We do have mutual interests and therefore denied since the days of colonialisation. in delivering commerce and just the sheer
engaging and paying attention to what is Australian High Commissioner to South people movement around Africa, which is
happening on the African continent and one of the reasons why Africa does not
engaging in what is happening there is Africa HE Adam McCarthy said Africa was trade much with itself,” McCarthy said.
critical.” globalised in an unfortunate sense during
that period as the continent’s nations be- “In some parts of West Africa, you have
While integrating Africa with Australia came ruled by their colonial masters. to fly up to Paris, across to London and
and the rest of the international community then back down to the Anglophone coun-
was emphasised by the panellists, it was “When you live in Africa it is really strik- try that you were seeking to go to. As well
agreed work had to be done on uniting ing how hard the national borders are as looking at integration internationally,
countries within Africa itself. compared to most other parts of the world you have to look at integration within Africa
now. You can travel to Europe seamlessly, itself.”
Ratifying the CFTA will go a long way in but clearly there is a lot of work to be done
achieving the unity the continent has been on this. There are significant hard barriers – Mark Andrews
Comet to land a resource at Titan
It was at Africa Down Under 2016 that details on what potential production tion in Nigeria, everybody is a sharehold-
Hugh Morgan’s Comet Minerals Ltd an- would look like during stage one of op- er in the outcome,” Morgan said.
nounced the extraordinary nickel discov- erations at Titan.
ery at Titan, 200km from Nigeria’s capital “Everybody is a shareholder because
of Abuja. Based on throughput of 1 mtpa, Com- it will bring attention, it will bring technol-
et has guided potential production of ogy and this project, we think, has all the
Given the unprecedented geological 15,000 tpa @ 1.5% nickel over 10 years, hallmarks of providing those opportuni-
characteristics of the nickel occurrence which at $US6/lb nickel annual revenue ties.”
at Titan, where balls containing 94% is estimated at $US200 million.
nickel have been reported, some ques- In April, an EIA was lodged and Comet
tioned the potential of the project. C3 costs of $US3/lb nickel have been was expecting the Department of Envi-
assumed at a project defined as a poten- ronment to issue a letter of consent at the
However, Morgan and his team, in tial game-changer for the whole of Nige- time of print, a key plank in having the ex-
particular consultant geologist professor ria. ploration licence at Titan upgraded to a
Louisa Lawrance and geologist Stephen mining licence for 25 years plus renewal
Davies, have stuck to the task and pro- “All those that have a role in the initial for a further 25 years. Additionally, Com-
gressed Titan to a stage where a JORC discovery – the explorers, the local com- et was working on a community agree-
resource is in the making. munities, the bureaucracy, the politicians ment to be lodged with the Government.
– all have a vested interest in ensuring
In the meantime, Comet has revealed that when and if you find a major proposi- – Mark Andrews
Hugh Morgan
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 51
AFRICA DOWNUNDER REVIEW
Base slides on
Ayear of record financials could be just on new challenges. Tim Carstens
the start of a prolonged period of growth The company has already begun the
for Base Resources Ltd. Carstens said the 857mt project was not
transition to Phase 2 at Kwale by fully adopt- only the best mineral sands development
The mineral sands miner posted record ing hydro-mining units and increasing spiral project in the world but was also a perfect
revenue (up 22% to $US198 million) and capacity in the concentrator by 70%. The fit for Base.
net profit after tax (up 114% to $US34 mil- major task now is to extend Kwale beyond
lion) in FY2018 as consistent production its current 2022 completion date. “We spent a lot of time looking at it and it
from the Kwale mine in Kenya coincided has a number of parallels with Kwale which
with average price improvements across “We are very focused on mine life ex- means we can execute it,” he said.
the product spectrum. tensions and drilling is under way focusing
on the Northern dune which will result in a Lycopodium and Mineral Technologies
Tightening supply and increased demand resource update in the next six months,” are conducting a PFS on the project, due
saw average rutile prices increase 17%, il- Carstens said. for release in early 2019.
menite 28% and zircon 46% during the fi-
nancial year. With the company producing Base is now intent on tapping into the “It will probably be out in February-March
91,672t, 464,988t and 37,157t respectively, positive market momentum which has seen instead of January as previously stated but
the improved price environment left Base in its shares climb from a low of 2.7c in Febru- that won’t change the schedule for the DFS
a position to reduce net debt by a further ary 2016 to stay consistently above 20c for which is still on target for 3Q19. Production
$US65.3 million, a key strategy in securing more than 18 months. is set for 2022; that coincides with a nice
long-term stability for the company. supply gap which we think we can get to
In January, the company completed the first.”
“Net debt is down to $US33 million from acquisition of the Toliara Sands project in
more than $US200 million just a few years Madagascar. – Dominic Piper
ago,” Base managing director Tim Carstens
said at Africa Down Under. “As debt comes down and earnings are
strong, we felt it was a good time to move,
The increase in cash flow, improved bal- particularly because of the time in the min-
ance sheet and bright outlook for the min- eral sands market,” Carstens said. “We see
eral sands sector has driven Base to take strength in the market and opportunity for
new supply.”
PAGE 52 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Canada shops African market
Head of global mining at the TSX and by a long shot,” McPherson said. Dean McPherson
TSX-V, Dean McPherson, returned to “We have over 1,200 mining com-
Perth for Africa Down Under looking to lure interest in the sector.
companies to his Canadian exchanges. panies listed and our nearest com- Commodity and equity markets have
petitor is the ASX with about 660.
McPherson was in attendance for Pay- So, if you are a mining company you tumbled markedly since June, however,
dirt’s sister mining conference – Latin should be considering our markets McPherson expected capital to start flow-
America Down Under – in May and while for sure. ing back into the sector soon.
companies with projects in that particular
region are naturally fitted on the Canadian “Latin American properties are “We have not seen a return to the bad
bourses, McPherson is looking to up the well represented on the TSX/TSX- days, but there is volatility,” he said.
ante in Africa. V, but African properties housed in
Canada makes up only about 7% “Raisings and financings have been
With more than 1,200 mining companies of our exchange, so there is a huge pushed back to Q3. They have not gone
listed in Canada, the TSX/TSX-V are the opportunity to increase that. We are away, they have just been pushed back.”
world-leading exchanges for raising equity focused on that and trying to get that
for the mining sector. number up because our investors, – Mark Andrews
particularly our institutional inves-
Of the mining companies listed in Cana- tors, are quite comfortable in the region and
da, 191 have properties across 37 African know the space quite well,” he said.
countries, with six new listings last year.
In addition to accessing large pools of
In 2017, the Canadian exchanges raised capital, McPherson said the process of
$C931 million for mining projects in Africa doing raisings was much less litigious in
alone, while 59% of equity financings and Canada than the US and Europe, while it
30% of equity capital raisings for a com- is also far quicker to execute listings and
bined total of $C8.5 billion was done on the IPOs in Canada than the US.
TSX/TSX-V.
Therefore, being at the forefront of min-
“In terms of the mining sector, we are ing investments and equity raisings in the
number one for mining investments glob- world, McPherson is best placed to gauge
ally for capital, public equity in particular,
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 53
AFRICA DOWNUNDER REVIEW
Hyde seeks steady development
After several years of excitement and tional mining and processing and mining said those decisions would see ounces
rapid advances, West African Re- is very straightforward. It is fully permit- brought forward in the mine plan, further
sources Ltd managing director Richard ted and we are making sure everything is de-risking the project. The challenge
Hyde appeared happy to project a story up to World Bank standards.” would then be to replace those ounces
of steady delivery for his company at this towards the end of the 11-year mine life.
year’s Africa Down Under. Burkina Faso has grown from West Af-
rican backwater to major gold producer in “The first five years will see plus-
The last three years have seen the the last decade and Hyde believes it still 200,000 ozpa,” Hyde said. “The aim is
company execute one of the most ag- has much to offer. West African will be to add more mineralisation to fill out the
gressive and successful exploration the first producer to come from a district back end. We don’t want to have mar-
campaigns in West Africa at its Sanbrado already boasting 14 moz in resources. ginal production in the last years of the
gold project. However, the move into de- He said it was Sanbrado’s geology which mine life.”
velopment following release of a robust placed it in pole development position.
feasibility study in June means the focus The high-grade M1 South shoot will be
now switches to ensuring correct imple- “Sanbrado has grade so will be the first the obvious place to start. The orebody
mentation of the 200,000 ozpa develop- into production.” has been defined to 500m but remains
ment. open at depth. Recent drilling included
Early works have already begun on hits of 8m @ 7 g/t from 694m and 11m
So, instead of conveying the excite- site but construction will not begin in ear- @ 11 g/t from 654m, among others “so
ment of exceptional intersections, Hyde’s nest until project finance is finalised. there are still significant hits underneath
presentation was littered with an atmos- the reserve that are not even in the re-
phere of smooth-and-steady execution. “We will announce a banking syndicate source yet”, according to Hyde.
before the end of Q4,” Hyde said. “The
“The recent feasibility study showed DFS saw a major change in develop- – Dominic Piper
how robust the project is with a head ment approach, with the Sanbrado un-
grade of more than 4 g/t for the first five derground mine now set to be developed
years,” Hyde said of Sanbrado, 110km in parallel with the open pit. West African
south-east of the Burkina Faso capital of is also considering incremental expan-
Ouagadougou. “The plan is for conven- sions to the plant and will release an opti-
mised mining schedule in October. Hyde
PAGE 54 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Automation good John Welborn
for nation
Greater automation will lead to more Af-
ricans taking on higher paid work, ac- still employ hundreds of expats, we have risk and better safety outcomes, lower pro-
cording to Resolute Mining Ltd managing got to do better than that,” he said. “Auton- duction costs per tonne and greater con-
director John Welborn. omous operations allow us to put technolo- trol of mining with less dilution.”
gy in place that means we don’t necessar-
The introduction of automation is com- ily need people with three-year university Welborn’s beliefs will be put to the test
monly associated with the loss of low-paid degrees to operate underground. We are over the coming 18 months as Resolute
manual jobs across most industrial sectors seeing that already at Syama where we ramps up underground mining at Syama.
but Welborn argued at Africa Down Under have a fully autonomous bogging machine
that increased automation in the African run by an all-Malian team. The operation produced 194,000oz,
mining industry would lead to more indi- largely from open pit stockpiles, in FY2018
genisation. “We want to train Malians to use world- but with sub-level caving expected to start
best automated equipment with remote in December, the company’s FY2019
“Automation is often viewed at through centres.” guidance for the operation has been set at
the lens of a car factory where menial 240,000oz.
tasks are replaced but in Africa it is about Welborn also dismissed claims automa-
efficiency, safety and a wonderful work- tion was not needed in Africa where labour All-in costs are forecast to fall in FY2019.
force benefit,” Welborn said. costs were a fraction of those in Australia. All-in costs averaged $1,283/oz in FY2018
but the recently updated DFS for the un-
Resolute has designed its Syama un- “I am often asked why we would auto- derground operation pointed to AISC of
derground mine in Mali to be Africa’s first mate in Africa when labour is cheap and $US746/oz.
fully automated underground mine. Wel- technology is difficult to implement,” he
born said there was already evidence the said. “We need to rewrite that idea. We are “This will continue to come down as we
move to automation was leading to greater convinced, along with Sandvik, that under- increase the efficiency of operations,” Wel-
shares of local employment. ground mining is going autonomous and born said.
electric. It leads to machine productivity
“We have run Syama for 10 years and and performance improvements, reduced – Dominic Piper
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 55
AFRICA DOWNUNDER REVIEW
EMR ready to ride bumps
and Trumps
EMR Capital continues to seek oppor- For project vendors, He-
tunities in Africa as its own investors
push for greater exposure to the Asian garty believes the EMR mod-
growth theme.
el of majority ownership of-
EMR has been perhaps the most ac-
tive private equity group in the mining fers both certainty of finance
space over the last 24 months, acquiring
a string of operations in Asia, Australia, and access to experienced
Africa, Europe and the Americas, but ex-
ecutive chairman Owen Hegarty said the management.
group would continue to pursue assets.
“We always want a con-
“We believe in multi-decade commod-
ity demand growth – not to say there trolling position,” he said.
won’t be a few bumps and humps and
Trumps along the way,” Hegarty said. “We are operators and need
“And, we are very happy to look at other
opportunities in Africa. to be in the coaches’ box,
“Private equity has been very benefi- not in the audience. For the
cial in the oil and gas sector but the min-
ing sector hasn’t seen a lot of it. EMR’s company we are investing
own investors are pushing for more in-
volvement in mining.” in, this gives a baseline of
The group’s only current Africa asset capital and enables them
is the Lubambe copper mine in Zambia,
bought from African Rainbow Minerals to reach milestones. And, it
Ltd for $US97 million earlier this year.
gives them access to the op-
Hegarty said EMR’s activities at Lu-
bambe since the acquisition were evi- erational experience in the
dence of the effect the group’s experi-
ence and financial firepower could have group.”
on assets.
EMR is focused on four
“Lubambe is a cracking opportunity
and is improving all the time,” he said of key commodities – copper,
an operation where EMR plans to double
copper production within two years. coking coal, potash and gold
Hegarty said EMR’s investment thesis – each of which have com-
for potential acquisitions was based on
scale, grade and cost. Once in control of pelling growth narratives, Owen Hegarty
operations, the group uses its vast oper-
ational experience to increase volumes, according to He- • CHAD
reduce sustaining costs and improve the • GHANA
“exitability” of assets. garty. • CÔTE D’IVOIRE
• GABON
“We are not a slash-and-burn pri- “Copper, the
vate equity group. We look to get in and
help existing operations to get volumes noblest of metals,
up and costs down. We bring cultural
change among the workforce and allo- has great diversity
cate capital for exploration.”
of uses and a 25
An exit strategy is vital to the EMR
model and Hegarty believes the world’s mtpa market,” he GOLD LITHIUM
major miners will increasingly make said. “Gold; well,
those exits a more appealing proposition
for his group. you can never
“Bigger companies have been holding have enough gold.
back money, placing strain on supply but
they are going to have to spend it on ac- We are in potash
quiring supply soon,” he said.
for the strong de-
mand growth and
coking because
we see that high-
quality coking
coal is quite rare.”
One commodity
group unlikely to
attract EMR is the
emerging battery
minerals.
“For the EV IRON ORE
market, we pre-
fer to get our ex-
posure through A DIVERSIFIED
copper,” Hegarty EXPLORER AND
said. DEVELOPER IN
EMERGING AFRICAN
FRONTIER PROVINCES
– Dominic Piper
www.ironridgeresources.com.au @aim_irr [email protected]
PAGE 56 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Guinea to start new page
Mohamed Baba Sylla “We have a new team in ministry dedi- est producer globally but hopes to attract
cated to investment,” Sylla said. “Guinea juniors to explore for other minerals.
Guinea’s Government is determined to needs to find ways to attract investors be-
change attitudes of international inves- cause its reputation has been damaged “The plan is to diversify away from bauxite
tors who still reference the Simandou saga by years of military rule, corruption and to gold, base metals and graphite,” Sylla said.
as a need to avoid the country. Simandou.
