pd249 May17 mag-web

Haiti is a small Caribbean nation with 10 million people

been scouring the world looking for 20 – there is no JORC-compliant re- there is also the option of a semi-porta-
more advanced opportunities and source, making drilling a priority for 3D. ble plant,” Mitchell said.
Mitchell believes the work undertaken
by Newmont and Eurasian means the “We plan to start with 1,200m of drill- Both deposits are oxidised caps of
Haitian projects could be exactly that. ing at Morne Bossa with around half as polymetallic sulphide deposits and as
much planned for Grand Bois,” Mitchell such could have low stripping require-
“We didn’t want to join that group of said. “We already have a lot of data, in- ments with potential for free digging.
companies playing at exploration,” he cluding some of the core logs. There is While metallurgical work has been lim-
said. “We wanted something we could certainly enough to be sure the gold is ited Mitchell said the data he had seen
develop and these projects offer that; there.” suggested good gold recoveries and low
the combined project is not too small cyanide consumption.
but not beyond the scope of a com- The two deposits, 30km apart, have
pany such as ours.” been explored independently in the past 3D is set to complete its due diligence
but 3D plans to consider a joint develop- on the transaction for both projects this
The jump from WA to one of the world’s ment scenario. month.
least developed nations would appear a
large one but Mitchell said the risk/re- “There are a couple of options for de- – Dominic Piper
ward balance was in 3D’s favour. velopment, they are close enough that
you could truck one to the other and
“We wouldn’t have gone there just for
an exploration project, the longer term
risks would be too much for a junior,” he
said.

Instead, the company is entirely fo-
cused on quickly reaching a develop-
ment decision and the recent due dili-
gence visit confirmed the opportunity
according to Mitchell.

“The risks are acceptable and if any-
thing the quality of the project has been
understated,” he said. “We still have to go
through the hurdles of due diligence but
we will probably take an engineer with us
next month to do a separate assessment
but it is simple stuff; there is infrastruc-
ture and a lot of the exploration work has
been done. Even during the final due dili-
gence stages we will probably do a con-
ceptual study.”

Despite Mitchell describing both de-
posits as “well defined” – Grand Bois has
75 holes in it and Morne Bossa around

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 51

LATIN AMERICA DOWN UNDER PREVIEW

Mining and energy tops for Peru

Efforts are underway in Peru to rebuild
the country after the recent deadly
natural disaster which claimed the lives

of over 100 people and destroyed parts

of the country.

Heavy rain caused flash flooding and

landslides in some areas, adding to the

large infrastructure deficit already facing

Peru.

The Government of President Pedro

Pablo Kuczynski, who is nearing comple-

tion of his first 12 months in office, is lead-

ing the way with various ministers visiting

affected regions, while the $US1.68 bil-

lion nationwide infrastructure spend has

received an additional $US764 million to

help with the reconstruction effort.

It has been reported that $US3 billion

will be needed in the short term to restore

heavily affected areas of Peru and up to

$US9 billion over five years in recon-

struction funding.

“I think it will lead to a pick-up in eco-

nomic activity,” Australian Ambassador Ambassador Nick McCaffrey

to Peru Nick McCaffrey told Paydirt from

Lima. 3mt in the same period. his ministry and minister are very fo-

“The economy was trending down a Delivering those goals will need cused on which revolved around red

little bit, they were getting 4%, maybe $US37 billion invested in Peru’s mining tape and allowing companies to get on

4.5%, growth this calendar year for GDP. sector in the next five years, with new and explore,” McCaffrey said.

That ticked down a bit in the figures for mining exploration regulations along with “We have had conversations with him

the first trimester but now the Govern- the return of the IGV (general sales tax) about a couple of specific Australian

ment will have to spend up big on infra- expected to encourage the promotion of companies that have the money, they

structure, it might get to around 3-4%. exploration activities in the country. want to invest, they want to get on with

That is pretty good in a regional and Peru Deputy Minister of Mines, Ricar- it but red tape and processes are hold-

global context but is down from the 6.5% do Labó, is expected to reaffirm this im- ing them back. He talked about the need

that Peru had averaged over a decade portant message at Latin America Down for red tape to be rolled back and a real

until about 2013/14. There are still very Under and highlight the ways in which desire to see exploration continue.”

good reasons to be optimistic about the the ministry aims to reduce red tape and At the APEC Summit in Lima last

longer-term rate of growth of the Peru- update regulations, ensuring miners and year, President Kuczynski and Austral-

vian economy.” explorers operate in a socially responsi- ian Prime Minister Malcolm Turnbull dis-

Peru’s immediate priority is to provide ble manner. cussed the role Australian investors and

aid and relief for the many people dis- “Minister Labó has been talking a lot its mining and services contingent could

placed by this year’s natural disaster and about reforms he was introducing that play in helping Peru fulfil its potential in

secure critical infrastructure the mining and energy sectors.

items to ensure basic ser- In addition to his post as Australian Ambassador to Peru, Nick McCaffrey urged Australian

vices can be provided. McCaffrey is also non-resident ambassador to Bolivia. investors and companies to

For the medium and long- The country, to the south of Peru, has not experienced the capitalise on the opportunities

er term, the Government has same influx of Australian miners and explorers as other regions and build on the good relation-

recognised the importance in Latin America, however, with lithium rising as an essential ships established in Peru; the

of a strong mining and en- commodity of the future, Bolivia is positioning itself to be a glob- world’s second largest copper

ergy sector to the economy ally significant producer. producer.

and has demonstrated a “Bolivia is interested in attracting investment, particularly in “The key for us is getting the

willingness to help partici- the lithium sector. In the two and a half years I have been here message out there that people

pants thrive in those sectors. we haven’t had a lot of interest in Bolivia’s mining sector,” Mc- should come and have a look

The Government hopes Caffrey said. at what is going on, not only in

that by 2021, 8% (currently “A couple of companies have come in and had a look and from Peru, but in Latin America and

6%) of the global mining ex- the Government’s point of view they seem to be making com- challenge some of their out-

ploration budget will be com- mitments and coming across to try and sell the opportunities dated stereotypes about the

mitted in Peru and plans to that exist, which is a positive. Bolivia is not an uncomplicated region,” he said.

increase copper production environment in which to work and for those that are interested, – Mark Andrews
by 30% to a record high of particularly in lithium, Bolivia is a place to be thinking about.”

PAGE 52 MAY 2017 AUSTRALIA’S PAYDIRT

Avanco poised for growth

Avanco Resources Ltd “We predominantly live in
managing director Tony Brazil, we almost all speak

Polglase would love nothing Portuguese and we really do

more than to see his Brazil- blend in. By working with the

focused company become a Brazilians and recognising

mid-tier copper producer. the way they feel they need to

As the first anniversary of do things, I think it negates a

commercial production at the lot of the problems that some

company’s Antas operation of the others have had in the

approaches, Polglase is mull- past.”

ing over the growth options Polglase also hoped his

for his business following an company’s success in Brazil

impressive debut year of op- would quash a widespread

erations. belief that operating in the

“I’d love to see Avanco grow country is more difficult than

into a mid-tier copper produc- in many other South American

er in Brazil, I’d be very proud jurisdictions, with Avanco put-

of that,” Polglase told Paydirt. Avanco put Antas into production less than five years ting Antas into production less
“I think we have the project after its initial discovery than five years after the initial
discovery.
pipeline in front us, basically

because they’re high-grade projects, decide at our leisure to hedge our copper “The better known countries like Chile

and the infrastructure within our region is going forward and that’s working well for and Peru are all having problems, so I

second to none. We’re in a good position us at the moment, although we only have think Brazil has a chance now to dem-

to grow.” to hedge a relatively small percent of our onstrate that whilst it does have its own

Commercial production at Antas, in production.” problems it can be as good as or can

the Carajas mineral province in northern It is not uncommon for new operations hold its own with the other South Ameri-

Brazil, was declared on July 1, with the to experience teething problems in their can countries,” he said.

operation churning out 11,188t copper first year, but production from Antas has “I think the mining code here, although

and 7,779t gold for the period ending De- proven to be reliable since the process- it’s come in for lots of criticism over the

cember 31. ing plant was switched on. years, actually is very adaptable and

Avanco appears to have made a suc- Polglase, a mechanical and electrical very suitable for a junior company. They

cessful start to 2017, with preliminary engineer with an honours degree in met- do recognise the needs and the short

numbers for the first quarter showing An- allurgy, credited that success to the fact lead times that junior companies need

tas produced 3,506t copper and 2,783oz his board comprised mostly operators to garner the support of the market and

gold over the three-month reporting with decades of experience in Brazil. they do have things here like trial mining

period. Both are in line with the 2017 “Brazil really isn’t for the amateurs,” licences and abridged environmental li-

guidance of 13,500-14,000t copper and he said. “We’ve been very lucky in that cences which enable companies like us

9,750-10,500t. we’ve done what we set out to do 10 to accelerate ourselves into production.”

Sale of 3,920t copper and 2,855oz years ago and that was to build a copper Avanco’s board last month approved

gold generated a provisional revenue company in Brazil. In saying that, there’s a $US10.6 million budget for explora-

of $US26.1 million, excluding costs, for been a huge amount of personal sacri- tion and development capital, to be fully

the March quarter, with an EBITDA of fice on people like my directors and my funded from cash flow. Planned works in-

$US6.4 million in line with budget esti- officers. clude drilling to upgrade the resource at

mates. Antas and studies to advance

Avanco reported an underly- the Pedra Branca East and

ing EBITDA of $US16.7 million Centro Gold projects.

for CY2016, including $US7.6 “We’re generating cash flow

million during the December on a relatively small discovery,”

quarter. Polglase said.

“We prefer to do that because “Carajas is an amazing prov-

we’re always very cognisant of ince. It is probably one of the

the negativity in the market to- most active provinces in the

wards Brazil,” Polglase said. world and that’s enabling us

“I have the view I’d rather to generate cash which will go

under-promise and over-deliver back into exploration and de-

and on that basis we’re pretty velopment. I think Brazil has it

confident we’re going to be im- all and we’re really pleased and

proving throughout this year. proud with what we’ve done

“We’re in a fortunate position and where we’re going.”

of being completely debt-free Antas produced 11,188t copper and 7,779oz gold in CY2016 – Michael Washbourne
and covenant-free, so we can

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 53

LATIN AMERICA DOWN UNDER PREVIEW

Perfect timing for Paguanta

Golden Rim Resources Ltd place for a good 12 months or
expects to unveil a resource
for its Paguanta zinc-silver-lead so when this one came along,”
project in northern Chile later
this month. he said. “Initially it was really

A RC drill programme was the quality of the project – we
due to wrap at the time of print,
with the company eager to feed weren’t too fussed about juris-
the results into an update of the
existing JORC 2004 resource. diction – but we’re very pleased

The 12-hole drilling cam- with Chile. It’s a good place to
paign for 3,500m at the Patricia
prospect followed a seven-hole operate and a strong mining ju-
diamond programme which re-
turned a number of encourag- risdiction.
ing intercepts on the Cathedral
vein, including 11.6m @ 5.4% “Certainly in terms of the geol-
zinc, 2.5% lead and 98 g/t silver
(including 4.4m @ 11.6% zinc, ogy and the project area we’re
5% lead and 194 g/t silver) and
5.65m @ 3.8% zinc, 1.1% lead in, there are some very large,
and 50 g/t silver (including 0.55m @
25.3% zinc, 11% lead and 457 g/t silver). particularly copper, deposits in

A broad zinc-lead-silver mineralised that vicinity, so it’s an area that’s
vein, named Lell, was also discovered
during the diamond programme, with well endowed. We think it’s go-
headline intercepts of 33.65m @ 2.7%
zinc, 0.8% lead and 32 g/t silver (includ- ing to be good for us.”
ing 1.65m @ 3.8% zinc, 3.4% lead and
102 g/t silver) and 9.8m @ 5.4% zinc, Golden Rim raised $2.77 mil-
0.9% lead and 43 g/t silver.
lion late last year to fund current
Golden Rim managing director Craig
Mackay said the resource update would Golden Rim is set to announce a resource for Paguanta exploration activities at Paguan-
offer an early indication of the potential later this month ta, with Mackay insisting share-
size of Paguanta, about 30km west of the holders were supportive of the
Chile-Bolivia border.
interest in Paguanta from AIM-listed Her- move to Chile and keenly awaiting the
“We’ll include the new drilling that
we’re doing, so hopefully that will start encia Resources plc last July for $US2.3 resource update.
to show the market [the resource]
is heading to be a little bigger in million. About $US32.5 million had been An update of an unfinished feasibility
size,” Mackay told Paydirt.
spent on the project at the time of the ac- study on Paguanta is likely to kick off
“We think it can be a lot bigger.
During our initial site visit, actually quisition. later this year if exploration continues to
just walking on site you could see
mineralisation that hadn’t been Paguanta is about 40km north-east of return encouraging results.
drilled, so in terms of size the sky
is the limit. BHP Billiton Ltd’s Cerro Colorado mine, With very few ASX-listed companies

“Where the drilling has stopped which produces about 175 mlbpa copper currently active in Chile, Mackay believes
further to the south, we’ve seen
more veins out there that haven’t cathode and hosts a resource of 400mt his company may have pounced on Pa-
been drilled and along strike we’ve
walked another 300-400m that @ 0.62% copper for 5.5 blb. guanta at the right time.
hasn’t been drilled previously.
Mackay said while the move to a re- “Things were very quiet in Chile [at the
“The other thing is the previous
drilling had only gone to 200m nowned mining jurisdiction such as Chile time of the acquisition] and in some ways
below surface. We’re now drill-
ing 400-500m below surface. So was not deliberate, the decision to jump they still are; things haven’t picked up
in terms of upside, we think we’re
heading in the right direction.” from Africa to Latin America was so far there like they have here [in Australia],”

Previously focused on West Af- proving to be the right one for his com- he said.
rica, Golden Rim acquired a 70%
pany. “I suppose that probably has a bit to do

“We did look at projects all over the with it being very much a copper-domi-

nated mining industry over there.

It was just a good time to pick up

a project. Things were in a pretty

desperate state.”

Golden Rim is currently re-

viewing its options for its assets

in Burkina Faso, although Mac-

kay said it was likely his company

would restart exploration at Ko-

rongou later this year.

An exploration target of 7.95-

9.72mt @ 1.8-2.2 g/t gold for

500,000-611,000oz has been set

for Korongou.

“There’s about 900m of strike

that we haven’t drilled as yet and

the current drilling is only down to

70m below surface, so we think

it’s a project that could produce

quite a sizeable gold resource,”

Mackay said.

