the looking at Australia’s interest,” Neuhaus
spread of Ebola with some success.
said.
In response to the Ebola outbreak, US
Secretary of State John Kerry and Nko- “You move firstly from an initial reaction
sazana Dlamini Zuma, M.B. Ch.B., chair-
person of the African Union Commission to a broader government response which
formalised a collaboration agreement in April
between the African Union Commission and lets us take into account the foreign policy,
the US Centre for Disease Control and Pre-
vention in creating the African Centre for Dis- the foreign interest and so forth, and then
ease Control and Prevention (African CDC).
you move into the humanitarian phase. As
Aubynn said this was a step in the right di-
rection. it got worse we realised we had to make a

“Even though we need a global approach [humanitarian] contribution.”
to situations like this, it is time Africa also got
itself prepared,” he said. Matthew Neuhaus The distance between the two con-

“Africa should also begin to create its own tinents makes it difficult for Australia to
resilience, its own preparedness to some of
these situations otherwise we will be continu- come to our aid. This is a lesson which, as have an immediate impact on situations in Af-
ing this same madness and opening our arms
and expect the international community to a continent, we need to learn. Infectious dis- rica like it would a crisis in the South Pacific,

eases do occur from time to time, but we have Neuhaus said.

learnt lessons.” However, the initiatives being worked on

While Aubynn was thankful for the interna- and mechanisms implemented should allow

tional support the most affected West African Australia and the international community to

nations received, he suggested countries respond more effectively in light of another

needed to consider more adequate respons- serious emerging infectious disease out-

es to the Ebola outbreak than just enforcing break, Neuhaus said.

tighter border control policies. – Mark Andrews
“They are not the solution to the challenge

of infectious diseases,” he said.

Matthew Neuhaus, assistant secretary to

the African Branch, DFAT, said a country’s

first duty during such a crisis is to protect

Business as usual in Guinea

Most mining companies were able to contin- how Ebola has been af- taken by the Ministry was
ue operating in Guinea despite last year’s fecting the mining sector,”
outbreak of the deadly Ebola virus, according Kante said. centralising all aspects of
to the country’s Ministry of Mines and Geology.
“Some of them concern mining regulations in Guin-
Guinea was the least affected of the three [bauxite miner] CBG,
West African nations hit hardest by the dis- which was said to have ea into a “one-stop shop”
ease, reporting just under 4,000 cases and delocalised its board
about 2,500 deaths, according to the latest meetings, but 95% of its government department.
World Health Organisation figures. meetings were still held in
the country and they have An agreement between
Ahmed Kante, managing director of the actually reached record
Ministry’s Bureau of Research and Strategy, production.” government and various
told Africa Down Under delegates the country
was well on its way to “reining in” the virus, Kante also said while mining companies around
with recovery rates now up to 62%. iron ore and base metals developer Bellzone
Mining plc was due to start production last the implementation of a
Kante, speaking via a translator, applauded year, its financing problems dated back to be-
individual companies and the country’s min- fore the Ebola outbreak. national multi-use infra-
ing sector for its efforts in providing assis-
tance to communities during the height of the SAG, a subsidiary of AngloGold Ashanti Ahmed Kante structure plan was signed in
outbreak. Ltd, removed all non-essential staff and Paris last June.
families from the country as a precautionary
The Ministry also played a major part in at- measure, but operations continued largely “One of the main improve-
tempts to eradicate and limit the spread of the unaffected.
virus, including setting up a joint health com- ments in the country’s [governance] structure
mittee and protection protocols for mining Kante said the reason most companies
companies to follow. were hardly impacted was also due to their has been a reform at legal level, including su-
compliance with new administrative policies
“In spite of Ebola, most mining companies and other proposed reforms. pressing the antiquated system and replacing
carried on with their activities and there’s
been a number of right and wrong facts about One of the major reforms recently under- it with a local justice system,” Kante said.

“This was done together with a lot of im-

provement and development of infrastructure

for the education and health sectors.”

– Michael Washbourne

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 69

AFRICA DOWN UNDER REVIEW

Nigerian potential still untapped

Mining companies are yet during a special panel ses- the Nigerian Government in countering vio-
to recognise the poten- lent extremism.”
tial for Nigeria to become sion for Australian heads
one of the world’s major Australia is also looking to develop better
economic players, according of mission to Africa. trade relations with the Robert Mugabe-led
to Australia’s High Commis- Zimbabwe – a process new Australian Am-
sioner to Nigeria Jon Rich- “Quite a range of [ser- bassador to Zimbabwe Suzanne McCourt
ardson. said was on the right track.
vice companies] have
Nigeria ($US522 billion “We talk very openly and easily with gov-
GDP) boasts Africa’s larg- snuck in under the radar ernment ministers about what Australian busi-
est economy, well ahead ness would like to see about the operating
of South Africa’s ($US351 because they’ve obviously environment in Zimbabwe, including stability
billion GDP), although its of policies,” McCourt said
population is more than tri- seen opportunities to have
ple that of the next biggest “That message has been received and I
African state. a presence or investment think the next couple of years will be the time
when we see if those words have been met
Several engineering and in operations to varying by actions.”
consulting firms such as WorleyParsons Ltd,
Macmahon Holdings Ltd and BlueScope degrees. Along with edu- The panel – comprising Richardson, Mc-
Steel have established bases in Nigeria and Court, Adam McCarthy (High Commissioner
Richardson hopes Australian mining compa- cation, things have been to South Africa), John Feakes (High Com-
nies will follow. missioner to Kenya), Joanna Adamson (High
moving ahead quickly in Commissioner to Ghana) and Mark Sawers
Kogi Iron Ltd is the only ASX-listed mining (Ambassador to Ethiopia) – agreed security
company to have a strong foothold in Nigeria, Nigeria.” remained a concern for those looking into Af-
but falling iron ore prices have severely im- rican investment, but it was rarely at the top of
pacted development of its Agbaja project over Jon Richardson Richardson said the their priority list.
the past 18 months. number of Nigerian stu-
“What they look for is open and transpar-
“Our economic diplomacy in support of dents on exchange in Aus- ent regulation and good governance,” Feakes
Australian businesses has been a key focus said.
we’ve really tried to ramp up in the last 2-3 tralia had tripled in the last three years – a
years, although mining companies are still “If you’re thinking about investing tens of
fairly thin on the ground,” Richardson said sign both countries were keen to strengthen millions of dollars, you can’t have the goal
posts move and you can’t tolerate corruption.”
diplomatic ties.
– Michael Washbourne
The recent election of Muhammadu Buhari

as the country’s new President – and the rela-

tively smooth transition of government – is

viewed in many circles as a key driver behind

Nigeria’s economic rise.

“It has certainly given a lot of people a lot

of hope, as does President Buhari’s clear

determination to root out any corruption and

strengthen governance,” Richardson said.

“The years ahead do offer a lot of challeng-

es and part of our relationship has focused on

the terrorism aspect in terms of support for

United policies will benefit Africa

African nations should align mineral regu- and boasting roughly one- some South American juris-
lation policies in a bid to overcome the third of the world’s remain- dictions.
many developmental challenges facing the ing resources.
continent, according to respected law firm EN- In South American coun-
Safrica. Matlou, also the firm’s tries such as Colombia, Brazil,
head of mining, said a lack Mexico, Chile and Panama,
ENSafrica director Otsile Matlou said the of trade between African resources are considered the
resources sector was widely recognised as countries had contributed to property of the State, which
the key driver to Africa’s long-term develop- the continent’s “disintegrat- has absolute, exclusive, inal-
ment, but conflicting country policies were ed” economic development ienable and non-lapsing own-
having a negative overall impact on the con- in recent years. ership of the minerals.
tinent.
“We all know the story “Those of you in the miner-
“Africa is facing the same developmental of the minerals of the con- al policy space will know that
challenges all over the continent, therefore tinent and their contribution Otsile Matlou the so-called South Ameri-
African governments must align mineral to instability historically, but can model is very influential
regulation with Africa’s development goals, we think that an integrated in how mineral policies are
regional integration as well as national priori- resource industry for the continent will repre- shaped around the world,” Matlou said.
ties,” Matlou said. sent some stability,” Matlou said. “South America shares a very similar his-
tory to Africa and what’s interesting about
“Africans need to collaborate in order to “In a lot of the countries [in Africa] you will South America is that the different countries
ensure the totality of the continent develops find one geological body transcending two or have got different regulatory instilments that
because it is a truly developed Africa that will three borders and you might find that a partic- speak to local conditions, but all of them have
be good for everyone. Africans must look out- ular deposit in one of the countries has been got very similar content that speaks to the
ward together in the same direction to make exploited whereas the comparable geology in broad regional issues.
sure Africa becomes what it should be and another country isn’t even looked at, so that’s “That makes South America – as a block –
takes its place in the world community of na- one of the benefits you will get if the regula- a model the world can look at and learn from.”
tions.” tory framework is streamlined.”
– Michael Washbourne
Africa’s continental GDP accounts for just Matlou urged all African countries to take
2.4% of the global GDP despite being the a closer look at foreign mineral development
world’s second largest continent behind Asia policies, particularly the ones employed by

PAGE 70 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Sport speaks to local communities

The “common language of sport” sport is a platform for business influ-
has allowed some of Australia’s
leading African-focused mining com- ence, which is still emerging in the
panies to successfully engage and
assimilate with their local communi- consciousness of businesspeople.”
ties.
Falvo supported this view, declar-
Gold producer Resolute Mining
Ltd and mineral sands miner Base ing that FFA would not have been
Resources Ltd have both gained
trust and respect in their respec- able to achieve many of its goals
tive regions in Ghana and Kenya
through fiscal contributions to local – including hosting the Asian Cup
sporting teams and organisations.
tournament in Australia earlier this
Resolute owns professional soc-
cer team Bibiani Gold Stars, based year – without the support of the
just outside of the company’s Bibi-
ani gold mine. The team is currently corporate sector.
third in the Ghana Football Associa-
tion’s Division One League. Carstens warned other African-

Base, in conjunction with Ken- focused mining companies to over-
yan non-government body Little
Sports Organisation, has rolled out look the importance of sport to a
more than 20 athletics-based programmes in
schools near its Kwale mineral sands opera- local community at their own peril.
tion.
“Chinese companies come in and
“It’s a common language and it doesn’t mat-
ter where you go, there’s a cultural overlap they create this microculture around
around sport, so you use that to your advan-
tage,” Base managing director Tim Carstens themselves and there’s just no at-
told a breakfast event hosted by BDO Aus-
tralia on the sidelines of Africa Down Under. tempt at engagement and that’s

“The first actual construction at our camp something the local communities
was the soccer pitch. We’ve comfortably got
the best soccer pitch in the country…and Sport is a common language mining companies can use to feel keenly,” Carstens said.
we’ve now got two company football teams
that play in a couple of the local leagues. engage with local African communities “We try and create this perme-

“It’s all been part of de-mystifying who we able involvement so there are no
are. When we were first doing exploration
work, every one of the guys had at any point in Africa are things like health, education, sus- barriers and, as a consequence, there is quite
time 5-10 footballs in their vehicles and every
time they drove past a village and there were tainability and other aspects. Where sport is a bit of blowback for the Government around
kids kicking a plastic bottle around, one of the
footballs would go out branded with ‘Base Ti- important is it gives you the context of being some of these projects because of the way
tanium’ on it. Those balls are absolutely eve-
rywhere now.” able to have a positive impact and be able to some of the Chinese companies come in and

Carstens was joined on the expert panel by provide what in many cases is a more lasting execute it.”
Resolute managing director John Welborn,
Gilbert & Tobin Lawyers partner and FIFA ex- benefit. – Michael Washbourne
ecutive committee member Moya Dodd and “It gives you something to talk about and
Football Federation Australia (FFA) head of
international affairs and government relations it gives Australia rel-
Mark Falvo.
evance in a place in
Welborn said it was almost an expectation
for mining companies to build some form of the world where we
sporting field or facility within their local com-
munity when developing a mine nearby, espe- might not have any
cially in Africa.
relevance. Sport op-
The former Wallabies rugby union player
and sporting administrator said Resolute’s erates as a vector to
ownership of the Bibiani Gold Stars had made
his company “visible” in its operating district. educate people about

“Sport is a great way of integrating into a where we come from.”
community and a great way of giving global
context of economics,” Welborn said. Dodd, also a former

“While there are a lot of benefits, I think the footballer for the Aus-
more important benefits mining companies
do in the communities we operate in around tralian Matildas, said

she often found sport-

ing facilities in many

African countries were

more developed than

other aspects of that

jurisdiction’s infra-

structure.

“You might drive

past shanti towns and

huts that people live

in, but then you come

to the stadium and you

see it’s magnificent,

and the football feder-

ation offices have got

all the latest IT,” Dodd

said.

