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Published by Paydirt Media, 2018-09-02 23:40:30

PD264_Sept2018_magweb

from Kalgoorlie, with Williamson report-
ing a positive response to the site visit.

The company is permitted to drill and
with $3 million cash to the end of the June
quarter, Williamson said drilling could oc-
cur quickly given impetus from the market
to do so.

Testing for gold and nickel sulphides
at Silver Swan South is expected to be a
fairly inexpensive exercise, but a poten-
tially rewarding one for Blackstone if it is
successful, particularly given the interest
in the area.

While Kanowna Belle is in close prox-
imity, after a tight tendering process Evo-
lution Mining Ltd has recently pegged
ground near Blackstone’s Silver Swan
South holding.

“Evolution has pegged the ground to
the west and Northern Star is to the south
of us. We have a very strategic position
within 100km of many, many process-
ing facilities that require ore,” Williamson
said.

“We are also close to the Silver Swan
processing facility, if we were to find nick-
el sulphides. It is a very strategic posi-
tion, where we don’t have to worry about
building infrastructure. There is plenty of
infrastructure in this Kalgoorlie region and
it is becoming a very aggressive space,
particularly for gold land acquisitions.”

– Mark Andrews Scott Williamson

Drilling at Black Eagle intersected 10m @ 3.2 g/t gold from 68m within 15m @ 2.2 g/t from 64m end-of-hole
AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 51

DIGGERS & DEALERS REVIEW

Global Geoscience story
far from boring

Service providers weren’t the only com- happens as we think it will, then really it is creasing, particularly in the boron silicate
panies to feature on the Diggers &
Dealers programme for the first time ever, 2025 and beyond to 2030 when that really glass area but also across the board,
with Global Geoscience Ltd laying claims
to being one of the only companies to pre- ramps up. We currently see 200-250,000 agriculturally as well. The uses of boron
sent a boron story in the conference’s 27-
year history. tpa of demand for lithium carbonate and are intimately tied to three things; urbani-

The arrival of the first boron story may that is going to be up to or above 1 mtpa sation; energy efficiency and agriculture
not have been enough to get the Diggers
faithful excited but Global’s credentials or up to 2 mtpa of demand by 2030.” – the need to feed, the need to conserve
should be.
Instead of beating the same drum as energy with insulation and building hous-
The ASX300 company boasts the larg-
est lithium-boron resource in North Amer- lithium peers, Rowe chose to focus on es,” Rowe said.
ica, with its Rhyolite Ridge project hosting
4.1mt of lithium carbonate and 11.9mt of the company’s main differentiator; boron “The boron market is about a $US3.2
boric acid in Nevada, US.
and its uses. billion a year market so it is actually fairly
While there are many potential
lithium plays around the world at The company estimates 35-45% of similar in size to the lithium market, but
various stages, few have a bo-
ron-kicker like Rhyolite Ridge’s. revenue will come from the boron compo- you don’t hear much about it. And, why

In fact, outside of Turkey – nent of Rhyolite Ridge where ore can be this is one of the first boron talks at Dig-
where the Government controls a
vast amount of boron – and Rio extracted using sulphuric acid in a simi- gers, I’d imagine, is that it is a duopoly.
Tinto Ltd’s Boron mine in the US
and the lithium-boron Jadar de- lar vein to how copper oxide deposits are The Turkish Government and Rio Tinto –
posit in Serbia, there is little other
supply. treated. in fact I think Rio Tinto has found every

Global’s unique value proposi- boron deposit in the world, in-
tion appears to have resonated
with investors and the company cluding the ones in Turkey – [con-
is now well placed to complete
a DFS and environmental pro- trol the market].”
cesses at Rhyolite Ridge in the
second half of 2019. With no spot price boron mar-

The company successfully keting is an opaque business in-
completed a $53 million place-
ment recently, led by Citigroup, timately tied to housing in the US
and supported by existing share-
holders and new investors plus domestic and China.
and international institutions.
In its PFS, Global is working
A PFS evaluating a low-cost, open pit
project over 30 years at 3 mtpa producing on a boric acid price of $US700/t
20,000 tpa lithium carbonate and about
160,000 tpa boric acid is expected to be to 2023 and $US10-12,000/t for
completed in Q3.
lithium carbonate.
The electric vehicle story and lithium’s
role in it has been subject to widespread “Given the importance of our
commentary at the last two Diggers so
Global managing director Bernard Rowe industries and the growing im-
wasted little time in covering dynamics of
the sector. portance of boron within those

However, Rowe did say: “We hear a lot industries, we’re looking at a
in the media and news about the oversup-
ply of lithium, in the short term that may or stable growth demand of 4-5%
may not be the case, but what we know
is that if projected electric vehicle take-up p.a. There is ideal opportunity for

a new deposit to come into the

market, with a tightening of sup-

ply that we’re expecting around
Bernard Rowe 2021 which is tied to Rio Tinto’s

Boron [mine] in California getting

“Everything that you have picked up, towards the latter stages of its life,” Rowe

touched or used [this morning], probably said.

half a dozen items at least contain boron “We see the customers in boron are

without [many people] knowing about very much going to welcome a third en-

that,” Rowe said. trant into the space. There are a couple

“There are a lot of different industries of other companies that produce a small

that use boron and in fact all of them use amount of boron, and when I say a third

quite sizable amounts of boron and there party, I am talking about hundreds of

is not one concentrated focused use.” thousands of tonnes of the material.”

Borosilicate glass is where most bo- Having secured funding to complete

rates end up, followed closely by insula- its feasibility studies, Global has targeted

tion for housing and ceramics. 2021 for production from Rhyolite Ridge.

Boron can’t be substituted and the Part of the feasibility studies will include

broad usage of the industrial mineral will drilling to infill and extend the current re-

keep it in demand for a long time to come, source, while the funding will also help

according to Rowe. Global secure any potential long lead

“Boron is here to stay and the quantity items.

of boron [demanded] is going to be in- – Mark Andrews

Page 52 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

BATTE2R0Y19

MINERALS

13-14 March 2019 – Perth, Western Australia

graphite tin cobalt
nickel
lithium
copper

manganese vanadium
rare earths

www.batterymineralsconference.com

To present, exhibit or attend as a delegate please contact
Namukale Nakazwe-Msiska on (+61) 8 9321 0355 or emaiAlUSkTaRAlLeIA@’S PApYDaIRyTdAiUrGtU.ScT 2o01m8 P.aague 53

SAREIC REVIEW

SAREIC’s closing panel
of Alexandra Blood, David Christensen,

John Anderson and Warren Pearce

SA’s cradle-to-grave
battery opportunity

Elon Musk’s bold decision to build the world’s largest lithium-ion battery some
230km north of Adelaide may have delivered South Australia an early
advantage in its bid to become a centralised technology processing hub.

While Western Australia has attracted ian one, and I think SA is probably better step of battery production.
plenty of attention through its re- prepared than most other states because “The SA Government has been very
cent launch of the Lithium and Energy they’ve been having the conversations
Materials Industry Consortium, SA has for two or three years,” Pearce said. fortunate to be privy to the internal global
won widespread praise for its role in the economics of how a company like Te-
successful commissioning of the 100MW “This whole idea has already been sla is looking at the entire battery value
Tesla battery at the Hornsdale Power Re- socialised with community and with gov- chain,” she said.
serve late last year. ernment in SA and you’ve got people
devoted to making it work. In an environ- “When we say that, we mean from cra-
SA is already home to Australia’s larg- ment where the market is moving very, dle – being the beloved mine site – right
est known resources of graphite – a key very quickly, being able to get to market through to grave with the manufacturing
component of the anode in a lithium-ion quickly is going to be very, very impor- of the anode and cathode, so the whole
battery – putting the State firmly in the tant.” portfolio, not just digging up the dirt but
spotlight of battery enthusiasts and end- also on the processing side.”
users. Speaking during the closing panel
session to this year’s South Australia Renascor Resources Ltd is one of
Association of Mining and Exploration Resources & Energy Investment Confer- several SA-based graphite hopefuls
Companies (AMEC) chief executive War- ence (SAREIC), Department of Energy embracing the battery boom. The Da-
ren Pearce suggested SA had already and Mining executive director Alexandra vid Christensen-led company undertook
proven to the world it was serious about Blood said the State had benefitted from a scoping study earlier this year on a
partaking in the technology revolution being involved in Tesla’s development of potential downstream processing facil-
sweeping through the various institution- the battery, from “cradle to grave”. ity which would leverage off its Siviour
al investment markets. graphite project on the Eyre Peninsula.
Blood, who heads the department’s
“If you can get into that secondary mineral resources division, said plans Christensen said SA’s status as a low
value-adding piece, there’s an Austral- were being put in place to ensure the sovereign risk jurisdiction was resonating
ian story here, not just a West Austral- State could contribute towards every with potential Chinese investors seeking
alternative graphite supply on the back of

Page 54 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

recent environmental law reforms in their such as the Hornsdale Power Reserve. “What we’re trying to do is actually be
home country. “Tesla is very interested in the pro- quite considered because you don’t want
to set up one part of the battery value
“Our investment case is based on the cessing side and they’re obviously willing chain here and focus only on lithium-ion
fact that we think we can extract the to pay more for the lithium from Australia [batteries] and miss out on where the in-
graphite at globally competitive prices because they figure their long-term risk dustry is going with the alternative bat-
and we think we’re one of the few places factor is much lower here,” she said. tery technologies.
where we can do it in a low sovereign risk
jurisdiction,” Christensen said. “They’re also willing to put pressure on “The other thing with batteries that
their miners to set up processing facilities people are missing in the conversation
“Chinese sources seem to be drying or drive their suppliers to set up in the ju- is the recycling potential. Now, it doesn’t
up for a number of reasons, mainly be- risdictions that they want.” sound like a sexy part of the value chain,
cause the environmental restrictions are however, the greater the drive for batter-
real, graphite mines in China are closing However, Blood encouraged those ies, the bigger the market for recycling.
down and there’s some depletion of their seeking to play a role in the burgeoning We are really looking at the entire cycle
existing resources. battery minerals space to take on the and considering where SA can best fit
challenge with an open mind. into that and how best to create the envi-
“Places like Tanzania and Mozambique ronment that stimulates it.”
have economic sources of graphite, but “Currently lithium-ion batteries are the
they come with some real sovereign risk technology of choice, however, there is – Michael Washbourne
issues. So, the fact we’re in Australia is rapid research looking into alternative
really at the forefront of what we think types of batteries,” she said. tainly improve the situation. It’s much
we’re selling and it’s one of the reasons better than dealing with whisper cam-
why we think we may be able to get some paigns from people who are anti-mining
of the investment capital to get a mine spreading all these horror stories about
started in the next couple of years.” what may happen.”

Investigator Resources Ltd managing Association of Mining and Explora-
director John Anderson said SA also of- tion Companies (AMEC) chief executive
fered unrivalled technological research Warren Pearce said there were inevita-
capabilities through its globally recognised bly some landowners who “shut the gate”
university programmes, which would only on mining and exploration companies
enhance the State’s bid to become a bat- from the outset.
tery manufacturing powerhouse.
“Sometimes you just have to accept
Blood called for more time and re- there might be 10-15% of people who
sources to be committed to engaging are never going to listen to our message,
with battery developers such as Tesla are never going to be supporters or will
to understood more about what materi- never engage or invest in the industry,”
als and facilities are required for SA to Pearce said.
remain at the vanguard of future projects
“Our journey is about winning over the
Consistency denly target people and start throwing in- other 85% and make sure the ones who
key to land formation at them on top of their life and will invest in our industry are helping sell
their day job,” she said. “It’s a constant our industry to those people who might
debate message and it’s a constant interaction not be engaged with it or might not know
and it’s a constant responsibility… so to that much about it. If you can hold the
Alexandra Blood has urged miners expect them to suddenly be on board attention of 85% of the community, then
and explorers to devote more time when you’re in an upturn I think is unreal- you’ve pretty much got your job done in
and effort into community and stakehold- istic and we need to adapt and be smart- that respect.”
er engagement, especially when the go- er about keeping a constant finger on the
ing gets tough. pulse to keep that information flowing.”

Blood, who oversees the mineral re- Renascor Resources Ltd managing
sources division for SA’s Department of director David Christensen said main-
Energy and Mining, said with sentiment taining an open dialogue with landown-
towards the resources sector picking up ers was the only way a company could
after a prolonged period of depressed ensure it will be regularly welcomed back
commodity prices, the industry needed on a property.
to be careful about how it approached
disgruntled landowners who may have “If you rock up to someone’s gate and
been unfairly taken advantage of in the say you want to do a drill programme,
past. there’s a set of expectations for that
visit but the difficulty arises when you
“You can’t walk into a boom and sud- come back for a second time because
people have these expectations around
how certain you are of building a mine,”
he said.

“Anything to get better information out
there, especially when you’re going back
time after time, again and again, will cer-

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 55

SAREIC REVIEW

Government goes deep
for SA explorers

New South Australian Minister for Energy taking modelling, and help to speed up the Derek Carter
and Mining Dan van Holst Pellekaan progress of exploration programmes.
gies marked a “game-changing” moment
has moved swiftly to address what respect- “We expect this will help stretch explora- for the State’s copper resources.

ed industry identity Derek Carter described tion dollars further and boost the likelihood “Traditional cars use up 22kg of copper
in battery technology and the electric ones
as an “appalling” record for exploration ac- of exploration success.” use 75kg of copper,” he said. “This is an
enormously exciting opportunity for SA.”
tivity in the State over recent years. Since taking on the energy and mining
SA hosts 66% of Australia’s known cop-
Since the heady days of 2011 when more portfolio following the Liberal Party’s elec- per resources, with the red metal being the
State’s largest exported material at $2 bil-
than $300 million was pumped into mineral tion win in March, van Holst Pellekaan has lion annually.

exploration efforts in SA, expenditure to wasted no time striving to improve condi- While SA has a long-term vision to be-
come a 1 mtpa copper producer by 2030,
unearth new discoveries in the State has tions for the State’s stalled resources sec- current statistics show some 200,000 tpa of
new copper resources will need to be dis-
dropped to less than $50 million. tor. covered over the next decade if that ambi-
tion is to become reality, assuming existing
“Our record in the last few years on ex- One of the Liberal Government’s first operations and other advanced projects are
either expanded or developed as flagged.
ploration is appalling,” Carter said during major decisions was to establish a sepa-
Carter also urged caution on some of the
the opening session at SAREIC. rate Department of Energy and Mining as forecasts around copper.

“It doesn’t take long to see that we are a “single focus for efficiency and account- “There’s been a 22% price increase in
copper in the last 12 months, yet the pro-
going back to the dismal days of the 1990s ability”, according to van Holst Pellekaan, duction is still in excess of demand and
they’re only predicting that the deficit in cop-
with the amount of money that is being rather than competing for attention in the per will occur in 2020. The reason for that is
the growth of the market in China and the
spent on exploration in SA. previous Department of Premier and Cabi- fact that there are few large scale deposits
coming onstream,” he said.
“We had in our projections $200-300 net portfolio.
“One of the issues the industry will have,
million as our objective to be a stable ex- “The leading priority will be on reducing in my opinion, is if the copper price con-
tinues to go up at that rate, what happens
ploration level for SA and we have dismally the cost of energy and improving energy of course is you get substitution of other
elements and you price yourself out of the
failed. It’s a problem for security, while also low- market. So, in that respect, people market-
ing copper have to be a little bit careful.”
the industry, it’s a prob- ering emissions from
Van Holst Pellekaan also said the Liberal
lem for government. generation,” he said. Government’s plan to abolish payroll tax for
small companies with less than $1.5 million
“I don’t have a par- “This is absolutely on their annual payroll would benefit the
junior exploration sector.
ticular solution today essential to underpin
“Our modelling shows the removal of this
that I can mention, I just a positive business cli- tax will benefit 3,200 small-to-medium busi-
nesses in SA and will very likely include ac-
bring it to your atten- mate to grow jobs and tive junior companies present here today,”
he said.
tion that our exploration the economy and to
“It is well documented that since 1990 the
is generally reducing, attract business to the junior exploration sector has been the ma-
jor driver of greenfield mineral discoveries.
our share of Australia’s State. And all of you So, every dollar saved in costs and taxes by
these companies can be diverted by them
exploration is reducing know how important into exploration programmes which will
commence the minerals value chain.”
and it’s a real problem Dan van Holst Pellekaan affordable and reliable
for us.” energy supply is to re- – Michael Washbourne

Van Holst Pellekaan sources projects.”

preceded Carter’s concerns by announcing Energy storage will be a big part of the

the maiden release of rock depth data from new Government’s focus, with SA set to

the Gawler Craton airborne survey. The house over 1.7GW of storage projects –

initiative is aimed at helping explorers con- including big batteries, pumped hydro and

duct more efficient and less cost-prohibitive virtual power plants – in the coming years.

programmes which could yield major finds. “We have a $50 million grid-scale stor-

The maiden data release is the first of age programme as part of the election

16 packages covering the remainder of the commitment which we will deliver to sup-

Gawler Craton survey area to be rolled out port the roll out of grid-scale storage,” van

by the SA Government over the next 12 Holst Pellekaan said.

months. “We also have a $100 million household

“When it comes to exploring under cover, storage programme. And, importantly, we

knowing the depth of prospective rocks is have retained the former government’s vir-

critical information, given the cost and ex- tual power plant which they entered into an

pense involved in drilling,” van Holst Pelle- agreement with Tesla for. We will and want

kaan said. to develop the 50,000 battery roll outs to

“The Geological Survey of SA and the household from that programme, plus our

CSIRO have brought you a data-enriched 40,000 household subsidised battery pro-

package that predicts the depth of prospec- gramme.”

tive rocks. In many instances this knowl- Carter, who was a key figure behind the

edge will save explorers the extra expense discovery of Prominent Hill two decades

and hard slog of data processing and pains- ago, said the rise of the battery technolo-

Page 56 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Resist social licence creep:
Koutsantonis
South Australian shadow mines
spokesperson Tom Koutsantonis has Tom Koutsantonis
warned the State’s resources sector to
be vigilant about the creeping of social needed to remind the community it took that emotion of rural landowners to tar-
licence into the approvals system. its obligations seriously. get what should be a traditional ally; the
resources sector.”
Koutsantonis acted as SA Resources “Of course, we can regulate industry
Minister for seven years during the previ- and I’ve not met a company yet which Asked for solutions to the discord,
ous Labor Government and now in oppo- didn’t have the environment at the fore- Koutsantonis suggested greater sharing
sition is determined to support the sector front of their concerns,” he said. “If the of state royalties with affected communi-
in holding the new Steven Marshall-led science says we can conduct activity ties.
Government to account. safely then we’ll support it.”
“In the south-east of the State, the La-
“Governments need to listen to people The lock-the-gate movement has bor Government forewent 10% of its roy-
who know what they are talking about,” taken hold in NSW and Victoria with, ac- alty. So, I suspect the answer is to derive
Koutsantonis said at SAREIC. cording to Koutsantonis, active support economic benefit out of it. It has worked
from an unlikely source. with windfarms. If we can start sharing
He was specifically referring to in- royalties with the landholders – directly
creased activism among rural landhold- “It is a right wing movement which has and indirectly – it will lead to greater ac-
ers opposed to exploration and mining been hijacked by a left wing party [the ceptance.”
on their property. Koutsantonis said the Greens],” he said. “It is a private property
resources industry needed clarity from issue but the Greens have tapped into – Dominic Piper
government on the issue of approvals
and regulation.