Outcropping zinc-lead-silver mineralisation on – Michael Washbourne
the Cathedral vein at the Patricia prospect

PAGE 54 MAY 2017 AUSTRALIA’S PAYDIRT

New-look Berrio back in vogue

Pacifico has consolidated its ground package at the Berrio gold project, Colombia

Pacifico Minerals Ltd will resume explo- and sizeable project to explore, so we’re There are very few juniors, either Aus-
ration work at its newly restructured pretty happy with the result.” tralian or Canadian-based, currently ac-
Berrio gold project in Colombia later this tive in Colombia, with the country still
month. Gran Colombia Gold Corp’s 1.6 moz suffering from the aftershock of the glob-
Segovia mine is about 100km north of al downturn in resources.
Work will include stream sediment and Berrio, while Gramalote (AngloGold/
panned concentrate sampling, with the B2Gold Corp) and the developing Cis- However, Noon said AngloGold’s re-
aim of identifying future diamond drill tar- neros (Antioquia Gold Inc) and San Ra- silience to push ahead with plans for its
gets. mon (Red Eagle Mining Corp) are both assets in the country, coupled with posi-
hosted in the Antioquia batholith. tive developments from Continental Gold
Pacifico will focus on areas of the Se- Inc at Buriticá and the Robert Friedland-
govia and Antioquia batholiths which are Pacifico first ventured into Colombia in backed Cordoba Minerals Corp at San
home to a number of large gold deposits, 2011 on the back of encouraging advice Matias, suggested sentiment was return-
hosted in either vein or stockwork sys- from Austrade. Despite not yet unearth- ing to Colombia.
tems. ing a major discovery, Noon said his
company had no regrets about setting “It’s been slow going in Colombia, as
The restart of exploration work in Co- foot in the country. was the case for early-stage exploration
lombia comes after Pacifico returned globally, but there is definitely more activ-
a series of unwanted tenements to An- “I came away from my first visit feeling ity happening now,” Noon said.
gloGold Ashanti Ltd, instead choosing really positive about the opportunity and
to focus on ground it had not previously Austrade assisted greatly in arranging With up to $US600,000 of funding now
covered. meetings with key people in the Colom- available to the company following the
bian mining authority,” Noon said. end of the AngloGold agreement, Pa-
“The tenements we’ve returned have cifico appears well funded to explore at
been subject to detailed exploration by “I’m very glad we made the decision to Berrio as well as to chase other opportu-
Pacifico and are unlikely to host signifi- set up there. Strategically, we are now in nities in the country.
cant gold deposits,” Pacifico managing a great position, having six years of in-
director Simon Noon told Paydirt. country experience and a pipeline of pro- Pacifico completed a fully subscribed
jects throughout the country.” share placement in March, raising
“While there is quite interesting gold $900,000 for exploration at Borroloola
mineralisation within some of the areas, Drill rigs will soon return to Berrio West in the Northern Territory. The com-
exploration revealed it was mostly con- pany, along with JV partner Sandfire Re-
tained within discontinued shoots.” sources NL, hopes to resume work at the
copper-zinc project as soon as the wet
Pacifico entered into a binding agree- weather subsides.
ment with AngloGold in early 2015 to
acquire 100% of a suite of tenements ad- A ground EM survey at the Copper-
joining ground the ASX-listed company mine Creek prospect is first on the agen-
already held in Colombia. da, with a drilling programme also incor-
porating targets at Mariner and Berjaya
With Pacifico choosing to focus on a to follow.
smaller ground package, under the terms
of the original agreement the company “We’re looking forward to completing
will receive $US200,000 back from An- more drilling in areas which have already
gloGold and save a further $US400,000 produced some interesting results,”
in future acquisition payments. Noon said.

“The remaining titles and applications “We’ve obviously been exploring for
cover a project area totalling some 67sq primary copper mineralisation, but we
km over portions of the Segovia and An- are now looking into the copper oxide
tioquia batholiths which contain known deposits within these prospects as well,
multi-million ounce gold deposits, includ- to see if there is potentially something
ing the Segovia mine and the Gramalote economic we can put together.”
deposit,” Noon said.
– Michael Washbourne
“We’ve retrieved some significant
funds and still have a highly prospective

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 55

LATIN AMERICA DOWN UNDER PREVIEW

Cleveland clears first hurdle

Acollective sigh of relief was heard Operations at Cleveland’s Premier gold mine could soon resume after the company
from everyone at Cleveland Mining negotiated a restructure of its outstanding debt package
Company Ltd last month.
a $400,000 equity raise at 6c/share to that we’ve resolved the position with
Following several months of nego- ensure enough working capital during Platinum, the financers can be happy
tiations, suspended miner Cleveland the refinancing process. any deal is a deal done with the ultimate
finally reached an in-principle agree- decision-maker, so that allows us to bring
ment with the receivers of Platinum Mendelawitz, who founded the com- in money, finish the audits and then get
Partners LLC to restructure the com- pany in 2007, revealed his personal frus- back to trading.”
pany’s outstanding debt package. tration of the past four years after tapping
Platinum for some extra cash to improve According to Mendelawitz, one posi-
Platinum was placed into liquidation operations at Premier, Central Brazil. tive to come out of this “frustrating” pro-
in August, with the firm’s senior man- cess was the potential exposure to key
agement later charged with a range of “We borrowed money for our opera- North American markets.
serious financial crimes, including mis- tions a number of years ago while the
appropriation of assets from obscure equity markets were unavailable to us, “North Americans are far more com-
investments. but unfortunately for us the guys we bor- fortable with South America than Aus-
rowed money off were not the right peo- tralians are, obviously being in the same
Cleveland’s shares have been in ple to work with,” he said. time zone and they’ve got more projects
suspension since October after the operating down there than ASX-listed
company failed to lodge its annual ac- “They’ve always worked against us companies do,” he said.
counts, with the Brazil-focused gold rather than with us to develop the mine
miner citing the inability to begin an and we’ve been struggling to get them off “We’re actually looking at whether we
audit prior to settlement of the Plati- our back ever since. We tried to restruc- do a dual listing or move our listing to
num debt. ture [the debt] but we couldn’t do that Canada because we’re quite convinced
without their support. we’ll get a significant re-rating of our
The company was initially scheduled stock if we were to do so.
to return $US13.9 million of outstand- “We had to wait until they were put
ing debt to Platinum on or before Sep- into receivership before we could do any “Even though we kind of missed the
tember 19, but arranged to extend the deal, so when the debt was due and our boat in Australia last year with the gold
due date by three months. accounts were due to be settled at the run, it’s only just starting to pick up in
same time, our auditors said there was Canada. We have the opportunity now
Negotiations with Platinum’s receiv- no point even commencing an audit with- that things have been sorted with Plati-
ers took much longer than expected, ac- out a settlement on the Platinum debt num to benefit from a rising tide over
cording to Cleveland. However, the com- because it’s such a material liability that there.
pany considers the revised terms to be if you can’t resolve it we’re no longer a
“superior” to the previous structure. company, we’re no longer a going con- “So, whilst it’s been painful, hopefully
cern. our shareholders will start to see some of
While the revised terms under the in- the benefits now.”
principle agreement are confidential, “This has gone on for many more
Cleveland is confident it will soon finalise months than we wanted it to, but now – Michael Washbourne
the full refinancing of the company and
be allowed to resume trading.

“It is an absolute relief,” Cleveland
managing director David Mendelawitz
told Paydirt from Denver where he had
just concluded a number of “exhaustive”
meetings with key parties.

“I’m not someone who really wants to
spend a lot of time looking backwards
– indeed we’ve been through a lot of
tough times – but the fact we’ve actually
achieved this basically overwhelms any
kind of pain we’ve been through because
it’s what we’ve been working so hard to
get done for all these years.”

No date has been set for Cleveland’s
resumption of trading on the ASX, with
the in-principle agreement not yet ex-
ecuted by either party so all timelines for
settlement can be aligned to refinancing
initiatives.

Operations at Cleveland’s Premier
gold mine have been mothballed since
the ASX-listed company’s shares were
suspended in October 2016. At the time
of print, the company had just completed

PAGE 56 MAY 2017 AUSTRALIA’S PAYDIRT

Maricunga powers up

Lithium Power International Ltd is fast- Evaporation testing at Maricunga returned several positive results
tracking development of its Maricunga
lithium brine project in northern Chile af- (32.3%) and Li3 Energy (17.7%). the next few months. To assist with that
ter completing its third capital raising in- “I’ve actually studied over 40 different transition, LPI has appointed former At-
side the past 10 months. las Iron Ltd chairman David Hannon and
lithium salars around the world and this ex-Newcrest Mining Ltd chief executive
The company raised $12 million via a one at Maricunga was definitely a stand- Russell Barwick to its board.
share placement to domestic and inter- out above all others from a technical
national institutional investors early last point of view,” Holland said. “Investors now have exposure to a
month, paving the way for Maricunga’s fully funded company with undoubtedly
development timetable to be brought for- “This has now had six years of work the best technical team globally working
ward by 3-6 months. put into it and now in excess of $US42 on this project, to advance it through all
million has gone into the project. It’s also the various phases of feasibility,” Holland
Some of those key development items been consolidated, whereas a lot of other said.
include deep drilling and a PFS, finalising salars are not. So getting to this position
the project’s engineering requirements, with a project that has scale in Chile is “Investors will soon get exposure to a
completing the environment impact re- very, very difficult and they almost don’t potential high-grade lithium resource up-
port and confirmation of production exist outside this one.” grade that’s going to come out in May.
methodology. Previously there was 574,000t of lithium
LPI plans to announce a maiden carbonate equivalent, but that resource
Last month’s share placement was the JORC-compliant resource for Maricunga was only drilled from 0-150m. We’ve now
third substantial raising LPI has complet- this month on the back of impressive re- gone 33% deeper and we’ve acquired
ed in less than a year following an $8 mil- sults from recent drilling, including peak 78% more land, so we believe the re-
lion IPO last June and $13.5 million via a lithium grades above 1,600 mg/L, which source update that comes out to market
private placement and SPP in October. is significantly higher than any other is going to be materially larger.”
brine project in South America except
LPI chief executive Martin Holland said the producing Atacama operation. Holland was also looking to welcome
the size of the three raisings showed in- more investors from North America on to
vestors believed in the company’s strat- PFS work will ramp-up from this month his company’s register following several
egy for Maricunga. and is expected to be completed before successful road shows in that part of the
the end of the year. world earlier this year.
“There’s been roughly around $33.5
million raised by our investors for this Evaporation test work also returned “From the time we had over there, we
project,” Holland told Paydirt. encouraging results, with brine concen- found their knowledge of lithium brine
tration increased five times from 1,260 projects is far superior than that of the
“I think, firstly, it’s a testament to the mg/L to more than 6,300 mg/L, with pre- normal Australian investor which is typi-
project itself because it’s the highest- cipitation of halite and silvite in the ponds. cally focused on the hard rock projects,”
grade pre-production lithium asset glob- Holland said.
ally. It’s going to be a project that fits on No change in brine concentration was
the bottom of the lithium cost curve and recorded during a separate 30-day pump “I think this project ticks a lot of boxes
it’s also in the same region as two com- test, with pumping sustained around 24- and that’s why we’re getting the appetite
panies – Albemarle and SQM – valued at 25L per second. from these investors.”
$US10 billion each.
Holland said the majority of exploration – Michael Washbourne
“We are the only listed company on work at Maricunga was considered com-
the ASX with exposure to a lithium brine plete and the company was now focused
project in Chile, so it’s quite unique from on transitioning into development over
that point of view. And, in addition to that,
we’ve managed to secure a whole range
of technical experts who have built lithi-
um brine projects before.”

LPI has hardly put a foot wrong since
listing on the ASX, with its stock comfort-
ably trading around 35c/share at the time
of print, having peaked at 50c/share dur-
ing its first few weeks on the bourse.

Oddly enough, Maricunga was not part
of LPI’s prospectus, which comprised a
suite of lithium projects in Western Aus-
tralia and Argentina.

LPI entered into an agreement with
Minera Salar Blanco to co-develop Mari-
cunga less than a month after listing and
the project, 170km north-east of the min-
ing town of Copiapo, is now the compa-
ny’s main focus.

Maricunga is being developed as a
three-way JV between LPI (50%), MSB

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 57

SAREIC PREVIEW

SACOME seeks
collaborative act

Power has been South Australia’s prime focus in 2017, with statewide black-outs and how best to deal with
them proving a contentious topic between state and federal governments. The power issue comes at a time
when the resources sector is battling for limelight itself in the State. However, in this preview to the 2017
South Australian Resources and Energy Investment Conference, May 23-34 at the Hilton in Adelaide, Pay-
dirt discovers it is not all doom and gloom for mining and exploration in the State, with a number of projects
on the cusp of development and willing explorers looking to tap into the untouched mineral potential South
Australia has to offer.

New South Australian Chamber of Act in more than four decades. the State, while the resources sector
Mines and Energy chief executive Some of SACOME’s key recommenda- represents about $4 billion, so we’re both
Rebecca Knol wants to see a greater em- large producers and both very important
phasis on collaboration between indus- tions were modernising processes to en- to the State’s financial health.
tries in an update of the State’s Mining hance operational efficiencies, improv-
Act. ing access to land and streamlining the “They need access to land, we need
procedure for mining lease approvals. access to land. They need access to wa-
Knol has wasted no time settling into ter, we need access to water. Rather than
the chief executive’s chair since replac- “The Mining Act, in any jurisdiction, is it being a divisive issue around land own-
ing long-serving predecessor Jason essentially a piece of legislation that eve- ers and proponents, I think it’s important
Kuchel in November, with one of her top rybody needs to work collaboratively on,” the legislation is such that we all have
priorities being a key submission for the Knol told Paydirt. equal input and can come to the table
first major review of the State’s Mining to discuss what issues are prominent for
“The agricultural sector here repre-
sents about $3.5 billion in resources to

PAGE 58 MAY 2017 AUSTRALIA’S PAYDIRT

“Rather than it being a divisive issue around
land owners and proponents, I think it’s
important the legislation is such that we all have
equal input and can come to the table to discuss
what issues are prominent for each sector…

“I think we’ve got far more issues of

common ground than we have of differ-

ence and that’s what we want to bring to

the fore. Those conversations have per-

haps taken place in the past, but there

hasn’t been a significant review of the

Mining Act in 40 years, so the time is

now.”

Knol served as a consultant to several

mining and gas energy companies in

both Australia and Africa for many years

before founding an education sector

company prior to joining SACOME.

Such a background has provided Knol

with a strong handle on the day-to-day

issues affecting junior to mid-cap re-

sources companies. And with projects

such as Central Eyre (Iron Road Ltd),

Kookaburra Gully (Lincoln Minerals Ltd),

Olympic Dam (BHP Billiton Ltd) and Car-

rapateena (Oz Minerals Ltd) mooted for

either development or expansion in the

near term, Knol said there Rebecca Knol

was plenty to like about the SA’s energy woes following widespread
power outages in the first quarter.
state of SA’s mining industry.
Knol said urgent action was required
“It’s looking healthy…we’re so many local businesses, including
several SA explorers and miners, which
certainly seeing a lift out of bank on those power sources would re-
main competitive in national and global
what has been a flat period,” markets.

she said. “Everybody is seeking secure, afford-
able and reliable energy because it un-
“It’s been a tough time for derpins their operations,” she said. “It’s
important for them to be able to secure
junior explorers and we are long-term contracts, which many of them
can’t do at the moment. Electricity prices
certainly seeing a lift in that are increasing somewhere between 50%
and 80% and that is having a huge im-
sector, which is always en- pact on their viability and their competi-
tiveness.
couraging. Commodity pric-
“We’ve put together an ACCC authori-
es, of course, impact junior sation to enable 19 companies to collec-
tively bid for power [over an 11-year pe-
explorers more than most. riod]. That’s the role I believe SACOME
can play in those kinds of initiatives.”
We do have a lot of explor-
At the time of print, the “buying group”
Hon Tom Koutsantonis ers here in SA, there’s a lot – which SACOME made the application
on behalf of – was granted interim au-
of ground and a lot of exciting thorisation and draft determination by the
ACCC. A final determination is expected
each sector and try and find a solution developments.” to be made by the ACCC later this month.

that is constructive and collaborative.” Maintaining SA’s identity as a mining- – Michael Washbourne

SACOME also recommended that friendly state is also high on Knol’s agen-

any disputes under the Mining Act re- da, with the new SACOME chief looking

vert to the Warden’s Court over the En- to foster that from bringing a fresh ap-

vironment, Resources and Development proach to the peak industry body.