In an effort to make ground accessible
The massive Simandou iron ore project “There have been many reforms to to juniors and mid-tier miners, Guinea is
has been mired in controversy for almost a the investment climate which have led to undertaking a formalisation of its wide-
decade due to allegations of bribery, cor- $US7 billion being invested in the country spread small-scale mining sector.
ruption and licence withdrawals. In June, since 2016, led by China, India, Europe
Rio Tinto Ltd announced “good progress” and Singapore. Big international financial “We are giving permits to small-scale
was being made in a deal to sell its stake institutions are backing the country.” miners and trying to formalise the sec-
in a project for which it is under anti-bribery tor by providing incentives for equipment,
investigation in the UK. The country’s 2011 Mining Code has etc.,” Sylla said.
been updated. The new Code contains no
The Simandou controversy began when local content quotas and a 10-15% free- At the commercial scale, AngloGold
Rio Tinto was stripped of half of the project carried interest for the Government. Ashanti Ltd produced 324,000oz gold in
in 2010, raising doubts about the security 2017 from its Sigiuri mine in the country’s
of tenure in the country. The entire cadastre system and all min- north while Russian miner Nordgold pro-
ing conventions can now be viewed online. duced 280,000oz gold from its LEFA mine.
Speaking on the sidelines of Africa Down
Under, Mohamed Baba Sylla – deputy di- “The Government is big on transpar- Despite the presence of larger players,
rector at the Centre of Promotion and Min- ency,” Sylla said. Sylla said the Government was keen to
ing Development – told Paydirt President promote the country to smaller explorers,
Alpha Conde’s Government had worked Guinea hopes the new initiatives – which hence his presence at Africa Down Under.
hard to re-establish the country’s image in also included investment in pre-compet-
the eyes of international investors. itive, open file geophysical data – would “Australian junior companies are among
allow the country to diversify away from the best in the world at exploring; that is
bauxite production. Guinea is the largest why we need them in Guinea,” he said.
supplier of bauxite to China and third larg-
– Dominic Piper
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 57
AFRICA DOWNUNDER REVIEW
Africa Down Under 2018, the cornerstone of
the budding Africa Week in Perth, was a huge
success. On top of a conference card packed
with many insightful presentations which took
place on the main stage, there were many side
events and social functions hosted as part of the
Africa Down Under conference.
Paydirt Media would like to thank everyone for
their participation in this world-class event and
a sincere thank you to all sponsors, speakers,
exhibitors and delegates of Africa Down Under
2018. Once again, Bryan Charlton from Picture
This Photography captured the event from
all angles.
PAGE 58 OCTOBER 2018 AUSTRALIA’S PAYDIRT
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 59
AFRICA DOWNUNDER REVIEW
Terramin backs in Algeria
Terramin Australia Ltd has spent the projects start to come offline.” Richard Taylor
best part of four years coming to grips Terramin could potentially bring Tala
with the best practice for mining at the “We probably won’t get into production
Tala Hamza zinc-lead project in Algeria. Hamza online by the end of 2021, with until end of 2021. We have a two-year
the 2018 DFS pointing to life-of-mine zinc construction period and six months of
The proposed block caving and sub- and lead metal in concentrate of 1.8 mtpa approvals, we should be able to deliver
level caving method has been scrapped via tonnes treated of 1.4 mtpa at unit op- against that timeframe, but timelines do
in line with the Government’s wishes, with erating costs of $US63.5/t and C1 cash extend.”
underhand drift and fill (UDF) now the costs of $US0.52.7c/lb.
preferred option. Taylor said the long history of work-
Indirect and direct ore-production ing in Algeria had enabled Terramin to
By applying the UDF method, more se- capital costs of $US341 have been esti- strengthen ties with the Government and
lective mining can be applied and it does mated, with life-of-mine capital totalling he looked forward to being an important
not sterilise any areas of the deposit, al- $US485.8 million. player in the country’s mining sector.
lowing mining of lower grades down the
track. Taylor said the company was well with- – Mark Andrews
in the financing window for Tala Hamza,
While there has been a lag in news flow which he believes will be an important
from Tala Hamza until the release of an part of future global supply as zinc and
updated DFS at Africa Down Under, Ter- lead demand heats up in the next decade.
ramin appears destined to have the pro-
ject on-stream at an opportune time in “To be in the approvals process, getting
both the zinc-lead market and for Algeria all the land, being able to look at optimisa-
itself, according to chief executive Rich- tion cases and being able to deliver the
ard Taylor. final design and engineering works that
we need to kick off for the early works
“Algeria is one [emerging] country to programme, we are excited by being able
watch in years to come,” he said. to now deliver upon those projects with
the work we have done over the last four
“The under-investment in base metals years,” he said.
is really going to bite come 2020 when
PAGE 60 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Avenira unveils growth plan
Senegalese phosphate producer Ave- P2O5 inferred], giving us the right base circuit upgrade are expected to reduce
nira Ltd is awaiting the imminent for investment.” operating costs and help to produce a
award of a revised exploitation permit that higher quality premium product grading
will allow it to grow production to 1 mtpa. Avenira recently raised $2.8 million via at least 35% P2O5.
a share placement to complete the feasi-
Avenira managing director Louis Cal- bility work. “We are benefiting from that experi-
varin told delegates at Africa Down Un- ence of having seen, touched, handled
der it was “only a matter of weeks” before Expansion of the current Gadde Bis- and processed the product,” Calvarin
an expanded 75sq km exploitation permit sik small mine, on the Baobab property, said.
was tipped to be granted for the Baobab will require the company to upgrade the
phosphate project. available infrastructure, including re- Phosphate rock prices are up more
placing the existing circuit with industry- than 10% in 2018, despite coming off 10-
Under Senegalese mining laws, Ave- standard flotation, magnetic separation year lows.
nira was previously permitted to develop and drying processes.
and operate a small-scale mine on a 5sq Calvarin said while demand for phos-
km patch of ground. Mining activities Improved recoveries provided by the phate rock was growing at 2% p.a., it was
were suspended last year, but the com- even stronger on the African continent.
pany has continued to process stockpiled Louis Calvarin
ore and sell product to a local phosphoric “Fertiliser growth is going to be espe-
acid producer. cially strong in Africa…over the past few
years, it has become the fastest-growing
Avenira is currently undertaking a fea- region in terms of fertiliser usage in the
sibility study, managed by Wood Group world,” Calvarin said.
plc, which it hopes to complete this quar-
ter. A BFS is slated to follow. “The phosphate price has been chal-
lenged over the last couple of years…but
“We are currently switching from our prices rebounded in 2017 and it’s on an
current small mine permit operation to a increasing path. It’s actually happening
full mining lease and we expect that to be slightly quicker than we anticipated, so I
secured before too long,” Calvarin said. think we are on the right path and we’ll
have our expanded capacity in service at
“That will encompass 75sq km and the the right time.”
vast majority of our resources [42mt @
19.4% P2O5 indicated, 320mt @ 16% – Michael Washbourne
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 61
AFRICA DOWNUNDER REVIEW
OCP brings flavour to ADU
Australian phosphate company Avenira ing areas,” El Asraoui said. Meriem El Asraoui
Ltd was joined on this year’s Africa “We also have an official partnership
Down Under programme by the world’s rocco’s south.
number one exporter of phosphate prod- with the Nigerian Presidential Fertiliser Ini- “Sustainable initiatives to desalinate wa-
ucts; OCP Group. tiative and this will help the Nigerian Gov-
ernment achieve tremendous rice fields ter and supply excess water to surround-
The Moroccan-based outfit’s expertise and create more than 25,000 jobs.” ing communities are in place. And, using
spreads throughout the fertiliser value- 99% of our wind for energy consumption
chain and is having a significant impact on With Africa’s population to reach about is part of the massive things being done in
agricultural developments across Africa via 2.5 billion people within 30 years, El As- the south,” El Asraoui said.
manufacturing of customised fertilisers. raoui said the continent was front and cen-
tre of OCP’s strategy. “There is a $3 billion development pro-
OCP SA legal director, commercial and gramme [committed] which will allow for
international affairs Meriem El Asraoui According to 2013 figures, it was esti- investments in the region and create more
said by heavily investing in making fertilis- mated that OCP exported about 30% of all than 5,000 jobs. That will allow us to go all
ers adaptive to different soil types, farmers forms of phosphate in the world. the way down the value chain in the south,
across the continent were benefitting from so we can also produce fertilisers there.”
better yields and crops. “In terms of phosphate reserves, we have
about 50bt of reserve in Morocco, most of – Mark Andrews
“We have new fertiliser-enriched prod- which is located in the north,” she said.
ucts that we matched up with micronutri-
ents and this helped the Ethiopian Gov- Meanwhile, in southern Morocco where
ernment to shift completely from the use 2% of the country’s phosphate reserves
of standard fertilisers to these new cus- are, OCP’s wholly-owned affiliate Phos-
tomised fertilisers. Thanks to this we are boucraa, has been instrumental in devel-
now developing a $2.4 billion industrial oping the region’s potential and nurturing
platform in Ethiopia where we are going to the establishment of a sustainable industry
be producing fertilisers to supply Ethiopian there.
needs, but also to supply all the surround-
Schools, apartments housing employ-
ees, clinics and leisure centres are initia-
tives being driven by Phosboucraa in Mo-
PAGE 62 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Support Aussie
investment: AAMEG
Australia Africa Minerals and Energy “The Senate inquiry was very important William Witham
Group (AAMEG) chief executive Wil- in detailing that. There were a number of
liam Witham has implored the Australian recommendations which we and DFAT ity and improving commodity prices, and
Government to boost its support for Aus- are following up on.” that’s now had a flow-on effect,” he said.
tralian explorers in Africa. “We’ve now got 85-plus active members
Witham said this was particularly im- doing a range of things, but our core
Earlier this year AAMEG contributed a portant given the growing number of members are mining and resources com-
submission to a Senate inquiry into Aus- non-western groups operating on the panies.”
tralia’s trade and investment relationship continent which did not necessarily have
with various African countries. The sub- Africa’s best interests at heart. Among key initiatives driven by AAMEG
mission detailed the key role the Australi- this year was foundation of a working
an resources industry plays across Africa “You’ve got non-western countries with group for Tanzanian-focused companies
and the overall positive impacts made. their own agendas playing by their own impacted by the changes to the country’s
rules, namely China, Russia and India, mining code.
Data collated by AAMEG indicates one putting a lot of money into Africa…but
in 22 ASX-listed companies is currently they don’t play by western principles, so Witham also unveiled plans for the
investing in Africa, with more than 48 we need to be successful and sustainable inaugural AAMEG Awards – to be pre-
Australian-based groups controlling min- in the face of these countries,” Witham sented at next year’s Africa Down Under
ing operations on the continent. said. Ministerial Dinner – highlighting industry
achievements in corporate social respon-
Australia is reportedly tipping about $40 Since taking on the chief executive role sibility and people development in Africa.
billion each year into exploration, extrac- at AAMEG eight months ago, Witham has
tion and processing activities throughout seen interest in the industry group grow – Michael Washbourne
Africa. as attention returns to opportunities in the
African resources sector.
“It’s very important for the Australian
Government to continue understanding “We had a quiet couple of years due to
the importance of Australian exploration the downturn in the general market, but
in Africa and the amount of money spent about a year ago we saw a lot of money
over there,” Witham said. being raised, a lot more exploration activ-
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 63
AFRICA DOWNUNDER REVIEW
More collaboration needed on Africa
More active and deeper Australian development and financing costs and re- gested a collaborative hub should be
government participation in African formed between Australian federal and
resources development could bring sig- duces the need to bring in other parties state governments, African govern-
nificant advantages for economies in both ments and investors “to improve fiscal
regions, according to a leading Australian more able to cope with uncertainty such and regulatory environment, thereby
resources lawyer. increasing certainty and reducing sov-
as China,” he said. ereign risk”, he said.
Gilbert+Tobin energy and resources,
partner, Phil Edmands used his address Recent diplomatic visits by French, “Australian government can mediate
to Africa Down Under to urge deeper en- investor demands and the investor has
gagement between Australia and African British and German leaders highlighted an additional outlet which helps with
countries, arguing it would result in better inherent conflicts and is solution rather
outcomes for the recipient countries and the growing interest major economies than dispute based.”
value-adding opportunities for Australia.
are showing in Africa’s economic future. Improved regulatory and fiscal re-
Edmands said while Australian finan- gimes would also benefit African jurisdic-
cial aid to Sub-Saharan Africa included Edmands said the Australian Govern- tions, according to Edmands with more
$121 million of official development as- rigorous, transparent regimes better able
sistance, much of this was dedicated ment had not been very active in sup- to manage disputes around tax “rorting”
to disaster relief programmes, leaving and investment “flipping”.
around $31 million for actual develop- porting outbound investment but did
ment assistance. “When states are impelled to take ac-
enjoy relative advantages, particularly tion, it is often rushed, heavy-handed and
“The emphasis is on capacity building underdone,” he said. “It is better to have
and education and system but there are in natural resources development, man- more rigorous regulation and compliance
other areas that need emphasis, particu- monitoring and enforcement upfront.”
larly regulatory and fiscal regimes and agement and innovation.
there is often little investor participation,”
he said. By providing greater support to African
Increasing assistance in regulatory jurisdiction, state and federal govern-
and fiscal regimes would lead to greater
opportunities for Australian investors, ac- ments could open up new opportunities
cording to Edmands.
for Australian investors, thus providing
“[Regulatory and fiscal regime] capac-
ity building provides investors with more Australian METS companies with new
certainty which lowers the risk premium,
expands the pool of financers, offtake markets based on Australian-owned pro-
parties and METS providers, reduces
jects.
“WA needs to diversify its economy
and the METS sector does that,” Ed-
mands said. “There is a comparative – Dominic Piper
advantage for Australia in METS but
there is competition from Canada, Lon-
don, Singapore,
South Korea.
Australia needs
a critical mass
hub and govern-
ment support for
METS.”
As a solution,
Edmands sug-
Phil Edmands
PAGE 64 OCTOBER 2018 AUSTRALIA’S PAYDIRT
New targets boost Stephen Stone
Azumah
that milestone.
Azumah Resources Ltd’s bid to add the interesting thing about that is it’s di- “When it does come to pressing the
crucial ounces to its inventory at the mensions are very similar to the anomaly
Wa gold project in Ghana has received an- that sits over the 800,000oz Julie mineral- button on development next year, it’s im-
other boost following a successful VTEM ised system, so you can understand why portant to remember that we’ve already
survey which returned multiple high-prior- the guys are quite excited, particularly done the hard work on this project when
ity targets for the rejuvenated explorer to when there’s no one single drill hole into we did the original study,” Stone said.
follow up in the coming months. that.”
“It really is primed for development.
On the eve of Africa Down Under, Azu- The positive VTEM survey results con- We’ve already got in place two 15-year
mah announced it had identified a new tinue a run of success on the exploration mining leases and our EPA permits are
EM anomaly, named Eve, which shared front for Azumah since the company part- being processed.”
geological similarities to its flagship Julie nered with private equity group Ibaera
deposit at Wa. Capital a year ago. Ibaera’s technical team, led by the re-
spected Jon Hronsky, is also assessing
Azumah also reported another “very Ibaera is investing $17.5 million to earn the untested depth potential of Wa on the
prominent” EM anomaly at Julie which a 47.5% stake in Wa while also providing back of a “game-changing” intercept re-
extends for several kilometres north-west technical expertise to the project. turned at Kunche earlier this year.
from already defined resources.
Both Azumah and Ibaera believe they “Our geologists have said these struc-
“I’ve always had a healthy scepticism must grow Wa’s reserves from the current turally-hosted orogenic gold deposits can
for geophysics, but there’s no denying 624,000oz to at least 1 moz for the project go down hundreds and hundreds and
that this survey has picked up two very, to have any chance of being developed. hundreds of metres,” Stone said.
very strong EM anomalies,” Azumah
managing director Stephen Stone said. An interim reserve and study update – Michael Washbourne
is due next month. It is envisaged an in-
“The new EM anomaly on the west side vestment decision will be made inside 12
of our Julie West licence stands out and months, with Azumah free-carried up to
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 65
AFRICA DOWNUNDER REVIEW
Strong start for Mako
With grades of up to 51 g/t gold re- Mako is initially earning up to 51% of Peter Ledwidge
turned from maiden drilling at the Napie from Occidental Gold, a subsidiary
Napie project, Mako Gold Ltd managing of Perseus Mining Ltd, via a $US1.5 mil- soil sampling programme outlined a 7km
director Peter Ledwidge has every rea- lion expenditure commitment over three soil anomaly, including a plus-20 ppb
son to be confident of making a large, years. Beyond that milestone, which gold anomaly, which appears to straddle
high-grade discovery in Cote d’Ivoire. Ledwidge said the company was already the contact between the granite and the
close to meeting, Mako can earn up to greenstone.