“We have the best regulators in the
country; they are never fearful to speak
to truth but we are entering a danger-
ous regulatory era,” Koutsantonis said.
“There is a new regulatory approval form
called social licence; the problem is I
can’t find it anywhere in the Mining Act.
What’s the point of setting regulation if
you are going to impart arbitrary deci-
sions on top of it?”

He said without legislation, the idea of
social licence would get out of hand.

“It is dangerous because it leads to
moratoriums and politics and that makes
it harder for you to raise capital,” he said.
“You can’t meet the threshold for a social
licence because it is uncodified. You just
cannot pass the new test of getting ac-
ceptance from everyone. If that occurs,
the industry will retreat and will end up
opening in the Third World where they
can get the social licence. Look at New
South Wales and Victoria; only popula-
tion growth is hiding their sins.

“As soon as we impose political rule
above regulation, companies will stop
coming.”

Koutsantonis said he found the sug-
gestion that government was unable to
regulate the industry as “offensive” but
said such opinion was growing smaller in
state parliament.

“The only way to combat that is to be a
progressive industry and speak out,” he
said.

Koutsantonis said the resources sector

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 57

SAREIC REVIEW

Leigh Creek fulfils
its gas potential

With first gas production imminent, Leigh Creek was one of the “strongest opportuni- Phil Staveley
Creek Energy Ltd managing director ties for low risk commercial UCG anywhere
Phil Staveley is now focused on refining the in the world”. “Pre-commercial stage will be one gasifier
company’s path to commercial production. over 60 days, large-scale commercial will be
“The scenario at Leigh Creek is very dif- 100 gasifiers over 30 years. That is too big
The company received environmental ferent to Linq Energy [Ltd] in Queensland; it a leap so we are now looking at an interme-
approval for its eponymous unconventional is not comparable. The key is that we are in diate stage with multiple gasifiers, probably
gas project in April, paving the way for pre- the right place to do ISG. The geological set- producing electricity.
commercial demonstration events to begin ting is perfect – the best identified site in the
during this quarter. world for ISG. Also, because of the historical “It is low risk and low capex. We have
coal mining all the infrastructure is in place.” completed the technical feasibility and it
Situated on the Leigh Creek coalfield, shows we can do it on daily operations and
550km north of Adelaide, the Leigh Creek In May, Linq (now in liquidation) was found that it’s boring; and financiers like boring.”
project will see in-situ gasification (ISG) used guilty of wilfully and unlawfully causing se-
to produce a syngas product which can then rious environmental harm between 2007 Stage two large-scale operations may in-
be converted into power, natural gas, pet- and 2013 at its ISG project near Chinchilla, volve further processing.
rochemical and agricultural products such Queensland.
urea. “As syngas is a raw material we can look
The task now is to demonstrate the com- at power and natural gas and we are also
Staveley said the environmental approval mercial viability of producing syngas with looking at opportunities to move up the value
was a milestone for the project, adding fur- Leigh Creek set to build its pre-commercial chain into urea and methanol.”
ther proof of its viability. demonstration plant.
Staveley said the company would upgrade
“Achieving environmental approval was a “We have been moving as fast we can its gas resources to reserves before the end
major step forward for us though we never into development,” Staveley said. “Moving of 2018 with feasibility studies, approvals,
had any doubts,” Staveley said. towards first gas production which will be a FEED and offtake negotiations to conclude
game-changer for us but we are now lifting before the end of 2019. Construction of a
Staveley said the SA Government’s en- our eyes beyond the demonstration plant. power plant would then begin in 2020.
vironmental assessment had shown Leigh
– Dominic Piper

Rex readies for financing
Rex Minerals Ltd has an approved PEPR Q4 as Rex looks to expand its potential “Back when I started in copper in 2013,
and a robust feasibility study update on customer base for the proposed open-pit there was 80 mtpa being produced and
its Christmas wishlist for the Hillside copper mining operation. used around the world,” Hall said.
project on the Yorke Peninsula.
Rex project director Greg Hall said initial “It’s substantially more than that now
South Australian regulators are expect- feedback on the PEPR submission had and it’s still increasing, but we just haven’t
ed to award environmental approval for been positive. had the mines developed. We do believe,
Hillside in the coming months following notwithstanding the recent pullback in
submission of the PEPR documentation “I don’t see, personally, any showstop- price, it’s the right metal to be in. Metals
in February and the subsequent six-month pers,” Hall said. “We’ve engaged with the like copper don’t go away.”
review period. Department [of Energy and Mining] sig-
nificantly over the last 2-3 years, we’ve Rex recently rattled the tin for almost $7
China Nerin Engineering Co Ltd is also engaged with the community significantly million of working capital as it looks to ar-
undertaking a feasibility study due in early over the last 2-3 years, so we’ve really rive at a final investment decision on the
worked through a lot of significant issues mine by late 2019.
Greg Hall in that time.”
Based on that timeline, commissioning
Earlier this year Rex updated its 2015 is slated for late 2021 following two years
feasibility study to reflect today’s prices, of mine construction and related infra-
with Hillside now commanding a $480 structure development.
million start-up capex. C1 cash costs are
estimated at $US1.61/lb and all-in costs of Rex already holds a granted mining
$US1.88/lb. lease for the project and Hall said develop-
ment of the mine would be a major boost
Based on a copper price of $US3/lb, for the Hillside community.
Hillside is expected to generate a post-
tax NPV of $188 million, IRR of 14% and “As we’re seeing with the different parts
EBITDA of $123 million. of Australia under some drought now, you
need to have multiple opportunities for
Hall, who previously guided copper pro- both jobs, for services, etc,” Hall said.
ducer Hillgrove Resources Ltd, said the
current fundamentals for the red metal – Michael Washbourne
were very encouraging.

Page 58 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Diversity delivers for BHP

BHP Ltd’s renewed focus on collabora- ing firm Mitchell Services Ltd to recruit Sundeep Singh
tion with contractors at Olympic Dam more indigenous workers to Olympic Dam
has resulted in increased female and indig- and is looking to increase the indigenous $500 million last year on equipment from
enous participation, as well as significant percentage of its total workforce to 5.9% about 350 SA-based suppliers as part of its
improvements in overall mining operations. over the next 12 months, against a 5.57% Local Buying programme.
target by 2020 set for its Australia-wide op-
About 27% of the Olympic Dam contrac- erations. “We’re so much more than delivering
tor workforce is female – up 12.7% from dollars and costs; we’re about communi-
September last year – while indigenous Singh said the company was also work- ties, we’re about people and we want to
employment sits at 4.2% against a target of ing with suppliers to design and introduce give everybody the opportunity to share in
3.1% for the famed South Australian mine. more women-friendly equipment to opera- our story,” he said.
tions such as Olympic Dam.
BHP has a 30-40% female employment – Michael Washbourne
target and last year reported a 3% increase “We are working with Komatsu, Caterpil-
in female labour hire contractors across its lar and Liebherr and our frontline teams are
Australian assets. coming together more readily with them
around the design of equipment,” Singh said.
Sundeep Singh, vice-president of BHP’s
Supply Minerals Australia division, said the “We brought together our female opera-
mining giant was seeing positive impacts tors with these equipment manufacturers
across its business as a result of having a and talked and shared ideas around how
more diverse workforce. to improve the design of this equipment
that we use. It’s actually culminated now in
“Ultimately we know a more diverse the industry coming together through the
workforce equals better results,” he said. earth-moving safety roundtable to relook
“Our most diverse sites outperform our av- at the design philosophies of these manu-
erage by over 15%. We want to encourage facturers.
that and we want to continue to drive that
through the workforce. “Since then we’ve seen Caterpillar, Ko-
matsu and Liebherr all form their own inclu-
“This is really a call to arms. It’s our job to sion and diversity design teams and work-
incentivise the marketplace to generate the ing groups.”
right momentum towards gender balance.”
Singh said BHP had spent close to
BHP has been working closely with drill-

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 59

SAREIC REVIEW

Explorers need backing in SA

South Australia’s new Liberal Govern- the new Steven Marshall Government’s Warren Pearce
ment must invest in greenfields explo- withdrawal of funding for the co-funded
ration if the State is to avoid falling further scheme has left SA at a disadvantage. they think they can be successful. It could
behind rival jurisdictions, according to As-
sociation of Mining and Exploration Compa- “Every state followed SA’s lead in intro- be easy to get some projects into operation
nies chief executive Warren Pearce. ducing co-funded drilling and for SA not to
reinvest would see greenfields explorers and then demonstrate these wins and from
Pearce said while SA’s policies were depart for other jurisdictions. SA is running
“welcoming” and its royalty rates “competi- behind trend in this regard,” Pearce said. there, confidence will grow quickly.”
tive”, it could not afford to drop incentives
to greenfields explorers, particularly as the The PACE programme was designed to He said government, industry and com-
cost of discovery continued to rise. fuel a new generation of discovery in SA.
Pearce said the returns already achieved munity needed to work together to ensure
“SA exploration needs its heart started; it confirmed the initiative’s value to the State.
is flat-lining,” Pearce said. “Nationally, other projects were developed.
states are seeing exploration increase. In “An independent valuation showed a 20:1
Queensland, Western Australia and Victo- return on PACE investment,” he said. “Car- “The State needs a whole-of-govern-
ria the numbers started switching at the end rapateena is the most well-known [example
of 2016, but not in SA. of discovery funded via PACE] and it has ment approach and then investment will
grown into a $2 billion project.”
“We need greenfields exploration and come,” Pearce said. “The best way to
need to increase exploration and find new Carrapateena is currently being built by
ways of attracting private investment.” Oz Minerals Ltd but is one of just a hand- achieve goals is to reduce barriers in the
ful of development projects in the State.
The SA Government became a trend- Pearce said more success stories would regulatory framework; this is all within the
setter last decade when it introduced a co- need to be found if investors were to be en-
funded drilling scheme as part of its Plan for ticed back to SA. Government’s control.”
Accelerated Exploration (PACE) initiative.
The scheme’s success was such that other “These are wins that must be celebrated,” Pearce praised the new Government’s
states and territories followed suit, however he said. “SA is not getting projects into pro-
duction and investors want to invest where decision to form a dedicated Department

for Energy and Mining.

– Dominic Piper

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Page 60 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Gas lights way for SA
power future
South Australia’s energy fu-
ture may be reliant on the Some $887 million of explora-
outcome of the National En-
ergy Guarantee debate but the tion expenditure is forecast to
State’s hydrocarbon production
future appears in rude health. be spent in the Bight between

While state and federal gov- 2011 and 2022 with a recent
ernments battle to find common
ground on issues around ener- study commissioned by the
gy, SA appears to be regaining
some of the traction which saw it Australian Petroleum Produc-
become a focus of Australian oil
and gas exploration at the start tion and Exploration Associa-
of the decade.
tion (APPEA) suggesting up to
The State was ranked the
best oil and gas jurisdiction in 2,000 jobs would be created as
the Southern Hemisphere in the
Fraser Institute’s Oil and Gas a result of development.
2017 survey. SA ranked as the
world’s third best jurisdiction for “We can see from seismic data
reserve potential and 10th best
for investment attractiveness in the size of the field,” Goldstein
exploration and development.
said. “It could be as big as the
Barry Goldstein, executive director en-
ergy resources at the Department of Ener- Gippsland Basin or it could be
gy and Mining, told SAREIC delegates that
despite a dip in licence applications in the nothing. The odds are stacked to
2011-2013 period, it appeared SA’s oil and
gas exploration sector was “back on track”. work in the favour of explorers.”

Goldstein said the launch of the Plan for The APPEA report examined
Accelerated Exploration (PACE) Gas pro-
gramme in 2016 provided a solution to the two possible production scenar-
gas supply problems caused by the low
international oil price. ios from the exploration permit

“There have been 23 applications from areas granted by the Federal
15 companies with nine projects in the
grant portfolio targeting 217 petajoules Government – a 1.9 bbl of oil
(PJ) with 1,957PJ of follow-up potential,”
Goldstein said. equivalent liquids base case

A total of $47.78 million had been distrib- Barry Goldstein and a 6 bbl higher case.
uted in PACE Gas grants with the likes of The higher case was esti-

Santos Ltd, Beach Energy Ltd and Cooper mated to create 2,166 SA jobs during con-

Energy Ltd receiving funding packages. struction and an average of 1,521 jobs per

SA’s gas renaissance was confirmed year for 40 years. Federal and State tax pay-

in August with Cooper posting a net profit ments over the 40-year study period were

turnaround of $39.3 million in its first full projected to be $70.6 billion (base case) or

year as a predominantly gas producer. up to $314.6 billion if it proved to be as large

Cooper reported growth of more than as the Bass Strait field.

400% in cash flow and EBITDA for FY2018 APPEA director external affairs, Mat-

from operations in SA’s Cooper and Otway thew Doman, said the Bight could “be-

basins and the Gippsland Basin in Victoria. come a game-changer” for SA.

While SA’s gas developments have “With proper regulatory oversight, South

been restricted to onshore basins, Gold- Australia can have a safe, sustainable and

stein is confident major offshore finds successful offshore petroleum industry,

will be made, fuelling a jobs boom for the as has been the case in Victoria and the

State. western and northern regions of Australia

“On the metrics for jobs, etc., the Great for many decades.”

Australian Bight will deliver,” he said. – Dominic Piper

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AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 61

SAREIC REVIEW

Tyranna up for the challenge

Tyranna Resources Ltd is still eyeing a Despite the setback at Challenger, Bruno Seneque
future toll treating arrangement at the Tyranna is pushing ahead with plans to
Challenger gold mine despite embattled drill some of its more advanced prospects revised head grades of at least 3 g/t gold
owner WPG Resources Ltd entering volun- at the Jumbuck project, including Camp- returned in some instances.
tary administration. fire Bore and South Hilga.
Seneque said the company was also
Just hours before Tyranna managing di- At Campfire Bore, about 40km north of keen to test the base metals potential of
rector Bruno Seneque addressed SAREIC Challenger, up to 4,000m of RC and 500m its ground in South Australia as part of its
delegates, WPG announced EY had been of diamond drilling is planned to upgrade push to offer its shareholders exposure to
appointed joint and several administrators the existing inferred 2.78mt @ 1.2 g/t gold the battery minerals revolution.
for the company and its subsidiaries. for 109,000oz resource to indicated status.
Tyranna recently expanded its footprint
WPG cited the inability to meet debt obli- Golf Bore (3.79mt @ 1 g/t for 119,000oz) to the US, picking up the Goodsprings co-
gations with contractor Byrnecut Offshore and Greenewood (900,000t @ 1.6 g/t for balt project in Nevada. At the time of print,
Pty Ltd following the withdrawal of a pro- 46,000oz) are the only two resources with the company was also finalising its ac-
spective investor as the primary reason for partial indicated classification. quisition of another gold project, Eureka,
calling in the administrators. 50km north of Kalgoorlie.
Tyranna is also keen to assess the depth
RSM Australia Partners were appointed potential of its key prospects. – Michael Washbourne
joint and several receivers and managers
last month. “The key to all of our gold deposits is we
haven’t really targeted the underground
Tyranna controls more than 9,700sq km potential yet,” Seneque said.
of tenure around the Challenger gold mine
and has several prospects with near-term “With Challenger, they didn’t really have
production potential. a handle on the underground until they
opened up the pit. There’s the potential for
“All of our projects are within trucking an underground mine at each of our de-
distance of Challenger,” Seneque said. posits.”

