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REGIONAL ROUNDUP

South Africa raises BEE threshold

South African Mines Minister Mosebenzi Zwane received a muted welcome during his
opening address to this year’s Mining Indaba

South Africa has raised the minimum investment and assets in South Africa Zwane told a news conference in the
threshold for black ownership of will continue to trade at a discount,” capital Pretoria that he had consulted
mining companies to 30% from 26%, the Ben Davis, an analyst at London-based widely with businesses.
Government announced in June, though Liberum Capital, said.
an industry body said it would try to block “We will engage with business going
it and other regulatory changes in court. The Government has said in the past forward in a respectable manner. We will
that companies must stick to ownership never take them to court,” he said.
Mining firms in the world’s top platinum targets even if black shareholders sell
producer have complained about a lack their stakes but Zwane said it had not The new charter stipulates that mining
of consultation over revisions to an in- yet decided whether mining firms must firms must pay 1% of their annual turn-
dustry charter that sets targets for black maintain the threshold permanently. over to the Mining Transformation and
ownership and participation in the pow- Development Agency, which helps black
erful sector. The Chamber of Mines said it would also communities.
take this issue back to courts. It argues
The charter is part of a wider empow- that a company should only be obliged to Under the new rules, prospecting
erment drive across Africa’s most indus- rights must be 50% black-owned and
trialised economy designed to rectify the “meet its black ownership targets once. mining rights should be 30% black-
disparities of apartheid that persist more What is certain owned. Mining firms are required to pro-
than two decades since the end of white is that South cure 70% of goods and 80% of services
minority rule in 1994. Africa continues to be from black-owned companies.
a terrible destination
The Chamber of Mines, which repre- for mining investment This could prove difficult for many com-
sents mining firms, said it would take the and assets in South panies, as much of the expensive and
Government to court over the charter Africa will continue to sophisticated equipment used on South
because it had not been consulted suf- trade at a discount. Africa’s increasingly mechanised mines
ficiently and feared the new rules would is imported from foreign manufacturers.
create regulatory uncertainty and scare The Mining Charter was introduced in
off investors. 2002 to increase black ownership of the The new rules also state that half of
mining industry, which accounts for about the members of mining company boards
Announcing the new rules, Mines Min- 7% of South Africa’s economic output. must be black, and a quarter of the
ister Mosebenzi Zwane said companies overall board must be women.
had 12 months to meet the new 30% Black South Africans make up 80% of
target. the 54 million population, yet most of the Officials at the Chamber of Mines said
economy in terms of ownership of land they hoped legal action would force the
The rand fell 2% after Zwane an- and companies remains in the hands of Government back to the negotiating table.
nounced details of the revisions. Johan- whites, who account for about 8% of the
nesburg’s Mining Index ended the day population. “We will not sign this charter because
more than 3% lower, underscoring in- it is not our charter,” Chamber of Mines
vestor concerns about the charter and chief executive Roger Baxter told a news
the uncertainties it raises. conference in Johannesburg.

“The value destruction is hard to quan- The Chamber, which represents com-
tify and the uncertainty will persist. What panies such as Anglo American plc and
is certain is that South Africa continues Sibanye Gold Ltd, did not take part in the
to be a terrible destination for mining launch of the new charter because of what
it said was a lack of prior consultation.

– Tanisha Heiberg and Ed Stoddard,
Reuters

PAGE 102 JULY 2017 AUSTRALIA’S PAYDIRT

AFRICA

Cardinal flying

Cardinal’s listing on the TSX was expected to occur at the end of June. The company
will trade under the same ticker as its ASX listing – CDV

Eight rigs churning and a team of geol- To this end, Cardinal has beefed up followed up with better recoveries from a
ogists burning through mountains of its team with the appointment of Richard flowsheet consisting of grind-flotation-
core was the setting at Namdini, Bolga- Bray as the company’s Perth-based regrind-CIL.
tanga province, in Ghana’s north-east, principal geologist.
when Paydirt accompanied Cardinal To help optimise the process flowsheet,
Resources Ltd managing director Archie Bray was most recently principal Cardinal has appointed former Newmont
Koimtsidis to site recently. resource geologist for Resolute Mining Mining Corp global director of R&D
Ltd, where he spent 22 years and covered Marc LeVier as an independent project
Since discovery in March 2014, Cardinal projects in Ghana, Mali, Tanzania, technical advisor.
has amassed a resource of 4 moz grading Eastern Goldfields and Queensland.
1.2 g/t gold (0.4 g/t cut off) at Namdini LeVier is a specialist at optimising
which covers an area totalling 20sq km. In addition to Bray, Ghanaian Ekow process flowsheets and with
Taylor has started as the company’s in- improvements in met testing and
Having announced the 4 moz gold country principal geologist. continued drilling success, Cardinal is
maiden resource late last year, there are garnering some market traction with
expectations the resource could now Taylor has spent the last five and a half stock trending upwards from 23c/share
grow north of 6 moz. years in Australia with Sandfire Resources in January to 58c/share at the time of
NL, where he most recently completed print. The company’s market cap is $182
In May, the company confirmed resource modelling for the Monty project, million.
mineralisation had been intersected near DeGrussa, Western Australia.
to a vertical depth of more than 600m, Van Eck, Commonwealth Bank
extending a further 250m to 350m below Both Taylor and Bray will be focused and Gold Fields Ltd are some of the
the initial resource, with a 200-300m on Namdini, as drilling continues – drilling substantial shareholders and with a TSX
wide mineralised corridor intersected has not stopped since July 2014, despite listing expected at the end of June, the
over a 600m strike length. market conditions leaving many other Royal Bank of Canada has joined the
juniors to quell such activities – with some registry with a 5% shareholding.
An upgraded resource is expected to “big eyes” keeping tabs on Cardinal.
be delivered when Lycopodium Ltd and By listing on the TSX, exposure to
Golder Associates Ltd finish respective While Namdini resembles the type cashed-up North American investors
studies around processing (PFS) and of large scale deposit the world has will grow and with the backing of highly
mining (scoping study). been waiting for, investors were less regarded industry players already, it is
than impressed with results from phase hard to argue with Koimtsidis when he
Both reports are expected to be one, single-hole metallurgical test work says: “Watch this space.”
completed by late Q3. released at the same time as the maiden
resource. – Mark Andrews
With a ground holding of 800sq km
in the Bolgatanga region, Cardinal is Recoveries of 76% gold from
confident there is potentially several preliminary metallurgical test work
more Namdinis in the wings. concerned the market, however, Cardinal

