pd254-October17 mag-web

legislative changes in Zimbabwe, how- Morocco’s capital, and appointed Beren- However, the problem up until now in

ever, those efforts had all but stalled. ice Owen-Jones as the first resident Aus- Egypt has been clear and fair legislation

A brighter note in McCourt’s patch has tralian ambassador in the country. towards foreign investors.

been a return to positive sentiment in While only a matter of months into Ambassador to Egypt Neil Hawkins

Zambia’s resources sector. the position, Owen-Jones is extremely was happy to report the landscape was

Better copper prices have provided a bullish on the prospects for Morocco to now changing.

spark for miners in Zambia and there has leverage from Australia’s overall mining “They have upgraded investment laws

been real effort from the Government to expertise. making it easier for foreign ownership

engage with industry. Owen-Jones hopes to put the Aus- and investors to come in,” Hawkins said.

“There have been some really big is- tralian-Morocco partnership on the map “You can expect to see more interna-

sues between Zambia and mining com- through initiatives like the Australia-Mo- tional interest in gold and other deposits

panies, most recently to do with the rocco Business Council, which will be in Egypt in the coming months.”

electricity tariff price and renegotiating launched in the near future. Egypt and Morocco may well provide

existing agreements,” McCourt said. Tongue-in-cheek, Owen-Jones said: fresh opportunities for Australian mining

“The ministers are making sure there “This could be the start of a beautiful companies and investors to consider.

friendship.”
“is open dialogue with mining companies. Therefore, it may not be long before

I guess that is an inroad into gov- tried and tested destinations like
ernment for companies to send
messages on what they need to This could be the start of Ghana need to compete harder
invest and continue operating in for investment attention.
Zambia, which is really critical.”
a beautiful friendship. Ghana’s new government has
The Nigerian Mines Ministry brought much needed stability to
was also praised for keeping its
the economy, with High Commis-

sioner to Ghana Andrew Barnes

lines of communication open, which is “The business council will help to facili- citing falling interest rates, improving

particularly important as the country tate business partnerships and opening employment numbers and a better credit

emerges from a trying economic period, an embassy in Rabat will allow us to en- rating as big ticks for the Government.

according to High Commissioner to Ni- gage in North Africa and give us scope to “They are doing what they can to make

geria Paul Lehman. cooperate on the security front,” Owen- it a more business friendly environment.

However, with security an ongoing is- Jones said. The Government says they want to make

sue in country and an election looming in The mining sector in Morocco is un- Ghana the most attractive destination in

early 2019, Lehman said, as always, “it’s dergoing reform to improve governance Africa for foreign investors and that is a

a mixed picture” in Nigeria. and transparency, while as a means of useful line we play back to them; we re-

“There are challenges around security, opening up the minerals sector, several mind them of their commitment on that,”

but as far as our efforts to access dia- hundred [exploration] permits will be is- Barnes said.

logue with the Nigerian Government, it is sued in the coming year. There remains some ironing out to be

in a good place and perhaps in an even “There has already been a bit of inter- done in Ghana’s mining sector, including

better place than some of the other coun- est in that already,” Owen-Jones said. negotiating on the 17.5% VAT on explora-

tries I cover,” Lehman said. Egypt recently embarked on a similar tion and accessing work permits.

“There is always something that fo- campaign to encourage investment in its “That is something which, if they can

cuses attention and can sometimes at- mining sector, with ASX-listed Resolute change, will be a win for foreign invest-

tract attention and Nigeria will be moving Mining Ltd swooping on the opportunity ment in the mining sector and we are

into pre-election phase about now ahead to participate in the relatively under-ex- hopeful that with the Government, which

of the presidential elections in January/ plored jurisdiction. is giving signals that they will move on

February 2019.” Centamin Mining plc has made good those. I think it is a positive picture,”

Nigeria has been looking for economic from its gold project in Egypt and the Barnes said.

diversification beyond the oil fields for Government has welcomed $53 million – Mark Andrews
some years and mining has been identi- in royalties a week from the Sukari op-

fied as a potential pillar for the economy. eration.

The country is early into a 20-

year roadmap to build a formida- Six weeks into the position of High Commissioner to Mauritius, Jenny Dee attended Africa

ble resources industry and with Down Under, and was happy to give her initial impressions on where Australia and Mauritius

new jurisdictions opening doors could strengthen ties.

to investors, Nigeria is keen to Mauritius is well known for its capacity as a financial services hub, however, it is in the area of

take its opportunity now. education where Dee believes there is a big opportunity.

