20/2/20 8:16 am June 2020 Volume 1. Issue 283 $11.95
1 + 1 = 99.9+ %
A different perspective on space-based
communications …
Aggregate Availability © 2020 Aurora Australis Network
Diverse Path We cordially invite you to contact us by phone or email so we can learn more about your project and requirements, and to discuss how our small team of the right people can bring a different perspective to your operations! Aurora Australis Network ABN 55 008 922 530 8/95 Canning Highway South Perth, 6151 Western Australia Tel: +61 8 6363 5030 Email: [email protected] Web: aurora.net.au
Primary Link through to The within ~3 your network, private vehicle whilst and IOT : Cost effective including systems the appropriate balance size and cost, link
Inherently diverse system design; 256kbps Link speeds from greater than 100Mbps; Comms on the Pause (COTP) : ability to “stop and prop”, and gain your network minutes via an auto-acquire antenna Comms on the Move (COTM) : The ability maintain access to even whilst moving on land, sea or air. With systems designed to handle up to 130km/h on land, extending a into a network directly on the move opens up new operational solutions for the continuous streaming of a small set of key parameters from remote assets, suitable for solar powered environments; Multiple bands: with systems spanning L, C, Ku, K and Ka bands, you can pick the right horse for the right course, terminal availability, bandwidth throughput rates and operational costs. Pictured: Aurora Australis, as seen from Wilsons Promontory, January 2013. Caused by charged particles from the sun colliding with atoms in the upper atmosphere, the aur
D
access to system; to possibilities; Telemetry selecting between De Grey bright spot:e Grey bright spot:
♦ ♦ ♦ ♦ ♦ ♦
make sense to spare without a remote sites are on a IP network, we figures reliability jointly the best possible outcome for also provide a communications and technologies, Western in with direct access to both Pacific and Region Hemi lifts exploration moodHemi lifts exploration mood
A spare. It wouldn’t site to 4WD tyre; yet countless operating with just a single satellite link; when it stops, the whole site is affected. With so many core business systems and operational systems relying “always-on” strongly believe in the value of delivering a robust satellite comms architecture overall delivers that approach the mythical 100%. The use of two or more satellite systems, landing at different teleports and using different hardware, helps us to and to your project, pathway for the smooth integration of new sat-comm technologies as they arrive into the market. With decades of experience in remote long-range and located strategically Ocean Indian Ocean Region satellite fleets, we offer a different perspective on: Solutions from Technology - Since 1997 l Southern States focus 05
Copper spotlight
l
Australia
systems
reliable
drive a
deliver
A4 Paydirt Ad.indd 1 l Mining Services ISSN 1445-3436 343007 771445
that
and
the
9
Cobre Targeting Expanded High-Grade
Copper-Gold VHMS Mineralisation
at the Perrinvale Project in Western Australia
Cobre Limited is a mineral exploration company with a
focus on base & precious metals, particularly copper.
Cobre is currently pursuing two base metal exploration projects, Perrinvale
and Sandiman, which both represent underexplored areas within the
low-risk mining jurisdiction of Western Australia.
With early confirmation of Volcanic-Hosted Massive Sulphide (VHMS)
mineralisation at the Perrinvale Project. Cobre has now moved to 100%
ownership of this asset.
Recent drilling at the Schwabe Prospect at Perrinvale has identified
massive sulphide mineralisation at shallow depth, including 6m grading
8.93% copper, 3.1 g/t gold, 3.52% zinc, 30 g/t silver and 0.14% cobalt.
Cobre is now focussed on follow-up exploration at perrinvale to
unlock the VHMS potential of the area.
“Cobre’s corporate objective is to think outside the box
to discover the mineral deposits of the future.”
- Martin Holland, CEO and Executive Chairman
LATEST COMPANY NEWS FROM OUR WEBSITE...
Email: [email protected] Sydney Office - Level 7, 151 Macquarie Street, Sydney NSW 2000 www.cobre.com.au
contents
PAYDIRT (ISSN 1445-3436) NEWS
Published by 8
Paydirt Media Pty Ltd. Government and industry have been most
A.C.N. 063 985 133 complementary in the way each has handled
Cobre Targeting Expanded High-Grade Head Office: the COVID-19 pandemic. Mark Andrews
talks to Saracen managing director Raleigh
Copper-Gold VHMS Mineralisation Suite 9, 1297 Hay St, West Perth Finlayson and Federal Resources Minister
Western Australia 6005
Hon Keith Pitt on how the mining sector’s
P.O. Box 1589, West Perth
image has been enhanced and what is key to
at the Perrinvale Project in Western Australia Western Australia 6872 nurturing resources workforces through the
Phone: (+61 8) 9321 0355
Facsimile: (+61 8) 9321 0426 current environment
[email protected]
www.paydirt.com.au 18 COVER
Cobre Limited is a mineral exploration company with a There’s nothing like a discovery to set the
market alight, which is exactly what De Grey
focus on base & precious metals, particularly copper. Editorial: Mining has done at the Hemi prospect in
Editor: Dominic Piper
Deputy editor: Mark Andrews the Pilbara. Since announcing the discovery 8
at the Mallina project in February, De
Cobre is currently pursuing two base metal exploration projects, Perrinvale Journalist: Michael Washbourne Grey’s shares have soared, as analysts are
and Sandiman, which both represent underexplored areas within the Art director: Nick Brown unanimous in their belief Hemi could contain
low-risk mining jurisdiction of Western Australia. Contributors: Brendan Ryan at least 1.5 moz gold. Dominic Piper has
With early confirmation of Volcanic-Hosted Massive Sulphide (VHMS) (Johannesburg) followed every drill hole at Hemi and spoke
mineralisation at the Perrinvale Project. Cobre has now moved to 100% Advertising: with new managing director Glenn Jardine
ownership of this asset. Advertising manager: Richa Fuller and technical director Andrew Beckwith
about De Grey’s next steps
Subscriptions: Kate Blanchard
Recent drilling at the Schwabe Prospect at Perrinvale has identified Phone: (+61 8) 9321 0355
massive sulphide mineralisation at shallow depth, including 6m grading Facsimile: (+61 8) 9321 0426 30 MINING SERVICES
8.93% copper, 3.1 g/t gold, 3.52% zinc, 30 g/t silver and 0.14% cobalt.
Cobre is now focussed on follow-up exploration at perrinvale to Pre-press and printing: Mining services companies are an integral
unlock the VHMS potential of the area. Vanguard Press, 26 John St, part of the success of the industry, often
Northbridge WA 6003 leading the way in innovation and safety, with
“Cobre’s corporate objective is to think outside the box Member of: no end to the constant thinking that goes
to discover the mineral deposits of the future.” into improving operational performance. In
our regular feature, Paydirt covers a diverse
- Martin Holland, CEO and Executive Chairman group of companies each with something
unique to offer industry
Paydirt Media 38 SOUTHERN STATES 18
Executive chairman: Bill Repard
Finance manager: Giovanny Jefferson Could Tasmania’s nascent mining scene be
Accounts/administration: about to boom? It may be a little while yet
but there appears to be some excitement
Lana Luketic building in sections of the State’s resources
Conferences: Melita Fogarty, industry, particularly in gold and base
Namukale Nakazwe, metals. Meanwhile, gold and copper-gold
Christine Oelschlaeger, porphyry potential in Victoria continues to
Mitchelle Matambo attract great interest
20/2/20 8:16 am June 2020 VOLUME 1. ISSUE 283 $11.95
A different perspective on space-based
1 + 1 = 99.9+ % Diverse Path We cordially invite you to contact us by phone or email so we can learn more about your project and requirements, and to discuss how our small team of the right people can bring a different perspective to your operations! Aurora Australis Network ABN 55 008 922 530 8/95 Canning Highway South Perth, 6151 Western Australia Tel: +61 8 6363 5030 Email: [email protected] Web: aurora.net.au There is no more precious commo
communications …
LATEST COMPANY NEWS FROM OUR WEBSITE... Aggregate Availability © 2020 Aurora Australis Network 42 REGIONAL ROUNDUP
♦ Inherently diverse system design; Primary Link ♦ Link speeds from 256kbps through to greater than 100Mbps; ♦ Comms on the Pause (COTP) : The ability to “stop and prop”, and gain access to your network within ~3 minutes via an auto-acquire antenna system; ♦ Comms on the Move (COTM) : The ability to maintain access to your network, even whilst moving on land, sea or air. With systems designed to handle up to 130km/h on land, extending a priva
world are as bountiful as Africa.
H
A spare. It wouldn’t make sense to drive a 4WD to site without a spare tyre; yet countless remote sites are operating with just a single satellite link; when it stops, the whole site is affected. With so many core business systems and operational systems relying on a reliable “always-on” IP network, we strongly believe in the value of delivering a robust satellite comms architecture that delivers overall reliability figures that approach the myth
l Southern States focus
De Grey Mining technical
on the continent’s east, while a bevvy of
l Copper spotlight
strategically
systems
l Mining Services
A4 Paydirt Ad.indd 1
and
companies at different stages are flying in
9 ISSN 1445-3436 771445 343007 director Andrew Beckwith
Member of: West Africa
42
Registered by Australia Post PP 643938/0071.
No pages or articles in this publication may be
Email: [email protected] Sydney Office - Level 7, 151 Macquarie Street, Sydney NSW 2000 www.cobre.com.au reproduced in any form without the consent of the
publisher. This includes photographs either taken
by Paydirt Media staff or provided by other parties.
Obstacles and opportunity
in COVID-19 world
In comparison to the rest of society, While such meetings are ideal for relaying vital information, they do
the mining sector has barely missed not allow the more personal interaction which plays an important, if
a beat during the coronavirus pan- intangible, role in solidifying business deals.
demic. And, neither provides the opportunity for relationship building
In fact, it is remarkable how little has with new contacts or bumping into old ones with new ventures.
actually changed for the industry, par- This network is a vital part of the junior mining sector.
ticularly in Western Australia. When Talking to people in the West Perth village, there is a clamour for
the threat of COVID-19 first emerged in China, it loomed as a major a return to some sense of normality and the opportunity to engage
problem for WA. When Premier Mark McGowan convened his first with people one-on-one, or at conferences and events, as we did
emergency meeting on the public health crisis in early February, for many years until just a few months ago.
he called in mining industry leaders to discuss the implications a The Paydirt team has worked hard to respond to the obstacles
crippled Chinese economy could have for WA. placed in front of both the magazines and our events. For the mag-
However, in the months since it has become apparent there has azines, we have increased our digital presence, making our publi-
been little immediate economic slowdown in China and iron ore cations more widely available online and stepping up our Paydirt
and gold prices have responded accordingly. TV output, a move which has proved incredibly popular with our
The WA iron ore majors have kept guidance and in the second audience. The Paydirt brand has always been a trusted one and
half of May the iron ore price even went on a run on fears about our video interviews continue to carry that cache with audiences
Vale SA’s ability to return to full capacity in Brazil. despite being launched in a crowded space.
In gold, Evolution Mining Ltd and Saracen Mineral Holdings Ltd For our conferences, we have been on a steep learning curve
hit record market values in May as the Australian dollar gold price about what is and isn’t achievable, but we are as convinced as ever
continued to soar. that industry leaders, government, service providers, investors and
And, thanks to the WA Government deeming mining an “es- media want to come together again, once regulations allow us to
sential” industry, even the base metal miners – although battling do so safely.
depressed prices – have been able to maintain production levels. For this reason, we have adjusted our conference calendar for
Perhaps most surprisingly, the WA exploration sector is also the rest of 2020 and have put together packages and platforms
booming following a spate of new discoveries in the early part of which will replace and, in some instances enhance, the things
2020. As well as this month’s cover feature company, De Grey which will be lost to restrictions this year.
Mining Ltd, Legend Mining Ltd and Chalice Gold Mines Ltd have Our flagship event, Africa Down Under, has been moved from its
caught alight thanks to greenfields discoveries. This run of explora- traditional September date to the first week of November to ensure
tion success follows others across the country in the previous two we can have an event of comparable scale to the 1,000 delegates
years. We could be in the midst of a golden age for greenfields who attended in 2019. While our international friends may be una-
exploration discovery. ble to attend, we are building innovative virtual and remote applica-
The overall performance of the WA sector is perhaps partly why tions to allow their participation to continue, wherever they may be.
McGowan has dug his heels in over state border closures. The Paydirt is confident that Africa Down Under will continue to be
decision to deem mining “essential” is proving vital in being able the premier platform for Australian-African relations, allowing for
to take this stance has meant the State’s main source of revenues dialogue and relationship building between companies, govern-
performing unabated, emboldening the Government by reinforcing ments, investors and service providers to continue in 2020 and be-
WA’s partial economic independence. yond. Among our other events, the Australian Nickel Conference
Away from essential services of site, everyone is adjusting to will remain in its October 6 date. The forum is the Australian nickel
new realities and wondering if the business world will ever get back sector’s annual get-together and given the exploration success we
to normal. I’m currently oscillating between optimism and pessi- have seen this year, we expect the entire WA mining community to
mism on a daily, even hourly, basis. show interest in what could be one of the first major industry events
While many mining and exploration companies are accustomed to take place in a post-lockdown environment.
to working with offshore teams or consultants in different places The Battery Minerals Conference will be held on November 2.
and time zones, many people are less comfortable. Dates for the South Australian Resources & Energy Investment
Although mining can operate remotely in a way it would have Conference, Latin America Down Under and NewGenGold 2021
been impossible to do 20 years ago, there is still vital component will be announced soon, providing delegates the physical forum so
of the business which relies on face-to-face interaction. badly lacking during the pandemic.
Webinars have been adequate as a way of filling the immediate Paydirt will, of course, strictly adhere to government require-
gap of not reaching audiences but have limitations, not least of ments on infection control and will always continue to be guided by
which is the levels of engagement among those logged in. advice from government and public health authorities.
Zoom and other video calling apps have been effective in replac-
ing traditional face-to-face meetings, but the bonuses are limited.
[email protected] @DominicPiper
Page 4 JUNe 2020 aUSTRaLIa’S PaYDIRT
neWs Alacer’s Çöpler gold mine in Turkey is set
to become the centrepiece of a new $US4
billion company which will also include SSR
Mining’s suite of operations in the Americas
Team focus key to Remote M&A
The friendly merger of Alacer Gold Corp
Alacer-SSR tie-up and SSR Mining Inc has potentially set the
benchmark for how major M&A deals play
out in a post COVID-19 world.
While site visits and technical due
diligence were completed before various
travel restrictions came into effect in
March, Alacer and SSR shrugged off the
he heads of Alacer Gold Corp and SSR creating a larger, stronger, more profitable inability to continue negotiations face-
TMining Inc believe they are bringing company offering increased liquidity and to-face – as was customary for such
together the best-performing teams in the scale to investors,” Benson said. transactions pre-pandemic – and finalised
global resources industry after last month “I’m confident that we’re bringing togeth- terms via remote means.
announcing a nil-premium merger valued er two of the best management teams in
at $C2.4 billion ($US1.7 billion). the business. Each team has a track re- “There were no impediments for us not to
Hot on the heels of other major corpo- cord of creating shareholder value through do it,” Alacer president and chief executive
rate deals to be struck in the gold sector exploration, construction and operation of Rod Antal said. “It made absolute sense
over the past six months, the proposed high-quality mining assets globally. We be- for us, there was no reason to wait.”
combination of SSR and Alacer is set to lieve this comprehensive skillset will afford SSR president and chief executive Paul
create a circa 780,000 ozpa gold producer us a competitive advantage in pursuing fu- Benson added: “We’ve been working
generating peer-leading average annual ture growth opportunities.” remotely for, I think this is our eighth week,
free cash flow of $US450 million, based Pending respective shareholder approv- but if you’d asked me 10 weeks ago ‘how
on analyst consensus estimates. als, the merger is expected to be com- efficient will you be working remotely?’, I
The combined entity will retain the SSR pleted sometime in the next quarter. At probably would have said something like
name and be headquartered in Denver closing, SSR and Alacer shareholders will 20-30%. It’s amazing everyone has figured
with a corporate office in Vancouver. Exist- collectively own 57% and 43% of the com- out how to work [Microsoft] Teams and
ing listings on the TSX, ASX and NASDAQ bined entity, respectively, on an issued we’ve continued to trundle along.”
will also be rolled over. and outstanding share basis.
Alacer president and chief executive Antal said the two companies formally
Rod Antal will assume the same roles at opened discussions to bring Alacer’s Çö-
the new company which will begin life with pler gold mine in Turkey and SSR’s Mari-
an estimated market cap of $US4 billion gold (Nevada, US), Seabee (Saskatche- gestions SSR was taking on unwanted
and consolidated cash and marketable wan, Canada) and Puna (Jujuy, Argentina) jurisdictional risk in acquiring the Çöpler
securities totalling about $US700 million. operations under the one business unit mine which is set to become the flagship
Michael Anglin will also continue as SSR late last year. asset of the merged group.
chairman, with the two companies to each Based on analyst consensus estimates, “It’s very hard to understand a country
elect four other directors to the new-look the combined entity’s forecast average an- until you go there and look at it…so I can
board. nual free cash flow of $US450 million over understand if you’re not really aware of
During a conference call to discuss the the next three years only trails Northern how advanced Turkey is,” he said. “It’s an
merger on May 11, Antal said the biggest Star Resources Ltd ($US538 million in emerging economy, but they’ve got some
benefits of the tie-up between Alacer (mar- 2019) in its peer group of companies. amazing infrastructure that would put a lot
ket cap $US1.8 billion) and SSR (market “This transaction is frankly transforma- of North America to shame.”
cap $US2.3 billion) would be observed at tional for both sets of shareholders; it cre- May was a busy month for high-profile
the corporate level. ates a leading intermediate gold producer gold M&A with Canada-based Gran Co-
“I think the benefit of this combination with high quality, long-life operating mines lombia Gold Corp unveiling multi-million
is it does bring two of the best-performing across four mining-friendly jurisdictions,” dollar mergers with Gold X Mining Inc and
teams together over the last 3-4 years and Antal said. Guyana Goldfields Inc to form a intermedi-
that’s what we were particularly excited “When you take a look at the broad skill- ate Latin America-focused gold producer,
by,” Antal said. sets retained within the combined compa- while China’s Shandong Gold Group is set
“The key priority for us is to retain all of ny, we have the ability to tackle most types to acquire TSX-listed TMAC Resources
that institutional knowledge and best prac- of deposits in the world. I’m eager to get Inc for circa $C230 million ($US165 mil-
tices and quality of team and get the align- to work and see what the combined team, lion).
ment going. There’s still some work to be with an even greater breadth of technical Shareholders were also set to vote on
done, but obviously we are in really good expertise, can accomplish.” the proposed combination of Endeavour
shape given the quality we have.” Antal added that most of the near-term Mining Corp and fellow West African gold
Antal’s comments were echoed by his exploration and development projects producer Semafo Inc, announced earlier
SSR counterpart Paul Benson. across the combined portfolio were all low this year, at the time of print.
“SSR and Alacer are two top-perform- capital intensive. – Michael Washbourne
ing gold producers and together we will be Benson also poured cold water on sug-
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 5
mInInG connect
David Atkinson General Manager, Aurora Australis Network
Atkinson has spent time with large multinational companies, Elon Musk and the like and Low Earth Orbit Systems (LEOs) as
including Rockwell Collins, NEC, and even engaged in a stint the future of satellite communications.
teaching Communications and Electronics at Swinburne “Rather than a single satellite there will be 100s of satellites
University while he completed his Master of Engineering. [LEOs] much closer to the earth, tracking and changing
In 1990, he formed a satellite equipment supply company, the dynamic of the communication systems completely.
which was sold to Hills Antennas in 2000 and later acquired Watching these systems go from being prototypes to viable
by another company. While working for ITC Global, David communications systems will be really exciting.
delivered innovative and ground breaking satellite projects “One of the issues with satellite is its longer latency circuit
for resources companies in Australia, international maritime because of the physical time delay of sending a signal
applications and supporting companies operating in Africa. into space and being transmitted back. LEO satellites are
In an era of fast-moving technological advancements, much closer to earth and the time delay is less. That will be
Atkinson sees the advent of the NBN SkyMuster satellites revolutionary as up until now there have been incremental
delivering capacity to support hundreds of thousands of users improvements every year but these LEOs are going to be a
at high speeds, the new range of constellations planned by crucial step.”
S tarting his career in the defence PD: Playing an essential role in keeping
force with the RAAF, David
people connected, particularly in the current
Atkinson has built vast experience
environment, does that give you satisfaction in
across the communications sector
over the past 40 years. your chosen career path?
DA: Very much so. Covid has seen the world
craving connection for business, health, and
PD: Given your expansive work history, can you social discourse more than ever before.
recall a career defining moment? Everyone is concerned to have robust and diverse
DA: I’ve always liked to be the person who works systems in their communication networks, particularly
outside the box rather than squeezing problems in satellite providers for remote backup systems. They
in the spotlight
into off-the-shelf solutions. are now ensuring that if something goes wrong with
I can honestly say that I have really enjoyed and their primary link that there is a secondary to rely on.
learned a lot from every job. However, in 1990, Connectivity is important to people, particularly for FIFO
when I left NEC and formed my own company Step workforces. People in remote jobs must go away for work
Electronics, would be a defining moment. I enjoyed but they need to stay in close contact with their families
the challenge when I stopped working for other people and for that they need to have ready access to the
and started working for myself. I relished making communications. That is where Aurora can deliver robust
big decisions and formulating bespoke solutions for solutions regardless of what crises might occur
companies. Fortunately, we had some success with a - a pandemic for instance.
small business of 10-11 people. Step still exists today
after becoming the premier satellite equipment provider PD: Technology has enabled instant connectivity
in Australia. I ran that privately for 10 years before and communications across great expanses. How
selling the company to Hills Industries where I managed important is it to switch off?
it for another five years. DA: Stern looks from my wife always work!