A feature on Cardinal will appear in next month’s Africa Down Under preview edition of Paydirt

AUSTRALIA’S PAYDIRT JULY 2017 PAGE 103

REGIONAL ROUNDUP

Avanco chases mid-tier dream

A PFS on Pedra Branca East found a 1.2 mtpa standalone operation could be developed for $US158 million. Inset: Tony Polgase

Brazil-focused Avanco Resources little bit braver and they’re going to have that the PFS has slipped, although I have
Ltd’s desire to become a mid-tier to step off Australia into something else. explained the reasons for it.”
copper producer could be realised within
three years. “I know Brazil does have some ap- One of those reasons was related to
parent issues but on the other hand the decision last year to increase produc-
A recent PFS on the company’s Pedra where we are, Carajas, is the most fertile tion at Antas from 12,000 tpa to 14,000
Branca East project indicated production region in Brazil for copper and we’ve got tpa on the back of early success at the
of 24,000 tpa copper and 16,000 ozpa the benefit of first-mover status in that re- mine, which was commissioned in the
gold was viable from a 1.2 mtpa stan- gion, which you can liken to the Pilbara, first half of 2016.
dalone underground operation. and we’re already the second largest
producer there.” Antas churned out 14,964t copper
Avanco is already producing 14,000 and 10,562oz gold during the first nine
tpa copper from its operating Antas mine, Key highlights from the PFS include a months of commercial production. Pol-
about 50km north-east of Pedra Branca, NPV of $US200 million with a 34% IRR, glase said the significance of previously
in the Carajas region of northern Brazil. net cash flow of $US368 million over the financing and building a mine in Brazil
life-of-mine, a pre-production capex of cannot be understated.
The company is also confident Pedra $US158 million and C1 costs of $US1.30/
Branca West will add a further 10,000 lb (assuming a conservative copper price “We’re obviously thinking about fi-
tpa to the overall production profile, al- range of $US2.65-2.95/lb). nance at the moment, we’re making good
though economics for that project have progress looking at debt,” Polglase said.
yet to be confirmed. Existing infrastructure such as access
roads, including a by-pass road around “We’ll be talking to the western banks
Such a lift in output will effectively Vila Feitosa, office facilities and ROM and we’ll also be revisiting our Brazilian
place Avanco alongside the likes of pad are expected to help keep capital banks in Sao Paolo. Since we’ve published
fellow ASX-listed copper producers costs to a minimum. the PFS, we’ve had interest from some
Sandfire Resources NL and Oz Minerals South American groups because the size
Ltd in an exclusive mid-tier club. Upon releasing the PFS to the market of Pedra Branca obviously puts us in that
in late May, Avanco immediately began 50,000 tpa potential mid-tier category.
Avanco managing director Tony Pol- work on the Pedra Branca East DFS,
glase expects his company will attract which is forecast to be completed within “And obviously with cash flow from
plenty of market attention as the Pedra the next 12 months. Antas accumulating cash at bank, that
Branca projects are developed. [financing] process should be easier for
First production from Pedra Branca us than it would be for a junior trying to
“If I look at what we have now and what East is tipped for 2020, although the finance its first project.”
Pedra Branca can bring in, I think we’ve company acknowledges that is a con-
got a reasonable chance of getting [into servative estimate. Avanco has committed to pumping
that mid-tier category],” Polglase told $US10.6 million into its projects this year,
Paydirt. “We’ve always been conservative with with roughly $US2 million set aside to
what we tell the market, but some people raise the tailings dam at Antas, $US3
“I don’t think the Australian market rec- have suggested to us that timeframe million for regional exploration around
ognises that at the moment, but one hopes appears to be very conservative and I the operating mine and $US5 million to
an improvement in the copper price is just would agree with that,” Polglase said. finalise the DFS on Pedra Branca East.
around the corner and if it does [improve]
I think there will be a bit of desperation on “Having seen the PFS slip a number At the time of print, the company was
the ASX to find good copper stories. of times, I think we’ve agreed among completing EM work over Antas following
ourselves to be more conservative in in- the purchase of two geophysical units in
“Obviously, the institutions like their forming the market. We’ve always tried to early May.
home-grown stories, but after that it’s deliver on our promises – and generally
very limited. So I guess when the time we have – but we have felt disappointed – Michael Washbourne
comes people are going to have to be a

PAGE 104 JULY 2017 AUSTRALIA’S PAYDIRT

LATIN AMERICA

Avalon revives the Ecuadorian dream team

Avalon Minerals Ltd has entered into a Ecuador evolve since then,” he said. “What it certainly didn’t do was test
binding agreement with Cornerstone In May, Ecuador elected its new presi- the full area that we consider to be

Capital Resources, to earn a majority dent, Lenín Moreno, replacing Rafael prospective.”

stake in the Bramaderos gold-copper Correa who held the top job since 2007. Avalon is currently going through the

concession in southern Ecuador. “Correa really set Ecuador on the path process of getting a drill permit, which

The 4,949ha Bramaderos concession to encouraging foreign investment in Norris expected to be finalised within the

sits within the Loja province, which is mining and exploration,” Norris said. next few months.

considered to be highly prospective for “He rewrote the Mining Act and opened “That is a process which involves

porphyry and epithermal copper-gold de- it up to foreign investment and now it’s stakeholder interaction and speaking

posits. booming. It is quite amazing to see the with the locals about drilling and what

Historical results from Bramaderos level of activity in Ecuador, primarily with happens to the water and those kinds of

include wide intervals such as 260m @ Canadian juniors, but also with some sig- things,” he said.