Court because the former is seen as be- “I would like to see a better align-

ing more accessible, less costly and has ment between the policy positions for

a history of dealing with mining-related our members and how we’re advocating

matters. those policy positions,” she said.

Knol said her organisation had deliber- “SACOME is a peak industry body and

ately entered its submission prior to the most importantly we’re there to represent

closing date on March 31 so others could our members and advocate on behalf of

review the document before making their those members. It’s important our activi-

own contributions. ties are in line with that.”

“We’ve found in our own discussions Undoubtedly the biggest challenge

with other sectors that many of their is- and highest priority for Knol since step-

sues are common,” Knol said. ping into the role has been addressing

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 59

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Whyalla braces for ‘new normal’

The township of Whyalla will need to BGC Contracting will continue to oversee mining operations at
embrace a “new normal” when the Iron Knob and South Middleback Ranges until 2022
long-awaited sale of Arrium Ltd’s steel-
works, port and mining operations are them,” BGC Contracting chief executive “SA just doesn’t have the bulk scale
finalised, according to South Australian- Greg Heylen told Paydirt. [iron ore production] that a place like WA
raised former Federal Resources and En- does and perhaps that undermines the
ergy Minister Gary Gray AO. “We’ve been there for four years, we importance of Arrium to continue, be-
understand the environment and we con- cause it is the most significant iron ore
Arrium was placed into administration tinue to deliver value to that client, who site in SA.”
in April last year on the back of falling iron recognised that and saw that there was
ore prices and the steelmaker and miner value in us working with them for the next BGC Contracting has become an in-
drowning in billions of dollars in debt. five years. It will underpin our business dustry leader in being able to success-
because it is a good, long-term and, we fully lower the cost base of an operation
Lead administrator KordaMentha is believe, profitable contract.” over recent years and the Perth-based
understood to have whittled the number firm relished the opportunity to do the
of bids down to the final few, with two Heylen said no one stood to benefit same for Arrium.
overseas groups reported to be among from Arrium’s collapse and praised both
the interested parties. the SA and federal governments for chip- “Clearly they had a situation where
ping in critical funds to keep operations costs were too high – not dissimilar to
Whyalla Steelworks has been the ticking over, including construction of two everyone else – and they needed to
town’s primary employer for more than a beneficiation plants which were over- lower those costs and therefore generate
century, with about one in five residents seen by BGC Contracting. some profit so they could get through the
directly employed at one of the mines, administrative process and come out the
port or steel mills. “I think it’s great the two governments other side with a business that could be
stepped in to support an important town sold for decent value,” Heylen said
Gray grew up in Whyalla – his mother and an important industry in SA to give it
and twin sister still call the “Steel City” the best chance of succeeding,” Heylen “We saw an opportunity with our col-
home – but warned residents not to ex- said. laborative model with our clients to lower
pect the town to return to its glory days
when the keys are finally handed over. their cost base in a way that was both
quick and efficient. We have taken about
“Unfortunately, it will not be like the old 30% out of that cost base in the first three
days when I was a kid and the steel mills, months of this collaborative approach. To
the rolling mills, the pellet plant and ship me, that just validates the process that
guards employed thousands of people,” we have already been through with peo-
Gray told Paydirt. ple like Cliffs [Natural Resources Inc]
that, in the right circumstances, works
“The new model will be fit for purpose, better than the more traditional master-
hard work and lean. Only through strate- servant type relationship.
gic decision-making and hard work can
the world-class resources that support “We would say that we have been in-
a world-class export from Whyalla con- strumental in assisting Arrium to estab-
tinue. lish a business that is now a viable and
should allow the sale process to succeed
“The new normal will be a harder and everyone involved will get something
place.” out of it.”

While Whyalla awaits news on the fu- Gary Gray AO – Michael Washbourne
ture of Arrium’s former operations, con-
fidence is growing among a number of
impacted parties that a more stable own-
ership structure is just around the corner.

BGC Contracting Pty Ltd was recently
awarded a contract extension – value at
$720 million – to continue mining opera-
tions at Iron Knob and South Middleback
Ranges until 2022.

The new contract – for a full range of
mining services, including drilling, blast-
ing, loading, hauling, dumping and train
load-out – replaced a previous deal that
was due to expire later this year.

“In an environment where large mining
contracts are still hard to come by be-
cause of concerns in the market around
commodity prices in general, it’s really
pleasing for us and our employees, par-
ticularly the people of Whyalla, that they
now have a solid five-year view in front of

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 61

REGISTER NOW

23 - 24 May 2017

Hilton Adelaide

Image courtesy of OZ Minerals

For sponsorship and exhibition packages please contact
Christine Oelschlaeger on (+61) 8 9321 0355 or email [email protected]

Presenters include:

Hon Tom Koutsantonis MP, Treasurer, Minister for Mineral Resources and Energy, Government
of South Australia

Dr Paul Heithersay, Deputy Chief Executive, Department of the Premier and Cabinet
Steve Johnston, Managing Director, Alliance Resources Ltd
Quentin Hill, Managing Director, Carpentaria Exploration Ltd

Barry Goldstein, Executive Director Energy Resources, Department of the Premier and Cabinet
Charles Moore, Director, Resources, Infrastructure and Investment Task Force, Department of the

Premier and Cabinet
Kyra Reznikov, Special Counsel, Finlaysons Lawyers
John Anderson, Managing Director, Investigator Resources Ltd
Dr John Parker, Managing Director, Lincoln Minerals Ltd

Ian Warland, Managing Director, Marmota Ltd
Daniel Zavattiero, Executive Director – Uranium, Minerals Council of Australia

Tony Belperio, Executive Director, Minotaur Exploration Ltd
David Hutton, Managing Director, Mithril Resources Ltd

David Christensen, Managing Director, Renascor Resources Ltd
Rebecca Knol, Chief Executive Officer, SACOME

Derek Carter, Board Member, South Australian Minerals and Petroleum Experts Group (SAMPEG)
Wayne Rossiter, Chief Executive Officer, WPG Resources Ltd

Sponsors to date:

saresourcesconf.com

SAREIC PREVIEW

China commits to Central Eyre

Iron Road Ltd’s dream of developing Corp, to develop a grain distribution
the Central Eyre iron project in South
Australia is a step closer to reality. and supply network on the Eyre Penin-

Last month the company confirmed sula using the company’s port and rail
it had received expressions of interest
from three major Chinese financial in- facilities from Wudinna to Cape Hardy.
stitutions, including two of the world’s
largest banks, to provide debt finance CRG is expected to be the lead con-
for the $US4 billion project.
tractor for the project, with many of
Subject to satisfactory due diligence
and completion of other formal docu- those roles likely to be subcontracted
mentation, the three groups have indi-
cated they can meet the $US3 billion to local firms because the group cur-
senior debt financing requirement to
develop Central Eyre, including mine, rently does not have a large presence
processing facilities, railway, port and
other related infrastructure. in Australia.

In a further boost for Iron Road, all Iron Road’s 2014 DFS forecast al-
three institutions – China Development
Bank (CDB), Industrial and Commer- most 2,000 jobs during the construc-
cial Bank of China (ICBC) and China
Construction Bank (CCB) – have each tion phase and about 700 jobs when in
stated a desire to achieve financial
close before the end of the year. operation, with a further 2,100 jobs in-

“This is a key step forward for the directly created through regional com-
company and the project after spend-
ing almost nine years and $150 million to munity growth.
get to this stage,” Iron Road managing
director Andrew Stocks told Paydirt. “I think people can take heart from

“We’re particularly happy with the en- this announcement that we intend to
thusiasm of the three banking institu-
tions. CDB specialises in development build this project and we believe we
finance for projects, especially infra-
structure projects, that support China’s can fund this project,” Stocks said.
national priorities and with them we’ve
got ICBC, the largest bank in the world, “This project is going to have im-
and CCB, the second largest bank in the
world, so a good group of banks to assist mense benefit to regional communi-
in the development of the Central Eyre
iron project.” ties as well as the State, and part of

As part of the due diligence process, our plan is for third parties to use the
the three Chinese banks will run their
eyes over Iron Road’s extensive data Andrew Stocks infrastructure. We’ve just closed off a
room containing more than 4,000 docu-
ments, as well as undertaking a site visit formal expression of interest process,
to Central Eyre, about 330km north-west
of Adelaide on SA’s Eyre Peninsula. It also comes as iron ore emerges from which was managed by Regional Devel-

“We’ve done the ground work, so a three-year slump which cast doubt opment Australia on our behalf, to call
relatively speaking, the next processes
should be reasonably quick, although it over a number of large projects, includ- for people interested in using the project
will be a very intense period, no doubt,”
Stocks said. “All three banks have con- ing Central Eyre, which hosts Australia’s infrastructure to tell us what they would
firmed they would like to – and have ca-
pacity to – achieve financial close by the largest magnetite reserve of 3.68mt @ want so we can try to incorporate that
end of this year.”
15.07% iron. into our plans. Everything is starting to
The receipt of formal expressions of
interest follows meetings in China and Iron Road has not been without its crit- come into focus.”
Australia during the first quarter between
the three banks, Iron Road and project ics since releasing an initial DFS in early An optimised DFS was completed in
development partner China Railway
Group (CRG). 2014, but Stocks said his team’s persis- late 2015 with reduced life-of-mine op-

tence and hard work through tough times erating costs of $US37.72/t. Iron Road

was now being rewarded. last year stated it was confident of shav-

“It’s very easy to be a naysayer be- ing a further $US2/t off those economics

cause you’ll be right for the majority of on the back of positive metallurgical test

times, given a lot of projects don’t get up work. Central Eyre has a reported break-

for whatever reason,” Stocks said. even price of $US40/t.

“We’ve taken a development approach Stocks, who has been with the iron ore

to this project in that we’ve understood hopeful since its inception, said his long-

the project, we’ve built a good team and term view on the bulk commodity had

we’ve built a very strong and supportive not changed despite prices coming off

shareholder base. Our top five share- slightly after a brief revival.

holders are long-term investment institu- “We have said for quite some time that

tions and immediately behind them we we’ll see a separation of the lower and

have a very good group of shareholders higher quality iron ores – and we see that

who understand this is not a six-month now, there’s a clear distinction between

flip; we’re actually truly building value into the two,” he said.

the business and the rewards will come “The price changes that we’ve seen re-

as a consequence.” cently have in no small part been driven

Central Eyre has previously been by the increase in stockpile size, but one

awarded major project facilitation status has to keep in mind that most of this is

by the Federal Government and was last the lower quality ores and there is still

year declared a “priority project” by Infra- strong demand and we only see that in-

structure Australia. creasing for the high quality ores.”

Iron Road has signed a MoU with Em- – Michael Washbourne
erald Grain, a wholly owned subsidiary

of Japanese conglomerate Sumitomo

PAGE 64 MAY 2017 AUSTRALIA’S PAYDIRT

Hawsons upgraded for PFS

Carpentaria Exploration “We stuck to our
Ltd is set to release a
PFS update on its flagship guns, we maximised
Hawsons iron project in
June. opportunities where we

At the time of print, the could, we minimised risk
company was running its
eyes over the final study where we could – with
numbers to support a 10
mtpa operation at Haw- limited resources – and
sons, about 60km south-
west of Broken Hill. now we’re in a position

It will be the first eco- where we are delivering
nomics applied to Haw-
sons since an initial PFS in the right time of the
was completed in early
2011, albeit to JORC 2004 market.”
requirements.
While iron ore was
“This update is going to
incorporate some process trading at its lowest lev-
improvements and it’s ob-
viously going to update the els since November at
cost estimates,” Carpen-
taria managing director the time of print, prices
Quentin Hill told Paydirt.
were still above $US65/t
“We’re working very hard to deliver on
our cost targets. I’ll reserve judgement and many hopefuls,
until it comes out, but at the moment our
focus is on delivering to expectations. such as Carpentaria,
We’re quite excited, but we’re not looking
past that.” are much more positive

The impending PFS update will be about the state of the
based on a revised resource estimate
of 2.4bt @ 14.1% DTR (Davis Tube re- industry.
covered magnetic fraction) for 336mt (at
17.1% iron head grade), following a re- Those within the in-
cent drilling programme which success-
fully converted 96% of inferred resources dustry also believe the
to indicated status.
Drill rigs have returned to Carpentaria’s Hawsons iron project company has some-
While the total resource is only up 6% for the first time in many years thing good on its hands
on the previous estimate from March at Hawsons, perhaps
2014, the indicated resource of 810mt @
14.6% DTR for 119mt (at 17.5% iron head head grade) from 92m and 200m @ best highlighted by Carpentaria’s nomi-
grade) is now 3.6 times larger.
16.8% DTR (at 19.2% iron head grade) nation in two categories – Rising Star
Current estimates are based on a
10% DTR cut-off, however, the grade in- from 105m. and Industry Leadership – for this year’s
creases to 15.2% DTR using a 12% DTR
cut-off, which the company believes sug- Mineralised intersections between Platts Global Metals Awards, to be an-
gests stability in the metallurgical char-
acteristics of the resource. 102m and 262m thick were returned from nounced later this month.

“To have a 96% conversion rate from 18 of the 20 holes, the first to be drilled at “People are predicting pellet feed
inferred to indicated really justifies our
faith in the resource,” Hill said. Hawsons for a number of years. and high quality concentrates to be the

“It’s certainly increased interest in the Carpentaria believes the current indi- growth part of the iron ore market, how-
project from investors and strategic end-
users. They’re very much liking the way cated resources will support at least 11 ever, there are very few projects that can
the project is developing, especially the
fact [this new resource] feeds into a PFS.” years of mining at Hawsons, with the to- be incentivised to produce that sort of

Carpentaria drilled almost 6,000m via tal resource equating to about 33 years. material at the long-term iron ore price,”
20 RC holes late last year, including hits
of 262m @ 15.3% DTR (at 16.7% iron It is expected the company will com- Hill said.

mit to a BFS almost immediately upon “We’re positioning Hawsons to be one

releasing the PFS next month, with more of the very few that can do that. If our PFS

drilling and metallurgical test work via a can demonstrate we can deliver on that,

pilot plant to be undertaken. we will have a very strategic and valuable

Carpentaria had already found cus- asset for the global steel industry.”

tomers for nearly 80% of the proposed Despite Hawsons falling within the bor-

production from Hawsons, with Emirates der of New South Wales, Carpentaria

Steel (900,000 tpa), Bahrain Steel (3 expects to truck product through South

mtpa), Formosa Plastics Group (2 mtpa), Australia and leverage off existing infra-

Gunvor Group (1 mtpa) and Mitsubishi structure at either Port Pirie or Whyalla.