Mako began a 4,000m-plus RC drilling 75% of the project by completing a DFS.
programme at Napie less than a month “When we discovered the Nabanga
after listing on the ASX in April, having Ledwidge said the company had con- deposit [for Orbis Gold] that was a very,
identified a 13km prospective corridor densed its large ground package into a very similar scenario, where the high-
which hosts the Tchaga and Gogbala more manageable size and was focusing grade gold is in the granite,” Ledwidge
prospects. on areas where high-grade gold anomal- said.
ism was present.
At Tchaga, Mako intersected grades of Mako also plans to drill an area at Niou
up to 51 g/t gold and widths of up to 26m “One of things we’ll be doing after the which has been subject to extensive arti-
from first-pass drilling, including an im- wet season is an IP programme which sanal mining and has returned rock chip
pressive intercept of 8m @ 8.53 g/t from will be another tool from our toolbox to samples grading up to 34.8 g/t gold.
31m (including 2m @ 30.17 g/t) with vis- help us hone in on the high-grade gold…
ible gold observed. which is pretty consistent over 2 g/t,” he – Michael Washbourne
said.
Individual assays at Gogbala returned
up to 14.7 g/t gold and widths up to 12m, Mako expects assay results from a
with a best hit of 12m @ 5.39 g/t from 600m diamond programme at Napie to
11m, including 5m @ 10.74 g/t. arrive early this month.
“We’re very encouraged and very hap- Maiden drilling at the company’s Niou
py to be able to follow up on that after the project in Burkina Faso is also sched-
wet season,” Ledwidge said. uled for after the wet season. A recent
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PAGE 66 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Confidence grows in Kouri
Golden Rim Resources Ltd manag- have buoyed Golden Rim’s confidence in eralisation continues at depth. Certainly
ing director Craig Mackay believes Kouri’s depth potential. with some infill drilling, it’s not going to
his company has “only just scratched the be hard for us to extend the resource
surface” with a 1 moz maiden resource The company’s best hit to date – 6m @ deeper.”
for its Kouri gold project in Burkina Faso. 25 g/t – also lies just 100m south-east of
the resource. Golden Rim recently topped up its
Since reporting the 20.8mt @ 1.5 g/t available cash via a $3 million oversub-
gold for 1 moz resource in May, Golden “We’re very confident that resource scribed placement and at the time of print
Rim has been actively looking at oppor- area extends another 1.5km to the south- was set to reel in another $1 million from
tunities to expand that estimate, both at west, goes through that river channel a SPP, subject to shareholder approval.
depth and along strike. and out the other side,” Mackay said.
The company has about $US200,000
Golden Rim has confirmed the miner- “We only calculated the resource from of a $US1 million drilling for equity agree-
alisation at Kouri extends beneath the surface to 90m below surface. This min- ment with major shareholder Ausdrill Ltd
estimate limit of 90m below surface and left to spend.
beyond the 3.2km of strike which con- Craig Mackay
tains the initial resource. Funds from the impending divestment
of the company’s Paguanta zinc-lead
“We certainly think with the explora- project in Chile will also be directed to-
tion we can significantly increase our re- wards future exploration at Kouri.
source base,” Mackay said.
Mackay said the exploration upside of
“Kouri is going to be a much bigger de- Kouri had been demonstrated through
posit than it currently is and certainly our recent drilling at the Red Hill prospect,
focus over the next 6-12 months will be only 4.5km south-west of the resource,
really pushing our exploration to see just where hits of 16m @ 1.8 g/t and 11m @
how big this thing could be.” 2.2 g/t were returned.
A resource update for Kouri is slated Golden Rim also plans to undertake
for release early next year with the com- some aircore drilling at its nearby Ba-
pany set to progress to scoping study bonga gold project during the next field
work thereafter. season.
Drill intercepts of 10m @ 11 g/t and 7m – Michael Washbourne
@ 11 g/t below the defined resource area
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 67
AFRICA DOWNUNDER REVIEW
Ghana to rework Indiana
investment approach again increases
Mali patch
Barbara Oteng-Gyasi Indiana Resources Ltd has expanded its
exploration footprint in Mali after striking
Ghanaian Deputy Minister of Lands Africa it is VAT refunds; the silent, sleep- a JV deal with AIM-listed Cradle Arc plc.
and Natural Resources Barbara ing giant elephant in the room.”
Oteng-Gyasi acknowledged her govern- Indiana moved into Mali in late 2017,
ment still has work to do to ensure the While Oteng-Gyasi didn’t address the chasing gold on the prolific Birimian
country continues to be a prime destina- issue of tax rates, she did acknowledge greenstone belt with the acquisition of
tion for foreign investment. the Government had work to do regard- unlisted Mukuyu Resources. The lat-
ing VAT returns. est deal effectively doubles Indiana’s
Speaking on the second day of Af- ground holding in the west of the country
rica Down Under, Oteng-Gyasi said the “The Government has noted the im- to 263sq km.
company was conscious of the issues plications of this tax, supports explorers
facing investors, including VAT refunds, and is working with stakeholders to ad- The Cradle JV sits immediately north
work permits and the terms of investment dress this challenge,” she said. of Indiana’s Koussikioto Ouest project
agreements. and was formerly held in JV with Rand-
Work permits for foreign workers are gold Resources Ltd. Chief executive
Ghana’s position as West Africa’s gold also causing challenges for foreign min- Chris van Wijk said the deal was a good
hub has come under threat in recent ers and Oteng-Gyasi said the Govern- fit for Indiana.
years as investors migrate to neighbour- ment would assist professionals in ac-
ing countries offering more equitable and quiring working visas. “It is consistent with the company’s
transparent investment climates. stated strategy to increase our interests
Mining investment agreements would in Mali and allows Indiana to methodical-
The Ghanaian Government has spent also be reviewed, she said, via a consul- ly continue its exploration in the area,” he
much of the decade toying with changes tative approach “to ensure equity”. said. “Our review of the area has indicat-
to the taxation rates on the mining sector, ed there is strong potential for the results
eroding investor confidence. However, The Government is also working to recently returned from Koussikioto to
just as damning has been the Govern- tame its rampant illegal gold mining sec- extend further north into Kossanto West
ment’s failure to return VAT refunds to tor. Oteng-Gyasi said the Government tenement and we are keen to commence
miners and explorers. was collaborating with all stakeholders activities on the ground next month.”
to implement its Multilateral Mining Inte-
John Welborn, managing director of gration Project (MMIP) which has been Speaking at Africa Down Under, In-
Resolute Mining Ltd which is consider- supported by the Australian Government diana said it had encountered “encour-
ing reopening the Bibiani gold project in and Andrew Barnes, its High Commis- aging” early results from Koussikioto
Ghana, said the issue was a major im- sioner in Accra. 3,900m during a drilling programme.
pediment to further investment in Ghana
and the rest of West Africa. The MMIP is designed to regulate and Hits from the programme included 18m
assist small-scale miners in order to im- @ 3.35 g/t, 4m @ 2.16 g/t, 5m @ 4.96 g/t
“A solution needs to be found,” Wel- prove efficiency, safety and environmen- and 8m @ 3.37 g/t gold. The results were
born said. “Governments are not re- tal outcomes. confirmation of Indiana’s targeting strat-
funding VAT back to companies and it is egy which has been complicated by the
happening all over Africa. At 18%, that Oteng-Gyasi said as well as stronger presence of cover on much of its ground,
has a significant cash flow impact. The enforcement of legislation, the MMIP making soil geochemistry of limited use.
enforcement of tax agreements is es- would see engagement at the civil soci-
sential. If one fiscal component would ety level and introduce new technology The company now plans to follow up
change investor attitudes towards West such as drones and satellite imagery to those results with geophysics outside the
curb the problem. main trend, a programme which may ex-
tend into the newly consolidated ground.
– Dominic Piper
– Dominic Piper Chris van Wijk
PAGE 68 OCTOBER 2018 AUSTRALIA’S PAYDIRT
SA clear to realise potential
With the proverbial seatbelt now loos- Roger Baxter like Orion Minerals [Ltd] and others,”
ened, Minerals Council of South Baxter said.
Africa chief executive Roger Baxter can and relative lack of investment to develop
finally see a clear opportunity for the those promising resources. “The country has huge, huge potential
country to realise its “huge” mineral po- and even in the absence of a greenfields
tential. According to the latest Fraser Institute exploration boom, which we haven’t seen
Survey, SA boasts a first quartile rank- in the country in last couple of years, our
Baxter’s address to Africa Down Un- ing of 20th out of 91 for mineral potential view is that mining investment in the next
der delegates was vastly different to his (assuming best practice) but does not four years could nearly double in the
very public on-stage dispute with former fare as well for investment attractiveness right policy regulatory and operating en-
SA Mines Minister Mosebenzi Zwane at (48th) and current policy attractiveness vironment.”
last year’s conference. (80th).
A recent MCSA survey found R122 bil-
Zwane was ousted from the post ear- In 2017, SA also accounted for just 1% lion of additional capital could be injected
lier this year and Gwede Mantashe in- of the global exploration spend. into the resources industry if SA was to
stalled as part of a major cabinet reshuf- return to the top 25% for investment at-
fle evoked by the appointment of new “It’s been a tough patch for the last five tractiveness.
President Cyril Ramaphosa. years, in particular, and the project pipe-
line has been weaker than it has been for Such a boost would equate to an 84%
Baxter said the administrative changes some time, but it’s probably a pipeline increase in investment and potentially
addressing state capture and rooting out we’re starting to see open up again and create another 200,000 jobs, both direct
corruption to ultimately recalibrate the that’s been demonstrated by companies and indirect.
country’s economy were already having
a positive impact on SA’s stalled resourc- Baxter said he was confident the
es sector. Ramaphosa Government was commit-
ted to turning around the fortune of SA’s
“There’s no doubt we are sitting in a mining sector.
very different space to where we were
sitting a year ago at this very forum, but “I think the discussions we’ve had so
that doesn’t mean we don’t have a cou- far with Government have been actually
ple of thorns in those green shoots,” he very encouraging as to what we can do
said. collectively and collaboratively to turn
a number of these different challenges
Baxter highlighted the “mismatch” be- around,” he said.
tween SA’s apparent mineral potential
– Michael Washbourne
White Rivers teases new find
Mark Creasy-backed White Rivers Ex-
ploration Pty Ltd had Africa Down Un- would be recoverable, based on a 5 g/t areas where it is easily accessible and that
der delegates frothing at the mouth after cut-off grade. will hopefully bring us up to a BFS stage.”
hinting at the prospect of unearthing a new
goldfield in South Africa’s famed Witwa- McCarthy said Kroonstad’s western White Rivers’ strategy is to collect his-
tersrand Basin. block was likely to host a similar concep- torical borehole data from government
tualised resource. The two blocks are records and structurally model conceptu-
Initial assessment of one of the more roughly 21km apart. alised resources across its dominant land
recent additions to White Rivers’ portfo- holding in the Witwatersrand.
lio of projects, Kroonstad, has pointed to “The cover over here is about 400m or
the same geological characteristics as the less, so we could access potential eco- Creasy has sole-funded the company’s
East and South Rand goldfields, among nomically mineralised conglomerates at a exploration ventures for the past decade.
others. depth of 400m,” he said.
White Rivers’ main focus is a 65:35 JV
“We suspect this Kroonstad area could “The way forward is to process the data, with Harmony Gold Ltd over an area ad-
represent a brand new goldfield, in the get the maximum out of it, and then if it still jacent to the Peter Steenkamp-led com-
same sense Evander was a goldfield, looks good, do infill drilling in the shallow pany’s operating Target mine. A PFS on
Klerksdorp was a goldfield, Velkom was the JV area is scheduled for completion
a goldfield,” White Rivers geological con- Terence McCarthy next month.
sultant Terence McCarthy said.
Other projects White Rivers is currently
“The upshot of all of this is we think this pumping exploration funds into include
has the potential of being a completely Bothaville and Ventersburg.
new belt, so it’s quite exciting for us.”
“Hopefully we’ll discover the Wits is far
White Rivers has conceptualised a re- from over,” McCarthy said.
source containing 62 moz gold in the east-
ern block at Kroonstad, of which 31 moz “It is the world’s greatest gold resource.
As they say, if you’re looking for elephants
go to elephant country.”
– Michael Washbourne
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 69
AFRICA DOWNUNDER REVIEW
West Wits tightens Rand proposition
West Wits Mining Ltd continues to put South Africa but has struggled to con- “As experienced Australian geologists,
genuine meat on its Witwatersrand vince the market it can succeed where a we thought we knew better but in fact it
was through talking to people who have
gold bone with publication of an updated number of other juniors hoping for similar spent their whole life working here that
we began to understand what it was we
resource for its Kimberley Reef conglom- resurrection have failed. had; an amazing part of an amazing
goldfield,” Tunks said.
erate project. However, a recent resource update
The area produced more than 40 moz
West Wits has long-held ambitions to for the K9B reef and release of an ex- historically and still boasted 13 moz gold
in resources when DRD shuttered opera-
revive the DRD and Rand Leases ground ploration target for the K9A reef will, the tions in 2000. West Wits’ plan is to take
out the more difficult remnant crown pil-
at the western end of the Wits Basin in company hopes, go some way to dem- lars on the DRD portion of its ground via
open pit before moving to the Rand leas-
onstrating the validity of the West Wits es where the high-grade K9B and K9A
were left unexploited.
strategy.
“There are 17 individual conglomer-
The resource updated showed the ate bands on the Witwatersrand Basin
but the focus is on the high-grade reefs
K9B conglomerate band on the Kim- of the K9B and K9A,” principal geologist
Marnie Swart said. “We will use the exist-
berley East area containing a global ing infrastructure underground, including
the mechanised decline.”
resource of 12.4mt @ 3.1 g/t for 1.25
For the open pit, the advantages come
moz gold at a 2 g/t cut-off. At a higher from the lack of infrastructure.
cut-off of 3.5 g/t gold, the K9B boasts “With all infrastructure cleared, we are
able to mine a lot of the crown pillars via
450,000oz @ 5 g/t gold. open pit,” Swart said.
Following work on the K9A reef, the
company has identified an exploration
target of 6.5-8mt @ 3-4 g/t for 0.65-1
moz gold.
The two reefs will form the backbone
of West Wits’ underground mining plan
which will be activated following 3.5
years of open pit mining on the tene-
ments.
West Wits exploration director An-
drew Tunks admitted the company
had experienced a few false starts in – Dominic Piper
its development of the project but now
Marnie Swart believes it is on the right track.
Upright and outstanding for Burkina
Burkina Faso’s steady reform pro- and you investors in particular that eve- cial outcomes, greater application of
gramme will continue as it aims to rything is done to ensure your safety and mechanised equipment and the elimina-
lock in the gold export gains it has made your investments for sustainable mining tion of gold fraud.
over the last decade and a half. exploitation in a win-win partnership,”
Sorgho said. – Dominic Piper
The West African nation has sprung
from resources backwater to one of the Recent years have seen a new Mining Brahima Sorgho
most vibrant gold jurisdictions in the Code introduced alongside a dedicated
world over the course of a 15-year peri- Ministry of Mines and Quarries. In 2017,
od which has seen nine mines and more the Government also began a mod-
than 400 exploration projects sprout up ernisation of its mining cadastre system
across Burkina Faso (which translates to which Sorgho said had cleaned up the
The Upright Fatherland). cadastre database, improved process-
ing of applications and made information
Gold now contributes more than 8% to available online.