“0.6 g/t gold and 0.14% copper in diamond nificant Australian players in there as well.” “While that is happening … we are re-

drilling and 42m @ 3.7g/t gold in processing some of the historic

surface trenching. data so we don’t have to recol-

According to Avalon, Correa really set Ecuador lect it again.”
trenching results at the western on the path to encouraging Avalon’s exploration success
breccia indicate Bramaderos
isn’t isolated to the southern

holds a fertile mineralised foreign investment in mining and hemisphere.
system with the potential to host The company has released
exploration. He rewrote the Mining what it calls “outstanding” geo-
a world-class discovery.

Cornerstone and Avalon have Act and opened it up to foreign physical results for its Satulin-
previously collaborated on the investment and now it’s booming. mäki project in Finland.
Cascabel copper-gold project,
Historical drilling outlined a

to the north of the country, gold trend over a 300m strike

which is now majority owned by length, but an IP survey has ex-

SolGold plc. Among the Australians active in the tended this out to 1.2km.

Avalon managing director Malcolm country are Brisbane-based (but AIM- For Avalon, these results represent a

Norris told Paydirt there was no better listed) SolGold and Fortescue Metals “scale change” for the project and suggest

partner to have in Ecuador. Group Ltd which recently won a govern- a larger deposit is waiting to be found.

“It is a very good agreement from our ment tender for a large tenement package. Norris said the survey results ex-

point of view and Cornerstone’s point of For Avalon, the historical data at ceeded the company’s expectations.

view. We’ve known the people at Corner- Bramaderos confirms its potential, but “We have a zone of strong gold in-

stone for nearly 20 years,” he said. Norris said there were still better targets tersections from drilling which we now

“We know them very well, they are very waiting to be found. interpret to extend for at least 1.2km to

trustworthy, and they have been oper- “There is a few geological and geo- the north-east, and have defined several

ating in Ecuador for the last 10 years so chemical indicators that suggest there other similar trends,” he said.

they know exactly how to operate.” are some targets that haven’t been “Satulinmäki is rapidly emerging as

Norris said political changes within Ec- drilled, which are just nearby the histor- a large gold system with considerable

uador over the last eight years had turned ical drilling. What the historical work did vertical extent. We look forward to

it into an attractive mining jurisdiction. really was tell us that we are in a miner- following up these results with our next

“The first time we did an exploration JV in alised district and the mineralisation is of drilling campaign.”

Ecuador … was in 2008. We have watched a style that we want to find,” Norris said. – Jon Daly

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AUSTRALIA’S PAYDIRT JULY 2017 PAGE 105

REGIONAL ROUNDUP

Peninsula has been in South Korea since 2013 having originally entered the country
hunting for moly-tungsten and copper-gold orebodies

Peninsula gets jump Peninsula’s Korean portfolio includes
on graphite off-take the Yongwon graphite project which has
returned high-grade channel sampling
I n the graphite game, off-take agree- aspect to the agreement in which they results including 13.8m @ 11.7% TGC
ments from anywhere are difficult to may participate in the development of and 12.7m @ 10.8% TGC.
come by, never mind finding a domestic those projects.”
user for your product but Korean graphite Metallurgical testing on Yongwon
hopeful Peninsula Mines Ltd has done Peninsula and Graphene Korea will now samples, carried out by Independent
just that. work together to develop graphite deposits Metallurgical Operations Pty Ltd,
with metallurgy suitable for end-users. produced high-quality concentrate
Peninsula has signed a non-binding results at an average of 97% TGC and
off-take and development MoU with The agreement includes the initial 87.3% graphite recovery.
Korean expandable graphite producer, supply of up to 20,000 tpa of plus-180
Graphene Korea Ltd. micron, plus-95% TGC flake graphite Dugdale said building relationships
concentrate and the development of with end-users within the same country
Peninsula managing director Jon mining and processing facilities in South as the operation was mutually beneficial.
Dugdale told Paydirt the agreement was Korea for selected projects which meet
in line with the company’s strategy to find metallurgical specifications. “We can set up an integrated business
off-take partners sooner rather than later. and there is benefit on both sides,” he
Samples from selected properties said. “You are right on the doorstep of
“Quite a lot of the time deposits will be tested at Graphene Korea’s pilot the end-user so they are going to favour
are found and a lot of money is spent facility, south-west of Seoul. your product, particularly if they have
working them up to point and then the a relationship with you and they can
last process is the sending of samples to Drilling and development will be identify if your stuff is the right stuff.
an off-taker to see if they want to buy the prioritised on projects which return
stuff,” Dugdale said. positive results. Dugdale said the “It is an advantage to us, because it
agreement represented a milestone for is likely that we will be the first in line,
“We’ve taken a deliberate approach the company. but it is an advantage for them as well,
to aggregate a number of graphite because they can depend on the ore,
properties in South Korea, get them to “It is a business plan approach. We they don’t have to ship it from Africa and
a stage where we have done the initial communicate with the end-users and they can rely on the product.”
metallurgy and determined the potential let them guide us to which projects to
of those targets. develop and accelerate into production,” Graphene Korea is close to
he said. commissioning an expandable graphite
“The idea is to aggregate a number processing facility about 20km west of
of projects from which we can generate The company is currently progressing Yongwon.
samples and at the same time establish with several flake graphite projects in
end-user relationships that we can then Korea, with the aim of establishing a The facility will use expandable
utilise to test those samples. sizeable resource which is suitable for graphite to produce heat resistant,
high technology applications. lightweight, non-toxic building materials
“They can say; ‘yes, the sample you and insulation.
sent me from that particular projects Peninsula will also establish a
was the stuff we want, go and drill that subsidiary, Korea Graphite Ltd, which The application of expandable graphite
one out and develop it and we might will focus on developing priority graphite in Korean building products will allow
even assist you’. Then, there is a second projects and supplying end-users with a manufacturers to meet increasingly strict
suitable grade of graphite. fire safety codes for foam insulation
panels, fillers and coatings.