“Africa has always

been a major player

in the politics of world

football and I don’t

think that will change.

It’s got more voting

member countries

than anything other

continent.

“In Australia I think

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 71

OPINION

Solving the child labour challenge

Africa: the host to an array of dependent on mining.
untapped resources provid-
ing the potential for local and In response to this, Save the
national economic growth.
Children, in collaboration with
Yet many African nations
are home to low human devel- the American Centre for Inter-
opment index ratings and face
political instability and poor national Labour Solidarity, un-
governance mechanisms for
environmental, human rights dertook a project, Reduce the
and social impacts.
Exploitation of Child Workers
With approximately 220 pub-
licly-listed Australian compa- through Education (REETE).
nies operating more than 1,000
mining projects across 30 Af- REETE was established to
rican nations, what positive
impacts can these companies contribute to the prevention
have on Africa to ensure that
economic prosperity is trans- and withdrawal of child labour
lated into long-lasting, positive
social change? in the DRC through relevant,

One of the challenges fac- quality education to children
ing mining companies is how
to manage artisanal mining, involved in and at risk of be-
or small-scale mining (SSM).
According to the International coming engaged in exploitative
Council on Mining and Metals
(ICMM), SSM provides direct or indirect live- child labour. REETE withdrew
lihoods for approximately 100 million people
globally. While it has the potential to alleviate and prevented 12,000 children
poverty through improvements in community
capital and economic diversity, it can also from working in mines and
lead to lost revenue for mining companies,
inequitable distribution of royalty payments, mine-related services, placed
the creation of black market minerals, envi-
ronmental degradation, health impacts, secu- children in the non-formal and
rity threats, gender inequality and a growth in
child and forced labour. formal education system and

Sub-Sahara Africa, where the majority of provided training to teachers,
African-based mining occurs, has the sec-
ond largest number of children in employment parents and communities on
(after Asia Pacific), with 57.6 million children
between the ages of 5 and 14 engaged in child labour, the right to educa-
various forms of child labour; or 26.2% of the
population. tion and child protection.

Across Sub-Sahara Africa, approximately Managing artisanal miners remains a challenge for mining companies The success of REETE
38.7 million children between 5 and 17 are
involved in what the International Labour Or- highlights the need for educa-
ganisation (ILO) defines in Convention 182 as
the worst forms of child labour, including child Children are also found carrying heavy bags tion-based programming that incorporates
trafficking, the use of child in armed conflict,
SSM, industry and services and bondage and of ore, waste and water which place huge de- innovative approaches to education. Innova-
slavery.
mands on their growing bodies making them tion needs to increase school efficiency, ef-
SSM is considered to be one of the worst
forms of child labour because of more vulnerable to disease and toxins. fectiveness and attendance; include tools that
the risks that it places on children.
Young children are known to be Yet according to the ILO, there has only provide quality learning experiences for chil-
involved in surface digging, or in
the transport, sorting or washing of been a 4% decline, in relative terms, of in- dren; enable partnerships with government
minerals. Older children are often
engaged in tasks like rock crushing, cidences of child labour between 2008 and to improve the policy environment and build
panning, or entering the mine pits
and tunnels to seek out minerals. 2012. This lagging rate of reduction, par- the evidence base for a strong education sys-
Children who are involved in gold
mines are often exposed to high ticularly the worst forms of child labour, pro- tem; and provide mechanisms that establish
levels of toxins, such as mercury,
leading to numerous health issues. vides an opportunity for corporations to form systems to for education support (i.e. fee as-

partnerships with NGOs and government sistance), while strengthening social services

agencies to implement collective impact pro- and child protection.

grammes that provide direct and sustainable International NGOs like Save the Children

local communities. cannot achieve this alone – collective impact

Following the guidance from the ILO, ICMM requires the collaboration with government

and other mining industry bodies, improving agencies and corporations. Our expertise

access to education is one of the key ele- is in delivering education programmes and

ments to increasing social capital and reduc- providing capacity building and awareness-

ing child labour. raising; as well as providing advice to com-

In the DRC for example, SSM is an econom- panies on incorporating relevant international

ic activity upon which an estimated 12-15% of instruments into their policies, processes and

the population is directly dependent on. Of day-to-day operations.

this part of the population, Pact Congo esti- By engaging in tri-sector education-based

mates that 80,000 are children; whose par- partnerships, mining companies can be key

ticipation in the industry frequently prevents actors in positive intergenerational planning

them from attending school, thus limiting their to support the education continuum from ear-

ability to transition into livelihoods that aren’t ly learning through to higher education and/

or vocational training. The com-

Kylie Porter is the senior adviser for Re- bined efforts can assist in provid-

sponsible Business at Save the Children. ing a response to the needs of

Her role includes assessing companies from vulnerable children and their fam-

a reputational and ethical risk perspective, ilies, having a sustainable posi-

and providing advice on responsible business tive impact on child labour and

practices to organisations. Previously, Kylie supporting the mining industry’s

worked in sustainability and communications social licence to operate.

roles in financial services in Australia, the UK

and Singapore. Kylie has travelled extensively

through Asia, Europe and parts of Africa. She

holds a BBus (Management), BA (Philosophy)

and a MSocSc (International Development).

PAGE 72 OCTOBER 2015 AUSTRALIA’S PAYDIRT

COMING IN THE
DECEMBER EDITION OF

OUR OFFICIAL FULL
INDABA PREVIEW

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PAGE 74 OCTOBER 2015 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 75

BASE METALS FEATURE

Heron tickled pink with
Woodlawn zinc

Heron Resources envisages a bright future for its Woodlawn zinc-copper project in New South Wales

The Woodlawn zinc-copper project’s story March 2014, when TriAusMin merged with
is very much one of the past, present and Heron Resources Ltd on the back of drill re-

future. sults that were too good for the then nickel

Historically, the project’s tome has varied hopeful to ignore.

from triumph to tumult. Heron managing director Wayne Taylor told
Discovered by St Joseph International Ex- Paydirt Woodlawn’s history was a blessing

plorations Ltd and Phelps Dodge Exploration and a curse for the company.

Corporation JV Jododex Australia Pty Ltd in “The blessing is that we understand op-

1969 during a roadside reconnaissance pro- erationally how this thing works,” Taylor said.

gramme, Woodlawn was mined via open pit “We’ve got 20 years of operating history, so

from 1978 to 1987 by both Jododex and Aus- we know what a base level plant performance

tralian Mining and Smelting Ltd – a subsidi- is going to look like. The curse is the hearsay

ary of Conzinc Rio Tinto Australia Ltd – be- and anecdotal stories that get passed around

fore it was acquired by Denehurst Ltd, which but the number of people that can tell me all

focused on underground development of the about Woodlawn but have never been to site

project for more than a decade. is unbelievable. There was a rational reason

Woodlawn thrived in a trying Australian for the demise of (Denehurst) and it certainly

base metals market and around 13.4mt of wasn’t because the resource had been fully

ore was extracted from the open cut, under- exploited.”

ground and satellite deposits between 1978 Although frustrated by some of the “myths”

and March 1998, at which point the mine was surrounding Woodlawn, Taylor hoped Heron’s
closed due to corporate work of late would put to
finance issues. bed any doubts about the
project’s viability.
Canadian explorer Tri The managing direc-
tor described the coming
We’ve got 20 years of operatingOrigin Minerals Ltd pur- together of Heron and
TriAusMin last year as
chased the mineral rights

history, so we know what a base levelto Woodlawn in 1999,

“plant performance is going to look like. Thebut departed Australia in
Heron managing director Wayne Taylor

2010, leaving the project curse is the hearsay and anecdotal stories the perfect scenario for

in the hands of its TSX that get passed around but the number of Woodlawn.
and ASX-listed spin-off, “[TriAusMin was] doing

TriAusMin Ltd. people that can tell me all about Woodlawn some work on the under-
Woodlawn assumed but have never been to site is unbelievable. ground, which has always
been the main prize and
its current incarnation in

PAGE 76 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Woodlawn was historically an open pit operation but Heron is focused on its underground capabilities

[it] had a couple of great drill intercepts,” he 414m and 2.4m @ 20.1% zinc, 1.6% copper, At the programme’s completion in
said. 4.2% lead, 2.1 g/t gold and 40 g/t silver from March, Heron ratified its strategy to expand
435m in hole WNDD0007 and 8.1m @ 7.2% Woodlawn’s shallow resource above 500m
“Heron was sitting on a fair amount of cash zinc, 1.1% copper, 2.3% lead, 0.9 g/t gold and depth and subsequently green lit a Phase 2
as a result of a takeover of a previous asset 28 g/t silver from 309m in hole WNDD0009. diamond drilling campaign to chase its vision.
it spun out and TriAusMin had a good project
and not a lot of cash. The combination of the Strategy and business development general Heron chief geologist David von Perger
companies worked really well and I guess we manager Charlie Kempson
are seeing the fruits of that deal now.”

Heron made its first post-merger move at
Woodlawn in August 2014, initiating a four-
month Phase 1 drilling campaign comprising
5,000m of shallow RC and 7,200m diamond
drilling holes to provide data for an updated
mineral resource.

The programme was also tasked with con-
firming Woodlawn’s shallow mineralisation
potential, which could lead to an earlier than
anticipated start to mining when coupled with
TriAusMin’s original tailings retreatment vi-
sion.

The company was particularly interested
in drilling Woodlawn’s Kate lens, where Tri-
AusMin hit 9m @ 28% zinc equivalent in June
2013.

The campaign’s first diamond hole target-
ing the Kate lens intersected 14.4m @ 4.6%
zinc, 4.1% copper, 0.8% lead, 1 g/t gold and
57 g/t silver from 374m.

Kate continued to deliver for Heron through-
out the back end of 2014, returning standout
intersects of 12.3m @ 20% zinc, 2.1% copper,
6.1% lead, 0.8 g/t gold and 53 g/t silver from

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 77

BASE METALS FEATURE

Woodlawn is located 30km south of Goulburn, New South Wales

Chief operating officer Andrew Lawry To instil further confidence in the worked through as part of the PEA demon-
future of Woodlawn, Heron engaged strate that this will be a mine that is not sitting
SRK Consulting to complete a PEA of at the top of the cost curve,” Kempson said.
the project.
“As history demonstrates, this mine oper-
Published in April, the PEA proved ated consistently at a profit. Our numbers also
to be happy reading for Heron and its indicate that the C1 and C3 costs we antici-
shareholders, with highlights includ- pate at this mine, whether as a zinc-only or
ing a $300 million post-tax NPV, 46% zinc, copper and lead project, are still sitting
post-tax IRR, two-year payback and very much in the bottom half of the cost curve.
post-tax net cash flow of $594 million. It’s a very strong case for a restart.”

The assessment outlined an initial The first 13 holes of the Phase 2 drilling
11-year mine life for the project and to- campaign were a hit for Heron, confirming
tal production target of 353,000t zinc, predicted up-dip extensions to the Kate lens
77,000t copper, 112,000t lead, 8.9 through massive sulphide intercepts of 7.1m
moz silver and 59,000oz gold based @ 16.1% zinc, 0.9% copper, 11.3% lead, 3.5
on Woodlawn’s underground and tail- g/t gold and 254 g/t silver (40.6% zinc equiva-
ings resources at the time. lent) from 340m and 4.8m @ 7.6% zinc, 0.4%
copper, 0.9% lead, 0.7 g/t gold and 37.4 g/t
“We have recently redone those silver (11% zinc equivalent) from 324m.
numbers based on updated consen-
sus forecasts and we’re still sitting As it continued to prove up the potential of
at $290 million post-tax NPV … and the Kate lens and Woodlawn’s western lens-
a 46% post-tax IRR,” Heron strategy es, the company announced in July a $20 mil-
and business development general lion equity funding agreement with London-
manager Charlie Kempson said. based mining and metals fund Greenstone
Resources.
“It’s very attractive, particularly
compared to the project’s capital cost Under the terms of the deal, Heron could
of $140 million.” access $6.8 million through a placement of
54.1 million shares to Greenstone at 12.6c/
Better yet, the PEA forecast C1 share – a premium to the company’s 9.5c
costs of $US0.01/lb zinc and C3 costs share price at the time of print.
of $US0.44/lb zinc, net of by-product
credits. The arrangement also provided for an ad-
ditional $13.2 million investment by Green-
“The cost structures that we have

PAGE 78 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Heron geologist Vaughan Shearer

stone, contingent upon a complete funding

solution being found for the project.

Taylor said Greenstone previously ex-

pressed interest in funding TriAusMin’s work

at Woodlawn in 2013, but walked away due to

a lack of development.

He said its return was a tip of the cap to

Heron’s work at the project.

“If you look around at the style of equity

deals people are doing, we are very fortunate

that it is equity-only and I don’t know of any at

the moment that have done it at a premium to

market,” Taylor said.