GDP and accounts for more than 10,000
jobs, overtaking cotton to become the “The modernisation aims to ensure
country’s largest export in recent years, that research permits are granted on a
despite several periods of political and first-come, first-served basis,” he said.
security turmoil in the country. Perma-
nent secretary of Ministry of Mines and The Burkinabe Government has also
Quarries Brahima Sorgho said the Gov- established a national agency for the
ernment would strive to continue this rate regulation of the artisanal mining sector
of progress in coming years. which will see production sites registered
and miners organised into cooperatives
“I can reassure all Burkina’s partners to ensure better environmental and so-
PAGE 70 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Cardinal starts to arch back
With a completed PFS on its flagship ing at Ndongo East, 20km from Namdini. “All we are looking at is near-surface,
Namdini gold project in Ghana im- Significant intersections included 2m @ high-grade mineralisation that can be
minent, Cardinal Resources Ltd is also 27 g/t from 10m; 6m @ 12.6 g/t from 2m transported to Namdini. That is the aim
preparing for another big season in the and 7m @ 2.2 g/t from 55m. from the district exploration,” Koimtsidis
field later this year. said.
Hitting multiple intercepts of near-sur-
“We now have a compelling business face gold mineralisation has encouraged The company hopes to re-start drill-
case to move into the DFS phase for the Cardinal there is potential for a three-fold ing at Ndongo East as soon as weather
9.5 Mtpa throughput processing facil- extension to the original 400m strike at permits, while a programme of 3,000m
ity based upon the optimum return on Ndongo East and enhanced its strategy at Kungongo is planned for Q4. Auger
capital employed. The feasibility study is of adding additional ounces to the near- soil drilling at targets to be determined
fully funded and will form the basis for by 6.5 moz Namdini project. from geophysical assessments at Bongo
the development of our Namdini Project is also part of the near-term regional
in Ghana with completion anticipated strategy.
in Q32019. The PFS study confirms
the Namdini project as one of Ghana’s Koimtsidis said there was potential
and Africa’s most promising undevel- for underground exploration down the
oped, large gold assets. The financial track, however, the focus for now was on
modelling of the project shows it to be close-to-surface ounces to feed through
technically sound and financially viable Namdini.
and could generate $US 1.4 billion free
cash flow [pre-tax] utilising the 9.5 Mtpa The current probable ore reserve es-
throughput model,” Cardinal managing timate from Namdini is 129.6mt for 4.76
director Archie Koimtsidis said. moz @ 1.14 g/t gold (0.5 g/t cut-off).
Prior to Cardinal’s presentation at – Mark Andrews
Africa Down Under, the company an-
nounced promising results from RC drill- Archie Koimtsidis
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AFRICA DOWNUNDER REVIEW
Lithium lights up IronRidge
Experienced West African geologist Len Len Kolff was to 30m vertical and this was drilling into
Kolff is eyeing off a major lithium discov- stacked sills, so we believe there is oppor-
ery in the region. IronRidge has reported the first batch tunity to expand that deposit considerably.
of assays from its maiden 8,000m drilling
Kolff played key roles in the discovery programme at the Ewoyaa prospect which “In addition to lithium, there’s also beryl-
and development of the Simandou and yielded hits of 128m @ 1.21% lithium oxide, lium, niobium-tantalum, caesium and tin po-
Mofe Creek iron ore projects in Guinea and 111m @ 1.35% and 35m @ 1.49%. tential within the pegmatites.”
Liberia respectively and has also run the
ruler over several gold opportunities along The company’s 645sq km exploration IronRidge is yet to undertake any major
West Africa’s Birimian greenstone belt dur- licence also includes the historical Egyasi- exploration work in Cote d’Ivoire, however,
ing his 21-year career. manku Hill deposit (1.48mt @ 1.67% lithium with a 3,235sq km gold and 1,117sq km
oxide) and several other prospective tar- lithium portfolio at its disposal, the company
Now chief geologist for AIM-listed Iron- gets. is unlikely to remain inactive there for much
Ridge Resources Ltd, Kolff is keen to longer.
replicate the success Birimian Ltd has “We believe there is huge upside poten-
enjoyed with its Goulamina lithium project tial there,” Kolff said. “The deepest drill hole The company also has 900sq km of tenure
in Mali, albeit across the border in Cote to explore for gold in mostly oil-focused Chad.
d’Ivoire and Ghana.
More than 10km of trenching has been
“West Africa has traditionally been the completed by the company over the past
focus of gold exploration and development two years at the Dorothe prospect. Head-
within the Birimian, yet we believe it’s highly line intersections from that work include
prospective for lithium too,” Kolff said. “We 32m @ 2.02 g/t gold and 4m @ 18.77 g/t.
completed a top-down geological review of
the Birimian and through that process we “We have basically got first-mover advan-
secured the Cape Coast lithium project in tage in Chad with two advanced gold pro-
Ghana and our portfolio in Ivory Coast.” jects, one of which is Dorothe,” Kolff said.
Cape Coast is IronRidge’s most ad- “We think we’re on to a new gold province
vanced project and is within 100km of Tako- here that’s potentially comparable to the
radi port and 800m from a bitumen highway. Tintina gold belt in Alaska.”
– Michael Washbourne
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PAGE 72 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Mod becomes master
of its dome
While delivering a positive feasibility back to exploration because we realised the T3 processing plant becoming a cen-
study for its T3 copper discovery re- T3 sits on a large regional dome structure,” tral hub for future discoveries was further
mains the priority, Mod Resources Ltd will Mod managing director Julian Hanna said. confirmed in August when it increased
not resist the exploration temptations it has “The breakthrough has been heli-borne the scope of the feasibility study to include
along its Kalahari copper belt landholding. EM. It has been fabulously successful in a 3 mtpa capacity, up 20% on previous
defining a number of domes along the belt. throughput rates.
Mod expects to deliver a DFS on T3 – in It became apparent from T3 that we had a
the Ghanzi district of north-west Botswana broad dome shape and then EM showed To achieve those ambitions, Mod will like-
– in March 2019 but such is the opportunity a large dome, identified further 7-8 targets ly have to step up its exploration efforts. To
opening up in front of it, the company will from EM at the T3 Dome complex, includ- fund such a move, the company is propos-
continue with aggressive drilling of other ing A4. ing to list on the main board of the London
prospects in the meantime. Stock Exchange before the end of the year.
“A4 was the first dome we targeted out-
In August, Mod announced an intercept side of the T3 deposit and it returned the hit “We need to uplift the scale of that explo-
of 52m @ 1.5% copper and 14 g/t silver (in- of 52m @ 1.5% copper.” ration effort,” Hanna said. “And the way to
cluding 15.5m @ 2.9% copper and 42 g/t manage this scale of project is to dual list
silver) from the first hole of its new regional Mod is now aggressively pursuing this re- the company in London because that mar-
drilling programme around the T3 Dome gional exploration model with nine diamond ket understands Africa and copper, where
complex. and five RC rigs currently onsite. we believe Australian investors have been
slow to understand the story.”
The hole, drilled into the A4 Dome pros- “We have a major exploration campaign
pect, intersected both high-grade stock- under way with dozens of targets in the T3 – Dominic Piper
work chalcopyrite veins (the 52m @ 1.5% Dome complex,” Hanna said.
copper) and vein-hosted disseminated
chalcocite and bornite (31.2m @ 1.1% cop- By mid-September, Mod had drilled nine
per and 11 g/t silver), confirming the geo- holes along 1km of the 5km-long A4 Dome
logical model Mod is now applying to the structural target. Ultimately, it could provide
project. additional feed for
the T3 processing
“We thought T3 was a one-off and that plant just 8km away.
we had got lucky but we recently shifted
Mod’s concept of
Julian Hanna MALAGASY EXTRACTIVE
INDUSTRY MUSEUM
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 73
AFRICA DOWNUNDER REVIEW
Celsius confident
in cobalt
Celsius Resources Ltd managing direc- a resource update and scoping study due Brendan Borg
tor Brendan Borg is confident cobalt- this month.
containing cathodes will continue to domi- of copper, cobalt and zinc, which are our
nate electric vehicle and battery storage Recent intercepts of 8m @ 0.18% co- metals of interest.”
applications for at least the next decade. balt, 0.51% copper and 0.64% zinc (includ-
ing 2m @ 0.30% cobalt, 0.70% copper and Results from a recent SkyTEM survey
According to research from Benchmark 0.97% zinc) and 6.43m @ 0.13% cobalt, over the Opuwo property were due at the
Mineral Intelligence, the use of cobalt in 0.38% copper and 0.53% zinc fall outside time of print and will be used to define fur-
batteries is forecast to more than triple the current resource of 112.4t @ 0.11% co- ther targets for an aggressive drilling cam-
over the next 10 years despite a potential balt, 0.41% copper and 0.43% zinc. paign to see out 2018.
shift to lower cobalt batteries within that
timeframe. A key feature of the Opuwo resource is While Borg acknowledged the DRC
more than 95% of it is comprised of fresh hosted some of the world’s best cobalt
“We think the shift towards the lower sulphide ore which is proving to be amend- projects, he believed Namibia had many
cobalt-contained cathode has been over- able to strong recoveries of cobalt, copper advantages which would ultimately lead to
stated,” Borg said. and zinc. Opuwo being developed.
“While there will be a shift towards the “We’ve done quite a bit of work on the “There are also favourable tax consider-
lower cobalt-contained cathodes, you can leaching already and what we’ve been ations for add-valuing in country and that
still see that by 2025 the 8-1-1 [nickel-man- able to develop so far is a method that’s is part of the reason why we’re looking to
ganese-cobalt] still only represents about a little bit different to what most projects of develop a downstream cobalt refinery as
17% of battery cathodes…while the overall this type would normally be developed on,” part of the overall project development,”
cobalt-contained cathode proportion actu- Borg said. Borg said.
ally increases during that period.”
“It’s a low-pressure, low-temperature, “We have hydro-electric power, we have
Celsius is approaching a defining period oxidative leach and we’ve been able to good roads and we’re in a country where
for its Opuwo project in Namibia with both demonstrate we can get good recoveries these downstream-type projects are al-
ready being produced.”
– Michael Washbourne
PAGE 74 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Nzuri trumpets DRC reliance
The global dependence on cobalt sourced region which has been affectionately de- Adam Smits
from the DRC is becoming more appar- scribed as “ground zero” of the global bat-
ent to the team at Nzuri Copper Ltd as each tery minerals revolution. 1,370 tpa cobalt for an initial eight years at a
day passes. C1 cost of $US0.85/lb.
Glencore’s Katanga and Mutanda opera-
It is estimated the DRC contributes 60- tions are reported to have already produced Cash flow from Stage 1 production will
70% of the world’s annual cobalt produc- at least 20,000t of cobalt this year alone. then be used to fund development of Stage
tion and demand for the metal is expected 2 which involves SX-EW processing of the
to grow exponentially based on the rapid One of the key features of all projects in mineralised waste and 1.5mt of cobalt-only
adoption of EVs and falling unit costs for the Kolwezi region is the high-grade nature ore.
lithium-ion batteries used in phones and of the cobalt resources.
other electronic devices. “Given the process simplicity, we’re not
“Only DRC projects have real grade,” exposed to the multi-year ramp-up that
“It effectively means that two out of three Smits said. “Those with less than 0.15% many of the HPAL plants will be,” Smits
people in this room today have 4g of DRC cobalt mean you have to process an enor- said. “We’re talking weeks to be at name-
cobalt in your iPhone, or we all have about mous amount of tonnes to make a mean- plate as opposed to years.”
2.5g of DRC cobalt in our phones,” Nzuri ingful quantity of cobalt.
executive director Adam Smits said. – Michael Washbourne
“Only one project in the US has DRC-like
“Every Tesla Model S has 87kg of cobalt grades, and without passing judgement on
in each car, of which 56kg is coming from that project in any shape or form, they’re
the DRC. At current rates, Tesla will con- current focus is how to get the arsenic out
sume almost 25 times what the US actually so they can sell the cobalt.”
produces in terms of cobalt, or 15% of the
world’s cobalt produced globally.” Nzuri continues to pursue project finance
for Kalongwe while undertaking early site
Nzuri’s flagship asset is the Kalongwe development works. All permits for con-
copper-cobalt project, about 15km south of struction of Stage 1 are in place.
Ivanhoe Mines Inc’s Kamoa-Kakula discov-
ery. Both projects are in the DRC’s Kolwezi An updated DFS for Stage 1 indicated
Kalongwe can be built for just $US53 mil-
lion to produce 18,657 tpa copper and
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 75
AFRICA DOWNUNDER REVIEW
Making the pieces fit
The need for early engagement and Thompson said the company had been ating officer Adam Smits said companies
consistent messaging to communities clear in stating all unskilled labour jobs looking to enter such jurisdictions needed
were the key takeaways from Globe 24-7’s would be afforded to locals within the San- to ensure total understanding of the labour
Africa’s “People Puzzle: Building national brado mine area. code.
workforces for the African mining industry”
panel discussion. “I am in direct contact with the people in “The labour codes in Senegal and Cote
the community, it is very important and we d’Ivoire have complete anti-regionality
“Starting early with government, man- are very consistent in our messaging that clauses in them. They want you to em-
aging expectations within community and all unskilled labour will be sourced locally; ploy anywhere in the country; everyone in
then the third thing around fair process that no question,” Thompson said. the country should have the right to a job,”
is transparent... I think those three things Smits said.
are very important in regards to setting the A census in the mine site area which
tone for your organisation, especially at that included a population of 2,400 people re- Smits said the first of two projects he was
early stage of construction and commis- vealed that six out 10 people wanted an op- in involved in Senegal wasn’t set up well,
sioning,” Globe 24-7 chief executive La- portunity to be employed by WAF at San- however the valuable lessons learned were
chlan Spicer said. brado. applied effectively in the second project.
Spicer’s Globe 24-7 human resource With such high demand, Thompson said “We set up an employment committee
management and consulting firm is well community consultation meetings occurred and we have representatives from every
versed in the African mining game, in which every six weeks as construction of Sanbra- one of the 32 villages and our company
integrating locals into projects is a core do progressed and changes were constant. was represented on the committee, but not
competency of the business. involved in the decision-making process,”
“We will be carefully tracking all those Smits said.
However, integrating unskilled workers [unskilled] posts that become available and
who are largely unfamiliar with the mining we already have people in the local com- “In Senegal, for unskilled labour we put
industry is often a challenge in Africa, but a munity put their hand up and say ‘yes’ we forward requirements for labour that we
particularly rewarding one when managed would work there. With that expectation we wanted in which we asked for a series of
properly. will need to be very careful to ensure that candidates names within a 72-hour time-
it only includes locals for unskilled work,” frame. We tested the people and if none
West African Resources Ltd (WAF) is Thompson. of them stacked up, we had the right to go
one Australian company currently gearing elsewhere and directly employ from other
up to start construction of the Sanbrado WAF’s local content policy for unskilled areas,” Smits said.
gold project in Burkina Faso. jobs is not dissimilar to what other compa-
nies have committed to in the past, how- “That was a key learning and I think the
Despite the country going through a gold ever, it is not a blanket rule to be followed in best approach is to not be responsible for
boom, with seven mines built in the last 10 other parts of Africa. who you employ. You make that someone
years, WAF is paying close attention to else’s problem and that way no one can say
managing community expectations about For instance, in places such as Senegal that you are not employing the right people.”
potential opportunities at the mine. and Cote d’Ivoire, the labour code is vastly
different. – Mark Andrews
WAF sustainability manager Joanne
Therefore, Nzuri Copper Ltd chief oper-
Lycopodium managing director Peter De Leo, Nzuri Copper chief operating officer Adam Smits, West African sustainability
manager Joanne Thompson, Globe 24-7 global HR manager Alain Pfammatter and Globe 24-7 chief executive
Lachlan Spicer addressed the topic of building national workforces for the African mining industry
PAGE 76 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Balancing on equal footing
African-focused mining companies tiated at a later date. Bertrand Montembault
should always negotiate contracts Therefore, incorporating clauses for
with host countries on an equal footing
and where possible include leaders of lo- renegotiations, including under what
cal community groups at the discussion conditions contracts can be renegoti-
table, according to Herbert Smith Free- ated, are critically important for both par-
hills partner Bertrand Montembault. ties, Montembault said.