Elsewhere on the continent, “Mauritius has an ambitious programme to establish itself as an education hub. Australian edu-

gold, lithium and potash stories cation institutions have been engaged with Mauritius for a long time, with one institution having

are starting to gather some mo- more than 8,000 graduates in Mauritius alone with Australian qualifications,” Dee said.

mentum in Ethiopia, the explo- “There is an increase in the number of offerings of Australian degrees and diploma qualifica-

ration scene is starting to open tions in Mauritius. In fact, there are opportunities for students from Africa, who can’t afford to get

up in Egypt, and Morocco could study in Australia, to come to Mauritius to get Australian qualifications in a range of areas. They

soon emerge as a destination of can then take related skills into the mining sector and related industries back in Africa.”

choice for miners. Ambassador to Ethiopia Mark Sawers concurred with Dee, saying while Ethiopia was open

As part of the largest pro- to foreign investment in the mining sector, opportunities for Australia to provide education in-

gramme in 40 years to expand its country were enormous.

diplomatic footprint, Australia has “Technical and vocational education opportunities are underdone in Ethiopia,” Sawers said.

opened an embassy in Rabat,

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 51

AFRICA DOWN UNDER REVIEW

Uranium set to bear a bull

Along-awaited uranium price recovery While secondary supply currently off- Brandon Munro
is on the horizon as nuclear power
utilities brace for an inevitable supply sets the structural deficit between utility between now and 2021, we’ll see utilities
crunch, according to Bannerman Re- in a long-term contracting panic and the
sources Ltd chief executive Brandon demand and mine supply, research from longer it goes towards, the more abrupt
Munro. and the more motivated those utilities are
Namibian-focused uranium hopeful Ban- likely to become.
ADVANCING THE WA GOLD PROJECT, GHANA
2.1Moz Mineral Resource nerman has indicated that gap will widen “Our thesis, based on market funda-
624,000oz @ 2.14g/t Ore Reserves mentals, is that we need to see the sec-
~90,000oz/yr; Initial 7 yrs; 92% av. recovery in 2019 and ultimately help lift yellowcake tor start to move and start to recover by
Mining Leases granted the end of next year, otherwise the utili-
Feasibility Study completed prices off the can- ties will be left in a very, very difficult and
Grid power, excellent roads and water supply awkward position by 2021.”
2,400km2 of prospective Birimian greenstones vas.
Extensive target pipeline Market commentators have identified
16.6% of neighbour, Castle Minerals Limited Uranium has a number of short-term catalysts which
may also contribute towards an uptick in
traded at decade- the uranium price, including the imminent
restart of several Japanese reactors.
low prices of circa
However, supply discipline from Kaz-
$US20/lb for much atomprom – Kazakhstan’s state-owned
uranium production company – leads all-
of the past two comers.

years. “The average cost of production on an
all-in sustaining basis in Kazakhstan to-
Munro expects day sits slightly above $US20/lb, so all of
a sudden the country that has delivered
secondary supply to all this volume since 2005 isn’t making
money,” Munro said.
taper during 2020,
“If that’s not a recipe for a turnaround
with a structural in a sector, then I’d love to hear one and
I’ll be on the phone to my brokers straight
deficit of 25 mlbpa away.”

to be evident by the Bannerman is currently updating a
DFS on its Etango project following a
following year. successful heap leach demonstration
plant programme, with the revised re-
“By 2025, there is sults due for release next year.

65 mlbpa that must – Michael Washbourne

come into the sec-

tor from new mines,

none of which are

viable at $US20/lb,”

Munro said.

“In this market

utilities typically

contract 3-5 years

in advance and we

can’t see them go-

ing closer than three

years to that crunch

point [of 2021] with-

out being forced to

do something about

it.

“At some point

PAGE 52 OCTOBER 2017 AUSTRALIA’S PAYDIRT

The Contrarian: John Borshoff

There was a time when a John Borshoff phase to cross.” “We consider ourselves
presentation was one of the most The realisation of these
highly anticipated on the Africa Down Un- differentiated from all
der programme. shortfalls won’t occur until
long-term contracts run out other mid-sized uranium
Borshoff has now departed the trou- between 2020 and 2024
bled Paladin Energy Ltd and uranium and fulfilling uranium de- players with a new man-
prices have fallen off the cliff since the mand becomes a problem.
company’s heyday. agement and core team
Borshoff said this would
Nevertheless, Borshoff can still hold a likely cause an “overshoot” in place that has a unique
crowd and if he is right, his new interest in uranium prices which
– Deep Yellow Ltd – will be demanding would go beyond the nor- uranium experience base
unrivalled attention in the next five years mal incentivised price of
as uranium supply dries up. $US70-75/lb. and is able to take this

“Production increases need to be Therefore, he is priming company to the highest
started now for five years’ time, but I can Deep Yellow in Namibia to take part in
assure you this won’t happen,” Borshoff the uranium upswing when it occurs. heights it can go,” Bor-
said.
Deep Yellow has 1.5 blb uranium in shoff said.
“Today, the same growth forecasts are measured and indicated resources in
in place as in 2011 and a deteriorating Namibia, but perhaps of even more value John Borshoff “You need a highly re-
supply in industry, with uranium prices is the team Borshoff has at his disposal. spected team and leader-
stuck at historic lows around $US20/lb is
not sustainable. This is a perfect storm Borshoff started as managing director ship, with very high cred-
for dramatic increases in uranium prices of Deep Yellow about 12 months ago and
in the near term. It may already be too has brought former Paladin board mem- ibility and knowledge of uranium which
late for the future supply shortfall to be bers Gillian Swaby and Justin Reid along
satisfied and it could be an interesting as directors, while head of exploration Ed has proven itself in business.”
Becker was also at Paladin.
It will take the general investment com-

munity a while longer to believe in urani-

um again, however, Deep Yellow already

has the support of Sprott Group Affiliate

and Collines Investment and $14.5 mil-

lion cash on hand to help it deliver its

strategy.