“I’d like to think it is a rubber stamp to what

we are trying to do here. It is certainly a sig-

nificant and major first step in the funding pro-

cess.”

Kempson added: “Given that these guys

are equity investors and are demanding pri-

vate equity-style returns, the fact that they are

prepared to put this money in should give you

some indication of what they believe the true

value of this project is.”

Heron is investigating two potential funding

strategies for Woodlawn.

In what Kempson described as a more

“vanilla” option, Heron is contemplating a

standard funding structure which would utilise

Greenstone’s investment, 60-70% debt with

residual financing from equity capital markets.

“We are also looking at a slightly more ag-

gressive funding strategy whereby we start

work this year potentially on building the plant

and build it for the tailings while we complete

the feasibility on the underground,” Kempson

said. Infigen Energy’s 50MW windfarm overlooks the Woodlawn project

“That’s a slightly different scenario in terms

of funding…which will be around $115 mil- further raising of $50 million post-feasibility or structure for that looks slightly different, with

lion, of which the Greenstone component is post-commissioning of the plant. That gets us funding more akin to bridge funding. It’s put

“again an important component, followed by a into production 12 months earlier. The funding in place on the debt side, but otherwise it will
If you look at the fundamentals, the Australian look fairly standard; a bit of bridge funding,
dollar per pound of zinc is great. From a the Greenstone equity cornerstone and in-
financial justification point of view we have no issue. stitutional money for the rest.”
What we have is an issue of confidence from the Taylor said Heron’s funding approach
market in general. The banks and debt providers will would ultimately hinge on the state of the
market.
“You can only do what the market allows

you to do,” he said.
“If you look at the fundamentals, the

Australian dollar per pound of zinc is great.

be hesitant to take a level of exposure that we would From a financial justification point of view
like to see when you’ve got this volatility around. we have no issue. What we have is an is-
sue of confidence from the market in gen-

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 79

BASE METALS FEATURE

Veolia uses the old Woodlawn open pit to store waste from Sydney and Canberra. The company harvests the
garbage’s methane and later converts it to electricity at its bioreactor

Heron’s latest 7.1m @ 40.6% zinc equivalent intersection came from eral. The banks and debt probably gets a little blasé after a while, but
the hanging wall at the Kate Lens providers will be hesitant these are fantastic intercepts and only serve
to take a level of expo- to boost the discovery potential,” Taylor said.
sure that we would like
to see when you’ve got Heron chief geologist David von Perger
this volatility around. Eq- said the company intended to continue drill-
uity markets also tend to out work on the upper Kate lens before invest-
take a holiday in these ing more time in Woodlawn’s deeper targets.
markets. Confidence will
probably be the biggest “We will probably put in a 550m deep hole
thing that drives our de- … and a 600m hole to test the bottom (of the
cision on that early-start, Kate lens),” he said.
staged development ap-
proach.” “The Kate lens is expanding nicely with
these intercepts much thicker than we got in
At the time of print, the first drill programme.”
Heron had recorded an-
other bumper intersec- Heron chief operating officer Andrew Law-
tion of 34m @ 10.1% ry said Heron’s consistent drilling success at
zinc, 1.1% copper, 3.5% Woodlawn gave the company good reason to
lead, 1.6 g/t gold and 98 initiate a DFS.
g/t silver (20.8 zinc equiv-
alent) from 326m in hole He said the company’s immediate plan was
WNDD0033 at the Kate to finish the project’s tailings feed study and
lens. critical drilling for reserve calculations.

The hit was located “It doesn’t mean we are going to stop drill-
30m up-dip from a previ- ing, but we’ve had to draw a line in the sand
ous 8.8m wide intercept and say this will be the reserve for the feasibil-
and some 25m along ity,” Lawry said.
strike to the north-west
from a 7.2m wide inter- “Metallurgical work is ongoing. There is
cept, proving a consid- some more detailed work that we will be do-
erable thickening of the ing over the next couple of months, as well as
Kate lens. mine optimisation and funding inquiries.”

“When you continually Lawry said he expected preliminary engi-
repeat these results it neering to be under way and administrative
approvals checked off in Q1 2016.

“In the second quarter we will finish the
(tailings feed) study and the reserve state-
ment,” he said.

“Within 18 months we will have made a

PAGE 80 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Paydirt joined a group of investor and media guests at Woodlawn in August

decision to mine...we will have our funding down as mining progresses.” every single year, bar the last seven months,
sorted out and we should be into construc- With all its permits in place and having re- which for a base metals operation at that time
tion. The concept of this project is the tailings in the Australian industry was quite remark-
and the underground. We’re planning to mine newed its mining lease in February, Heron able. Its history is good from a capacity to
tailings of up to 1.5 mtpa and the underground is in a good position to restart Woodlawn to deliver while competing against global peers.”
we will do a bit under 700,000 tpa. The plant capitalise on a favourable zinc market.
will have a capacity for 1.5 mtpa. The ratio – Rhys Dickinson
of underground to tailings will vary between “Woodlawn is a great deposit irrespective
100% tailings to 50/50 tailings and under- of what is happening in the zinc space,” Taylor
ground. It will have the ability to move up and said.

“Its financial history under the Denehurst
period … it did make cash for the business

Zinc price set to soar: CRU

CRU managing consultant Alex Tonks be- Alex Tonks still a relatively high-cost environment and an
lieves Heron Resources Ltd is in the right inflationary environment as well,” Tonks said.
place at the right time of the commodity cycle. “That, in our view, is a problem from a per-
spective that those (Chinese) mines are typi- “More importantly our (CRU) guys in China
Tonks told investors and media at Heron’s cally higher cost and it’s important to know have been working through those projects
recent Woodlawn site visit that zinc topped they will probably only get higher in cost given and while there are a lot of projects in China,
the list of CRU’s commodities to watch be- that most of the western world’s producers they’re typically pretty small. Previously in bull
yond 2015. are going through cost deflation while China is markets China has been able to deliver that
supply, but going forward we are less certain
He said although zinc had come under that will happen.”
some pressure this year due to the slowdown
in China’s economy, he expected the com- The CRU was also concerned about bot-
modity to bounce back with a vengeance in tlenecking on the smelter side of the zinc
2016, predominantly due to its supply funda- equation, which Tonks said was a first for any
mentals. commodity.

“It’s probably one of the most differentiat- “We actually think we’re going to run out of
ing factors of all the commodities we cover,” smelter capacity by 2018,” he said.
Tonks said.
“We are already at high utilisation rates at
“We really don’t see a lot of supply growth the moment. In total, over the next couple of
in zinc, particularly in the western world. What years, we will run into some big deficits both
you can see is existing mine production drop- on the concentrate and then in the outer years
ping away quite sharply on the back of clo- the metal side too. We think that will get re-
sures to mines like Century, which is effec- flected in some pretty positive price move-
tively now shut from a mine site perspective.” ments in the next couple of years.”

Tonks said the market was very aware of – Rhys Dickinson
zinc’s pending supply shortage and the prob-
lems associated with relying on Chinese
mines to fill the shortfall.

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 81

BASE METALS FEATURE

Coventry starts at cracking pace

Just six months after acquiring Cari- “We are not looking at the copper
bou Dome, Coventry Resources
Inc managing director Mike Haines is price to make this work rather our be-
already excited about the potential to
at least double the size of the Alaskan lief is that if we double or triple the
copper project.
size of the project then it will improve
Having kicked off its stewardship
with a 15-hole programme earlier in the economics to the extent that the
the year, Coventry returned to the
project in July. As well as drilling ex- copper price won’t matter. With the
isting mineralised targets, the new
20-hole programme was designed to grades we have got, the right amount
test recently identified IP targets and
Haines hailed its immediate success. of tonnes will ensure this is econom-

In August, the company an- ic, regardless of the spot price.”
nounced the first hole targeting these
IP anomalies had intersected 10.6m Haines compared the project’s po-
of copper-rich massive sulphides and
the company will test the other four tential to that of Sandfire Resources
targets as part of the current 4,000m
RC programme. NL’s DeGrussa copper project in

Haines said the strong correlation Western Australia which was brought
between IP and high-grade minerali-
sation had the company confident it could ex- into development on the back of a
pand the size of the Caribou Dome resource.
12mt @ 5.12% copper resource.
“We looked at the only other geophysi-
cal programme done there and recognised “Even if we double or triple it we
there was good correlation between it and
the known high-grade mineralisation,” Haines are talking 5-10mt which would be
said. “So, we did some more IP in June-July
and came up with our own targets; most of something like DeGrussa,” Haines
them are in the vicinity of known mineralisa-
tion and that is where our focus is. said.

“To hit 10m of massive sulphides in the first “If all the anomalies came up we
hole, exactly where we expected them to be,
is confirmation that the approach we have Located in Alaska, Caribou Dome enjoys some auspicious would get a sixfold increase in size
adopted can be extremely useful.” base metals company of the resource base and because of
the grade we will only require a small
The IP survey and subsequent testing of
anomalies is symptomatic of the strategy Cov- 5.8% and 18.1m @ 9.35% copper, has had footprint, a small capex and hopefully low op-
entry has employed on a project which has
suffered from a lack of concerted exploration limited exploration and none of it by legitimate erating costs.”
efforts in the past.
developers. For the first time, Coventry is a Haines said the plan was to delineate a
Originally discovered by a private prospec-
tor in the 1960s, Caribou Dome has failed to legitimate party to explore and develop the resource and begin development studies as
attract the kind of funding needed to develop it
into a commercial proposition. Some 95 holes project.” quickly as possible. However, if all five IP
were drilled between 1965 and 1970 with
high-grade sedimentary-hosted copper min- It is the kind of opportunity struggling ex- anomalies offer up economic mineralisation,
eralisation being identified across nine lenses
on the property. However, a mining study in plorers everywhere long for; to pick up a long- resource updates could be postponed.
1970 deemed the project uneconomic at the
prevailing 35c/lb copper price. forgotten prospect on the cheap and turn up “We will finish the programme in October

Haines said that was the last time the pro- interesting intersections in your very first drill with assays received in November so we
ject had been seriously considered for devel-
opment. programmes. could be in a position to release a resource in

“Somehow, the initiative was lost from there “In six months we have drilled 15 holes with early 2016,” he said. “But, if we continue to hit
and nothing was done until 1999 when three
deep holes were drilled down dip. They were another 20 holes in this programme. This is mineralisation we may need to continue drill-
unlucky because they could’ve had success if
they had moved them slightly.” what the project has been crying out for; sys- ing before we calculate a resource. We would

Another decade passed before Caribou tematic exploration to make it a bigger, more need to work out how big it is.”
Copper Inc drilled the project, but after its
shallow holes had only limited success, the economically viable proposition.” Haines said the company’s early drilling
TSX-listed company withdrew due to funding
problems. Coventry’s early work focused on the had already sparked interest among investors

“So, since 1970 this project with histori- known mineralised lenses and recent drilling and peers.
cal drilling results of 15.4m @ 7%, 12.8m @
on Lens 7/8 returned hits of 10.1m @ 7.1%, “We’ve only been showcasing the project

12.2m @ 3.2%, 3.4m @ 4.8% and 4.6m @ since May and there is already a great deal of

10.6% copper. interest,” he said. “We know other companies

While that confirmatory work will continue are taking considerable note of us but we be-

throughout the 4,000m programme – set for lieve there is a huge amount of value we can

completion this month – Haines is looking to add to this project ourselves.”

the step-out work to build the economic case – Dominic Piper
for Caribou Dome.

Nine mineralised lenses have been identified at Caribou Dome, but only three
have been substantially drill-tested

PAGE 82 OCTOBER 2015 AUSTRALIA’S PAYDIRT

8 October 2015
Pan Pacific Perth

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BASE METALS FEATURE

Stellar refuses to stand still

Stellar Resources Ltd is re- under 500,000t @ 0.86% tin.
fusing to park the bus dur-
ing one of tin’s most challenging It’s a nice incremental add-on
periods.
at this stage and what we’ve
Managing director Peter
Blight told Paydirt while other now decided is to go back and
tin explorers packed up shop
and waited for the market to keep our focus on Heemskirk,
turn, Stellar was making the
best of a bad situation by taking because that’s clearly the main
a closer look at its Heemskirk
project in Tasmania. game for us.”