“We certainly hope that keeps going be- All but one of the defined resources
cause we want to be able to feed into that across the Jumbuck property have pro-
plant.” duced positive pit optimisation results, with

Page 62 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Juniors defy exploration malaise

Reports about the death of the South a 600m deep conductor. tem under thin cover. If the outcomes of the
Australian exploration sector have “The depth shouldn’t be a deterrent be- resource estimate and metallurgical test
been greatly exaggerated; just ask John work are positive, we will feed them into
Anderson and Steve Johnston. cause the prize is substantial,” Anderson a scoping study in the second half of the
said. year.”
Anderson and Johnston – managing di-
rectors of Investigator Resources Ltd and The company is now combining the MT Johnston believes Weednanna could
Alliance Resources Ltd respectively – gave data with historical work to clearly define its open the area up to a camp-scale gold
the SA detractors plenty to consider on the strategy. play.
first morning of SAREIC.
“We are using a combination of legacy High-grade gold is associated with sul-
Exploration expenditure in the State data from adjacent drilling and new data phide replacement of magnetite along a
shrivelled to less than $50 million in 2016/17 and MT,” Anderson said. “So, we have Hiltaba-age granite and calc-silicate con-
(having exceeded $300 million 10 years sandwiched the target between the grav- tact and also associated with disseminated
before) but little blame can be laid at the ity and the magnetics and from below with arsenopyrite in an altered Archaean (Slea-
feet of Investigator and Alliance, which ac- the MT.” ford) granite.
counted for $8 million of exploration spend
between them in the 2018 financial year. At Paris, ongoing metallurgical test work Alliance has drilled 92 holes for 14,000m
will provide the ultimate answers to the sil- in defining the geometry of four shoots,
Investigator has taken a highly scientific ver project’s economic standing. with a fifth having received a few holes.
approach to exploration, undertaking ex-
tensive research into the style of minerali- “Recoveries for Paris are 74% and we “Hits from the drilling included 49m @
sation its Paris silver discovery represents have more leach test work under way as 6.3 g/t gold from 45m and 60m @ 5.65 g/t
and the best way to unlock the smoke we seek further increases,” Anderson said. from 47m,” Johnston said. “Fifty-eight holes
around its Maslins IOCG prospect. “The challenge is that it is very fine-grained reported intercepts of more than 1 g/t gold.”
acanthite and primary native silver, plus
The company is using data collected in secondary silver halides with much of it as Drilling was set to restart before the end
a recent magno-telluric (MT) survey under- inclusions in sulphides & quartz. of August to test the limits of the high-grade
taken by the Geological Survey of SA to fourth and fifth shoots.
identify new targets at Maslins. “We continue to work to look for ways to
improve recovery because that’s key to the The recent programme also hit a quartz
MT maps metallogenic corridors and tar- project.” vein of up to 20m thickness in the hanging-
get flares, providing new target vectors for wall of Shoot 1 with intersections of 28m
exploration. While Investigator’s South Gawler strate- @ 2 g/t, 5m @ 5.4 g/t and 2m @ 16 g/t
gy is based on the application of new tech- in a hole which will not be included in the
The SA MT survey captured data from nology and geological theories, Alliance’s maiden resource estimate.
35km below the surface, allowing explor- is grounded in the mistakes of the past.
ers to consider deeper controls on miner- Exploration will continue on the other
alised corridors. The company is set to reach 83.6% own- shoots with a 3D IP survey expected to
ership of its Wilcherry Hill JV with Tyranna highlight further targets.
Investigator’s work suggests Maslins Resources Ltd this year as it funds the $3.2
shows similarities to Olympic Dam from a million exploration budget. “These are the best gold results I’ve
MT perspective. ever worked with and we have nine further
Alliance increased its exploration spend shoots modelled,” Johnston said. “We are
“We’re surfing the magno-telluric wave this year after identifying at least 13 gold on the verge of having a gold camp here
and I think it’s a key aspect of the revitalisa- shoots on the Weednanna prospect at and if we had these results in WA they
tion of discoveries in SA,” Anderson said. Wilcherry Hill, a project which has been would be vectors to go straight into drilling
“MT is allowing us to look from the bottom almost entirely tested for base metals and out the entire camp.”
up; it is a whole new concept.” magnetite since its discovery in the late-90s.
– Dominic Piper
Investigator filled in the gaps of the sur- “We are punching above our weight ex-
vey using its own money and has identified ploration-wise,” Johnston said. “We have
identified a high-grade shallow gold sys-

John Anderson Steve Johnston
AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 63

SAREIC REVIEW

Gindalbie scopes out next phase

Gindalbie Metals Ltd was expected to In his first address to SAREIC delegates, two key deposits – Windabout and MG14
complete its acquisition of an initial 25% Gindalbie chief executive Chris Stevens – with JORC-compliant resources con-
stake in the Mt Gunson copper-cobalt pro- said a simple and conventional flowsheet taining 158,000t copper and 9,500t cobalt,
ject following SAREIC. underpinned the company’s successful as well as a third advanced prospect at
scoping study update and would be car- Emmie Bluff.
Approval of the recently completed scop- ried over to the PFS due to be completed
ing study update from JV partner Torrens in the next 12 months. Drilling at Emmie Bluff is slated for later
Mining Ltd was the trigger for the earn-in this quarter and could be factored into the
milestone. “Historically this project has suffered PFS pending positive results.
from low recoveries and struggled to get
Gindalbie has already begun work on saleable concentrates,” Stevens said. Regional exploration across the 750sq
the PFS which, when completed, will lift the km land package is also on Gindalbie’s
company’s interest in the project to 51%. “We believe based off the last year of agenda for FY2010.
work, we have a solid base case to take
Chris Stevens forward into PFS, so our focus will be really “The exploration story is really exciting,”
developing and proving up this flowsheet Stevens said. “We have 750sq km of very
as we go into the next phase of work. We prospective tenements in prime real estate.”
believe we can get split copper and cobalt
concentrates which is fundamental to the Gindalbie boasts an enviable cash posi-
marketability of cobalt products.” tion of $35.4 million from its days associ-
ated with the troubled Karara iron ore mine
The PFS will look at the addition of a hy- in Western Australia, described by Ste-
dromet circuit capable of producing cobalt vens as the “8 mtpa elephant in the room”.
sulphate, copper cathode and zinc car-
bonate products. However, Stevens does see a light at the
end of the tunnel for his company from that
Early studies have indicated only a small forgettable period earlier this decade.
hydromet circuit will be required due to the
high-grade concentrate set to be produced. “We have a significant war chest to look
at other acquisitions and build a portfolio in
Mt Gunson, about 25km west of Oz Min- the copper-cobalt space,” he said.
erals Ltd’s Carrapateena project, hosts
– Michael Washbourne

AsX: tyX

About tyrAnnA resources LtD

Tyranna is an ASX listed diversified junior
explorer offering shareholders broad
minerals investment opportunity through the
successful exploitation of its gold and battery
minerals portfolio.

• Goodsprings Cobalt Project (Nevada, USA)
– Outstanding Cobalt exposure

• Eureka Gold Mine (Western Australia) –
Potential for early cash flow opportunities

• Jumbuck Gold Project (South Australia) –
An expanding core asset located in known
gold ground

Level 2, 679 Murray Street, West Perth WA 6005 tyrannaresources.com
T: +61 (08) 9485 1040 I F: +61 (08) 9485 1050

E: [email protected]

Page 64 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

New department
sharpens government

focus

The head of South Australia’s new ded- tion expenditure again.” Paul Heithersay
icated resources regulator told SA- Reform of the approvals process could
REIC delegates the sector would benefit pushed for SA to be deeply involved
from the department’s singular mission. be the first step in attracting further in- in developing new exploration tech-
vestment. Heithersay said the Mining Act nology and having hosted the recently
Paul Heithersay has been at the heart review, launched by the previous Gov- completed Deep Exploration Technolo-
of SA’s mining regulator throughout sev- ernment, passed through Cabinet in July gies CRC, the State is now preparing to
eral department name changes. He will and set to be put before parliament last house the new MinEx CRC.
head up the new Department of Energy month, would streamline processes.
and Mining after the new SA Govern- The $218 million programme MinEx
ment chose to take the industry out of The reinvigorated regulatory frame- CRC will be focused on developing more
the Department of Premier and Cabinet. work will be paired with new pre-compet- productive, safer and environmentally-
itive data produced in the last 12 months friendly drilling methods to discover and
Heithersay – chief executive of the by the Geological Survey of SA. drill-out deposits, including coiled tubing
new department – said the decision con- drilling technology.
firmed the Steven Marshall-led Govern- Heithersay said recent programmes,
ment’s economic motivations. including the world’s largest contiguous – Dominic Piper
airborne magnetics/radiometrics survey
“The new Liberal Government ap- on the Gawler Craton, were “generating
proach is to have a single minister and a world-class, leading edge geoscience”.
single chief executive,” Heithersay said.
“The Department of Energy and Mining “The Gawler Craton survey is the big-
shows that energy minerals and petro- gest ever done; it’s like going from black-
leum are key areas of focus.” and-white TV to
HD,” he said.
The mining, petroleum and METS sec-
tor currently contributes $4 billion to the Other initiatives
SA economy and employs 28,000 peo- include interpre-
ple but Heithersay sees opportunity to tation of national
double that economic return. AEM surveys and
the Coompana
To do so, the Government will need to exploration pro-
find definitive answers to the sector’s two gramme which will
main problems; the energy crisis and the bring together data
lack of exploration expenditure. sets from magnet-
ics, radiometrics,
“Closing the gap on electricity pricing gravity and seismic
is a central priority of the Government surveys with drilling
and there are a number of projects which to turn the region
will see SA part of a genuine national en- into a greenfields
ergy market,” Heithersay said. frontier.

While Tesla Inc’s large-scale battery “We have part-
installation made most of the headlines nered with CSIRO
last year, there are a number of other to produce the most
projects expected to alleviate SA’s en- comprehensive
ergy concerns. depth-to-basement
survey we can and
“Lower energy prices are to be at- the magnotelluric
tacked from a number of fronts includ- data clearly works,”
ing support for an interconnector to New Heithersay said. “It
South Wales and the virtual power plant,” is about getting im-
Heithersay said. proved data to play
with and Coompa-
On the minerals side of his portfolio, na is already show-
Heithersay has been tasked with ensur- ing potential for
ing exploration grows from the $188 mil- nickel and copper.”
lion reported for the 2017 financial year.
Heithersay
“We need to double efforts to make SA has consistently
attractive to investors,” he said. “And the
question is about how to make sure we
get to 12-15% of the Australian explora-

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 65

SAREIC REVIEW

New scheme Marmota
proves popular steps out

The Junior Mining Exploration Incen- clarity on exploration expenditure deduc- Marmota Ltd is preparing to enter a re-
tive (JMEI) has proven resoundingly tions via the new TR 2017/1 ruling. source definition phase after a suc-
popular but small-cap resources compa- cessful drilling campaign on its Aurora Tank
nies can expect the Australian Tax Of- “The new ruling is a lot more helpful,” gold project.
fice to increase its focus on the sector, Brittingham said. “If you invest in long-
according to a leading resources tax law lead assets before the decision to mine, Marmota has been exploring at Aurora
specialist. it won’t come under exploration expendi- Tank – 50km north-east of the prolific Chal-
ture but exploration in existing assets lenger gold mine in western South Australia
The scheme, introduced at the back- could. If expenditure is after decision-to- – for three years, following identification of a
end of 2017-18 replaces the Exploration mine it means it is likely to be capital.” large gold-in-calcrete anomaly.
Development Incentive which failed to
inspire much additional exploration amid He said deductions required close More than 17,000m has been drilled
claims it was overly complicated. links to exploration and could include since the discovery, focused largely on the
studies to evaluate the economic feasi- Goshawk prospect where drilling has re-
In contrast to its predecessor, the JMEI bility of mining, such as selecting basis turned plus-1 g/t gold intersections over a
is already proving popular among explor- of design and evaluation of front-end en- 500m zone.
ers, with the scheme oversubscribed for gineering design.
the current year. In total, 46 companies The most recent round of RC drilling re-
were successful in applying for $25 mil- The new ruling also clarifies deduc- turned hits of 4m @ 23 g/t gold from 44m,
lion of tax credits. tions for exploration on existing mining 4m @ 8.5 g/t from 32m, 4m @ 6.9 g/t from
operations. 32m and 4m @ 6.9 g/t from 36m.
The four-year scheme will continue in
2019-20 and 2020-21 with the credits “Activity that is part of assessing Marmota senior geologist Aaron Brown
capped at $30 million for each of those whether a new mine, mine extension or said the company was now examining how
years. expansion is feasible may not constitute Aurora Tank, and Goshawk in particular,
an operation in the course of working that could be brought into production.
To qualify, companies must be a mining property, whereas activity direct-
greenfields explorer which has not car- ed towards getting at minerals or getting “We will be doing down-plunge and
ried out any mining in the previous year them out will,” Brittingham said. down-dip extension testing at Goshawk
and has no taxable income. The scheme from September and beginning maiden re-
only applies to new share capital raisings Explorers should be conscious, howev- source modelling,” Brown said.
(not existing shares) and shareholders er, of the ATO’s growing focus on explo-
must be Australian residents. ration expenditure, according to Britting- The size of any potential operation could
ham who pointed to recent comments by be determined by the extensional drilling
Finlaysons tax and revenue partner ATO deputy commissioner international campaign.
Mathew Brittingham said the scheme Mark Konza made in May regarding the
could be a useful one for eligible explor- ATO’s ongoing areas of interest. “There has not been a lot of drilling down-
ers but warned there were still areas over plunge which is something we will rectify in
which applicants should proceed with “We will also be continuing to look at the next round of drilling,” Brown said.
caution. the energy and resources sector – spe-
cifically exploration expenditure, hubs Limited metallurgical test work has al-
“You have to watch out for the corpo- [particularly marketing hubs] and related ready been undertaken on the fine-grained
rations law issue of whether an explorer party financing such as debt funding, the gold mineralisation. Bottle-roll tests pro-
will be in breach of its constitution by use of derivatives to avoid interest with- duced recoveries of 93.9%, 96% and
providing credits to 97.3%. Brown expected improved results
certain sharehold- holding tax and as studies were increased.
ers to the exclusion cross currency in-
of others,” Britting- terest rate swaps,” Away from the immediate Goshawk
ham told SAREIC. Konza said in Syd- mineralised zone, Marmota is planning to
“There is also the ney. “With Aus- launch a new calcrete and biogeochemi-
issue of what the tralia projected to cal sampling campaign at Aurora Tank.
corporate tax rate become the world’s The low-impact biogeochemical method
will be – 27.5% or biggest exporter of involves sampling plant tissue from trees on
30%. It is likely to liquefied natural gas the exploration ground.
be 30% as income, by 2019, the oil and
if any, will be from gas industry is a “Roots of arid trees go deep and their
passive sources. particular focus for surface area is huge so they are interacting
So, if companies Mathew Brittingham us. With big devel- with a lot of soil,” Brown said.
use 27.5%, they may have under alloca- opments and long-
tion of credits with the balance creating term contracts being a feature of the LNG A trial at Goshawk saw 54 biogeochemi-
a tax loss.” industry, it is important we get the pricing cal samples collected in one day from two
right from the start.” tree species. Brown said the results includ-
As well as the introduction of the JMEI, ed elevated gold in the acacia and senna
explorers had also been granted greater leaves with responses higher over the bet-
ter mineralised zones and low in poorly min-
eralised zones.

– Dominic Piper

Page 66 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Siviour:
African quality with

SA security

Renascor Resources Ltd managing addition opportunities. David Christensen
director David Christensen spies op- The company completed a scoping
portunity among the current travails of the
company’s graphite peers in East Africa. study on the production of spherical
graphite in February, presenting a poten-
East African graphite deposits are tial upgrade to revenues.
commonly acknowledged as the best
quality globally but with the Tanzanian “We are pushing ahead with the DFS
Government still deciding on the ex- and could be in construction by the end
act regulatory framework to be placed of 2019 but we are also focused on the
around its new Mining Act, developers in spherical graphite downstream options
the country have seen their plans halted. and will complete a PFS on it this quar-
ter; it will be a great opportunity to unlock
South Australia’s graphite sector also the value in Siviour,” Christensen said.
witnessed an early burst of activity before
seeing development halt, not through Marketing has also become a priority
legislative inertia but a lack of marketable for Renascor with Christensen spending
product among the State’s deposits. much of April and May in China to discuss
potential offtake agreements.
Christensen believes in the Siviour
project Renascor boasts the best of both China dominates world graphite produc-
worlds with its high grades and devel- tion but with falling ore quality and an en-
oped world location providing advan- vironmental crackdown taking hold, West-
tages over its South Australian and East ern developers are
African counterparts respectively. spying a window of
opportunity.
“We are looking at a world-class pro-
ject which seems to have more in com- “We think there is
mon with the East African graphite pro- a place Siviour could
jects,” Christensen said. “We have seen fit in the graphite
others have trouble funding projects but supply chain,” Chris-
we don’t have that in South Australia and tensen said. “We
now we have a PFS which shows we can are looking at that
produce at the lowest cost in the world.” spherical graphite
market and we have
The PFS, released in March, sug- also begun looking
gested Siviour was capable of hosting an at the expandable
operation producing 142,000 tpa during graphite market with
the first 10 years of a 30-year life. Pre- test work from the
production capex of $US29 million and lab and customers
operating costs of $US590/t (including hitting the mark.
$US333/t in the first three years of op-
eration) make it among the lowest cost “We are seeing
development projects in the world. a mix of high purity
and flake size which
Its location on SA’s Eyre Peninsula will is quite favourable
play a big role in ensuring Siviour enjoys and by any meas-
lower costs than most graphite develop- ure it looks like a
ment projects. world-class project.
It is also one big
“I think because of our location we can orebody, rather than
start at a cash cost of $590/t and capex a number of differ-
of $29 million,” Christensen said. “We ent deposits, which
can truck our product to Port Adelaide has advantages for
and ship it from there using all the estab- customers who are
lished infrastructure available.” looking for consist-
ency in their supply.”
While natural flake graphite concen-
trate production represents the quickest
and simplest development path for Re- – Dominic Piper
nascor, it remains eager to pursue value-

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 67

SAREIC REVIEW

Terramin targets 1 moz

Terramin Australia Ltd hopes to un- gold containing grades as high as 31.1
earth a 1 moz gold resource from the
high-grade Bird-in-Hand and surround- g/t in some areas.
ing projects in South Australia.
Terramin was behind the development
Only Bird-in-Hand (588,000t @ 13.3
g/t gold for 252,000oz) hosts a defined of the Angas lead-zinc mine in SA two
resource, but Terramin is confident
neighbouring targets such as The Ridge decades ago and has been focused on
and untested depth potential will deliver
a sizeable uplift for a company which the Tala Hamza zinc-lead project in Al-
first set foot in SA during the 1990s as a
base metals developer. geria in recent times.

Terramin is currently undertaking A potential de-merger of the compa-
a scoping study – due for release next
quarter – assessing the viability of pro- ny’s precious and base metals assets is
cessing high-grade feed through its exist-
ing Strathalbyn processing facility. on the cards for early next year.

Infill drilling to upgrade and extend the “We believe the gold story in SA for
Bird-in-Hand resource at depth is also
under way. Terramin has the right material to be

“Given what we now know about the Richard Taylor a significant gold company in its own
Bird-in-Hand resource, we’re going to be right,” Taylor said.
targeting some of those step-out oppor-
tunities which could provide earlier and getting to 1 moz from our resource base “Gold is a fantastic commodity to be
shallower feed,” Terramin chief executive
Richard Taylor said. here in SA and we think we can do that in. In Australian dollar terms it’s still main-

“We’ve got an aspirational vision of relatively quickly because of the time and taining record high levels compared to

energy we’ve put into developing these a few years ago…so we think this is the

targets over the last 2-3 years. right time to be looking at letting this story

“Most of them come from within our fly separately from our base metals.”

existing tenement package, but there are Terramin is advancing its mining lease

some we’ve got our eye on locally that we application and other regulatory approv-

can feed into the process and be able to als in conjunction with its economic stud-

get to that aspirational target of 1 moz.” ies, with construction activities pencilled

One high-grade opportunity already on in for late 2020.