Corp (1 mtpa) all signing non-binding “We are extremely fortunate – and it is

MoUs last year. one of the great strengths of the project

Such agreements have put the rela- – that there is a substantial amount of ex-

tively unknown Brisbane-based junior on isting infrastructure for the project, be it

the radar of investors, with its stock up power, workforce, rail and port,” Hill said.

more than 170% since the start of 2016 “We are following the process at Whya-

despite a tough climate for all iron ore lla as close as we possibly can and we’re

companies. doing everything we can to maximise the

“We made a decision in 2013 to focus opportunities that Whyalla presents to

on the Hawsons project because we be- the project.”

lieved we understood where the project – Michael Washbourne
fit strategically and globally in terms of

quality of product and deliverability,” Hill

said.

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 65

SAREIC PREVIEW

Rex to sing from Hillside again

The market has barely heard
from Rex Minerals Ltd over
the last two years but managing

director Richard Laufmann has

assured investors the company

has not been hiding. Rather, it has

been doing the work needed to

ensure its Hillside project is more

robust second time round.

Hillside – on South Australia’s

Yorke Peninsula – was vaunted as

among the strongest of an emerg-

ing crop of IOCG projects during

a boom period for the State in Before and after shots of the Hillside copper-gold project on the Yorke Peninsula. Following the

2008-2012 however, there were resource drill out, Rex rehabilitated the land and three full crop seasons have since been enjoyed

major hurdles to negotiate includ-

ing a small but vociferous community op- thing major but the Government informed opportunity to stop the project early. But I

position group and the tailing off of the us that we needed to submit a new de- am confident. I attend all public meetings

commodities boom. tailed plan; one which was consistent and have developed a good rapport with

The company had chosen to expand and conformed to the original mining li- the opponents.”

the scope of the project in a 2012 PFS cence,” Laufmann said. “I have to admit Rex has largely withdrawn from the

but the subsequent fall in iron ore and that process took as long as the feasibil- market during the revision process, a

copper prices left Rex in the unenviable ity study work.” deliberate move according to Laufmann.

positon of having to resubmit its mining There is no doubt Rex has been cau- “We have not been out to the invest-

licence application in the face of contin- tious in putting together its revised plan ment community with the repackaged

ued community opposition. and PEPR. Laufmann said given the project yet,” he said. “We will have quite

“We certainly fell out of bed,” admitted community concerns, the company had a good story to tell but wanted to make

Laufmann last month. “The big change requested an extended period to submit sure it was shovel-ready with no commu-

was the iron ore price; the project had the PEPR. nity or regulatory concerns around it be-

started to configure around iron ore but “We now have until September to com- fore we did go out. When we’re finished

that meant adding capex to the build just plete it,” he said. “Most of the concerns the submission we will revisit the invest-

as the price began falling.” are around the procedures we will have ment proposal with shareholders and re-

Rex took the decision to revert to a in place for things such as dust, noise, start financing discussions.”

copper-gold mining scenario, choosing vibration and traffic management. It is The company’s strategy suggests late

to forego magnetite production in order quite a significant piece of documenta- 2017 as a date for marketing to kick in

to strip 9 mtpa from the operation’s ca- tion and I think we’ve raised the bar again and that timing could also prove benefi-

pacity, thus reducing capex, opex and with the quality.” cial from a macro perspective with Lauf-

the mine’s footprint. The postponement of Hillside’s devel- mann confident copper is beginning to

“We went to ground to produce a ro- opment coincided with BHP Billiton Ltd’s regain traction.

bust, old-school feasibility study where decision not to proceed with the Olympic “The smart money is starting to look at

we were not trying to push the envelope,” Dam expansion and Laufmann believes the copper space and there are not many

Laufmann said. Rex was caught up in the subsequent development projects around,” he said. “I

The extended feasibility study, re- backlash in SA. think this is going to be a great story sec-

leased in May 2015, envisaged Rex “It came as a shock to government and ond time round.”

mining 24% of the 337mt @ 0.6% cop- community, especially because it was The extended feasibility study placed

per and 0.14 g/t gold resource and pro- being fast-tracked and we have had a job a $480 million price tag on Hillside’s de-

cessing it through a 6 mtpa plant with the winning back respect in the community,” velopment and Laufmann said Rex was

iron ore pre-crushed and stored at the Laufmann said. “In these cases changes keen to pursue opportunities to reduce

Hillside tailings facility for potential future to the plan immediately raise suspicion. its contribution to the capex.

processing. If we were already operating, the com- “Everything is on the table; we are

Rex was confident the study made munity wouldn’t be so sceptical but the not going to hold onto this project. If we

Hillside ready for development once cop- changes back to the original plan have need a JV or a bigger player in, that’s

per hit $US3/lb – a price it hasn’t been meant we have had to take time reinvest- what we’ll do. An outright sale doesn’t

at since November 2015 – but following ing in the relationship with the commu- make any sense but it reducing the bite

release of the extended feasibility study, nity.” we take does make sense. There aren’t

the SA Government informed the com- Similarly, the company’s impending many copper stories around and some of

pany it would have to resubmit its mining resubmission has stirred up another hor- the venture funds are very interested in

licence and approved programme for en- net’s nest. copper long term.”

vironment protection and rehabilitation. “The small group of opponents took it – Dominic Piper
“We thought it was just a different stag- as an opportunity for a victory dance and

ing of the project and wouldn’t need any- are now viewing the resubmission as an

PAGE 66 MAY 2017 AUSTRALIA’S PAYDIRT

Gold drive for Musgrave

Musgrave Minerals Ltd may have Rob Waugh A quick turn into production and sub-
gone quiet in South Australia for sequent cash flow generation from Cue
now, however, managing director Rob “We’re targeting a 200,000oz gold could provide Musgrave with the finan-
Waugh knows where he’d like to invest resource in between Break of Day and cial clout to reinvest in exploration in SA.
some money. Lena and then we can make a develop-
ment decision from there. We are as- In addition to the Musgrave province,
“We’d probably like to focus back on sessing a number of options, including the company also has silver and base
the Musgrave [for a new greenfields dis- whether to grow the resource more or metals prospects in the Gawler Craton.
covery] with the money. That’s the thing; not. We can do a scoping study in three
getting cash flow and being able to fund months or so,” Waugh said. “We have a geochem survey planned
exploration internally and make that next for May/June at Corunna [Southern
discovery,” Waugh told Paydirt. Gawler Craton] and from there we hope
to work up some drill targets. We also
The company has a large exploration have to follow up on some results from
footprint in SA’s Musgrave province but last year. In the Musgrave it’s been about
with the appetite not there from inves- trying to find a JV partner, a new player
tors to support greenfields exploration, interested in the nickel-copper-cobalt
Waugh has refocused efforts on chasing potential,” Waugh said.
gold in Western Australia.
A CSIRO and SA Government airborne
Musgrave is farming into Silver Lake survey over the Musgrave is planned,
Resources Ltd’s Cue project where it which Waugh hopes will unearth anoma-
is advancing its interest to 80%, which lies people may be interested in drilling.
includes the Moyagee gold and Hollan-
daire copper resources. Essentially, a Nova-Bollinger type of
strike in the region would help gener-
RC drilling at Lena (1.273mt @ 1.86 g/t ate some interest in SA, according to
for 76,000oz gold) and Break of Day gold Waugh.
prospects is progressing well ahead of a
resource upgrade next month. – Mark Andrews

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 67

SAREIC PREVIEW

Challenger-Tarcoola
gets them talking

All-in sustaining costs at Challenger WPG broke ground at Tarcoola late last year
have been less than satisfactory, ac-
cording to WPG Resources Ltd manag- early March and grades extracted were To prevent stockpiled ore from Tarcoola
ing director Wayne Rossiter, but the situ- in line with expectations. happening, a mill expansion study ana-
ation is being remedied. lysing increased CIP processing capac-
Rossiter said operations were pro- ity from 600,000 tpa to 700,000 tpa is
Year-to-date costs reported are ceeding well and four road train deliver- under way. The proposed stage one
$1,550/oz, an improvement on $1,614/oz ies from Tarcoola to Challenger per day expansion plan can be done for minimal
realised in the December quarter. had been bedded down. capital expenditure ($2.5-3 million), with
a stage two expansion study to increase
A combination of mining lower grade In terms of processing the material, dif- capacity to 800,000 tpa or more at a later
material outside the resource, a lack ferent Challenger/Tarcoola blend ratios date.
of development and some lower grade have been tried and to date mixing two
stopes left by former owner Kingsgate parts Challenger and one part Tarcoola Rossiter said the company had
Consolidated Ltd has meant Rossiter ore has run without any hiccups. achieved a degree of success in stage
and incoming chief operating officer Cor- one by testing throughput from 77 tph to
nel Parshotam have had full plates to “We want to go two thirds/one third, 82-85 tph.
start their respective tenures at WPG. based on the ratios where we think we
are going to land,” Rossiter said. “We have been able to up the through-
“The orebody is behaving well, the de- put quite easily and all we have done
velopment rate is up and we have been “The mill has been handling the to the mill is increase the power [from
working to remedy that. Our mining con- Tarcoola ore pretty well, we have a lit- 750kw to 1,000kw] of one of the mill mo-
tractor PYBAR mobilised an additional tle test work that we need to do around tors. The impact on recovery has been
jumbo to site, which showed up in Janu- settling of clay in the oxide, that is the minimal. This plant has always had great
ary and made an immediate difference, issue of the ratio; how much clay mate- recoveries because there is so much
which got us back on track in January rial can you put in this typical oxide ore? gravity recovery, a really high percent-
and February,” Rossiter said. At Tarcoola, the initial material is oxide age of gravity recovery,” Rossiter said.
then it moves into a transitionary and pri-
“In March, we slipped a little for a few mary zone. In our initial plan to develop “That has been quite easy to do but to
reasons, but we are working to catch Tarcoola, we planned to mine that in two be able to do that on a sustained basis,
up on that development. We got to a years, but process it in three.” particularly as we have more fresh rock,
squeeze in December, we were down there are some modifications that we
to one stope but we now have multiple The idea was to build a significant want to do to the mill. Stage one is es-
stopes in front of us. We really want to run- of-mine stockpile at Tarcoola to be sentially what we have done, but we have
have five or six [stopes]; that is where drawn down over time, however, it has also changed the screens in our absorp-
we should be, that is the sort of flexibility become obvious to WPG that processing tion circuit to have a slightly higher mesh
that we want to have underground, but it stockpiles at Tarcoola (3 g/t gold reserve size and flow rate. That is probably the
takes time to rebuild that position and we grade) would be better than having work-
are actively doing that right now.” ing capital tied up.

Drilling at Challenger Deeps has deliv-
ered a lot of upside for WPG, with ad-
ditional ore drive extensions identified at
Challenger West appearing to continue
down plunge.

A resource upgrade is being worked
towards, with assays from drilling at
M1 (1.66m @ 14.32 g/t gold from 58m);
Aminus (0.86m @ 45.12 g/t from 121m
including 0.26m @ 139.69 g/t) and Chal-
lenger West (0.86m @ 232.12 g/t from
140m including 0.26m @ 740.17 g/t) pro-
viding encouragement for WPG.

Also pleasing for the company has
been the implementation of ore from
Tarcoola through the Challenger mill.

WPG broke ground at Tarcoola in De-
cember, however, rain prevented ore
from being trucked to Challenger initially,
with the first gold bar containing Tarcoola
material poured in February.

WPG reported it had hit fresh rock in

PAGE 68 MAY 2017 AUSTRALIA’S PAYDIRT

other principle change and is resource at Challenger and
something that we are work-
ing on now.” 71,000oz of gold reserves

Adding a tertiary crusher, at Tarcoola, WPG is open
increasing leaching capac-
ity by recommissioning two to toll treating third party
tanks that are currently re-
dundant and installing an- ore. Challenger hosts the
other tank in the absorption
circuit are also proposed in only mill in close proximity
the mill expansion.
to other deposits in the re-
“Other processing, auto-
mation and another couple of gion.
initiatives to minimise materi-
al handling from the front-end WPG has guided pro-
loader perspective is what
we are working on now. We duction in the range of
are completing an advanced
scoping study as we speak, 52,000-56,000oz gold from
and then there will be some
more advanced engineering Challenger and Tarcoola
around it with flow rates etc to complete,”
Rossiter said. (20,000 ozpa is the aspi-

Investing in the mill expansion indi- rational target) for FY2017,
cates the potential WPG sees in devel-
oping further resources at Challenger, as it looks to re-engage the
which involves drilling into Challenger
West, Aminus, plus opportunities at the market with its story.
historic M1 and M2 lodes.
After selling a suite of
Meanwhile, near-mine exploration
drilling targeting M3/SEZ and CSSW is South Australian iron ore

Mill expansion studies could see capacity at Challenger assets to OneSteel Ltd in
increased to in excess of 800,000 tpa 2011 for $320 million, WPG
kept a low profile until for-

being carried out to increase the Chal- malising the acquisition of Challenger

lenger resource. last year.

With the ownership structure of “We are in the process of upping our

ML6457, Challenger Deeps, which sits engagement with the investment com-

below the 215 shear and displaces the munity,” Rossiter said.

Challenger mineralised zone, remains “People didn’t really know what we

undefined and poses potential upside for were doing but it appears they are now

WPG. interested in the combined Challenger-

While confident of finding more ore in Tarcoola story.”

addition to the 838,000t @ 9.79 g/t gold – Mark Andrews

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 69

SAREIC PREVIEW

Lights on at Paris

Investigator Resources Ltd is working to- John Anderson “Being a resource upgrade there is
wards confirmation that it has Australia’s a fairly lengthy document [to read] so it
best undeveloped silver project, Paris on might take investors and analysts some-
South Australia’s Eyre Peninsula, in its time to absorb it,” Anderson said.
portfolio.
What might trigger interest for Inves-
The company will release a PFS on tigator is a surge in silver prices, and
Paris in the September quarter, and despite Anderson believing the precious
hopefully by then, the market will be up metal is due for a run in the vicinity of
to speed with its significance. $US50/oz, he is wise enough not to pre-
dict when that may occur.
Last month, Investigator announced a
26% upgrade to the Paris resource which At the time of print, silver was trading at
is now 9.3mt @ 138 g/t silver and 0.6% $US18.30/oz, about $US2/oz higher than
lead for 42 moz contained silver and 12 months ago.
55,000t lead, at a cut-off grade of 50 g/t
silver. Usually silver prices follow gold prices
and with tensions mounting between
The indicated component is 4.3mt @ North Korea and the US, the strength of
163 g/t silver and 0.6% lead for 23 moz both metals may continue to rise.
contained silver and 26,000t contained
lead, an estimate derived predominantly Being an important component in elec-
from the area designated for infill drilling tricity, Anderson groups silver with the
last year. other “fad” battery metals in demand at
the moment.
Investigator managing director John
Anderson told Paydirt the result was a Furthermore, as with other commodi-
great outcome, particularly from a grade ties, most of the easy silver deposits have
perspective, and plenty of upside re- been cherry picked, Anderson explained.
mained.
“A simple way to look at it is the Span-
ish and Incas mined all the easy-to-get

PAGE 70 MAY 2017 AUSTRALIA’S PAYDIRT

stuff in the better known silver producing Paris is potentially Australia’s best undeveloped silver project
areas, like in Mexico, for example,” he
said. portunities and we foresee these oppor- 10% of the State’s spend on exploration.
tunities will need further funding, so we We are developing our opportunities and
“The mines in the Americas are large- will certainly be considering ways of rais- moving them forward. We are doing our
ly epithermal, thin, narrow veins, good ing funds to build on what we have got bit to keep the exploration business mov-
grades in the 200-400 g/t range but they in our portfolio, which is looking pretty ing in the State.”
are underground and narrow vein, so try- strong at the moment,” Anderson said.
ing to get tonnes out from narrow work- – Mark Andrews
ings [is a challenge]. “We are strong explorers in South Aus-
tralia and are currently spending about
“Paris, being a fresh open pit opportu-
nity, has all the advantages of being an
open cut scenario. Even in the Americas’
the odd remaining open pit deposits, the
grades are sitting down in the 100 g/t or
less than 100 g/t range, so our indicated
grade at 163 g/t means we are looking at
a very strong open pittable grade.”