Graphene Korea is also planning a
second facility to produce other products,
including graphene, for technological
applications requiring superconductors.

– Jon Daly

PAGE 106 JULY 2017 AUSTRALIA’S PAYDIRT

ASIA

Highlands a Star in the making

Highlands has drilled 4,110m into Star going out again,” Lennon said.
Mountains in the current programme “At this stage, the plan is to extend this

Highlands Pacific Ltd is extending its A further two drill holes are planned programme for a couple of holes, come
hunt for the next Ok Tedi. at the Fune prospect back in, review the data and then poten-
In conjunction with JV partner Anglo tially towards the end of this year/early
American plc, Highlands plans to drill that is the expectation from this hole, the next year go out for another drill pro-
another two holes into its Star Mountains third hole at Fune, is we seem to be inter- gramme. The objective there is to ensure
copper-gold project in Papua New Guinea secting around the 300-500m mark. So we’re drilling the very best targets that
following encouraging results from recent 600m should be, if the geologists have got we believe we have.
work at the Fune and Unfin prospects. it right, where we have the intersection.
“I think it’s a good approach; we’re
Five new holes for 4,110m have “You only need to look at the depth not just out there drilling for the sake of
been punched into the project, about of Wafi-Golpu to see how far down drilling.”
25km north-east of the famed Ok Tedi these good deposits can be.”
mine, with results from the third hole at Anglo American has been funding ex-
Fune providing the catalyst for further The second hole at Unfin also re- ploration work at Star Mountains since
drilling. turned encouraging hits of 5.8m @ early 2015, with an initial up-front spend
0.05 g/t gold and 0.43% copper from of $US10 million (split into two tranches
Based on a 0.2% copper cut-off, the 417m and 4.5m @ 0.01 g/t gold and of $US5 million).
third hole returned hits of 63m @ 0.14 g/t 0.65% copper from 551m.
gold and 0.43% copper from 84m, 12m Under the terms of the JV, Anglo Amer-
@ 0.19 g/t gold and 0.68% copper from Highlands expects the current pro- ican can acquire a 15% interest in the
198m and 94m @ 0.17 g/t gold and 0.58% gramme to wrap in August, with ad- project by spending $US25 million over
copper from 260m (including 42m @ 0.31 ditional geophysics and survey work four years and a further 36% upon dec-
g/t gold and 0.87% copper from 326m at to uncover other potential drill targets laration of a 43-101/JORC-compliant in-
a 0.5% copper cut-off). Only the upper taking place in the background. ferred resource of 3mt contained copper
447m of the hole had been assayed when equivalent within five years of execution.
the decision was made to extend the pro- It follows the airborne ZTEM survey
gramme by a further two holes. completed over the 675sq km property Anglo American can then lift its stake to
last year which ultimately yielded the 80% by completing a BFS within 15 years
Highlands managing director Craig Fune and Unfin prospects. of the initial JV agreement being struck.
Lennon said most of the drilling so far
had gone beyond 800m deep, with one Lennon said the JV had made a stra- Highlands retains management rights
hole even hitting the 1,000m mark. tegic decision to not look too far ahead to the project until Anglo American sur-
with exploration plans. passes an expenditure of $US25 million.
“It just goes to highlight the size of the de-
posit Anglo is looking for; they’re wanting a “The way that we’ve been working with “We always believed we had some-
big deposit,” Lennon told Paydirt. Anglo has been around an approach of thing there, but it was going to take
going out and doing work, then coming someone with bigger pockets to look
“These next two holes will probably be back in and reviewing the work and then further. Anglo saw that as well and came
around 600m in depth and the reason for into it,” Lennon said.

“I think it’s been a really good partner-
ship in the sense we’re very comfortable
working in PNG and Anglo have brought
some great expertise into the project. We
also get some certainty around funding,
such that we don’t have to put in funding
for this project for a very long time.”

Star Mountains was walked over by
Kennecott Copper Corp prior to the
discovery of Ok Tedi in the 1970s, with
Lennon confident his company and
Anglo American can add to the region’s
mining history.

“A couple of shallow [historic] holes in
Star Mountains probably doesn’t do it jus-
tice and I think that’s why we wanted to get
in there because we thought there might
be something big to find,” Lennon said.

“I think you can see that happening
a lot around the world these days with
people going back and looking at targets
that may not have been investigated fully.
We’re very hopeful we’ll find something.”