Terramin’s books is The Slopes which his- – Michael Washbourne
torically produced about 4,000oz of alluvial

Page 68 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Carpentaria lands BFS funding

Japanese trading house Mitsui & Co is tip- and construction funding now and success quality iron ore and this is driving the devel-
ping more than $80 million into Carpen- will validate and boost our development opment of Hawsons,” Hill said.
taria Resources Ltd’s Hawsons iron project, plans,” Hill said.
about 60km south-west of Broken Hill. “We will be cash flow positive at an iron
“Once $27 million of BFS funding is se- price of less than $US30/t.”
Following managing director Quentin cured, we will seek to complete our BFS
Hill’s presentation to SAREIC, Carpentaria and approvals in 12-15 months and produc- Carpentaria is targeting the Chinese di-
confirmed Mitsui would contribute $5.4 mil- tion in three years…and rect reduction pellet feed market which,
lion towards the cost of a BFS – currently there are a number of
estimated at $27 million – for an option over re-rating events through according to CRU, is
2 mtpa of 70% Fe product, trademarked by that process.” seeking at least 70mt
the company as “supergrade”. of new supply over the
A PFS completed in next decade.
If Mitsui exercises the option for 20 years July 2017 found a 10
of Hawsons off-take, it will then provide mtpa operation at Haw- “It is very difficult to
$US60 million ($81 million based on current sons would generate an produce DR quality iron
exchange rates) of debt funding for the con- annual profit margin of ore, only around 10 pro-
struction of the $1.4 billion magnetite mine $US401 million over an jects are capable and
and operation. initial 20-year mine life, there is a lot of com-
with estimated low mercial interest to get
The Mitsui agreement means Carpentar- operating costs new sources of supply,
ia has now secured off-take deals for 140% of $US48/t CFR of which we are the
of the planned production from Hawsons, China for the 70% Fe product. Quentin Hill leader,” Hill said.
which has been described by respected an-
alytical group CRU as “the world’s leading The Hawsons “supergrade” product is Hawsons was re-
undeveloped, high-quality iron ore project”. expected to attract a premium of at least cently granted Major Project Status by the
$US25/t over the standard 62% Fe product Federal Government given its strategic im-
Hill told SAREIC delegates the company produced by many iron ore mines over the portance to both its location in New South
was confident of raising the funds needed world. Wales and product transport route through
for the BFS and beyond. South Australia.
“The market has shifted to favour high
“We’re negotiating offtake-linked BFS – Michael Washbourne

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 69

SAREIC REVIEW

Pit exposure key to future success

Hillgrove Resources Ltd’s four years of lated to extensional tectonics and magma- @ 2.5% copper, 19m @ 0.9%, 33m @
open pit mining at Kanmantoo could tism, according to Rolley. 0.8% and 17m @ 0.5% – which have never
have longer term benefits than immediate been followed-up.”
production revenues. The company is using this newly de-
veloped understanding to begin mapping At a regional scale, Hillgrove is extrapo-
Kanmantoo produced 5,642t copper and the operation’s future with a 5-10mt @ lating its knowledge of the Kanmantoo
2,042oz gold in the June quarter, cement- 1.7-2.2% copper and 0.4-1 g/t gold under- system to define targets on the rest of its
ing the improved performances achieved ground resource target identified. Adelaide Hills ground.
since the Giant cutback was completed at
the start of the year. “We are utilising existing data and Rolley said Kanmantoo and Hillgrove’s
knowledge to identify new copper-gold most advanced exploration prospects –
The company expects to enjoy steady targets,” Rolley said. “We have significant Kanappa and Mt Rhine – were located
production throughout coming years but plus-1.5% copper zones extending beyond along the Tasmin Line, a continental-scale
with a six-year mine life hanging over it the open pit to depth in structural conduits. structure known to host, where exposed,
from the mine’s inception, Hillgrove is ea- large orebodies such as Stavely, Mt Lyell,
ger to find additional tonnes before the “It gives us confidence in the project Rosenberry, Hellyer and Henty in Victoria
looming 2020 deadline. geometry of the system at depth and past and Tasmania.
drilling confirms four underground targets
That quest is being aided by the knowl- ready for infill drilling.” Soil sampling, ground magnetics and IP
edge being gleaned from the mine itself. has already been undertaken at Kanappa
The company has a $2.5 million budget with geochemistry returning values of up
“From the Kanmantoo mine we are us- for 2018 with the four underground targets to 34% copper along a 4km anomaly with
ing our understanding of the exposed ge- at Kanmantoo the priority. coincident magnetic and IP chargeability
ology to unlock the opportunities under anomalies overlaying it.
cover,” principal geologist Peter Rolley “It is easy access and low capex to mine
said. “We can map the open pit and put in at Kavanagh [the main ore system],” Rolley “They all go to identifying a large target
geological structural controls and reinter- said. “We are doing the economic evalu- which will be drilled in September. This
pret 10 years of data and learn more about ation now before committing shareholder could be the starting point for a major
the mineralisation.” funds.” change to our business,” Rolley said.

The interpretation has led to the iden- Stepping out from the open pit, Hillgrove At Mt Rhine, the company plans to fol-
tification of the orebody as a series of is planning to restart exploration in the low up a 1.7km-long anomalous copper
structurally-controlled shears, lodes and 5km mineralised corridor in which Kan- zone which suggests a large-scale altera-
breccias with the original host rocks being mantoo sits. tion system.
greywackes, siltstones and sandstones
with mineralisation later-Cambrian and re- “There has been no systematic explora- – Dominic Piper
tion since we went into DFS in 2008,” Rol-
ley said. “There are a number of hits – 5m

New floats raising the bar

Metals and mining IPOs are up three- Excluding Jupiter’s IPO 90%) and Cooper Energy
fold on the same time last year, ac-
cording to research from boutique corpo- for the Tshipi manganese Ltd (up 25%) leading the
rate advisory firm Taylor Collison.
mine in South Africa, gold way.
Across the first seven months of 2017,
new metals and mining listings on the ($31 million) is the most fa- Boroughs also noted
ASX totalled almost $340 million.
voured commodity among 2017 was the first year
While Jupiter Mines Ltd’s $240 million
IPO – the biggest new float on the ASX in new metals and mining since the highs of 2011
a decade – accounted for more than 70%
of the capital raised, Taylor Collison’s floats, followed by cobalt where global greenfields
Reece Boroughs said it was a clear sign
resources plays were back in vogue with ($20 million), coal ($18 exploration had reported a
investors after a torrid few years.
million), lead-zinc ($14.75 year-on-year expenditure
“This suggests there is money out
there for the appropriate projects and million) and copper ($12.5 uplift.
people are willing to invest the capital,”
he said. million). “Small cap managers

“We’re still a long way from the highs “Metals and mining, like are still reluctant to dip
of 2011-2012 when people were pre-
dominantly shoring up balance sheets oil and gas, has been the their toes into greenfields,
and there was significant demand still, place for investment managers to Reece Boroughs but I think it’s good to see
but the green shoots are most definitely
there, particularly in the new listings, and earn alpha, or returns in excess of the majors starting to dip
there is strong investor appetite.”
index,” Boroughs said. their toes into funding via JVs, particular-

“The initial rally was led by iron ore ly the likes of Oz Minerals [Ltd],” he said.

and gold, but recent rallies have included “Now that BHP [Ltd] has shored up

nickel and even alumina having a decent its balance sheet and Samarco is under

run after years and years of promise but control, it would be terrific to see them go

not really getting there.” ahead and start to do more of those JV

Oil and gas companies are also en- structures like they were pre-GFC.”

joying an investment renaissance, with – Michael Washbourne
South Australian-focused entities Beach

Energy Ltd (up 176%), Santos Ltd (up

Page 70 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

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BASE METALS

New Century waltzes in

Twelve months ago the only speaking spot Patrick Walta could get on the
conference circuit was outside a Kalgoorlie kebab shop several hundred
metres down the road from the big tent at Diggers & Dealers.

Fast-forward to today and Walta barely “It’s great to see the plant back alive. partners, cobbled together almost $100
has time to tuck into a kebab as he The guys have been working quite hard million worth of project financing and re-
regularly fields calls and inquiries from for the last 12 months and to start to see furbished all of the existing infrastructure
investors and analysts hungry to know the fruits of your labour, to see the bub- for the start of production last month.
more about New Century Resources bles coming over the top of the flotation
Ltd’s stunning revival of the famed Cen- vessels, to see the hydro miners blasting For Walta, New Century’s managing
tury zinc mine in Queensland. away, it’s very satisfying and given eve- director, none of those achievements
ryone a lift. were by accident.
Operations at Century were officially
restarted last month with the prime focus “We’re now entering that next stage “Every company sets targets and goals
now being on reprocessing the tailings of where we’re ramping up and progressing and they’re either very conservative or
the former MMG Ltd asset. our concentrate on spec, ramping up re- lofty and we certainly set very aggres-
coveries, throughput and ultimately stick sive targets, but we had been planning it
“Big zinc is back, as one of the guys to that target of being a top 10 zinc pro- for a very long time,” Walta said.
said on site the other day,” Walta told ducer in the world.”
Paydirt. “We’ve been engaging with MMG for
Walta and his team received a luke- nearly five years, so we had it reasonably
Patrick Walta warm response from the market when well planned. The execution strategy was
they first proposed the concept of repro- quite aggressive, but to see it then unfold
cessing Century’s tailings early last year. and deliver in that way is not so much
Many investors were of the opinion that surprising, but more just satisfying. No
if a company of MMG’s ilk was walking matter what your business you always
away from the mine, there was little left try your hardest to achieve it and it’s
for an unknown junior such as New Cen- great to see a project come to fruition the
tury to come in and recover. way you’ve designed and the way you’ve
planned it.”
History will show that New Centu-
ry proved the critics wrong. In just 12 Walta credited the condition of the ex-
months, the company completed a back- isting infrastructure as one of the main
door listing, reported a robust feasibil- drivers behind his company’s ability to
ity study, secured five different off-take rapidly bring the operation back to life.

Pasminco spent $US1.8 bilion de-

Page 72 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

two separate next 10 years. When you actually boil

placements to en- that down into tonnes, you’re looking at

sure the entire re- over 280,000 tpa of new zinc metal that

furbishment would has to come into the market just to take

be completed on care of that increasing demand, let alone

time and on budg- other mines coming offline and that sort

et. of thing. Basically another New Century

“We timed the must come online every year for the next

market well – I 10 years, just to facilitate that demand.”

wouldn’t say by Century’s current reserve of 77.3mt @

design – but we 3.1% zinc equivalent is confined solely

Century is forecast to produce 264,000 tpa zinc and 3 mozpa were able to ac- to the tailings and supports an initial 6.3
silver (in 500,000 tpa of concentrate) over its initial 6.3 years of quire the project years of operations. However, New Cen-
and put it back into tury is confident of growing the mine life
operating life the public space from in-situ resources (9.3mt @ 10.8%

veloping Century before handing over during the height zinc-lead) via an expansion study due
the reins to Zinifex in 2004. Following
Zinifex’s merger with Oxiana to form Oz of the zinc bull market,” Walta said. for completion this month.
Minerals Ltd four years later, amid a fall-
ing zinc price, Century was offloaded to “Investors were able to have a lot of “Beyond that, we have 1,800sq km
MMG which ran the operation relatively
smoothly until the end of its supposed confidence and obviously commit a lot of tenements, some really good green-
life in early 2016.
of capital because they could see the fields targets being generated by some
“If we acquired Century in 10 years’
time and it had been sitting there idle for plant and they could see the infrastruc- IP programmes and some initial work
all that time this would be a completely
different story,” Walta said. ture that was already there. We supplied our geological team has done, so we’re

“Things would be a lot older and there people with the information and they looking forward to starting to tell that
would be a lot more issues, but we
picked it up only 18 months after it had could visualise what they were investing story,” Walta said.
gone into care-and-maintenance
and that really enabled us to in. Having the plant there already built “The focus of the company has very
time it well and get things started
quickly again.” makes it a lot easier than someone visu- much been on restarting Century, get-

With the new phase of opera- alising a greenfields development with ting into production, extending the mine
tions now under way and first
batch of concentrate due to leave no infrastructure.” life out on known resources and then
site shortly, New Century has set
its sights on hitting throughput According to last year’s feasibil- we’ll really start to tell the story of green-
capacity of 264,000 tpa zinc and
3 mozpa silver in next to no time. ity study, New Century will produce fields exploration with the plan to keep

New Century has reported 507,000 tpa of concentrate for a C1 cost operations up and running into a second
strong initial progress on hy-
draulic mining operations, with decade.”
activities to date demonstrating
the Century tailings deposit is Despite the widespread praise
amendable to rapid ramp up of
target slurry density. for his efforts in guiding the com-

“We might be called New pany to where it is today, Walta
Century Resources, but to put a
different inflection on it, it is mining re- is not one to count his chickens
sources for the new century,” Walta said.
before they hatch. However, he
“We’re very much a lean and mean
operation, it’s not the same Tier One de- cannot help but marvel at the
posit anymore, but we can utilise the Tier
One infrastructure to be able to drive this culture which has developed
very good operation in a new way.”
within the organisation over the
Now an ASX300 company, New
Century has signed off-take contracts past 12 months.
with Mercuria Energy Trading SA,
Transamine Trading SA, Nyrstar Sales “This project has really cap-
& Marketing AG, MRI Trading AG and
Concord Resources Ltd, accounting for tured people’s imaginations. It’s
80% of the initial production from the
tailings. very much if you’re in, you’re roll-

New Century raised $93 million from ing your sleeves up and you’re

involved,” Walta said.

“No one is working 9-5 and

Refurbishment of the Century processing plant was punching in, punching out.
completed on time and on budget They’re seeing it as a challenge
and that’s really driven a strong

‘can do’ team-oriented culture

of $US0.38/lb and a C3 cost of $US0.50/ which has been fantastic to see develop

lb. A zinc price of $US1.25/lb was as- inside the company, considering when

sumed in the study. you go back 15 months we had about

Walta is confident traditional zinc sup- eight people on site. Two weeks ago, we

ply-demand fundamentals will stand up had 350 people on site.

despite prices for the base metal coming “To grow that quickly and still devel-

off in recent months, largely due to the op a really strong culture has been im-

fallout of the US-China trade wars. mensely satisfying and really now for

“Zinc is like copper, it’s everywhere. the team, both corporately and on site,

You don’t see it, but it’s absolutely eve- it’s about maintaining that culture and

rywhere you go. So for us, we know the growing the business in that same way.

demand fundamentals are very much We’re going to protect that culture and

linked to global growth,” Walta said. really utilise it to maximise value for

“Zinc demand has being growing at shareholders.”

a 2% growth rate for the last 10 years – Michael Washbourne
and it is projected to grow at 2% for the

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 73

REGISTER NOW

23 October 2018

Perth,Western Australia

Image courtesy of Western Areas Ltd

THE BEST NICKEL STORIES ALL IN ONE DAY

Sponsors to date:

Opportunities to present, exhibit or attend still available, don’t miss out.
Contact Christine Oelschlaeger (+61) 8 9321 0355 [email protected]

Preliminary Programme Tuesday 23 October 2018



Arrival tea, coffee and registration

Session One
Welcome: Bill Repard, Executive Chairman, Paydirt Media Pty Ltd (5)
BHP Nickel West, Speaker TBA (20)
Dan Lougher, Managing Director & CEO, Western Areas Ltd (20)
Peter Bradford, Managing Director & CEO, Independence Group NL (20)
Michael Rodriguez, Chief Operating Officer, Poseidon Nickel Ltd (20)
Ashley Zumwalt, Chief Operating Officer, Black Mountain Metals (20)
Questions (10)

Morning Tea sponsored by St George Mining Limited (25)

Session Two
Q&A with Hon Bill Johnston MLA, Minister for Mines and Petroleum, Government of Western
Australia with convenor Dominic Piper, Editor, Paydirt Media (20)
John Prineas, Executive Chairman, St George Mining Ltd (20)
Ian Mulholland, Managing Director, Rox Resources Ltd (20)
Mark Wilson, Managing Director, Legend Mining Ltd (20)
Sarah Mitchell, General Manager Technical Services, Ardea Resources Ltd (20)
Questions (10)

Lunch (50)

Session Three
Peter Harold, Managing Director, Panoramic Resources Ltd (20)
Warren Hallam, Managing Director, Metals X Ltd (20)
Richard Bevan, Managing Director, Cassini Resources Ltd (20)
Peter Muccilli, Managing Director, Mincor Resources NL (20)
Questions (10)
Q&A with Ross Louthean (Australia’s Nickel Adventure) with convenor Mark Andrews,
Deputy Editor, Paydirt Media (5)
Afternoon Tea sponsored by PCF Capital Group (30)

Session Four
Justin Werner, Managing Director, Nickel Mines Limited (20)
Peter Sullivan, Chairman, GME Resources Ltd (20)
Malcolm Cattach, CEO/Geophysicist, Gap Geophysics Australia Pty Ltd (15)
TBA (20)
Questions (5)
Closing Panel Discussion (convened by Dominic Piper, Australia’s Paydirt) (50)
Closing Drinks sponsored by GR Engineering Services

*This programme is subject to change without prior notice

australiannickelconference.com

BASE METALS

Red River far from running dry

Red River has excess capacity in the Thalanga plant, allowing it to
immediately introduce new ore sources once in development

Another few quarters of record produc- trate as well; we just have to get more Palancian will be hoping that consist-
tion and Red River Resources Ltd of it. We have come up with a new recipe ency in results and EBITDA rebound.

will have proved its Thalanga operations for the copper circuit which we will roll out The $400,000 loss for the June quar-

have the consistency to fulfil their poten- this month and we are confident it will im- ter followed EBITDA of $3.7 million in

tial, according to managing director Mel prove recoveries.” the March quarter. Palancian said the

Palancian. The company switched Thalanga back 15,000t of ROM stocks impacted the

Despite posting negative EBITDA of on in the December quarter but a series EBITDA figure, as did increased ce-

$400,000 for the June quarter, Red River of severe weather events at the start of mented rock fill placement and produc-

achieved record underground production 2018 slowed ramp-up. However, a sec- tion drilling underground.

figures from Thalanga, moving 84,000t ond successive quarter of improved pro- The company built and commissioned

of ore from underground at the West 45 duction has fortified Red River’s belief in a new cemented rock fill batch plant dur-

deposit, a 29% increase on the previous the longevity of the mine. ing the quarter, allowing it to double pro-

quarter. The Thalanga plant processed “We bounced back and we are con- ductivity.