– Mark Andrews

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 53

AFRICA DOWN UNDER REVIEW

Lesotho looks beyond
sparkly rocks

Its diamond potential may Keketso Sello
be far from realised but the
Government of Lesotho is and geochemical surveys.
actively encouraging inves- Among 23 commodities targeted in the
tors to test the mountain
kingdom’s prospectivity for surveying exercise are copper, zinc, iron
other commodities. ore, uranium and gold.

Lesotho Minister for Min- Speaking to Paydirt on the sidelines of
ing Keketso Sello said his the conference, Sello said Lesotho relied
newly elected government on its stability to attract ongoing invest-
had developed a number of ment.
policies designed to foster
exploration in the country. “We’ve never had a time where we
have disagreed or had arguments with
Lesotho – an enclave in investors,” he said. “It is important that
central South Africa – has we show our support for the mining in-
developed a reputation as dustry and we honestly value their in-
a prolific producer of large, vestment which will give us the royalties
quality gemstones with its we are in need of.
diamond sector (led by the
Gem Diamonds Ltd-owned “You cannot just change laws. Stability
Letseng mine) averaging a is important and we cannot afford to lose
world-leading $US1,066/ct any investor for being too harsh.”
in 2016.
Lucapa Diamond Co Ltd is the only
The country has ASX-listed company currently operating
405 known kimber- in Lesotho, having acquired the Mothae
lite bodies but its diamond project earlier this year. Lucapa
30,355sq km land- managing director Stephen Wetherall
mass still remains said any diamond industry insider would
largely unexplored. be excited by working in Lesotho.

Sello said explo- “This tiny country is the seventh largest
ration was “an es- producer by value,” he said.
sential prerequisite
to the development – Dominic Piper
of any mining indus-
try”.

“Lesotho thus,
promotes explora-
tion and develop-
ment of her mineral
resources through
availability and dis-
semination of all
geoscientific data
necessary for the
promotion of the
minerals sector,” he
said.

This promotion
includes policies
to establish a well-
resource geological
survey, consolidate
existing information
on mineral poten-
tial and undertake
countrywide geo-
logical, geophysical

PAGE 54 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Lucapa climbs Lesotho’s
diamond mountains

Lucapa Diamond Company Ltd Stephen Wetherall
is intent on avoiding share-
holder dilution but such is its ernment of Leso-
belief in both project and jurisdic- tho – plans to bring
tion, the company couldn’t resist Mothae into produc-
bidding for the Mothae project in tion in Q2 2018.
Lesotho earlier this year.
Previous owner
Lucapa acquired Mothae – lo- Lucara Diamonds
cated in the diamond-rich South- plc took the pro-
ern African kingdom of Lesotho ject to the brink of
– through a competitive tender production; drilling
process, beating off competition 8,000m and pro-
from nine other companies to cessing 600,000t
secure the project. to recover 23,000ct.
That work will al-
The move surprised some low Lucapa to move
market observers who had wit- swiftly into devel-
nessed Lucapa continue to opment once it has
plough profits from its share completed its opti-
of alluvial diamond mining at misation study.
its Lulo diamond JV project in
Angola back into kimberlite ex- “Once we have
ploration on the same project. taken the optimisa-
Managing director Stephen tion results through
Wetherall admitted the move for Mothae the Mothae board
could look like a change in strategy but we will tell [the mar-
he said the fundamentals of the opportu- ket] how we are go-
nity were too compelling to ignore. ing to do it, when
we are going to do it
“When we were told this project was and how much it is
coming up for tender, from what we knew going to cost.”
about Lesotho and the area we obviously
ran at it,” Wetherall said. – Dominic Piper

Lucapa has enjoyed 18 months of suc-
cessful alluvial diamond mining at Lulo
but the experienced Wetherall and the
rest of the Lucapa board and manage-
ment know that institutional investors are
reluctant to back diamond companies
solely focused on the often fickle alluvial
gravels.

The Mothae acquisition delivers Lu-
capa both project-level risk diversity by
bringing a high-value kimberlite resource
into the portfolio and geopolitical risk
diversity with Lesotho considered one
of the safest investment jurisdictions in
Southern Africa.

“This board is heavily focused on
growing Lucapa but we are also focused
on identifying key investment hurdles
and overcoming those and we are also
interested in operating in a niche area of
the market,” Wetherall said.

Mothae boasts the second highest
value-per-carat JORC resource in the
world, behind only its neighbour, the Let-
seng mine owned by Gem Diamonds Ltd.