Having received the results it was after
in the Paris resource upgrade, Investiga-
tor can carry confidence into the PFS,
with works around mine design, water
supply and metallurgical extraction pro-
gressing well. At the time of print, 5t of
material from Paris was ready for labora-
tory testing.

The company’s cash balance – about
$4 million at the start of the year – has
been put to use in moving Paris along
and drilling the nearby Nankivel copper-
gold porphyry prospect.

“We are spending money on good op-

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 71

SAREIC PREVIEW

Alliance reinvigorated by
Wilcherry Hill

Alliance Resources Ltd may have en- Wilcherry Hill has a variety of mineralisation sive with hits of 49m @ 6.3 g/t gold
tered the project looking for base styles but Alliance is choosing to initially from hole 17WDRC003, 2m @ 61.1
metals but managing director Steve focus on tin and gold g/t from 17WDRC012, 10m @ 6.8 g/t
Johnston is not going to reject any gold from 17WDRC011, 7m @ 11 g/t from
opportunities which the Wilcherry Hill pro- base metals but we also knew there were 17WDRC013, 14m @ 36.1 g/t and 7m @
ject offers the company. some great gold shows at the Weednan- 7.4 g/t from hole 17WDRC017, 3m @ 5.5
na prospect,” Johnston said. “So, while g/t from 17WDRC021 and 3m @ 3.1 g/t
Alliance acquired its 51% interest in we were processing the results from the from 17WDRC022.
Wilcherry Hill – on South Australia’s airborne mag, we decided to put some
Gawler Craton – last year with clear holes into Weednanna.” “We were chasing the high-grade min-
intentions to follow up on Tyranna Re- eralisation but they were sensational re-
sources Ltd’s tin discovery at the Zeal- The results have been impres- sults and better than anything which the
ous prospect. That follow-up work has area has produced before,” Johnston
initially comprised EM surveys over Zeal- said.
ous and the Telephone Dam prospects in
an effort to identify bedrock conductors Gold mineralisation at Weednanna
likely to represent drilling targets. had been first tested by Acacia Resourc-
es as far back as 1997 after discovery
However, Johnston explained to Pay- of a strong gold-in-calcrete anomaly on
dirt Alliance was eager to keep active the prospect. Successive drilling pro-
while it was awaiting results from the sur- grammes identified mineralisation as-
veys and had chosen to begin testing of sociated with skarn alteration and brec-
other prospects. ciation but both Acacia and successor
Tyranna failed to get mineralisation to
“We went into the JV on the back of the

PAGE 72 MAY 2017 AUSTRALIA’S PAYDIRT

hang together into a coherent body. Tyranna had produced a best hit
Johnston said the Alliance/Tyran-
of 28m @ 469 ppm tin.
na JV was taking a slightly different
approach to previous work. “We are trying to get that tin

“Tyranna had different priorities; project up and we can test our
it focused on the western part and
drilled it for a low-grade envelope,” concepts in just a few holes,”
he said. “But we are looking within
that for some high-grade material. Johnston said.
I think we are starting to get a han-
dle on the controls. We will be able Alliance is arguably the most
to build on that previous work and
confirm that the high-grade pods active junior explorer in SA right
do hang together if they are drilled
in the opposite direction.” now, a title Johnston puts down

With a rig already booked to to its unique financial position. At
start testing bedrock conductors at
Zealous and Telephone Dam this the end of the December quarter,
month, Johnston said the company
would likely put some extra holes Alliance boasted a cash balance
into Weednanna mid-year.
of $10.2 million, thanks largely
“Weednanna is starting to shape up
pretty well and is certainly catching up to to the settlement of its previous
the base metals prospects but we defi-
nitely want to have a crack at them first interest in the Four Mile uranium
before we do further gold drilling.”
project, also in SA.
The array of targets on the 1,074sq
km Wilcherry Hill tenement package is “We are in a unique position
sometimes hard to keep up with. As well
as Weednanna (gold) and Zealous (tin), of having the money but not
there is silver-lead-zinc at Telephone
Alliance surprised even itself with the high-grade nature the premium,” he said. The set-
of the gold intercepts at Weednanna tlement of the Four Mile legal
dispute has also freed Alliance

Dam, iron ore at Wilcherry Hill and cop- to pursue exploration and Johnston ex-

per, uranium and tungsten occurrences. pects investors to recognise that fact

“It is so highly mineralised and there over the coming 12 months.

is a variety of styles of mineralisation “People are starting to pay attention

throughout the property,” Johnston said. to Alliance again but we are still sitting

“We have covered 85% of the project at cash backing. Hopefully, we can get

area with airborne EM and have done a rerating off the back of our exploration

some follow-up groundwork.” success.”

For the meantime, however, the JV’s – Dominic Piper
focus will be on Zealous where drilling by

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 73

SAREIC PREVIEW

Argonaut: Access all areas

Argonaut Resources NL has won Roxby Downs and at Carrapateena,
an almost two-decade long battle then we can move forward and start

to access a key tenement at its Tor- to work out the actual tonnages and

rens IOCG project in South Australia. continue with the advanced explora-

On March 31, SA’s Environment, tion and resource drilling.

Resources and Development Court “It’s fair to say we are confident that

granted Native Title authority to Argo- given the volume of target rock out

naut and its 70% JV partner Aeris Re- there, that somewhere out there is a

sources Ltd to access and undertake massive deposit.”

exploration within EL5614. Torrens will be Argonaut’s main

It is the first time a party has been game from this point onwards, al-

approved access for exploration pur- though Owler said his company would

poses since 1998 when Argonaut’s also conduct follow-up work on two

wholly owned subsidiary Kelaray Pty tenements which neighbour the newly

Ltd was granted initial rights to drill granted licence.

into the prospective ground. Until it became clear Native Title au-

Argonaut and Aeris (then Straits thority for Torrens would be granted,

Resources) were able to complete Argonaut’s focus was the Nyungu

some drilling on what is referred to as copper-cobalt deposit in Zambia,

the Torrens anomaly in 2007/08 be- where exploration targets of 130-

fore three Aboriginal groups claimed 180mt @ 0.45-0.55% copper for 0.58-

Native Title rights over the area. 1.15mt and 15-20mt @ 0.08-0.12%

These claims ultimately spilled over cobalt for 12,000-24,000t have been

into a Federal Court proceeding, with guided.

all three groups having their claims Argonaut recently reached an

dismissed last August, allowing the agreement with Chilean copper major

Torrens JV to apply unchallenged for Drilling was last conducted at Torrens in 2008 Antofagasta plc to re-acquire a 25%

Native Title authority. beneficial interest in the Lumwana

Argonaut, manager of the Torrens “Back in 2007/08, we drilled three West project, which hosts the Nyungu

JV, now only has to gain two more ad- holes and two of those holes hit proximal deposit.

ministrative approvals before it can start alteration and sniffs of mineralisation, so Antofagasta spent almost $4 million on

punching holes into the ground again. we are absolutely in the hunt in this huge regional exploration at Lumwana West,

“Under SA guidelines, we require one system for one or several IOCG depos- about 65km south of the Zambia-DRC

for Aboriginal heritage and one for op- its,” Owler said. border, under an earn-in arrangement

erational matters – both of which we held “It’s just a matter of getting some more between April 2014 and October 2015.

previously – so we see those as being holes into the ground and snagging that Argonaut will re-acquire the 25% inter-

approvals that will come in a matter of first hit, so we’ll be drilling through 400m est through a series of milestone pay-

due course,” Argonaut chief executive of bound, sedimentary cover to get into ments, including $US1 million upon start-

Lindsay Owler told Paydirt. the target zone and then we’ll be continu- ing a feasibility study and $US3 million

“This means the principal impediment ing to drill down to 1,200m. upon any development decision.

to a drilling programme over the mag- “We need to get our drill holes right, Despite the proposed greater focus on

netic and gravity anomaly at Torrens has but we also need to be persistent South Australia, Owler said his company

been overcome and we can proceed to enough, given the scale of the area, to had no intention of parking up its Zam-

gain the operational approvals and get drill enough holes to snag the deposit. bian assets.

under way with drilling in the second half Once we’ve snagged it, as they did at “We’re looking at getting back out

of the year.” there, either on our own or in JV with

Drilling of the Torrens anomaly another party, to expand the cobalt

– within 50km of Oz Minerals Ltd’s mineralisation footprint, which is

Carrapateena copper-gold deposit not something we have specifically

– was first conducted by Western chased in the past,” Owler said.

Mining in the late 1970s prior to the “We also want to expand on the

discovery of Olympic Dam. copper to see exactly what the

Torrens is reported to be a coinci- Nyungu deposit has to give. We

dent gravity-magnetic anomaly with have in excess of 40 holes over a

a footprint larger than Olympic Dam, 1.7km strike length, but it’s fair to

about 75km away to the north-west. say a number of additional holes

Previous drilling campaigns have have justified continuing to explore

confirmed the existence of a major certain zones, either for cobalt or

IOCG mineralising system beneath copper and cobalt.”

several hundred metres of sedimen- Argonaut and Aeris have been granted Native Title – Michael Washbourne
tary cover. authority to access the Torrens anomaly within EL5614

PAGE 74 MAY 2017 AUSTRALIA’S PAYDIRT

Gindalbie steels for base metals

With little to no value placed on its investor sentiment. Stevens, a mineral
minority investment in Karara economist, said the SA Government

Mining – the Ansteel-run magnetite pro- was taking strong steps in promoting in-

ducer in Western Australia – due to high vestment in the State, with experienced

gearing and the iron ore price environ- people in place leading the charge.

ment, Gindalbie Metals Ltd has been on “From somebody that has a back-

a worldwide search for a base metals ground in international investment pro-

project. motion, I was very impressed with the

As it turns out, the company did not messaging and how the Government

need look too far from its Australian was looking at various aspects of in-

roots, with the Mount Gunston copper- ward investment promotion from an in-

cobalt project, 135km north of Port ternational point of view,” Stevens said.

Augusta, fitting Gindalbie’s criteria for “From a regional point of view, it has

investment. to be driven by overall recoveries in

“From our point of view, strategically the mining industry, freer availability of

we wanted to look at low sovereign risk Gindalbie is farming into the Mount Gunston capital and project driven. I think suc-

jurisdictions and we certainly believe copper-cobalt project, 50km west of Carrapateena cesses like Carrapateena are great for
that South Australia is a very attractive promoting that. There is also the farm

and supportive mining jurisdiction, which cision to mine, with Gindalbie having the in Oz Minerals have announced, our own

is a strong attraction for us,” Gindalbie option to purchase an additional 5% in- projects and two or three others that

chief executive Chris Stevens told Pay- terest for $1.5 million. Torrens’ subsidiary have been noted very recently, so I think

dirt. Terrace Mining Pty Ltd is free-carried to that there’s a lot of interest in that.”

“Gindalbie was founded in the early a total of $8.62 million, exclusive of the Stevens added that access to facilities,

1990s in WA and has been a WA-fo- additional 5% JV interest. information and the state-of-the-art core

cused company since, but South Austral- In addition to completing PFS and fea- library would help aid discoveries which

ia is very close by and something which sibility studies, attention will also be giv- inevitably attract investor attention.

we believe our existing shareholders will en to exploration over the 824sq km ten-

understand from a geographic point of ement package in

view. It is relatively easy for us to access, the SA copper belt

the project is just 10km off the Stuart hosting BHP Bil-

Highway, about a five-hour drive to site liton Ltd’s Olympic

from Adelaide.” Dam copper-urani-

Mount Gunston would be known to um mine, 100km to

some Australian market observers, with the north, and Oz

the project formerly in the hands of Tan- Minerals Ltd’s Car-

zanian mineral sands hopeful Strandline rapateena copper

Resources Ltd. project, 50km to the

Resources at the MG14 deposit of west.

1.6mt @ 1.4% copper, 0.04% cobalt Therefore, there

and 14 g/t silver (JORC Code 2012) and is infrastructure

18.7mt @ 1% copper, 0.05% cobalt and support for Mount

10 g/t silver at the Windabout deposit Gunston and with

(JORC Code 2004) provides Gindalbie Oz due to release

some sort of starting point to work from. an update on the

The farm-in and JV agreement was PFS at Carrapa-

executed in March with a wholly owned teena at the end of

subsidiary of Torrens Mining Ltd. For a the month, which

total spend of $6.62 million within a six- will include further

year period, Gindalbie can earn a 70% financial analysis

share in Mount Gunston. and information on

Sums of capital committed during the project progress

earn-in will be varied and Gindalbie’s and scope, the po-

interest reflected accordingly as it ad- tential of the area

dresses key project risk areas at differ- will be highlighted

ent stages. once again.

The first port of call for Gindalbie is to This may bode

continue with test work and flow sheet well for both state

design before entering the study phase and companies in

in stage two. the region, which

Stage three will see the study phases could do with a

completed and the project taken to a de- boost in positive

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 75

SAREIC PREVIEW

Copper the Champion for Marmota

After raising a small amount South Australian market.
of cash in February, Mar- The 18-month PACE Copper

mota Ltd is well placed to ex- initiative is due to come to an

plore the Champion and Aurora end in FY2017 and DSD has

Tank projects in South Austral- stated there will be no exten-

ia. sions past this period.

And it appears the company “I think there should be some-

has the commodities of choice thing similar to encourage more

– copper and gold – to ignite copper exploration in South

some interest in a state lacking Australia as well,” Warland said.

attention from the investment Nevertheless, Marmota’s

community. placement to sophisticated in-

“It is a bit quiet here in South vestors at 2c/share earlier this

Australia and the market is still year saw a total of $1.3 million

fairly quiet also. We are not netted to execute its planned ex-

a player in the gold or lithium ploration programme this year.

sector in Western Australia, The company is keen to follow

which is where most of the in- up on the phase two drilling pro-

terest has been of late. How- gramme completed at Aurora

ever, we have assays from With copper prices trading at one-year highs, Marmota may Tank last year which delivered

drilling at Champion being pro- excite the market with drilling results from the Champion 14 intersections grading better

cessed and started diamond project on the Yorke Peninsula than 1 g/t gold, including 1m @

drilling there, which should be 5 g/t gold from 32m, including

quite interesting,” Marmota managing di- on the Yorke Peninsula were pending, 8m @ 3.6 g/t from 32m and 4m @ 9.4 g/t.

rector Ian Warland told Paydirt. while a two-hole diamond drilling cam- Results from Aurora Tank, 50km from

At the time of print, results from RC paign to test for primary copper sulphide Challenger, also indicated mineralisation

drilling at the Champion copper project mineralisation was in progress. was consistently within 50m of surface

While it is an and mineralisation extends over a strike

early stage pro- length of 750m.

ject, Champion and “We announced a lot of high-grade in-

other prospects are tercepts and there appears to be a co-

needed by the State herent body of mineralisation there, at

to ensure it meets least in the supergene zone. We have a

its target of tripling number of targets to follow up in the Au-

copper production rora Tank area and on our Gawler Craton

to 1 mtpa within the project as well. We have an extensive

next two decades. land holding up there; that is a really ex-

“I know DSD is citing project up there as well,” Warland

marketing South said.