70,000t of ore – leaving a further 15,000t fident that performance will continue,” “This had enabled the crown pillar

of ROM stocks – to produce 330t of cop- Palancian said. “The results have been stopes to be filled quicker. It added to

per concentrate, 2,065t of lead concen- excellent and we have got the confidence the costs for the quarter but will pay divi-

trate and 5,477t zinc concentrate for the to run the mill to match the mine output dends over the life-of-mine,” Palancian

quarter. “which is consistently hitting 100 tpd.” said. “We have also increased produc-
Palancian said the record produc-
tion drilling in the quarter and about
tion numbers proved both mine and
plant were performing well. 80% of the planned stopes over

“We had a good quarter at West The copper is a good the life-of-mine have been sludge
45,” Palancian told Paydirt. “There concentrate as well; drilled.”
was record underground production
and the plant is doing well. Recov- Palancian also expects grades to
eries for zinc and lead have been
we just have to get more of it. increase in coming months.
We have come up with a new “The stopes are split into high,

medium and low-grade stopes but

fantastic [88% and 77.3% respec- recipe for the copper circuit we have to mine the lot and the
tively] and we are producing some which we will roll out this mine sequencing dictates where we
of the best concentrate grades are. For the next 12 months we are

in the world and it is a very clean month and we are confident looking at higher grade stopes.”
product. it will improve recoveries. Achieving consistency at West 45

“The copper is a good concen- could coincide with the arrival of the

Page 76 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Far West underground mine as a second That is a good mine life ahead of us and greater Liontown resource,” Palancian

source of mill feed. we will hopefully extend it even further said. “It has been drilled down to 350m

Construction of Far West began in the before we discover anything else.” but is still open. We are also in the pro-

June quarter with the box cut complete Exploration is still a priority around cess of updating the Waterloo resource

and 20-30m of development already Thalanga and Palancian admitted to be- and we will hopefully have a reserve on

achieved when Palancian spoke with ing surprised at the levels of success that by the end of 2018. We can then turn

Paydirt in early August. achieved in the three years Red River both of them into mines and we haven’t

“Far West will begin production in has controlled the district. even looked at Orient which is still open

3QFY19 with development ore before we “The exploration potential has actu- and needs drilling.”

start stoping in Q4,” he said. ally exceeded our expectations,” he said. With a series of other targets in front

PYBAR Mining Services will conduct “We have doubled the resource with of it, Red River will continue to plough

mining at Far West with ore from the three years of drilling and at a discovery money into drilling.

1.5mt @ 12% zinc equivalent reserve cost of about $3.50/t; that is pretty good “Our philosophy is if you keep drilling

“expected to increase throughput rates at going.” you keep finding more and if you stop
…we have excess capacity in the mill and
the orebody is very similar so there are no you go out of business,” Palancian said.
restraints or need to blend.
Consistency from existing operations

will allow for further work.

“We want our exploration and develop-

ment work to be self-funded.”

If both production and exploration

goals are realised, Red River should be

set for a market rerating, with or without

the under-utilised Thalanga plant. The company’s lead exploration pro- a boost from metals prices.
“It won’t really change the sequencing ject is the Liontown East prospect. A
maiden resource was due last month, “We are hitting our straps on explo-
at West 45 because we have excess ca- representing Red River’s first solo dis-
pacity in the mill and the orebody is very covery on the belt. ration and production and by delivering
similar so there are no restraints or need
to blend,” Palancian said. “What it does “Producing a maiden resource for Li- for two or three quarters we will make
do is extend the mine life out to 2025. ontown East opens up potential for the
people sit up and take notice,” Palancian

said.

– Dominic Piper

Mining in the West 45 underground mine hit record levels in the June quarter.
West 45 will be joined by production from the Far West underground mine this month

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 77

BASE METALS

Heron tracks Woodlawn was more than 70% constructed at the time of print
steady path
to production

Heron Resources Ltd managing direc- ment drive from next month to fill key is because you have a level of trans-
tor Wayne Taylor sees an advantage operational and maintenance roles at parency and you can get a reasonable
in not being the first of a new wave of zinc the mine, about 250km south-east of sense of where the fundamentals are
developers to achieve producer status. Sydney. going,” Taylor said.

At the time of print, Heron’s Woodlawn “We can offer people a residential “That should give you an ability to
project in New South Wales was more quality of life which is probably hard to have some insight when it comes to
than 70% constructed, with the first match across Australia in terms of hard supply and demand on what you’re
product shipment still on track for early rock mining and that has certainly drawn likely to see, so we take some com-
Q1 2019. in a lot of interest,” Taylor said. fort from that. But, looking forward, the
projections show at best we will have a
Woodlawn will become the third zinc “We are finding that we are able to get balanced market over the next couple
operation to come online behind Red people that basically want to live in an of years.
River Resources Ltd’s Thalanga mine area where you’ve got Sydney at your
and New Century Resources Ltd’s restart fingertips if you want it, but you can also “We’re still on very much a deficit this
of Century inside the past 12 months. have a hobby farm or anything in be- year and everything is there to suggest
tween.” there will be further scarcity of supply
While Taylor acknowledged it was which should underpin prices.”
an exciting time for the Australian zinc Zinc will account for about 52% of
space, he believes his company will ul- Woodlawn’s revenue, with copper and Heron is expected to remain active
timately benefit from not being a “first lead forecast to contribute 23% and 15% with the drill bit around Woodlawn once
mover taking the path of least resist- respectively. the first batch of concentrate leaves site
ance”. early next year, with plenty of in-mine
Base metal prices have tailed off in and regional exploration programmes in
“Incentivised restarts are great, but recent months amid the fallout of the the pipeline.
they are typically restarts because the US-China trade wars and a somewhat
project has been idled for a reason,” Tay- negative reaction by the market to po- Since Heron took control of the project
lor told Paydirt. tential new supply coming online. How- in 2014, the company has discovered
ever, Taylor is unperturbed and believes two new lenses – taking the overall pro-
“What that does is it brings metal units his company is turning on the lights at ject total to 14 – but neither have been
into the market, but typically at higher Woodlawn at the right time in the cycle. factored into the reserve.
prices, so that provides some comfort
for us if we’re able to achieve the costs “You can never be entirely sure The G2 Main lens is viewed as a poten-
we expect because we’ll be a lower-cost what the markets will do, but one of tial early stage mine plan addition, while
producer which is somewhat insulated by the reasons you get into base metals satellite projects such as Currawang and
the higher-cost producers.” Peelwood have returned encouraging
Wayne Taylor initial exploration results.
According to the 2016 feasibility study,
Woodlawn is forecast to produce 40,000 Last month marked the one-year an-
tpa zinc, 10,000 tpa copper and 12,000 niversary of the start of construction at
tpa lead (plus gold and silver credits) at Woodlawn and Taylor said the excite-
steady state. The current reserve (under- ment was building internally as the first
ground 2.8mt @ 14% zinc equivalent, re- production milestone rapidly approached
processing 9.5mt @ 6% zinc equivalent)
supports an initial mine life of 9.3 years. “It’s obviously a great opportunity to
be involved in constructing a project on
Based on zinc’s spot price of $US1.18/ what is essentially a bare paddock,” Tay-
lb in early August, Woodlawn is expected lor said.
to generate an average annual EBITDA
of more than $100 million. C1 costs are “Every visit down to site always comes
estimated at $US0.51/lb zinc equivalent, with no surprises. It is coming together
or $US0.04/lb zinc post by-products. very well and we just look forward to
completing it.
As Heron moves towards operational
readiness at Woodlawn, the company “The first concentrate leaving site will
has awarded all major works contracts, be an event for us. It’s about getting ma-
including underground mining services terial to the market that we can sell.”
to PYBAR Mining Services Pty Ltd.
– Michael Washbourne
Heron will undertake a major recruit-

Page 78 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Alta rebalance nearly complete

Alta Zinc Ltd has endured a tough 12 up with the DFS, which was based on a The company’s geological team has
months but executive chairman Alex
Burns is ready to resurrect the company’s large-scale development.” spent more time in the archives as it has
image in the marketplace.
Burns relocated to Italy and brought on the drill rig but the approach is begin-
At the end of 2016, Alta appeared to
have everything going for it; a strong zinc on an experienced Italian management ning to produce results.
price environment, a robust resource at
its Gorno zinc project in Italy and positive team to reinvigorate the project. Fifteen In March, while mining the historical
share price movement. However, when a
resource downgrade and delayed DFS months on from the downgrade and data, Alta identified a new zone of thick,
curtailed that momentum, the company
was left devoid of market support. postponement of the DFS, he feels Alta stratabound sulphides at the Pian Brac-

Now 15 months on from the start of its is back on track. ca zone. Underground sampling returned
big share price correction, the company
has gathered itself and is ready to “We have come a long way in 12 assays of 10-20% zinc-plus-lead.
start over the job of convincing the
market it has an economic project. months, we just need to demonstrate that “That is an obvious follow-up target,”

It may sound an insurmountable to the market which will culminate in Q4 Burns said.
task until you realise the executive
chairman is Alex Burns, the man with release of the DFS,” he said. The company is now investigating
who was at the heart of Sphere In-
vestments when it went from a $20 The revised study is focused on a ways of proving up a resource at Pian
million stock to $500 million takeo-
ver target on the back of iron ore as- starter project model which will see Alta Bracca with only limited drilling, including
sets in Mauritania, West Africa.
the use of geophysics underground.
Burns told Paydirt Alta’s situation
shared many similarities to Sphere’s “The first priority is to get the DFS
more than a decade ago.
finished to demonstrate the viability
“When we went into Mauritania
in 2002, iron ore was $US20/t and of getting Zorzone into production,”
the project was valued at $1 million,
by 2005 the spot price had risen to he said. “From there we have got an
$US80/t and the same rocks were
valued at $500 million,” Burns said. option to drill Pian Bracca which is
“We then raised capital which al-
lowed us to bring credibility to the the first exploration priority. It is a
project.
question of when it makes sense to
“Alta is a similar situation. The com-
pany currently has a market value of less start.”
than $10 million but there had been $20
million spent on Gorno before I arrived Alta had $2.3 million in the bank at
here in 2014. Prior to that, it operated as
a mining-processing-smelting business the end of the June quarter, having
so it has probably had $100 million spent
on it down the years.” raised $3 million via a placement to

Burns’ task has been complicated by Arete Capital in April. Those funds
the resource downgrade and postponed
DFS at the beginning of 2017. The down- will be vital in taking Gorno through
grade saw Gorno’s overall indicated-
inferred resource reduced from 3.87mt the DFS which Burns expects to
@ 7.7% zinc-plus-lead and 25 g/t silver
to 3.3mt @ 6.1% zinc-plus-lead and 27 complete in the December quarter.
g/t silver.
“Once that is done, we will put our
“That is the reason the stock has been
hammered in the last 12 months,” Burns final permitting applications in and
said. “When we drilled from underground
between Zorzone and the southern ex- should be ready for project finance
tension zone we found the mineralisation Alta will refurbish the 10km-long access tunnel within 12 months,” he said. “At the
had pinched out much more than we had
assumed. That reduced the overall re- to transport Gorno ore to the surface same time, we can be doing the
source by 20% and meant it didn’t match
FEED to enhance the project as well

use the extensive infrastructure already as begin rehab of the tunnel and some of

present underground at Gorno, including the inexpensive early works.”

a 10km-long access tunnel. The market is often sceptical of com-

“It is based on taking a staged ap- panies’ ability to navigate the European

proach,” Burns said. “We can build a permitting process but Burns said he

smaller, modular plant and can focus on was delighted by the level of support Alta

taking the high-grade ore from Zorzone had received at a community and provin-

because we will no longer be constrained cial government level.

by getting tonnes to the mill.” “There is strong support from commu-

The starter project will likely have a nity and region because they are proud

reduced capex requirement as Alta will of their mining history and want to see it

use underground ore sorting and crush- returned to the glory days,” he said. “I’ve

ing as well as the 10km access tunnel to never encountered the amount of sup-

move ore to a new plant on the existing port and enthusiasm we have had here

processing plant site. and we’re fortunate that the government

Once the starter operation is estab- has been very supportive of the work and

lished, and the modest capital repaid, approach being taken.

Alta will investigate opportunities to bring “We have been through the process

on Gorno’s other deposits. – which calls for submissions from all

“We could treble the size of the starter stakeholders – before and we have a very

case before we have any bottleneck is- good relationship with stakeholders. The

sues,” Burns said. local government is encouraging us to ap-

Thanks to nearly a century of produc- ply for future stages of development now.”

tion up until its closure in 1980, Gorno – Dominic Piper
has plenty of opportunities to offer Alta.

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 79

BASE METALS

Venturex prepares
to rewrite

Sulphur Springs story

Venturex Resources Ltd’s reset plans took another step forward last month
with the release of positive metallurgical results from testing
on its Sulphur Springs copper-zinc project.

An airborne EM survey has highlighted a number of prospects
along the 27km Sulphur Springs VMS trend

Page 80 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

The results from flotation test work on “Historically, Venturex has already AJ Saverimutto
open pit material delivered recoveries spent a lot of money on studies, so the
of 89.7-91.7% and concentrate grades of market has possibly become a bit jaded “We currently have Australian and in-
25.5-26.8% from the transitional copper by the story,” he said. “The problem for ternational banks in the data room and
material and 88-89.5% recoveries and Sulphur Springs is that when the market we are looking at financing the project
16-16.6% concentrate grades from the was up the project was being de-risked through a mix of debt and equity, or
supergene ore. and when the project was significantly de- through funding from off-take partners.
risked the market has been down. Once people realise how much progress
“We had previously completed exten- we are making behind the scenes, I’m
sive met work on the underground [fresh] “Now, the project has been de-risked very confident that the company will be
material but up until now the transitional and the market for copper and zinc is defi- re-rated.”
material had not had any work, now it nitely on the up. Copper has come off a
is completed and the results have been bit in recent months but is still up strongly While the DFS will be based on cur-
excellent,” Venturex managing director from its lows in 2015-16, and there are rent reserves and resources, Saveri-
Ajanth (AJ) Saverimutto told Paydirt. strong forward markets for both metals.” mutto knows the economic argument for
Sulphur Springs would be given more
The positive metallurgical outcome With around 70% of feasibility work and weight if further discoveries were made.
has moved Venturex further along a path 80% of permitting already complete, Ven-
which it hopes will culminate in a deci- turex believes it can deliver a DFS before “Only 20% of the ground outside Sul-
sion-to-mine by the end of 2018. the end of the September quarter. phur Springs has ever been drilled,”
Saverimutto said. “We have 27km of this
Before that, the company must com- The major remaining technical question belt and we want to unlock it using geo-
plete a DFS into Sulphur Springs, a mile- surrounds recoveries from the transitional physics.”
stone which has proved elusive for sev- and supergene ore at the top of the de-
eral years. posit. The company flew airborne EM in late
2017 and has spent the 2018 field sea-
Venturex has controlled the Pilbara Saverimutto said the met results pro- son testing near-mine targets.
project since 2011, taking it to the brink of vided another positive component for the
full feasibility study several times before DFS which is building on the findings of “This is a typical VMS system and we
disappointing the market. Saverimutto – previous studies. want to find the clusters that form them,”
who arrived at the company in April – is Saverimutto said. “The strategy is to
conscious of the reputation built by both The last economic assessment of Sul- build a central modular plant at Sulphur
company and project over that period but phur Springs in 2017 identified a $183 Springs and then bolt on additional ore-
is determined to find a path to develop- million price tag for the project build but bodies, in the longer term growing to per-
ment this time around. Saverimutto expects Venturex to find sav- haps plus-3 mtpa as we discover them.”
ings through the DFS process while also
Saverimutto came to Venturex on the increasing processing capacity from 1 Perhaps buoyed by having the arche-
recommendation of Stuart Tonkin and mtpa to 1.2 mtpa. typal junior-to-mid-tier success story
Bill Beament, former WA School of Mines as a major shareholder (Northern Star
peers and executives of the company’s “We are confident that we can reduce holds 19%), Saverimutto has ambitions
largest shareholder, Northern Star Re- the capex, even with the proposed in- beyond getting Sulphur Springs into pro-
sources Ltd. crease in the plant size to 1.2 mtpa,” he duction.
said. “We recently bought a camp from
“When I joined Venturex, I was aware Moly Mines [Ltd] for $1 million and we “We want to build a long-term foot-
there were a few legacy issues in the have already recouped most of the cost print in the Pilbara and will also consider
market, but just look at the quality of the by leasing it out for 12 months. The only other base metals opportunities, build-
project. Before coming on board, I did 2-3 thing which will fall under EPCM will be ing on the foundations we establish at
months of due diligence on it and I really the plant – the rest we can do ourselves.” Sulphur Springs,” he said. “If we find op-
liked it,” Saverimutto said. “It will… gener- portunities that make sense and fit with
ate lots of cash.” The 2017 value engineering study dem- our vision to build a mid-tier base metals
onstrated NPV of $338 million and IRR of miner, we will move quickly to take ad-
Saverimutto admits his challenge now 52% for the 1 mtpa project, based on a vantage of them. We’re not going to sit
is to overcome market perceptions that $US6,450/t copper price and $US2,535/t on our hands.
the 7.28mt @ 1.2% copper and 3.5% zinc zinc price. However, the increase in ca-
reserves and 17.4mt @ 1.3% copper and pacity to 1.2 mtpa could see the project “Not everyone has as strong a share-
4.2% zinc resource project is an eternal generate more than the $602 million free holder base as ours and there are almost
bridesmaid. cash flow over 12 years forecast. no other base metals mid-cap miners in
that $50-250 million space.”
Venturex plans to complete a DFS on the Those numbers may look tempting to
7.28mt @ 1.2% copper and 3.5% zinc financiers who are short of options in the – Dominic Piper
Sulphur Springs project this quarter base metals development space. The
challenge for Saverimutto is convincing
both financiers and investors that Ventu-
rex represents the best vehicle for realis-
ing their interest.

“A lot of people don’t have exposure to
base metals at the moment and this is a
robust project which ticks a lot of boxes
from an investor’s perspective,” Saveri-
mutto said. “It is located in a Tier 1 juris-
diction, close to a port and infrastructure,
it has good grades and it will produce two
metals which are currently in a cyclical
market upswing. The only problem is that
the project currently sits in a $50 million
company.”