“Very often states do not have neces- “There are some legal reasons that
sarily the same capacity [as mining com- make the balance difficult to achieve,” he
panies] to negotiate and may have had said.
bad experiences in the past which will
make them suspicious or quite conserva- “One may consider it as important to
tive in your approach to negotiating new limit situations where the state feels that
clauses,” the French law specialist said. it has to do so [modify the legislation or
contract] and these situations are largely
“Another thing which I think would be situations where the state considers that
quite useful is to involve local commu- the terms agreed for mining projects are
nities at the negotiating stage. If there unfair to the state.
is opportunity to involve the local com-
munities, it would help make sure that “This is why it is particularly important
their interests are properly taken into ac- for both mining companies and the state
count.” to try to get the balance right when ne-
gotiating contracts. This is a complex is-
Montembault said balancing the needs sue, but it is crucially important to deal
and desires of both the mining company with that early if you want the arrange-
and the host state was never easy and ments you negotiate to be sustainable.”
quite often contracts need to be renego-
– Michael Washbourne
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 77
AFRICA DOWNUNDER REVIEW
Bass’ expandability Tim McManus
in Madagascar
Poor supply of large flake graphite for the talking plus-300 micron. That size is re- a separate processing plant will be used,
industrial minerals sector is the oppor- ally growing in price and that comes from infrastructure already established will keep
tunity Bass Metals Ltd is capitalising on. a poor supply chain. There is not a lot of the capex low.
large flake graphite out there and there is
The Madagascar-focused company is not a lot of knowledge of how to exactly Furthermore, expandability tests across
planning a feasibility study for stage two handle it and get it to the customer.” all flake sizes at Graphmada have returned
of its Graphmada project in light of suc- favourable results, with some large flakes
cessfully recommissioning and produc- Graphmada is primed to produce at a exceeding 400 microns.
ing 1,100t of large flake graphite since the rate of 6,000 tpa during stage one, with
start of FY2019. concentrate grades above 94% fixed car- The expandable graphite market is a
bon and 45% of production classed as key plank for stage three of Graphamada,
Bass reported that drying and packag- premium large flake. which Bass is proposing to conduct at
ing of 520t large flake graphite at an ex- Tamatave port.
pected C1 cost of $US500/t had been pro- McManus said the material produced
duced since July from Graphmada, about from Graphmada was attracting “very “We are pretty excited about this [ex-
100km from Madagascar’s main export good pricing”. pandable] market, our graphite is highly
port at Tamatave. amenable and it has quite a large rate of
“I suppose if the battery price ever went expansion,” McManus said.
“We have made sales already through above the price we are receiving for our
that supply chain, we have established large flake, then we can make the graphite “As a result of a lot of the regulatory
customers and it is also worthy to note smaller as it is just a matter of grinding the changes in both China and Europe which
that the Japanese Government and the graphite a little bit smaller,” McManus said. are both trying to get rid of the bromides
Malagasy Government are doing a port and carcinogenics out of their fire retard-
expansion, so there is a really good feel “The attraction of Graphmada is pre- ants. The natural replacement for that is
in Madagascar at the moment in investing dominantly large flake, therefore our bas- expandable graphite.”
and pushing the country forward,” Bass ket price across those sizes can achieve
chief executive Tim McManus said at Af- a much higher overall basket price. That is In addition to its graphite ambitions,
rica Down Under. our competitive advantage along with our Bass has lithium potential in central Mada-
low mining cost.” gascar, where channel sampling at Millie’s
“What we have noticed is a divergent West returned 31m @ 3.72% lithium oxide.
market – large flake, jumbo flake – we are Stage two of Graphmada is being billed
to produce 20,000 tpa by 2020 and while – Mark Andrews
Minbos calls shots
Lindsay Reed under way. mineralised widths of 50m in trenches.
Local company Orezone Drilling Mad- Reed said work on Ambato had dem-
Minbos Resources Ltd has begun drill-
ing the first of seven untested targets agascar SARL has been contracted to onstrated three key characteristics for
at its newly acquired Ambato rare earths complete the drilling programme which large rare earth deposits – alkaline igne-
project in Madagascar. is also being overseen by Malagasy ge- ous activity, hydrothermal activity and
ologists. supergene weathering enrichment – as
Drilling at the Ankazohambo prospect supported by studies from two reputa-
is designed to test the depth extent of The sixth drill hole of the initial pro- ble groups, including one based out of
high-grade surface outcrops as well as gramme was being completed when Madagascar.
assess the grade and mineralogy of the managing director Lindsay Reed was
immediate subsurface material. presenting the Minbos story to delegates “We’ve had some preliminary miner-
at Africa Down Under. alogy done here in Australia by ANTSO
Ten diamond holes will be drilled as which shows it’s very clean with the
part of the initial programme. A minimum “We’re very, very happy with the speed preferable mineral bastnaesite and the
of 100kg of core is being recovered for that things have gone,” Reed said. gangue mineral is easily separated,” he
mineralogical determination and produc- said.
tion of flotation concentrate. “We quickly identified there were at
least seven prospects on the licence “It’s early days, but we’re quite opti-
Minbos acquired the project in late area we’ve taken up that have never mistic that we’ll get large tonnages, high
March and subsequently raised $3.5 been drilled. It’s really quite remarkable. grades with easy beneficiation to make a
million via a placement to get the drilling We look at this area and think it’s a re- saleable concentrate.”
ally, really good opportunity that’s been
PAGE 78 OCTOBER 2018 AUSTRALIA’S PAYDIRT known about for 30-40 years, but never However, he said, the company was
had a drill hole.” not yet closing the door on a country
where it had operated for a decade.
Ankazohambo has previously returned
rock chip samples grading up to 41% – Michael Washbourne
TREO over a strike length of 2.4km with
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AFRICA DOWNUNDER REVIEW
Canadian support for Ethiopia
The Ethiopian Government has turned ity to be ensured and for this we have a
to a Canadian-backed institute to help number of interventions, of which one is
boost the contribution of the country’s to have a more effective and proactive li-
mineral sector towards its fiscal revenue. cencing administration system.”
Founded by three universities, the SUMM is seeking to implement four
Canadian International Resources and key systems overseeing the manage-
Development Institute (CIRDI) is tasked ment of Ethiopia’s mining cadastre, geo-
with strengthening the “human and tech- science information, environment and
nical capacity” of Ethiopia’s Ministry of community development and general
Mines, Petroleum and Natural Gas. knowledge.
A $C15 million budget has been es- Mandefro said the institute would look
tablished for the project – Supporting the to use international expertise to fill any Geremew Negassa Gelete
Ministry of Mines (SUMM) “critical gaps” in its pro- the country’s untapped resources as a
“land of opportunity” for foreign invest-
– which is to be imple- posed strategy, as well ment.
mented by 2023. as drawing on assistance “We are investing heavily in the devel-
opment of quality geodata to de-risk and
“Unlike other govern- from Ethiopians who may therefore reduce cost of investment,” Ge-
lete said.
ment-supported projects, have studied abroad.
“We have a stable legal framework and
what makes the SUMM Ethiopia has been one of are committed to transparency and ac-
countability in the extractives sector.
project peculiar is its fully Africa’s strongest perform-
“We have carried out extensive con-
implemented by the part- ing economies for the past struction of enabling infrastructure for the
mining sector in line with the growth and
ner institution,” SUMM decade, averaging 10% transformation plan.”
managing director Yared growth per annum, despite – Michael Washbourne
Mandefro said. not having a recognised
“The main aim of this mining industry.
project is to establish a Geremew Negassa Ge-
consistent, predictable lete, director of planning
and transparent licensing for Ethiopia’s Ministry of
system. Mines and Petroleum and
“We want sustainabil- Yared Mandefro Natural Gas, described
Australian doctors set the standard
Australian Doctors for Africa founder dic surgery, gastroenterology, urology, Dr Graham Forward
and chief executive Dr Graham For- paediatrics, obstetrics and gynaecol-
ward spoke of how proud he was to be ogy and clubfoot, while future projects “The equivalent value for that type of
associated with Australia’s mining and include ophthalmology and plastic sur- enterprise in Australian would be about
exploration fraternity operating in Africa. gery. $12 million. We can see great value for
money in simple infrastructure develop-
However, many in the industry would “In Ethiopia we have 108 orthopaedic ment that we do.”
concur that it is organisations like medi- surgeons in training in the same sort of
cal NGO Australian Doctors for Africa four-year training programme we would – Mark Andrews
that deserve due recognition and ac- have in Australia,” Forward said.
claim for the work they do in making peo-
ple’s lives better. However, once an orthopaedic sur-
geon graduates in Ethiopia being af-
Currently, Australian Doctors for Africa forded an opportunity to operate in a
is present in Madagascar, Comoros, So- clean environment with sterile condi-
maliland and Ethiopia. tions with good equipment, like an Aus-
tralian counterpart, is not always pos-
The NGO thrives on openness, hones- sible.
ty, offering a fair go to all, giving a hand
and contributing as much as possible to “Infrastructure development is the
the local communities it is within reach next step up our development stair-
of, in addition to providing medical train- case,” Forward said.
ing and teaching to help improve the lives
of people in need. “In infrastructure development we usu-
ally try to replicate a first world operating
“The teaching and training is really circumstance. Recently in Ethiopia we
overwhelming, people have an insatiable treated three operating theatres, brand
thirst for knowledge,” Forward said. new fully equipped with X-ray machines,
lights and operating tables at a cost of
The current specialty areas for Austral- $350,000.
ian Doctors for Africa include orthopae-
PAGE 80 OCTOBER 2018 AUSTRALIA’S PAYDIRT
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AFRICA DOWNUNDER REVIEW
Conflict in the Sahel:
The elephant in the room
Conflict in its many forms is “the elephant which has evolved over time, from the oc- African Geopolitics principal Max
in the room”. Everyone is aware of it, casional street protests in stronger states, de Vietri (far right) chaired a panel
but few in our industry are willing to debate to the creation of fundamentalist cells in discussion on Conflict in the Sahel.
it in public, even with the recent murderous divided societies and government over- Panellists included Resolute Mining
events directly affecting our personnel and throws in weaker states, to countries being managing director John Welborn, former
our commercial activities. torn apart. UN Peacekeeper Seth Appiah-Mensah,
Herbert Smith Freehills partner Bertrand
The negative effects that conflict can The objective of our panel discussion Montembault, David Kamara of African
have on our projects is obvious, but con- at Africa Down Under was to focus on the Professionals Australia, UWA research
sideration is seldom given to the effects on problem of conflict that affects all stake- fellow Muhammad Dan Suleiman and
the wellbeing of the ordinary African or of holders – not just our own industry – and Australian High Commissioner to
the detrimental effects on the development attempt to come to an understanding that
of his or her country. As individuals or cor- could lead to remedial steps. Australia HE Bello Husseini
porations, we can do more to engage in a
meaningful manner with the African states Resolute Mining Ltd managing director stakeholder and a collaborative partner-
that host us to see what can be done to John Welborn said conflict situations rep- ship model is required.
eradicate “conflict” or at least mitigate its resented a major risk to foreign investment
effects. and therefore economic and social pro- Seth Appiah-Mensah, a former UN
gress in the region. peacekeeper and researcher in interna-
The southern edge of the Sahara, tional relations at UWA, approached the
known as the Sahel, is an interface of not Resolute, like most Australian compa- question of conflict from a political and mil-
only contrasting climatic and ecological nies operating in the Sahel, conducts its itary viewpoint. He cited Sierra Leone and
regions, but of contrast in the social, politi- business strictly in accordance with the Liberia as examples of well-completed
cal and economic make-up of the human Voluntary Principles on Security and Hu- peacekeeping missions. However, CAR,
communities in that region, irrespective of man Rights. These principles guide com- Mali and the DRC still have tens of thou-
colonially imposed and often arbitrarily de- panies on how to manage risk, provide a sands of peacekeepers and yet conflicts in
marcated national and state borders. platform for mutual learning and problem these countries continue.
solving, and ultimately provide a platform
This contrast, exacerbated by the his- for greater tolerance and understanding. Appiah-Mensah viewed conflicts from
torical events of Arab and European co- a supranational viewpoint, acknowledg-
lonialism, brought different political and Welborn stressed that Resolute’s in- ing that conflict situations were often very
religious influences and led to inequalities country team in Mali worked closely with “complex”. He said international peace-
between ethnic groups. the local community, adding that mining keepers provide a conducive environment
companies operating in Africa have a re- for peacemaking and peacebuilding so
This inequality fed feelings of greed sponsibility to recognise the importance that domestic stakeholders are able to
and grievances, inciting increasing unrest of the host government as a significant
PAGE 82 OCTOBER 2018 AUSTRALIA’S PAYDIRT
sustain the peace once peacekeepers lable fire – a situation needing fuel, oxy- cal groups in his native country, Australian
have departed. gen for combustion and an ignition source High Commissioner to Nigeria HE Bello
– with militant ideologies and socio-eco- Husseini gave multiple reasons for the
To this end, he called on Australia to join nomic inequalities being the “oxygen” and understanding of conflict situations in the
like-minded countries to provide troops “fuel” for marginalised people to want to Niger Delta and north-eastern regions of
and police, as well as training and assist- rebel, and “ignited” by the arms and weap- his country. He spoke about the ethnic,
ing with high-end technical capabilities, for ons that have increasingly become avail- religious and economic differences that
the local forces to do their job. able. have contributed to so many conflicts not
only in Nigeria, but most African countries.
Bertrand Montembault, a senior law- With some 950 million small arms and
yer with Herbert Smith Freehills, spoke light weapons in circulation in the world Security is a key agenda item for the
about the controversial nature of ransom and a further 90 million manufactured current Nigerian administration and – in
payments and the legal complexities sur- each year, Kamara made a plea for stricter spite of sensational news stories – posi-
rounding them. He also touched on the controls on weapons manufacturers and tive results have been recorded tackling
disagreements that exist around the pay- international distribution. the threat of insurgency in the north-east.
ment or non-payment of a ransom. The multi-national joint task force efforts of
A heated discussion between Muham- Nigeria and other neighbouring countries
He suggested that the legality of pay- mad Dan Suleiman, an academic and has also helped to yield a significant result.
ing a ransom would depend on the laws Research Fellow at UWA, and Professor
that apply to a particular company. If the Samuel Makinda concerning the root of Peace and good governance will almost
person demanding a ransom is classified militant Islam, demonstrated there isn’t a certainly open any country with unrealised
as a terrorist or is subject to restrictive consensus, even among Muslims, as to mineral potential to investment and devel-
measures or sanctions under US, UK or how the destructive conflict environment opment.