But seriously, people always come first, most importantly
PD: How did you handle the challenges of starting a
small business and making it thrive? our families. That is why we need to stay connected. On
the other hand we do have to turn off from always being
DA: I surrounded myself with good engineers and accessible to work and outside interruptions. Younger
I kept a ‘learning’ mindset. Now I’m with Aurora, people with wide social contacts,mortgages and children,
another small start-up, we again have a few might think they always have to be ‘available’ but that can
people with decades of industry experience. become a little obsessive if the people you are with are
We love what we do and there are plenty of opportunities neglected. Life has taught me that family relationships
as the world seeks better communications and we bring are a high priority. Being able to work and connect
our wide expertise to that space. My own business cannot take over your life. We had three small children
started in the GFC downturn in 1990 when major when I ran our business and even though I travelled a lot,
electronics firms were closing their doors. That dark time when I was in town, I always made sure I was there to
in the comms industry allowed me to purchase excellent eat with the family each night. Every now and then you
test equipment to set up our lab. While the current must do some things out of the ordinary but overall we
COVID-19 crisis again threatens many businesses, our get to decide the things that are important to you. Healthy
experienced team knows more of the unknowns now, activities and families need their fair share of attention.
so we can direct customers to the solutions that best You want them to be there when your working life is
suit their requirements. People always need to be on the completed.
lookout for where the silver lining might be in dark times.
Page 6 JUNe 2020 aUSTRaLIa’S PaYDIRT
David Atkinson General Manager, Aurora Australis Network
neWs
Time to
check in
ining’s greatest challenge – improv- five workers in Queensland, are stark re- son told Paydirt.
Ming its reputation in the community minders of the varied challenges faced “I think being around, talking to our
– has taken significant steps in the past by the mining sector. people understanding their issues, op-
12 months as companies seized oppor- Saracen Mineral Holdings Ltd man- portunities and their concerns around
tunities to enhance their ESG credibility. aging director Raleigh Finlayson has safety has been significant for us as an
And, in this time of crisis, mining’s es- approached the lockdown head-on, executive team and a subtle reminder
sentialness has come to the fore and swapping his slacks and shiny shoes for that these issues are very important.
the industry widely praised for initiating hard hat and boots. As his staff had to Going forward, sparing time in the cal-
changes quickly to sustain workforces make the switch from one week swings endar to go back to where fundamentally
and livelihoods safely. to three weeks on and three weeks off the business is based will make sure we
While industry has been praised for its at the height of the pandemic in Western keep a really close eye on the ball, that’s
pandemic strategy, the longer tern con- Australia, Finlayson headed to site. been by far and away the biggest posi-
sequences for its public image are still to More recently, Saracen’s workers ad- tive to come out of it.”
be determined. justed back to a two-and-two roster and Spending a week at time on site has
During the swathe of March quarter Finlayson is thankful he’s been on hand made Finlayson realise the profound im-
company presentations, many execu- to help nurture the changes. pact social distancing has on its workers.
tives gave top billing to managing the “You get very busy in life and if I look “They finish a 12-hour shift, go back
mental wellbeing of workers, as the back on the last three years it has been and eat their meal. They couldn’t sit
strains of longer shift patterns and gen- a bit of groundhog day; every month was around a table like they normally would;
eral uncertainty continue to be digested. the same as the last 12 months. I think they go back to their room, they couldn’t
Last month’s incident in South Hed- what has been a shock to the system go the gym or the bar like they normal-
land, where a 34-year-old FIFO con- has been spending time on site. It has ly would. These are the social impacts
struction worker was shot dead by police given us a reality check in our roles as of social distancing and implementing
after wielding a knife through a shopping executives in marketing, financing and positive controls around preventing the
centre and attacking customers, as well servicing shareholders and we have an spread of the virus,” Finlayson said.
as the mine blast at Anglo American appreciation for the fundamental task of “There are implications around that
plc’s Grosvenor coal mine which injured running our business day to day,” Finlay- and that became really apparent early
Page 8 JUNe 2020 aUSTRaLIa’S PaYDIRT
Raleigh Finlayson
on. We have tried to identify where we doing is in the national interest,” Pitt told
could, obviously honouring social dis- Paydirt.
tancing, ways to shift gym activities “You just have to deal with the cards
outside and encourage people to get you have been dealt, it has been a very
around a table to chat, which was really difficult situation. The resources sec-
important to adapt the team to that. We tor’s response has been absolutely mag-
will constantly provide EAP assistance nificent. They have done what has been
to all of our employees, that has picked necessary and done things they wouldn’t
up a little bit. At the end of the day, com- usually do to keep the sector running and
munication is what it is all about and operational; I am very thankful for the
what mental health is about.” work they have done. In these jobs you
Across Australia’s mining sector, some do what you have to.
workers committed to longer rosters “The fact when you find yourself in
upon immediate request as mobility be- challenging circumstances there is al-
came restricted. ways a way to deal with it. The Australian
Federal Resources Minister Hon Keith people are incredibly resilient, they are
Pitt (left) praised the sector for respond- accepting of the challenges that occur
ing in such fashion and extended his ap- across their lives not just in the current
preciation to state counterparts for the pandemic. Their response has been ab-
level of cooperation in handling the cur- solutely wonderful and it never ceases
rent situation. to surprise me just what people can do
“[The mining sector] has done a fan- when they have to.”
tastic job, don’t stop. There’ll be greater – Mark Andrews
opportunities on the other side of the
pandemic, fundamentally what they are
Greenfields exploration could be on the
wane for some time, according to Saracen
Mineral Holdings Ltd managing director
Raleigh Finlayson.
ven Saracen – market capped at over funding back into the junior market to drive
E$6 billion – felt it necessary to reduce its greenfields exploration and while he kept
footprint in greenfields activity in immediate an eye on what was unfolding in the space,
response to the coronavirus pandemic. a lot of the company’s attention would be Greenfields exploration is expected to
“Very early on we did roll back on non- on understanding what’s inside the Super suffer for the foreseeable future
essential activities – lots of greenfields ex- Pit.
ploration and those sorts of areas – and “A lot of our focus is on unpacking that things to find itself in a challenging posi-
that has had an impact on our contract beast and looking under the bonnet to try tion, we need to make sure that explora-
partners,” Finlayson said. “We are look- and see where the upside is. We have tion continue because that is our future.”
ing to carefully bring those things back into been pleasantly surprised at the sheer “As we come out of the pandemic, re-
play and still honouring them on the back scale of the things and the opportunities sources will be so critical to what happens
of this significant risk. At the same time we there,” he said. in our economy. I think we need to be very
want to keep these people in work and the It appears explorers will have to remain strategic in our planning. I am looking at
economy ticking over. particularly stoic now more than ever and options to open up Beetaloo Basin [North-
“This has split the industry open a little any assistance would be most welcomed. ern Territory], where is our next big oppor-
bit. You have got some juniors, that de- Federal Resources Minister Hon Keith tunity, how do we make sure that there is
spite the record gold price, struggled to get Pitt said he was championing industry’s low risk for investment, what infrastructure
funding coming into this period and that cause and hoped to deliver the sector and strategic infrastructure that the Fed-
probably hasn’t changed a lot. So, the real some good news in the October Budget. eral Government can be looking at. All
greenfields exploration which is critical for “The Junior Mining Exploration Incen- those discussions are ongoing right now.
industry is probably some way off. The im- tive [JMEI] has a year to run and also on I think there is a world of opportunity for
pact maybe sustained for a bit longer and I top of that we have Exploring for the Future the resources sector and in my mind that
think the producers have probably enjoyed coming up to its end date on the current is pretty straightforward. That means there
the gold price revenue generated into that set of funding,” Pitt said. “I look forward to is a world of opportunities for jobs, particu-
so they have been able to sustain, stem or putting up some options for consideration larly in regional Australia, and that is what I
curtail it through the COVID situation.” by our team in Cabinet. Obviously, when am passionate about.”
Finlayson said it was important to get cash is tight exploration is one of the first
– Mark Andrews
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 9
neWs
Sniffing out
a porphyry
in PNG
s soon as COVID-19 restrictions are est neighbours is the 24 moz Porgera diamond mine which ended up being the
Alifted in Papua New Guinea, Gold gold-silver mine operated by Barrick Gold first diamond mine in Canada,” he said.
Mountain Ltd plans to restart drilling at the Corp and Zijin Mining Group. “I spent approximately eight years on the
Monoyal prospect where the company is Little exploration has been carried out of project covering all facets from develop-
convinced it has uncovered a large por- Gold Mountain’s tenements over the last ment through to production in the early
phyry system. 30 years. These licences and surrounding 1990s. This was the most satisfying pro-
Drilling of MCD007 – the fifth of an on- areas were previously held under applica- fessional experience I have ever had and
going nine-hole diamond programme at tion by BHP Ltd. an experience that most people can only
Monoyal – was suspended on March 30 “With my experience of being employed dream of.
upon reaching a depth of 409m. Initial ob- by BHP Billiton in Canada, US and Aus- “Before accepting the position of CEO
servations indicate drilling had intersected tralia, this is a very strong endorsement of for Gold Mountain, I reviewed all acces-
the highest levels of copper-gold minerali- the area’s high potential for discovery of a sible data of the company, its tenements
sation to date. porphyry system,” Cameron said. and I also went to site to ascertain the
Preliminary pXRF results returned a 21m Gold Mountain picked up an additional likelihood of finding the next big copper-
interval averaging 0.54% copper, including exploration licence during the March quar- gold mine. Needless to say, I was abso-
a 2m interval containing 1.54% copper. lutely amazed at what I saw whilst on site,
Official laboratory results for MCD007 including the core samples, and I phoned
are expected this month, while the find- the managing director [Tony Teng] the first
ings from earlier drilling at MCD005 and night saying, ‘count me in as I believe we
MCD006 were due at the time of print. are sitting on the mother lode’.
Gold Mountain chief executive Tim “This is the first time I have been overly
Cameron said the style of mineralisation excited about a job since my Ekati days
observed in MCD007 is understood to be and hence why I accepted the position.”
similar to that seen in the previous four Despite the lockdowns currently in place
holes drilled into Monoyal, part of Gold to combat the spread of COVID-19, Cam-
Mountain’s Wabag project. eron said he was looking forward to get-
“Results from MCD003 and MCD004 in- ting back on the ground in PNG as soon
dicate we are drilling in a large system and as possible.
what we have observed in holes MCD005, “PNG has its own obstacles like many
MCD006 and MCD007 confirm this,” other parts of the world, but I concentrate
Cameron said. Gold Mountain believes it may have discovered more on working with what you have and
“We are looking for signs that the a large porphyry system at Monoyal, part of its making it work for the betterment of Gold
Monoyal prospect has the potential to host Wabag project in PNG Mountain etc,” he said.
a large porphyry copper-gold-molybde- “Once I was fully abreast and experi-
num deposit. These signs include the right ter, thereby increasing its ground holding enced enough in PNG, I find that you can
styles of mineralisation (copper-molyb- at Wabag to 2,271sq km. It comes after do anything you need to just like many
denum) alteration and veining which are rock chip samples with distinct skarn char- other companies have done and continue
characteristics of these types of deposits.” acteristics and assaying up to 10% cop- to do in PNG.
Earlier drilling at Monoyal returned inter- per, 1.34 g/t gold and 73 g/t silver were “It should be noted that PNG is an ex-
cepts of 101m @ 0.14% copper, 776 ppm returned from the Lombokai Creek area ceptional mining destination with one of
molybdenum and 0.03 g/t gold from 398m which sits on the boundary between one the highest densities of Tier 1 gold-copper
in MCD003 and 124m @ 0.12% copper, of the key existing licences and the newly projects in the world, including Ok Tedi,
105 ppm molybdenum and 0.06 g/t gold granted tenement. Porgera, Frieda River, Wafi-Golpu, and
from 125m in MCD004. Cameron, who joined Gold Mountain many others. PNG also has an excellent
Monoyal is one of several potential in October last year, said while porphyry and secure tenement system, somewhat
porphyries on the Wabag licence, hosted exploration was not for the faint-hearted, similar to that of Australia.”
along the northern part of the New Guinea the rewards for discovering such systems – Michael Washbourne
Mobile Belt (sometimes called the Central were well worth the effort.
Orogenic Belt). One of the project’s near- “I was heavily involved in BHP’s Ekati
Page 10 JUNe 2020 aUSTRaLIa’S PaYDIRT
TMT secures maiden offtake
echnology Metals Australia Ltd (TMT) in the steel industry is at 98%, so we can is expected to generate EBITDA of $4.1
Thas moved a step closer towards es- automatically give them at least 1% more billion over the first 16 years of operations,
tablishing the world’s next primary vana- vanadium for every pound that they’re buy- pre-tax NPV of $US924 million and IRR of
dium mine after securing a maiden binding ing off us. 34%. Pre-production capex is estimated at
offtake deal for its Gabanintha project in “The other thing is just that security of $US318 million, which is forecast to be paid
Western Australia. supply. Having an operation in a Tier 1 ju- back within 3.2 years of first production.
CNMC (Ningxia) Orient Group Company risdiction like WA, I think they can be very With most of the key project work already
Ltd (CNMNC) has officially committed to a comfortable and confident that the supply completed, TMT has been largely unaf-
three-year take-or-pay offtake quantity of is going to keep coming through and have fected by the travel restrictions imposed by
at least 2,000 tpa (4.4 mlbpa) vanadium very little interruptions.” the WA Government to contain the spread
pentoxide, representing about 16% of the While the terms of the binding agreement of COVID-19. However, Prentice conceded
forecast average annual production from were being fleshed out, CNMNC introduced it was not the ideal situation when trying to
Gabanintha. TMT to representatives from its sister com- pull together further offtake deals and pro-
The agreement includes an option to re- pany, China Nonferrous Metal Industry’s ject financing.
new for a further three years and scope to Foreign Engineering and Construction Co Separate to the agreement with CNMNC,
increase the quantity of vanadium pentox- Ltd (NFC), which is keen to assist with pro- TMT has a MoU with Shaanxi Fengyuan
ide, at CNMNC’s request. Pricing is refer- ject financing and EPC arrangements. Vanadium Technology Development Co
enced to published European and Chinese TMT has also opened talks with the Ltd for a further 3,000 tpa of vanadium
domestic vanadium pentoxide prices. Northern Australia Infrastructure Fund pentoxide from Gabanintha. Both parties
Binding terms were agreed almost a year (NAIF) around potential supporting infra- recently agreed to extend the terms of that
after TMT and CNMNC first entered a part- structure in WA’s Murchison region. arrangement until the end of June to enable
nership over the potential future production “Funding is the big one that we’re working an “orderly progression” of discussions
of vanadium from Gabanintha, about 40km on at the moment and that’s why it’s such which has proven challenging due to the
south-east of Meekatharra. an important milestone delivering this bind- pandemic.
CNMNC – a subsidiary of China Nonfer- ing offtake because financiers want to see Last month the company also signed a
rous Metal Mining (Group) Co Ltd – is one who are the customers and what quality of MoU with Big Pawer Electrical Technology
of China’s largest producers of vanadium- customer you’ve got,” Prentice said. Xiangyang Inc Co Ltd for a potential JV over
nitrogen alloys and ferrovanadium for use “We’re dealing with one of the biggest future vanadium electrolyte production and
in the stainless steel industry. The group mining organisations in China, so we know a vanadium redox flow battery manufactur-
recently announced expansion plans to we’ve got that really good pedigree behind ing base in Australia. While not yet binding,
increase vanadium-nitrogen production our customers, which is really important the agreement establishes a framework for
to about 3,000 tpa, while its overall vana- when you’re putting together that whole TMT to deliver at least 1,000 tpa but not
dium pentoxide consumption is set to rise package around the finance.” more than 5,000 tpa of vanadium pentoxide
to about 6,000 tpa. TMT hopes to make a final investment on a take-or-pay basis.
TMT managing director Ian Prentice said decision some time in mid-2021. Prentice said the company was also in
the proposed high purity product his com- “We want to be funded and ready to be- discussions with traders from Japan and
pany would produce from Gabanintha, as gin construction before that date, so then Korea, as well as groups in India and Eu-
well as its associated security of supply, everything else flows from there,” Prentice rope, which are connected to the growing
were major drawcards for CNMNC. said. vanadium redox flow battery market.
“We’ve got a really high purity product,” The company is close to finalising its sub- “We see this as a massive opportunity,
Prentice told Paydirt. “Our analysis and in- mission for environmental approval to de- we see this as playing our part in trying to
formation that’s gone through from the pilot velop Gabanintha into a low-cost operation make a greener planet,” he said.
study we did in the DFS shows 99.5% puri- producing 27.9 mlbpa vanadium pentoxide
ty or thereabouts. To put that in perspective, for $US4.04/lb. – Michael Washbourne
most benchmark pricing for vanadium used According to last year’s DFS, the project
TMT’s proposed high purity
vanadium product has attracted
the attention of one of China’s
leading vanadium-nitrogen alloy
and ferrovanadium producers
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 11
neWs
US Government
boost for Peninsula
Peninsula has changed from an alkaline ISR
n a career spanning over 30 years in the ura- uranium from the outset at a $US50/lb price, operation to a low pH ISR operation at its
Inium industry, Peninsula Energy Ltd manag- which is significantly above spot market price. Lance projects, Wyoming
ing director Wayne Heili has never seen an Given the term market price today and 3
opportunity to sell uranium to the US Govern- mlbpa production – 3 mlbpa is more than we major companies hogging all the market
ment, until now. are currently doing so industry is absolutely share is the opportunity. What is a small con-
A long-awaited report commissioned by being given a boost. tract to the big companies – 400,000-500,000
President Donald Trump recognising the “That is not a disappointment and peo- mlbpa contracted for the next decade – is a
national security implications of not having a ple read in the details that they are looking big one for us and we’re not going to go away.
domestic uranium production industry and a at 17-18 mlbpa over the 10 years, I think the What we’d love is 1 mlbpa contracted so we
front-end nuclear fuel cycle has given com- purchasing and use will be higher than in the can run it at scale, ramp it up and enjoy the
panies like Peninsula a burst of inspiration to initial years. Therefore, in future years cost economies of scale for our project.”
continue business aspirations. will start incurring for uranium conversion and After a number of false starts for the urani-
“For a long time [US] was rightfully per- enrichment. They may use that same pool um sector in the past 20 years. The jury is out
ceived as a leader in nuclear and we’ve al- of money, but the details are not there, and on whether this year’s rally in price is the jolt
lowed that leadership to slip over the decades people don’t really know how the Govern- needed by industry participants to power on.
to the point where in the US there is nobody ment intends to spend the $US150 million. I “There is good cause to be short-term bull-
actively pursuing the production of uranium,” think it could get bigger and they need to work ish on the fundamentals of uranium. Cameco
Heili told Paydirt. out how much uranium they could purchase [Corp] has shut down the Tier 1 mines at
Anticipation had been building on what the at what price and how quickly they can meet McArthur River and Cigar Lake while Ka-
Nuclear Fuel Working Group’s (NFWG) re- their objective of attaining nearly 20 mlbpa,” zakh production is being curtailed, such that
port would deliver the US industry. he said. we see about 50% of mine supply being
Reactions to the NFWG’s recommenda- Information on how the recommendations shut at present with no prospect of being re-
tions were subdued, as there was a dearth of provided by the NFWG will be acted on is be- started until the uranium price is much closer
new information built upon from the Budget ing worked through as Peninsula – the only to $US40-50/lb. This is the long-term price
release. US-based uranium company authorised to needed for profitable operations,” Far East
Highlighted in Trump’s February Budget use the low pH ISR method – positions the Capital’s Warwick Grigor noted in late April.
announcement was direct purchases of ura- Lance project, Wyoming, to be a beneficiary “So, we are actually seeing an acceleration
nium and nuclear fuel services to expand of the country’s renewed appetite for domes- of the tail end of the uranium cycle, causing
five-fold the American Assured Fuel Supply tic yellowcake. the uranium price to increase from $US23/
strategic inventory stockpile by purchasing Prior to stopping activities at the Ross pro- lb to US$33/lb in the space of a month. The
17-19 mlba over a 10-year period of US pro- ject at Lance because of COVID-19, Penin- nature of the market is switching from being
duced uranium beginning no later than 2020. sula had been granted approval by the Wyo- inventory dictated to one of production con-
An amount of $US1.5 billion over 10 years ming Department of Environmental Quality strains. It is looking like a momentum play
to build the country’s uranium reserve was set for the low pH field demonstration. now with expectations that the uranium price
out in the budget, which is set to be comple- Field demonstration is part of de-risking could hit US$40/lb by the end of May.”
mented by a throng of policy changes by the the low pH ISR method at Ross, which Heili The UxC spot price was $US33/lb at the
Department of Energy to accommodate the hopes will play a role in the US nuclear strat- time of print, giving Heili an optimistic outlook
domestic uranium industry. egy at a time when some of the world’s big- for Lance.