Lucapa – in a 70/30 JV with the Gov-

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 55

AFRICA DOWN UNDER REVIEW

Step taken in Nigeria’s roadmap

Nigeria’s 20-year roadmap for its min- evant parties in a better position to de- Dr Kayode Fayemi
ing sector is in its infancy however it velop them than the Government.
is being driven in the right direction ac- Iron ore and gold companies have
cording to the country’s mining minister. “We also need to facilitate particu- been attractions for Australian miners
lar interests that the Government has, in the past, while Hugh Morgan’s private
Speaking to Paydirt on the sidelines for example, the coal sector. It’s about enterprise – Comet Minerals – has cre-
of Africa Down Under, Nigeria’s Minister power generation for us, it is not about ated some excitement in country since
of Mines and Steel Development, Hon Dr just taking out coal or utilising it for other confirmation of the unique Titan nickel
Kayode Fayemi, said the team assigned things. Similarly, with limestone or other discovery last year.
to deliver the roadmap had made signifi- industrial minerals generally, it is about
cant progress in a short period of time. processing and beneficiation. In bitumen Titan, situated between Abuja and
for example, it is about ensuring that we Jos, is in a region unfamiliar with mining.
“Cabinet approved the roadmap 14 build an orebody that can feed the con- Therefore, Comet has proceeded cau-
months ago and the mine strategy imple- struction, manufacturing and processing tiously with the project thus far, paying
mentation team was put in place to make in country,” Fayemi said. particular attention to community sensi-
sure that the roadmap just doesn’t sit on tivities.
the shelf,” Fayemi said. “Downstream processing and benefi-
ciation is clearly a priority we are dealing Fayemi said the community was slowly
“We have started with all the issues with, value addition for the mining sector starting to understand the potential of Ti-
that the roadmap identified as challeng- is a major challenge. There are a whole tan and how it could benefit from a poten-
es that must be tackled by government in lot of minerals in Nigeria, but they just get tial operation.
order to attract investors into the mining taken out raw without any value addition,
sector. That has forced improvement in without any beneficiation but the market “At first it wasn’t well understood,” Fay-
geological data, access to finance, min- in Nigeria is large enough to benefit from emi said.
ing infrastructure plus protecting and for- additional value from these minerals.”
malising artisanal miners.” “Part of the ministry’s job is to enlight-
Australian companies and govern- en people about the huge potential this
Addressing the role of artisanal miners ments are seen as key players to help project contains for the country. From
was seen as a priority, given the size of Nigeria fulfil its mining potential. time to time people ask how is it going,
the sector in Nigeria and the potential for what is happening, but for people who
illegal miners to be a “cog in the wheel” A select group of staff from Nigeria’s are not familiar with mining and the mine
for major investors. Mining Ministry are currently undertaking development process, it is all about the
learning programmes in Western Aus- bottom line – when is it going to start?
Attracting foreign investment into the tralia, with an emphasis on regulating
mining sector will help diversify Nigeria’s mining licences, royalty administration “The journey from resource discovery,
economy, which is largely driven by the and technical exploration capacity build- through exploration to mine production
oil sector. ing. can be a torturous one, and it doesn’t al-
ways align with political or electoral cal-
To demonstrate its willingness to pro- Fayemi said Nigeria enjoyed a good endars, for that matter.
mote and develop mining, government relationship with the WA Government
funding to the sector has increased, and hoped to leverage from the State’s “If you are a political leader who needs
while the World Bank has contributed experiences and expertise. a quick win, you want these things to
$US150 million to Nigeria’s roadmap. happen bright and early. You want it to
Fayemi also hoped Australian mining start producing the results that people
While the World Bank’s support is rela- and exploration companies would boost can feel and see and say: ‘yes, this is a
tively small in a mining context, Fayemi their engagement in Nigeria’s mining tangible achievement by this company’. It
said the money was welcomed and a sector and bring investors along for the is a bit of a difficult one to explain.”
good start for the Nigerian mining sector ride as well.
which has been “largely ignored over the – Mark Andrews
last few decades”.

The lack of attention or interest from
investors in Nigeria’s mining sector is
somewhat reflected in the make-up of
the country’s GDP.

“Over the next 20 years, we hope at
least 5% of the GDP will come from min-
ing,” Fayemi said. “The current 0.33%
contribution now is really peanuts. If we
continue on the trajectory that we are
on now, we are confident that we will
be moving in the direction of 3-5% GDP
from mining.”

Coal, gold, iron ore, limestone, lead-
zinc, barites and bitumen have been
identified as strategic minerals Nigeria is
focused on exploiting.

Fayemi said work had now started on
matching such commodities with rel-

PAGE 56 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Comet lands at next phase

Comet Minerals Ltd announced Lawrance said Titan had the
its rare Titan nickel discovery in
Nigeria to the world at last year’s Af- potential to rival the highest grade
rica Down Under and this year saw
further light shed on a project which nickel sulphide mines in the world.
has the potential to put “Nigeria on
the map”, according to Hugh Mor- “It is early days, but Titan might
gan.
challenge this standard as the
“The nature of the orebody is that
it expresses itself with these nickel mineralisation is low in iron and
balls that run 90%-plus pure nickel,
but not all so, and many of them are efficient in sulphur and of course
very small in nature, down to 40
microns,” Comet director Morgan contains native metal,” she said.
said.
While defining the geology and
“How to recover these [nickel
balls] has been an interesting chal- chemistry is ongoing, Comet is en-
lenge. Our first appraisal was think-
ing that it would be an easy job just joying good government support
like separating out gold nuggets;
it is far from being the case. Now it is a for a project which could be coun-
function of assays: How do you assay
this material?” try defining.