Earlier this year, Stellar en- Stellar’s ultimate goal was
gaged Teale and Associates
Pty Ltd to complete a geo- to complete Heemskirk’s DFS,
logical optimisation study for
Heemskirk, which was intended which Blight said could cost up
to help focus the company’s ex-
ploration efforts. to $10 million last time he spoke

Blight said the now complete to Paydirt in May.
study proved interesting read-
ing for Stellar, revealing a genu- “There are still plenty of irons
ine structural dimension to the distribution of
mineralisation at Heemskirk. in the fire and there are people

“Previously it has been thought to be stra- who are continuing to look at
ta-bound, but within the broad strata-bound
models we do get these north-west structures the market and at some point
and I think that is important for us in that we
identified higher grade mineralisation relating we will be in a position to com-
to some of these structures,” Blight said.
plete a deal,” he said.
“That gives us a focus for future drilling
and it means some of the drilling will be in a Blight was also encouraged
slightly different direction. If it comes through
the ultimate prize is an increase in the grade by the International Tin Re-
of, particularly, the Severn deposit. It may
also help us to define higher grade at depth A Heemskirk DFS is at the top of Stellar’s wish list search Institute’s (ITRI) most
as well.”
recent update in August.
In addition to the geological study, Stellar
also engaged IAMM Consulting to prepare an ered around 400,000t of tin and they’ve cur- Although the ITRI’s report predicted a sub-
interpretation of seismic data at Heemskirk
after it was discovered two lines of a six-line rently got 200,000t in resources. We’ve been dued market for the rest of 2015, it forecast
2D seismic survey completed by a previous
explorer in 2008 fortuitously ran across the going for about four years now and we’ve improvement in 2016 on the back of the com-
project’s deposits.
found around 70,000t tin, but we know there modity’s strong fundamentals.
The reinterpretation identified many more
faults than those mapped at surface or in drill is a lot more to be found. “Demand growth remains relatively healthy;
core samples and demonstrated the potential
for faults to tap granitic fluids. “I guess the geology and geophysics are it’s growing at around 1.4%, which is getting

It also reinforced Stellar’s helping us hone the model. When we are in a close to the average of the past few years,”
view that a highly prospective
zone existed between its deep- position to do more drilling we are going to be Blight said.
est 500m drill holes and the top
of the project’s granite structure. very well focused on how we go about that.” “The other thing is that most of the Myan-

“I think importantly it has Stellar also recently received the scoping mar impact is in the market now. There may
given us a clearer picture of the
sub-surface distribution of the study for its satellite St Dizier project. be a modest increase in production, but it’s
granite source rocks and the tin
mineralisation,” Blight said. The study revealed it would cost just $3.8 not going to have the impact it had in 2014

“It’s shown us how vast the million to deliver feed for an initial mine life of and earlier this year. And if we look at refined
subsurface exploration area re-
ally is and highlights potential 30 months. production there have been cutbacks in Ma-
that this really is a system com-
parable to the Renison mine Based on the deposit’s current mining laysia, Thailand and Peru. I think that is a
system.
inventories, a maximum extraction rate of positive development.
“If you look at Renison, they
have been working there for well 16,000 tpm would be insufficient to fill Heem- “I guess if you look at the cost curve…35%
over 50 years and have discov-
skirk’s processing plant alone and as a result of the industry is not covering its cash costs

Stellar expects St Dizier’s ore to be used as a at the moment, so there will be further adjust-

blending feed for underground mining produc- ment on the supply side and that’s going to

tion from the Heemskirk project. feed into better prices as we move towards

“It’s something we will schedule in the min- 2016.”

ing plan for the Heemskirk project,” Blight Blight was also encouraged by the contin-

said. ued slide of the Australian dollar, which he

“It represents a mineable resource of just said mitigated tin’s US dollar spot price de-

cline, and the availability and

affordability of contractors and

equipment.

“We’ll be saying more about

costs as we move through [Oc-

tober], but certainly from our

perspective things are moving

in the right direction,” Blight said.

“The focus remains on bring-

ing that partner in to complete

the DFS and really putting our-

selves in the position that once

prices do recover we can move

in very quickly through that DFS

and into production.”

– Rhys Dickinson

St Dizier’s optimal pit design

PAGE 84 OCTOBER 2015 AUSTRALIA’S PAYDIRT

REGISTER NOW

8 October 2015
Pan Pacific PerTthhursday 8 October 2015

8.00 Arrival tea, coffee and registration
Session One Chair: Peter Bradford, Independence Group NL

08.45 Welcome: Bill Repard, Executive Chairman, Paydirt Media (5)

08.50 Opening Address: Hon Bill Marmion, Minister for Mines and Petroleum (20)

09.10 Eduard Haegel, Asset President, BHP Billiton Limited Nickel West (30)

09.40 Dan Lougher, Managing Director, Western Areas Limited (20)

10.00 Carey Smith, Senior Analyst, Alto Capital (20)

10.20 Ian Mulholland, Managing Director, Rox Resources Limited (20)

10.40 Questions (5)

10.45 Morning Tea (20)

Session Two Chair: Dan Lougher, Western Areas

11.05 Peter Bradford, Managing Director, Independence Group NL (20)

11.25 David Moore, Managing Director, Mincor Resources NL (20)

11.45 Mark Wilson, Managing Director, Legend Mining Limited (20)

12.05 David Singleton, Managing Director, Poseidon Nickel Limited (20)

12.25 Questions (5)

12.30 Lunch (60)

Session Three Chair: David Singleton, Poseidon Nickel Ltd

13.30 John Prineas, Executive Chairman, St George Mining Limited (20)

13.50 Mike Jones, Managing Director, Impact Minerals Limited (20)

14.10 Richard Bevan, Managing Director, Cassini Resources Limited (20)

14.30 Bronwyn Barnes, Executive Chair, Windward Resources Limited (20)

14.50 Stuart Ferguson, Senior Product Manager, Maps, SNL Metals and Mining (20)

15.10 Questions (5)

15:15 Afternoon Tea (15)

Session Four Chair: Dominic Piper, Paydirt Media

15.30 Graham Short, National Policy Manager, AMEC (20)

15:50 TBC (20)

16.10 Closing Panel (50)

17.00 Closing Drinks * This programme is subject to change without prior notice

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BASE METALS FEATURE

Search for next Broken
Hill continues

Silver City Minerals Ltd’s game plan has
been clear since it listed on the ASX in
2011 – find Broken Hill’s next big base metals

project.

The company strategically acquired

1,170sq km of exploration tenure covering a

large area of the Willyama Supergroup, which

surrounds the “supergiant” that is the Broken

Hill lead-zinc-silver deposit.

Silver City initially set out to target near-

surface mineralisation in the area with a view

to utilise a JV agreement with local private

miner CBH Resources – which operates the

Rasp mine and mill in Broken Hill – but more

recently the company has turned its attention

to finding something bigger and deeper.

“We like to say we’re out there to find an-

other elephant, which is what Broken Hill is,

but if we found elephant droppings we would

be fine,” managing director Chris Torrey told

Paydirt.

“If Silver City was to find a deposit just 1%

of the size of Broken Hill we would have happy Silver City is testing Balaclava with two diamond holes

shareholders. A 3-4mt orebody would cer-

tainly be an excellent discovery.” tors were coincident with elevated zinc, lead Late last year Silver City completed a RAB

Silver City is currently banking on finding an and manganese gave him confidence there drilling programme at Balaclava to sample

elephant – or its lucrative ordure – at its Ra- was something bigger at play at Razorback bedrock beneath alluvial and soil cover, with

zorback West and Balaclava projects. West. one hole intersecting a gossan over 9m @

Razorback West is characterised by a 5km “They were very subtle EM anomalies be- 0.48% zinc, 0.61% lead and 0.37% copper

long, 400m wide zinc-lead anomaly detected cause the mineral we are looking for is sphal- from 2m.

in historic auger and RAB sampling pro- erite, which doesn’t generally respond very At the time of print, the company was half-

grammes. well to EM,” Torrey said. way through a two-hole diamond drilling pro-

Torrey said Silver City was particularly in- “We will be going back there to drill some gramme at Balaclava, which Torrey said was

terested in Razorback West’s zinc anomaly, more holes beneath those existing holes to designed to test five close-spaced horizons in

which overlaid a ridge of gravity anomalism, target those EM conductors.” a zinc-rich rock package approximately 150m

which extended for 6km along strike. Balaclava – a JV with CBH – lies in a fault- wide.

The company first probed the target in April bounded block enclosing the southern exten- “It’s an initial test to get a feel for what is

2012 with a 1,600m RC drilling campaign, sion to the Broken Hill “line-of-lode”. going on there,” Torrey said.

which Torrey said only produced “low levels of Torrey said although outcrop was poor, a “It’s probably about 600m all up.”

zinc and manganese”. historic diamond hole drilled in 1989 returned Torrey said Silver City’s partnership with

Still encouraged by the target’s prospects, a standout intersection of 10.1m @ 6.8% zinc CBH, which owned about 50% of its tenure,

Silver City green lit an IP survey at Razorback and 0.7% lead. was an ace up the company’s sleeve.

West in December 2012, which “It gives us flexibility in how we

identified three distinct areas of explore because CBH is inter-

elevated chargeability, the Cen- ested in putting more ore through

tral, Northeast and East zones the mill,” Torrey said.

– ironically below areas already “The scenario that they’d like

tested during the target’s maid- to see is us having high-grade,

en drilling campaign. near-surface mineralisation that

Work at Razorback West could be trucked into town. They

idled until late last year when would own 25% of that and they

Silver City gave the go ahead have the off-take rights. It’s a

for a moving loop EM survey win-win. Even though we’re look-

over the prospect’s geochemi- ing for elephants, we could find

cal and IP anomaly. something quite small and still

The survey covered an area make money out of it. With a part-

of 7.14sq km and identified ner that has a beneficiation mill

a weak conductor extending no more than 15km away, it gives

along strike for more than 1km. us lots of flexibility.”

Silver City was far from dis- – Rhys Dickinson
heartened with the results and

Torrey said the fact the conduc- Razorback West is less than 15km from the famed Broken Hill zinc-lead deposit

PAGE 86 OCTOBER 2015 AUSTRALIA’S PAYDIRT

New deal delivers for Encounter

Encounter Resources Ltd has tasted no drilling at all to the east and south
immediate success from its new
earn-in agreement with Chilean major of this so that’s our next immediate
Antofagasta plc at the Yeneena project in
Western Australia’s Paterson Province. follow-up target.

A compelling IOCG target, subse- “If we can find 5m of that sort of ma-
quently named Aria, was identified
early last month within one of the four terial, then we’re probably going to be
tenements which make up the Lookout
Rocks copper project area. in a different camp pretty immediately.

The discovery was made during the If we can find 90-odd metres of it, it’s
first drilling to be completed under An-
tofagasta’s new $US6 million earn-in really going to excite the whole mar-
agreement to acquire up to 70% of
Lookout Rocks over the next four years. ket.”

Antofagasta called an early end to Pressure is quietly mounting on Aus-
the previous earn-in agreement in July,
having spent almost $US8 million of a tralia’s zinc hopefuls to unearth the
$US20 million expenditure commitment
to claim 51% ownership of tenements next major base metals discovery and
E45/2658 and E45/2805.
fill the gap in the market that will soon
Lookout Rocks is about 35-50km north of
the BM1 and BM7 copper prospects housed be opened up by the imminent closures
within those tenements.
of Century and similar-sized mines.
Antofagasta drilled several diamond holes
over a select 4-5km long trend under the pre- Robinson believes his company
vious agreement, including the breakthrough
intercept of 140m @ 0.2% copper earlier this could be the one to make that water-
year. Zones of up to 7% copper were also re-
corded along the targeted area. shed discovery and potentially bring

Encounter managing director Will Robinson Will Robinson a new wave of explorers into the Pat-
said his company would pick up where Antof-
agasta left off later this quarter. erson Province, already home to the

Robinson said it was possible another ma- gossan zone intersected in July. Nifty and Telfer operations.
jor might also be interested in earning into
the project because it had displayed all the Assays confirmed broad intervals of weath- “The zinc drilling we did earlier this year is
hallmarks of a large sediment-hosted copper
system. ered zinc mineralisation, including 91.8m @ about as close as you get to drilling a spec-

“There’s some immediate follow-up targets 1.6% zinc from 384m and 38.7m @ 0.9% zinc tacular intersection without drilling the actual
that we’re going to address and we’ll do
that sometime in October, either by our- from 256m. discovery hole,” Robinson said.
selves or with a new partner,” Robinson
told Paydirt. The gossanous discovery comes less than “If something is going to make an immedi-

“Focusing into the best part of this 12 months after the company’s last drill hole ate change to us in the next couple of months
system is the challenge that we face,
but there are others with particular ex- of its 2014 campaign hit an impressive 7m @ you’d have to think it’s likely to be the zinc,
pertise in sediment-hosted copper that
might have things they can bring to the 5% zinc. simply because we’ve got a very clear follow-
table.
Encounter is now investigating whether the up target that’s got scale. It’s got evidence you
“It’s an advanced stage 14km copper
trend with high-grade copper sulphides gossan unit transitions at depth into a body of can produce high grade and it’s very poorly
already established in the system, so
we’re looking forward to getting back zinc sulphide mineralisation. drilled to this point.
there and testing some of the targets
that remain.” “What this material was once upon a time “It ticks a lot of boxes – and maybe we’re

Encounter has up to 10,000m of before it was preferentially weathered is really a few million years too late for that particular
drilling planned for the rest of the field
season which typically ends in early the big question mark that we want to follow intersection – but at some point you do think
December. This includes a programme
at the new BM7 East prospect, which up in the near-term,” Robinson said. there’s a high likelihood that it could transition
has only been tested down to a depth of
about 100m. “We’ve got evidence of the sort of high- to something primary at depth.”