Among some of the policy changes pro- gest uranium producers are pulling back on “Our investment decision is nearer today –
posed was streamlining regulatory reform operations. far nearer than a month or two months ago,
and land access, while allowing the Nuclear “What we really need to realise coming out when the market needed to improve. I say
Regulatory Commission to cap some ura- of this is the value of supply diversity; there is it is going to sustain and I think we can see
nium materials imported from Russia. a place for smaller mines, there is a place for $US35-40/lb in the near term this year even.
“I think there was some disappointment in more jurisdictions producing at varied levels,” We’re near $US35/lb, but nobody is talking
the market, but I am not disappointed,” Heili Heili said. about $US40/lb uranium prices yet,” Heili
said about NFWG’s report. “Supply diversity from more jurisdictions, said.
“If you look at $US150 million a year for 10 more mining companies all working together – Mark Andrews
years that will buy the Government 2-3 mlbpa to supply the product rather than one or two
Page 12 JUNe 2020 aUSTRaLIa’S PaYDIRT
1 - 2 April 2020
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neWs
Rhyolite Ridge DFS
Low-cost lithium on the After-tax NPV @ 8%: $US1.265 billion
Unlevered after-tax IRR: 20.8%
menu at Rhyolite Ridge Annual EBITDA: $US288 million
Annual cashflow: $US193 million
Annual revenue: $US422 million
Capex: $US785 million
s the release of the DFS on the Rhy- 20,600 tpa lithium carbonate and 22,000
Aolite Ridge lithium-boron project in tpa battery-grade lithium hydroxide from AISC: $US2,510/t LCE
Nevada, US inched closer, ioneer Ltd the fourth year onwards. Payback: 5.2 years
managing director Bernard Rowe started An additional $US99 million – to be Carbonate production: 20,600 tpa
pondering the traditional scepticism which funded out of operational capital – is need- Hydroxide option: 22,000 tpa (yrs 4-26)
is often directed at companies when such ed for the construction of a hydroxide cir-
results are published. cuit and heat recovery system. Boric acid production: 174,400 tpa
In particular, Rowe was bracing for his One of the main contributors towards Resource: 146.5mt
company’s proposed low cost of produc- ioneer’s expected low AISC is the co-pro- Reserve: 60mt
tion to be heavily scrutinised. duction of 174,000 tpa of boric acid. Life-of-mine: 26 years
Based on Roskill’s assessment of all lith- “A lot of lithium deposits have by-prod-
ium operations across the globe last year, ucts – tungsten, tin and potentially some
ioneer’s estimated AISC of $US2,510/t other things – but typically those by-prod- lithium ion batteries because they have the
LCE would comfortably sit at the far left of ucts are very small contributors to the rev- second largest car fleet in the world, but
the all-important cost curve. enue,” Rowe said. importantly the US essentially produces no
Speaking to Paydirt last month follow- “The difference at Rhyolite Ridge is, in lithium of its own today,” Rowe said.
ing the official release of the DFS, Rowe round numbers, there’s $US100 million a “There’s one small mine, but that produc-
was confident his company had the data year that comes from the production and tion actually doesn’t go into batteries, it’s
to back up its estimates. sale of boric acid. So, it’s truly a co-prod- more for research purposes, so really there’s
“There’s always going to be a lot of uct, not a by-product. a huge market that’s going to emerge in the
scepticism when companies come out “To explain the impact of it, if you take US as they electrify their motor vehicle fleet
and say ‘oh, we’re going to be the lowest that boric acid as a credit and you apply and there’s zero domestic production cur-
cost producer’, particularly when they’re it against your lithium, it pays for about rently for that.
not producing anything, but backing up 75-80% of your total operating costs, “We think we’re really well positioned
our claim to that statement is a 5,000-page and that’s how we arrive at $US2,510/t. to come into production in 2023. We think
DFS that’s been completed in conjunction If it wasn’t for that boron stream, that cost that’s an ideal time when we’re going to start
with Fluor and a whole host of other top- would be $US8,000-8,500/t.” to see a big uptick in a shortage of supply
tier engineering and process-type firms,” An important addition to the DFS from from 2025 onwards.”
Rowe said. the PFS is the upfront inclusion of a steam With a two-year timeline in place for that
“There’s a huge amount of data and test turbine for power generation, which is set first production target, ioneer has moved into
work supporting that estimate. There’s to provide the entire operation with enough the final stages of permitting with state and
30% engineering completion estimates energy for it to be fully self-sufficient. federal regulators, having completed all en-
by Fluor, there’s a lot of firm bids on a lot In completing and publishing the DFS vironmental baseline studies, in a bid to gain
of equipment and reagents, so we’re very on Rhyolite Ridge, ioneer now has the development approval for the project within
confident those numbers are a very ac- most advanced lithium project in the US. the next 12 months.
curate estimate, not just an arm wave ‘we From Rowe’s perspective, it is a good Offtake discussions will also ramp up over
can do this’.” position to be in given there is essentially that period. While the company has signed a
Other key estimates in the DFS were a no local production of the key battery min- five-year supply contract with Dalian Jinma
pre-production capex of $US785 million to eral in one of the world’s fastest emerging Boron Technology Group Co Ltd for 105,000
develop a 2.5 mtpa mining and process- markets for electric vehicles. tpa of boric acid, no agreements have yet
ing operation at Rhyolite Ridge, producing “The US is a large emerging market for been struck on the lithium side.
Rowe said the company was hopeful of
bringing in a strategic partner at the project
level ahead of the scheduled final invest-
ment decision mid-next year.
“We think the economics, the longevity
and the location in the US are all going to
make it incredibly attractive for potential part-
ners,” he said. “It’s an important and main
piece in the funding solution for the project.”
Late last month the company also signed
separate distribution and sales agree-
ments with Kintamani Resources Pte Ltd
and Boron Bazar Ltd to supply boric acid
into multiple Asian countries, including
Malaysia, Indonesia and Singapore, for
at least the first three years of production
Rhyolite Ridge will be one of the lowest-cost
lithium production centres in the world when from Rhyolite Ridge.
in operation, according to ioneer’s recently – Michael Washbourne
released DFS
Page 14 JUNe 2020 aUSTRaLIa’S PaYDIRT
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neWs
Carawine well spread in result then you’d get good value for it and
carry on,” Boyd said. “It is not all dark
clouds but is frustrating because we are
explorers and we want to get out there
Australia’s hotspots and do stuff.”
Like many company executives, Boyd
is also confined to his desktop for the time
being, plotting the company’s next steps.
While Boyd gets to work from
Carawine’s new base in suburban Perth,
he has the luxury of doing so knowing
that the company’s presence in the field
is not all lost with Rio Tinto Ltd, Fortescue
Metals Group Ltd and IGO Ltd set to fire
up exploration efforts on ground joint ven-
tured in Western Australia’s Paterson and
Fraser Range provinces.
Boyd said Rio Tinto was planning to
drill some targets in the West Paterson JV
and Fortescue had airborne EM surveys
earmarked for the Coolbro JV in the Pat-
erson. Meanwhile, IGO was preparing for
potential aircore drilling and ground EM
work at the Fraser Range JV.
“Once things change, we have the
wherewithal to get out and get stuck into
some targets whether they are in WA or
Victoria in November. In the meantime,
Rio, FMG and IGO are doing half the ex-
ploration for us,” Boyd said.
Having some of industry’s heaviest hit-
ters as partners in challenging fields is
handy at a time when cash conservation
is paramount.
Carawine has had a steely focus on the Lachlan Fold Belt in south-eastern Carawine has $2.3 million cash and
Australia since 2017
while it can hold onto that tightly giving
there are no outgoings in Victoria, the
t has been a long time since Australia’s 26.7 g/t and 0.7%. The result came from company won’t sit still, particularly in the
Isouth eastern corner has revelled in the a four-hole programme (1,112m) at a new Fraser Range where it also has ground in
levels of exploration activity currently be- high-grade zone discovered 50m west of its own right.
ing witnessed. the main zone. Legend Mining Ltd (Mawson) and Gali-
Alkane Resources Ltd at Boda in New “We’ve drilled two more holes – one be- leo Mining Ltd (Lantern) have relit the ex-
South Wales and Stavely Minerals Ltd in ing more of an extension – and we man- ploration fire in the Fraser Range, while
Victoria are standout success stories but aged to get a hole into one of the shallow on the outskirts of Perth Chalice Gold
behind them greater momentum is build- porphyry targets and we expect those re- Mines Ltd (up from 24c/share to $1.27/
ing in the southern states. sults from Hill 800 soon,” Carawine man- share) has cast the spotlight on the nickel
Companies hoping to follow in similar aging director David Boyd told Paydirt. sector.
footsteps to both Alkane and Stavely have Excited by the good gold showings and Carawine can capitalise on the wave of
grown in numbers recently, however, the “intense porphyry-related alteration over positivity in nickel exploration at Big Bang,
team at Carawine Resources Ltd has 167m length” in respective drill holes, 50km from Mawson and directly south of
been at the party since prior to listing in Carawine was of course eager to press Lantern, where the company is focused
2017. Carawine was spun out the back of on with its exploration push in Victoria be- on advanced generative target-type work
Sheffield Resources Ltd, taking the min- fore onset of winter. with designs on sending a crew to site.
eral sands-focused company’s gold and “Our part of Victoria closes down for “We have picked up some more ground
base metals assets via a $7 million IPO. winter, irrespective of coronavirus, the ac- in the Fraser Range, north of Big Bull-
Under the Carawine banner, projects cess tracks to where we go are closed, so ocks, on the northern edge of the Fraser
such as the gold-copper Jamieson VHMS we’re forced into a June-October closure Range and also we’ve got a couple
project in Victoria’s Mt Useful Slate Belt, period anyway,” Boyd said. 100%-owned tenements in the Paterson,
within the Melbourne Zone in the Lachlan Carawine suspended drilling in Vic- where at Cable we haven’t done any pro-
Fold Belt, have been brought into sharper toria at the end of March and faces the ject generation type work. In the next 3-4
focus. prospect of next getting on the ground in months we’ll look at low-cost exploration
Hill 800 has been the primary project at November, subject to travel restrictions so when we do get going, we will have a
Jamieson, with the latest diamond drilling being lifted across Australia. really good suite of projects to work on,”
campaign returning 11m @ 9.87 g/t gold, “Unfortunately, there’s a bit of a pause. Boyd said.
0.3% copper from 179m, including 4m @ It’s frustrating because if you had a great
– Mark Andrews
Page 16 JUNe 2020 aUSTRaLIa’S PaYDIRT
6 October 2020
Perth, Western Australia
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aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 17
coVeR
Nothing gloomy
about De Grey’s
intrusion story
Page 18 JUNe 2020 aUSTRaLIa’S PaYDIRT
espite a pandemic-induced Among this cohort of successful explorers, De Grey Mining
D skittishness to the market, the Ltd has established itself as market leader. Since February
6, when the company announced the discovery of the Hemi
Australian junior exploration sector prospect on its Mallina gold project in Western Australia’s Pil-
is enjoying a rare period of good bara region, De Grey shares have been on a rocket-fuelled
run, climbing from 4.8c to 40c by the middle of May.
fortune with a series of exciting The company capitalised on the investor interest in late
discoveries sending several juniors April, raising $31.2 million via a 28c/share placement. The
funds will be used to solidify the early excitement around
on exponential growth curves more Hemi.
recently associated with COVID-19 Jardine as managing director. Through more than in the in-
To lead this process, the company has appointed Glenn
infection projections. dustry, Jardine has developed a reputation as leading project
manager and is now tasked with building the Hemi story from
a market shooting star to one of sustainable growth.
“The investment case for De Grey is clear and compelling,”
Jardine told Paydirt. “We are discovering gold that has a val-
ue that is orders of magnitude greater than its single digit dis-
covery cost. The value of the gold being discovered is being
driven by a combination of scale, grade, continuity, geometry
and proximity to surface. Added to this is the demonstrated
potential to find more of the same.”
What is remarkable is how uniform the enthusiasm for
the Hemi discovery has been. Most new discoveries are re-
ceived with a healthy bout of scepticism to balance out the
backers but since the early hits of 24m @ 7.5 g/t gold, 49m @
3.7 g/t and 36m @ 4 g/t on the Brolga zone and 24m @ 4.2
g/t, 15m @ 2.5 g/t and 21m @ 2.5 g/t from the Aquila zone
at Hemi, De Grey has enjoyed widespread support with con-
sensus among Australian resource analysts that, even at this
early stage, Hemi contains a minimum 1 moz gold. As early
as March 26, analysts at Argonaut Securities – which led the
recent capital raising – were predicting Hemi could contain
1.9-2.8 moz gold.
This is a bullish appraisal of a prospect which has seen
only 12 weeks of RC and diamond drilling. The company itself
has been careful not to make any ambitious claims, choosing
instead to focus on the business of defining the orebodies.
However, De Grey technical director Andrew Beckwith isn’t
completely surprised by the response.
“There are still a few sceptics but what surprised me was
how many people got on board during the aircore drilling,
even though I knew they were very spectacular results,” he
told Paydirt.
“The comments we get from all the investors now is ‘This is
going to be a mine.’ Right from the start investors automati-
cally thought it would be mined.”
Fostering the confidence of investors is the mineralisation
style of Hemi.
“It is something very new for the Pilbara and if you think of
intrusives, they tend to be big orebodies. So, once we did the
RC drilling at Brolga and in those seven holes demonstrated
exceptional thickness with good grades, it became pretty
easy to get your mind around what it could likely be.”
It is a far cry from four years ago when Beckwith arrived at
De Grey with the company seemingly adrift in a tough mar-
ket.
“Chairman Simon Lill probably never gets the pat on the
back he deserves for his role because we went through some
hard times,” Beckwith said. “We had a $1 million market
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 19
coVeR
The value of the gold being discovered is
being driven by a combination of scale,
grade, continuity, geometry and proximity to
surf
“ace. Added to this is the demonstrated
potential to find more of the same.
cap and not much cash. But the board twice without any pressure for the money,” dian miner Kirkland Lake Gold Ltd. While the
showed faith with our ideas. We chopped Beckwith said. “They went from not being conglomerate excitement soon petered out,
and changed in that period between lithi- interested in a shareholding to taking $3 mil- the funding would prove vital.
um, gold and base metals, which is what lion in shares. They remain happy with their “We had the ups and downs of the con-
you have to do as a junior when funding position and we expect them to continue as glomerate run, which worked for us and
is tight. All that time, we remained fo- shareholders.” against us,” Beckwith said. “It delivered a
cused on the gold ideas and then slowly The deal gave the exploration team ac- sugar hit but there was a severe headache
sentiment towards gold exploration be- cess to more than 200km of anomalous afterwards.”
gan to turn.” ground with an exploration target of an ad- While welcoming the conglomerate at-
The approach was backed by major ditional 1 moz gold identified. tention, De Grey refused to be too far side-
shareholder DGO Gold Ltd which in- “It was then about finding the trap sites and tracked from its ultimate goal; definition of a
vested $5 million for 7% of the company the existing resources were walk-up targets standalone operation at the Mallina project.
in July 2018 and increased its holding in for that,” Beckwith said. “We could see how Beckwith and the management team
subsequent capital raisings. we could expand resources by 50% or 100% were aware more ounces would be
Beckwith’s arrival coincided with De if we got the drilling right, in what is a very needed to convince investors and finan-
Grey’s decision to consolidate the dis- large project area. The biggest hindrance to ciers Mallina could get off the ground
trict around its Turner River project. The expanding the resource was cash.” and stay afloat. To find those ounces,
company struck agreement with neighbour Funding relief came from an unlikely the exploration team got out the standard
Northwest Nonferrous Australia Pty Ltd over source, a new gold rush in the Pilbara region WA gold playbook.
the adjacent Indee gold project, increas- led by Novo Resources Corp and its intrigu- “When we started exploring it was defi-
ing its resource base from 464,000oz to ing conglomerate gold discovery. nitely the structural shear-hosted miner-
809,000oz and adding more than 100km Novo set international gold circles on fire alisation we were interested in.”
strike of the Mallina shear zone to its port- in late 2017 with its declaration of a new con- Those efforts delivered, with the global
folio. glomerate discovery south of Karratha. De resource at Mallina increased by 21% to
“The deal with Northwest Nonferrous Aus- Grey soon made its own conglomerate gold 29.65mt @ 1.8 g/t for 1.68 moz gold in
tralia took a while, but once done they were nugget discoveries and used the interest to July 2019 and a further 29% to 37.44mt
very supportive and allowed us to extend gather a $5 million cash injection from Cana- @ 1.8 g/t for 2.2 moz in April this year.
Page 20 JUNe 2020 aUSTRaLIa’S PaYDIRT
However, by the time of the latest re- typical narrow Pilbara gold occurrences,
source announcement, the exploration tend to be large, broad, consistent sys-
team was already turning some of its at- The comments we tems. Beckwith said De Grey was fortu-
tention away from shear-hosted minerali- get from all the nate it could call on an exploration team
sation towards the intriguing new prospect with knowledge of testing large systems.
at Hemi. investors now is “All the senior geos at De Grey are
“It was when we started to look over the ex-AngloGold Ashanti [Ltd] which has
‘Th
Toweranna deposit that the intrusion model “is is going to be helped,” he said. “It is a good thing having
began to take shape,” Beckwith said. “We a mine.’ Right from that big company experience and mental-
had been rebuilding the database over two ity as it looks at things on a much bigger
years. When we loaded the historical data, the start investors scale. That allowed us to focus on a big
an error meant Toweranna wasn’t in the automatically thought project picture quickly; how to focus the
global resource. Once we realised this and money and Toweranna was the one that re-
reviewed Toweranna, is when we decided it would be mined. ally kicked off our focus on the intrusions.
to do more drilling on it. The mineralisation “After 12 months working on Toweranna
was notably different, intrusion-related and thinking through the strategy, the logi-
rather than shear-hosted.” gets,” Beckwith said. “We went back and cal thing to do was focus on four or five of
While common in other parts of the re-interpreted the magnetics and the drill- these intrusion-related targets in the Hemi
world, intrusion-related gold mineralisa- ing, etc, trying to get into the minds of pre- area. Once we received POW approvals in
tion was relatively unknown in WA, until De vious geologists and how they were log- late 2019, drilling commenced and the first
Grey started putting the various datasets ging. We then asked ourselves why they positive aircore holes were reported in De-
together. had stopped drilling in 2000 even though cember 2019.”
“It was good geological detective work. they had tested a few of the intrusions. It Success, in Beckwith’s eyes at least,
The WA Mines Department had done was the typical story of corporate priorities came immediately with aircore drilling re-
good work showing Toweranna intrusions changing.” turning hits of 43m @ 3.7 g/t gold from 36m
were all part of a sanukitoid suite of intru- Intrusion-related gold systems, unlike and 25m @ 2.7 g/t from 32m in December.
sions and we began identifying other tar- “The initial aircore results looked very
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 21
coVeR
De Grey technical director Andrew Beckwith
with his prized 1957 Austin Healy
encouraging to us even though the market of leaching and communition tests with
ignored them,” he said. the help of ALS and GR Engineering.
The market didn’t repeat its oversight with “Scale also makes a difference. If you
De Grey’s shares moving from 4.6c to 9.5c have scale, tonnes and ounces, nobody
immediately after resuming trading follow- asks about refractory ore; look at the Su-
ing the Brolga and Aquila hits announced per Pit, Carlin or the success of Alacer
on February 6. By St Valentine’s Day, De [Gold Corp which is subject to a $US1.7
Grey’s shares were trading at 21c. billion takeover from SSR Mining Inc]; all
Results and therefore interest have have been treating refractory ore.”
been maintained since those initial hits Beckwith’s mention of the existing fea-
but now Beckwith and the exploration sibility study is a reminder of De Grey’s
team must put some meat on the Hemi previous motivation, defining a stan-
bone to justify the early success. dalone operation from the existing 2.2
Fortunately, the large, uniform nature moz resource at Mallina.
of the mineralisation means De Grey can While the non-Hemi component re-
do this relatively quickly. mains a work in progress as a stan-
“We’re in the process of systemati- dalone, the economics of Hemi mean it
cally and methodically drilling it,” Beck- will likely be comfortably incorporated
with said. “We are lucky that we can drill into a wider project, potentially giving
on 80m by 80m spacing and are seeing Mallina a plus-4 moz gold inventory,
good continuity on this space. We are based on consensus analyst assump-
very conscious of the recent project de- tions. That is without considering the
velopment failures where the lack of de- further 200km of shear-hosted potential
tailed drilling might have been an issue. at Mallina.