EU laws, the payment of a ransom to such in the Sahel had arisen or evolved.
a person could amount to indirect terror In a closing statement, Eve Howell, sen-
financing. In its roots, Islam was agreed to be a ior adviser with African Geopolitics, said
“political” religion, just like Christianity. Australia had an important role to play in
For example, ransom payments are ille- However, Islam does not profess to ask mitigating some sources of conflict.
gal under Australian law and no one is ex- its followers to “turn the other cheek” with
empt, including private security firms and injustices but teaches that true social jus- “We must help make sure that, in the
insurance providers. tice is “an eye for an eye and a tooth for a communities, the young people find gain-
tooth”. Terrorism is not part of the religion ful activities and employment and don’t be-
African Professionals Australia’s David and is an abhorrent manipulation by cer- come fodder to terrorist groups who want
Kamara brought a socio-economic ap- tain radical individuals and militant Islamic to turn them into thieves, traffickers, arson-
proach to the discussion, reflecting a very factions in their search for power. ists and murderers,” she said.
real concern for the ordinary youths in the
rural regions as well as in the streets of the On considering the social, political and Article by Dr Max de Vietri,
sprawling cities of Africa. economic impacts of the activities of radi- Principal, African Geopolitics
Kamara likened conflict to an uncontrol-
Investors invited to
bank on Mauritius
Mauritius should be seen as more than Mauritius’ unique combination of fi-
just a holiday destination – a case nancial, taxation, investment and politi- Sanjiv Bhasin
hard to argue against given the presenta- cal regimes means it can offer interna-
tion by AfrAsia Bank chief executive San- tional investment communities wanting “The IPPAs also provide for arrange-
jiv Bhasin at Africa Down Under. to expand, or tap into Africa’s explora- ments for settlement of disputes be-
tion, project development and mining tween investors and the contracting
With Mauritius ratifying 44 Double opportunities that other jurisdictions lack states. That is the sort of investment
Taxation Avoidance Agreements (DTAA) the capacity to do. comfort Australian miners and explor-
with both leading and developing econo- ers are looking for in JV and other com-
mies around the world, there are certain- Bhasin encouraged Australia’s re- mercial partnerships covering African
ly fiscal benefits for Australian resources sources sector to capitalise on Mauri- resources projects.”
and investment outfits weighing up op- tius’ simple tax jurisdiction and access
portunities in Africa. to DTAAs and IPPAs as a means of of- Bhasin added that the Stock Exchange
fering investment protection to overseas of Mauritius (SEM) would also be a good
In addition to the DTAAs, Mauritius plays. fit for ASX companies considering a dual
also has 23 Investment Promotion and listing on another bourse.
Protection Agreements (IPPA) with 23 “Mauritius also offers full protection
African countries. of foreign investment in key African na-
tions through its network of Investment
“...so this gives Australia’s resources Promotion and Protection Agreements,”
sector a significant choice of project and he said.
investor options in Africa”, Bhasin said.
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 83
AFRICA DOWNUNDER REVIEW
Thinking outside the box
Nigerian lawyer Ayodele Kusamotu has Coming to Nigeria, you have to think out- Ayodele Kusamotu
urged his country’s government and side the box.”
foreign mining companies to “think outside pany having legally applied for and been
the box” to give the West African nation Kusamotu encouraged mining compa- granted access to the ground.
the best chance of realising the full poten- nies and government regulators to strike
tial from its mineral wealth. a “symbiotic relationship” between the Other examples detailed by Kusamotu
mining laws and what is actually required included duplication of cost obligations,
Kusamotu, chairman of Lagos-based on the ground. hijacking of reconnaissanced land and
law firm Kusamotu & Kusamotu, said avoiding bureaucratic bottlenecks in the
there was often a disparity between what “Whilst we need to adhere to the laws export licensing regime.
is written in legislation against what is ac- of Nigeria and the unrestricted policies,
tually practical on the ground to make a sometimes you find that in order to come “Legal guidance cannot be overempha-
mining project work. out as a commercial success you have to sised,” he said. “You want to discuss with
be very practical,” he said. a lawyer before you dive in it.”
Therefore, he suggested the best way
to counter these problems was to think “We have been having conversations – Michael Washbourne
laterally and open an early dialogue with with the Government, the administration
the relevant parties to find a solution and trying to bring these issues to the
which keeps everyone happy. fore. I am a lawyer, but I am also a mining
investor, so I have a little bit of knowledge
“We need to think outside the box be- about the practical problems that are
cause sometimes there’s some human faced which the law may not actually be
feelings which can actually affect the totally accurate.”
implementation of these policies, and a
clever or serious mining company needs Kusamotu cited examples where min-
to really think about these things from the ing companies, governments and/or lo-
beginning to the end,” he said. cal communities could come unstuck
because of ambiguity in the legislation
“We have the laws, we have the regu- around exploration or mining tenements.
lations, we have the policies, but careful
plans need to be done from the beginning One of those scenarios involved local
to the end in order to achieve success. communities having “surface rights” to
prospective land despite the mining com-
Gabon’s manganese dream
Gabon is seeking to become the world’s tal output. trative and regulatory procedures and bet-
leading manganese producer within NoGa Mining, which operates the ter security of the investments.
the next three years. Franceville mine, is progressing the “The purpose of all this, which is clearly
understood and clearly stated, is to attract
Speaking via a translator at Africa Okondja project through feasibility studies more direct foreign investment.”
Down Under, Gabonese Republic Min- and hopes to bring that asset into produc- Despite Gabon’s aforementioned man-
ganese production ambitions, Magnagna
ister of Mines Hon Christian Magnagna tion by 2021. said the country was looking to diversify its
mineral economy.
said the country’s three manganese mines Chinese-backed CITIC Damang’s
Balkan group Managem is in the pro-
churned out a combined 5mt in 2017. Ndjole is the third operational manganese cess of shuttering its depleted Bakoudou
gold mine, the only other active mining op-
Comilog-Eramet’s Moanda manganese mine in Gabon and produced 700,000t eration in Gabon.
operation contributed about 80% of the to- last year. “The geology of Gabon has a lot of simi-
larities with the geology of Brazil, which is
Magnagna said the country was a very big mining country, as they are both
inheritors of the Gondwana super-conti-
committed to attracting more for- nent,” Magnagna said.
eign investment into its fledgling “Such geology is mostly characterised
by ancient and extremely ancient rocks
mining sector. which host several types of ore with con-
siderable mineral potential and that pre-
“The existing mining code and sents numerous opportunities to develop
exploration projects to discover new gold,
its amended version, which is be- diamonds, iron, manganese, platinum
group elements and rare earth deposits.”
ing reviewed by the parliament,
– Michael Washbourne
promotes good practice and good
governance in the management of
mining activities,” Magnagna said.
“It now takes into account all as-
pects relative to the social respon-
sibility of business and sustainable
Tembo Capital’s John Hodder, Genmin Group development. It promotes local
chairman Joe Ariti, Gabon Minister of Mines transformation and protection of
the environment. It also ensures a
Christian Magnagna and Trek Metals managing better comprehension of adminis-
director Bradley Drabsch
PAGE 84 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Niger offers Symbol shapes up in Nigeria
tax incentives
Hon Abubakar Bawa Bwari
Niger is committed to improving its invest-
ment climate for foreign mining compa- While Nigeria has known for some ments in Nigeria.
nies, according to Ministry of Mines cabinet time that diversifying its economy “This initiative was driven by the na-
director Sekou Aboubacar Hassoumi. away from its oil-rich base is essential,
the process has not been quick. tion’s vice president and resolving of the
“We believe we are one of the best places issues that have hindered mining pro-
to do mining business in West Africa and we However, it appears the ball is now roll- jects from taking off has led to $US3.3
will continue to make efforts to improve the ing as Nigeria has worked feverishly to billion in private investment into projects
mining investment climate,” Hassoumi said. establish a platform conducive to foreign covering gold mining, refining, founda-
investment, which not only includes reg- tion works, lead zinc exploration and
“The target is to report consistent pro- ulatory and institutional reform, but solid production, tin and coal bed mining and
gress and lift our ranking on the World Bank geological data. processing among others,” he said.
Doing Business Index [currently 144].
“We’ve needed to introduce legal and “The Ministry of Mines and Steel devel-
“We are looking into providing potential regulatory framework and institutional opment has resolved to focus on remov-
investors with a package of flexible mining reforms to help mining along,” Minister ing challenges hindering formal exploita-
investment routes. This is all part of our de- of State for Solid Minerals Hon Abubakar tion of gold, tin and lead zinc minerals.”
termination to consolidate our success in Bawa Bwari said.
uranium, which we’ve been doing for a long Bawa Bwari said formal mining was
time, and diversify our minerals exploration “Also, the right idea is for us to gener- on the rise in Nigeria, with the likes of
strategy.” ate the right geoscientific data to attract Australian zinc company Symbol Mining
mining investors.” Ltd among the prominent players and
Niger is the world’s fourth largest uranium he welcomed more participation in the
producer, currently averaging 4,000 tpa Bawa Bwari highlighted Australia’s country’s mining sector from foreign in-
from a handful of yellowcake operations. involvement in helping Nigeria’s mining vestors.
sector, with many of the country’s min-
Mining represents 50-70% of the coun- ing professionals taking up postgraduate At the time of print, Symbol was on the
try’s exports and has contributed almost 7% and short course mining-related educa- cusp of delivering the first shipment of
to its GDP for the past few years. tional opportunities down under. zinc-lead concentrate from the Macy de-
posit, within the Imperial JV project.
According to the country’s mining cadas- “This is in addition to investment by
tre, 73 licences have been granted, includ- several Australian mining companies in Symbol chief executive Tim Wither
ing 22 for uranium and 40 for gold. the Nigerian mining sector, which have said he expected the company to gener-
helped improve the capacity of Nigerian ate about $10 million from Macy in the
Niger has also opened the door to com- professionals while also creating jobs next 12 months.
panies looking to exploit the country’s and wealth,” Bawa Bwari said.
known tin, lithium, titanium and vanadium “We will be reinvesting that back into
resources. Despite a blip across the board in the exploration,” With said. “All expectations
commodities sector, which many believe are that we will build Symbol into a mid-
Sekou Aboubacar Hassoumi to be a short-term pull-back, the popular tier mining house in Nigeria.”
belief is that the mining cycle is headed
Hassoumi was hopeful improved taxation upwards. Having found Macy – 137,000t @
reforms would prove attractive to foreign 18.3% zinc and 2.1% lead – after just
mining companies. Therefore, Nigeria has made efforts to 4,500m of drilling to a depth of 85m,
engage investors and the mining frater- Symbol is looking forward to discovering
“The Government of Niger is working nity to encourage further investment in a replica deposit.
hard to have a policy that takes into account the West African nation.
the long-term commitment because mining “We have 30 priority targets and we
is a long-term business and big money is Bawa Bwari said the Government have the ability to fund exploration from
involved,” he said. deliberately reached out to parties con- cash flow. We’re looking to start drilling
strained by the country’s bureaucratic again in Q4 to find the next Macy,” Wither
“Our government is committed to fully processes, which has reportedly result- said.
promoting world-class governance stand- ed in over $US3 billion worth of invest-
ards across exploration and mining. We’re – Mark Andrews
working towards publishing all contracts on-
line for transparency.”
Under certain conditions, companies are
exempt from taxes on importation of goods,
services and funds relating to mining activi-
ties.
Companies are also tax exempt during
the exploration stage.
– Michael Washbourne
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 85
AFRICA DOWNUNDER REVIEW
Winmar kicking ethical goals
Emerging DRC cobalt play Winmar Re- bished plant to produce up to 12,000 tpa Jason Brewer
sources Ltd has jumped on the front foot of high-grade concentrates comprising a
to ensure its imminent product stream is 30-40% cobalt hydroxide product and a production and cash flow.
ethically sourced and manufactured. 15-20% copper hydroxide product. “There’s a tremendous appetite for our
Winmar has appointed UK-based consul- Brewer said there was no question the product and I think for us as a listed compa-
tancy group Kumi Consulting Ltd to develop DRC was a “world-class” address for co- ny, with all the protections in place in terms
and implement a responsible and ethical balt production. According to Bloomberg, of compliance and responsible sourcing of
cobalt mining and production strategy for its the country’s cobalt production was up this product, we will be very well placed to
upcoming Luapula operations 40% in the first half of 2018 compared to lock down that financing with some very
the preceding six months. credible players,” Brewer said.
The strategy will be aligned to IFC perfor-
mance standards and the OECD guidelines “If you’re in cobalt, there’s no other – Michael Washbourne
for responsible mineral supply chains. place to be,” Brewer said. “Without ques-
tion, the DRC is a difficult country to oper-
“We have to demonstrate that our mate- ate, but I’ve been there now for the past
rial has been responsibly sourced in order 2.5-3 years and I think the reality on the
to deliver this product to the market,” Win- ground is very different to what you read in
mar chairman Jason Brewer said. the front pages of the newspaper.”
“The LME has just introduced new rules Winmar is currently subject to a
and regulations requiring companies to re-compliance order by the ASX due to the
demonstrate where their products have “significant change of operations” brought
been sourced. [Kumi] will complete a thor- about by the Luapula transaction, but Brew-
ough audit of where we source all our ma- er remains confident it will not hinder the
terial – both material which we’ll purchase company’s bid to achieve first production
from third parties and the material we’ll within the next 4-6 months.
mine ourselves – and of course a review of
our mining practices.” At the time of print, Winmar was final
-ising financing discussions with equity and
Winmar acquired the Luapula processing offtake partners which will ensure the com-
facility earlier this year and plans to push pany is fully funded through to steady state
250,000 tpa of ROM feed through the refur-
Code changes attract premium
Recent changes to the mining codes in rates for the DRC are currently hovering characteristic and is indicative of the faith
Tanzania and the DRC has resulted around the 2% mark, having come off an the political risk market has kept with
in greater premium rates for political risk all-time low of 1.75%. people investing specifically in the min-
insurance in those countries. ing sector in the region over that period,”
However, Gallagher executive direc- Morgan said.
Data presented by leading insurance tor, structured credit and political risks,
broker Gallagher showed both Tanzania Rupert Morgan said increased premium “I always like to make the point that de-
and the DRC experienced upticks in pre- rates were rarely based on a single factor spite the sometimes adverse publicity the
miums since possible changes to their re- such as a change in mining legislation. region gets, sub-Saharan African projects
spective mining codes were first mooted. are responsible for less than 10% of politi-
“These decisions will always be in- cal risk insurance losses paid across a 20-
Tanzania’s political risk insurance pre- formed by more than just the host coun- year period from 1997 to 2016, which I think
miums have increased from less than try’s mining code, or similar legislation, is quite remarkable considering the geopo-
1% in early 2015 to almost 2%. Premium and any recent and/or anticipated chang- litical upheaval in the region in that period.
es to it,” Morgan said.
Rupert Morgan “The political risk insurance market has
“These include country appetite, risk always, and continues to have, strong ap-
specifics, capacity availability, sector ex- petite for good projects, even in the most
posure aggregation and loss history for challenging environment – and sub-Sa-
the sector and/or country.” haran Africa is no exception to that.”
Morgan noted that premium rates for Morgan also presented political risk in-
both Tanzania and the DRC had remained surance data for Burkina Faso which has
relatively stable for the best part of a dec- remained relatively stable for the past 13
ade prior to their recent increases, high- years despite a minor “blip” in September
lighting the growing confidence among 2015 which coincided with a brief presi-
industry and investors in sub-Saharan dential coup.
mining projects.
– Michael Washbourne
“Given the region which we’re talking
about, I think that’s quite a remarkable
PAGE 86 OCTOBER 2018 AUSTRALIA’S PAYDIRT
DRC embraces change
One of the key figures behind the The DRC delegation was out in force at Africa Down Under
adoption of modern mining regula-
tions in the DRC has welcomed the latest it’s easy to explore and to mine because and we really encourage other people who
update of the country’s mining code. most of it is open-pit mining.” have these initiatives to come and invest
in the DRC.”