Before the field season comes to a grade zinc sulphides that you can get only a – Michael Washbourne
close, the RC rig will be moved to the couple of hundred metres away, but there’s
Millennium zinc prospect, about 35km
north-east of the BM1-BM7 copper dis- Encounter expects to complete up to 10,000m of drilling at its Yeneena copper-zinc
coveries, to follow up on the iron-rich project before the end of the year

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 87

BASE METALS

Peel’s zinc surprise at
Mallee Bull

Peel Mining Ltd’s geology team initially Mallee Bull is known for its copper-rich mineralisation and hosts a resource
thought its XRF gun was faulty when some of 3.9mt @ 2.3% copper, 32 g/t silver and 0.3 g/t gold
spectacular zinc numbers starting firing out of
the Mallee Bull project in central New South magnetic features also warrant further atten- “Copper is what we’ve got predominantly
Wales. tion. at Mallee Bull…but I like the zinc space and
obviously if you can find zinc-rich [mineralisa-
Despite historic evidence of lead-zinc min- “We’ve got a fairly strong handle on the tion] you’ll probably get the market’s attention.
eralisation, recent EM surveys suggested copper mineralisation at Mallee Bull as it
nothing worth mining existed on the 80sq km stands, but we’ve never quantified the lead- “Our modus operandi is to look for any
property until an Orion 3D survey was com- zinc mineralisation, yet we’ve had some good mineralisation that is economic, so zinc isn’t
pleted earlier this year. hits there historically and obviously more re- a pure focus by any means. We’re base and
cently,” Tyson said. precious metals-focused so really any cop-
Mallee Bull is known for its copper-rich con- per-lead-zinc-silver-gold mineralisation will
tent and Peel has already delineated a 3.9mt be welcomed.”
@ 2.3% copper, 32 g/t silver and 0.3 g/t gold
resource for the project following a series of Peel is also anticipating plenty of activity at
aggressive drilling campaigns. its nearby Cobar Superbasin project up until
the end of the year.
Positive feedback from the Orion 3D survey
encouraged the company to complete follow- At the time of print, the company was wait-
up exploration at the T1 target during the June ing for earn-in partner JOGMEC to finalise
quarter – and the results of that programme exploration plans, which were expected to
almost proved too good to be true, according include MLEM and gravity surveys and RAB/
to Peel managing director Rob Tyson. RC drilling at the Mundoe, Burthong, Wirlong,
Red Shaft and Sandy Creek prospects.
RC drilling returned a number of high-
grade, near-surface intercepts, including 10m JOGMEC can earn up to 50% interest in the
@ 15.8% zinc, 7.6% lead, 322 g/t silver and Cobar-style project by funding up to $7 million
1.28 g/t gold from 106m, 12m @ 20.3% zinc, of exploration. Expenditure had totalled $1.5
14.8% lead, 308 g/t silver and 1.59 g/t gold million by the end of the June quarter.
from 83m and 7m @ 21.4% zinc, 12.7% lead,
203 g/t silver and 0.58 g/t gold from 71m. Peel will also begin sampling some historic
core from its Apollo Hill gold project in the
“We actually thought the XRF on site might north-eastern goldfields of Western Australia
have been busted because it was reading later this quarter as it prepares for another
such high levels of zinc, in particular,” Tyson drilling programme there within the next 6-12
told Paydirt. months.

“We had always had a bit of a suspicion that RAB drilling at the Mud Hut/40G prospect
this area might have had some mineralisation during the June quarter returned some en-
close to surface, but it was pretty much invis- couraging intercepts of 2m @ 1.32 g/t gold
ible to the EM surveys we’d done.” from 16m and 2m @ 2.11 g/t from 22m.

The zinc-lead-gold-silver mineralisation No immediate work is planned for the At-
remains open along strike to the north and tunga tungsten project, about 20km north of
south, and up and down dip. Tamworth in NSW, although the company is
weighing up some potential JV offers over the
Tyson said the close proximity of the miner- prospective ground.
alisation to surface at Mallee Bull was the big-
gest surprise of the “potentially game-chang- Peel’s focus has turned to the zinc – Michael Washbourne
ing” drilling results for the project it co-owns potential on offer at Mallee Bull
with CBH Resources Limited, a wholly owned
subsidiary of Toho Zinc Co Ltd.

“It comes within about 50-60m of surface
under the massive sulphide…but because it’s
zinc-rich, it doesn’t light up with the EM sur-
veys,” Tyson said.

“The surface surveys we’d done hadn’t de-
tected it previously and we completed some
MLEM just recently to confirm whether it
could be seen or not, and it’s invisible…so the
results are a bit of a surprise.”

The results have prompted changes to
Peel’s proposed exploration programmes for
Mallee Bull and surrounding projects, includ-
ing the Cobar Superbasin, to focus more on
the zinc potential.

A deeper drilling campaign could get under
way as early as this month, pending approval
from CBH. A number of regional targets with

PAGE 88 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Marindi’s eyes on big zinc prize

With cash now at its disposal, Marindi Met- Marindi is drill testing four high-priority targets at its Newman zinc project,
als Ltd is on the hunt to find Australia’s including the untapped Wolf prospect
next large zinc-hosted orebody.
discovered, and that’s the primary aim of what “It’s certainly not insignificant and at certain
Marindi started a maiden drilling campaign
at its Newman zinc project in the Pilbara early we’re planning to do over the next 12 months prices it can mined.
last month to test four high-priority targets
along the prospective Prairie Downs Fault or so.” “We’re on the hunt for something quite large.
Zone.
The initial focus of the drilling at Wolf will be That’s the bigger picture play for Marindi and
The aggressive 5,000m programme will
comprise about 40% diamond and 60% RC extensions to the mineralisation both down- we expect that to take quite a while to unravel,
drilling and is expected to be wrapped up be-
fore the end of the year. dip and down-plunge, and along strike. but if we get it right we know it will be signifi-

Marindi, previously a private company with Marindi will then move the multi-purpose cantly larger than anything we’ve seen so far.”
limited cash reserves, merged with ASX-list-
ed Brumby Resources Ltd in August – a union drill rig to Prairie, about 2km south-east of Like many other Australian zinc hopefuls,
that culminated in a $3.75 million placement
and rights issue to fund the drilling at New- Wolf, to test for the development of high- Marindi will look to quickly work up any major
man.
grade shoots within the main deposit, as well find to fill the gap in the market to soon be
Marindi managing director Joe Treacy said
the merger had obvious synergies for both as the southern extension at Prairie Pup. opened up by the impending closure of MMG
companies.
The final hole will test a coincident gravity Ltd’s Century mine.
“We spent two years building the project
up to the point where we needed to drill it to and aeromagnetic anomaly at the Titan pros- Treacy said he expected to see a dynamic
understand what was going on, but that was
beyond the capacity of the private seed inves- pect, about 5km south-east of Prairie. change in the zinc pricing market over the
tors to carry,” Treacy told Paydirt.
Treacy said his company was taking a next 12-18 months as stockpiles are further
“In an ideal world, we would have looked to
do an IPO, but with the market being what it is greenfields view towards exploration of the depleted.
we decided to look around and through a bit
of good luck, we came across the guys from brownfields project, about 60km south-west “It’s our view that there aren’t any large zinc
Brumby and they were actually in the market
for a good base metals project.” of the town of Newman. mines out there that are going to fill that gap

About $15 million has been spent on the “Although there’s a resource at Prairie, it’s for the next five years at least, and that’s a
project by previous explorers, particularly at
the Prairie deposit where a 3mt @ 5% zinc, probably not enough to justify an operation, view held by producers and smelters as well,”
1.6% lead and 15 g/t silver resource has been
delineated. certainly not at current prices,” Treacy said. Treacy said.

Marindi intends to complete follow-up work “We would hope that in the
at Prairie, but its current interest lies with a
number of promising regional targets, includ- next 12-18 months we’ve put
ing the Wolf prospect which has never been
drilled out. our foot on something that’s

Historical hits at Wolf include 8m @ 11% capable of being brought into
zinc, 8% lead and 73 g/t silver from 97m, 10m
@ 8.2% zinc, 7.5% lead, 0.4% copper and 203 production within that five-year
g/t silver and 63m @ 1.9% zinc,
1.6% lead and 47 g/t silver from cycle.”
66-117m.
Marindi also acquired
Treacy said every historical
drill hole along the fault had Brumby’s prospective zinc as-
intersected some form of base
metal mineralisation in the ox- sets in the Northern Territory as
ide zones.
part of the merger, including the
“When we came along and
reviewed the project, it was a McArthur/Yalco North projects
real surprise to me there was a
system that could track for 1km which are currently optioned to
and be up to 100-200m wide
with 0.5-2% base metals con- Teck Australia Pty Ltd.
tent, but no understanding of
what it was or what caused it,” Teck, which is also farm-
Treacy said.
ing into Rox Resources Ltd’s
“At one end we’ve got a 3mt
resource, at the other end we’ve Teena/Reward zinc project to
got this huge alteration system
with a lot of zinc. There may be the south, can earn up to 70%
a very large prize waiting to be
of Marindi’s ground by spending

$3.5 million over a three-year

period.

Vacuum drilling was completed late last year to define targets – Michael Washbourne
for current exploration programmes

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 89

BASE METALS

Gates open for Red River

Red River Resources Ltd hopes the immi- Red River is closing in on a restart to production at the Thalanga zinc project in Queensland
nent release of a restart study on Thalanga
will confirm the company is on track to become company wants to follow up soon is the Er- Palancian was promoted to the top execu-
Australia’s next zinc producer. mine group of deposits and prospects, where tive role in July after briefly serving as the
a best intercept of 3.2m @ 29.2% zinc, 7.9% company’s chief operating officer. The experi-
Production at Thalanga, about 60km south- lead and 1.2% copper was recorded. enced mining engineer replaces Donald Gar-
west of Charters Towers in Queensland, could ner, who will remain as an executive director
resume before the end of the year if the study Other promising hits, including 11m @ of Red River.
– due for release at the time of print – returns 10.4% zinc, 3.7% lead and 0.6% copper at the
a favourable outcome. Snake Oil prospect, are also commanding im- “It’s a minor tweak to where we’re headed,
mediate follow-up work. given we have been looking to put the mine
Red River has been busily working up the back into operation in the short-to-medium
ground since acquiring the project last year Red River expects to discover more pros- term,” Palancian said.
for $3.6 million. The former Kagara Ltd asset pects as further regional exploration work is
has been kept on active care-and-mainte- completed over the property, including exten- “We had discussed [possible manage-
nance since early 2012. sions of the IP programme trialled earlier this ment changes] for a while and I think given
year. my operational experience this was the best
Historic production from open pit and un- direction for the business to take. Donald has
derground mining at Thalanga has totalled “It’s forgotten ground and I guess the thing done an excellent job in getting the company
more than 4mt, churning out average grades that could be a game-changer for that belt is to where it’s at today and, most importantly,
of 9.3% zinc, 3% lead, 1.6% copper, 0.4 g/t we did a programme of high-powered IP and he’s staying with us.”
gold and 77 g/t silver. [found] half the belt has a cover sequence
which is conductive,” Palancian said. Palancian’s résumé includes extensive
Thalanga has a current resource base operational experience at a number of base
of 5mt @ 12.4% zinc equivalent, including “The high-powered IP basically sees metals projects, including long stints for MMG
1.16mt @ 14.4% zinc equivalent at Far West through that cover clearly down to about Ltd at Century, Rosebery and Golden Grove.
and 591,000t @ 15.2% zinc equivalent at 500m and we think that’s a game-changer in
West 45. Both deposits are slated for produc- terms of both project generation and target The impending closures of major zinc
tion when the restart is given the green light. generation.” mines Century and Lisheen – and the holes

Red River managing director Mel Palancian both will leave in the market –
believes the up-keep of the surrounding infra- bode well for an emerging pro-
structure, including a 600,000 tpa polymetal- ducer such as Red River and its
lic processing plant, should allow for an easy Thalanga operation.
transition back into production.
“Zinc has been relatively in
“It’s got double-digit grade, all the infra- deficit for the last two years, so
structure is in place, all the permitting is in that deficit is likely to – at the very
place and it’s only 200km out of Townsville,” least – be maintained, if not ac-
Palancian told Paydirt. celerated, once those two mines
shut,” Palancian said.
“It’s in a stable part of the world, people
have mined underground at Thalanga before, “Even though there is a lot of
the process plant has processed the ore be- volatility in the market today, I
fore, so there are a number of knowns and think 2016 looks very promising
that all means it’s pretty low risk. And more for zinc and lead.”
importantly, in the current environment, it’s a
low capex project.” – Michael Washbourne

Thalanga has established zinc equivalent Production could resume from the West 45 underground
resources around five deposits, including Ori- portal before the end of the year
ent (540,000t @ 13.6%), Waterloo (707,000t
@ 17.8%) and Liontown (2.04mt @ 8.4%).