However, the scale, grade and the fact Any project of that size is destined to
mineralisation is so uniform and consist- foster wider market interest, particular-
ent gives confidence in stepping out. The ly at a time of near-record gold prices.
variability is not there, so there is less “ We’ve been Beckwith said the recent capital raising
likely to be unexpected changes. inundated with was a demonstration of the levels of en-
““There will come a point for feasibility thusiasm the company is experiencing.
study purposes when we have to drill it interest from large “We’ve been inundated with interest
out more fully, but now it is about scoping investors including from large investors including the big-
out the size of the deposits.” gest gold funds in the world. There has
De Grey hasn’t set a specific time- the biggest gold obviously been corporate interest, and
frame for a maiden resource, preferring funds in the world. we have fielded calls from quite a few
to focus on defining the scale of Brolga, bigger companies. Hemi has scale and
Aquila and Crow, the newest discovery should be hitting their radars.”
at Hemi. He said the $31.2 million raising also
Defined by aircore hits including 63m the pandemic but the aircore rig is now allowed De Grey to bolster the share reg-
@ 0.9 g/t gold, 89m @ 0.6 g/t and 14m on site drilling Hemi extensions and then ister to allow it to remain in charge of its
@ 0.7 g/t over a 1km-long, 400m-wide will be pushed onto other targets such as own destiny.
area, Crow is shaping as a third miner- Scooby, Antwerp and the shear zones. “The capital raising was about not only
alised zone to rival Brolga (plus-640m “We will keep the aircore going dur- strengthening the balance sheet but also
long and plus-300m wide) and Aquila ing the year and progress onto other the shareholder group. We have attract-
(minimum 800m by 300m). intrusions once heritage clearances are ed a number of large long-gold funds,
Beckwith said a 5,000m RC pro- completed. The extra funding allows that which was always our target.”
gramme would test Crow along strike to happen and we are keen to know if For Jardine, the task is simple.
at the same time as extensional drilling there’s other mineralised intrusives be- “As you can imagine, we have a very
continued to push Brolga and Aquila fur- cause that could change the scale again. enthusiastic team of employees and very
ther out. “For development reasons, firstly supportive contractors and consultants,”
“There has been a lot of focus on we need to know how big Hemi is and he said. “Our board is experienced and
Brolga initially because of the wide and whether there is another large deposit knowledgeable. Our collective aim is to
consistent grade,” he said. “We are now nearby.” continue to discover and grow high-qual-
advancing more drilling into Aquila and Although the company is yet to post ity gold resources and to grow De Grey
Crow to understand their size and grade. a resource, the clamour for economic into a high-quality gold company.
The immediate success at Hemi has studies has already begun. Beckwith “Hemi is in a Tier 1 jurisdiction just
meant the other intrusion targets have said while the company would be stead- south of Port Hedland with ready access
taken a backseat but Beckwith is eager fast in its systematic approach it had to high quality infrastructure including
on returning to regional work later in the started preliminary metallurgical testing. high voltage mains power, gas distribu-
year. “We were immediately comfortable tion network, transportation corridors,
“Remember, this is just one of many with the metallurgy and we still are,” he services and communications.”
intrusions. We have already started re- said. “We have embarked on a systemat-
gional work for the next discovery. We ic met programme with diamond core in - Dominic Piper
reduced the aircore drilling because of the labs now being subjected to a series
Page 22 JUNe 2020 aUSTRaLIa’S PaYDIRT
Perth, Western Australia 21
November 9 - 10
21
Perth, Western Australia
November 9 - 10
The world’s pre-eminent gold exploration event
25 years of world-class discoveries from
43 countries around the globe
www.newgengold.com
For all enquiries about presenting, exhibiting or attending please contact
Mitchelle Matambo on (+61) 8 9321 0355 or email [email protected]
Jointly organised by:
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coPPeR sPotlIGHt
Copper miners
preserve and prepare
in face
of COVID-19
Amid extravagant jolts to spot prices, Australia’s mid-tier
copper producers are maintaining their positive outlook for the
market and their own investment decisions.
opper lurched to a four-year low of sition, financially and strategically, than around the corner and where the impact
C$US4,371/t in March as the coronavi- many other larger copper producers.” may be. But we are in a stronger position
rus spread throughout the world. By mid- Sandfire finds itself in a similar situa- than we thought.
May however, spot prices had recovered tion. While the West Australian-based “Guidance relies on so many assump-
to $US5,318/t as China further reopened miner withdrew financial year guidance tions and we will be certain to tell you if
its economy and the rest of the world be- during the March quarter as it adjusted something changes but there is height-
gan considering relaxation of stringent to lockdown measures in the state, man- ened activity of smelters seeking copper.
lockdown measures. aging director Karl Simich said the com- Ports are operating well, customers are
For miners such as Oz Minerals Ltd pany remained positive about the imme- operating well and banks are as well. So,
and Sandfire Resources Ltd, the pan- diate future. it is largely pleasing on the sales side.”
demic and related lockdowns have made “The March quarter saw just under Oz maintained its FY2020 guidance
forecasting difficult, but both remain 16,000t copper produced at 74c/lb and following the March quarter after report-
steadfast in their strategies for growth. we are hopeful we will still achieve ex- ing all operations delivered in line with
“Notwithstanding the recent pressure cellent operational results for the year,” expectations.
on the copper price as a result of the Simich told analysts and media on a Production at its flagship Prominent
reduced global economic activity due quarterly conference call in April. “Finan- Hill copper-gold mine in South Australia
to COVID-19, we remain positive that cially, the company is in a very strong remained strong with 15,580t copper and
the copper market, and by implication position, debt free and we are being pru- 49,049oz gold produced in the period at
the copper price, will remain supported dent with assessing carried value of as- AISC of $US0.29/lb.
through these extraordinary events we sets.” At Carrapateena, plant ramp-up and
are experiencing,” Oz managing director Sandfire chief financial officer Matthew underground development continued
Andrew Cole said at the company’s AGM Fitzgerald said guidance had been with- with the plant hitting its 12,000 tpd name-
on April 17. “Copper will be much needed drawn as a precaution given the uncer- plate capacity for five consecutive days
as the world and its economies rebound tain times created by the pandemic. during March and production reaching
from this crisis and as society demands a “There is a heightened sense of aware- 2,495t copper and 5,041oz gold.
lower carbon footprint. And, as one of the ness in which it is hard to predict the un- In Brazil, Carajas remained on track to
lowest cost producers in the world, we predictable,” Fitzgerald said. “I think we hit guidance after producing 2,156t cop-
remain in a relatively much stronger po- are well set but we don’t know what’s per and 1,516oz gold.
Page 24 JUNe 2020 aUSTRaLIa’S PaYDIRT
Ramp-up at Oz Minerals’ the project during the March quarter but
Carrapateena copper the company is still proceeding cautious-
operation has not been ly given the complexity of the permitting
affected by COVID-19 process in Montana.
restrictions “The timing is still to be determined
and there are clearly a number of thresh-
olds,” Simich said. “We still need com-
pletion of the bonding programme and
DFS and still need to go through the pro-
After each made company- cess and do some work on the ground.”
altering acquisitions in the last Having two projects close to develop-
2 years, the question for both ment decisions could put Sandfire’s bal-
companies is whether the pan- ance sheet under pressure but Simich
demic and subsequent econom- is confident there will be no scheduling
ic shock will restrict their growth issues.
options. “We are not looking at holding back on
According to Simich, Sandfire anything,” he said. “In a perfect world if
would not be backing away from the decision-to-mine was taken on Bot-
its development plans, particu- swana, it would be 22-24 months with-
larly at its T3 copper project in out any extreme circumstances. The US
Botswana. is probably a longer timeframe of 2.5-3
“Optimisation of T3 is ongo- years from decision-to-mine. So, maybe
ing,” he said. “We are having it will be one in one year and then the
delays to people responding other project a year later.”
because of the jurisdiction but it Oz remains equally confident its port- Karl Simich
won’t change key objectives and folio will continue to develop, with Cole
milestones. We expect to make saying during the company’s March ties associated with low-cost metal pro-
a positive investment decision in quarterly presentation it would deliver duction in 2020 and subsequent years
the not-too-distant future.” the Malu paste plant at Prominent Hill and we also sought to preserve jobs,”
Simich said the Botswana and the Carrapateena expansion PFS Cole said during the company’s quar-
Government remained “solidly and life-of-province scoping study in the terly presentation.
behind the development of new June quarter. The decision has led to a slowing of
projects”. It has also issued cautions over project projects. Cole said the timeline for Cen-
“There is support community so we timelines in response to the COVID-19 trogold in Brazil – currently mired in reg-
can run hard there.” pandemic. The company announced it ulatory problems – would be pushed out
The situation at Sandfire’s Black Butte had removed or deferred $150 million of as the Brazilian regulator had suspend-
project in Montana, US is more compli- costs, predominantly from exploration ed all administrative activity. In Australia,
cated. and growth spending in 2020. field exploration activity on the West
The company received a record of de- “Our focus is to retain only those activi- Musgrave JV with Cassini Resources
cision – essentially a mining permit – for
Ltd has been suspended to shield local
communities from the virus.
In the meantime, desktop work would
continue to advance the company’s pro-
ject pipeline.
“Work progresses with all project
teams remaining in place,” Cole said.
“We are using this time to hone our fo-
cus, optimise project scopes, look for
ways to improve value for all stakehold-
ers and embed the modern culture we
have been championing for some time.”
While admitting the virus’ effects could
linger, Cole said the company was also
preparing for the inevitable rebound.
“We consider this to be Phase 1 of
our response. We have prepared plans
should the conditions worsen and we are
also preparing post-COVID-19 recovery
plans to ensure we can accelerate out
of this crisis. We have a team develop-
ing our recovery plan. This pandemic is
not all about the downside we are seeing
today.”
– Dominic Piper
Oz managing director Andrew Cole signing the Carrapateena partnership agreement
with Kokatha Aboriginal Corporation deputy chairman Chris Larkin
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 25
coPPeR sPotlIGHt
Cobre starts to crane the neck
fter listing on the ASX in January via a “We received strong results around mer chief executive of Chilean lithium com-
A$10 million IPO, Cobre Ltd pulled back 6,000 sieverts, which is highly conductive pany Lithium Power International Ltd, is
on marketing to concentrate on drilling and underneath already known massive sul- fully aware of the work required to build the
acquiring full ownership of the Perrinvale phide material, so everyone is pretty excit- company’s credentials, therefore, he is sur-
VHMS project in Western Australia. ed about that from a technical point of view. prised by the outside interest in the copper
Both objectives have been fulfilled, with That is going to be a target [300m-long] hopeful already.
a cash and share deal in mid-May allowing adjacent to the already known discovery at Despite some work being done at Perrin-
Cobre to mop up the remaining 20% stake Schwabe.” vale (5m @ 9.8% copper, 3.2 g/t gold, 34
it did not already own in Perrinvale. Internally, the company is pumped about g/t silver, 3.1% zinc, including 3m @ 12.6%
“That 20% was free-carried up to DFS the opportunities ahead at Perrinvale and copper, 4.7 g/t gold, 43.7 g/t silver, 3.6%
and the transaction we did was about 8% stoking enthusiasm further was a recent zinc at Schwabe) as a private concern, it is
dilutive to current shareholders for a 20% technical pow-wow with Dr Susan Belford flattering for Cobre to be earning the atten-
free-carried interest in the project, so it – author of a thesis on the Jaguar mine, tion it is given the nature of its early-stage
made a lot of sense,” Cobre executive 100km from Perrinvale – substantiating prospects.
chairman Martin Holland told Paydirt. why she believed Cobre was in the thick of It is perhaps the involvement of success-
“The three vendors are already share- a rich VMS system. ful investment outfit Metal Tiger plc – the
holders of Cobre, so they end up with “[Dr Belford] has worked on a lot of other cornerstone investor behind Cobre – and
more shares in the company as well as VMS deposits around the world and also the high profile shareholders in the com-
cash [$528,000]. That now sets us up as we had Margaret Hawke, who was Pros- pany’s top 20 that has motivated others to
a company owning 100% of the asset and pector of the Year for DeGrussa, plus a position themselves early in potentially one
about to commence a 6,000m drilling pro- number of other technical professionals on of the few emerging high-grade copper
gramme. That puts us in a good position the line and we came to an understanding players in the market.
now to leverage from results.” of what we are going to do and where to Holland reports that two large copper
An initial 1,000m drilling programme al- place holes. We have a PoW approved and companies had shown interest, while off-
ready completed has confirmed the pres- it is about placing it and reviewing the old takers were also keen on Cobre’s potential.
ence of high-grade VHMS mineralisation results that we have received. Hearing from However, Holland stated the company’s
at the Schwabe prospect where primary Susan that she is seeing the full bed of the intention for now was to forge ahead alone
copper, zinc, gold and silver mineralisa- VHMS is very positive; she has actually de- at Perrinvale, meaning JVs or strategic
tion at shallow depth (6m @ 8.39% copper, clared that we are in a VMS system, which partnerships would be held at bay.
3.52% zinc, 30 g/t silver, 0.14% cobalt, 3.1 is very positive news for the company,” Hol- “We know there are only a handful of
g/t gold from 49m; 6m @ 5.63% copper, land said. companies – if that – on the ASX that have
3.89% zinc, 22 g/t silver, 0.1% cobalt, 1.4 “In addition to DHEM we have also com- exposure to a high-grade copper deposit in
g/t gold from 28m) was revealed from dia- pleted a whole regional moving loop EM VHMS massive sulphide material in WA.
mond core. programme, so we are getting all of that We have already been approached, which
Disseminated and stockwork base met- information in from a targeting perspective. is quite bizarre, by large companies and
als mineralisation were also reported from We’ll have a lot more data this time around.” also offtake partners on the basis that there
the first two holes at Zinco Lago, while Holland, co-founder of Cobre and for- really is no other [companies], which is real-
modelling of the DHEM sur- ly interesting,” Holland said.
vey data exposed another “Companies I have been
three strong conductors involved in previously have
below Zinco Lago, along had to go a lot further down
the Zinco Lago-Lago Rame the value curve of generat-
gossan trend and adjacent ing resources and infor-
to drilling at Monti. mation before you get any
“There’s definitely some- phone calls. It is interesting
thing happening in the re- to see that happening a lot
gion. The other prosects earlier in this space, so that
that we explored, which gives me a lot of confidence
were quite a fair way from moving forward. That is one
the known discovery of the reasons why we de-
[Schwabe], had no histori- cided to take full ownership
cal work completed. When now, complete 6,000m of
we drilled the hole, we drilling, generate a lot more
found mineralisation of cop- information, then we can be
per. Importantly, when we in a position to have more
did the DHEM, it showed strategic discussions after
we’d gone into large con- that and maximise share-
ductors, which are down holder value.”
dip from the already known Cobre has secured 100% ownership of the Perrinvale project, – Mark Andrews
mineralisation,” Holland said. north-west of Menzies and Kalgoorlie, and started
a 6,000m RC/diamond drilling campaign in late May
Page 26 JUNe 2020 aUSTRaLIa’S PaYDIRT
Comet hopes to begin maiden
drilling at its Barraba copper
project, about 550km north of
Sydney, in Q3
Comet steadies after
bumpy entry
atthew O’Kane knew there would be stricted to desktop planning for such a pro- Many forecasters are anticipating cop-
Mchallenges during his first six months gramme, but that work has only reinforced per supply deficits from 2025. With that in
as managing director of Comet Resources its decision to go after the project, about mind, O’Kane believes now is the time to
Ltd, but he never expected them to be quite 550km north of Sydney. look more closely at the red metal, espe-
as marked as what played out. The Barraba exploration licence covers cially with several governments also tipped
O’Kane arrived at the company last No- an area of 2,375ha along the Peel Fault to increase fiscal spending as the world
vember and immediately set out to find line and encompasses the historic Gulf emerges from the COVID-19 pandemic.
an asset to complement the Springdale Creek and Murchison copper mines. The “I think the future for copper once we’re
graphite project in Western Australia. With region is known to host VMS-style miner- past this current situation is very positive,”
copper being his mineral of choice, that alisation containing copper, zinc, lead and he said.
search quickly led him to the Barraba pro- precious metals. “With the whole COVID-19 thing and
ject in New South Wales. Historical workings at Gulf Creek report- potentially a recession, maybe that all gets
Comet announced the proposed acqui- edly produced high-grade copper and zinc pushed out to 2026, but there is no doubt
sition of Barraba in January, accompanied for a short period at the turn of the 19th we’re looking at copper deficits based on
by a small capital raising to support its century. current installed production versus de-
rapid integration into the company’s port- “There’s a lot of information about that mand forecasts.
folio. Then market conditions changed historical mine which enables us to plan “On top of that you’ve got copper’s role
due to the global COVID-19 pandemic and this initial drilling programme to both con- in this decarbonisation of the transport
O’Kane was forced back to the drawing firm grade and test for extensions on the network and renewable energy. There’s
board. Gulf Creek mine,” O’Kane said. five times as much copper in a EV than
It took a few months longer than origi- “The Gulf Creek historical mine in partic- there is an internal combustion engine.”
nally planned, but Comet was able to wrap ular was one of the major points of interest O’Kane believes there is adequate
up the acquisition in April, along with a re- for us when acquiring this project. It was room in Comet’s portfolio for both Barraba
vised raising. Now it is just a waiting game mined in the late 1800s and early 1900s, and Springdale, indicating the company
for O’Kane and his team to get back out it produced copper grading an average planned to advance the two projects con-
on the ground in NSW and begin exploring of about 5% – up to 10% in some areas currently once the initial field work in NSW
what they believe is a highly prospective – and it had accompanying zinc grades of has been completed.
project in a commodity with plenty of near- around about 1-2 times the copper. Metallurgical testing on graphite sam-
term upside. “There’s also an IP survey that was ples collected from Springdale last year
“Whilst it has been a little bit of a difficult undertaken at site previously and that’s has resumed after being deferred in Q1
trot at the start of the year, there’s a lot of already delineated a couple of high prior- due to the changed market conditions.
upside and I think there’s a lot of value in ity drill targets for potential other VMS de- The first results from this Australian-based
the stock right now,” O’Kane told Paydirt. posits on site, quite proximate to the Gulf work could be released this month.
“I’m feeling very positive about moving Creek deposit itself, so we hope to be able Comet then plans to send concentrate
into the second half of the year and putting to test at least one of those in that initial samples to Germany for more detailed
all the current difficulties behind us.” drill programme as well.” testing and validation.
Pending the resumption of interstate O’Kane said the company had viewed “We need both of those results in order
travel within Australia, Perth-based Barraba as being “highly complementary” to understand the deposit more and then
O’Kane believes his company will be able to Springdale because copper and graph- to be able to understand what the next
to undertake maiden drilling at Barraba ite are both widely used in batteries for steps for Springdale are,” O’Kane said.
during Q3 2020. Comet is currently re- electric vehicles.
– Michael Washbourne
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 27
oPInIon
China is short of copper scrap
his is largely a problem of its own making. and transfer any quotas held by traders to in Hong Kong. Last year’s shipments from
TChina has steadily restricted imports of a actual copper processors. the US to Malaysia had an average content
material officially designated as “waste” dur- Beijing has also just suspended for one of 31%, lower than any other top 10 export
ing its broader war on pollution. year a punitive 25% import tax on US cop- destination.
Beijing had intended to ban all copper per scrap as part of the Phase I trade deal. Malaysian processors dismantle and
scrap imports at the end of this year in the That tax pretty much killed off scrap flows clean this material before purifying it into a
same way it has already locked out other from what has historically been China’s larg- form of copper that meets Beijing’s new “re-
forms of “foreign garbage” such as used est supplier. source” thresholds.
plastic. But it is a moot point whether Beijing’s Malaysia has emerged as the largest sup-
The Government has since relented un- latest change of scrap policy can revitalise plier of copper scrap to China, accounting for
der pressure from its own copper sector, trade between the world’s two biggest econ- 18% of total imports last year. The calculated
which was panicking about the loss of a omies. content of the material averaged a high 89%.
major component of China’s copper supply China’s imports of US copper scrap im- It is, however, simply US supply in dis-
chain. Imports of higher-grade copper scrap ploded to 89,000t last year from 352,000t guise. The world’s biggest exporter is still
have been reclassified from “waste” to “re- in 2018, according to the country’s customs shipping to China but, thanks to Chinese
source”. scrap and trade policy, now via Ma-
Other things being equal, China’s laysia.
copper scrap imports would be The global supply chain has
expected to recover from their de- The availability of changed and probably permanently,
pressed levels to fill any gap. “ concentrates was already mitigating the impact of Beijing’s duty
However, COVID-19 has upended waiver.
that assumption. tightening before COVID-19 as Scrap is often the hidden balancer
The coronavirus has restricted the new Chinese smelters fought of the copper market. During periods
collection and processing of scrap of oversupply and low pricing, scrap
around the world, including in China. with incumbents for raw availability reduces, increasing de-
Lockdowns have idled manufactur- material. The virus has thrown mand for primary copper.
ing activity, halting the generation of Thanks to COVID-19, the Lon-
“new” scrap. The copper price has supply disruption, particularly don copper price has tumbled from
slumped, reducing the value of “old” in key exporting countries a January high of $US6,343/t to
scrap. $US5,315/t.
China’s newly defined copper “re- such as Peru, into the mix. That is a sufficiently sharp fall to in-
source” is one that is currently in short hibit scrap supply. But the coronavirus
supply. is also accentuating the price effect
But the gap was evidently wide as lockdowns freeze national collec-
enough for Chinese processors suc- tion networks and international trade
cessfully to lobby Beijing to exclude flows.
high-grade “resource” from the loom- Just as China has reopened its
ing ban. doors to copper scrap imports, even
China is the world’s largest refiner those from the US, it’s likely to find
of copper from scrap material. Such there’s not much there.
secondary production has been run- The scrap gap is going to take a
ning in excess of 1.5 mtpa for the last dec- department. while to plug.
ade. What was shipped was extremely high pu- Those Chinese smelters that can, will go
Imports have fed this industry. Although rity material with an average implied copper after more copper concentrates.