– Michael Washbourne

AUSTRALIA’S PAYDIRT JULY 2017 PAGE 107

REGIONAL ROUNDUP

MRG predicts big find in Sweden

Little-known MRG Metals Ltd will is the Bjorkdal gold mine, about 130km it into something much, much larger, at
use new predictive modelling tech- east of Norlidden, which has a style of which point they’ll have the rights to come
nology to grow the resource at Mandalay mineralisation which is incompatible for back in and get more involved,” he said.
Resources Corp’s Norrliden VMS project processing at the former’s gold-focused
in Sweden. mill. “The project certainly wasn’t viable in
2004, but if you run the numbers today
MRG has entered into an agreement “The resource that’s sitting on it has a very different look and if we can
to farm-in to the project, which does not Norlidden today is a relatively small but expand [the resource] it wouldn’t take
fit into TSX-listed Mandalay’s current high-grade zinc resource, so it’s not much to turn this into a viable resource.”
mandate of near-term production assets. really the type of dirt that you would
process in the Bjorkdal processing MRG plans to use the Sasak predictive
Under the terms of the agreement, plant,” MRG chairman Andrew Van Der modelling technology it acquired in
MRG will initially earn a 10% stake in Zwan told Paydirt. 2013 on the Norlidden ground, having
the project by spending $US500,000 previously deployed it over a suite of
within 15 months. That interest will lift to “It doesn’t naturally fit for Mandalay, as Australian projects.
25% from a cumulative spend of $US1 Mandalay look to enhance undervalued
million within 27 months and 50% from a mining operations. I’m sure their interest A joint operating committee was
cumulative spend of $US3 million within will be enhanced if we can grow the established early last month ahead of
39 months. resource size and the agreement is the first work programme beginning
certainly structured to accommodate that sometime this quarter.
A JV structure will progress the project outcome.”
thereafter. Mandalay also has the ability “We’re excited by the opportunity to
to claw back the project on “favourable A preliminary economic study was search for resources at depth in this
terms to MRG”, should the ASX-listed completed on Norlidden in 2004 when region because there hasn’t been a lot of
junior make a major discovery. the gold price was about $US300/t, zinc work at depth,” Van Der Zwan said.
was less than $1,000/t and copper was
A resource has already been defined also struggling, but Van Der Zwan said “We’re confident this resource may be
at the centrally located Norrliden Norra the project numbers were likely to be a open and using our technical approach
deposit – 1.5mt @ 4.4% zinc, 0.4% lead, lot more attractive at today’s prices. we aim to expand the known resource.
0.8% copper, 0.8 g/t gold and 59.9 g/t There are also other zones on this
silver – of which about 40% is classed MRG was introduced to the project by tenement which need to be tested. We
as indicated. non-executive director Chris Gregory, think we have something pretty good on
who is vice-president of operational our hands and we can see why S2R are
Norrliden Norra sits within an geology and exploration at Mandalay. so positive on the region as well. You only
approved mining concession, while Van Der Zwan said the farm-in deal was a have to look at the region and see how
Norlidden Sodra and at least four other “win-win opportunity” for both companies. many mines sit along that strike zone
exploration targets are contained within which runs from the north-west down to
the surrounding exploration licence. “Mandalay didn’t want to give up the the south-east.
ground, and even though new field
The project abuts the Bjurtraskgruvan exploration is not their number one “It’s a very, very attractive geological
VMS deposit currently being explored by priority, they were accommodating in zone and we’re just happy to have a
Mark Bennett’s S2 Resources Ltd. allowing us to farm-in, hoping we can turn piece of it.”

Mandalay’s major operation in Sweden While its focus is now firmly on Sweden,
MRG has no plans to abandon its Australian
Norlidden is part of the same mineral province as gold and base projects, including Yardilla and Xanadu in
metal projects held by Boliden Group and S2 Resources Western Australia and a number of IOCG
prospects in Queensland.

“We’re a small company and while we
like all our projects, we can only keep
chasing elephants for so long,” Van Der
Zwan said.

“We’re not abandoning those projects,
we just need to reallocate our limited
resources where we can get the best
bang for our buck. If you do the math on
Norlidden, we don’t need a lot of success
for this to become a very significant
operation for us.

“There’s no point chasing elephants if
you’ve got no money to do it. The best
way for us to generate capital is to have
near-term success. We think Norlidden is
a great opportunity for us to spend a bit of
money and get some success relatively
quickly.”

– Michael Washbourne

PAGE 108 JULY 2017 AUSTRALIA’S PAYDIRT

EUROPE

Talga positions itself for
a renewable revolution

Talga’s high-grade Vittangi graphene project could be joined by its Lautakoski cobalt
project in the company’s development pipeline

Mark Thomposn “We looked around and we saw these in operation in Scandinavia by 2020.
other grades at a project called Aha- “A group of very senior executives
Talga Resources Ltd has positioned vuoma.”
itself to capitalise on Europe’s move have left Tesla and they have planned
towards electric vehicles and clean Having found archived drill core from and started a factory that is essentially
energy. the prospect which reported high-grade the same size as Tesla’s gigafactory, for
cobalt, copper and gold mineralisation, lithium-ion batteries to be built. They are
Talga managing director Mark Talga expanded its Lautakoski project to just deciding if the location is Sweden or
Thompson told Paydirt the company had include Ahmavouma. Finland,” Thompson said. “That is one of
been watching the battery space closely. at least four gigafactories that we know
The highest grade individual inter- of built in or planned for Europe.”
“With our graphene development, cepts were 0.6m @ 6.00% copper from
we’ve actually made battery prototypes, 136.1m, 2.0m @ 0.76% cobalt from 73m Thompson said the company’s cobalt
so we are well aware of what the battery and 0.4m @ 2.88 g/t gold from 65.3m. assets were proximal to a Finish smelter
market is doing, and it is a great meg- which produces 10% of the world’s co-
atrend that we are a part of,” he said. Ahmavuoma has three exploration li- balt.
cences covering 40sq km.
Talga has been in the battery minerals “We have got the support infrastruc-
race since 2012, when it went from WA The area was initially explored by the ture to quite cheaply capitalise on devel-
gold explorer to Swedish battery mineral Swedish state mining company Luos- oping our cobalt assets to be exposed to
developer, with its Kiskama cobalt project savaara-Kiirunavaara Aktiebolag (LKAB) those factories in Europe,” he said.
and Vittangi graphite project. in 1978 and is 30km north-east of Talga’s
flagship Vittangi graphite project. When asked about US President
“In late 2016, we drilled one of our Donald Trump’s decision to withdraw
graphite prospects and we accidentally Thompson said there was a global from the 2015 Paris Agreement to curb
went through 85m of cobalt-bearing sul- shortage of quality cobalt opportunities climate change and support renewable
phide. The project is now called Lauta- in politically stable jurisdictions, which energy would affect the market’s appe-
koski,” Thompson said. represented a gap in the supply-chain tite for battery minerals, Thompson said:
that Talga was eager to fill.
“The hole we drilled is about 30-40km “I actually don’t think the US is a big
away from the nearest hole and if you go “While Talga’s graphite and graphene driver of it. If you look at the growth of
through 85m of cobalt, copper and gold- products remain our primary focus, the electric vehicles and electric devices …
bearing sulphide that far out, it does give decision to elevate the assessment and the main drivers of that are the different
you an idea that you are in a very fertile exploration of our cobalt projects, provides governments of Europe,” he said.
area. leverage and exposure to the surging de-
mand for battery minerals at a time when “The main drivers for the demand,
“Without any targeting whatsoever if several European lithium-ion battery fac- which we can see from our position in
you hit that practically accidentally while tories are being planned,” he said. Sweden, is actually fairly insulated from
drilling something else, of course, it is the US. It is more about what is hap-
pretty cheap and easy to have a look at.” “If proven to be commercial, Talga’s pening in Europe which is a really big
Swedish cobalt projects are excellently population and it extends over to India.
Earlier this year, Talga announced it placed, alongside our graphite projects, India has recently said a lot of their cities
would evaluate historical drilling data at to become a potential high-quality source will be electric vehicles only by 2030. I
the Swedish cobalt assets. of local supply to European-focused bat- don’t see it as an American story at all.”
tery manufacturers.”
– Jon Daly
Northvolt has plans for a 35Gw/h, $US4
billion lithium-ion battery gigafactory to be