Red River recently completed a review of
the regional exploration potential on its 420sq
km land package and identified more
than 20 high-priority targets within close
proximity to the Thalanga process plant.

Palancian said his company was
stunned at just how little exploration had
been carried out in the area during the
past two decades.

“The Mt Windsor Volcanics has pretty
much been ignored for base metals,
in particular zinc and lead, for the last
20 years so for us we’re really playing
catch-up,” Palancian said.

“We were really surprised as to how
much prospective ground there is but
with very little work done on it. We’ve got
over 30 walk-up targets now and that’s
on about 10-15% of our ground. We
could run an exploration programme up
there for the next 20-30 years.”

Among the high-priority targets the

PAGE 90 OCTOBER 2015 AUSTRALIA’S PAYDIRT

Segue welcomes MMG
into Fraser Range

Multinational base metals player probably not be able to raise that mon-
MMG Ltd has joined the throng of
nickel hopefuls in the Fraser Range. ey in the market right now and even if

MMG’s enters the arena through its we could our shareholders would dilute
namesake subsidiary on the back of a
farm-in JV agreement with Segue Re- to 10%,” Michael said.
sources Ltd at the Plumridge nickel pro-
ject. “It is a big tick of approval for the re-

“It’s been a long time in the making gion but we would like to differentiate
and now the shareholders can sit back
and let someone else spend the money ourselves somewhat. The large explo-
and hopefully there is a discovery in the
making,” Segue managing director Ste- ration teams believe that Nova is not a
ven Michael told Paydirt.
one-off.”
“MMG first approached us in June
last year. We’ve had serious discus- In addition to the eight JV tenements
sions for several months now and in the
last 4-5 months it has moved quicker. We can at Plumridge, Segue retains 100% in-
move a lot thicker and faster with MMG’s in-
volvement.” terest of three licences west of Plum-

The farm-in JV agreement is over eight ex- ridge, including the Plumridge gold and
ploration tenements covering 2,250sq km at
Plumridge. Salt Creek projects.

By funding $6.5 million in exploration activi- An exploration strategy is being de-
ties before December 2019, MMG can earn
51% in Plumridge, with an initial $1.5 million to Steven Michael vised by Segue at Salt Creek, near the
be committed by the end of next year. Independence Group NL/AngloGold

Should MMG sole-fund the initial $6.5 mil- Ashanti Ltd 3,000sq km Salt Creek JV, and
lion, it has the option to increase its share in
the project to 70% by spending a further $7.5 the Plumridge gold project, which is 60km
million within two years.
south-west of Tropicana.
When Paydirt spoke with Segue, the deal
had just been announced to market and ex- With the Plumridge nickel JV being funded
ploration activities yet to be decided, with the
first JV discussion taking place at the time of and managed by MMG, Segue can focus on
print.
the other aspects of its Plumridge package,
Steven said the in-house expertise at MMG
would be invaluable in advancing exploration which totals 3,300sq km.
at Plumridge, while the cash backing is the
envy of many junior explorers. The size and continuity of Segue’s 100%

“When we were in a trading halt our market owned Plumridge tenements is the point
cap was $6 million. These guys [MMG] are go-
ing to spend $14 million to get 70% and in the of difference for the company in the Fraser
first instance $6.5 million for 51%. We would
Range, according to Michael.

“There are about 25 junior exploration

companies in the Fraser Range, all are ac-

tive but have various sized landholdings.

Some of the small explorers have discrete

packages spread out which MMG aren’t inter-

ested in and the guys with bigger land hold-

ings – Windward [Resources Ltd, 3,000sq

km], Orion [Gold NL, 4,500sq km], Legend

[Mining Ltd, 3,000sq km] – have deals with

Creasy [70:30] so that makes it hard for MMG

to get in. We have a large tenement package –

3,000sq km – altogether which no other com-

pany can offer,” Steven said.

MMG can earn 70% in Segue’s Plumridge nickel – Mark Andrews
project in the Fraser Range by spending $14

million on exploration

8 October 2015 The CD-Rom of the 2015
Pan Pacific Perth Australian Nickel Conference

will be available soon

www.australiannickelconference.com

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 91

BASE METALS

TopTung sees future
at Torrington

TopTung Ltd is hoping to turn over a new
leaf following a recent period of tumultuous
trading as Krucible Metals Ltd.

Krucible Metals Ltd was fined $300,000 for

undertaking unsanctioned drilling at its Tober-

morey copper project in the Northern Terri-

tory – a penalty resultant from action brought

on by the Northern Territory Department of

Mines and Energy, which the Court of Sum-

mary Jurisdiction upheld on August 25.

The drilling, approved by the company’s

previous management team, resulted in a

copper discovery that was later proved non-

existent.

At the time print, the company had lodged

an appeal to the decision.

A majority of Krucible’s board resigned in

late 2014 and major shareholder Leon Pre-

torius was elected as the company’s new ex- Leon Pretorius

ecutive chairman. Ferberite tungsten mineralisation in silexite
Pretorius told Paydirt he intended to take
It also gave TopTung some in-

the company down a more positive path – sight into the future of Torrington by compil- very shallow workings.”

specifically with its new Torrington tungsten ing a compelling exploration target estimate TopTung intends to pursue a RC and dia-

project in New South Wales. of 5-39mt @ 0.063-0.5% tungsten trioxide for mond drilling programme at Torrington to fur-

The former Carbine Tungsten Ltd chairman the project. ther delineate Resolve’s resource, but at this

advocated for the company’s move into the “All we need for a small project is 400 sqm stage it is unable to do so due to delays in

tungsten space, which he described as a “bul- of that to be mineralised enough to give us the native title clearances.

letproof” market. resources which we feel will kick-start a pro- Pretorius said it could take up to six months

“Tungsten is very unique in the sense ject for us,” Pretorius said. to negotiate the clearances.

that… there are no chemicals involved and “It’s got a thin veneer; there is granite under “This is obviously a great disappointment,

no tailings. Environmentally, it’s fairly benign,” the intrusives and in places it is outcropping. but will allow management and its technical

Pretorius said. No work to date has been done to prove that consultants to complete the other statutory

“The other thing is there are no true depos- the silexite, which hosts the tungsten, is any requirements, such as the reviews of environ-

its in the world, so it’s highly unlikely that any- thicker that 25-30m, so you are looking at mental factors, baseline EIS studies, access

one can start producing 100% and compensation agreements,

of the material. The Chinese establish a local operating base,

produce a lot, but most of it source local personnel and estab-

comes from small-scale opera- lish an on-site sample preparation

tions.” laboratory ahead of drilling,” he

TopTung acquired Torrington said.

from Resolve Geo Pty Ltd in Upon receipt of the clearance,

April on the back of the project’s Pretorius said TopTung would fo-

historical credentials. cus on depth extensions to histori-

Pretorius said data from pre- cal workings.

vious workings, including 418 “We will go in and drill a 50 sqm

drill holes, gave TopTung hope pattern to start off with and…we

there was much more metal will then infill as we need to with

to be found beyond Resolve’s diamond drilling,” Pretorius said.

original 1.16mt @ 0.19% tung- “We’ve allowed for $1 million

sten trioxide for 2,247t tungsten worth of diamond drilling and in

trioxide resource estimate. the current market we can get a

Under the terms of the acqui- lot of drilling done for that money.

sition, Resolve was contracted We will also have an XRF analyser

to complete an update of the on site and we will basically see

mineral resource using a LiDAR where the mineralisation is and

survey, which was under way at continue drilling on that basis”

the time of the deal. – Rhys Dickinson
In August, Resolve complet-

ed an updated indicated and

inferred resource estimate of

2.14mt @ 0.23% tungsten triox-

ide for 4,965t tungsten trioxide. The Torrington project is located 35km south of the Queensland border

PAGE 92 OCTOBER 2015 AUSTRALIA’S PAYDIRT

TSX cash woe opens
ground for MinQuest

MinQuest Ltd has used the exploration MinQuest’s Fyre Lake project has the advantage of being near existing infrastructure
downturn to capitalise on potential near-
term producing assets in Canada. ples of VHMS-style deposits perfectly tailored where a small holding cost for a project like
for smaller companies to develop small to me- Fyre Lake – 13mt @ 2.2% copper equivalent
A back-door entrant via Merah Resources dium sized high-grade deposits. – of $16,000 for the year is getting too much
on the ASX last year, the Jeremy Read-led for some of the Canadian companies. There
MinQuest has snapped up VMS copper-rich Furthermore, while money remains tight are opportunities for JVs and farm-ins like we
projects – Fyre Lake and Marg – in Canada’s for juniors, there is no “use it or lose it” policy have done at Fyre Lake,” Read said.
Yukon district. existing in the Yukon, allowing companies to
hold ground for long periods of time. A resource of 8.93mt @ 1.52% copper,
And the company is in line to claim the Wol- 0.09% cobalt and 0.56 g/t gold is the oppor-
verine zinc mine should Yukon Zinc Corp’s “A number of deposits were found in the tunity MinQuest is farming into at Fyre Lake,
restructuring proposal fail to satisfy the Su- 1980s and 1990s, but no work has been done while earlier this year the company expand-
preme Court of British Columbia. on them and companies have been able to ed its presence in the Yukon by entering an
sit on ground. Now it is getting to the point agreement to earn up to 75% of Marg with
It is the Court’s recommendation that cash- Golden Predator Corp.
strapped Yukon, which placed Wolverine
operations on care-and-maintenance in Jan- A scoping study at Marg – 11.74mt @ 1.27%
uary, proceed with an asset purchase agree- copper, 3.23% zinc, 1.55% lead, 0.61 g/t gold
ment with MinQuest. and 39.78 g/t silver (cut-off grade of 0.5%) – is
expected to be completed by the end of 2015.
MinQuest has proposed to acquire Wolver-
ine for $C15 million, with an additional $C3 Upgrading of the resource and initial metal-
million to be paid to the Yukon Territory Gov- lurgical test work is also expected to be com-
ernment to supplement a $C7.7 million envi- pleted ahead of a feasibility study next year.
ronmental bond.
“You can do feasibility studies for reason-
Via the combination of a share placement able amounts of money and create quite a bit
and an issue of convertible notes, MinQuest of value if you get onto a good one because
secured $2.29 million in August to help it pro- of the grade. We went to the Yukon because
ceed with the Wolverine acquisition. we felt the Canadian junior market was worse
than ours. Canadians are having more trou-
Yukon was scheduled to meet with its bles trying to raise money than we [Australian
creditors in early September and present its companies] are,” Read said.
restructuring proposal, however, should it be
successful in meeting creditors’ requirements – Mark Andrews
Wolverine will remain closed until metal pric-
es improve. Jeremy Read

Zinc had reached a one-year high of about
$US1.10/lb in April/May this year, however, at
the time of print prices had fallen to $US0.79/
lb.

Nevertheless, Read believes Wolverine
has a short-term future which can drive Min-
Quest’s ultimate goals.

“In the case that the company’s [Yukon
Zinc] restructure falls over then our bid for
Wolverine comes into play. We are looking to
see if we can purchase Wolverine so we can
use the infrastructure – processing infrastruc-
ture – to fast-track development of our Fyre
Lake project, which is only 28km away to the
south-west [of Wolverine],” Read said.

“We are looking to put Wolverine back into
production, it is quite high-grade – 12% zinc,
1.5% copper – so if we can secure that asset
to bring Fyre Lake into production but also run
Wolverine for two or three years, that will give
us time to permit Fyre Lake. Then when we-
can change the plant over from a lead-zinc-
copper three-stream concentrate plant over
to just copper, cobalt and gold into a single
concentrate, which we are in the middle of
working through at the moment.”

The market has dictated that companies
demonstrate a quick path to production, which
is what has attracted MinQuest to Yukon.