China’s own scrap generation is rising, the content of almost 90%. That’s not easy right now. The availability
intense pressure on Beijing to part-reverse However, little of it stayed long in China. of concentrates was already tightening be-
its policy tells you that industry players felt Every major US shipment arriving in the third fore COVID-19 as new Chinese smelters
domestic supply increases wouldn’t be quarter last year passed customs under a fought with incumbents for raw material. The
enough to compensate for the total loss of “processing with imported material” code, virus has thrown supply disruption, particu-
imports. implying it made no lasting impression on larly in key exporting countries such as Peru,
The semantic battle may have been won China’s domestic scrap market. into the mix.
but now the coronavirus is restricting both What the US used to ship to China it now This means the scrap gap will translate
domestic and overseas scrap supply further. sends to Malaysia, the hub of a new off- into stronger demand for refined metal to
Multiple mine curtailments due to quar- shore industry converting lower-grade scrap compensate for any loss of domestic “sec-
antine have simultaneously disrupted flows to Chinese import specifications. ondary” production and for a shift in input
of copper concentrate to Chinese smelters, US exports to Malaysia mushroomed mix by fabricators that use both scrap and
representing a raw materials double-wham- from 120,000t in 2018 to 221,000t last year, metal to manufacture products.
my for the country’s producers. according to International Trade Centre fig- As ever with scrap, the balancing effect
It is noticeable that among the measures ures. In 2015, the export flow to Malaysia will be hard to see or quantify, but Beijing’s
announced by the Government of Jiangxi totalled just 613t. recent changes of policy leave no doubt Chi-
province to support its local copper industry This is a redirection of lower-grade mate- na feels it needs to start plugging the gap.
is a pledge to revitalise scrap import quotas rial once destined for China or its back door
– Andy Home, Reuters
Page 28 JUNe 2020 aUSTRaLIa’S PaYDIRT
2020
BATTERY
MINERALS
2 November – Pan Pacific Perth
NEW DATE ANNOUNCED
copper graphite tin cobalt lithium manganese vanadium rare earths
SPEAKER HIGHLIGHTS:
Hon. Bill Johnston MLA John Prineas Matt Dusci
Minister for Mines and Petroleum Executive Chairman Chief Operating Officer
Government of Western Australia St George Mining Ltd IGO Limited
Joe Belladonna Scott Williamson Andrew Radonjic
CFO and Company Secretary Managing Director Managing Director
Western Areas Ltd Blackstone Minerals Ltd Venture Minerals Ltd
Mark Thompson Allan Mulligan Andrew Spinks
Director Executive Director Managing Director
Talga Resources Ltd Walkabout Resources Ltd EcoGraf Ltd
SPONSORS AND SUPPORTERS TO DATE:
www.batterymineralsconference.com
To present, exhibit or attend as a delegate please contact Namukale Nakazwe
on (+61) 8 9321 0355 or email [email protected]
mInInG seRVIces
Simplicity is key:
trust us
t may seem incongruous with detailed “The zero-based design teases out the teams’ requirements to fit in with man-
Iengineering design but for Mintrex Pty complexities and makes the project as agement goals.
Ltd engineers, simplicity is most often the simple as possible.” “It is always a balancing act scenario.”
key to success in mineral processing plant Coming together with simplicity is the This can become particularly challeng-
design. trust Mintrex builds with its clients. ing when preparing investment proposals
Mintrex has established itself as one of “Trust can be a rubbery concept, but for major brownfields projects.
Australia’s leading engineering consult- we know we have to build it because we “When someone has an optimisation
ants thanks not only to its ability to pro- want people to come back to us and ask or major plant upgrade project, it must
vide results for clients but to do so with for help again,” he said. be treated like a new investment,” Ken-
simple, cost-effective solutions. Mintrex pursues a trusted adviser mod- dall said. “That means making sure the
According to executive engineer Tom el which allows it to ensure outcomes are client gets the promised return on invest-
Kendall, simplicity and trust are key to aligned with the client’s best interests. ment. That is fundamental to any project,
Mintrex’s success. Kendall explained the trusted adviser but quite often these projects are driven
“Zero-based design means we must model relied on three areas – expertise, by people at site who are not only under-
clearly understand what the client objec- minimising conflict of interest and under- resourced, but may have limited experi-
tive is,” Kendall told Paydirt. “We try to standing of investment protocols. ence preparing project cost estimates,
achieve those objectives with minimum For Mintrex executive consultant Leon and economic evaluations. A trusted
capital expenditure. This means the de- Lorenzen, understanding those invest- advisor ensures an assessment of every
sign needs to be outcome-based, with ment protocols allows Mintrex’s trusted aspect can be incorporated in a project.
simplicity not complexity at its heart. adviser status to extend beyond the ex- The value for the company comes in the
“Engineering design is a team sport ternal relationship into the client company fact they can allocate capital with a rea-
and that team must gel. Everyone arrives structure. sonable idea of what it will really cost and
on a project with preconceived ideas, but “We sometimes become the link be- return, because someone is collating the
you must set an environment which ques- tween management and the operations whole picture for them.”
tions that because half of those ideas will team,” Lorenzen said. “Often you en- Providing such advice goes back to
be irrelevant to the job at hand and you counter operations teams with very differ- Kendall’s second point about the trusted
can add hundreds of thousands of dollars ent expectations from management. We adviser; minimising conflict of interest.
to a job. can guide teams to understand and align “Sometimes your answer ends up be-
Page 30 JUNe 2020 aUSTRaLIa’S PaYDIRT
Leon Lorenzen
ing “do you really want to spend that mon-
ey?”,” Lorenzen said. “The do-nothing
option is always the base case in our ap-
proach.”
This becomes a potential issue for or-
ganisations when offering project selec-
tion advice at the same time as offering
design and execution services.
“If we are advising a client to spend $10
million and aligning ourselves to win that
$10 million, there is potential for conflict
of interest; taking the trusted advisor ap-
proach minimises that conflict,” Kendall
said.
Mintrex has established itself as a nution or leaching circuit – and they need
leader in gold plant design in Western to upgrade them to keep the revenue go-
Australia and West Africa but is also see- ing.
ing increased activity in the brownfields “Once you get all those components
space. Lorenzen said the company had working together, you can have very ben-
completed several optimisation and de- eficial results.”
bottlenecking projects in the gold space Even projects not yet built can benefit
in recent years as companies look to take from adaptation. West African Resources
advantage of the rampant Australian gold Ltd wisely delayed project development
price. after finding new ore sources which would
“There are different reasons for optimi- fundamentally change mine scheduling
sation projects but it is rarely because the and metallurgy.
plants are underperforming, but rather the Lorenzen said it was important devel-
operating parameters have changed,” he opers and established producers were
said. “It may be that the ore source has fleet-footed in their approach.
changed from the original one or the pit has “It is not a straight line, if you change
progressed from oxide to fresh material.” ore sources, blends, etc. it has an impact
Even new plants often and you must apply those changes to
benefit from optimisation, reserve modelling, mine scheduling and
according to Kendall. metallurgy,” he said.
“Most orebodies start The WA junior gold sector has experi-
in oxide material and so enced several failures in recent years, but
can run up to 30% above none were the result of processing prob-
capacity, but can’t con- lems.
tinue to run above capac- “A lot of the failures were on reserves
ity as the harder ore is and mine scheduling. If you provide the
presented to the plant.,” engineers with a certain schedule and
he said. “If the grade is that changes, it will change everything,”
consistent that means af- Lorenzen said.
ter harder ore is present- Kendall believes such setbacks should
ed, gold production will not be viewed as a failure of industry but
drop. So, suddenly rev- rather part of its nature.
enue streams drop, but “It is a high-risk investment so there will
companies become very always been a certain amount of failures,”
used to that revenue, so he said. “However, the Australian industry
they begin looking for has a very good rate of success.
ways to keep it elevated. “The way to avoid failure is to have a
In trying to lift the capac- Plan B and implement it quickly. Good ad-
ity they begin finding vari- vice can also help”
ous bottlenecks – most
commonly in the commi- – Dominic Piper
Tom Kendall
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 31
mInInG seRVIces
M
Murray takes its reputation internationalurray takes its reputation international
The Murray Engineering workshop
hile international competition in the en- an example of how the company’s diversity in Pinjarra, WA
Wgineering services space continues to can add value to clients’ assets.
rise, Australian mining services companies “By managing sales, distribution, procure- system using 3D sensors to ensure precise
still enjoy a superior reputation. ment, hire and maintenance, we can main- drilling angles and optimum rock fragmenta-
International engineering groups have tain and guarantee costs,” he said. “We can tion – essentially removing the most vulner-
grabbed a market share in Australia thanks use our association with Byrnecut to collect able failure point in the harsh drilling environ-
to their low-cost bases but the expertise of lo- and analyse data from its 30 years of un- ment. The OptiME Shotcrete Optimiser uses
cal mining services firms means they remain derground mining experience to accurately 3D technology to measure and analyse the
the go-to option for more complex, special- assess and guarantee costs on mobile ma- application of shotcrete ground support in
ised work, according to Murray Engineering chinery. underground mines. According to Murray,
managing director Craig Lindsay-Rae. “It becomes a risk mitigation strategy for the Shotcrete Optimiser can deliver up to
“Australia has a leading role when it comes clients, one which some of the largest com- 50% cost savings by improving the quality,
to mining, particularly underground mining” panies in the world are using. By guarantee- efficiency and safety of shotcreting under-
Lindsay-Rae told Paydirt. “That ‘Made in ing costs and availability, clients have the ground.
Australia’ tag becomes the Rolls Royce for ability to reduce costs, improve performance The company continues to work with cli-
mining technology.” and decide on future investment because ents and partners to identify problems and
For Murray Engineering, success comes we own the assets.” generate innovative solutions.
from welding that expertise with a diverse set Underground mining is in the midst of a “The boom alignment and shotcrete tech-
of services, allowing it to fulfil multiple client revolution of sorts as automation and tele-re- nology were both client driven and we will uti-
needs. mote operation is rolled out across the sec- lise those partnerships to ensure we deliver,”
The strategy stemmed from the compa- tor. Lindsay-Rae said Murray was commit- Lindsay-Rae said.
ny’s opening of its consolidated workshop in ted to keeping pace with the innovation push The global COVID-19 pandemic has
Pinjarra, Western Australia in 2010. Having gaining traction throughout the industry. sparked another round of innovative thinking
committed to the new facility, the company “Innovation and the use of automation and and Murray is already on the move to negoti-
was faced with a choice of how to best make new technology is a distinguishing quality ate the restrictions.
the complex deliver a return. for us,” he said. “Innovation is not something “Restrictions on international travel has put
“We had to work out how to fill it up,” Lind- you can do in two days; it takes vast invest- pressure on our African contracts, but that
say-Rae said. “That meant either large-scale ment because not every innovation makes it has led us to innovate,” he said. “We have
repetitive work – e.g. fabrication or electrical to the field. We have used the solid founda- developed the RemoteME system where we
assembly – or something with more exper- tions of the business to invest in R&D and can talk over internet protocols, allowing for
tise. We realised that while we couldn’t com- attract the right people to implement it.” virtual project management of a site.”
pete with low-cost jurisdictions in the large- The major OEMs have led the move to- While miners across the spectrum are
scale services, clients were also looking wards autonomous mining over the last dec- eagerly embracing autonomous operations,
for other advantages such as time savings, ade, but Murray has carved a niche for itself Lindsay-Rae had a word of warning regard-
superior quality and increased flexibility. We in providing solutions which cross brands ing the perceived effect on employees within
decided to offer that across numerous ser- and operating systems. those remote jurisdictions.
vices under one company. Building a diver- “Clients like to have a choice of different “The take-up of autonomous equipment
sity of services while retaining the expertise, equipment in their fleet so don’t want to be has been extensive, but you have to be care-
all in one company, made us more attractive locked into one brand,” Lindsay-Rae said. ful how you encourage that,” he said. “There
to companies looking for low-risk solutions.” “The question is how you automate a single was a lot of scepticism when we introduced
Murray now boasts project work across site using multiple brands or types of ma- loading and tramming functions in the DRC.
Australia, Asia and Africa, covering services chines. If we had gone there and said it will replace
as varied as mechanical, electrical, control “People come to us to innovate different people and reduce costs it would have failed
systems, fabrication, pumping and equip- diagnostics across brands and if we can con- completely.
ment sales, hire and maintenance. trol the IP we can tweak and change things “Instead, once we explained that it would
Lindsay-Rae said Murray’s diverse skills- ourselves to suit individual clients. This allow people to develop new skills in oper-
set allowed it to take a more holistic view of means clients are not bonded to many years ating while reducing exposure to dangerous
a client’s needs. of extra subscription costs which come with environments and improving safety, and that
“Being a one-stop shop makes it easier for dealing exclusively with international groups. they are less likely to damage equipment,
our customers because we are integrated “So, it is often fine-tuning, interfacing and operators began to listen. Australia is lead-
throughout. That allows you to recognise automating further aspects of the machinery ing in that mining technology and what we
areas of their business where they can inno- cycle which people come to us for.” do attracts widespread respect in places
vate within the wider context,” he said. Murray is also leading the introduction of likes Africa.”
Lindsay-Rae pointed to Murray’s suite of new technologies. In 2019, the company de-
underground mobile machinery services as veloped AlignME; a jumbo boom alignment – Dominic Piper
Page 32 JUNe 2020 aUSTRaLIa’S PaYDIRT
The digital safety net
for tenement compliance
LandTrack has found its tenement
espite being the most basic and often only ronmental obligation monitoring and alerts management training courses
Dasset a company owns, resources firms to changes in tenement holdings. It has also increasingly popular
have a chequered history of managing their established a training programme to build new
tenement licence portfolios. and experienced tenement managers’ under-
Perhaps the most infamous example of standing of the role. LandTrack’s suite of products also provides
recent years came in 2005 with the Shove- These efforts have helped LandTrack high- productivity improvements for companies ea-
lanna saga which saw a Rio Tinto Ltd mining light the importance of tenement manage- ger to take advantage of such gaps. The Geo-
lease lapse over an iron ore prospect licence ment to a company’s entire structure. Search tracks changes to land uses and tene-
due to clerical and logistical errors. Before Rio “That is part of what we do; making sure or- ment holdings and alerts users to new ground
Tinto could rectify the situation, junior explorer ganisations understand why tenement man- available.
Cazaly Resources Ltd swooped, applying agement is so important, why it needs that “It is like the bipolar cousin of Tenement
for the licence itself. After a protracted battle, data and how it all fits together,” Whiteman Safety Net,” Whiteman joked. “Normally, you
then West Australian Minister for Mines, John said. could spend all day monitoring tenement
Bowler, reversed the decision and awarded Many companies choose to outsource their changes but using GeoSearch means you
the licence to Rio Tinto, citing public interest, tenement management to consultants but are alerted immediately when ground be-
but the story highlights just how precarious LandTrack’s strategic support officer Peter comes available.”
companies’ asset bases can be if their tene- Brammall, who has more than 30 years’ expe- LandTrack’s services have now expanded
ment management is not foolproof. rience in tenement management, believes this to tenement management training. Support
LandTrack Systems co-founder Justin von may bring unwanted consequences. and Training Officer, Mike Smith, said the
Perger has seen plenty of human errors in ten- “In using consultants, you are forfeiting initial practical course for newcomers had
ement management systems since launching company and project knowledge,” he said. spawned an array of specialist units.
LandTrack and its tenement software pro- “By keeping it in-house, it allows companies “We started with the Practical Tenement
grammes in 2005, but they are often com- to deploy a wealth of project history. Products Training course because we had identified
pounded by structural problems in companies’ are codified for a new person coming in, the there was hole in the industry training we
tenement management apparatus. business protocols are captured in the product could help fill,” Smith said. “As we began, we
“We haven’t yet come across a company itself and show the new tenement manager found the hole was even bigger than we re-
which didn’t have errors or discrepancies on, how they do what they do.” alised and so we set up specialised courses
for instance, tenement expenditure,” von Per- LandTrack’s software packages are de- for expenditure, advanced tenement manage-
ger told Paydirt. “Management is adept at signed to allow companies to manage their ment, agreements and environmental issues.”
identifying and understanding their company’s tenement compliance in-house while mini- Whiteman said the training had highlighted
major risk around things like safety or social mising the threat of human error. The com- another aspect of the tenement manager’s
licence, but when they are asked about the se- pany’s LandTracker programme is designed role; few people are specialists when they be-
curity of their tenement management – the ac- to protect, manage and track mineral title gin the job.
tual licences holding their assets – they have compliance, while the Expenditure Watch “Some companies make an effort to em-
no answer and quickly point to the tenement programme manages and tracks tenement ploy tenement managers while others train up
manager. There are parallels to safety compli- expenditure on individual licences. The Tene- someone within the organisation; a geologist
ance; it only takes only one safety incident for ment Safety Net programme prioritises tene- who doesn’t want to be in the field or an office
everything to fall into a complete heap. It can ments compliance, checks data and identifies manager,” she said.
be the same if you let a tenement lapse.” errors and omissions to mitigate risk in the Brammall expected such newcomers to be
LandTrack client relations officer Rachel licensing process. the target audience for the training modules
Whiteman believes there is a general lack of As with any risk mitigation strategy, it is dif- but was soon surprised.
understanding about the importance of tene- ficult to quantify exact cost savings but Bram- “We originally aimed the Practical Tene-
ment management in many mining and explo- mall said the potential was obvious. ment Management course at newbies but we
ration companies. “Solely on time saving and productivity im- soon found it attracted tenement managers
“There is a huge disconnect between ten- provements around due diligence and data with 14-15 years’ experience who got a lot out
ement managers and the accounts depart- entry, the software could pay for itself in 6-12 of it,” he said. “They enjoy the interaction be-
ment, for instance, because the accounts months,” he said. “But, when you consider the cause in their individual companies they are
department don’t understand how and why risk mitigation, it could pay for itself within a often quite isolated and as a result of the train-
tenement management is important to the week.” ing they have set up networks to talk to teach
company’s tenement management,” White- It can also be used to identify gaps in com- other.”
man said. “The tenement manager is often panies’ reporting, as Brammall has first-hand For von Perger, the success of LandTrack’s
working separately from the rest of the com- knowledge of. training programmes is proof the company’s
pany so communication is often vague and “We began using Expenditure Watch when holistic approach is working.
painful.” I was at Cliffs [Natural Resources Inc] and the “We have always believed if we were only
These systemic gaps in tenement manage- first-pass analysis revealed $2 million unas- providing tools we were not helping them at
ment has seen LandTrack adapt its services signed to any tenement. It just sat there doing all,” he said. “By providing the ongoing train-
from basic compliance tracking to tools for nothing, not contributing to any licences’ com- ing, we are giving them the actual support they
expenditure tracking, agreement and envi- mitment,” he said. need to perform their job.”
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 33
mInInG seRVIces
Getting real about exploration
ill innovation and technology ad-
Wvancements in the mining and ex- technology
ploration sector be left behind as a result
of the global health crisis?
“Unfortunately, what we do see in times
like this and through other down cycles, make those decisions. That has been
innovation does come down and become gaining traction in the industry over the
‘nice to haves’ and therefore people stop last few years. It is definitely something
their innovation practices,” IMDEX Ltd that can help a lot right now, which we
general manager product development are seeing even in these first few weeks
Dr Michelle Carey told Paydirt. [of COVID-19 lockdown] and I think we
“The additional challenge that we are will continue to see a strong pull through
seeing now is that companies don’t want for that,” Carey said.
people on site, they definitely don’t want While there has been a strong explo-
people on site who are nice to have, ration focus on accessing real-time data
which means people embedding new and increasing range of scanning equip-
technology on site expose companies to ment now available, Carey said there
an element of risk they’d rather not have.” was a push to further capitalise on the
There remains, however, a thirst for sophistication of communications, data
tools which help people continue with storage and cloud technology to help
day-to-day tasks while in isolation, high- with improvements across the mining
lighting the importance of maintaining in- chain.
novation. “There are far more sophisticated
“Anything within this space that helps down-hole sensors that have appeared,
remote working creates the possibility of which have all become connected sen-
momentum behind technology and inno- sors. Increasingly, we are seeing the Michelle Carey
vation as people are forced to work in a idea that data can be pushed up into the
different way,” Carey said. cloud and made live to people. That pro-
Imdex’s IMDEXHUB-IQ enables data gression from smart sensors to connect- drill bit and automation of the drilling pro-
flow between field and office, or living ed sensors, not just in geoscience, but cess has been proven at the operational
room, delivering the ability to access in- across mining with regards to sensors level.
formation in real-time. on trucks, rocks, etc has been an overall “We are seeing a few people dabble
For example, the instant transfer of growing trend,” Carey said. with automation of exploration drilling. I
drilling information from rig to desktop IMDEX’s vision is to have all its geosci- think we will see more of that because it
has helped companies with their explo- ence sensors connected to cloud tech- is a significant safety risk. It is one of the
ration decision-making process in real- nology enabling for fast, easy access to biggest risks we can take out, so I think
time. data “anywhere, anytime” allowing com- that automation trend we’ll see more and
“You can be anywhere you want, and panies to test more targets and/or pro- more as we go along,” Carey said.
the quality of the data can be trusted as viding the opportunity for resources to be “For example, Wallis Drilling has been
well, you can see the metadata behind defined quicker than in the past. tasked by guys in the Pilbara to try and
it and you can confidently sit there and Of course, everything starts with the automate parts of the RC drilling process.