AUSTRALIA’S PAYDIRT JULY 2017 PAGE 109

SIGNED, SEALED AND DELIVERED DRAglobal.com

ALS expands its Brazilian testing business West Wits making
waves at Sol Plaatje
Global testing, inspection and certification business ALS Ltd has acquired Brazilian
company OILCHECK. ALS Mining Pty Ltd has won the tender
to conduct load and haul services at West
ALS said the acquisition of OILCHECK, which provides tribology services to mobile Wits MiningLtd’s Sol Plaatje project, within
and stationary equipment, would complement its existing tribolab business in Brazil, ef- the broader Soweto Cluster gold project,
fectively doubling it in size. near Johannesburg in South Africa.

Based in Belo Horizonte, Brazil’s mining capital, OILCHECK employs 50 staff. The mining contractor fleet was being
ALS acquired OILCHECK and US-based Marshfield Food Services for combined up- mobilised at the time of print, with opera-
front payments of $18.4 million last month, with a further $4.2 million in earn-outs due tions expected to begin in late June.
over the next three years if specific financial hurdles are achieved.
According to the tender, the scope
of work was based on calls for monthly
production of 15,000t of reef ore.

ALS was chosen after an extensive
tender process. West Wits made the de-
cision in conjunction with its partner and
head contractor Elandiwave Pty Ltd.

West Wits and Elandiwave are assessing
proposals for contract ore processing.

Westgold will take on owner-operator duties at its WA operations after acquiring West Wits has awarded ALS Mining a
Australian Contract Mining haul and load contract at its Sol Plaatje

Westgold gobbles up mining contractor gold operation in South Africa

Peter Cook’s Westgold Resources Ltd has moved to acquire one of Australia’s Quadrio on trial
largest privately-owned underground mining and drilling contractors. at Fortitude mine

Westgold signed an agreement last month to acquire Australian Contract Mining Pty Quadrio Earthmoving Pty Ltd has been
Ltd (ACM), which currently has mining contracts at three of the gold producer’s under- appointed the mining contractor for the
ground mines. upcoming trial mine at Matsa Resources
Ltd’s Fortitude gold project in Western
The move to acquire ACM comes after Westgold successfully commissioned its Australia.
fourth operation at Fortnum, with the company turning its focus to lowering its cost of
mining by reducing contractor margins and increasing flexibility in mining plans through Mobilisation to site, including all of the
becoming an owner-operator. required infrastructure, equipment and
personnel, was taking place at the time
“This is a fantastic move and opportunity by the company to consolidate and focus of print.
the outputs from our operations to the common goal of increased gold production at a
lower cost per ounce,” Cook said. Terms and conditions are in accord-
ance with the trial mining study.
“ACM is an excellent underground mining contractor with a highly skilled, motivated
and productive team and a pool of equipment and resources ideally matched to com-
plement our growth profile.”

Westgold will acquire all of the shares in ACM for a net consideration of $25 million
cash plus 14 million fully paid ordinary shares.

ACM founder Brian Rodan will join Westgold’s executive management team and con-
tinue as chief executive of the wholly-owned subsidiary.

OVER 2000

PROjEcts & studiEs cOmPlEtEd

succEssfully aROund thE wORld

PAGE 110 JULY 2017 AUSTRALIA’S PAYDIRT

PROJECTS COmPlETEd GlObally FINd OUT mORE DRAglobal.com

Lycopodium moves to Decmil Group and BESIX Australia ISI charged with
next phase at Nyngan have been contracted to provide tug powering up Colluli

Lycopodium Ltd will build TSX-listed infrastructure and service facilities Inglett and Stubbs International (ISI)
Scandium International Mining Corp’s has been announced as the preferred
Nyngan scandium project in New South Decmil awarded new power provider for Danakali Ltd’s Colluli
Wales. Fortescue contract sulphate of potash project in Eritrea.