Former DRC Minister of Mines and Hy- Despite the changes to the mining
drocarbons Simon Tuma-Waku oversaw code attracting most of the headlines, Tuma-Waku was part of a strong Con-
the implementation of the 2002 Mining Tuma-Waku said the biggest challenge golese delegation at Africa Down Under,
Code which attracted the likes of Glen- for the DRC’s resource industry were re- along with Cominiere SA director general
core, Randgold Resources Ltd, Ivanhoe lated to available power and energy. Athanase Mwamba Misao.
Mines Inc and MMG Ltd to set up opera-
tions in the country. “We are attracting a lot of exploration State-owned Cominiere has a JV with
right now and, yes, at the exploration level Force at the Kitotolo-Katamba lithium
Tuma-Waku is a supporter of the re- we don’t need power, but once these pro- project, adjacent to AVZ Minerals Ltd’s
cent changes to mining code which were jects turn into production we need power,” Manono project.
signed into law by DRC President Joseph he said.
Kabila in June. Those changes included Speaking via a translator, Misao told
increasing royalties on copper from 2% “We are sitting right now with about Paydirt he was excited about the explora-
to 3.5%, on gold from 2.5% to 3.5% and 1,000MW deficit for the mining industry. tion both Force and AVZ were undertaking
on cobalt from 2% to as high as 10% if We need to catch up. Fortunately there at their respective projects.
the mineral is deemed “strategic”. are some private projects which are com-
ing on stream, so that should help solve “There’s lot of potential for lithium around
Glencore and Randgold were particu- the deficit. Within the next five years we Manono, so by starting there and building
larly vocal about the changes and at one should be able to solve the energy deficit, the project there, it will have a positive im-
stage threatened legal action against the but right now it’s quite a challenge and one pact on the local communities and from
Kabila Government. must be aware of that. there it will just keeping growing and grow-
ing the further they go with the project,” he
Speaking to Paydirt on the sidelines of “We are using a lot of trucks at the mo- said.
Africa Down Under, Tuma-Waku – now ment. There are hundreds and hundreds
vice-president in charge of mining at the of trucks carrying copper-cathode in Con- “Based on all the work they’ve been
Federation of Enterprises of Congo – in- go which is a big challenge for our roads doing so far, we’re fairly reassured about
sisted the changes were necessary for which are being destroyed. We should try the seriousness of the company going for-
the DRC to remain competitive as an in- and move at least half of that load into rail- ward. We only have Force’s best interests
ternational resources destination. way and I know the Government is work- at heart for now to success in their endeav-
ing on a solution for that.” ours.”
“In the DRC, we can’t afford not to at-
tract investment, because we need in- Tuma-Waku heaped praise on mining Force began a 16,000m RC and dia-
vestment,” Tuma-Waku said. entrepreneur Jason Brewer for leading a mond drilling programme at Kitotolo-
new group of ASX-listed juniors into the Katamba last month, following up on
“The changes we made in our new min- DRC, including Force Commodities Ltd, previous assay results which returned
ing law are very minimal. Sure, people Winmar Resources Ltd and Vector Re- high-grade lithium mineralisation of up to
are complaining about the cobalt, which sources Ltd. 2.15%.
if it’s declared strategic it will go to 10%,
but one must also look at how the cobalt “They are very aggressive in exploration Meanwhile, Vector has executed a
price did in the last 2-3 years. It went from and I think we can foresee in the next com- $US20 million committed debt facility with
$US25,000/t to almost $US100,000/t. So ing months, less than year, we’ll have more Medea Future Materials Fund LP as part
it’s important for the DRC people to grab producing companies,” Tuma-Waku said. of its requirements for the acquisition of a
a little bit of a share in that increase. 60% interest in the Adidi-Kanga project.
“This shows that our mining law is still Settlement is expected to occur in early
“It’s not just for the mining company, very attractive, otherwise they wouldn’t October.
we need to share wealth. If the Congo- come. We are very pleased to have Jason
lese people are happy, investors will be – Michael Washbourne
happy, everyone will be happy. We need
to know how to share the wealth together
so that we can develop the DRC and im-
prove the life of the people.”
Tuma-Waku said despite opinion to the
contrary, the DRC was very welcoming
of new foreign investment into its mining
and exploration industries.
“What is very positive for the DRC, it is
a very virgin land open to exploration and
the grades are very good,” he said.
“If you compare, for example, a copper-
cobalt project, our grades average 4-5%
but if you go to Zambia or other countries
it maybe 1-2%. We have quite a diverse
range of minerals, very good grades, and
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 87
AFRICA DOWNUNDER REVIEW
Battle of the taxes
Namibia is Africa’s most attractive des- only countries that are highly likely to re- Ben Gargett
tination for foreign mining investment ceive any taxation revenue at all,” PwC
capital, according to the latest research partner Ben Gargett said. as the returns are simply not sufficient to
report by PwC. justify the miner spending the capital to
“There are only so many profits and develop in these countries,” Gargett said.
Based on the economic analysis of a so much cash flow generated by a min-
nominalised 200,000 ozpa open-pit gold ing project. If the costs are too high the “It has to be a great mine to generate
mine operating under the same condi- project is uneconomic. The same applies enough of a return if only 27% of the pie
tions across four countries – Ghana, Tan- to the government taxes – if they are too remains for the company, as is the case
zania, Egypt and Namibia – as a repre- great for the project, there is insufficient in Tanzania. Therefore, I would put it to
sentative sample of the wider continent, left for the miner to generate a commer- you that a smaller share of the pie is a
the southern African nation emerged as cial return.” better outcome for the government than
having the most favourable tax settings no pie at all.”
for direct foreign investment. According to the PwC report titled “Bat-
tle of the Taxes”, the Namibia gold mine – Michael Washbourne
Namibia (25.3%) was the only country ($US435 million) generated the least rev-
to meet PwC’s minimum requirement of enue for its government over the life of
a 25% project IRR for the mining com- mine, compared to Ghana ($US487 mil-
pany. Ghana (24.2%) fell just short, while lion), Egypt ($US579 million) and Tanza-
Egypt (20%) and Tanzania (18.1%) were nia ($US694 million).
uncompetitive.
The study also found that mining com-
As a reference point, a similar gold panies were entitled to a 54% share of
mine in Western Australia returned a pro- the total revenue for the Namibia gold
ject IRR of 26.2% amid the recent defeat- mine, compared to 49% in Ghana, 39%
ed threat of an increased gold royalty. in Egypt and just 27% in Tanzania.
“While the Australian and Namibian “The burden of government take is
tax take may at first glance appear lower simply too high in Tanzania and Egypt for
than the other countries, they are the the mining company to fund the project,
Hybrid solution for Essakane
Renewable energy specialists Total Essakane’s hybrid plant is expected “We can deliver all of technology
Eren SA has hailed the recent suc- to deliver fuel savings of 6 million litres ‘bricks’ which lead to an energy storage
cessful commissioning of its off-grid hy- a year and eliminate some 18,500 tpa solution, whether it be a solar or wind
brid power plant at IAMGold Corp’s Es- of carbon dioxide emissions, with 1% of plant, a hybrid management, battery
sakane gold mine in Burkina Faso. project revenue also dedicated to com- storage or thermal power plant.”
munity investment via a registered car-
Total Eren was tasked with integrating bon credit programme. Faure said the company offered early
a new 15MW solar plant to complement contractor involvement in project devel-
the existing 57MW diesel plant at Es- Total Eren senior business developer opment plus extensive project financing
sakane. Commissioning began in April Clement Faure said the benefits of re- experience, including the recent closing
under a 15-year power purchase agree- newable energy systems were there for of a $US100 million loan with IFC and
ment. all to see. African Development Bank for the con-
struction of a 120MW photovoltaic plant
Clement Faure “It is operating totally in line with ex- in India.
pectations and we are slightly ahead of
schedule in terms of fuel displacement,” “It all starts with understanding how
Faure said. your customers run their plants and
from there you can propose a utility or
Total Eren boasts a global portfolio a variation of that utility which will main-
of more than 1GW of renewable en- tain its operating habits, but also deliver
ergy projects either in operation or un- what renewable energy can deliver,” he
der construction. A target of 3GW by said.
2023 has been set for the company to
achieve. “The way we see our role in the global
mining market is really to enhance prof-
In Africa, the company has operating itability of your assets, but lower your
power facilities in Uganda and Egypt, running costs.”
as well as Burkina Faso, totalling more
than 150MW. – Michael Washbourne
“We are actively looking for private
offtakers in Africa,” Faure said.
PAGE 88 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Mali: More than gold and oil
While chief of staff for the Malian Minis- ian can add another bow dicated can be paid back
ter of Mines, Oumou Soumare Traore,
took the opportunity at Africa Down Under to to the country’s resources within 2.5 years.
promote the country’s gold and oil sectors,
Birimian Ltd executive director Greg Walker sector. While it all sounds sweet,
happily talked up the West African nation’s
lithium potential. As it stands, Birimian’s one of the major challeng-
Mali is well-known for its gold potential 103.2mt @ 1.34% resource es for Birimian is getting its
and has 13 mines in operation, while there
is an estimated 80t of gold in reserves. at Goulamina, 150km product to market.
And despite some concerns around se- south of Bamako, is ranked There are two ports
curity, Mali is still attracting foreign invest-
ment in its resources sector, which was among the top 10 hard rock Birimian is considering
applauded by none other than Resolute
Mining Ltd managing director John Wel- lithium deposits in the world. transporting 362,000 tpa
born.
An updated PFS con- spodumene concentrate to
Welborn said Mali’s attractiveness as an
investment destination was on the back of a ducted on Goulamina, via road – Abidjan, 1,000km
solid mining code and the transparency of
the process of operating in country, which which was released in Oumou Soumare Traore away or Dakar, 1,600km.
Walker also agreed with. June, indicated a 2 mtpa “We have done a lot of
“Even with the security operation over 16 years work in terms of practicality
issues across the region
we are seeing an influx of from reserves of 31.2mt @ 1.56% lithium at in getting product to market. Mali is a land-
capital in Mali,” Welborn
said. operating costs of $US281/t was possible. locked country; everything that comes in
The quality of gold en- “The project benefits from wide pegma- and out of the country comes in and out via
dowment in Mali will see
investors continue to flock tites with true widths up to 100m and is road, including some 600,000t of cotton in
to the country and while oil
is an industry the Govern- open at depth. And, with excellent mine- a six-month period of the year,” Walker said.
ment wants to promote,
the likes of Birim- ability, basically it’s a dream,” Walker said. “There are certainly no qualms about
“The overburden removal moving lots of material over the road net-
is going to be minimal, so it work and the road network is in fact very
will certainly make it a joy to good. Abidjan, although it is a busy port,
mine and operate. In terms one of the busiest in Africa, it has excel-
of processing, it is vanilla, lent and very underutilised bulk loadings
basically bog standard pro- facilities so we are certainly very encour-
cessing layout, very similar aged by that.”
to the operations here in Exporting through Abidjan is the pre-
Western Australia.” ferred port option, with Birimian planning
Estimated capital cost first production from Goulamina by 1H2020.
revealed in the latest PFS – Mark Andrews
on Goulamina was $US199
Greg Walker million, which Birimian in-
Juwi justifies hybrid cause
With 620 million or 68% of Africans While there are challenges to contend Dave Manning
without access to power, energy so- with in adopting hybrid energy solutions,
lutions across the continent are required Manning said there were some positive When installed, the solar power project
fast. signs emerging on the back of recent at DeGrussa, 900km north-east of Perth,
drops in solar module costs and battery was reportedly the largest integrated off-
Renewable energy is one way forward, technology becoming more affordable. grid solar and battery storage facility in
however, there are hurdles to overcome the world.
for the adoption of wind and solar-gen- “These movements have resulted in
erated power systems to be adopted significant capital cost reductions to the Sandfire accesses about 20% of its
across Africa, according to Juwi Renew- point where a typical 12MW hybrid pow- power needs for DeGrussa from the so-
able Energies Pty Ltd global head of hy- er station in Africa can deliver power for lar power system.
brid Dave Manning. under $US0.14/kWH; these are real time
numbers,” Manning said. – Mark Andrews
“We must continue to drive develop-
ment and cost-effective energy solu- “A lot of these numbers come out of the
tions,” Manning said. projects we have done in the past such
as DeGrussa.”
“Poor financial provision for many of
the utilities in Africa is a major issue for Juwi delivered the $40 million solar
us, which is compounded by the very power project for Sandfire Resources
large upfront capital cost required for NL’s DeGrussa project in Western Aus-
renewable energy. Even though a lot of tralia in 2016, placing the mid-tier cop-
countries in Africa have energy policies per-gold producer ahead of the curve as
now, the legal and regulatory framework a renewable energy user in an off-grid
is still very patchy and inconsistent.” mining environment.
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 89
AFRICA DOWNUNDER REVIEW
Mkango tangos with rare earths
in Malawi
While many investors have gravitated portance of rare earths, particularly neo- funded and Talaxis granted 49% of the
towards cobalt and lithium stocks dymium in permanent magnet motors
project.
on the back of the battery minerals craze, used in EVs, is starting to be realised. “We are targeting a resource update
rare earths players are in the wings mak- One company positioning itself to play by the end of the year and a BFS by the
ing compelling cases to be part of the a part in the sector is AIM and TSX-V end of next year and we are targeting
conversation. listed Mkango Resources Ltd. production by the end of 2021,” Mkango
The rare earths market has struggled Mkango has the Songwe Hills project chief executive Will Dawes said.
for positive attention since 2011, but the – 13.2mt @ 1.62% TREO (indicated) and Following completion of the BFS, Tal-
situation is starting to reverse as the im- 18.6mt @ 1.38% TREO (inferred) – in axis has an option to increase its stake in
Malawi, which has drawn inter- Songwe Hill to 75% by taking care of all
est from Noble Group’s green development costs, essentially handing
technology resources focused Mkango a 25% free carried interest.
subsidiary, Talaxis Ltd. Dawes said that since Mkango list-
Talaxis has backed Mkango’s ed in 2010, there had been significant
downstream processing arm changes to infrastructure in Malawi and
Maginito Ltd, which was set up with the rare earths market on course for
earlier this year, while it holds a sustained uptick, there was good mo-
20% of Lancaster Exploration mentum behind Songwe Hill.
Ltd, the vehicle Mkango is driv- “This is one of the few advanced rare
ing Songwe Hill through. earths projects anywhere in the world,”
Talaxis has already invested Dawes said.
£5 million in Lancaster and a “With the new railway line, that will un-
further £7 million outlay fol- lock the potential in that part of the coun-
lowing a resource update at try.”
Will Dawes Songwe Hill will see a BFS fully – Mark Andrews
Sudan’s hidden treasures
With in excess of 220 pyramids host- In addition to a vibrant gold sector, source of 72.7mt @ 1.3 g/t for 3.05 moz
ed in country, Sudan is home to the Ibrahim noted the country’s abundance gold (indicated) and 19.8mt @ 1.2 g/t for
most triangular-shaped structures in the of reserves in silver (1,535t), iron (52bt), 750,000oz (inferred).
world. zinc (2.7mt), copper (5mt), tungsten
(1.2mt), chromium (1.2mt) and manga- – Mark Andrews
Therefore, there is a fair chance min- nese (4.8mt).
ing companies will notice them when fly- Mohamed Ahmed Ali Ibrahim
ing airborne EM surveys or traversing the Despite Sudan’s mineral
East African nation in search of minerals. potential, Australia has never
had a great presence in the
Sudan is, of course, the land of limit- country’s mining sector, how-
less resources, as explained by HE Gen- ever, that may change pend-
eral Mohamed Ahmed Ali Ibrahim, Minis- ing the success of Canada’s
ter for Minerals, Republic of Sudan. Orca Gold Inc’s Block 14 gold
project, near the Egyptian bor-
“We aim at using safe and sustainable der.
practices to exploit our mineral poten-
tial and we invite you to invest in Sudan ASX-listed gold producer
where you will find marvellous opportu- Resolute Mining Ltd has a
nities, limitless resources; it is a mining 17% stake in Orca.
dreamland,” he said.