As we often do in the space, our part to
play is the provision of data. If you are
The availability of real time data has meant increased analytics going to automate something you really
on data and created the desire for instant information
need all the data available to automate
it. We see partnerships where we gather
all the data, deliver it back to the drilling
companies, which allows them the data
to do the automation bit.
“Drilling fluids are also a big part of
what we do and that is an automat-
able process, too. We have started that
journey with data gathering using our
MARTA system, which records fluid pa-
rameters in real time and delivers them
back. If someone automates the rig, we
automate the fluids and all of it starts to
work as an automated system and not
just the drill rig itself,” she said.
– Mark Andrews
Page 34 JUNe 2020 aUSTRaLIa’S PaYDIRT
The new MinVu Shift Manager app is set
to transform the way miners collaborate,
receive and analyse information
Big shifts made
by RPM Global
s mines begin to run on limited re- to help with the app’s implementation. starting to embrace greater mobility with-
Asources, accountability is going to At the time of print, RPMGlobal was in its workforces.
be essential in making sure schedules working remotely with Anglo American “Some of that mobile work around our
remain intact. on a series of onsite and offsite training XECUTE product [short-term scheduling
“You really have to make sure that the programmes. solution]; we thought ‘where are you go-
right work is being done at the right time. “We went to one of the Anglo sites in ing to use such a complex, mobile engi-
If you are not working the plan the way it Chile and they understood what we were neering product?’, but Freeport [McMo-
was actually designated or you are not proposing was going to change the an- Ran Inc] loved this mobile application, as
aware of the things that impact that plan, cillary works onsite. They already have it could be used on the bus on the way
that has a great impact on your ability to the modular dispatch that controls truck to work,” RPMGlobal’s chief technology
deliver work in these times; flexibility and shovels and drills, but this solution en- officer Paul Beesley said.
visibility of that work is key,” RPM Global sures they are doing the right work at the “That then allows us to know exactly
operational data product specialist Ian right time with their ancillary people and where we got to on the shift last night
Jones told Paydirt. making sure that is visible to their people and planning for what needs to happen
Given the extreme circumstances cur- in dispatch so they don’t overload,” Jones on the current shift can get under way
rently being experienced, it is apt that said. as soon as they reach the office; I never
RPMGlobal’s MinVu Shift Manager app “With the remote aspect of their work, thought of it being used like that.”
has been released recently to help com- the people we are working with can rec- It is through working and partnering
panies execute plans to spec. reate solutions to keep their people em- with clients like Freeport that RPMGlobal
RPMGlobal’s new mobile interface ployed. One customer we were talking to continues to thrive.
merges MinVu and MinVu Shift Manager, is taking their supervisors offsite to run “I think some of that innovation is part-
which allows different departments and the control room. This software allows nering with customers, looking into the
personnel complete visibility of equip- them to do that because it is web-ena- future to see what the world might look
ment and equipment status, underpin- bled, can be used internally or externally like,” Beesley said.
ning the ability to plan intra-shift activi- and it allows them to deliver on what they “The thing I love about pre-sales work
ties and enhance connectivity between didn’t think they could in these challeng- is talking with customers, they are really
rosters all via an app. ing times.” thinking about how they want to use the
MinVu Shift Manager is completely Coronavirus-related travel restric- product in 5-10 years’ time, so they re-
web-enabled and can be accessed via tions will impact FIFO operations in the ally try and stretch our imagination about
various devices and used anywhere, months ahead, despite mining consid- what you can and could potentially do.
anytime. ered an essential industry, and the avail- Existing customers always have a prob-
Queensland mining companies have ability of technology and apps like MinVu lem today that they want you to solve im-
been early adopters of the app and there Shift Manager will be pivotal in providing mediately, but the new customers start
is growing interest from global major real-time data straight to decision-mak- challenging the norm and what you are
Glencore. ers wherever they are. doing.”
Anglo American plc is also keen, with The shift away from the desktop was – Mark Andrews
Jones travelling to Chile several times already occurring before the lockdown
before COVID-19 restrictions took place came into effect, with industry leaders
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 35
mInInG seRVIces
Q A
&
After a successful career with Olympus, Marcus Lake
has branched out and launched Phoenix Mining
Technologies. Paydirt caught up with Lake recently to
find out which trends he sees as shaping and changing
the mining sector in the next decade.
Marcus Lake is managing director of
PD: How have mining PD: What is Phoenix distributing Phoenix Mining Technologies
technologies changed in the last at the moment?
10 years? ML: Our main client is Geotek [UK]. They PD: Has there been a favourite
ML: In my view innovation over the last have been very successful in the soft rock mining story that you have
10 years has been slow. Yes, the current [petroleum and academia] markets and are followed?
available technologies have become faster now pivoting into the mining industry. We
and more accurate, but we haven’t really have signed a global exclusive agreement for ML: I would have to say that the most
seen anything new in the market; something the sales and marketing within the mining beneficial project that I have worked on
that the entire mining industry looks at vertical for their analytical equipment. Their was with Gold Fields Ltd. If there was one
and says “wow we need that”. We do now new product is the BoxScan – a multi- company that pioneered the application
have multiple scanning technologies and sensor device combining Olympus pXRF, and use of pXRF, it would have to be Gold
automation technologies and in addition to ASD Terra Spec, magnetic susceptibility and Fields. Gold Fields’ geoscientists at the
this, over the past few years we have seen high-resolution line scan photography. We time understood the limitations of pXRF
a strong move towards data science; thus have also been engaged by Mining Plus to regarding actual gold analysis. Thus,
innovative software packages that can assist with the development of an innovation they worked around these for analytical
provide customers with a useful derivative and technology strategy. solutions required for gold exploration. It
information from the current data sources Later this year we will be the global partner was this company which really provided
they have. Phoenix Mining Technologies for the new low-level gold technology out of this technology with the foothold it now
is taking the most innovative products, Perth, Portable Parts per Billion (PPPB). enjoys. We are pleased to still be working
housing them under our agency and allowing with some of these people on Phoenix’s
customers to choose their digitisation PD: What has been the most new suite of technologies.
strategy. popular piece of equipment you PD: What will the mining sector
PD: Is there enough being invested have promoted to industry during look like in the next few years?
by mining companies in R&D? your career?
ML: This is my 13th year within the mining ML: I believe that the we are at a major
ML: Mining companies for a long time have turning point for the entire industry. There
had R&D departments and I believe that the technology business, for most of this time has been a lot of chat about the digitisation
dollars spent has been on [automating] the I was involved with Olympus and their and automation of this business. This
trucks and shovels side of the business. Not analytical equipment, pXRF and pXRD. So talk is warranted as we are one of the
enough money has been spent on extraction naturally I am going to say that the pXRF has last industries to modernise. With new
technologies. The orebody in the ground become the ultimate technological success technologies, in addition to the future
is a company’s asset and I believe this is story during my time. In all seriousness, technologies, we will see people’s roles
where more R&D money should be spent. since starting my career in the business changing. Geoscientists will be able to
R&D and innovation within the technology we have seen pXRF go from a tool that was be scientists again, instead of project
space is being funded and developed by discounted by a fair number of industry managers and there will be many more
the companies that make this equipment professionals to a must-have analytical new jobs created in data science and
and software. They are then delivering new instrument that is now used within all technology. My point of view, from the
products, releasing them into the market sectors of our business. It is somewhat of a technology side, is that the future is bright
and measuring the uptake. natural fit for us to be working with Geotek and believe this augers well for the entire
and PPPB. We have an ongoing commercial minerals extraction business.
relationship with Olympus, as both of these
technologies require a Vanta pXRF.
Page 36 JUNe 2020 aUSTRaLIa’S PaYDIRT
Guiding the flow of the avalanche
of incoming data
Pure Storage’s FlashBlade technology
offers companies an efficient, effective
way of capturing, collating and storing
ith hundreds and thousands of sen- the data, collecting it and then collating it data ready for use
Wsors on even a standard mine, data and there is also the cost of actually stor-
capture, processing and storage is loom- ing that data using public cloud.”
ing as a critical component in resources To counter those limitations, Pure Stor- are working with a large miner who uses
operations in the coming decade. age has developed its FlashBlade tech- Pure Storage’s flash-based technology to
The mining sector has undergone rapid nology which can handle tens of billions run everything from automated haulage
digitisation in the last five years with infor- of files and objects. to process control systems.
mation being captured at every level of an “We have been working with a Perth- “This is where the simplicity of the
operation, from underground jumbos, to based group which collects a lot of in- technology becomes more important be-
haul truck brake pads and canteen sup- dependent seismic data,” Jobbins said. cause it has lower power requirements
plies. Mining companies are producing “By leveraging FlashBlade technology and very few moving parts. Being able
billions of data points every day, but many to process data at incredible speed, that to replace parts with a remote worker on
are still grappling to how to take advan- group has found problems around ingest- one of those sites becomes important.
tage of much of this data. ing data were taken away, and they were The miner has better logistics to get com-
“Many organisations in the resources able to do it at 17 GB/second, 30 times ponents to these sites better than any IT
sector struggle to hold onto data and put faster than other technologies.” company could.”
it to use. They capture and store it but FlashBlade also allows users to simpli- Jobbins said Pure Storage’s mantra of
are not too sure how to process,” Mark fy the cleansing and preparation of data, reducing complexity meant it could pro-
Jobbins, vice president and field chief meaning the process of data sharing is vide a high level of technology innovation
technology officer for Pure Storage Asia sped up. while keeping it incredibly simple to use,
Pacific told Paydirt. “It may take 12-18 “Using advanced analytics to do that creating greater operational efficiency
months to do something useful with that can give companies a glimpse into data and effectiveness even in core business
data and that is staggeringly long. Many almost in real time, instead of waiting 6-12 applications.
companies are looking to put the data to months to make what could be business- He said the company’s DataHub tech-
greater use and use it almost in real time. critical decisions.” nology could also allow companies to
The amount of data will continue to grow This speeding up of data interpretation break down the silos which form over-use
exponentially and those who can harness becomes particularly important in remote of information.
the power of that data will be the compa- locations. Jobbins said the FlashBlade in- “With those large datasets, it becomes
nies which will thrive.” frastructure also gave miners benefits in more important to share information ef-
The constraint usually comes in captur- this regard. fectively through the different stages of
ing and correctly storing the data. Jobbins “The resources industry offers unique the use,” Jobbins said. “Silos are usu-
said public cloud technology had limita- environmental challenges, but companies ally driven by applications or storage; it is
tions when dealing with massive data have taken advantage and are putting our probably the same underlying data being
sets. technology into remote mines in the most used across different applications.
“There are constraints about ingesting demanding of conditions,” he said. “We “Through our DataHub, companies are
able to hold the same information on the
same technology and allows for different
groups to share the information between
the different applications and stages.
Simplifying how that data is shared be-
comes important. It means companies
can focus teams onto higher value work
rather than working out how to export,
copy, re-import and protect this data.
They can get into using it much quicker,
instead of securing it.”
– Dominic Piper
Technology such as seismic is generating billions of data points
for companies in oil and gas and now hard rock mining
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 37
soutHeRn stAtes
Here come
the North
Americans
ictoria’s mining and exploration sector tain, Providence, Timor, Avoca and Moorm- chuk said.
Vlacked spice until Kirkland Lake Gold Ltd bool. “I think it is going to become a hotter and
started to unravel the potential of the Foster- Motton was largely behind compiling tene- hotter camp based on the success of Kirkland
ville gold mine, 20km from Bendigo. ments to fly under the Fosterville South guise Lake at Fosterville, but companies like Foster-
An original Australian gold rush town, Ben- as far back as 2015, with the application ville South raising this capital means there will
digo’s legacy as a historic gold mining centre process for Lauriston, a 600sq km package be a lot more money going into the ground via
appears far from complete given the resur- directly south and adjacent to the Fosterville drilling. With more capital in the ground you
gence of activity close to town, which has mine, starting in 2017 and completed mid- are going to end up with more results, more
transpired into an exploration boom for the 2019. interest and more activity; I think that bodes
State. “We happen to know Rex [Motton] through pretty well for Victoria.”
And, if Fosterville South Exploration Ltd a variety of other endeavours internationally Fosterville South hopes to put some early
chief executive Bryan Slusarchuk is on the over the past several years. Based on our ex- runs on the board at Golden Mountain, with
money, Victoria’s attractiveness as an explo- perience with him he trusted us as a public a two-part drilling programme in progress at
ration destination may long continue. company group to work with and access the the time of print.
Slusarchuk introduced Fosterville South to capital markets,” Slusarchuk said. The company has planned 18 holes for
the TSX-V in April and within a month of list- Much of the team had built a North Ameri- 2,215m comprised of shallow percussion
ing the company had expanded its interests can reputation with PNG-focused K92 Mining and diamond drilling targeting deeper zones
in Victoria and seen great demand for a $C10 Inc. of the central mineralised section at Golden
million private placement led by Claurus Se- “The listing in North America was put in Mountain.
curities. place because that is where our network is. Slusarchuk said permitting, government
In fact, there were offers for double the We had a fair amount of success with K92 dealings and access to ground had been
amount Fosterville South had sought to raise Mining over the past few years. We have a smooth, even in times of tighter intrastate
and a figure of $C15 million was set to close fairly large base of precious metals investors travel restrictions in the State.
at the time of print. in North America where almost every firm, The ease of doing business will no doubt
Speaking to Paydirt from his Vancouver every bank that is involved in the mining sec- play a part in Victoria’s attractiveness as a
base, Slusarchuk said taking the Fosterville tor seems to cover Kirkland Lake. Therefore, mining jurisdiction, however, how the Govern-
South story to institutional investors during there is a lot of familiarity in North America ment handles the State’s shot to prominence
PDAC in early March meant significant mar- with Fosterville. We were fortunate early on to in the resources sector, particularly in a post-
keting of the company had been completed bring Eric Sprott on as an investor. COVID-19 world, will be closely watched.
prior to the COVID-19 global clampdown. Ross Beaty joins the likes of Sprott as a Victoria’s gold producers were welcomed
“By the time we got listed and trading we significant investor in Fosterville South, and to 2020 with a new 2.75% royalty, which
had full access to our sites in Australia [Vic- Slusarchuk expects a growing number of his amounted to $US7.2 million or $US47/oz gold
toria]. We were able to move towards drilling Canadian peers to be en route to Victoria. sold to AISC in Q1 2020, as reported by Kirk-
at Golden Mountain and the fundraising we Kirkland Lake’s average production head land Lake at Fosterville.
were able to do was because we had seen all grade in excess of 30 g/t gold for the best Victoria’s gold royalty has a negligible im-
of these institutional investors at PDAC; it was part of 2019 is more than enough assurance pact on the exploration sector and while Slu-
a fresh story for people and we didn’t need to for Canadian investors to back the next best sarchuk doesn’t know how a near-term pro-
get on a plane and introduce it,” Slusarchuk thing. ducer would assess the situation, he believes
said. “People have watched Kirkland Lake’s suc- explorers from North America would still view
While the administration and capital flows cess and they have seen our launch which the State positively as investor sentiment
are taken care of by Slusarchuk and co. has garnered good support from Canadian starts to drift back to precious metals stocks.
across the ponds in North America, the com- institutions and large investors like Eric Sprott. “I think over the past few years we have
pany’s down under contingent is strong with I would guess that you are going to see more seen a really subdued environment for the
the likes of Rex Motton (chief operating of- Canadian companies in Victoria in short or- mining stocks in North America, but over
ficer), John Lewins (director) and Doug Kirwin der. We have had companies reaching out several months there has been an increase
(technical advisor) close to Fosterville South’s to us already asking about the state of play in in interest and there’s no doubt that over the
suite of projects – Lauriston, Golden Moun- Victoria and what our thoughts are,” Slusar- past couple of months there’s been huge in-
Page 38 JUNe 2020 aUSTRaLIa’S PaYDIRT
There has been no shortage of interest
in Victoria’s gold scene since Fosterville flourishes
Kirkland Lake stunning revival of the
Fosterville mine
amid COVID-19
terest coming back. That has been driven by he Fosterville gold mine in Victoria has in March and April. Some of those activities
precious metals, but not as much interest in Tcontinued to churn out some impressive resumed last month.
base metals at this point; interest and appetite production numbers despite Kirkland Lake Makuch said the company planned to
for gold and silver remains very strong,” Slu- Gold Ltd withdrawing its guidance for 2020 continue investing heavily in exploration
sarchuk said. and the next three years while the Canadi- at Fosterville and its two Canadian opera-
“The precious metals funds are getting in- an-based company assesses the impact of tions.
flows of capital, therefore, the specialist inves- COVID-19 on its operations. “Fosterville performed extremely well
tors in the space all of a sudden have more Production at Fosterville has continued in Q1 and predictions for Q2 seems like it
and more capital to deploy. At the same time largely unaffected by the global health pan- will continue to go like that,” he said. “Defi-
as the precious metals funds are getting in- demic, with Kirkland Lake reporting out- nitely exploration success is a key driver to
flows, we are starting to see generalists start- put of almost 160,000oz at a cash cost of what’s going to happen at Fosterville.”
ing to dabble or nibble in the gold space and $US126/oz for the March quarter. Kirkland Lake produced 330,864oz
that is quite exceptional. We have had quite This contrasted reduced operations at across its three operations in Q1 2020,
a lot of incoming enquiries from generalist Detour Lake and Macassa in Canada, with the newly acquired Detour Lake con-
investors in places like New York, Toronto where the company initiated steps to cut tributing just two months worth of gold out-
and these generalists it seems have taken back the number of people at both sites in put to that total.
a macro view that they want some exposure a bid to stop the potential spread of COV- Operations at Macassa and Detour
to gold, but they haven’t been involved in the ID-19. Lake were being progressively ramped up
gold space for a while, so right now they are Speaking on a conference call last month from the start of May after being partially
just searching for good quality deal flow.” to discuss the March quarterly results, Kirk- shutdown through April.
Having introduced a gold stock to market land Lake chief executive Anthony Makuch Exploration work is also resuming at
and undertaken a capital raising, Slusarchuk said the decision to withdraw guidance was those mines after all drilling programmes
is as qualified as anyone in the junior sector to consistent with what other gold producers were suspended late in the March quarter
comment on the state of the market in North were doing and there was no strict timeline as the reality of the COVID-19 pandemic
America and the burning questions of wheth- on when the expected output from its three began to set in.
er the company is capable of replicating Fos- mines would be reissued. Makuch praised the workforces at each
terville’s success and if it will seek exposure “When we discuss COVID-19, we don’t of the company’s three operations for their
on the ASX. talk about returning to normal because we efforts during “a challenging environment”
Slusarchuk said it made sense to seek are not sure what normal will be in the fu- in Q1 2020 which yielded net earnings of
another listing on the ASX at some point, ture,” Makuch said, $US202.9 million and adjusted operational
while with three potential high-grade projects “There are a lot of moving parts. There cash flow of $US302 million.
near Fosterville, the company has a good a is no question that there will be some im- “We maintained our industry-leading fi-
chance as any to latch onto another super pact on how our business is done. This is nancial strength and we returned capital to
deposit in Victoria. a key reason why we have suspended our shareholders – probably the highest level
“We are adjacent to and contiguous with three-year guidance. The world is going to of capital returned to shareholders in a
Kirkland Lake’s Fosterville tenements, we be a different place because of COVID-19, quarter of anyone in our industry – and we
have the big regional structures running particularly if there are additional waves of did this through extensive share buybacks
through Lauriston. We have gold with anti- the virus that occur.” and by doubling our quarterly dividend,” he
mony in spades at Lauriston and really impor- Fosterville’s output for the March quarter said.
tantly at Lauriston there has been significant largely fell into line with the high expecta- “We also took steps during the quarter
hard rock production in excess of 230,000oz tions after record production of 192,000oz to streamline our portfolio to focus more
gold north of 20 g/t head grade,” Slusarchuk at a remarkable average grade of 49.3 g/t fully on our three cornerstone assets. We
said. gold was achieved in the December quar- will continue to invest aggressively in ex-
“Lauriston has never really had the big ter. ploration and believe with Macassa, De-
modern systematic look via the drill bit and Production at Fosterville, about 20km tour Lake and Fosterville we have three
has never been tested at depth. We think north-east of Bendigo, in Q1 2020 was up of the most exciting exploration projects in
there is big potential there.” 24% on the output in Q1 2019, including a the industry.