The EPCM contract award follows Ly- Decmil Group Ltd and BESIX Australia The appointment of the US-based
copodium recently completing feasibility Pty Ltd have been jointly awarded a $21 supplier follows a competitive tendering
study work for Scandium International at million construction contract with Pilbara process which also yielded expressions
Nyngan. Marine Pty Ltd, a wholly owned subsidiary of interest from power providers in the
of Fortescue Metals Group Ltd. Middle East, Australia, Africa and the UK.
Nyngan has received the key envi-
ronmental and mining permits required The scope of the contract includes ISI’s initial bid included power gen-
to construct the mine, as previously de- the provision of tug infrastructure and eration cost estimates within 1.5% of the
signed, with full construction and develop- service facilities such as fuel, lighting, DFS numbers, with marginally lower de-
ment of the project subject to financing. electricity and water at Anderson Point, velopment capital.
Port Hedland.
DRA to top and tail Danakali’s project team will work with
Elikhulu retreatment Work began last month and is ex- ISI to further optimise a power solution for
pected to be completed early next year. Colluli with a focus on cost compression.
DRA Global will deliver a detailed
design and construction supervision Mitchell makes splash ISI’s solution will be integrated into the
service for the Elikhulu gold tailings re- at Oaky Creek front-end engineering design process
treatment plant facility at Pan African currently under way.
Resources plc’s Evander operations in Mitchell Services Ltd has entered into
Mpumalanga, South Africa. a two-year drilling services contract with Meanwhile, Danakali has appointed
Glencore at its Oaky Creek coal mine in construction and project management
It will be DRA’s first gold tailings retreat- Queensland. firm Turner & Townsend to define the full
ment plant and involves all aspects of scope of the EPC bidding requirements.
construction, including hydraulic mining, The contract, which includes a one-
processing and tailings deposition. year extension option, is material in size Turner & Townsend has previously un-
and based on the anticipated resulting dertaken potash consultancy work in the
The scope of services through all revenue. UK and Canada.
stages of the R1.6 billion tailings retreat-
ment project includes the reclamation of Mitchell plans to use existing surface Inglett and Stubbs International will
three existing storage facilities – Kinross, drill rigs for both large diameter and ex- provide Danakali with power for its
Leslie, Winkelhaak – as well as water ploration drilling services.
supply, hydraulic mining infrastructure Colluli potash project, Eritrea
and a new CIL gold recovery plant.

Other work to be undertaken by DRA
includes construction of pump and
piping systems to transfer the hydrauli-
cally mined tailings slurry to the CIL plant
and the new tailings storage facility.

The new CIL process plant has a com-
missioning target date of Q4 2018, with
the final phase of the tailings storage fa-
cility to be completed in Q1 2019.

DRA has been involved with Pan Af-
rican since the DFS phase of the project.

ExtRaORdinaRy POssibilitiEs in mininG and minERals PROcEssinG find Out mORE

DiAmonDs GoLD RARe eARth PLAtinum CoAL BAse metALs DRAglobal.com

AUSTRALIA’S PAYDIRT JULY 2017 PAGE 111

COMINGS AND GOINGS

BHP Ltd has elected Ken Plymouth Minerals Ltd Jonathan King has resigned which today boasts of port-
MacKenzie to succeed has appointed Kevin as managing director of folio of about £14 billion.
Jac Nasser as chairman. Tomlinson as non-executive Riva Resources Ltd, citing
MacKenzie will assume the chairman, with Adrian Byass other business commitments Grange Resources Ltd
role of chairman on Sep- to continue as managing which require his time and has appointed Michael
tember 1, following Nasser’s director. London-based Tom- attention. Dontschuk as a non-exec-
retirement as both chairman linson is an experienced utive director. Dontschuk is
and a non-executive director. project finance, development Gascoyne Resources Ltd a financial professional with
MacKenzie joined the BHP and mining executive with has appointed Sally- more than 30 years of experi-
as a non-executive director more than 30 years of expe- Anne Layman as a non-exec- ence in investment, treasury
in September 2016 and is a rience and is currently non- utive director. Layman has and financial risk manage-
member of the board’s sus- executive chairman of West 23 years of experience in the ment and was previously
tainability committee. African-focused Cardinal mining and financial sectors, group treasurer for Grange.
Resources Ltd. including the past 14 years at
Asimwe Kabunga Macquarie Group Ltd as joint Monax Mining Ltd has
Michael Anderson, Martin head of the Perth office for recruited Ian Gordon
Asimwe Kabunga has Boland and Stuart Love the metals, mining and agri- as a non-executive director.
joined Lindian Resources have replaced Garry Cam- culture division. Gordon was previously
Ltd as a non-executive eron, John Taylor and Peter managing director of both
McKenna as non-executive Brian Thomas has replaced Ramelius Resources Ltd and
director. A Tanzanian-born directors of Heemskirk Con- Michael Fry on the board Flinders Mines Ltd. He is
solidated Ltd. of Cougar Metals Ltd. Thomas expected to assist the com-
Australian entrepreneur, is non-executive chairman of pany with assessment of its
Trish O’Reilly Orinoco Gold Ltd and a non- existing assets and new pro-
Kabunga also sits on the executive director of Tempo ject acquisitions.
Inaugural Australia-Africa Australia Ltd. Fry will continue
boards of Volt Resources Ltd Minerals & Energy Group as company secretary and Peter Youd
(AAMEG) chief executive Trish chief financial officer.
and Strandline Resources Ltd. O’Reilly has decided to hand Peter Youd has joined
over the reins after six years in Stuart Tarrant has been the board of Haranga
Marenica Energy Ltd the role. O’Reilly was respon- appointed chief finan- Resources Ltd. Youd is cur-
has appointed Shane sible for liaising with the Aus- cial officer of Danakali Ltd, rently executive director and
McBride as a part-time chief tralian Government to drive replacing Chris Els. Tarrant the chief financial officer of
financial officer. McBride has positive outcomes for AAMEG was formerly head of finance First Graphite Ltd. He fills
also assumed company secre- members in pursuing suc- for the Eritrea-focused potash the void left by non-executive
tary duties from Susan Hunter. cessful operations and devel- hopeful and previously an chairman Brian McMaster.
opments in Africa. Doug Horak accounting executive for BHP
Matthew Bowles will assume the chief executive Ltd and HWE Mining. Pacific Road Capital Man-
role on an interim basis. agement Pty Ltd nominee
Tanga Resources Ltd Min (Benjamin) Zhai has Susan Corlett has resigned
has appointed Matthew Gulf Industrials Ltd has been appointed a non- as a non-executive director of
Bowles as chief executive. undertaken a board executive director of CuDeco ABM Resources Ltd. Corlett
Bowles is a senior corporate restructure following its Ltd. Zhai is the nominee of recently left her role at Pacific
finance executive who was acquisition of an initial 40% Valuestone Global Resources Road, ABM’s largest share-
previously chief development interest in the Gbane project, Fund I following its subsidiary holder, with Mark Faul nomi-
officer at Gryphon Minerals Ghana. James Arkoudis has Gemstone 101 Ltd’s recent nated to take her place on the
and a non-executive director been appointed chief execu- investment in the Queensland gold explorer’s board.
of Alicanto Minerals Ltd. tive and executive director, copper producer. Meanwhile,
Anthony Karam is the new Leni Stanley has replaced Oscar Aamodt has resigned
managing director and David Bruno Bamonte as company as non-executive chairman
Chidlow will be the compa- secretary. of Alchemy Resources Ltd after
ny’s technical director. Wayne six years. Lindsay Duffield
Kernaghan will continue as Berkeley Energia Ltd has has been announced as his
a non-executive director and appointed Nigel Jones replacement.
company secretary. and Adam Parker as inde-
pendent non-executive direc-
tors. Jones spent two decades
at Rio Tinto plc where he held
a number of senior roles,
including global head of busi-
ness development, managing
director of Rio Tinto Marine,
and head of investor rela-
tions and marketing director,
uranium. Parker is a recently
retired institutional fund man-
ager who co-established
Majedie Asset Management,