Australia as a cop- “We are planning our next drilling

per state and if we phase at Aurora Tank to finish off the drill

could actually see out. There are other targets in that area

them provide more to follow up and we are also conduct-

incentive to back up ing a large regional calcrete sampling

their copper focus programme in the Gawler Craton in the

and copper pro- vicinity of our Aurora Tank project to gen-

gramme [that would erate more targets to follow up later in the

be good],” Warland year.

said. “Hopefully we can generate a resource

Warland ap- out of that and then follow up a number of

plauded the State’s drill-ready targets around that and to also

PACE initiative generate a number of drill-ready targets

and said there was through our calcrete work. I think we defi-

merit in replicating nitely can’t overlook the Aurora Tank and

the PACE Gas ini- Gawler Craton projects as gold is gaining

tiative, whereby $24 more attention in the market for explorers

million in grants is compared to base metals.”

the incentive on of- – Mark Andrews
fer for companies

to extract more gas

and supply it to the

PAGE 76 MAY 2017 AUSTRALIA’S PAYDIRT



REGIONAL ROUNDUP

Golden road back to Botswana

Gold Road Resources Ltd’s success in quisition (subject to
Western Australia’s Yamarna green-
stone belt will be hard to replicate, how- shareholder approval),
ever, Laconia Resources Ltd believes it
has a chance of doing so in Botswana. Laconia will have almost

“Our plan is to do exactly what Gold 900sq km of ground pro-
Road has done and apply those first-
pass, simple, tried and tested and highly spective for gold-nickel-
successful methods to a terrain that
hasn’t had that work done on it at all,” La- copper-PGMs in terrain
conia chief executive Quinton Hills told
Paydirt. bereft of modern day ex-

While Gold Road started from scratch ploration.
at Yarmarna – where it has since courted
Gold Fields Ltd to the 5 moz Gruyere pro- Previous exploration
ject – Laconia’s vision is a little clearer at
Kraaipan. has been focused on

Laconia has over 14,000 soil samples outcropping rocks only,
from a geochemical survey to work with,
while geophysical data has identified leaving untapped poten-
several anomalous areas for immediate
follow-up at Kraaipan. tial under cover.

Furthermore, Kraaipan, southern Bot- Hills said transport-
swana, is directly along strike from Har-
mony Gold Mining Company Ltd’s 4 moz ed overburden meant
Kalgold open pit operation in South Af-
rica and also adjacent to significant PGE there was about 30m of
deposits in that country.
cover to contend with
Upon completion of the Kraaipan ac-
at Kraaipan, with some

sections only covered by

5-10m.

Geochemical soil and

calcrete sampling will

be applied at Kraaipan,

while analysis of infill soil

survey samples and as- Laconia has 50km of greenstones in Botswana, about 45km
sessment of regional soil north of Harmony’s 4 moz Kalgold mine in South Africa
sampling survey results

will be undertaken by a gold expert. the work and make sure the drill targets

An aircore drilling programme sam- are strong enough to drill. We may have

pling the calcrete is also to do some ground EM also to ensure the

planned, along with a targets are strong enough,” Hills said.

geophysics programme. Early exploration success could serve

Results from that work Laconia well considering the amount of

will be used to design a land it has in Botswana.

more revealing drilling “I can see so many companies

programme incorporating scrounging over postage stamp size ten-

new targets and testing ure that has been worked over four or

of mineralisation detected five times, whereas we can go over this

by previous explorers. enormous suite of greenstones and ap-

Rock chip sampling has ply these simple proven methods to find

returned assays grading ore deposits which have never been ap-

up to 36 g/t gold, while plied [to this area],” Hills said.

RAB drilling has inter- “On the back of the success of Gold

sected significant shallow Road, still quite strong gold prices and

gold mineralisation with the market definitely appearing to be

hits such as 13m @ 1.7 g/t waking up, we are confident in this pro-

from 11m, including 3m @ ject. We believe this is a really unique

5.1 g/t. opportunity. You cannot get that size of

Hills said Laconia package of greenstones, highly prospec-

hoped to be in a position tive greenstones, which are proven to

to drill the gold targets by have gold in them from some historical

the end of the year, while exploration, anywhere in the world.”

testing of the nickel-cop- – Mark Andrews
per-PGM potential could

start earlier.

“Within three to four

months we should be able

to work those [existing]

VTEM targets, the VTEM

is a bit older so we have to

Quinton Hills get a geophysicist in to do

PAGE 78 MAY 2017 AUSTRALIA’S PAYDIRT

AFRICA

Peak plays waiting game

Peak Resources Ltd is under no illu- A completed BFS at Ngualla leaves Peak as one of a handful of companies
sion rare earths prices need to pick with an advanced rare earths project
up substantially before the company can
lock down development funds for the plete its application for a mining licence and something that’s very easy to oper-
Ngualla project in Tanzania. during the quarter. ate and is properly costed up,” Townsend
said.
Peak confirmed it had one of the Townsend said investors and other
world’s leading rare earths projects last stakeholders in Peak could take comfort “These circuits do carry a lot of work in
month with the release of a robust BFS, from the fact Ngualla was one of the few progress and build-up of stocks, so you
headlined by a low operating cost of just rare earths projects globally with a com- have to put a lot of effort into modelling
$US34.20/kg for production of a neo- pleted BFS, also done at the bottom of up things like inventory and work in pro-
dymium-praseodymium oxide. the cycle. gress. We made sure we had all of that in
our working capital assumptions for the
Ngualla’s annual operating costs have Peak’s work over the past two and a bankable study.”
reduced from $US118 million in the 2014 half years was also completed for a low
PFS to $US83 million. spend of under $US25 million and was Townsend also singled out Michael
supported by Appian Natural Resources Prassas (general manager sales and
Other highlights from the BFS include Fund and IFC for almost the duration of marketing), Dave Hammond (technical
a pre-tax NPV of $US676 million, IRR of the study phase. director), Gavin Beer (general manager
25%, average annual revenue of $US228 metallurgy) and Roy Gordon (metallur-
million and average annual cash flow of “To have attracted that financing from gist) for their input into the BFS.
$US104 million. Appian and IFC and then continue with
a BFS through that six-year low point in While project financing discussions
Pre-production capex is estimated the price cycle I think is testament to the are only at a very early stage, Peak has
at $US356 million (down from $US367 quality of the asset and the team we have already secured a site at Tees Valley on
million) to build an operation producing here,” Townsend said. the north-east coast of the UK for its pro-
2,420 tpa neodymium-praseodymium posed rare earths refinery.
oxide over a 30-year mine life. “A lot of projects really got parked up
during that period, so we’re very happy Townsend said availability of low-cost
The current spot price for neodymium- to have actively progressed the pro- reagents and chemicals was the main
praseodymium is around $US42.50/kg ject instead of sitting here twiddling our reason for selecting this location.
and slowly rising, but Peak managing di- thumbs. There’s not a lot of companies
rector Darren Townsend acknowledged that have actually completed bankable “There’s quite a lot of excess chlor-
project financiers want to see further studies for rare earths, so we’re primarily alkali capacity in Europe – we’re talking
increases before committing to develop- positioned, we think, to be the go-to in- about 110,000 tpa of reagents we use
ment funds for Ngualla. vestment as the industry picks back up.” for our process versus 30,000 tpa of
rare earth concentrate – so you want to
“I don’t think we can hide away from A series of beneficiation breakthroughs be close to where the chemicals are be-
the fact we do need to see further in- over the past two years has lifted Ngualla cause it’s a chemical logistics and cost
creases in neodymium-praseodymium (total resource of 214mt @ 2.15% REO exercise,” he said
prices to make the project financeable,” for 4.62mt) to the front of the pack in the
Townsend told Paydirt. rare earths space, with Townsend prais- “That was the primary driver, but I think
ing the efforts of his technical and man- it’s fair to say there’s some added bonus-
“If you approach it from a standard agement teams. es located in that part of the world. Ide-
western bank debt financing perspective, ally, we would like to get some business
I think that’s the reality of where we are “Our chief operating officer Rocky in due course with some of the suppliers
with rare earth prices. We’re not far off Smith, or Mr Mountain Pass as we re- into some of the European car manufac-
six-year lows in pricing, although we’re fer to him, his expertise from Mountain turers and the whole e-mobility space.”
very pleased to say that since the start Pass has been instrumental in making
of this year we’re now up to what might sure we have got the right circuit design – Michael Washbourne
be our fourth increase in price coming
out of China, with circa 10% increases in
neodymium-praseodymium prices.

“We’ve obviously got the big demand
drivers for magnet metals where 90% of
the motors for electric and hybrid cars
are rare earth magnets. We’re starting
to see the impact of that demand growth
and we think we will continue to see that
pricing increase.”

While Peak will be forced to play a
waiting game before project financing
talks turn serious, the company will con-
tinue to advance other areas of the pro-
ject, particularly on the regulatory side.

Peak received its environmental certifi-
cate for Ngualla in late March, paving the
way for the ASX-listed company to com-

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 79

REGIONAL ROUNDUP AFRICA

Cardinal raises hopes

Cardinal Resources Ltd is build-
ing a team to take the Namdini
gold project into production.

Just what that team has at its

disposal will become clearer when

a PFS is completed in Q3 this year.

Despite not having set numbers

on Namdini, Ghana, to reveal yet,

the list of admirers for Cardinal is

growing, highlighted by major Gold

Fields Ltd becoming a substantial

shareholder (10.35%) in the com-

pany last month, while loyal sup-

porter Van Eck increased its hold-

ing to 8.49% in late March.

Support for the company waned

late in 2016, after investors did

not take kindly to the metallurgical

results reported upon the declara-

tion of a 4 moz gold maiden re-

source at Namdini.

The company has since demon- More than $70 million in offers were tabled during Cardinal’s recent $15 million capital raising

strated high gold recoveries can

be achieved through a basic crush-grind- The studies were expected to start at In preparation of the TSX listing, Car-

float-regrind CIL circuit, with ongoing the time of print, as Cardinal prepared to dinal also undertook a capital raising via

metallurgical test work indicating oxide list on the TSX. the placement of 45.5 million shares at

zone cyanide leach gold recoveries of With over 30% of its institutional share- 50c/share for $15 million. The uptake

greater than 90% and efficient rough flo- holders from North America, it is logical was swift and in high demand with in ex-

tation gold recoveries greater than 95%. Cardinal has a listing on the TSX and it cess of $70 million bid for the $15 million

Overall gold recoveries being targeted filed a preliminary non-offering prospec- offering.

by Cardinal at Namdini are greater than tus with the Ontario Securities Commis- Hartleys Ltd was the global lead man-

84%. sion last month. ager and sole lead book runner and

Cardinal managing director Archie Ko- By listing on the TSX, Cardinal expects Claurus Securities Inc – which provides

imtsidis told Paydirt that metallurgy was the knowledge base and understanding research on Cardinal – acting as the lead

no longer an issue for investors who were of its potential to be better, allowing it to manager in North America.

focused on the numbers being compiled enhance its profile. The funds will help Cardinal through

in the PFS. the PFS, while it also has four rigs

“We are focused on produc- functioning 24/7 to continue to

ing a good quality PFS to show define the Namdini gold system,

the banks and the world what which is 1km long and up to 300m

we have at Namdini,” Koimtsi- wide and remains open at depth

dis said. and along strike.

“Now all we have and what Resource expansion work is

others have are numbers on the ongoing during what Cardinal de-

back of an envelope. We want scribes as the busiest time in its

to see the real deal, as a board history.

we want to know what we have. “We have many work streams

Now that we have found a bit of running in parallel which will pro-

gold, we can’t just leave it sit- vide strong news flow throughout

ting there; we have to act on it.” 2017, including drill results, a sec-

Lycopodium Minerals Pty Ltd ond and final phase of metallur-

has been engaged to deliver a gical test work across the entire

process PFS, comprising pro- orebody as well as permitting and

cessing, associated infra- approvals processes. In addition,

structure and tailings facilities. we are pleased to be commencing

Meanwhile, Golder Associates exploration at some of our promis-

Ltd will handle the mine scop- ing regional gold targets in Gha-

ing study, including geological, na,” Koimtsidis said.

hydrology, hydrogeology, min- – Mark Andrews
ing, geotechnical and environ- Cardinal managing director Archie Koimtsidis with non-execu-

mental services. tive director Simon Jackson at Africa Down Under last year

PAGE 80 MAY 2017 AUSTRALIA’S PAYDIRT

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REGIONAL ROUNDUP

Grasberg on the cards

Washington has billed US vice presi- The contract row that has crippled operations at Freeport’s Grasberg – the world’s second
dent Mike Pence’s visit to Indonesia largest copper mine – was expected to be discussed when US vice president Mike Pence
as a booster for the strategic partnership visited Indonesia last month
between the world’s second and third
largest democracies, but a raft of bilateral Indonesia was the third stop on an to our exports, why not stop importing
tensions could sap the goodwill from his April 15-25 tour that included South Ko- some of their goods?”
trip. rea, Japan and Australia.
Despite the strains, the Government
Pence’s counterpart in the world’s Google declined to comment for this official said Indonesia would be careful
most populous Muslim country has report, and JPMorgan did not respond to to start its relationship with the Trump ad-
voiced worries about US President Don- a request for comment. ministration on the right foot.
ald Trump’s immigration policy, which
critics say is biased against Muslims, and Freeport Indonesia spokesman Riza Indonesian President Joko Widodo’s
about his “America First” mantra on trade Pratama said: “This visit is happening approach to foreign policy has been led
and investment. entirely independent of our current ne- more by economic interests than geo-
gotiations with the Government of Indo- political considerations: he has pursued
“We in Indonesia never change. The nesia.” increased trade and investment from
change is there. That’s why we’re asking China but keeps a diplomatic distance
them now, ‘what is your policy now on the However, billionaire investor Carl from Beijing and established a strategic
economy, on democracy, now that Trump Icahn, Freeport’s third-biggest share- partnership with Washington under for-
is in power?’,” Indonesia vice president holder and now a special adviser to mer President Barack Obama.
Jusuf Kalla told Reuters. Trump, has described Jakarta’s tactics
over the mining contract as “disingenu- US ambassador to Indonesia, Joseph
“What does it mean, ‘America first’? I ous and insulting”, according to the New R. Donovan Jr, said in a statement last
can say, too, ‘Indonesia first’ if you say York Times. month that Pence’s visit reflected a con-
‘America first’.” tinued commitment to that partnership,
In other news, the US National Bio- would deepen economic engagement
Indonesia is one of 16 countries diesel Board (NBB), a producer group, and boost regional security cooperation.
against which the US runs a trade defi- has petitioned the US Government to
cit that will be investigated by the Trump impose anti-dumping duties on biodiesel “The US embassy here certainly is go-
administration for possible trade abuses. from Indonesia and Argentina, claiming ing to great lengths to make the visit a
they have flooded the US market. success,” the Indonesian official said.
Trump’s combative approach will not sit “My impression is he’s [Pence] not going
easily with Indonesia, where economic “This is one of the issues that we have to ruffle feathers in public, he’s not going
nationalism and protectionist tendencies asked the trade ministry to bring to the to cause a ruckus.”
have flourished since a slump in com- meeting [with Pence],” Paulus Tjakrawan,
modity prices in recent years slammed a director at the Indonesia Biofuel Pro- – Kanupriya Kapoor and
the brakes on economic growth. ducers Association, told Reuters. Fransiska Nangoy, Reuters

“Unfortunately I do see a hardening of “Our hope is for the Government to be
attitudes on our side,” a senior Indone- firm ... otherwise we will be taken advan-
sian government official, who declined to tage of,” he said. “Not to act like thugs
be named, said. but, for example, if they put barriers

“And it’s of particular concern because
we’re on that list of 16 countries ... that
are going to be investigated.”