Slusarchuk also added that it was too early 46% improvement in the average grade to “We’re cautiously optimistic that condi-
to consider any corporate scenario with Kirk- 42.4 g/t gold. A focus on mining at the high- tions are improving in terms of COVID-19
land Lake given how close the two parties grade Swan zone has been credited for this and we’re starting to resume work in key
find each other. achievement. areas. This will be a gradual process ex-
“Being a Canadian company in the pre- The AISC of $US313/oz also included for tending throughout the year. We also rec-
cious metals space, we have some common the first time a new royalty to the Victorian ognise that some changes may become
investors like Eric Sprott, so we are definitely Government on January 1, accounting for the new normal and with everything we
on the radar of the realm of those sorts of $US47/oz or $US7.2 million. do, the health and wellbeing of our work-
people, but it is too early to say what might While production at Fosterville has con- ers, their families and our communities will
or might not happen in terms of any type of tinued uninterrupted through the pandemic, remain our top priority.”
corporate synergy,” he said. work on a new ventilation system and other – Michael Washbourne
surface infrastructure projects were consid-
– Mark Andrews
ered non-essential and halted temporarily
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 39
soutHeRn stAtes
Renison back in vogue at Metals X
asmania’s Renison tin mine has re- tened a little bit in pricing but it hasn’t the metallurgy improvement programme,
Temerged as the lead asset in the Met- been a major downturn in tin. So, a very, mobile equipment rebuilds and the Area
als X Ltd stable for the first time in almost very good quarter given the backdrop of 5 mining optimisation study. Increased
a decade. COVID-19 and we see that continuing go- mill throughput rates and recoveries were
Despite being Australia’s largest source ing forwards.” also observed.
of tin, Renison has taken on a supporting During the March quarter, the Renison Positive progress at Renison will be
role at Metals X in recent times following resource was increased by 8% to 18.54mt welcome news for Metals X shareholders
the acquisition of a suite of West Austral- @ 1.54% tin for 285,100t, representing at after a difficult end to 2019, with opera-
ian gold assets in 2013 and the Nifty cop- least seven years of ongoing operations tions at Nifty suspended and the compa-
per mine three years later. in Tasmania’s north-east. ny’s board and management team over-
Shortly after the purchase of Nifty, the A mining optimisation study on the hauled in quick succession.
gold portfolio was spun out to form West- higher-grade Area 5, including an up- One of the first decisions made by new
gold Resources Ltd and copper became dated life-of-mine plan, is due this month. chairman Patrick O’Connor and his board
the prime focus for Metals X. Metals X is also anticipating increased was to mothball Nifty – in WA’s Paterson
However, with Nifty now on care-and- production from the key ore source in the province – and commission a strategic
maintenance and its immediate future second half of 2020. review of the company’s copper division.
unclear, the new-look Metals X board “If you look at the history of Renison, it’s Spreadborough, who was formally ap-
and management team have turned to its been a good, solid, consistent performer pointed chief executive in March, said the
50% stake in Renison as a key pillar in the for Metals X,” Spreadborough said. copper review was on track to be deliv-
company’s rebirth. “We’re doing more work on Area 5 and ered this month and all options were on
Solid production numbers from Reni- other exploration, so maybe that mine life the table.
“It’s probably forgotten by many peo-
ple that Nifty as a mine itself has over
600,000t of copper in the resource and
the [nearby] Maroochydore project has
over 400,000t of copper, and then sur-
rounding that is a large suite of tenements
which are highly prospective,” he said.
“We’re looking at everything from total
sales, to JVs, to us taking it on board and
restarting some of the businesses. For
our shareholders, that announcement in
June will really be important because that
will give them a flavour of how we can
take Metals X forward given that last year
was a pretty tough year.”
Spreadborough is also keen to land
a strategic partner for Wingellina, the
world’s largest undeveloped nickel later-
ite project, which straddles the borders
of WA, South Australia and the Northern
Territory.
son for the March quarter appear to justify will grow, but as I said it continues to be Minimal work has been done on the pro-
that decision. Output of 1,740t tin-in-con- a consistent performer, delivers cash flow ject since a DFS was completed in 2008,
centrate was 5% higher than the previous to the business and it is, in terms of tin although recent infill drilling has identi-
quarter, ensuring production remains on assets around the world, a quality tin pro- fied two potential higher-grade starter
track to meet the 7,100-7,300t guidance ducer. pits which Spreadborough believes has
for FY2020. “Our concentrate is well sought-af- opened the door for Metals X to resume
Newly installed Metals X chief execu- ter; we don’t have any dramas selling it its search for a development partner.
tive Mike Spreadborough said the March through Malaysia and Thailand. We are “I think it’s a very good time in the mar-
quarter results were particularly impres- really well supported by our smelters who ket to go looking for partnerships,” he
sive considering what was playing out in are continuing to take concentrate, so said.
the background. that’s a positive and we’ll keep up that op- “Nickel will continue to be a big element
“Despite all the impact we’ve seen erational focus going forwards.” as we go forwards in the battery market.
around the world with COVID-19, Reni- The company’s 50% share in Renison The world is going to be short of nickel
son wasn’t impacted at all by either sick- (the remaining interest is held by Yunnan and Wingellina, with its high grade, really
ness on site or people logistics, and con- Tin Group of China) generated EBITDA of comes out as one of those early options
centrate delivery to our customers was all $3 million for the March quarter with net that can be brought to the market.”
very, very good,” he told Paydirt. cash outflow of $1.5 million. Metals X said
“In the backdrop to that, tin has sof- that reflected its continued investment in – Michael Washbourne
Page 40 JUNe 2020 aUSTRaLIa’S PaYDIRT
Lenigas laces up for Tassie tilt
ot many would choose Tasmania as a cility, as part of a strategy to refinance debt per parts of the orebody, which don’t form
Ngo-to mining and exploration destina- raised to start mining and processing at part of the JORC resource and about 180m
tion, but then again not everyone views Hellyer, was agreed by NQ and its subsidi- down vertical. We’ll obviously be making
things through the same lens as NQ Miner- ary Hellyer Gold Mines Pty Ltd. a beeline for the old workings to see if we
als plc chairman David Lenigas. At the time of the debt refinancing agree- can find some reasonable tonnage there to
Last month Lenigas told Paydirt the reg- ment, Lenigas said Hellyer was performing start putting into the mill. Once the tailings
ulatory regimes in some Australian states, as expected and the support from financi- are exhausted, which gives us some cash
including Western Australia, were too cum- ers was a show of confidence in what NQ flow, it gives a chance to get the decline
bersome. was doing in Tasmania. down to connect to the 430m main decline
“I find Tasmania’s regulatory side a lot Since then, NQ has progressed its ac- at the bottom of the shaft.”
more proactive towards getting something quisition of the Beaconsfield gold mine and Of course, Lenigas is factoring in poten-
done that suits both parties,” he said. “If I recently announced a measured, indicated tial time lags to get things approved and
had a choice of a project in Tasmania or and inferred resource of 1.45mt @ 10.3 where funds will be allocated as everyone
WA right now, I would choose Tasmania as g/t gold for 483,000oz plus an additional adjusts to operating in COVID-19 condi-
a better place to establish a mining opera- 67,000oz gold from Tailings Dam 1 at the tions, however, with a “fair headwind” it is
tion.” historic operation. possible gold from Beaconsfield could be
Lenigas’ recent experience in WA includ- NQ was finalising due diligence on Bea- produced later this year or in early 2021.
ed the chairmanship of Artemis Resources consfield – 200km by road from Hellyer Most will remember the gold mine for
Ltd until February 2019, while he currently – when Lenigas spoke to Paydirt and he the devastating collapse in 2006, which
serves Southern Hemisphere claimed the life of one worker,
Mining Ltd (Chile) as a non-exec- and Lenigas will call upon his ex-
utive director. perience as a mining engineer to
Therefore, he is well versed on see Beaconsfield into a new era.
how the ASX works, but for now “I think there is a bit of re-
the company’s Tasmanian as- thinking to be done,” he said.
sets will fly under the NQ Miner- “All mines have seismicity. The
als banner listed in London and deeper you go, the more brit-
the US. tle the rocks and you are going
“We have a listing in the States to end up with mining-induced
and soon to be listed in Europe, seismic activity. It is a new thing
whether we choose at some people are focusing on around
point to float off Beaconsfield I the world as mines get deeper.
don’t know,” Lenigas said. “From a Beaconsfield per-
“It gets mentioned from time to spective, there was a lot of atten-
time, but our priority is to develop tion on big development drives
[the Beaconsfield gold mine] un- NQ Minerals aims to put Tasmania back on the map as a and headings. When you are
der NQ. We have a very good mining jurisdiction mining something that is not nec-
operation down there at Hellyer essarily 5-6m wide and you have
where we are reprocessing tailings and that hoped to have completed the formal pro- got 5m access drives and 50t dump trucks
is a very long-life operation. We’re doing cesses of the acquisition with the State’s and 5 cubic metre loaders driving around
lead-zinc concentrate very effectively, we Mineral Resources Tasmania (MRT) de- people tend to over size things. There’s a lot
are ramping up production there at the mo- partment this month. of open stoping issues around the way Bea-
ment. Included in NQ’s due diligence will be a consfield was and I think when we get back
“Over the next couple of years, we will full mine plan and the company’s strategy into mining it the whole concept of ground
look at bringing our gold-silver circuit in, for restarting production at Beaconsfield, support is going to be key.”
which will extend the mine life well beyond which Lenigas suggested would involve A successful tilt at Beaconsfield, as op-
the 10 years we are looking at there. We costs of less than $10 million to bring the erations at Hellyer start to ramp up, will no
have just picked up all the underground plant back online with all the “bells and doubt put NQ on a good footing with the
rights at Hellyer, which has 1.25mt already whistles” you would expect in a 2020 de- Tasmanian Government and provide impe-
at pretty high-grade lead-zinc-gold-silver. sign. tus for the company to pursue further devel-
We’d like to be in exploration mode there at “Estimates are that it will take 4-6 months, opments in the State, including the 25mt @
Hellyer with a view that we re-open Hellyer.” so once we get the deal moving through the 0.6% nickel and 0.05% cobalt Barnes Hill
The March quarter saw NQ produce MRT the priority is to get the plant up and project in the Beaconsfield region.
8,127t lead and 4,609t zinc concentrate in going. There is some potential for some “You can centralise a lot of the top corpo-
addition to 1,081oz gold and 230,441oz sil- early feed into the plant from Tailings Dam rate admin in northern Tasmania to service
ver (payable precious metals credits) from 1, which we have put a couple of scout both [Hellyer and Beaconsfield] operations,
Hellyer, where by the end of the current holes into. The metallurgical data indicates which gives you quite good cost savings.
quarter the operation is expected to be run- that there is 67,000oz in there and we need There are another couple of projects in
ning at 122 tph, up from 110 tph. to work out what type of dirt we have avail- Tasmania that we are looking at, which are
To the end of 2019, gross revenues from able, that is easy dirt whilst we look at put- quite significant, but we have to tick these
Hellyer totalled $58 million since operations ting in a 3.6km decline which will probably things of one by one,” Lenigas said.
started in 2018. In March, a definitive term take 1.5 years,” Lenigas said. – Mark Andrews
sheet with Traxys Group and a European “We might get a bit lucky because the
resources bank for a $US60 million debt fa- decline is going to run fairly close to the up-
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 41
AFRIcA
Staying true to the cause at Tulu Kapi
he demographics and cli- have it now than when you
Tmate of Ethiopia – at 110 have 1,000 people on site,”
million people Africa’s sec- Anagnostaras-Adams said.
ond most populous country “The country was in a
– meant coronavirus had yet [military] state of emer-
to grip the East African na- gency for three years which
tion when Paydirt spoke to didn’t help and now there is
Kefi Minerals plc executive a dramatic push for change;
chairman Harry Anagnosta- COVID has given us a
ras-Adams recently. smack in the face so it has
In fact, at that stage there been very frustrating for the
were only three reported company, community and
COVID-19 related deaths in shareholders that we can’t
Ethiopia (zero reported cas- get the show on the road as
es near Tulu Kapi), however, quickly as we’d like, particu-
as the country’s borders larly with the gold price go-
remained open to arrivals, ing so well.”
subject to mandatory 14 If widely tipped forecasts
days quarantine upon land- ring true and gold continues
ing, it will soon be known on a steep upward trajec-
how effective the Govern- tory, TKGM stands to lap up
ment’s preventative meas- the riches once in produc-
ures have been. tion at a designated start-
A state of emergency re- up rate of 140,000 ozpa
lated to COVID-19 was an- gold over seven years at
nounced on April 8 and is $US800/oz from the open
another impost on a country pit reserve of 15.4mt @ 2.1
just starting to emerge from g/t totalling 1.1 moz.
a three-year period of politi- Underground opportuni-
cal turbulence. ties lie in wait at Tulu Kapi,
Therefore, it has hardly however, given the journey
been an ideal setting for a to breaking ground, nailing
would-be gold developer the maiden gold pour will be
to be surging ahead with a mighty achievement for all
a $US200 million project Kefi chairman Harry Anagnostaras-Adams reported the National Bank of concerned.
backed by a suite of parties. Ethiopia, Ethiopia’s central bank, had approved the signed term sheets with Anagnostaras-Adams
Despite the latest inter- the project finance banks which were expected to provide the long-term believes he has the backing
ruption, Kefi remains stead- development debt finance for the Tulu Kapi gold project of the best in the business in
fast in its approach to having Africa to do exactly that.
project financing in place at Tulu Kapi in Oc- authorities are keen for the project to be “If we didn’t have African development
tober and full production in 2022. pushed along. banks which really cared about Ethiopia and
Tulu Kapi, 360km west of Addis Ababa, Offsite construction (road and power) con- if we didn’t have contractors like Lycopodium
is seen as a country-shaping project and is tinues and October can’t come quick enough and Perenti, which are very experienced
poised to be the first modern day commer- for the stakeholders behind Tulu Kapi. with managing ups and downs of emerging
cial gold operation in Ethiopia. October will bring about the end of the markets, with both groups having worked in
Tulu Kapi has the nation’s backing with the wet season and has been earmarked by the Africa for many decades it would be quite
Ethiopian Government part of the Tulu Kapi Ethiopian Government as an appropriate debilitating given what we have already
Gold Mines (TKGM) consortium comprising time to release the country from the corona- been through in states of emergency, politi-
Kefi, ANS Mining (local private sector invest- virus-imposed state of emergency. cal change and now a pandemic; it has been
ment company), Lycopodium Ltd and Per- “That means we and all of the consor- quite a challenging thing for the company,”
enti Global Ltd. tium partners have the next six months to he said.
About $US58 million in equity will come get ready. The project relies on banking and “There has been a very shared valued
from the Government and ANS ($US38 mil- equity and all the consortium partners like constructive approach taken. With the gold
lion), with the remaining financing to be ar- Lycopodium, the contractors, the banks, the price running hopefully we can get the show
ranged through bank or bond-based debt. equity people want to make sure everything on the road with the seasoned operators be-
It is fortuitous for Kefi that drawing down is under control in Ethiopia and calm before hind us and we can start to see some value
debt and construction ramp up at Tulu Kapi we start drawing down on a plus-$US200 created for the shareholders as well. The
hadn’t started given the impact COVID-19 million funding package. The only good country is hungry for this project.”
would have had on activities. thing I can say about COVID is that if there
Nevertheless, community leaders and was going to be a pandemic it is better to – Mark Andrews
Page 42 JUNe 2020 aUSTRaLIa’S PaYDIRT
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W
West African M&A est African M&A
c
comes to the boilomes to the boil
West African Resources poured first
ustralian miners and explorers are pre- natural bolt-on but Hyde told Paydirt the gold from its new Sanbrado operation in
Aparing for the much-anticipated M&A company’s ambitions did not end there. Burkina Faso at the end of March
rush in West Africa, following the proposed “We certainly don’t want to be a sin-
merger of Canadian firms Endeavour Min- gle-asset producer and want to remain
ing Corp and Semafo Inc. focused on Africa,” Hyde said. “We are of the key reasons we signed with Taurus
The $C1 billion deal between the two running the rule over a few projects at the was to get early access to capital. We
mid-tier gold miners will create the biggest moment and there is a lot of really good signed in December 2018 and drew down
gold producer in Burkina Faso, increasing early-stage exploration going on which is $US75 million in April 2019. Having ac-
its focus on a country which, despite rising positive.” cess to capital early meant we could really
insecurity, has risen to be among the most While grassroots exploration opportuni- get on with things.”
prominent gold producing jurisdictions on ties fits in with WAF’s track record, Hyde is While undoubtedly a major milestone
the continent. also keen to make use of the company’s for the company, the 23.9kg gold bar
The combined group will produce 1 mo- newly developed skills. represented just the start of a forecast
zpa gold, making it a larger West African “We want to redeploy our build team and 300,000oz produced in the first 12 months
producer than Newmont Gold Corp, Bar- look to build another significant project,” he of operation and 217,000 ozpa over the
rick Gold Corp, and Gold Fields Ltd. said. “I’d like to see WAF as a 3-4 mine first five years. Hyde is conscious of the
Endeavour shareholders will own about producer over the next 10 years.” testing period still in front of WAF as it
70% of the combined company, with the Hyde’s confidence stems from a near- strives to hit those targets, particularly
rest going to Semafo shareholders. The flawless delivery of Sanbrado. The com- given recent high-profile setbacks for gold
deal represents a premium of 54.7% to pany poured first gold on March 18 – just juniors in Australia.
Semafo’s March 20 share price. days before Hyde and the rest of the man- “When you go through this process
The deal could be a harbinger for further agement team departed site to beat COV- you become a student of everyone who’s
consolidation and asset sales in the re- ID-19 lockdown restrictions – with con- come before you,” he said. “I spent a lot
gion. Australian companies could play an struction ahead of schedule and on track of time going through the West Australian
influential role with newly operational West to be completed for less than its $US186 cases and why they struggled. Following
African Resources Ltd (WAF) the centre of million price tag. that process, we made sure we had suf-
attention. Hyde said the company’s development ficient funding by raising slightly more than
WAF produced first gold from its Sanb- success could be attributed to decisive ini- we thought we would need [$US200 mil-
rado mine in Burkina Faso in March, ce- tial actions. lion in debt and $US78 million in equity].”
menting its position as the region’s newest “We laid the foundations early on with The task in front of the company now is
gold producer. The company has taken some really solid geological work and our to hit commercial rates in both the mine
Sanbrado from greenfields site to mine off feasibility studies in 2018 and 2019 and and the plant.
its own back, but executive chairman Rich- then we were fortunate of putting together “Getting the plant to steady state is the
ard Hyde recognises the company’s prime a really good team to build the project, first aim – at the moment, we are maintain-
growth period may still be to come. thanks to Matt Wilcox and his team,” Hyde ing a fairly constant throughput of 8,000
In April, WAF paid B2Gold Corp $US45 said. tpd on mainly oxidised material,” Hyde
million for the 1.1 moz gold Toega project. “We ran a thorough process for project said. “At the same time, we are making
At just 14km from Sanbrado, Toega is a finance and selected Taurus in 2018. One sure the open pits are reconciling and
that’s been pretty good.
Page 44 JUNe 2020 aUSTRaLIa’S PaYDIRT
big impact; on main- erations within 50km. Tremain said their
taining that produc- presence – and the fact both have underu-
tion at 200,000 ozpa tilised mills – added another option for Ex-
or higher out to 10 ore to consider.
years.” “Our strategy is always been to define
Sanbrado has plus-1 moz before we get stuck into eco-
been a modern West nomic studies, so we continue to step-out
African exploration on Antoinette,” he said. “However, we do
success story and feel the resource is reasonably strategic,
there is a growing given there are a couple of operating gold
clamour among ASX- plants within 50km with limited mine lives.
listed juniors to emu- That is a second option for us to consider.”
late WAF’s feats. Exactly how Exore proceeds at Bagoe
Among the leaders may not be entirely in its own court. In May,
of this new brigade is it was announced project partner Apollo
Exore Resources Ltd Consolidated Ltd – which sold the project
which announced a to Exore in 2018 – had agreed to sell its
maiden resource for remaining 20% interest to private equity
its Bagoe gold pro- group Ibaera Capital for $7 million.
ject in northern Cote Ibaera has taken a shine to West Africa
d’Ivoire in early May. in recent years, having earlier this year
Exore Resources’ Bagoe project is surrounded by The Bagoe re- formalised its 100% ownership of the Wa
several large, underutilised mills in West Africa source – 9.75mt @ gold project in Ghana via a takeover of
1.9 g/t for 600,000oz ASX-listed junior Azumah Resources.