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 81

SITE VISIT

Hot Chili
peppers around

Productora

One of the hottest junior copper developers on the ASX a few years ago,
Hot Chili Ltd, like many others in its field, has taken a beating amid
the choppy waters in the resources sector.

Asnapshot of the company’s profile tial eight years) project in Chile’s Region Chili and Productora proved to be dif-
when at its peak – $250 million mar- III, which has attracted Minera del Pacíico ferent beasts and gained recognition at
ket cap when copper was $US3-3.30/lb S.A. (CMP) as a 20% partner at project Diggers & Dealers 2015, being crowned
in 2013 – reveals Hot Chili’s exalted po- level. Best Emerging Company.
sition as a copper stock of choice. That
ascendancy came on the back of its Pro- A large-scale 237mt @ 0.48% copper, Given the hand Hot Chili has since
ductora asset; now a potential 66,000 tpa 0.1 g/t gold and 135 ppm molybdenum had to play, managing director Christian
copper and 25,000 ozpa gold (over an ini- resource play doesn’t usually resonate Easterday and the Hot Chili team would
with the Australian market however Hot undoubtedly have forgone the applause

Page 82 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Blue Spec Drilling Pty Ltd provides a
variety of drilling services including:

Reverse circulation
Surface diamond drilling
Directional drilling
Water bores
Remote area exploration and camps
Blue Spec Drilling employs highly skilled
and experienced operators and has a fleet
of 19 modern multi-purpose drill rigs, which
incorporate the latest safety and drilling
techniques.
Blue Spec Drilling is based in Kalgoorlie, WA
and also has operations in South America.

Blue Spec Drilling Pty Ltd is based in Kalgoorlie, WA
and also has operations in South America.

Contact Murray Black 0417 973 394 P: 08 9021 3033
www.bluespec.net.au Email: [email protected]

SITE VISIT

under the famous tent in Kalgoorlie that Blue Spec was amid a 5,000m drilling programme when
frosty August night three years ago to Paydirt was on site in July
have project and company where they
believe both should be. projects is, so one would think Produc-
tora, and Hot Chili in general, with what
As it stands, Hot Chili is market capped we have already put together – in addi-
at $23 million and was trading at 2.9c/ tion to a very rich growth pipeline in front
share at the time of print despite a relative of us – would start to look very attractive
lack of competition in the copper space. very soon.”

A quick glance of the ASX shows a cup- Since Easterday’s comments prior to
board bare of genuine would-be develop- Latin America Down Under in May, Hot
ers of the red metal, as prices ($US2.84/ Chili’s “re-start” has gathered real mo-
lb at the time of print) start to show signs mentum, but admiration in the market
of a rebound after a mid-year slump. has yet to follow.

Prior to the recent blip, copper was ris- One reason could be that people
ing towards five-year highs as the reality haven’t awoken to the fact that there is
of a looming supply deficit started to be
realised, with the likes of Goldman Sachs
forecasting prices of $US8,000/t for cop-
per this year.

Should the judges’ forecasts prevail,
Hot Chili is one of the rare companies in
the world primed to fill the supply gap.

“I just don’t see the copper sector hav-
ing the ability to have an elastic response
to pressure on supply,” Easterday told
Paydirt earlier this year.

“The biggest hurdle [for new projects]
is the pure capital intensity and time it
takes to build large new supply and what
the pipeline looks like. We have heard a
lot of recent discussions coming out of
CESCO commenting on just how limited
the supply of large new development

The El Fuego project currently comprises San Antonio, Lulu and Valentina

Page 84 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

more to Hot Chili than Productora. A PFS on Produc-
“I don’t think the penny has dropped
tora in 2016 indicated
just yet,” Easterday told Paydirt in light of
a recent site visit to the company’s high- a 10-year mine life
grade San Antonio copper project.
based on resources
“It might not always be the first results
you put out, but I think if we continue to of 1.5mt copper and
deliver as we are starting to now the re-
sults will do the talking. The analogies 1 moz gold, espous-
of some of these modest-scale 10-20
mtpa projects running 2% copper, there ing average annual
just aren’t many of those running around,
particularly many that sit right next to a EBITDA of $US185
company’s flagship asset that we have
spent $100 million on already. million over the life-

“These can be very transformative to a of-mine at copper
much larger value proposition or, in their
own right, often underpin companies,” he prices of $US3/lb. San Antonio had been a private concern for more than
said. Pre-production 50 years before Hot Chili negotiated a four-year option

San Antonio is one part of Hot Chili’s capital cost was es- on the high-grade copper project
budding El Fuego suite of assets, which timated at $US725
includes Valentina and Lulu, subject to
four-year option agreements. million, with C1

San Antonio has received the most at- cash costs of $US1.47/lb guided. While Mod Resources Ltd and NewGold Inc –
tention thus far and when Paydirt was on
site, Australian drilling outfit Blue Spec Productora was very much front of the showed projects such as San Antonio
was nearing completion of a 5,000m RC
programme. queue in the copper development space could be “very high value… and at this

Initial results from that campaign con- two years ago, the environment wasn’t early stage things are looking good”.
firmed the continuation of the Main Lode
at San Antonio, with significant intersec- ripe for juniors to be pushing ahead with As results from San Antonio were fil-
tions including 19m @ 2% copper from
61m down-hole, including 11m @ 2.4%; new capital-intensive projects. tering in, Easterday said there would be
15m @ 1.7% copper from 80m down-
hole and 13m @ 1.3% from 17m down- Hot Chili bided its time and with El pleasant surprises from drilling at Valen-
hole, including 5m @ 2.3%.
Fuego is now mounting a serious case tina, with the programme under way at
Several wide zones of strong copper
mineralisation in a further 10 holes was to once again be the copper developer the time of print.
also reported, with further results pend-
ing at the time of print. of choice as the commodities cycle turns “Particularly in this last quarter, we

“We have been able to visually confirm favourably. have been really successful, there are a
wide zones of quite high-grade copper
really close to surface and extending “Overall, this last quarter has been lot of smiles on Hot Chili faces at the mo-
over into an underground, which is show-
ing towards 700m of continuity,” Easter- very active for us and it’s been about ment,” Easterday said.
day said.
demonstrating what we had in this first Those smiles may broaden if the com-
“I think what we are seeing is the emer-
gence of a new sort of jewel in the crown pany can deliver true success at Val-
of Hot Chili. I think San Antonio at this
early stage is showing all the hallmarks entina, while adding further plays in the
of something that could meet our entire
high-grade ore blend strategy from a size mould of El Fuego to its portfolio.
perspective.
Easterday said there were potentially
“We were looking to augment 10% of
our 14 mtpa feed from these type of de- two or three more opportunities close
posits with grades 4-5 times where Pro-
ductora grades are. Just with San An- to Productora which have been family-
tonio alone, I think the early drill results
are pointing towards where we might well owned mines and lacked modern-day
have achieved that target from just one of
those deposits,” he said. exploration.

San Antonio, Valentina and Lulu are “We are advancing our discussions
all within 20km trucking distance to what
Hot Chili refers to as its centre of gravity with a few parties and we will see what
– Productora.
we can roll out over the remainder of

the year as we continue to consolidate,”

Easterday said.

As the company warms to its growth

strategy, it has gone cool on a proposed

TSX-listing, for the time being at least.

The TSX has proven hostile to mining

stocks this year and while the Canadian

bourse is a natural fit for a company host-

Blue Spec driller Tony Crow, with Hot Chili ing a South American asset, Hot Chili will

project geologist Ana Centeno and country take a measured approach to its dual list-
manager Jose Ignacio Silva ing strategy.

“We have a growing investor base over

phase. We are about to get very active there with Rick Rule supporting us and

with planning for our second phase of continuing to build their exposure on our

drilling and some geophysical surveys to register. I do see, moving into a new cop-

refine some of the numerous targets we per price cycle, that we will move into a

have defined south of San Antonio. We point we have seen in previous cycles

have an 8-9km corridor that has 10 high- where the North American market is a

grade copper targets dotted all the way lot more dominant when it comes to base

along it, and features two mines, and we metals, particularly copper, and valuation

are now just starting to show that these gaps have often opened up between the

things are continuing with good grades Australian and North American markets,”

and widths,” Easterday said. Easterday said. “Equinox found that with

He said investigations into compara- their project and several others did and it

tive companies elsewhere – including is something that the company would be

keen to capitalise on and broaden its ac-

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 85

SITE VISIT

cess to capital in that market. There are markets and I think copper is certainly
probably a few milestones that Hot Chili heading that way. We will see how that
wants to hit and then at the right time I unfolds and this will certainly affect the
think that would add a lot of benefit to our medium term, but I think it may well play
shareholders, but not now.” itself out over the short term and have a
little bit more stability.”
Hot Chili boasts a loyal band of share-
holders, with 58% of the company taken – Mark Andrews
up by five shareholders alone, which
include KAS & Blue Spec Group, CAP Hot Chili senior geologist Andrea Aravena
SA, Taurus Funds, Megeve, Exploration at San Antonio
Capital Partners & Sprott.
Drilling at San Antonio has confirmed
It is testament to Hot Chili and Pro- the continuation of the Main Lode at
ductora that it has managed to retain a San Antonio
strong following plus attract the likes of
Sprott during the lean times.

Easterday said the company was “sit-
ting in a pretty secure position on any-
thing that would threaten us at a low valu-
ation”.

“While we concentrate on our rerate
strategy and our high-grade projects, we
see that as being somewhat a catalyst
for more interest in us, plus we have the
potential for further acquisitions also,”
Easterday said.

“I think that once Hot Chili has a lot
more value, any company that is talk-
ing about having an operating centre
towards 100,000 tpa copper project
which is this advanced and at such
a low capital intensity on the Chilean
coast line with infrastructure, it is a
natural question to wonder about an
asset like this sitting in the hands of a
non-major,” Easterday said.

Copper supply is expected to reach
a critical point in the next two to three
years, with a shortage of new projects
ready to come online.

The situation appeared to be rec-
ognised last year with copper prices
booming from below $US2.50/lb to
over $US3.20/lb in a short amount of
time.

Despite no fundamental shift in the
supply/demand equation, the copper
price has tailed since June.

Nevertheless, copper has been one
of the more resilient of the base met-
als during the mid-year market malaise
and Easterday is confident of its long-
term future.

“It really relates to the sound bites
coming out of the White House and the
impact that they may have on China’s
production and therefore consumption
of the half of the world’s actual re-
source commodities,” he said.

“It’s not surprising, but I think these
things have a way of working themselves
out and I don’t think the White House or
the world is trying to deliberately send
the rollercoaster off the rails. I think that
probably is symptomatic of higher volatil-
ity and that higher volatility is often a hall-
mark condition that is prevalent in tight

Page 86 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

MINING CUMBRE REVIEW

The second Investing in LatAm Mining Cumbre in Santiago,
Chile, brought investors, mining companies, service providers,

government delegations and media together in July

Tangoing by the
rules key

The second Investing in in Mexico’s economic ascension and while opposition from local communities has
LatAm Mining Cumbre in those with interests in the country are tak- been a deterrent for foreign investors.
Santiago, Chile, was held ing a “wait-and-see” approach in relation
amid a changing political to AMLO’s handling of the sector, major And, while global markets remain volatile
landscape across Latin changes affecting the industry aren’t ex- – largely on the back of the stiff US trade
pected. policies – investors are being cautious with
America. their capital as they navigate through po-
Just as Mexicans were coming to grips litical risk factors and it could be sometime
Former Mexico City mayor Andres Ma- with new leadership, Colombia was initiat- before Colombia appeals as a safe place
nuel Lopez Obrador (AMLO) had just ing the new Democratic Centre Party led to invest.
been elected as the new president of by President Ivan Duque who took office in
Mexico in July courtesy of an aggressive August. One man with a history of successfully
campaign promising to weed out corrupt operating in jurisdictions considered politi-
politicians and curb the country’s deadly Toughening a peace deal brokered with cally challenging is Peter Hambro.
drug wars. Marxist rebels after 50 years of conflict and
strengthening the economy were key planks Hambro, former executive chairman and
If successful, AMLO has the potential behind the right-wing leader’s victory. one of the founders of Russian gold mining
to lead Mexico into a golden era, with the giant, the London-based Petropavlovsk plc,
country already Latin America’s manufac- In the early days of his tenure, Duque has has over 30 years’ experience in the mining
turing powerhouse and on track to be the flagged possible changes to the holistic ap- sector which has seen him take on ventures
10th largest economy in the world. proach to how royalties from the mining and across Africa and Venezuela.
extractive sectors are distributed within the
Mining is tipped to play an important part country. Among his current roles, Hambro is a
strategic advisor to Guyanese outfit WBD
Colombia’s mineral endowment, particu- Gold Inc which is focused on the 2.3mt @
larly in gold, has been much talked about 5.86 g/t for 449,000oz (indicated and in-
however the country’s troubles and staunch ferred) Quartzstone gold project.

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 87

MINING CUMBRE REVIEW

The company has invested about $US23 BN Americas senior managing editor Laura Su- low when investing in Latin America.
million over 10 years and has budgeted a perneau hosted a one-on-one with former execu- “Don’t try and be clever and make certain
further $US7.93 million for resource exten-
sion, near-mine and greenfields exploration tive chairman of Petropavlovsk Peter Hambro that you absolutely follow the rules. There
drilling in Guyana. were a huge number of people who came
the former Soviet Union. to the former Soviet Union in order to get
Hambro said the company was happy to Reflecting on the 1990s when he was projects on the cheap,” Hambro said.
have progressed to a NI 43-101 resource
estimate at Quartzstone and was bullish one of the few foreign investors to enter “Most importantly, have a good partner
on the opportunities in Guyana, despite a Russia, Hambro said it was the most “fright- and make certain you are doing the right
dispute with Government which ended in ening” place he’d ever agreed to invest in. things by the legal body. The way it was
London’s Court of International Arbitration. in Russia in the 1990s/early 2000s, there
There was little comfort on the ground were people playing the system and trying
“It took a very long time and it took a lot of for Hambro in Russia and the exercise of to make money by manipulating our share
money, but we got the ruling we hoped for,” building a high-grade gold project almost price in collaboration with the rogue ele-
Hambro said. vanished before any dirt had been dug. ments in the natural resources world, but
we had no problem from the actual state
“It was then a matter of going back to Guy- “We did have our licence challenged at all. There are baddies everywhere and
ana and asking for this ruling to be applied. almost immediately when we got there you have to put up with that. The way the
The fact that British/English law is the basis because they thought we were some for- State and the regulatory authorities have
of Guyanese law, meant it was relatively sim- eigner coming in to steal all the goodies. behaved has been remarkably good; it is
ple to do, but it comes back to making cer- Luckily, we did everything we should have vitally important to stick to the rules.”
tain that you are doing things correctly and done. They took us to court, but we kept the
you are not trying to cut corners. licence without any problem,” Hambro said. By following script, Hambro established
Petropavlovsk as one of Russia’s biggest
“These are operational issues, the chal- Hambro attributed the early success in gold producers, with the company at one
lenges from the State are worse. I was Russia to having the right partner on the point valued at more than £2 billion.
asked the question about Venezuela and it ground, one who understood all the sys-
is very hard to know how that is going to tems and protocols, and strictly playing While the company is experiencing some
play out. I had a small investment in one of within the rules; a mantra for people to fol- difficulties and Hambro was voted off the
the Canadian companies operating there company’s board last year, the achievement
who also won their case and a judgement of building an empire in a jurisdiction consid-
of $US1.5 billion, but the chances of ever ered closed at the time of Petropavlosk’s flight
getting that back are extremely remote.” is some sort of template for others to follow,
particularly those keen to test the waters in
Hambro said the situation in Venezuela emerging destinations in Latin America.
was one of the only “losses” he’s had from
a government point of view, which is quite – Mark Andrews
remarkable given his early involvement in

Miners asked to the table

Development Partner Institute (DPI) execu- nomic and social progress and the little work with the mining sector and that is how
tive director Wendy Tyrrell has urged min- things, respect, dialogue and understand- the Development Partner Institute came
ing companies to get the “little things” right. ing. I think as an industry we have the best about. We are working in Latin America, Af-
of intentions, but I don’t think we always rica and starting to work in the Indo-Pacific
Speaking during the “rebuilding public bring those two things together. I do feel region as well,” Tyrrell said.
trust in mining” panel discussion at the Min- that there is opportunity for us as an indus-
ing Cumbre, Tyrrell said that while she had try to work on the big things with other sec- “There is real opportunity to connect
seen good examples of industry making tors and organisations and to ensure that the work from company to company, from
significant contributions to economic and we always come to the table with humility industry to industry, so that mining, agricul-
social progress around the world, compa- and respect for others.” ture, tourism, the tech sector and energy
nies should not forget common decency. sector can begin to work together in much
Tyrrell has 25 years experience in min- more effective ways with communities and
“I think as an industry, being respectful ing and has been executive director of the civil society organisations.”
and coming to the table with humility and newly formed DPI for 11 months.
being prepared to really generally listen and Tyrrell said engaging government, multi-
understand [is key],” Tyrrell said. DPI was formed in 2016 by the Kellogg lateral institutions and academics was also
Innovation Network in the US after it was important.
“The two things are connected – eco- identified that despite mining’s positive role
in innovation and collaboration, in the last “We have to find new, very effective and
Wendy Tyrrell 10-20 years there was a growing gap be- efficient ways to collaborate between the
tween societal expectations and what the sectors and different groups so that we
industry was able to deliver. can deliver social and economic progress
in effective and cost-effective ways for the
“The world is changing so dramatically in industry. Having been in the industry for
so many ways, with social media, innova- my whole career, I understand there is a
tion and technology, and expectations of reticent for the mining industry to take on
communities. Countries are changing and it more responsibility when there are already
was felt there would be value in creating an significant requirements for environmental
initiative and entity that could focus on this and social assessments,” she said.