The official said a tougher stand by
Indonesian authorities had also contrib-
uted to a series of disputes with US com-
panies, including Alphabet Inc’s Google,
miner Freeport-McMoRan Inc and finan-
cial services giant JP Morgan Chase &
Co.

Indonesia has duelled with Google
over back taxes and fines running into
hundreds of millions of dollars, and with
Freeport in a contract row that has crip-
pled operations at the world’s second-
largest copper mine, Grasberg.

It also dropped JP Morgan as a prima-
ry bond dealer after the bank’s research
analysts issued a negative report on the
country in November.

“It’s a very unfortunate series of issues
which all happen to be American,” the of-
ficial, who expects them to come up in
private during Pence’s visit, said.

PAGE 82 MAY 2017 AUSTRALIA’S PAYDIRT

ASIA

Red light for Siana operations

Ongoing regulatory and feasibility update by Min-
government mining pol- ing One Pty Ltd which

icy uncertainty in the Philip- confirmed production of

pines has forced Australian about 60,000 ozpa gold

gold producer Red 5 Ltd over an initial eight year

to suspend activities in the life-of-mine at AISC of

country. $US800-850/oz.

The company notified the The study was an in-

relevant authorities of its dication of Red 5’s com-

intentions for Siana in mid- mitment to operating in

April, stating that the deci- the Philippines as it was

sion was not “taken lightly prepared to spend the

A temporary and uncer- pre-production capex of

tain end to mining opera- $US49.5 million to bring

tions follows Red 5’s move the underground to frui-

to suspend ore processing tion.

at Siana in late January, with In the first half of FY2017,

the group intending to carry Red 5 reported gold pro-

on processing for about one Regulatory uncertainty in the Philippines has forced Red 5 to stop open duction of 35,257oz gold
more month in order to max- pit mining at Siana on the island of Mindanao and a cash and a refined
imise the use of the existing gold metal balance of

tailing storage facilities. Red 5 will continue with community about $28 million at the end of February.

“Based on the group’s current cash relation activities and environmental and The strong cash position allows Red

position [$23.5 million at the end of the regulatory compliance and dewatering, 5 to entertain other corporate opportuni-

March 2017 quarter], the group has suf- as it informs the mining contractor to stop ties, while the regulatory environment in

ficient funds to maintain the group’s open pit operations and start demobilis- the Philippines remains uncertain.

mining assets in good standing and, if ing equipment. In the meantime, Red 5’s Philippine-af-

necessary, to continue the suspension As there is no timeframe for Red 5 to filiated company, Greenstone Resources

of operations for at least two years,” the restart mining and producing cash flow, Corporation is working closely with the

company said in a statement. underground development at Siana has local communities and government of-

“While the decision to suspend mining also been suspended after low-cost de- ficials in Surigao del Norte Province to

operations has not been taken lightly, the velopments, including two steel set rein- lessen the impact on the people affected

group has decided that this is the best forced portals with declines and drives by halting operations at Siana on the is-

way to preserve the significant inherent totalling 350m had been completed with land of Mindanao.

value of the large in-situ gold inventory power, compressed air and ventilation in- There has been a long history of mining

and high-quality infrastructure at Siana, frastructure. at Siana with nearly 1 moz gold produced

and to protect the group’s balance sheet Red 5 was planning to extract first ore before Greenstone/Red 5’s involvement.

and shareholders’ interests.” from the underground in March 2018 and Having a history to work with, Red 5

Also a factor in Red 5’s decision is the ramp up to a steady state of production in proposed the construction of a new open

likely changes to open pit operations and December of that year, as open pit min- pit – 100m deeper than the existing pit –

the approval of the environmental com- ing was scheduled to be completed dur- which started to be mined in 2010.

pliance certificate amendment for the ing FY2017/18. By 2012, Red 5 was celebrating the

long-term tailings storage facility and Underground development started in pour of its first gold bar at Siana.

other mining challenges. the second half of last year in light of a

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AUSTRALIA’S PAYDIRT MAY 2017 PAGE 83

REGIONAL ROUNDUP

Turkey central bank to
boost gold stocks

Turkey is taking steps to for comment at the Cen-
give its central bank the tral Bank.

right of first refusal on do- Under the scheme, the

mestically produced gold, Central Bank is under

according to two sources, no obligation to buy do-

allowing it to boost reserves mestic gold, the sources

of the precious metal with- said, adding it would de-

out depleting foreign cur- cide on the timing and

rency holdings. amount of its purchases.

Like other central banks, A total of 27.5t of gold

the Central Bank of the was produced in Turkey

Republic of Turkey holds in 2015, according to

a mix of assets, includ- the latest industry data,

ing foreign currencies equal to around $US1.1

and gold, as official re- billion at current prices

serves. The International of about $US1,280/oz at

Monetary Fund (IMF) has the time of print.

recommended that Turkey “It is important to in-

bolster its foreign reserves crease the Central

to shield itself from exter- Turkey’s central bank has been given first right of refusal on the Bank’s reserves. This

nal volatility. purchase of domestically produced gold to boost its reserves adjustment will contrib-

Buying more domesti- and avoid depleting foreign reserves at the same time ute to the Central Bank’s

cally produced gold, which gold reserves over time,”

is priced in lira, will allow the bank to option,” to buy locally mined gold, an of- one source said.

avoid depleting foreign reserves at a ficial from the domestic gold sector said. As of March, the Central Bank’s gold

time when the domestic currency, has “This means the Central Bank will be- reserves stood at $US17.25 billion, ac-

been hammered by political concerns. come a primary gold buyer in lira.” cording to official data.

The Central Bank is being given “first No one was immediately available – Nevzat Devranoglu, Reuters

Copper recycler on the hunt for scrap

Aurubis AG, the world’s biggest copper That business is producing copper Internally, his focus is on maximising
recycler, is likely to start its search for from concentrated ore or scrap and recy- value through improvements – saving
acquisitions in Europe and the US as it cling materials. energy, for instance, by recycling heat.
looks to expand into other metals, but will
not get into mining, its chief executive told Alongside major copper smelters in Aurubis reported a higher-than-expect-
Reuters. Hamburg and Luenen in Germany, Au- ed operating profit for the first quarter.
rubis has copper and copper product
Juergen Schachler, who took over as activities in countries including Bulgaria, Schachler said the company has
chief executive in July 2016 after two Belgium, Italy, the Netherlands, Finland, adapted to the current challenge of poor-
decades in steel, said he aimed to turn and the US. er ore grades and that, unlike the mining
Aurubis into a multi-metals company by sector, it was not at the mercy of the cop-
expanding into non-ferrous metals, but For Schachler, one business he does per price, which is stronger than a year
has given few details ahead of a strategy not see fitting with those activities is min- ago, but faces uncertainties.
update planned for October. ing.
“We will be growing. Copper concen-
“We’re very strong in Europe. We have “If you have combined activities, smelt- trates are getting more complex, that’s
a footprint in the US so there’s some log- ers and mines, it’s very tricky to love both where we’re strong,” Schachler said.
ic we will look at these areas first, but this kinds of business in the same way be-
doesn’t exclude that we’re looking fur- cause every dollar you spend in invest- “Our business model is quite inde-
ther,” he said in an interview in Santiago, ment in the mine is a much higher pay- pendent of the copper price. We buy and
Chile, where he attended the CRU World back versus a smelter,” he said. we sell probably at the same moment, so
Copper Conference. we’re hedging most of the material that
“It makes a lot of good logic for the we have.”
“One focus – it has to be a good fit for miners to concentrate on the mines,” he
the core business that we have at the added, saying the performance of inte- – Barbara Lewis, Reuters
moment,” he added grated smelters often showed “room for
improvement”.

PAGE 84 MAY 2017 AUSTRALIA’S PAYDIRT

EUROPE

Cinovec sparks on low charge

It was not the reaction European Europe, is only going to become
Metals Holdings Ltd managing di-
rector Keith Coughlan was hoping more and more sought after.”
for when he posted the results of
a PFS on his company’s Cinovec European Metals will move
lithium-tin project in the Czech Re-
public. straight into a DFS on Cinovec,

Shares in European Metals with Coughlan expecting all the re-
slipped 21.6% to 98c on April 19
– the day the PFS was released quired study work to take up to a
– having hit at an all-time high of
$1.39 only a fortnight earlier. year to complete.

“If you had asked me when we put A scoping study on Cinovec,
it out and there had been no market
reaction, I would have said it was a located in the Krusne Hore Moun-
great result and we were very happy
with it,” Coughlan told Paydirt. tains near the border of Germany,

“You can’t judge these things too was completed in 2015 but with a
much on what happens on the day.
We also have listings in London and focus on tin and an area with mini-
Germany, so that’s something you
always have to take into considera- mal lithium credits.
tion.”
With the tin price coming off af-
The PFS flagged Cinovec as po-
tentially the world’s lowest cost lithi- ter the study was published and
um carbonate mine with a net oper-
ating cost of $US3,483/t, excluding lithium then emerging as a min-
by-product credits.
eral of interest, European Metals
Other highlights from the PFS
include a post-tax NPV of $US540 switched its focus to an area rich
million with IRR of 21% from pro-
duction of 20,800 tpa battery-grade in lithium which had been mined
lithium carbonate, based on a mine
life of 21 years. for tin previously.

Total capex is estimated at $US393 According to the PFS, the com-
million.
pany can generate small cash re-
“If we’re able to deliver those numbers,
we’ll be the lowest cost hard rock produc- turns from tin, potash and tungsten
er of lithium carbonate in the world and
I think that’s a pretty good place to be,” by-product credits.
Coughlan said.
“Ultimately what we’d like to
“It’s comparable with cost of produc-
tion for brines, as far as published num- be able to do is have a scenario
bers show us. I think it’s fair to say those
published numbers from the big guys where we could access the part
might be a little rubbery, but we are still
comparable with the lowest cost produc- of the orebody which is most ap-
ers in the world, so that’s significant.
propriate to the prevailing metal
“It’s also a very, very large deposit.
The highlight here is that this study is prices,” Coughlan said.
based on less than 10% of the indicated
resource [347.7mt @ 0.2% lithium for A PFS has indicated Cinovec could be the world’s “The tin is an important by-
3.89mt] and I think it’s only about 5% of lowest cost lithium carbonate mine product, it’s still a strategic metal,
the overall resource [656.5mt @ 0.2% particularly in Europe. It’s also a
lithium for 6.99mt], so it’s a very, very big,
low cost project in a commodity the world the PFS was due to the market having LME metal, so the market is transparent,
wants and one that everyone is saying
the demand outlook going forward is a greater understanding of spodumene the pricing is transparent and there’s a
very good.”
production over that of the micas which standard unit. From that point of view, it’s
Perhaps one of the reasons why Eu-
ropean Metals took a hit upon release of Cinovec would churn out. a much easier metal to deal with than the

Coughlan hinted his company would lithium, which is a bit opaque.”

need to spend some time educating in- Coughlan said his company had

vestors who are more familiar with spo- opened talks with potential financiers

dumene production about the economics and he was confident of securing the

of lithium micas. funds required to guide European Metals

“When you look side by side at a mica through this next phase of study work.

deposit versus a spodumene deposit, European Metals also stands to benefit

there is a bit of an impact on grade so from its relative proximity to a number of

I think people have generally thought key customers when the focus turns to

the micas won’t work purely because of off-take.

grade,” Coughlan said. “Within 500 miles of our deposit,

“What this [PFS] indicates to us is somewhere between six and seven mil-

that’s not the case and micas will work lion vehicles are made every year, and

because the cost of production, com- every year that goes by, more of those

pared like for like with spodumene, is are being made electric,” Coughlan said.

considerably lower. “Last year there were 42% more EVs

“I think what we’ve done is demon- made in the world than the previous year,

strate to the market, to PFS-level of con- so the long-term outlook for this project

fidence, that we can produce battery- is very, very good. It’s a strategic asset

grade lithium carbonate from micas at from the point of view of the European

competitive prices out of a very stable EV industry.”

jurisdiction, both economically and politi- – Michael Washbourne
cally. We’re also not reliant on third party

ore sources and lithium, particularly in

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 85

SIGNED, SEALED AND DELIVERED DRAglobal.com

South32 goes digital Anne Beadell borefield pipe-
with help from GE
lines and associated infrastruc-
GE has signed a three-year strate-
gic partnership to assist in the devel- ture. Upon completion, this
opment of South32 Ltd’s technology
roadmap and digital transformation. borefield will secure water sup-

The partnership is GE’s first with an ply for the construction works
Australian mining company in the digi-
tal space, with South32 to deploy GE’s and provide potable water to
Predix platform, which is designed
specifically for industry and connects Gruyere Village.
industrial equipment, data analysis
and instant insights. Local company Desert

According to South32, Predix will Sands was awarded an earth-
enable the company to make “fast, in-
formed decisions” and provides an op- works contract, including
portunity to optimise entire operations,
rather than individualised assets and ground works for the Gruyere
equipment.
Village Stage 1, upgrading of
“Bringing the world of operational
technology and information technology existing roads and tracks and
together to monitor equipment and sys-
tems remotely and predict future behav- installation of some new tracks.
iour is a game changer,” South32 chief
executive Graham Kerr said. McNally Group Contracting

“It has the potential to identify and Pty Ltd was set to install an ad-
solve a problem before it affects opera-
tions.” Gold Road has awarded a number of contracts as vditional 360 rooms last month,
development of the Gruyere gold project ramps up with the complete 648-room

Gruyere Village expected to be

Contracts galore for ready for occupancy towards the end of
Gruyere development this month.