Led by Professor Louisa Lawrance, “We are on track with our com-
Comet has made significant inroads on
assaying techniques with the process munity agreement, we are on track
under way to officially patent a method.
with our environmental agreement
“That assay process will mean an
amendment to the plant we are design- which is well under way and we are

expecting to commence a drill pro-

Hugh Morgan gramme,” Morgan said.

“We have had significant support

ing right at this time,” Morgan said. from the Minister [Dr Kayode Fayemi]

Independent lab work has confirmed and the Mines Department. They have

that up to 70% of the nickel balls are fine been very good in ensuring that we have

grained and can go undetected by the had good occupancy, good relationships

naked eye. with the community and excellent rela-

Therefore, initial visual grade esti- tionships with the Government.”

mates of 1-3% weight nickel are believed – Mark Andrews
to be an underestimation and the grade

could be as high as 6-10% weight nickel.

COMESA curbs resource nationalism

Common Market for Eastern and Chilean mining sector, ereign wealth funds
Southern Africa (COMESA) secre-
tary general Sindiso Ndema Ngwenya which had turned to- that are simply put
says sustainable development in African
mining is a crucial part of addressing a wards anti-mining poli- away and not used,” he
growing trend of resource nationalism.
cies at points in its his- said.
“Over the past few days I have listened
to the narratives of resource nationalism. tory, to indicate how “If you use them you
I asked myself whether or not it exists,
and I don’t think it does, because there any jurisdiction was will affect the economy
must be a problem when you have re-
source nationalism,” Ngwenya said. susceptible to populist and it will result in a

“It means that the constituency our policies towards min- lack of competitiveness
leaders are governing do not feel like
they are benefiting from mining opera- ing. among other sectors
tions and agreements.”
“They went through of the economy. This
Ngwenya said the golden thread in the
situation of some African nations and all these problems that is problematic if you
recent global events such as Brexit and
Donald Trump’s election, was the happi- we have gone through are trying to industrial-
ness of the people.
over the years, such ise or go into services.
“When you have a population that is
not happy with what is going on, the gov- as nationalism and Sindiso Ndema Ngwenya People will move away
ernments will move towards something privatisation,” he said. from those sectors and
more extreme,” he said.
“They addressed go into mining.”
Ngwenya gave the example of the
this by creating a sovereign wealth fund To face the challenges of the present

that was not touched by government; the and future, Ngwenya said, African na-

only time that money could be used was tions had to look to the world’s best prac-

when the Chilean senate approved it.” tices for inspiration and guidance.

Ngwenya said a higher commodity “I’d say that Chile is an ideal example.

price could funnel additional income into They have gotten the economic manage-

the economy, creating inflation and im- ment right across the value-added chain

balance in the community. in terms of their decisions,” he said.

“This is why it is important that when – Jon Daly
we experience good times we have sov-

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 57

AFRICA DOWN UNDER REVIEW

Azumah lands sparring partner

Azumah Resources Ltd managing di- Stephen Stone Ltd, giving another layer of experience to
rector Stephen Stone has ploughed call on.
away at the Wa gold project in Ghana for tal GP Ltd and Ibaera Capital Fund LP
some time now, with his company spend- – a stone’s throw from Azumah’s office Upon completing its earn-in, Ibaera
ing $80 million on 500,000m of drilling in in Perth. will have a 47.5% interest in Azumah’s
the last 10 years. Ghana subsidiary.
With Stone providing the main man-
At the height of the last West African agement capacity for Azumah, the trans- Stone said the company had not “given
gold boom, a feasibility study was under- action promises to be a twofold boon for the project away by any means” and ex-
taken at Wa which outlined potential for a the company. pected a rerating in the market consider-
1.2 mtpa CIL project to produce 90,000 ing the magnitude of Ibaera’s investment
ozpa gold over seven years at all-in costs Firstly, the $US17 million earn-in over and Azumah’s current market cap of $16
of $1,046/oz. The capital cost require- two years will provide funds for the Wa million.
ment is $129 million. project to be advanced, while Ibaera is
backed by former business development “What this transaction does, which is
However, the numbers never quite experts from Fortescue Metals Group more important than the money, is bring
stacked up in a sluggish gold price en- in to Azumah a fantastic team of guys
vironment. who have a terrific track record through
exploration generative work, exploration
“The capital cost has really hurt us and also developing mines,” Stone said.
and capital intensity per ounce, which is
about $US228/oz, if you add to the cash “The focus now with Ibaera is improv-
cost you jump over $1,000/oz. The way ing the metrics of the project and reduc-
the gold price has been of late, there has ing that capital intensity per ounce. We
not been enough margin to want to de- can do that by increasing our reserves
velop that,” Stone said. and we have seen enough today to know
we are going to be able to do that through
Azumah has been finding ways to opti- straight exploration discovery. We can
mise the project but has also spent time rebase our operating cost, adjust that
scouring the world for a cashed-up part- and probably capture some more gold in
ner. our existing pits without drilling another
hole and then we have depth extension
Azumah “kissed a lot of frogs” in vari- opportunities as well.”
ous parts of the world before stumbling
across its perfect match – Ibaera Capi- – Mark Andrews