Read said Fyre Lake and Marg were exam-

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 93

REGIONAL ROUNDUP LATIN AMERICA

Much more than silver
lining for Azure

Azure Minerals Ltd manag- from most of the high-grade silver
ing director Tony Rovira we see in Mexico,” he said. “Most

has declared himself “thrilled” silver mines are predominantly

with the high-grade silver results narrow vein, a few metres wide

produced from the company’s at most, but here we have a thick,

Alacrán project in Mexico. flat-lying zone on top of a hill; it

The results – which included won’t take much drilling to define

hits of 9m @ 1,235 g/t silver a resource and it could potentially

from 3m within 39m @ 347 g/t prove easy to mine.”

silver from surface – came from When Alacrán was acquired

the first four RC holes drilled last year it was its copper porphy-

into the Mesa De Plata prospect ry potential which most interested

at Alacrán, northern Mexico. Azure. While the company will

“I’m really bullish following continue to test the copper por-

these results,” Rovira told Pay- phyry potential at the La Morita

dirt. “It shows we have enor- prospect, the Mesa de Plata dis-

mous potential here and I think covery adds to the exploration

we have a great opportunity to mix at Alacrán.

delineate a deposit very quick- “This will now be our major

ly.” focus. We are still doing work

Rovira said his excitement elsewhere at Alacrán and the

was generated by the grade, Mesa de Plata’s (Silver Table in Spanish) location and dimensions have Promontorio work is still being

thickness and consistency of left Azure optimistic it can quickly delineate a deposit at the prospect done by Rio Tinto [Ltd]. We went

the silver mineralisation with into Alacrán looking for copper,

three holes intersecting 70.5m @ 187 g/t sil- another 200m.” gold and silver and we have

ver (including 21m @ 531 g/t), 45m @ 204 g/t Such is Mesa de Plata’s set- definitely found it here.”

(including 18m @ 408 g/t and 18m @ 698 g/t) ting, the Azure team is already Azure played down Alacrán’s

and 39m @ 347 g/t (including 18m @ 698 g/t getting excited about the po- silver potential when it first ac-

and 9m @ 1,235 g/t) tential to delineate a resource quired the project and Rovira

“This is the first drilling programme to be quickly. admitted selling silver stories to

carried out at Mesa de Plata, and to find large “Obviously more drilling is an unwitting Australian market

thicknesses of strong and consistent silver required, but with the thick- could prove difficult.

mineralisation starting from surface, including ness of the mineralised layer, “Australian investors have

internal zones of very high grade silver, is an the high grade of the minerali- little idea about silver and sil-

excellent achievement.” sation, and its location forming ver mining. Most of the larg-

The prospect was first identified by rock the top of a hill, I believe that Tony Rovira est in Australia are associated
chip sampling which showed a flat-lying layer Mesa de Plata has excellent with base metals and the ones

of vuggy silica rock that forms the capping potential to be a large, eco- that aren’t have largely been a

on a prominent flat-topped ridge. The four nomically significant, silver deposit.” failure. However, Mexico is the world’s larg-

holes drilled in August were spread 430m Rovira said further rock chip results were est silver producer and has many productive

north-south, but Rovira said rock chip and soil expected in the coming weeks and would be mines.”

sampling suggested the mineralised zone ex- followed by both diamond and RC drilling. And Australian companies also have form.

tended further. “In a few weeks, we plan to have a dia- In 2007, Coeur Mining Inc paid $US956 mil-

“And, visually you can see it continues on mond drill rig in there and four to six weeks lion for Bolnisi Gold NL and its 62 moz silver

from now we will bring resource at the Palmarejo project. Eight years

an RC rig in for some on, Palmarejo is producing 7.6 mozpa silver

closed-space drilling, and 116,500 ozpa gold.

tight enough to define “The Bolnisi story shows that it has been

a resource. We expect done before by Australians and, although it is

this set of results to be very early days, we have discovered some-

just the first in a series thing which could potentially be as big and

of good results for the with higher grades than Palmarejo,” Rovira

project,” Rovira said. said.

Intercepting high- Azure shares closed up 53.8% at 2c/share

grade silver minerali- on September 16, the day the drilling results

sation in Mexico is no were announced.

rarity but for Rovira – Dominic Piper
it is the thickness of

the high-grade zones

which offers such

Azure has produced a string of high-grade silver intercepts promise.

from its Mesa de Plata prospect in Mexico “This is different

PAGE 94 OCTOBER 2015 AUSTRALIA’S PAYDIRT

SAVE THE DATE!

LATIN

AMERICA

17-18 May 2016, Perth

EARLY BIRD
RATE

$AAV9A9I0L.A00BLINE CU.NGTSITL
18 MARCH
2016

After four highly successful years in Sydney, Paydirt Media will present the 5th Latin America Down Under
conference in Perth. Since its inception in 2012, Latin America Down Under has grown into the premier
forum for Australian-Latin American relations, particularly in the area of resources investment and policy, all

of this in the vibrancy and momentum of Australia’s mining capital.
The two-day conference will provide prime opportunity for governments, companies, service providers,
media and investors to network and share their stories and experiences of operating in one of the world’s

premier mining investment regions.

www.latinamericadownunder.com

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

REGIONAL ROUNDUP

Production restarts at Premier

Production has resumed at Cleveland Min- sation programme to be undertaken shortly. Production has restarted at the Premier
ing Company Ltd’s Premier gold mine in Plant availability has also increased be- gold mine in Brazil
Brazil following the completion of several key
aspects of its expansion and upgrade pro- low 50% prior to operations restarting to
gramme. more than 92% in early September. The
company’s production plans are based on
Operations were suspended in the sec- 83% availability
ond quarter so the company could install and
commission a series of components to the Cleveland managing director David Men-
processing plant. Work is continuing on the delawitz said the restart of mining and pro-
newly renovated 1.25MW ball mill. cessing operations marked important first
steps in the company’s turnaround strategy
The new flotation circuit was operating at for Premier.
28 tph throughput at the time of print and will
require additional tankage to expand to its ul- “We are very pleased to see major im-
timate capacity of 100 tph and reach the final provements in several key operational
targeted recovery when processing sulphide metrics very early on, including dramatic
material. improvements in mechanical availability,
volume and grade of exposed ore and re-
Gold recovery from the combined gravity covery of gold from sulphide ore,” he said.
and flotation circuits has peaked at 84% and
is averaging 70-80%, depending on the ore “While there is still plenty of work ahead
type. This is expected to increase to the tar- of us, these are positive steps and we will
geted level of 85% following a planned optimi- continue to execute our growth plan in a
very focused, diligent and measured way.”

Urucum estimate exceeds expectations

Beadell Resources Ltd expects to finalise a needed to finalise the Urucum resource. drilling. The lodes also form continuous sub-
PFS on its Urucum underground project in “This maiden underground resource state- parallel ore shoots hosted within a 100m-wide
Brazil in the coming months. banded iron formation (BIF).
ment, which includes very high-grade gold
The ASX-listed gold producer last month ore in the measured and indicated category, Gold mineralisation at Urucum is predomi-
announced a maiden underground resource lays the foundation for a PFS into a low-cost, nantly stratabound to specific-sheared litho-
for Urucum of 4.86mt @ 4.06 g/t gold for sustainable underground operation,” Bowler logical units within the BIF and is character-
634,000oz, based on a lower cut-off grade of said. ised by strong disseminated and shear fabric
1.6 g/t gold, including 2.73mt @ 4.56 g/t gold pyrrhotite sulphide.
for 400,000oz in the measured and indicated “The profitability of our current six-year
category. open pit mine plan will most likely be signifi- Central Lode 1 contains a resource of
cantly enhanced and extended with the ex- 592,000t @ 7.54 g/t gold for 143,000oz. The
AMC Consulting has since begun a prelimi- pected positive results from the PFS, to be upper limb of this shoot encroaches into the
nary review of the model which will form the finalised before year’s end.” Urucum North open pit, but no underground
basis of a PFS the company hopes to com- resource has been included or reported within
plete before the end of the year. The Urucum underground resource covers the open pit because it forms part of the cur-
a strike length of about 800m, down to a depth rent open pit reserve.
Beadell managing director Peter Bowler of about 500m below the open-pit reserve
said his company could not be more pleased and showing a gold endowment of more than However, the company said the high-grade
with the outcome of its drilling programme 1,000oz per vertical metre. mineralisation at the base of the open pit will
over the past year. Almost 10,000m of drill- be considered for inclusion into the under-
ing from 26 additional orientated holes was Three main ore lode horizons – Lode 1, ground inventory at a later date.
Lode 2 and Lode 300, have been defined by

Cascavel still on schedule

Orinoco Gold Ltd is on track to achieve first sioning in Q1 2016 with a gradual ramp-up to mineralisation provides strong support for
gold production from its Cascavel project full capacity late next year, coinciding with the our belief that the project can underpin an
in Brazil early next year. progressive ramp-up of the underground min- exceptionally high-grade, high-margin mining
ing operation. operation.”
Commissioning of the processing plant
remains on schedule after the company was Orinoco managing director Mark Pap- Orinoco applied to have the plant relocated
granted necessary licences to relocate the endieck said development activities were pro- to Cascavel in July in a bid to reduce opera-
proposed 90,000 tpa facility from Sertão to ceeding “at full pace”. tional costs and centralise the location closer
the Cascavel site. to other potential sources of mill feed, includ-
“We are very pleased by the strong pro- ing Garimpo, Cuca and Tinteiro.
A crushing circuit being manufactured in gress being made at Cascavel, which puts
country is expected to be delivered to site the company firmly on track to make the leap Drilling is continuing at Sertão, which is fully
next month. The gravity circuit is scheduled from gold explorer to gold producer early next licenced for both mining and plant operations,
to be factory commissioned in Ballarat and year,” he said. to test for both down-dip and along-strike ex-
shipped from Australia later this month and tensions of the high-grade mineralisation pre-
should arrive in Brazil during December. “The presence of visible gold in all develop- viously mined by Troy Resources Ltd.
ment faces currently accessible at Cascavel
The processing plant is slated for commis- and the presence of thicker than anticipated

PAGE 96 OCTOBER 2015 AUSTRALIA’S PAYDIRT

LATIN AMERICA

Alicanto readies itself
for market uptick

Alicanto Minerals Ltd may a couple of drill orientations
not be spending big at the and we are trying to define

moment but the company is far the orientation by re-logging.

from hibernating in Guyana, ac- “Using the mapping we

cording to managing director have done and the re-logging

Travis Schwertfeger. we can design a range of drill

The current market malaise orientations. That will be key

has led to many juniors bat- because we will be targeting

tening down the hatches, but the high-grade veins when

Schwertfeger and the Alicanto we begin drilling again.”

exploration team are deter- Like the geologically simi-

mined to keep up momentum lar Birimian greenstone belt

while keeping down expendi- across the Atlantic Ocean in

ture on the company’s Arakaka West Africa, Guyanese gold

and Tassawini gold projects in systems are typically low

Guyana. grade but Alicanto is keen

In August, Alicanto complet- to find the local equivalent

ed an extensive sampling pro- of high-grade West African

gramme on its Arakaka project, deposits such as Lulo and

identifying at least a dozen drill- Gounkoto (both in Mali).

ready soil and rock chip anoma- “There is the opportunity

lies across the 12km-long min- for higher grade mineralisa-

eralised corridor. Alicanto believes the Northern Guyana Shield has the potential to repeat the multi- tion,” Schwertfeger said.
Schwertfeger told Paydirt
million ounce high-grade discoveries of the Birimian Shield in West Africa – Dominic Piper
Alicanto would continue low-

cost work as it waited for a change in market such as Aurora (8.6

conditions. moz gold) and Karouni LATIN
“The emphasis is on getting the project (1.07 moz gold), only
limited drilling had
set up for when the market is ready to turn,”

Schwertfeger said. “The work we are doing ever taken place. AMERICA
is on expanding the soil sampling, complet- “There have been
ing auger drilling on the anomalies and re-
a few holes drilled

ally tightening up the drill targets. This type of but just single fences

work means the project is still moving and we across the main ar-

are easily meeting our permit commitments.” tisanal pits and they 29-30 May 2013, Sydney
The company’s most recent soil sampling were done before the

programme returned peak values of 8.1 g/t GFC,” Schwertfeger

gold with eight samples returning more than 1 said.

g/t gold-in-soils from the Purple Heart target As well as geo-

area. chemical pro-

Those results followed on from a rock chip grammes, Alicanto is

sampling programme undertaken in July at also re-logging his-

the Eyelash area. That programme returned torical core as another

peak values of 142 g/t, 41.8 g/t and 27.1 g/t low-cost technique to

gold. prepare for more ex-

Alicanto controls 550sq km within the tensive drilling when

Northern Guyana Shield, a region which has the time is deemed

already proven prolific for gold discoveries. right.