Gold Road Resources Ltd has award- Compass Group Remote Hospitality
ed a number of key contracts as it ramps Services Pty Ltd was awarded the camp
up development of its Gruyere gold pro- management services contract.
ject, about 200km east of Laverton.
WA-based drilling firms DDH1 Drilling
MACA Civil Pty Ltd, a subsidiary of and Ranger Drilling Services have been
MACA Ltd, has been confirmed as the awarded key contracts as part of Gold
preferred bulk earthworks contractor for Road’s $30 million greenfields explora-
tion programme for 2017, including work
developing the main access at the North Yamarna and South Yamar-
road, borefield access tracks, na projects.
airstrip, process plant earth-
works and tailings storage facil- Gold Road sold 50% of its Gruyere
ity. A formal contract was set to project to Gold Fields Ltd for $350 million
last year.

be finalised at the time of print. RUC ready to roll at
The preferred EPC contrac-

Mt Morganstor is a JV between Amec Fos-

ter Wheeler plc and Civmec

Constructing and Engineering. Dacian Gold Ltd has issued a condi-

The scope of EPC work will tional LOI to RUC Cementation Mining

cover the detailed design, pro- for the award of the underground mining

curement and installation of the contract at its Mt Morgans gold project in

process plant, administration Western Australia.

office, workshop, warehouse as It is intended for the conditional LOI

well as the main water pipelines to be replaced by a formal underground

and powerlines to the borefield. mining services contract following agree-

GE chairman Jeff Immelt and South32 chief executive GR Engineering Services Ltd ment to the final terms and conditions.

Graham Kerr sign off on a strategic three-year digital has been awarded a contract to Works under the contract, which will

partnership between the two companies design, supply and install the have an initial term of three years with

OVER 2000

PROjEcts & studiEs cOmPlEtEd

succEssfully aROund thE wORld

PAGE 86 MAY 2017 AUSTRALIA’S PAYDIRT

PROJECTS COmPlETEd GlObally FINd OUT mORE DRAglobal.com

two discretionary one-year extensions, Futuro and MTN are required to train 60- Engineering School, UDD’s innovative
will include establishment of a new portal 120 supervisors and in-house employ- rigging and control system technology
for Beresford, rehabilitation of the exist- ees. Revenue from the first stage of the was the first major change in dragline
ing portal and decline for Allanson, all contract will be low, but is expected to technology for multiple decades.
decline and level development and all grow upon ramp-up of further develop-
ore driving and stope production. ment works at Oyu Tolgoi. MineWare has since developed its
core technologies into market-leading
Underground mining is tipped to begin Construction at Oyu Tolgoi began last products, including the Pegasys dragline
this month. year, with Rio Tinto committed to invest- monitor, Argus rope shovel and hydraulic
ing $US126 million on technical and excavator performance monitoring sys-
GR Engineering Services Ltd was further education for an expanded work- tems.
expected to begin construction of the force as the project enters the next stage
new 2.5 mtpa CIL treatment facility last of development. Ferrum awards drill
month. contract for Toral
Komatsu acquires
DuPont subsidiary to MineWare technologies Ferrum Crescent Ltd has signed
deliver plant technology Sondeos y Perforaciones Industriales de
MineWare, a spin-off company of Bierzo SA (SPI) to undertake a diamond
MECS Inc, a wholly owned subsidi- Mining3 (formerly CRCMining) with ad- drilling programme at its Toral lead-zinc
ary of DuPont, will supply sulfuric acid vanced dragline and shovel monitoring project in Spain.
production technology for two new technologies, has been acquired by Ko-
plants owned by Codelco, the world’s matsu. The drilling contract is for a minimum of
largest copper producer. 1,400m and a maximum of 2,100m and is
Established in 2005, MineWare came expected to take up to three months to
The MECS technology will treat off- out of the Mining3 research programme complete. The drill cost is €80/m.
gas from the Chuquicamata copper which produced the Universal Dig and
smelter complex in the Antofagasta re- Dump (UDD) technology. Developed Preparation of the drill sites and mobili-
gion of northern Chile. in conjunction with the University of sation of the rig were ongoing at the time
Queensland’s Mining and Mechanical of print.
Construction of the two new plants –
each expected to produce 2,048 tpd of Outotec tasked with
market-grade sulfuric acid – has testing brine solution
begun and is likely to be completed
sometime next year. Anson Resources Ltd has ap-
pointed Outotec Finland to carry out
Long-time MECS partner SNC- test work on synthetically prepared
Lavalin will provide detailed EPC brine solutions similar in composi-
services for the new plants, which tion to those at its ULI subterranean
will replace existing facilities that pressurised lithium brine project in
have become environmentally ob- Utah, USA.
solete.
The synthetically prepared brine
Oyu Tolgoi to obtain will be similar to the lithium brine
a Futuro education extracted from the Roberts Well drill
hole, which is closest to the targeted
RBR Group Ltd subsidiary Futuro brine horizon previously assayed.
Skills, in conjunction with Mongolia
Talent Network (MTN), has won a Test work will be carried out in two
tender to provide two packages of phases, with magnesium and calci-
training and assessment services um to be removed initially before the
to Rio Tinto Ltd’s Oyu Tolgoi copper extraction of lithium carbonate and
mine in Mongolia. MineWare, a spin-off company of Mining3, additional economic commodities.

Under the terms of the contract, has been acquired by Komatsu

ExtRaORdinaRy POssibilitiEs in mininG and minERals PROcEssinG find Out mORE

DiAmonDs GoLD RARe eARth PLAtinum CoAL BAse metALs DRAglobal.com

AUSTRALIA’S PAYDIRT MAY 2017 PAGE 87

COMINGS AND GOINGS

Uranium industry veteran of project development for Volt Resources Ltd has ecutive director, technology
Mike Leech has joined Pretium Resources Inc where appointed Tanzanian- and business development.
the board of Bannerman Re- he oversaw the development born Australian entrepreneur Meanwhile, Andy Cardoso
sources Ltd as a non-execu- of the Brucejack underground Asimwe Kabunga as a non- and Graham Fyfe have also
tive director. Leech was man- gold project. executive director. Kabunga joined the company as project
aging director of the Rössing also sits on the board of director and project manager
uranium mine in Namibia for Mantle Mining Corp Ltd Tanzania-focused mineral respectively.
six years until his retirement has appointed Tom de sands hopeful Strandline Re-
in 2011, having previously Vries as chief executive, with sources Ltd. Pilbara Minerals Ltd found-
held other executive positions executive director Rick Valen- ers Neil Biddle and John
with Rio Tinto plc. Leech will ta transitioning to a non-ex- Alex Bates Young will join the board of
also chair Bannerman’s Na- ecutive role at the company, Spitfire Minerals Ltd follow-
mibian subsidiary. while continuing as a consult- Newmont Mining Corp has ing the acquisition of unlisted
ing geologist. appointed Alex Bates to company Admiral Gold Ltd
Berkut Minerals Ltd has ap- lead the company’s business and completion of a $4.5 mil-
pointed Neil Inwood as Ian Finch has stepped down in Australia. Bates joined lion placement.
managing director. Inwood is as a non-executive director Newmont in 2015 to oversee
an experienced geologist with of Orinoco Gold Ltd. Finch operations at Boddington and Thor Mining plc has ap-
more than 22 years of experi- joined the company five years has been serving as acting pointed Alastair Middleton
ence in gold, base and spe- ago when it began to repo- regional senior vice-president to its board as a non-execu-
cialty metals. He was most sition itself as a Brazilian- since January. He was previ- tive director. London-based
recently geology manager for focused gold explorer and ously general manager of Rio Middleton is a director of
both Cradle Resources Ltd developer. Tinto Ltd’s Brockman iron ore company shareholder Metal
and Boss Resources Ltd. operation and held a number Tiger plc.
Salt Lake Potash Ltd has of senior roles with that com-
Bronwyn Barnes appointed experienced pany. Founding director Andrew
mining engineer Will Long- Childs has resigned from
Bronwyn Barnes has joined worth as chief operating of- Global Geoscience Ltd the board of Riedel Resourc-
Indiana Resources Ltd as ficer. Longworth has worked has appointed James es Ltd.
non-executive chair. Barnes, on numerous potash projects Calaway as non-executive
who also chairs RNI NL, was around the world, including chairman. Houston-based Celsius Resources Ltd has
most recently executive chair for Vale SA and Rio Tinto Ltd. Calaway was chairman of appointed Brendan Borg
of Windward Resources be- lithium producer Orocobre Ltd as managing director. Borg
fore last year’s takeover by Andrew Wright has re- for eight years until stepping is a respected geologist who
Independence Group NL. placed Michael Langou- down in July 2016. specialises in the battery min-
She was previously deputy lant as company secretary of erals sector. He is tasked with
chief executive and general Nyota Minerals Ltd. Alan Rule has been ap- fast-tracking development of
manager, corporate, of West pointed Galaxy Resourc- the Opuwo cobalt project in
African-focused Alliance Min- Ricus Grimbeek has been es Ltd’s new chief financial Namibia.
ing Commodities. Meanwhile, promoted to the newly officer. Rule has worked in
former chairman Derek Fish- created role of chief technolo- similar roles for Sundance Former Gryphon Minerals
er will remain on the board as gy officer at South32 Ltd, with Resources Ltd, Paladin En- managing director Steve
a non-executive director. Paul Harvey taking on chief ergy Ltd and Mount Gibson Parsons has joined the board
operating officer duties for the Iron Ltd. of Centaurus Minerals Ltd.
ENSafrica has appointed company’s Australian assets. Parsons was instrumental in
seasoned mining law ex- David Flanagan has been the discovery and delineation
pert Ntsiki Adonisi-Kgame as Ricus Grimbeek promoted to executive of the 3.6 moz resource at
a director of its African mining chairman of Battery Minerals Gryphon’s Banfora gold pro-
practice. Company secretary Steve Ltd. Flanagan, who assumes ject in Burkina Faso before
Brockhurt has replaced the day-to-day management the company was taken over
Lion One Metals Ltd has ap- Howard Digby on the board responsibilities, is the founder by Teranga Gold Ltd last year.
pointed Ian Chang as chief of Estrella Resources Ltd. of Atlas Iron Ltd. Meanwhile,
development officer. Chang Digby has stepped down for Cherie Leeden has transi- Steve Parsons
was previously vice-president personal reasons. tioned to the new role of ex-

PAGE 88 MAY 2017 AUSTRALIA’S PAYDIRT

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LEFTFIELD

Pink Star shines at auction

Sotheby’s has broken a world record The stone also after Sir Philip Oppen-
when its 59.6ct pink diamond, dubbed
the Pink Star, fetched $US71 million at an boasts the highest heimer, whose family
auction in Hong Kong on April 4.
colour and clarity controlled De Beers for
Renowned Hong Kong-based jeweller
Chow Tai Fook made the winning bid and grades from the GIA 80 years before selling
renamed the gem the “CTF Pink Star”, to
commemorate the memory of his father for pink diamonds and to Anglo American plc
Dr. Cheng Yu-Tung and the brand’s 88th
anniversary. has been identified in 2012.

Speaking about the record sale, So- as a Type IIa, found In an unusual twist in
theby’s chief executive Tad Smith said: “It
is fitting that the owner of the most pres- in less than 2% of all auction history, the re-
tigious jeweller in Greater China should
today break the record for the most valu- gem diamonds. cord price for the Pink
able item ever sold in Asia as well as the
most valuable diamond ever sold at auc- Type IIa stones are Star is $US12 million
tion – now appropriately named the CTF
Pink Star,” Smith said. “Sotheby’s has chemically the purest The Pink Star, mined in Botswana by less than the $US83
been honoured and thrilled to serve this
very discerning client for many years.” of all diamond crys- De Beers, recently sold at auction for million offer made by

The Gemological Institute of America tals and have extraor- $US71 million diamond cutter Isaac
(GIA) said the Pink Star was the largest
internally flawless fancy vivid pink dia- dinary transparency. Wolf in 2013.
mond that has ever been graded.
Mined by De Beers in Botswana, 1999, That sale collapsed when Wolf never

the 132.5ct rough diamond was cut and paid and Sotheby’s had to reclaim the

polished over two years by Steinmetz stone.

Diamonds, owned by Israeli billionaire Sotheby’s jewellery division chairman

Beny Steinmetz. David Bennett said he was delighted the

The vivid pink took the title of high- diamond had finally been crowned the

est auction price from the Oppenheimer most valuable gem ever sold at auction.

Blue, a 14.62ct blue diamond which went “The price has more than doubled the

under the hammer for $US58 million in a record for a fancy vivid pink diamond that

Christie’s sale in Geneva. we set just last year in Geneva.”

The Oppenheimer Blue was named

INDE X

3D Resources 50-51 Crusader 36 Kumba Iron 7 Resolute 25
Rex 66
Admiral 88 Dacian 86-87 Laconia 78 Rio Tinto 87, 88
Aeris 74 De Grey 32 Li3 Energy 57 RNI 88
Alicanto 20-22, 23-29 Lincoln 59
Alliance 72-73 Estrella 88 Lion One 88 Salt Lake 88
Anglo American 7, 41-42 Eurasian 50-51 Lithium Power 57 Sandfire 17, 55
AngloGold 55 European Metals Santana 47-49
Anson 87 Evolution 85 Mantle 88 Seriti
Antioquia 55 8 Marmota 76 Shandong 7
Antofagasta 74 Metal Tiger 88 Silver Lake 5
Argonaut 74 Ferrum Crescent 87 Metals X 14 SolGold 67
Arrium 61 First Quantum 25 Mineral Resources 11 South32 40
Atlas Iron 10, 57, 88 Fortescue 10 Mount Gibson 88 Southern Copper 38, 86, 88
Aus Tin 16 Freeport 41, 82 MSB 57 Spitfire 41-42
AusQuest 38 Mt Gibson 10 SQM 88
Austral 45-46 Galaxy 33, 88 Musgrave 67 Strandline 37
Avanco 53 Genesis 32 Sundance 75, 88
Gindalbie 75 Superior Gold 88
Glencore Newcrest 40, 57 5
Global Geoscience 7, 8
B2Gold 55 Gold Fields 88 Newmont 5, 21, 24, 25, 37, 50-51, 88
Gold Road
Bannerman 88 Golden Rim 37, 78, 80, 86 Northern Star 5 Takara 24
Gran Colombia 78, 86 Talisman 17
Battery Minerals 88 Grange 54 Nyota 88 Teranga 88
Greenstone 55 Thor 88
Barrick 5, 22, 24-29 Guyana Goldfields 10 Toro Energy
83 Torrens 9
BC Iron 10-11 OceanaGold 12-13 Troy 75
21, 22, 24 Orinoco 88 Tyranna 20-22, 24, 30-31, 45
Beadell 44 Orocobre 72-73
Oz 33, 88
Berkut 88 59, 74, 75

BHP Billiton 7, 8, 9, 40, 54, 59, 66, 75

Boss 88

Cameco 9 Harmony 78 Pacific Rim 12 Vale 88
CAP 39 Herencia 54 Pacifico 55 Vimy 9
Cardinal 80 Hot Chili 39-40 Paladin 88 Volt
Carpentaria 65 Peak 79 88
Celsius 88 Poz 20
Centaurus 88 Independence 88 Pretium 88 Westgold 14
Cleveland 56 Indiana 88 WPG 68-69
Cliffs 61 Investigator 70-71
Codelco 87 Iron Road 59, 64 QCoal 8
Continental Gold 55
Cordoba 55 Kalium Lakes 11 Realm 8 Yamana 37
Cradle 88 Kimberley Diamonds 9 Red 5 83 Yancoal 8
Kingsgate 68 Red Eagle 55 Yunnan Tin
Kirkland Lake 5 Reidel 88 14

PAGE 90 MAY 2017 AUSTRALIA’S PAYDIRT



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