Page 88 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Bets hedged on copper

Lithium and cobalt have been Ignacio del Rio, partner at private
the runaway commodities as equity house Mineria Activa.

the electric vehicle and battery Del Rio said that while lithium and

future gathers pace however cobalt companies were attractive

with work already under way to propositions for investment, copper

assess the future battery chemi- stocks proved to be safer bets.

cal composition there is potential “Within the mining industry we

for substitution. feel that copper has the better bal-

“We do see other commodities ance of risk/reward,” de Rio said.

that will be structurally affected “Cobalt and lithium have the big-

on the demand side besides co- gest demand in EVs [currently], but

balt and lithium. This is a tricky with that comes the changing of

game because technologies chemistry in the battery and with the

do change and we do think the use of nickel [rising], there will be a

lithium battery is going to lead Deloitte global leader, mining, Phil Hopwood, Mineria slowdown in the demand growth for

this generation of batteries, but Activa partner Ignacio del Rio and BTG Pactual – asset cobalt. But, in the case of copper,
management director Nicolas de Camino there are very limited substitutions.”
10 years from now we may not

even have lithium,” BTG Pactual Based on projections from some

– asset management director Nicolas de ium for the same calculations that you of the world’s largest car manufacturers,

Camino said. would do for lithium or cobalt. Therefore, Deloitte global leader, mining, Phil Hop-

Therefore, de Camino’s investment we have been looking at other minerals wood said demand for copper in the next

banking firm has opted for exposure to that perhaps are not obvious to everyone 10 years would increase by 20-30%.

other ingredients just as essential in the else,” de Camino said. “BMW estimates 15-20% of their sales

make-up of EVs. While bullish on the role particular rare will be EVs by 2025, VW reckons they

“We have ended up with rare earths, earths could play in the EV revolution, de will have 2-3 million sales of EVs [20-

mainly neodymium and praseodymium, Camino said the one commodity which 25% of their car sales] at the same time

which are critical in making electrical en- would remain a constant is copper. and Honda says by 2030 two-thirds of

gines. The electrical car has five times “Copper goes with electrification, their sales will be EVs. These are pretty

more permanent magnets than a com- whether technology changes or not cop- intense figures,” Hopwood said.

bustion engine would. The demand will per will be there,” he said. – Mark Andrews
need to increase five times for neodym- De Camino’s thoughts were echoed by

Plateau levels on lithium

By its own admission, Plateau Energy LCE,” Plateau Energy Metals president tion and production times than brine
Metals Inc became a lithium explorer Laurence Stefan said at Mining Cumbre deposits.
by mistake, but in quick time it is mak- prior to the release of the resource es-
ing the most of the opportunity at the timate. “It is something completely new and
Falchani project in the Puno district of I am convinced that there are similar
south-east Peru. “We started as a uranium explorer deposits in other parts of the planet
and when we put it together we became too, but people probably didn’t have
In July, a maiden resource at Falchani a lithium explorer by mistake.” the eyes to look for them. What we are
was announced which came just nine trying to do now is send a strong mes-
months after the discovery hole was With uranium resources of 124 mlb, sage to other lithium explorers to do the
drilled on the project. Plateau believes it has one of the larg- same,” Stefan said.
est lithium-uranium projects in the world
The indicated resource estimate to- at Macusani, which hosts Falchani, and Plateau is currently conducting a PEA
talled 40.58mt @ 0.67% lithium oxide while there is potential to grow the yel- on Falchani, while metallurgical test
and 1.65% LCE for 670,000t LCE and lowcake endowment by 5-6 times and work also carries on.
inferred resources measured 121.7mt be one of the largest producers of ura-
@ 0.59% lithium oxide and 1.45% LCE nium oxide for the next 20 years, lithium Met test work has been conducted at
for 1.78mt LCE. is the focus. the Sydney-based ANSTO laboratory,
with results to date indicating potential
“Our first initial resource of 2-2.5mt “We are looking for better [uranium] for low-cost, open pit mining operations
LCE probably positions us in the top prices, our focus is now on lithium,” Ste- from straightforward lithium processing
five size-wise, but we believe the actual fan said. is possible from Falchani.
area will make it much larger than Bo-
canora [Mexico]. It is large enough for Stefan said Plateau’s lithium deposit Plateau is planning on being in pro-
a lithium mine of 40-50 years produc- was unique because it was not spo- duction in 2020/21.
ing anything between 50-100,000 tpa dumene or lepidolite but volcanic tuff
making it amenable to quicker extrac- – Mark Andrews

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 89

regional roundup latin america

Mining the upside for Ecuador

Ecuador has emerged as of BHP Ltd, Rio Tinto Ltd, New-
one of the hottest ex- crest Mining Ltd and Fortescue

ploration destinations in the Metals Group Ltd hope to cash

world and now the country in on.

is being backed to go to the However, it has been Austral-

next level of hosting signifi- ia’s Solgold plc which has led the

cant mining operations. charge with the highly acclaimed

“It [Ecuador] distinguishes Cascabel discovery.

itself with the delivery of sig- Cascabel hosts a resource of

nificant infrastructure pro- 430mt @ 0.78% copper equiva-

jects, highways, hydropower; lent containing 3.35mt (indicat-

all of which are instrumen- ed) and 650mt @ 0.62% copper

tal in placing Ecuador in a equivalent containing 4.03mt

perfect position vis-a-vis (inferred) and is subject to a

graduating from an explora- PEA by Solgold.

tion country, which it has be- Meanwhile, with 3,200sq km

come, to a country starting to “ Ecuador vice minister of mining Henry Troya Figueroa of ground in Ecuador, Solgold
host major mining projects,” It [Ecuador] distinguishes has expanded exploration into
Alicanto Mining Corp execu- itself with the delivery of regional areas and the company
tive chairman Raziel Zisman significant infrastructure projects, has come up with 10 priority
told delegates at Investing in highways, hydropower; all of which are projects – Blanca Nieves, Rio
LatAm Mining Cumbre. Armarillo, Cisne Loja, Porvenir,
Timbara, Chillanes, Salinas,
Zisman, who is also di- Sharug, La Hueca, Cisne Victo-
rector and member of Inter- ria – selected for second phase
national Affairs Committee,

Prospectors and Develop- instrumental in placing Ecuador in a exploration.
ers Association of Canada perfect position vis-a-vis graduating Unveiling another Cascabel
(PDAC), said Ecuador had
will certainly fit into Solgold’s

embraced the mining sector from an exploration country, which it strategy of becoming a Tier 1
in the right way and applaud- has become, to a country starting to copper and gold producing com-
ed the Government’s con- pany, as other companies start
sistent approach to industry host major mining projects. to get active amid a prosperous
policies. time for Ecuador’s mining sec-

Zisman’s comments came tor.

on the back of Ecuador vice “There has been a consistent

minister of mining Henry orientation by the Government

Troya Figueroa announcing of Ecuador in terms of identify-

at Investing in LatAm Min- ing very reasonable, very logi-

ing Cumbre the introduction cal policies in terms of mining

of scout or reconnaissance investment and they are consist-

drilling within an exploration ent with the message of invest-

concession, while removal ment,” Zisman said.

of the windfall tax and roy- “They are listening to inves-

alty incentives for miners are tors and they are focused on

also in play. achieving a major mining coun-

One company poised to try because Ecuador realises

capitalise on the positive the importance, both in terms

mining environment unfold- of economic development and

ing in Ecuador is Lundin Gold in foreign currency generation,

Inc, which closed a senior of the mining sector. Those two

secured project finance debt aspects are the ones that will

facility of $US350 million keep the state steady for the

with seven senior lenders for Raziel Zisman foreseeable future to ensure
the development of the Fruta that the success they have had

del Norte gold project. 4.9 moz gold @ 9.2 g/t (probable re- in the last few years in attracting
The underground Fruta de Norte, in serves), Fruta del Norte will be one of the the major mining companies which are
few world-class gold deposits to come on- now exploring and investing in Ecuador
Ecuador’s south-east, is expected to stream in the foreseeable future. continues through to the construction of
produce 325,000 ozpa gold at AISC of projects.”
$US609/oz for about 15 years, with pro- With only about 5% of the country sub-
duction slated to start at the end of 2019. ject to exploration, there remains signifi- – Mark Andrews
cant untapped potential, which the likes
Construction started last year and with

Page 90 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 91

MINING CUMBRE REVIEW

Silver side on the up

As a new precious metals up-cycle be- to capture any surge in demand for silver sector especially with the silver players be-
gins, silver players are pitching to be with the company operating three mines ing big players in the mining industry.”

the stocks to watch. and developing another in the world’s pre- Peru, Chile and Bolivia are among the

“This is exactly the time to be putting mier silver hub, Mexico. top silver producing countries behind,

silver in your portfolio and don’t look at it Group silver production in Q2 2018 in- however, there are currently some head-

until the end of the year,” Endeavour Silver creased 19% to 1.36 moz on the corre- winds to navigate for investors considering

Corp chief executive Brad Cooke said at sponding period in 2017 and gold was also prospects in such jurisdictions.

Investing in LatAm Mining Cumbre. up by 5% to 13,058oz. From a geological perspective, Valdes

At the turn of the century, physical de- Since Cooke arrived at Endeavour in said Bolivia was “a great place to be”, but

mand for silver climbed with the advent 2003, the company has developed four after a visit two years ago he remained un-

of digital photography and more recently mines in Mexico and is expected to make sure of how to “bring foreign investment” to

there has been an exponential growth in a development decision on its fifth – Ter- the country.

silver usage in the photovoltaic and solar ronera – in Q3. Meanwhile, the political turmoil in Peru of

market. Endeavour is targeting a ramp-up in the last 18 months and Chile’s new govern-

BMO Capital Markets has forecast de- silver production at a time of change in ment, which is trying to make big changes

mand for silver to grow 15% by about 2025, Mexico with dawn of new leadership under to the environmental approvals process,

with traditional industrial uses of jewellery the presidency of Andrés Manuel López are factors potentially impeding silver pro-

demand (particularly from India) and the Obrador (AMLO). duction in the short term.

automotive space the primary drivers. New Pacific Metals Corp managing di- “Each country has its own challenges,

And, there has been significant research rector Gordon Neal said his company had but I think overall they are trying to go down

into silver-zinc batteries, although this sec- a profitable interest in Mexico’s silver space the right track,” Valdes said, adding that sil-

tor remains a work-in-progress. and while he didn’t expect the incoming ver was very much a secondary market and

“We have seen solar take over in the government to interfere too much with largely a by-product of lead-zinc production.

last 10 years as the fastest growing com- mining sector, he would monitor progress Global supply of silver has declined for

ponent of industrial demand [for silver] and closely. the past two years, leading to what Neal be-

I will go a step further and say we have a “Most silver production comes from lieved to be a “perfect storm” for players in

disruptive technology staring us in the face countries that I am not going to say are the sector and impetus for New Pacific Met-

but nobody talks about silver when we talk high risk, but where there are some uncer- als to get active in Bolivia despite an appar-

about the electric car,” Cooke said. tainties, especially Mexico with AMLO just ent lack of investor interest in the country.

“About 5% of total demand last year coming into power. We have to wait and “Hopefully, we are contributing as a pri-

went into conventional cars, all the cir- see what happens,” Neal said. mary [silver] producer out of Bolivia,” Neal

cuits in conventional cars used about 50 “We have our own view, and I don’t think said.

moz silver and with the emergence and AMLO will mess much with the mining “What I am getting a sense of is that gov-

growth in the electric ernments in previous

car business, I think years were getting

that will become the the revenues from

new fastest growing mining and using

aspect of silver in them whatever way

industrial demand in they wanted. Corrup-

the next five years. tion was inherent in

I think we have a the system but is now

very exciting time for somewhat starting to

us on the demand dissipate.

curve.” “I think govern-

Despite base met- ments are starting to

als prices picking see that their votes

up recently, there come from the com-

are still few copper munities and they

and lead-zinc new can curb corruption

mine developments by working with their

coming on-stream, communities. As

leading to a continu- mining companies

ation of the decline coming into their

in by-product silver countries in that re-

production. spect, starting from

Endeavour aims the ground up will

to grow its silver pro- help the entire Latin

duction by 20% this American states,” he

year and 50% over Deloitte’s Andrew Swart discussed silver supply/demand fundamentals with said.
three years and is Endeavour Silver chief executive Brad Cooke, New Pacific Metals Corp
therefore well placed Gordon Neal and RCF Latin America managing director Martin Valdes
– Mark Andrews

Page 92 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

Chilean mining expertise is set to have a big impact on Australian operations in the future Giancarlo Tosti-Croce

ProChile Macaya Industrial Supplies and Novamine. Chilean companies and the Australian
Leading the contingent was ProChile’s mining and METS sector was strong, with
ProChile’s Programme of International
business development manager – mining Promotion of Mining Suppliers was
strengthening.
on the move Giancarlo Tosti-Croce.
“It is important for us to place our mining “We are not reinventing the wheel. They
sector into more advanced mining jurisdic- [Chilean METS providers] are leaders in
tions,” Tosti-Croce told Paydirt. what they do and have innovations that
in Oz “We are ready to export [METS] and Australians haven’t seen before,” Tosti-
meet big players in Australia, there is a lot Croce said.
of value-add and innovation in the Austral-
ian market. It is very professional and we Tosti-Croce identified the likes of grind-
ing balls mills, detonating fuses, ammo-
ProChile will look to double its country’s are open to new ways of doing business. nium nitrate, detonating caps, TNT-based
METS exposure to Australia over the “We want to double exports to Australia mixtures, drilling machines, engineering
services for extractive mining, software,
next few years. and the other countries [identified as key and specific ICT services, as examples of
the diverse range of products and services
The export promotion bureau for the markets]. We want to double and increase Chilean METS exporters could offer the
global mining community.
Trade Commission of Chile, ProChile, was business in the mining communities be-
Furthermore, having the expertise of the
out in force at the Queensland Mining & tween Australia and Chile. We will go world’s largest copper miner – Codelco –
at its feet was something Australian com-
Engineering Exhibition (QME) 2018 in home happy if our companies manage to panies could benefit from.

Mackay during July to increase awareness sell to big companies,” he said. He said the similar conditions faced by
miners in Chile and Australia meant the
of what Chile’s METS providers can offer Chile is the world’s largest copper miner, open pit and underground mining technol-
ogy and expertise developed by Codelco
the mining fraternity. one of the benchmarks for lithium produc- would be particularly relevant to local min-
ing houses.
In a bullish market, ProChile returned to tion and is often ranked among the premier
“Codelco has provided expertise in bulk
QME with its biggest ever presence at a mining jurisdictions in the world, which is underground mining techniques to some
of Australia’s biggest mining companies,”
trade show in Australia and the first major evidenced by the presence of blue-chip Tosti-Croce said.

activity down under for the Chilean Gov- miners with operations in the country.

ernment Programme of International Pro- Over half of Chile’s national income

motion of Mining Suppliers. is derived from the mining sector, which

ProChile’s appetite for boosting engage- is fertile ground for the country’s 6,000

ment has come on the back of research METS providers.

conducted last year which indicated Aus- With the mining sector starting to wake

tralia, Canada, Mexico and Peru were key from its slumber in 2016, global exports

strategic markets Chile should be target- of Chilean METS companies goods and

ing. services totalled $US471 million, with non-

ProChile was accompanied by seven copper exports of mining goods and ser- – Mark Andrews

Chilean METS outfits to QME, which in- vices to Australia increasing by 2.7% from

cluded representatives from Aceros Chile, 2015 to $US7.5 million.

Arcotex, Ericar, FMA Industrial, Ingepro, Tosti-Croce said the bond between

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 93

SOUTH AFRICA

Gold Fields has started
restructuring plans

having failed to turnaround
performance at its South
Deep gold mine

Gold Fields Ltd is set to re- Gold Fields “The proposed restructuring
turn to the drawing board South African at South Deep aims to consoli-
at its South Deep gold mine date mining activity to increase
after admitting the deep-level focus and to match the cost
operation had continued to un- structure to the current level
derwhelm. of performance,” the company
said.
A global top 10 gold produc-

er, Gold Fields announced in troubles deepen Initiatives to stem the
August that it would begin a re- mine’s losses include tempo-
structuring of South Deep after rary suspension of mining at
failing to overcome a number the 87 Level and redeployment

of operational challenges since of mining crews elsewhere; ser-

acquiring the project in 2006. vicing of the eastern part of the

Gold Fields’ strategy from the begin- However, the allure of the deep re- mine from the Twin Shafts and restaffing

ning was to move away from traditional sources (mining currently occurs 3,000m of the South Shaft operations to a single

South Africa mining methods and apply below surface) at South Deep for Gold shift per day and reducing growth capital

modern, mechanised mining techniques. Fields has always remained. Reserves expenditure for the next 18 months to re-

However, its latest restructure is akin to stood at 30.49 moz @ 6.1 g/t at the end duce cash burn.

an admission of failure in this regard. of 2006 with resources at 62.79 moz but “New mine development has outper-

“The key challenge has been the dif- the company planned to expand produc- formed the plan in recent years, which al-

ficulty in transitioning the mine from one tion to as much as 800,000 ozpa. lows us some flexibility to reduce this activ-

run with a conventional mining mindset That mark now appears wildly am- ity for the near term,” the company stated.

and practices to mining with a modern, bitious with the company targeting Detailed mine planning was expected to

bulk, mechanised mining approach,” the 196,000oz for the half-year. begin this month with guidance for 2019

company said in a statement. Instead, the company will embark on and beyond to follow before the end of the

Operations have suffered from geo- further restructuring with up to 1,100 per- year.

technical challenges, sub-optimal sup- manent employees and around 460 con- Complicating matters for Gold Fields is

port services, poor equipment reliability tractors – among a workforce of 6,000 – the political ramifications of more redun-

and equipment and labour productivity set to lose their jobs. dancies. South Deep is the iconic South

issues throughout its time in operation. African gold miner’s only remaining do-

These failures have led to the mine con- mestic operation after it spun-out the rest

sistently failing to meet both mining and of the portfolio into Sibanye Gold Ltd in

production targets. 2013.

Gold Fields reported production of New Minister for Mineral Resources

49,000oz gold and a cash burn of $US24 Gwede Mantashe blamed Gold Fields

million for the June quarter, well below its management for the job losses.

target of 500,000 ozpa by 2022. “Gold Fields is sitting on the second big-

South Deep has lost R4 billion over the gest gold deposits in a mine in the world,”

last five years despite Gold Fields invest- Mantashe told Reuters. “Going for job cuts

ing R32 billion into the mine, including is the easy way out. The real problem is

the R22 billion price tag. The company poor management.”

has decided continued losses are unsus- When asked if he planned to step down,

tainable. Holland, who has been at the helm of the

“The cost structure needs to be rea- company since 2008, told Reuters: “No.”

ligned with the current lower level of pro- “We understand his concern about job

duction,” the company reported. losses, obviously the industry is struggling.