Resolute’s $C22 million buy
In the past 10 years, Sudan’s gold pro- into Orca also includes ex-
duction has increasingly grown from be- posure to the Morondo gold
low 500,000 ozpa to over 4 mozpa, with project in Cote d’Ivoire where
small-scale mining companies compris- a maiden resource estimate
ing 45% of the industry and large scale remains a work in progress.
miners making up 38%.
However, in Sudan, Orca is
There are some 2 million artisanal min- gearing up for feasibility work
ers in Sudan, which is reportedly rich in at Block 14 which has a re-
gold tailings and artisanal waste.
PAGE 90 OCTOBER 2018 AUSTRALIA’S PAYDIRT
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4 - 6 September 2019
Perth,Western Australia
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NICKEL PREVIEW
WA’s nickel roots
set to regenerate
Just as the West Australian nickel in- officer Ashley Zumwalt said Lanfranchi ramic, Mincor Resources NL and Inde-
dustry appeared to be drifting into
relative irrelevance, a US-based private would be just the first step on the firm’s pendence Group Ltd built successful
equity firm has arrived to spark new life
into the sector. nickel journey. businesses around the discarded WMC
Black Mountain Metals made its entry “The signed SPA [sale and purchase nickel assets. Applying a junior company
into the WA nickel scene at the start of
the year. Based on the group’s success- agreement] for Lanfranchi is exactly ethos to the mature assets, the new own-
ful oil and gas model, Black Mountain’s
strategy is designed to deliver it a foot- aligned with BMM’s strategy to explore ers ensured the mines received the dedi-
hold in Class 1 refined nickel, which it
sees as being on the cusp of a funda- investment opportunities in battery met- cated attention they needed. However,
mental supply shift thanks to the growth
of electric vehicles. als within WA. I am looking at personally by the middle of this decade it was appar-
It launched its ambitions in August with getting involved at several stages of the ent the deep, narrow mines were coming
a takeover offer for Poseidon Nickel Ltd
but when the junior developer decided to project – from exploration to production to their natural end.
go its own way for equity funding, atten-
tion switched to Panoramic Resources and scalability,” Zumwalt said. “We are Black Mountain’s wider strategy is to
Ltd and its hibernating Lanfranchi mine
in Kambalda. confident in returning Lanfranchi back to bring consolidation back to the Kambal-
In September, Black Mountain an- production in the near future and I think da assets, starting with Lanfranchi.
nounced it had paid $15.5 million for
Lanfranchi, which has been on care-and- in doing so we will create value for eve- “We have hired an Australian manage-
maintenance since August 2015.
ryone.” ment team which is very familiar with the
Speaking to Paydirt following the ac-
quisition, Black Mountain chief operating It is a remarkable stance in an industry assets, and established offices in Perth
PAGE 92 OCTOBER 2018 AUSTRALIA’S PAYDIRT which has appeared to be slowly wither- so we can have a team on the ground at
“ing for much of the last decade. Pano- all times,” Zumwalt said. “Our manage-
You certainly haven’t seen the last of
BMM – we are very dedicated to WA
and plan to continue to explore investment
opportunities within this sector.
Black Mountain is confident in returning Lanfranchi back to production in the near future
Ashley Zumwalt ment team understand the Kambalda- Black Mountain’s aggression has
style of mineralisation and once we have shook up the WA nickel scene at a time
got scale of assets we can begin explor- when BHP Nickel West’s future remains
ing. unsure and other players such as Inde-
pendence and Western Areas Ltd are
“You certainly haven’t seen the last of pursuing new markets.
BMM – we are very dedicated to WA and
plan to continue to explore investment op- Zumwalt said the firm would continue
portunities within this sector.” to pursue opportunities in both nickel and
other battery minerals.
Where the junior miners profited from
WMC’s divestment, Black Mountain sees “If there’s a company involved in the
opportunity in consolidation. battery metals space, we’ve talked to
them,” she said. “I’m playing my cards
“As a private player, we have advan- very open in regard to what BMM’s focus
tages in not being beholden to markets,” in WA is. I don’t think there is anything to
Zumwalt said. “Our investors are more be gained from being sneaky or under-
patient and we can spend time and mon- handed. There is a growing demand for
ey on exploration. That’s what this asset electric vehicles, a gap in the supply of
needs. Lanfranchi has a reliable produc- battery minerals, and we are excited by
tion history of approximately 11,000 tpa the opportunity to help fill it.
nickel and we believe it has considerably
more to offer. “We we certainly keeping our options
open for further activity, and as one of
“Currently we are conducting further BMM’s greatest skills is being able to
due diligence and looking at our explora- make decisions and act quickly – we feel
tion options. We are confident in returning positive about what the future holds.”
the mine to production in the near future
with a substantial mine life ahead of us.” – Dominic Piper
AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 93
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23 October 2018
Perth,Western Australia
Image courtesy of Western Areas Ltd
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PAGE 94 OCTOBER 2018 AUSTRALIA’S PAYDIRT
Programme Tuesday 23 October 2018
08:00 Arrival tea, coffee and registration
Session One
08:30 Welcome: Bill Repard, Executive Chairman, Australia’s Paydirt Pty Ltd (5)
08:35 Karl Stokes, Head of Integrated Operations, BHP Nickel West (20)
08:55 Dan Lougher, Managing Director & CEO, Western Areas Ltd (20)
09:15 Peter Bradford, Managing Director & CEO, Independence Group NL (20)
09:35 Michael Rodriguez, Chief Operating Officer, Poseidon Nickel Ltd (20)
09:55 Ashley Zumwalt, Chief Operating Officer, Black Mountain Metals (20)
10:15 Questions (10)
10:25 Morning Tea sponsored by St George Mining Ltd (25)
Session Two
10:50 Q&A with Hon Bill Johnston MLA, Minister for Mines and Petroleum, Government of Western Australia
with convenor Dominic Piper, Editor, Paydirt Media (20)
11:10 John Prineas, Executive Chairman, St George Mining Ltd (20)
11:30 Ian Mulholland, Managing Director, Rox Resources Ltd (20)
11:50 Mark Wilson, Managing Director, Legend Mining Ltd (20)
12:10 Sarah Mitchell, General Manager Technical Services, Ardea Resources Ltd (20)
12:30 Questions (10)
12:40 Lunch (50)
Session Three
13:30 Peter Harold, Managing Director, Panoramic Resources Ltd (20)
13:50 Warren Hallam, Managing Director, Metals X Ltd (20)
14:10 Richard Bevan, Managing Director, Cassini Resources Ltd (20)
14:30 Peter Muccilli, Managing Director, Mincor Resources NL (20)
14:50 Dr. Stephen Davis, Director, Comet Minerals Ltd & Prof. Louisa Lawrance, Consultant Geochemist and
Principal, Louisa Lawrance Associates Pty Ltd (20)
15:10 Questions (10)
15:20 Q&A with Ross Louthean (Australia’s Nickel Adventure) with convenor Mark Andrews, Deputy Editor,
Paydirt Media (5)
15:25 Afternoon Tea sponsored by PCF Capital Group (20)
Session Four
15:45 Justin Werner, Managing Director, Nickel Mines Ltd (20)
16:05 Peter Sullivan, Chairman, GME Resources Ltd (20)
16:25 Malcolm Cattach, CEO/Geophysicist, Gap Geophysics Australia Pty Ltd (15)
16:40 Questions (10)
16:50 Closing Panel Discussion (Convened by Dominic Piper, Australia’s Paydirt) (50)
17:40 Closing Drinks sponsored by GR Engineering Services
* This programme is subject to change without prior notice
australiannickelconference.com
NICKEL PREVIEW
The 90s laterite revival
heats up
EV Metals’ Range Well nickel-cobalt laterite project was last seriously tested in the 1990s
Having been intimately involved in the said Weld Range’s position in the nickel lat- more than 58,000m of drilling across 1,300
first wave of Australian laterite develop- erite story had been largely forgotten. holes, of that 36,000m was done for nickel-
ments, Michael Naylor will not get carried cobalt-chrome in laterite to a depth of 30m,”
away in the current nickel-cobalt rush but he “This is a world-class project,” he said. he said. “That equates to a very large ton-
remains convinced the sector’s day is com- “Twiggy’s priorities at Anaconda were first nage of 2.4mt nickel and 150,000t cobalt.
ing. Murrin Murrin, then Mt Margaret and then That makes it the largest nickel-cobalt de-
Weld Range. But this is actually the first posit undeveloped in Australia; more than
Naylor worked with Andrew “Twiggy” For- time since then that it has really been spo- CleanTeq [Holdings Ltd] and Australian
rest at Anaconda Nickel during its 1990s ken about. Management rights have been Mines [Ltd] and on a par with Ardea [Re-
heyday and while that initial nickel laterite split through JVs, corporate structures and sources Ltd].”
boom failed to deliver on its promise, that different company priorities.”
insight could ensure his new company, EV EV Metals plans to build confidence
Metals Group Ltd, is well-positioned to take In the 20 years since it was a focus of lat- in the Range Well resource by undertak-
advantage second time round. erite exploration, Weld Range has attracted ing infill drilling programmes either side of
attention for its iron ore, chromium and lat- Christmas, ahead of a PFS set for release
Using EV Metals as his vehicle, Naylor terly PGM potential but Naylor believes the in early 2019.
has consolidated the ground making up nickel opportunity at the Range Well pros-
the Weld Range Complex nickel-cobalt- pect remains strong thanks to a 385.3mt “The first phase of the infill drilling will
chromite project in Western Australia’s Mur- @ 0.64% nickel and 0.04% cobalt inferred focus on the high-grade nickel-cobalt ar-
chison district. resource. eas within the thicker horizon of the laterite
profile,” Naylor said. “The second phase
Speaking to Paydirt last month, Naylor “When you look at the resource, there is
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PAGE 96 OCTOBER 2018 AUSTRALIA’S PAYDIRT
then focus on upgrading the resource from el before it goes into the HPAL plant. It has development correct. To assist in this pro-
inferred through to indicated and measured low magnesium and aluminium values so cess, the company has brought in Chinese
ahead of the full feasibility study.” there will be low acid consumption.” groups ENFI and MCC to assist with de-
sign, construction and commissioning.
Nickel laterite resource numbers always Murrin Murrin was the first, and now only,
appear impressive on paper but Naylor HPAL plant in WA but Naylor believes the ENFI will complete the Range Well PFS,
knows only too well the market considers technological advances of the last 20 years having signed an agreement with EV Met-
project execution as the key to unlocking mean the process has a bright future. als in late August.
any inherent value.
“There were early problems at Murrin “ENFI and MCC have the technology
He said the company had already started Murrin but that is now a highly success- and the know-how to do that,” Naylor said.
metallurgical test work and believed the iron ful operation and those problems have all “They built Ramu [HPAL in Fiji], commis-
oxide silica orebody was amenable to ben- been addressed in the last 20 years. It is sioned it and operated it. They are probably
eficiation prior to a HPAL process. now proven technology.” the most successful laterite developer of
the last decade.”
“The test work on beneficiation showed If Range Well is to follow in Murrin Mur-
we could upgrade it from 0.64% to 1% nick- rin’s footsteps, EV Metals must get project Naylor is conscious of the disappoint-
Some 58,000m of drilling has been conducted on the nickel-cobalt mineralisation at Range Well, producing plus-1mt of contained
nickel and 150,000t contained cobalt in inferred resources
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AUSTRALIA’S PAYDIRT OCTOBER 2018 PAGE 97
NICKEL PREVIEW
-ments of previous laterite development at- in production in 2023.”
tempts but is determined to follow the les- Naylor said the company
sons learnt.
was working on a $US15
“I don’t think there’s any getting around million capital raising due
that but with partners who have experience for completion this month
of design, construction and funding of these with an ASX-listing be-
plants, which China is chasing,” he said. ing considered for the first
quarter of 2019.
You have to be realistic about capex. No
amount of clever engineering will reduce By then, the company
the cost of the plant and the issue will al- hopes to have progressed
ways be capital intensity, commissioning project partner discus-
problems and cost overruns.” sions.
EV Metals is giving itself time to execute “We need to be work-
development correctly with the company ing with people who know
setting itself a 2023 target for commission- what they are doing,” Nay-
ing. lor said. “We have started
discussions and we want
“There have been mistakes in the past a strong partner with the
trying to cut corners but that only results in appropriate technical skills.
more delays,” Naylor said. We don’t want to wait until
the final feasibility study to
The 2023 target is also significant from start the process and we
a market perspective with the middle of are confident we will have
the decade widely earmarked as the tip- someone identified and
ping point for EV uptake and, therefore, in- hopefully on board by the
creased nickel demand. end of the first quarter next
year.”
“This whole project is about being able to
produce high purity value-added products – Dominic Piper
such as nickel and cobalt sulphates for EVs
and energy storage,” Naylor said. “Demand
for nickel from the EV market starts to kick
in from 2023-2035 and we want our project
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PAGE 98 OCTOBER 2018 AUSTRALIA’S PAYDIRT
NICKEL PREVIEW
Philippines implements
fresh nickel mining curbs
The Philippines, one of the world’s top be banned. as tall as he is in six months.
suppliers of nickel ore, has started limit- Nickel miners will be limited to a produc- Miners will be required to put up a 5
ing the land that miners can develop at any
one time as new rules to protect the envi- tion area ranging from 50ha to 100ha at million Philippine pesos ($93,370) perfor-
ronment take effect. any one time, depending on the size of mance bond every year as a guarantee
production and whether they have a pro- that they will comply with the requirement
The new curbs, backed by President cessing plant. on mine rehabilitation. The bond will be
Rodrigo Duterte, target 29 of 48 mines op- forfeited if they fail to comply.
erating in the Philippines, which are nickel The Government order, now in place,
producers supplying ores to the world’s will allow mines producing up to 1 mtpa of “Our member-companies are fast-track-
leading market, China. Reuters first re- nickel ore to work on 50ha at any one time. ing efforts to comply with the order, includ-
ported the new set of restrictions in April. ing the revegetation of mined-out and in-
Those producing more can work on active mine areas,” Rocky Dimaculangan,
Mining is a deeply contentious issue in 60ha up to 100ha, while projects with the Chamber of Mines’ vice president for
the resource-rich South East Asian coun- a processing plant will be allowed up to communications, told Reuters.
try after past examples of environmental 162ha.
mismanagement. Nickel ore output fell 10% in the first
“If mining companies intend to open a half of 2018 from a year earlier to 9.43 mil-
The industry group Chamber of Mines of new area, say 100ha, they should also lion dry metric tonnes, government data
the Philippines said it supports the govern- progressively rehabilitate the same 100ha showed.
ment order. that they previously disturbed,” Manila’s
Geosciences Bureau Director Wilfredo Eleven of the nickel mines had zero out-
Under the new rules, a 20m “buffer Moncano told Reuters. put during the period because their opera-
zone” will be established inward from the tions were suspended or they were under
mining tenement boundary and near rivers Duterte told miners in April to reforest ar- maintenance status.
and streams, where metals extraction will eas where they operate, warning he would
revoke their permits if he doesn’t see trees – Reuters
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PAGE 100 OCTOBER 2018 AUSTRALIA’S PAYDIRT