PAGE 112 JULY 2017 AUSTRALIA’S PAYDIRT

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LEFTFIELD

FMG celebrates all-female graduates
Fortescue Metals Group Ltd’s Voca-
tional Training and Employment already part of the Fortescue family and “The best ideas come from a diverse
Centre has marked its first all-female they gave me the determination to give workforce; teams with a broad range
graduating class. it a go and to push me towards a better of backgrounds, skills, experience and
future for me and my daughter,” she said. personalities,” Power told Paydirt.
Nine female trainees from South
Hedland and eight other graduates “It has been a long journey to make “We are proud of our diverse workforce,
from Roebourne will now go to work it here but it really is life changing. If it especially the increasing participation by
at Fortescue’s Christmas Creek and wasn’t for the support of my family, I both women and Aboriginal Australians.”
Solomon operations. would not be graduating today.”
Power said the company offered a
New graduate Narelle Dhu said she Graduates will be mentored on site by number of training pathways which “align
was looking forward to starting her Aboriginal development coordinators. with our long-standing belief that the best
career at Christmas Creek. way to end Aboriginal disadvantage is
Fortescue chief executive Nev Power by providing opportunity through training
“I know other single mothers who are said the company was committed to and employment”.
workplace diversity.
– Jon Daly



INDEX

ABM 112 Encounter 72 Magmatic 40 Resolute 54, 63, 103
Evolution 4, 21, 58-59, 63 Mandalay 108 Rio Tinto 10, 30-31, 112
Agnico Eagle 58 Exco Marenica 112 Riva
93 Marmota Rumble 112
Agrimin 74-75 Matsa 86 54-55
Metals X 112
Alchemy 112 Minbos 4, 78-79
Mincor
Alderan 18 First Graphite 112 Mineral Resources 74
Fortescue 105, 111 Minjar 44
Alicanto 112 Flinders Minotaur 5-6, 56-57 S2 Resources 76, 108
112 Mithril 58
Alliance 84, 86, 93 MMG 83, 87, 90 Sandfire 36, 103, 104
Monax 98
Alto 4 MRG 15 Saracen 63
112
Anglo American 102, 107 Ganfeng 56 108 Scandium International 111

AngloGold 71 Gascoyne 112 Sibanye 102

Ardea 80 Glencore 14, 46, 49, 50, 58, 111 Sipa 72

Artemis 52 Gold Fields 40, 61-63, 72, 103 SolGold 105

Auris 36 Gold Road 61-63 St Barbara 58, 66-67

Australian Potash 74 Graphene Korea 106 St George 46

Avalon 105 Grange 112 Strandline 50, 112

Avanco 104 Gulf Industrials 112 Stonewall 9

Avenira 74 Neometals 56-57 Sumitomo 63, 91
Newcrest 15
Haranga 112 Newmont Syrah 18
Harmony 9 Northern Star 103
Barrick 10, 59 Heemskirk Novo 21, 58, 63, 71
Heron 112
Berkeley 112 Highlands 80 52 Talga 109
Talisman 36
Blackrock 52 107 Tanga
Toho Zinc 112
BHP 31, 50, 82, 85, 90, 112 Toro Energy 66
Troy 53
Botswana Diamonds 9 OceanaGold 4, 21-26, 58 Tyranna 4
Orinoco 112
Boss 42, 92 Independence 4, 54, 70-71, 72, 76 Oz 84, 86, 93
15, 98, 104
Investigator 84, 95

Cameco 38, 53 Iron Road 91
Cardinal 103, 112
Carpentaria Kalium Lakes 74-75 Pan African 111 Vale 80
CBH 94 Kazatomprom 38 Peel 66-67 Vimy 38, 53
Centrex 66-67 Kingsgate 96 Peninsula Mines Volt
Cliffs Kingston 90 Pilbara 106 112
CopperChem 74 Plymouth 5-6, 72
Cornerstone Capital 72 POZ West Wits 112
Cougar 71 112 Western Areas 4, 46, 48-50, 72
CuDeco 105 74 Westgold
112 Woodside 78-79, 112
112 La Mancha 59 Ramelius 72, 112 WPG 31
Latitude 72 Randgold 58 96
Legend 76 Red River
Danakali 111, 112 Lincoln 98 Regis 14-15
De Beers 9 Lindian 112 Renascor 58
Lucara 96
9

PAGE 114 JULY 2017 AUSTRALIA’S PAYDIRT



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