The project – 45km south-west of Jo- If we can find other alternatives, we don’t

hannesburg on the West Wits Basin – close the door entirely, but we can’t argue

was commonly seen as South Africa’s with economics, R3 million a day out of

last great gold mine when discovered by the bank is a lot of money,” Holland said.

JCI in the 1980s but has been riddled by South Deep is one of the world’s deepest gold – Paydirt staff and Reuters
equipment, safety and geological prob- mines and boasts a main shaft comprising a

lems throughout its existence. single-drop to a depth of 2,995m

Page 94 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

SAVE THE DATE

Perth, Western Australia 9
November 12-13

24 years of world-class discoveries from
43 countries around the globe

www.newgengold.com

Jointly organised by:

Keith Yates & Associates Pty Ltd

For all enquiries about presenting, exhibiting or attending or to purchase a proceedings book from a
previous conference please contact Mel Fogarty on (+61) 8 9321 0355 or email [email protected]

regional roundup EUROPE

Raiden eyes on maiden
in Serbia

Shortly after arriving on the ASX in factors highlighted by market commen- With Rio Tinto doing the heavy lifting
early 2018, Raiden Resources Ltd tators as reasons for copper low-balling,
however, Ljubojevic is confident in the at Majdanpek and Pojas – a VTEM and
longer term upside.
set the market alight when it announced it aeromag programme started at Majdan-
“Copper is the one thing that has legs
had courted Rio Tinto Ltd as a JV partner long term, the fundamentals are right for pek West and Pojas in Q3 – Raiden is
the medium-to-long term and there are
across two copper-gold projects in Ser- no substitutes for copper,” he said. freed up to focus on Stara Planina.

bia’s Tethyan Belt. There are also no world-class copper Ground IP, mapping and sampling
assets appearing on the horizon at the
With a dearth of new copper projects moment, with no better place to unearth a at Stara Planina was conducted in Q2.
Tier 1 deposit than in Serbia, according to
coming on stream, Rio Tinto’s commit- Ljubojevic. Drilling on the Aldinac and Gradiste

ment to an option to spend $US31.5 mil- Ljubojevic is not alone in his belief and prospects was nearing completion at the
the list of companies active in the country
lion over three stages to earn up to 75% is of the highest order – Freeport McMo- time of print with results due this month.
ran, JOGMEC, First Quantum Metals ltd,
of the Majdnapek and Donje Nevlje pro- Dundee Precious Metals, Eldorado Gold, “All going well, we hope to have a
Nevsun Resources Ltd and, of course,
jects was a boon for Raiden and clear Rio Tinto. maiden resource in the first half of 2019.

signal of the major’s high regard for the On the junior side, ASX companies This 3,000m is the first phase of drilling
have been slow to the party with TSX
Serbian copper landscape. and AIM vehicles looking to replicate and once we have had the results back
discoveries such as Cukaru Peki at the
Furthermore, copper was trading at Timok project, where Nevsun has con- we will probably follow up with another
ducted a PFS on the Upper Zone meas-
nearly $US3.20/lb in March when the deal ured and indicated resource of 28.7mt drilling campaign later this year. Hopeful-
@ 3.7% copper and 2.4 g/t gold for 1mt
was announced which added further shine copper and 2.2 moz gold. ly that will do it for the maiden resource

to Raiden’s feat. At the time of print, Lundin Mining Corp in the first half but more than likely we will
had just launched a hostile $1.1 billion bid
However, a prolonged winter in Ser- for Nevsun for exposure to Cukaru Peki. have to do some more drilling next year,”
Nevsun has advised its shareholders to
bia meant a slow start to Rio Tinto’s ac- reject the offer and take no action, after Ljubojevic said.
Lundin took its all-cash offer of $C4.75/
tivities, leading to a lag in news flow that share directly to Nevsun shareholders on Aldinacisacopper-moly-goldsoilanom-
July 26. Its five previous proposals were
cost Raiden rejected by the company, according to aly covering
Reuters.
momentum in anarea2.5km
“Cukaru Peki is a deposit that is at
the market. depth to about 400m, but one of the in- by 750m, with
tercepts and one of the maiden discov-
The day the ery intercepts was over 100m @ plus- eight rock
10% copper with credits of gold as well,”
deal with Rio Ljubojevic said. chip sampling

Tinto went “The potential is there to make a ma- results from
jor discovery of a Tier 1 asset, which
public, almost to be honest will work anywhere in the a previous
world when you put it at those grades.
all of Raid- The country is still open to these types of explorergrad-
discoveries. Nobody has looked at that
en’s register and a lot of the ground we have looked at ing 2-12.5 g/t
show indications of anomalies, but they
turned over haven’t been followed up and that is es- gold.
sentially why we are there; to find a Tier
from a vol- Dusko Ljubojevic 1 discovery.” Nicholas Young Meanwhile,
ume perspec- historical

tive and the trench sam-

RDN ticker took off from mid-2c/share to a pling results from Gradiste include 2m @

high of 4.7c/share. In mid-August, Raiden 10.55 g/t gold and 6m @ 7.37 g/t; 4.5m @

was trading at 1.6c/share. 6.4 g/t gold and 0.16% copper, including

“We didn’t have the follow-up news to 0.5m @ 101.5 g/t. Continuous rock chip

sustain it at 4.7c/share,” Raiden manag- samples of 22m @ 1.9 g/t gold and 6m @

ing director Dusko Ljubojevic told Pay- 3.76 g/t and 0.17% copper have also been

dirt. “Since then we have only really reported from Gradiste.

been coming out with positive news; we Stara Planina has been bereft of any

have executed the JV with Rio, they com- modern-day exploration and while for-

pleted their due diligence and they have eign investment in the mining sector is

commenced work. We have defined two relatively new to Serbia, the success rate

very large targets and are starting to drill has been unrivalled.

them, so it has been all positive stuff. I Ljubojevic said there was 10 times as

just think that the market needs to be- many copper projects under develop-

come a little bit more aware of Raiden.” ment in Chile than Serbia, however, giv-

Ljubojevic spoke with Paydirt ahead en foreign investment only started flow-

of a marketing campaign down under ing into the former Yugoslavian republic

to build awareness around Raiden amid in the early 2000s, the discoveries of Rio

continued downward pressure on copper Tinto’s Jadar lithium project and Cukaru

prices ($US6,044/t at the time of print). Peki spoke volumes for the potential of

Currency issues in Turkey and the US- the country.

China trade dispute were some of the “After the Second World War, during

Page 96 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

the socialist times, the been dominated by TSX and AIM com- Despite its Central European location,
state-owned compa- panies. Serbia is greatly underexplored
nies led exploration
and development, with “The recent discoveries of Tier 1 assets going to start yielding a lot more discov-
no foreign capital com- like Cukaro Peki and the entry of Nevsun eries and it is very seldom that you have
ing in,” Ljubojevic said. into the country generated a lot of focus this degree of geological potential paired
on Serbia and it has been really positive. with a country keen to develop infrastruc-
“Then Serbia was It is highly underexplored despite the fact ture and is a cost effective place to oper-
caught up with all the that it is in the middle of Europe. ate in. All the factors are right for us.”
troubles in the 1990s,
so the foreign capital “I think it is a matter of time as further – Mark Andrews
only started coming investment comes in that this region is
in from the mid-2000s
and onwards. And, in High-grade copper-gold opportunities
a very short amount of are attracting explorers to Serbia
time that foreign capi-
tal has had access to
this market, a number
of Tier 1 discoveries
have been made.

“In the 1960s, the
State drilled one hole
down at Donje Nevlje
and returned 281m @
0.1% copper. It is not
economic, but ended
in mineralisation and
then not a single drill
hole has been put into
this area since.”

Now with Canadi-
an, and an increasing
amount of Australian geological and min-
ing expertise arriving, the scene is set
for Serbia to emerge as a destination of
choice for copper hopefuls.

And, with the Government introducing
a welcoming investment structure based
on Scandinavian models – 5% royalty
rate and 15% tax rate plus 10-year ex-
ploration tenure – prospective ground is
being taken up quickly.

Raiden has three projects at different
stages of application/granting/transfer,
but the current popularity of Serbian
copper-gold exploration plays means
the well is starting to dry up for any ASX
hopefuls looking for entry.

“I think the Australian market has only
recently been introduced to the Serbian
plays, it is something that the AIM and
TSX have dominated and is one of the
reasons why we decided to list it in Aus-
tralia and why the vendors decided to fo-
llow up with Raiden and list in Australia,”
Ljubojevic said.

“Most of the Western Tethyan belt has

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 97

regional roundup

Myanmar Metals bites
into Bawdwin

The Bawdwin JV is progressing at an accelerated pace in order to have a feasibility study completed by late 2019

As Myanmar emerges on the interna- global mining sector’s sullen outlook for told Paydirt.
tional scene, investors have begun emerging markets but attitudes are rap- “We are at the beginning of a new
jostling for investment opportunities in idly changing and the likes of Woodside
the country. Ltd, PanAust Ltd and Coffey make up wave, so I think this new mine develop-
some of the Australian contingent enter- ment at Bawdwin will set the standard in
Telecommunications outfits moved ing the mining and energy arena as inves- modern mines for foreign investment and
early and have had a profound impact in tors warm to propositions in Myanmar. it is actually going to be a very important
setting up wireless services in-country, mine. It is a destination that probably
which has created a path for tourism, Myanmar Metals Ltd, with its Bawdwin 12-15 years ago probably wouldn’t have
commercial property developments and polymetallic project in the northern Shan been on a mining company’s radar, but
now the manufacturing sectors, with State of Myanmar, is leading the charge it certainly is now because the mineral
companies such as Ford looking to es- from an Australian perspective. endowment in Myanmar is outstanding
tablish a stronghold in Myanmar. and largely untapped. There are great
“It [mining] has been one of the slower tracts in Myanmar that are unexplored,
A buoyant Australian-Myanmar Cham- sectors [to the party], with the initial wave certainly in the area we are in.”
ber of Commerce has been pivotal in of investment being in telecommunica-
introducing Australian companies to the tions. The [general] investor sentiment Myanmar Metals has locked in 51%
South East Asian nation, which now has been very strong and the numbers ownership of the historic silver-lead-
hosts one of Australia’s big four banks – are growing enormously. People are be- zinc deposit at Bawdwin, which is being
ANZ. ing accustomed to the fact that this place primed for production in 2021.
is working as an investment destination
Alongside ANZ, there are other Aus- – the economy is the fastest growing in The scope of the project will start to
tralian financial and legal service provid- Asia – and the amount of foreign invest- take shape in the near term, as Myanmar
ers established in Myanmar, however, ment, particularly Western investment is Metals continues to determine the extent
one sector usually at the vanguard of now phenomenal. The amount of devel- of the Tier 1 deposit.
Australia’s entry into emerging destina- opment is phenomenal; in terms of inves-
tions – mining – has responded a little tor sentiment it is actually very strong,” “I couldn’t tell you how big Bawdwin is
slower to the potential in country. Myanmar Metals chairman John Lamb because I don’t know it has ever been ex-
plored. We have a tenement that covers
This could be largely attributed to the 9km of strike length, we know that, and

Page 98 SEPTEMBER 2018 AUSTRALIA’S PAYDIRT

ASIA

we have a mineralised envelope drilled Myanmar Metals’ 51% stake makes it the major partner in the Bawdwin project
in that. We haven’t even finished drilling JV with partners Win Myint Mo Co. Ltd and East Asia Power (Mining) Co Ltd
it out and we already have an 82mt
JORC-compliant resource. It is an ex- it has really never been tested for cop- er advantage. We have a supportive JV
ample of the opportunities in Myanmar,” per. There are many signals that there partner, supportive regulators and sup-
Lamb said. is high-grade copper there but it wasn’t portive investors, like Mark Creasy, and
of interest to the original Chinese miners we have a very strong and experienced
Bawdwin was one of the great mines in who mined for silver and it wasn’t of inter- team. We are well cashed up to deliver,
the world when under British control from est to the British who mined for lead. But, we are very pragmatic, we just need to
1914 through to WWII and while Myan- we are finding copper in the high-grade get on and deliver,” Lamb said.
mar Metals had to generate its own mod- zones in the main lodes and there are
ern day data, to date an indicated and any number of signs from historical work- An experienced silver-lead-zinc miner
inferred resource of 82mt @ 4.8% lead, ings around the place that there is copper by trade, Lamb said that part of the com-
119 g/t silver, 2.4% zinc and 0.2% copper in sight,” Lamb said. pany’s role was to help develop the min-
(0.5% lead cut-off) has been established. ing industry in Myanmar and there was no
“We have a very clear development better way to do that than building a mine;
Furthermore, analysis of assays cover- plan to bring Bawdwin into production something he has the capacity to do.
ing a broader suite of elements from drill- starting with a small starter pit, which in
ing conducted in 2017-18 has revealed itself is exciting as we’re talking about Mining has been a foreign industry in
wide intervals of copper-cobalt minerali- a decade for a starter pit. We are ham- Myanmar and Lamb recognises the need
sation, which included 27m @ 0.16% co- mering away, we are doing pre-feasibility to import the necessary skills to develop
balt, 0.84% copper and 1.74% lead; 15m work with more drilling and in about Q1 Bawdwin.
@ 0.15% cobalt, 2.78% copper and 86 g/t next year we may be in a position to de-
silver, including 21m @ 0.14% cobalt, 1% clare the first ever JORC reserve pub- “We do find some of the profession-
copper, 95 g/t silver and 4.8% lead. lished at Bawdwin.” als – the geologists and so on that come
through the university system – need a lit-
Meanwhile, an intersection from 2017 Lamb said the plan was to move tle a bit of guidance. Those guys are quite
drilling included 22m @ 0.16% cobalt, straight into feasibility work soon after capable, but there hasn’t been a strong
122 g/t silver and 5.95% lead, which also and, subject to permitting and financing, mining industry for quite some years,” he
assayed 5.5m @ 0.9% cobalt, 3.25% construction to follow in 2020. said.
copper, 116 g/t silver and 1.03% nickel,
including 1m @ 1.47% cobalt, 13.4% cop- The company’s proposed timeline has “There isn’t a high level of skilled peo-
per, 452 g/t silver and 4.4% nickel. been consolidated courtesy of an over- ple who know how to operate machinery
subscribed $35 million placement in and so on, so that has to be built. We in-
The copper-cobalt-nickel mineralisa- June. tend, as we build up the Bawdwin mine,
tion, to be followed up on with a drilling to bring contracting in the first instance
programme being planned, gives the A cornerstone investment of $19.1 mil- and that contract will involve the transfer
company confidence there is further up- lion from Perilya Ltd and Mark Creasy of skills across to the local workforce over
side to future mining operations at Bawd- was included in the raising, which indicat- the life of the mine.”
win, where a small starter operation is ed the esteem Bawdwin is being held in.
being targeted initially. – Mark Andrews
“We have established credibility and
“The big story at Bawdwin is copper; support networks and we have first-mov-

John Lamb

AUSTRALIA’S PAYDIRT SEPTEMBER 2018 Page 99

SIGNED, SEALED AND DELIVERED www.nucleussc.co.za

MACA locks in five Centurion raised for handling and preparation plant in South
more at Duketon Anglo American Africa.

Regis Resources Ltd has extended its Transport and logistics provider Cen- The design and EPC contract – and
contract with MACA Ltd for open pit min- turion has marked its second phase of a further ancillary works contract – will
ing services at its Duketon South opera- growth with a contract award from Anglo generate revenue to Sedgman of about
tions, near Laverton, Western Australia. American plc. $US210 million over 26 months, while the
operations and maintenance contract will
Contract services include drilling and Centurion will provide general transport rake in about $US100 million over a four-
blasting and loading and haulage over a services for all of Anglo American’s oper- year period post completion of the facility.
five-year term with the option for a further ations in the Bowen Basin, Queensland.
five-year extension. The project comprises design, civil,
The contract will cover Anglo Ameri- structural, mechanical, piping, electrical
It is expected to generate about $590 can’s five coal mining operations, with the and commissioning works, as well as
million in revenue for MACA over the five-year deal worth in excess of $75 mil- operations and maintenance, for the 15
initial five-year term, adding $221 million lion. mtpa operation in the Waterberg coal-
work-in-hand beyond what was previous- field, Limpopo Province.
ly contracted with Regis at the Rosemont It is a boon for Centurion which only
and Garden Well pits. entered Queensland’s heavy haulage Work is expected to begin once pro-
marketplace 15 months ago. ject funding has been finalised, with debt
MACA’s work-in-hand for FY2019 now providers currently in the final process of
stands at $430 million, with total work-in- credit approvals.
hand at $1.282 billion.
A trailer bound for an Anglo American RBR expands its net-
St Barbara sticks with mine site is loaded at Centurion’s Mackay work in Mozambique
reliable Alliance
logistics hub Labour hire and training specialists RBR
Alliance Aviation Services Ltd will Group has struck database agreements
continue to provide charter flights to St Sedgman shores up with local companies to expand its net-
Barbara Ltd’s Leonora operations for an- $US310m coal contracts work of potential Mozambican job seekers
other three years. by more than 100,000 people.
CIMIC Group’s mineral processing
St Barbara has been using Alliance company, Sedgman, has been awarded The expansion represents the start
services since 2012, with eight flights per contracts by Resource Generation sub- of what RBR believes will be significant
week currently scheduled between Perth sidiary Ledjadja Coal for the design, growth in its labour database network as
and Leonora. engineering procurement and construc- it prepares to be a key supplier of person-
tion, as well as ongoing operations and nel and training services to the impending
“The flexibility of Alliance’s fleet, to- maintenance, at the Boikarabelo coal $US50 billion LNG construction boom in
gether with industry-leading time per- Mozambique.
formance, greatly assisted Alliance in
retaining this contract,” Alliance chief ex- One project will be built by the Ana-
ecutive Lee Schofield said. darko-led consortium and the other by the
ExxonMobil-led consortium. Both are ex-
“The St Barbara contract is the fifth pected to require peak construction work-
contract Alliance has retained in a se- forces of up to 50,000.
lective tender process over the last 12
months. Alliance continues to maintain RBR is poised to be the first and one of
the highest retention rate of clients in the just a few organisations in Mozambique
FIFO air charter sector – an achievement which will be accredited by the UK’s En-
of which all the team at Alliance are very gineering and Construction Industry Train-
proud of in such a competitive market.” ing Board.

Under the country’s current labour laws,
19 of every 20 workers must be Mozam-
bican. While there are likely to be conces-
sions provided to projects during both con-

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