Alicanto picked up its ground “very cheaply”, Schwertfeger said

according to Schwertfeger, and will continue the re-logging could

to look to build its land position along the provide vital informa-

greenstone belt. tion when it came time The CD-Rom of Paydirt’s 2015
“The belt has seen a fair bit of surface work to chasing high-grade Latin America Downunder Conference
mineralisation with the
but next to no drilling,” he said. “We are look- drill bit.
ing at evaluating the entire greenstone belt

because it is now the best underexplored “These types of sys- ORDER NOW!
greenstone belt in the world.” tems are largely dis-

The Purple Heart area was typical of the seminated but they do

underexplored nature of the Northern Guy- have high-grade veins CD-Rom for non-conference delegates – $175 (inc.GST)
ana Shield. Despite extensive artisanal min- within them,” Schw- CD-Rom for conference delegates – $115 (inc.GST)
ing, successful geochemical campaigns and ertfeger said. “So, it
the presence of major deposits along the belt is important to have Phone (+61) 8 9321 0355 or email [email protected]

AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 97

REGIONAL ROUNDUP

El Nino cuts Freeport’s
copper sales

Freeport-McMoRan has revised Hong Kong said, referring to Freeport.
down its 2015 forecast for copper Exports from Freeport Indonesia’s

concentrate sales from its Indonesian Grasberg mine complex in remote

unit by 3%, an official at the US min- Papua have already been hindered

ing giant said, after milling operations this quarter by new payment rules for

were hurt by the El Nino dry weather buyers and the closure of the compa-

pattern. ny’s domestic smelter.

Freeport, which runs one of the Freeport Indonesia usually pro-

world’s largest copper mines in Pap- duces about 220,000 tpd of copper

ua in eastern Indonesia, said a lack of ore, which is then converted to cop-

water supply would cut its 2015 sales per concentrate. Kinneberg declined

by 25 mlbs from an earlier sales esti- to provide daily output details for the

mate of 860 mlbs for the year. mine.

“During the third quarter, milling Union officials said in September

operations have been impacted by a that Freeport sent a letter to employ-

reduction in process water available ees on August 20 asking for greater

under current El Nino conditions,” efficiency and emphasising the need

company spokesman Eric Kinneberg for cost-saving.

said in mid-September. Freeport-McMoRan has cut its forecast copper concentrate sales from In September, Indonesia’s Energy

Indonesia is expected to face mod- Indonesia by 3% in 2015 due to the El Nino dry weather pattern and Mines minister said the Govern-

erate El Nino conditions from July to ment planned to push ahead with

November, affecting provinces from Sumatra output cuts at copper mines in response to changes that would allow miners to seek an

to eastern Indonesia, although the weather prices mired at six-year lows. earlier renewal of expiring mining contracts.

pattern could strengthen from September to Any lengthy disruptions to supplies could Freeport has for years been seeking con-

December. support benchmark copper prices that have tract certainty before investing the more than

An intensifying El Nino is also impacting Ok fallen around 15% so far this year and cur- $15 billion needed to turn its Indonesia asset

Tedi Mining Ltd’s Papua New Guinea copper rently trade at about $5,340/t. into the world’s biggest underground mine af-

mine, which a company executive said earlier “It helps protect the downside, but if we see ter 2016. The company’s current deal is due

this month is likely to stay shuttered until the a deceleration in China, it won’t stop prices to expire in 2021.

first quarter of 2016. going down to the $4,500/t range,” Dominic – Melanie Burton, Reuters
The past month has also seen a stream of Schnider of UBS Wealth Management in

India to auction 20 major iron ore mines

India will auction about 20 major iron ore and “about 20 iron ore mines”. States are esti- project it agreed to set up in India a decade
mines this year in its first such sale ever, a top mating reserves, Kumar added. ago.
government official said, as it looks to revive its
corruption-tainted mining industry. India produced 136mt of iron ore last fiscal While a withdrawal by POSCO could dent
year ended March 31. About 1.5mt of ore are Prime Minister Narendra Modi’s “Make in In-
India’s mining sector has been mired in needed to make 1t of steel, implying India’s dia” manufacturing push, Kumar said the Gov-
controversy over illegal allocation of resourc- ore output will have to more than triple in 10 ernment cannot change its laws for individual
es. Once the world’s third-biggest iron ore ex- years if steel companies are to be self suffi- companies.
porter, the country now imports the steelmak- cient.
ing ingredient due to a court-led crackdown Kumar attended a meeting in Modi’s office
on illegal mining. Most of the iron ore mines being sold are in in August to consider options for POSCO’s
the southern state of Karnataka, known for its plans for the steel plant in Odisha state that
The Government hopes auctions will help high-quality ore. This will greatly benefit local was billed as India’s biggest foreign direct in-
curb wrongdoing. While it is unlikely to lead steelmakers like JSW Steel vestment.
to an immediate boost in iron ore output at a
time when there is a global glut, mine sales Led by JSW’s purchases, India’s ore im- A source at the meeting said there was
will bring India closer to its target of tripling its ports hit a record of over 15mt last fiscal year no concrete result from it and Odisha and
steel capacity to 300mt by 2025 and relying as global prices collapsed. POSCO have been asked to look at other op-
less on ore imports. tions.
Kumar expects prices to improve by the
“Most of the states are in the midst of car- time the mines start. Odisha’s state mining company can be
rying out their pre-auction activities and allotted a mine, iron ore from which can be
hopefully by the end of October and Novem- “The mining process takes 2-3 years be- sent to POSCO if they form a JV, Kumar said.
ber onwards they will start (auctions),” Mines cause they will need all kinds of clearances: Odisha has said that was a possibility but
Secretary Balvinder Kumar told Reuters in an forest, environment, from pollution control POSCO wants to see the details first.
interview in September. board. (It) takes a lot of time to comply.”
– Krishna N. Das, Reuters
He expects about 80 mines to be auctioned India’s new law to auction mines instead
in the first phase, including limestone, gold of handing them over to private firms without
competition could, however, prompt South
Korea’s to scrap plans for a $12 billion steel

PAGE 98 OCTOBER 2015 AUSTRALIA’S PAYDIRT

ASIA

Matsa intrigued by Siam finds

Matsa Resources Ltd is building momen- A view of the copper rich vein at Siam 1 prior to sampling
tum at its promising Siam copper project
in Thailand. Paul Poli Poli said. “Those copper deposits have signif-
icant copper with silver and notably no gold.”
In late August, Matsa bagged a surface
rock assaying 54.7% copper and 148 g/t silver Matsa’s good news at Siam 1 continued in
near the border of its Siam 1 West prospect. early September when assay samples from
the previously unearthed vein returned values
Following the discovery, Matsa hand dug a of 45% copper and 123 g/t silver.
50cm deep trench at the site of the grab and
exposed a vein that was approximately 10cm Poli said the results prompted Matsa to
wide within a broader altered zone up to 1m green light a concentrated 200m by 200m
wide. shallow auger soil campaign, which was set
to start at the time of print.
Matsa executive chairman Paul Poli told
Paydirt the vein, which contained some of Matsa would also immediately embark on
copper’s most valuable sulphides in chalcoc- an IP survey of the Siam 1 prospect.
ite, malachite and azurite, was characteristic
of a supergene enrichment zone typically un- “We hope to kick that off around the third
derlain by primary iron copper sulphides. week of September and we are currently go-
ing through the design process for the sur-
“It was just 30cm below surface,” Poli said. veys, selecting our contractors and working
“Throughout Siam…what we have found is out the safety features and then we will blast
four areas of about 20sq km that contain a away,” Poli said.
lot of rocks with copper at surface, typically
2-3% (copper) and native copper with some “We will do a mixture of gradient IP and
malachite. When we were mapping the area dipole-dipole IP. We think that will take some-
we came across this spot where we saw much where between 30-35 days.”
more colourful and detailed rocks. We wanted
to do an auger sample, so we would drill down Matsa is in a great position to give Siam
2m and take soil samples in the uncompleted a real shake due to its strong financial posi-
zone. We found we couldn’t go any deeper tion – a position that improved significantly on
because we hit bedrock. When we dug it apart September 16 when its settled the sale of its
we saw a chalcocite vein heavily stained with Mt Henry gold project to Metals X Ltd.
malachite. It was complete fortune that we
found it.” Matsa received 6.6 million shares in Met-
als X valued at about $8.1 million at the time
Poli said the vein might be a fault or frac- of print.
ture of controlled leakage of copper and silver
from a major copper deposit or one of an ex- “Funds are not an issue,” he said.
tensive suite of copper-rich veins. “We are gearing up quite strongly in Thai-
land. We are employing staff and it’s very
“There are many models where you’ve got pleasing to note that we’re employing local
this very high-grade chalcocite on top of cop- where we can. The area that we are in is not
per deposits and we’re hoping that what we an affluent area, so if we can produce 20-30
have found is a model deposit of other copper jobs overnight we think that’s a wonderful
deposits in the world as seen in Yunan in Chi- achievement.”
na and Keweenaw in Michigan in the USA,”
– Rhys Dickinson

Matsa hopes the recent Siam 1 vein discovery is the first of many at the project
AUSTRALIA’S PAYDIRT OCTOBER 2015 PAGE 99

REGIONAL ROUNDUP

Green light awaited at Citronen

Australia’s mining fraternity in closer to further de-risking the
Europe can often fly under
the radar and unfortunately the Citronen project.
zinc price is not helping Ironbark
Zinc Ltd gain any traction in the “We are not far away now from
market.
getting our mining licence and
At the time of print, zinc
was worth about $US1,800/t, China Non-Ferrous is moving
well below the heights of over
$US4,000/t experienced in 2007. forward with us. We are awaiting

Ironbark has little control over schedule for public consultation
zinc prices, however, manag-
ing director Jonathan Downes is which is part of the mining licence
confident the commodity is due to
come back in vogue. application process,” Downes

“Zinc is renowned for having said.
some periods in the doldrums
with explosive rallies. The view “We have lodged all the paper-
is certainly that the current zinc
shortage isn’t going to see appre- work and we have all the receipts
ciable price rise until the short-
age becomes critical and then in order which has been a larger
you are going to very much see
an explosive rally, as you did in job than we had initially anticipat-
2007 when prices of zinc went
over $US2/lb. I certainly see that ed. However, the mining licence
will happen. Until then you are not
going to see many, if any, of the projects get in Greenland actually allows you
up and running,” Downes said.
to go up and start mining, so you
Ironbark’s own Citronen zinc-lead project,
northern Greenland, hosts $US5.65 billion don’t have to do subsequent en-
worth of materials in the ground, however the
market is struggling to comprehend how capi- vironmental permits; it is an all-
tal costs of $US430 million will be met.
encompassing agreement. We
China Non-Ferrous has signed a MoU in-
dicating it will facilitate Chinese bank funding would like to see all that complet-
for 70% of Citronen, while it retains the right to
buy 20% of the project. ed and have the mining licence by

Downes added that the market should also the end of the year.”
consider what Wolf Minerals Ltd has achieved
at its Hemerdon tungsten and tin project in Having a mining licence grant-
England’s south-west during a difficult time
for the mining industry. ed this year could be the tonic for

Citronen is host to 13 mlb of zinc and lead Ironbark to receive some share

market love, like it briefly experi-

First tungsten concentrates were produced enced in late July, after results published from

from Hemerdon in late August after the pro- the Mestersvig project.

ject was brought on stream on the back of The company was dealt a slice of luck when

a $222 million funding package, comprising informed that a laboratory error occurred

senior project finance facilities from ING, Uni- when drill holes from 2011 were analysed.

credit and CAT Financial plus a bridge finance Results from a three-hole diamond drilling

facility with its major shareholder Resource programme at the Sortebjerg prospect origi-

Capital Funds. nally reported from SB017 as 2.5m @ 8.9%

Wolf was recognised for its financing abili- zinc and 2 g/t silver, when in fact it was 4.95m

ties with the European Mining and Metals @ 11.23% zinc and 2.9 g/t gold.

2013 Dealer of the Year award. It was a small win for the company which

Hemerdon was spun into the Wolf vehicle has had a lean year.

in 2006 when Ironbark and Graynic Metals Nevertheless, the company is bullish on

divested its interest in the tin-tungsten asset. the zinc sector and recently upped its partici-

Downes said the Wolf story was an exam- pation in the Captain’s Flat JV, in New South

ple Ironbark could possibly follow, as it moves Wales, with a subsidiary of Glencore to 50%.

Glencore is a major shareholder in Iron-

bark, with the former’s $US50 million M&A

facility remaining untouched by Downes and

his team.

Across the resources sector there is be-

lieved to be many undervalued companies

and projects, and while Ironbark has been in

the position to capitalise on such opportuni-

ties, nothing has come to fruition yet, Downes

told Paydirt.

“It is very much a case-by-case [situation],

talking to the groups and working out whether

there is a synergy and doing the due diligence.

There were a couple times we got close to

an acquisition but the overriding sense I get

from the shareholders and the board is that

the company is more focused on the develop-

ment of the Citronen project than ever before.”

– Mark Andrews

Ironbark could receive a mining licence for Citronen by the end of the year
PAGE 100 OCTOBER 2015 AUSTRALIA’S PAYDIRT