“The big milestone will be dropping the gold (at a 0.5 g/t cut-off) – came just 16 Tremain said Exore’s pre-emptive rights
first stope on M1 South. Currently, we’ve months after Exore started work on the over Apollo’s 20% meant it was still in
done development at 180m below the property. Managing director Justin Trem- charge of its own destiny.
surface. We are pushing to drop that first ain is confident there is ample opportunity “We have the funding to exercise that
stope in Q3 and that’s when we will see the for expansion in coming months. pre-emptive right and we are very positive
grade and production pick up.” “It is very much an interim position for and confident of growing the resource, but
Since its discovery in 2016, the high- us, and we are looking to continue to grow our priority is to put money in the ground to
grade M1 South deposit [underground re- the resource,” Tremain told Paydirt. “The do that,” Tremain said.
serves of 646,000oz @ 10.2 g/t gold] has resources come from only a little more “Ibaera is well-funded and have expe-
been slated as the cornerstone of Sanb- than 12 months of activity and only includ- rience in West Africa so they have some
rado’s 10-year mine life. ed drilling up until February. The results ambitions and capacity to invest substan-
It is currently set to deliver tailing off from subsequently have demonstrated it will tial amounts. They are paying a reason-
Year 4 of the mining schedule, but Hyde is continue to grow.” able amount and a substantial premium
confident reserves will be extended as the With a $8/oz discovery cost, Exore is en- to our share price on a see-through basis.
mine heads deeper. joying exploration success without having That’s a vote of confidence in the project
“The deepest hole was 25m @ 15 g/t at to embark on expensive deeper drilling. and demonstrates our share price isn’t
670m vertical,” he said. “We had planned “We’ve been able to define those ounc- fully valuing the project.”
to start drilling again in Q1 but obviously es efficiently because they are shallow Among the other ASX-listed juniors to
the coronavirus restrictions pushed that ounces, around 90% in the top 150m and participate in the recent round of asset
programme back. We are expecting we since stepping out along strike on 100m trading has been Mako Gold Ltd which at
can start again late in the June quarter or step-outs this has continued with hits of the start of May sold its Niou project in cen-
early next quarter.” 9m @ 5.7 g/t and 12m @ 4.9 g/t gold,” tral Burkina Faso to established producer
WAF’s ability to maintain production in Tremain said. Nordgold SE for $1.07 million.
the latter years of Sanbrado has been par- The bulk of the Bagoe resource comes Mako managing director Peter Ledwidge
tially answered by the arrival of Toega into from the Antoinette deposit which remains said the company was happy to have at-
the portfolio. open along strike and at depth. Exore will tracted the attention of a “world-class glob-
“Given how close the project is to us, it continue testing strike extensions, particu- al gold producer” such as Nordgold, which
was unlikely B2Gold was going to carry out larly to the south. recently took a 19.9% stake in Ghanaian
a standalone operation,” Hyde said of the “We’ve done some much wider aircore gold-hopeful Cardinal Resources Ltd and
rationale behind the deal. “It’s a 1.1 moz @ drilling in the 2.5km along strike and inter- proposed a non-binding preliminary pro-
2 g/t resource but that is constrained within cepts such as 12m @ 3.9 g/t gold demon- posal to acquire the company.
a $US1,400/oz pit shell so there is oppor- strates the opportunity to grow Antoinette. “We are happy to have retained some
tunity to expand that.” Our view is that we have only drilled the upside to Nordgold potential success
Hyde said drilling would start in the Sep- first 1,000m of 4-5km of prospective strike; through our 1% net smelter royalty,” he
tember quarter with permitting work to be- it is a very large system.” said. “We look forward to applying the
gin next year. Tremain said he expected a second re- funds from this transaction to advance our
“We would expect to bring Toega into source estimate before the end of 2020. flagship Napie project in Cote d’Ivoire.”
the mining schedule from about Year 3,” Bagoe is surrounded by established – Dominic Piper
he said. “Production tends to drop off af- mines with Barrick Gold Corp’s Tongon
ter Year 5 so that’s where it could have a and Perseus Mining Ltd’s Sissingue op-
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 45
ReGIonAl RounDuP lAtIn AmeRIcA
Tesoro’s
charming start
fter relisting on the ASX in early Feb- million ounce IRG
Aruary, Tesoro Resources Ltd has held deposits and Te-
its ground on the bourse courtesy of a soro believes there
continuous stream of wide, high-grade is district-scale
results from drilling at the El Zoro gold IRG potential at
project, Chile. El Zoro, starting
In fact, such an impression is being with Coquetas fol-
made at the Coquetas prospect that Te- lowed by undrilled
soro’s starting price of 3c/share peaked targets Toro Blan-
at 9c in April. co, Drone Hill and Tesoro hopes to announce a maiden resource from
When Paydirt spoke with Tesoro man- Buzzard. the El Zoro gold project this year, with 11 diamond
aging director Zeff Reeves and non-ex- Typically, the drill holes completed at Coquetas to May. Meanwhile,
ecutive director Geoff McNamara, both deposits in Tintina Tesoro is efficiently identifying outcropping rocks worth
of whom are experienced geologists in range from Pogo- sampling, with 400-500 surface channel samples across
the Latin American region, the company style narrow vein, Drone Hill and Buzzard to be assessed for
had settled at around 5c/share with lat- high-grade depos- potential drilling
est results on hand being 34.73m @ 2.94 its to large, low-
g/t gold, including 15m @ 5.99 g/t and grade orebodies
41.17m @ 1.38 g/t, including 14.17m @ like the Fort Knox 0.5-1 g/t gold open pit. at Coquetas to wrap a resource around
3.25 g/t. “There is everything else in between and form the basis for a potential open
Bringing a new story to the market in [in Tintina] and I think what we have got pit starter mine from an area grading in
the current environment is far from easy, at El Zorro is probably a bit of a mix. We excess of 1 g/t gold delivering straight up
but with the benefit of $3 million and are seeing that 0.5-1.5 g/t gold around returns.
the knowledge of 16 holes drilled at El those structures, but we are definitely Running in the company’s favour when
Zoro prior to listing, Tesoro has quickly seeing coherent lodes forming that are it is time for production plans to be con-
brought the market up to speed with what upwards of 3 g/t along those north-west sidered is that El Zoro, in Chile’s Region
it believes to be mineralisation not previ- structures,” Reeves said. III, is 10km from both the Pan American
ously described in Chile. Mineralisation from several of the 16 Highway and Pacific Ocean. A port at
So far, the unspectacular looking rocks holes drilled prior to Tesoro’s rebirth Caldera is also 55km by road from El
Tesoro is coming across are akin to in- (formerly Plukka) reportedly started at Zoro, while the mining town of Copiapo
trusive related gold (IRG) systems, how- or near surface to depths of 200m and is 140km away.
ever, finding what causes the intrusion the company’s confidence that a shallow Importantly, access to water for a suc-
and subsequent mineralisation is the resource can be confirmed sometime cessful operation at El Zoro will suffice
company’s greatest challenge. this year has only grown from further from the Pacific Ocean, according to Mc-
In the meantime, the geological in- diamond drilling completed at Coquetas, Namara.
formation confirmed to date provides a plus channel sampling further afield. “We will be able to use seawater, which
competitive advantage Tesoro plans to “I think that what the market is grasping is a significant risk mitigant for the El
leverage, as Reeves explains. is that this does start at surface. Unlike Zoro project. The previous asset I was in-
“I suspect they have been mined but a lot of other gold, nickel or base metals volved in proved that you could use sea-
perhaps put into the epithermal basket. projects; we are not drilling soil anoma- water to produce a saleable magnetite
It is quite an odd system for Chile and lies or geophysical anomalies. It is out- copper concentrate and that project was
the rocks are quite unusual for Chile,” he cropping and it is fresh rock and I think bought by a Canadian mid-tier,” he said.
said. the market is starting to understand that,” Given the infrastructure, Tesoro be-
“They are good challenges to have McNamara said. lieves it is not inconceivable for a junior to
because it opens up the rest of the re- “If you look at that from an operational take El Zoro through to mining, with the
gion for us when looking for these things. mining perspective, at some point this pathway to potential production already
I think we are going to be miles up the will be a mine with a low strip ratio be- starting to be plotted.
curve understanding the signals for these cause the mineralisation starts at sur- “Hopefully towards the end of this year
deposits up and down the whole coastal face and currently goes to 300m depth. we’ll have a resource on the table and
belt in Chile. We are still working on what It is still open at 300m, but when you are met work sorted, so then we can scope
the ultimate cause of the intrusion is and planning an open pit there is not much out the project to see what the develop-
once we find that we think we will be able point going too much deeper than 300m ment phase looks like and blue sky po-
to find more of these things up and down at this stage.” tential,” Reeves said.
the belt on a regional scale.” McNamara acknowledged the efforts – Mark Andrews
For context, the Tintina province in of Reeves and the on-ground team for
North America hosts numerous multi- understanding the high-grade structures
Page 46 JUNe 2020 aUSTRaLIa’S PaYDIRT
LATIN
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AUSTRALIA’S PAYDIRT MAY 2020 PAGE 1
ReGIonAl RounDuP
Jason Ward
Ecuador mining cadastre on the way
cuador’s vice minister of mines Fernando mining companies were preparing for a cau- far away from the nation’s centres. So, as a
EBenalcazar flagged the possibility that the tious restart to activities in Ecuador at the country, really the Government, like most
reopening of the country’s mining cadastre time of print. countries, are talking about how they come
could be delayed until early next year. After bringing Fruta del Norte online last out of the lockdown. You may see progres-
Many of the world’s biggest mining houses year, Lundin was gearing up to have the sive relaxation in some locations, not neces-
are jostling for position in Ecuador’s mining mine – one of Ecuador’s largest – in com- sarily the whole country at once. It has to be
sector given the recent success of SolGold mercial production in Q2. very mindful of what risks and how they can
plc at Alpala, Cascabel, and Lundin Gold Inc However, it was announced on March start up again, how to protect the local com-
at bringing Fruta del Norte to fruition. 22 that Fruta del Norte would be placed on munities and employees,” Biswas said.
Ecuador’s cadastre has been shut since care-and-maintenance due to concerns of “But, as I said, they [Lundin] are a great
February 2018 after some 275 concessions the growing spread of the coronavirus. management team and managed that well.
were granted through auction from Novem- Amid the temporary suspension of Fruta When the green light is given I am pretty
ber 2016 to January 2018. del Norte, Newcrest Mining Ltd was re- sure that it won’t take them that long to get
During a webinar hosted by the Australia vealed as the suitor behind the acquisition of back up to where they were before, which
Latin America Business Council (ALABC) in the gold prepay and stream facilities and an was very good commissioning and a well-
mid-May, Benalcazar told Paydirt there was offtake agreement for $US460 million. run business.”
roughly a backlog 700 applications stalled Newcrest’s deal was with funds affiliated There are high expectations within Ec-
since January 2018, which were aimed to be with Orion Resource Partners and Black- uador that mining can alleviate some of the
worked through within 60 days of the cadas- stone Tactical Opportunities. pressure placed on its oil sector to backbone
tre reopening. “The acquisition is expected to be earn- the economy and while there is a ground-
However, original designs to have the new ings accretive with the gold prepay and swell of support – and higher ambitions to
mining cadastre operational by Q3 have stream facilities expected to provide New- create further opportunities downstream –
been disrupted by COVID-19. crest with economic exposure to approxi- the industry is not accepted across Ecuador
“Now the key target for reopening is for Q4 mately 400,000oz of gold from the mine entirely.
2020,” Benalcazar said in his presentation. between 2020 and 2026. With gold prices at Resource companies such as SolGold
“There is potential this could happen in the levels we see today, Newcrest expects have garnered much experience in the
January or February 2021, but those days to receive significant cash flows which will country since discovering the 10mt copper
we are going to have election days.” rank ahead of Lundin Gold’s equity holders,” and 21 moz gold Cascabel project, and col-
Sensitivities around the mining sector and Newcrest managing director Sandeep Bis- lectively are doing everything possible to
the potential political ramifications related was said. manage community expectations about pro-
to election strategies could have a bearing Meanwhile, Biswas was confident it ject development.
on the timing of the reopening of the mining wouldn’t take Fruta de Norte long to be re- In peak construction, a workforce in ex-
cadastre. activated once it was safe and restrictions cess of 4,000 will be required at Cascabel
While it is hoped the mining cadastre lifted. and 700-1,000 people when SolGold an-
opens at the earliest possible date, some “In relation to Fruta del Norte, it is also very nounces production.
Page 48 JUNe 2020 aUSTRaLIa’S PaYDIRT
lAtIn AmeRIcA
Despite the uncertainty in global markets cast upon by the
coronavirus, SolGold received more support for Cascabel with a
$US100 million NSR Financing Agreement signed with Franco-
Nevada Corp in May.
Additionally, the agreement includes an option to upsize the fi-
nancing to $US150 million at SolGold’s, while the company and
Franco-Nevada have also entered into a $US15 million secured
bridge loan agreement of immediately available funds as an initial
advance prior to closing the NSR Financing Agreement.
Franco-Nevada which, subject to further studies, has indicated
an interest in participating in the financing of SolGold’s share of the
mine development at Cascabel via a gold stream, joins the likes of
BHP Ltd and Newcrest into a project estimated to run for over 50 Ecuador could reopen its mining cadastre by the end of the year
years.
According to SolGold, the gold-rich nature of the Alpala por-
phyry at Cascabel, the project can support up to $US1 billion of Ecuador has restarted some mining
precious metals stream financing.
SolGold exploration director Jason Ward said there were many operations that were paused for nearly
more Cascabel’s to be discovered in Ecuador and he expected two months due to the coronavirus
exploration alone to make a huge contribution to the country’s
wellbeing. pandemic, but residents of a community
SolGold itself has helped near one of the country’s largest mines
develop over 150 small lo- have protested that resuming work could
cal businesses in the Cas-
cabel area during the ex- spread the disease.
ploration phase and over
life-of-mine, $17 billion in The Andean country’s government, in need of revenue to help
taxes to Ecuador are ex- service a heavy debt load, approved new security protocols for
pected to be contributed mineral transport and the return of workers to the mines. Mining
from the one mine. activity has fallen by 60% due to quarantine measures to stem
The benefits are well un- one of the worst coronavirus outbreaks in Latin America.
derstood by the community Ecuador’s two largest mines, Fruta del Norte and Mirador,
near Cascabel and despite are preparing to restart operations gradually, the country’s vice
the COVID-19 situation, minister of mining Fernando Benalcazar said, while smaller
there is an eagerness from gold miners in the south have already begun transporting min-
some in the community to erals.
get on with project develop- Some residents of the town of Zamora near the Fruta del
ment. Norte mine said they do not believe the company is doing
Given PFS work is in pro- enough. Three people, including one member of the local po-
gress (due for completion in lice force, were arrested in mid-May for seeking to block vehi-
Q3) and there is no need for cles bringing materials to and from the mine, though they have
Sandeep Biswas further drilling, personnel since been released.
on site is limited. “We are concerned and scared that our people get infected,”
“The pandemic at the moment has been a really good eye opener Zamora’s mayor, Miguel Gonzalez, said in a telephone inter-
and really changed the way we think about integrating communities. view, adding that the town’s 50-year-old hospital was not pre-
The challenge is for everyone, there’s no easy answer, but we can’t pared for an outbreak.
just stop the development of this, considering the importance of it to Canada’s Lundin Gold Inc, which operates Fruta del Norte,
the country. At the same time, we don’t we want to be careless and said it was restarting mineral transport under international se-
putting people’s health in jeopardy,” Ward said during his ALABC curity protocols for workers and nearby communities.
webinar presentation. It said it would test the drivers of the vehicles that entered
“But, as we go through time, there is push from community to start its mine for COVID-19, the respiratory disease caused by the
working again. We are seeing the community in Cascabel wanting novel coronavirus, and fumigate daily.
to start work, but we are working cautiously to make sure that we Lundin said its vehicles would not make any stops at nearby
don’t contaminate anybody. We’re very lucky that we don’t have any restaurants or gas stations, which would help avoid the spread.
cases in the region of Cascabel. As well as that, we do have pro- Ecuador’s energy ministry said it had discussed the new proto-
jects across Ecuador – SolGold is the largest concession holder col with more than 250 officials from localities near mines.
in Ecuador with 75 concessions right across the country – and dif- An oil-producing country wrestling with a debt crisis, Ecuador
ferent communities react differently. Health and safety has always is seeking to develop its mining industry to diversify the econo-
been our No.1 preoccupation before we go into any community. my and sources of government revenue.
Environmental considerations, social considerations are ongoing, “The priority continues to be containing the spread, but in this
training in health and safety remain and now we are learning about stage of economic reactivation the new protocol allows us to
COVID-19. reach that goal,” Benalcazar told Reuters on May 16.
“I think the biggest contribution we can make is to keep things go- Ecuador’s government projects that its mineral exports,
ing with Cascabel. Obviously this project is going to make an enor- mostly gold, copper and silver, will reach at least $642 million
mous difference for the economy of the country. We are already this year. Exports from Fruta del Norte and Mirador will begin in
making a huge difference in the local community with over 500 peo- early June, Benalcazar said.
ple employed directly and many more indirectly.”
– Alexandria Valencia, Reuters
– Mark Andrews
aUSTRaLIa’S PaYDIRT JUNe 2020 Page 49
ReGIonAl RounDuP
Alta rewrites Gorno recipe
aving a project right at the epicentre 35 years, underground sampling in 2018 programme of channel sampling to test the
Hof Europe’s initial COVID-19 outbreak returned grades of 10-20% zinc-plus-lead grade of the visible mineralisation gives
could be assumed to be a severe hand- before drilling in the latter half of 2019 pro- you confidence to follow-up with drilling. It
brake for a junior explorer but Alta Zinc Ltd duced numerous mineralised intercepts, means you are not drilling at shadows.”
has managed to keep things moving de- including: 12m @ 12.1% and 38 g/t, 12.1m With lockdown restrictions now easing
spite the limitations. @ 19.4% and 60 g/t and 15m @ 18.3% and as Italy’s infection rates fall, Alta is prepar-
Alta’s flagship asset is the Gorno zinc 70 g/t, confirming the potential of the zone. ing for a restart of drilling, including hitting
project, in the Lombardy region of northern Even more encouraging was evidence Ponente.
Italy, location of the first major coronavirus that the Pian Bracca thrust structure sits “We were back on site in May and remo-
outbreak in Europe earlier in the year. above the stratabound horizon of the exist- bilisation of the driller will begin in June. We
The Italian Government imposed strict ing Zorzone resource, opening up a second will spend the rest of 2020 and 2021 defin-
lockdown conditions in early March, curtail- exploration horizon for the entire Gorno ing the resource and in 18 months from now
ing Alta’s onsite activity but as Alta manag- system. I think Zorzone will be only a portion of the
ing director Geraint Harris explained, that “The reinterpretation has been really in- overall mineral inventory, and one of the
didn’t result in a complete freezing of work formed by what we found at Pian Bracca,” lower-grade, thinner zones at that.”
for the company. Harris said. “Suddenly, it is looking very dif- Defining resources on seven additional
“We have actually moved the project on a ferent to when we only had Zorzone. It has targets could transform a project which has
lot in the last few months,” Harris told Pay- allowed the exploration team to put a lot fallen short on expectations on several oc-
dirt. “We stopped drilling and staff began more meat on the bone and in going back casions in the last decade.
working from home in March and that re- through the Zorzone drill holes we can see “It has always been considered a good
ally gave us the focus to sit down and un- we missed that thrust mineralisation in the project but has never been given the best
derstand what the drilling from Pian Bracca northern holes that were drilled into the crack of the whip by the market,” Harris
was telling us (about the wider exploration right post-code.” said. “In the past, the company perhaps
potential). But since then we have had a lot Alta is now planning to apply this knowl- couldn’t afford to divert attention from the
of feedback from the regulators on the min- edge to six other targets it has identified at Zorzone resource but using the strong
ing licence renewal and that collaboration Gorno. technical work we have done in the past
has been positive.” “Pian Bracca is the start of looking at and reviewing the historical data we have
Technical aspects of Gorno have also the low-hanging fruit,” Harris said. “We are been able to put together a wider picture.
been addressed with the exploration team targeting seven areas, giving us the better “It has always been considered a good
taking the pause in field work to build a chance of successfully building out a strong project but has never been given the best
greater understanding of mineralisation. resource base in the most efficient man- crack of the whip by the market,” Harris
“We have done a lot of reinterpretation of ner.” said. “In the past, the company perhaps
the geology,” Harris said. Work began on the first of the targets, Po- couldn’t afford to divert attention from the
The pause for reinterpretation could even nente 850m along strike from Pian Bracca, Zorzone resource but using the strong
be considered well-timed. Alta’s Gorno ex- before lockdown with channel sampling re- technical work we have done in the past
ploration strategy has undergone a trans- turning assays of 2.4m @ 58.8% zinc-plus- and reviewing the historical data we have
formation over the past 18 months after lead and 80 g/t silver and 2.2m @ 32% and been able to put together a wider picture.
positive results from drilling on the newly 39 g/t, Alta once again using the historical “This is a Mississippi Valley-type [MVT]
drilled Pian Bracca zone, first identified dur- adits to sample directly from the face. orebody, only it’s been thrusted like a deck
ing a review of Gorno rich historical data. “At Pian Bracca, we started with channel of cards and is therefore stacked on top of it-
Although tested, Pian Bracca was unde- sampling and it has proven very effective. self in the north-south direction, rather than
veloped at the time of Gorno’s closure in It tells you a lot about how real and predict- just one single horizon. We have historic
1982. In the first exploration in more than able the mineralisation is. Having a leading mining present over 8-10km east-west and
we know that the Metallifero geology, which
hosts the mineral, is present for many tens
of kilometres” Harris said. “So, this is a big
system which is something not recognised
in the past.”
“We have taken the concentrate to a zinc
market expert and asked where we would
sell it, whether we would get preferential
financial terms, etc and his response was
there was nothing comparable available in
the open-market,” Harris said.
“He said it was the cleanest, high-grade
concentrate available which gives us con-
fidence that we can back up the things we
have been saying about the metallurgy for
some time.”
Alta Zinc has found channel sampling
in underground adits an ideal guide – Dominic Piper
for exploration drilling
Page 50 JUNe 2020 aUSTRaLIa’S PaYDIRT
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