Cabinda primed to grow Angola

Minbos Resources Ltd’s Cabinda ing probably the third larg- phate projects in Angola.
phosphate project could be the cata- est economy by GDP,”
lyst required to jumpstart a booming ferti- Reed said. Reed said his compa-
liser industry in Angola, according to chief
executive Lindsay Reed. “It has the land avail- ny would not be the only
able and the raw materi-
Angola is one of the largest economies als to be a great fertiliser party to benefit from the
in Africa, yet remains one of the world’s manufacturer and it also
biggest food importers, a consequence has a need in terms of merger.
of the civil war which followed the coun- food import substitution.
try achieving independence in 1975. We have a big anomaly in “It will create invest-
that Angola has a strong
An oil boom last decade also proved economy, but it has low ment, jobs, revenue and
destructive to Angola’s agricultural sec- agriculture and we’re
tor, with competition for capital resulting looking at our opportunity market access particu-
in Luanda being crowned the world’s [at Cabinda] to capture that.”
most expensive expat city in four of the larly for the people of
last five years. Minbos is aiming to complete a BFS
on Cacata – the flagship deposit in the Cabinda, but also the
While 47% of Angola’s countryside is Cabinda project – although no definitive
suitable for agricultural activities, only timeframe has been set for its release. people of Angola. It will
4% is recognised as arable land.
Following Africa Down Under, Minbos Lindsay Reed also generate cash flow
Reed said Angola’s dependence on shareholders approved a long-awaited to take the next steps,”
food importation needed to change. merger between the ASX-listed company
and its project partner Petril Phosphates he said.
“More than half of the fertiliser used in Ltd, with the combined entity now boast-
all of sub-Saharan Africa is used in Nige- ing a portfolio of 10 prospective phos- “We have plans in place where we will
ria, Zambia, Ethiopia, Kenya and South
Africa. The anomaly there is Angola be- look to take some of that product and in-

troduce it to the domestic market in a way

that can be used to kickstart Angola’s ag-

ricultural sector.

“Angola will return, hopefully one day,

to the position it once was where it was

self-sufficient and an exporter of many

agricultural commodities.”

– Michael Washbourne

PAGE 58 OCTOBER 2017 AUSTRALIA’S PAYDIRT



AFRICA DOWN UNDER REVIEW

West African the envy of juniors

Junior gold explorers would be envious tion for the project. That would mean we Richard Hyde
of the success West African Resourc- are not just a 200,000 ozpa producer, but
es Ltd has enjoyed in Burkina Faso. potentially a 300,000 ozpa producer.” and maximising project value before pro-
ject financing discussions start in ear-
While many West African gold stocks At the time of print, West African had nest.
have felt the brunt of a depressed mar- started drilling 700m holes at M1 and M5,
ket, the high-grade 2 moz Sanbrado gold with visible gold prevalent at more than The company is well funded to achieve
project has delivered in spades for its 500m vertical depth at M5. those milestones and in the meantime
owner. the market can look for resource up-
The plan for the company is to con- grades at M1 and M5, followed by an up-
And, the good news for West African’s tinue drilling at a rate of 60,000m a year dated feasibility study early in 2018.
supporters is that more ounces are being at Sanbrado, while improving metallurgy
added and confidence within the team – Mark Andrews
growing that it can potentially exceed ini-
tial designs of being a low-cost 150,000-
200,000 ozpa gold producer.

“The key takeaway is that we have
172,000t in indicated and 55,000t in in-
ferred resources at OK [within the M1
South resource]. That is not a lot of
tonnes, but the contained metal is over
230,000oz gold with the head grade
about 34 g/t,” West African managing di-
rector Richard Hyde said.

“This high-grade shoot keeps adding
ounces basically. For every tonne you
are adding, an ounce is added, which
is remarkable. All the mineralisation we
have got is going straight to the bottom
line. The study we put out in February
showed we pay back very quickly. Every
M1 will add 100,000 ozpa gold in produc-

Burkina to stand tall again

At the height of the last West Afri- To put that into context, Burkina
can gold boom, Burkina Faso was
the destination of choice for explorers. Faso ranked higher than the likes

As a result, the country is now en- of Namibia in Africa and New South
dowed with more than 1,000t of gold
reserves and with the gold price – Wales and Tasmania in Australia.
$US1,330/oz – showing some con-
sistency, investors are starting to feel “We are trying to make sure in
more comfortable backing juniors
who are active in the country again. particular everything is done to en-

However, time will tell whether sure your safety and your invest-
Burkina Faso and companies in-
vested in the country will attract the ment for a sustainable mining exploi-
same amount of attention they did in
the past. tation win-win partnership in Burkina

Initiatives such as the West Africa Faso,” Ministry of Mines and Quar-
Mining Activities forum – in its sec-
ond year – in Ouagadougou (September ries’ Sylvain Some said.
28-30) aims to define strategies for bet-
ter integration of the mining sector in the To encourage investment in the
economies of African countries and pro-
mote investment in Burkina Faso and the mining sector, a new Mining Code
wider region.
was implemented in 2015, which
There is no disputing Burkina Faso’s
geological potential, however, security Some said needed to be considered

Sylvain Some when weighing up opportunities in

Burkina Faso.

issues are of concern, particularly in light “[We enable] the free use of funds and

of a recent terrorist attack at a hotel in ability to repatriate profits of the mining

Ouagadougou. sector, while a local development fund to

Nevertheless, the Fraser Institute Sur- enhance the local communities has also

vey of Mining Companies 2016 edition been set up,” he said.

ranked Burkina Faso inside the top 50 – Mark Andrews
countries on the investment attractive-

ness index.

PAGE 60 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Policy must be dynamic
and stable: Urama

Miners and governments must be deal with the emergency policy issues. Kevin Urama
conscious of the changing nature When the economy starts growing, you
of demands brought about by economic need to start evolving.” Urama said inclusive growth policies
growth in developing countries, accord- should instead cut across sectors.
ing to a senior African Development Bank It is a challenge common throughout
advisor. Africa as governments and companies “Policies shouldn’t think about just
struggle to deal with changing commu- that one metal, they should think about
Speaking at the Australia Africa Re- nity expectations. the interaction of the metal with the in-
search Forum on the eve of Africa Down frastructure, the people who are going to
Under, Kevin Urama – senior advisor to “As incomes grow, needs change work there and the economy you want to
the African Development Bank president and the awareness of communities be- improve,” he said.
– said natural resource development gin to change,” Urama said. “And, once
strategies and policies needed to be dy- that awareness begins to change, their In 2015, the African Development Bank
namic to ensure inclusive growth. demands for inclusion also begin to established its High Fives strategy to
change.” track progress of the five priorities it has
“Successful and inclusive growth pro- for the continent – lighting up and power-
grammes for natural resources extrac- The only way companies can stay on ing Africa, feeding Africa, industrialising
tion and beneficiation evolves over time. top of the issue is to ensure they engage the continent, integrating the movement
It calls for a long-term strategic and dy- stakeholders from the earliest opportu- of goods and services and improving the
namic policy at all levels,” Urama said. nity. quality of life.

“Countries at different stages of devel- “Stakeholder participation is a vital Urama said inclusive growth models
opment and particularly natural resourc- platform for inclusive growth develop- and policies in the extractives sector
es development need radically different ment of natural resources at all stages.” would play a key role in ensuring the pri-
policies. It is not right to just give a blue- orities were met.
print and use it because it depends on If mining companies have to be adapt-
what is exactly needed in that economy able, governments need to ensure their “We all know the importance of energy
at that particular time.” policy settings are both dynamic and sta- and we are building into programmes
ble. bringing power to communities; that is
African miners have been confronted inclusive because it is powering econo-
by a series of policy changes across the “The bank has found that regulatory mies to continue growing when the min-
continent in the last five years as gov- conditions can be a short-term disin- ing company has left,” he said.
ernments struggle to marry the need for centive for growth. They are sometimes
foreign investment with inclusive growth. too cumbersome or too complex to en- “Similarly on agriculture, the Bank is
This year alone has seen two of Africa’s act and therefore become just policies trying to bring agriculture as a business
largest mining economies, Tanzania and on paper. In this situation, they become rather than a social activity and mining
South Africa, significantly alter their min- barriers not enablers to investment. can play a role in that.
ing policies to ensure greater local par- There can also be conflict with other leg-
ticipation. islation and policies, as in South Africa, “Inclusive growth has to be broad
because they were not inclusive when based and cut across all sectors.”
Urama said his research had shown it they were designed.”
was possible to achieve inclusive growth – Dominic Piper
and stable investment policies but gov-
ernments and miners had to show some
flexibility.

“Countries which are beginning at the
earliest stage of development; all they re-
ally need is to increase incomes to kick-
start development. In such cases, coun-
tries might want to pursue development
of the country and the environmental and
other social safeguards – while still nec-
essary – don’t carry the same weight in
terms of how you prioritise what needs
to happen.”

Urama said in such circumstances
governments would necessarily create
policies which attracted foreign investors.

“That is why you are able to go into
a country today and they give you con-
cessions to allow you to start mining be-
cause they need resources in order to

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 61

AFRICA DOWN UNDER REVIEW

Kibaran charged for next move

Kibaran Resources Ltd’s cessing facility in Dar es Salaam. Andrew Spinks
impending entry into “We’ve had feedback from all the end-
the battery-grade graphite users that this is a capex of $US89 million.
scene is set to be con- suitable location,” Other key financials from the BFS were
firmed over the coming Kibaran manag-
months. ing director Andrew C1 operating costs of $US500/t FOB Dar
Spinks said. es Salaam, pre-tax NPV of $US211 mil-
GR Engineering Ser- “Currently, the lion, IRR of 38.9% and an annual EBIT-
vices Ltd was in the throes world is reliant on DA of $US44.5 million.
of completing a study on all this spherical
the potential production of graphite coming The BFS results do not include sales
premium spherical graph- out of China, so into the emerging battery market.
ite from Kibaran’s Epanko the world is really
project in Tanzania at the needing a new sup- “The most important thing to note
time of print. ply of battery-grade here is our feasibility study has been
graphite. signed off by an independent engineer,
Kibaran has previously “We see our- and I can’t say this loud enough or long
been focused on develop- selves as being a enough,” Spinks said.
ing Epanko for the tradi- very long-term sup-
tional flake graphite mar- plier of this mate- “This has been a very gruelling, robust
kets, with binding off-take rial into the anode due diligence over the last 14 months
secured from two promi- manufacturers and and we’ve spent $US11 million. The rea-
nent European-based cus- that will then go into son we’re doing that is because we’re
tomers. electric vehicles pursuing development funding from the
and energy stor- German Government.”
However, interest from age.”
end-users in the rapidly Kibaran com- Kibaran plans to release another up-
growing lithium-ion bat- pleted a revised date to the BFS once the proposed
tery markets tempted Kibaran to assess BFS on traditional changes to Tanzania’s Mining Act are of-
opportunities to build a downstream pro- graphite production ficial, with the company anticipating mini-
from Epanko in July, mal impact to Epanko’s development.
with the project able
to support a 60,000 During Africa Down Under, Kibaran
tpa operation over announced it had completed its resettle-
an 18-year mine life ment action plan, which was a prerequi-
for a pre-production site to securing credit approvals for the
company’s pursuit of a debt financing
package.

– Michael Washbourne

PAGE 62 OCTOBER 2017 AUSTRALIA’S PAYDIRT

No hurdles in Walkabout’s stride

Walkabout Resources Ltd has sub- Walkabout released a of annual production
mitted a mining licence application
for its Lindi Jumbo graphite project in Tan- revised DFS on the pro- forecast from Lindi Jum-
zania despite a moratorium remaining in
place for the award of such permits. ject, taking into account bo and signed a land-

Proposed amendments to Tanzania’s the proposed legislative mark EPCM contract
Mining Act have cast doubt over the fu-
ture of several major mining projects in changes, with the results with a private Chinese
the country, including Lindi Jumbo, but
Walkabout remains confident its applica- confirming the com- engineering firm.
tion will still be processed administrative-
ly, pending final requirements pursuant pany’s standing as po- The revised DFS
to the new regulations.
tentially the lowest cost flagged a lower start-
“The directors remain confident of the
award of a mining licence in compliance graphite miner among its up capex of $US28.6
with the standard fiscal and regulatory
requirements,” the company said. “As African peer group. million (down $US9.1
soon as the regulations have been final-
ised and are enforced, further discussion “It’s always been our million), but higher on-
regarding the proposed 16% ‘free carry’
will be progressed.” intention that you have Andrew Cunningham mine operating costs of
to be able to compete $US349/t (up $US57/t)
Walkabout’s confidence in the devel-
opment of Lindi Jumbo were evident in with the Chinese to be FOB Port of Mtwara.
the company’s presence at Africa Down
Under last month. as cheap as them,” Walkabout technical “Since we’ve brought out this revised

In the lead-up to the conference, director Andrew Cunningham said. DFS, I’ve been spending quite a lot of

“In my opinion, we are in the best time in China speaking to traders and

graphite province in the entire world. We the price of some of these flake sizes

are sitting in what is a fairly low-grade has gone up; by 50% in some instances,”

region…so the high-grade Lindi Jumbo Cunningham said.

project is really an anomaly in this re- “[Our EPCM partner] Jinpeng is sell-

gion.” ing our story in China and word is getting

In the past 12 months, Walkabout has around. It’s a pretty exciting time to be

completed a DFS and a subsequent re- working on this project.”

vision of the project economics, secured – Michael Washbourne
sales and purchase agreements for 75%

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 63

AFRICA DOWN UNDER REVIEW

Battery Minerals powering
along in Mozambique

Mozambique has identi- had been a huge success.
fied the mining sector
as one of the pillars for the “Maybe, even one day we
country’s industrialisation
and companies willing to par- can move one of those to
ticipate in the industry have
been welcomed. Mozambique,” he said.

One Australian company Already committed to em-
to have made significant
strides in the country has ploying “more and more”
been graphite hopeful Bat-
tery Minerals Ltd. local people, value-adding

The company aims to start through downstream pro-
construction of the 41.4mt
@ 8.8% TGC (probable re- cessing in country would
serve) Montepuez project
next year, with exports fol- create different layers of
lowing in 2019.
employment for Battery Min-
In the near term, Battery
Minerals hopes to receive erals in Mozambique.
mining licence approval
from the Government, while Before that can occur, the
advancing bulk sampling
process optimisation, value engineering company must deliver the
and procurement, more exploration and
completion of a concept study at Balama initial stage of Montepuez,
Central.
which will be a 30,000 tpa
Battery Minerals’ attention to detail
in engaging with the Government and graphite project at a cost of
local communities has seen opportuni-
ties open up for the company, executive $40-50 million.
chairman David Flanagan explained at
Africa Down Under. Cash flow from the starter

“The Government has also provided us project will enable Battery
further assistance in giving us an alloca-
tion of port capacity at Pemba. Minerals to build up to the
The Government has also made Adriano Senvano desired 100,000 tpa run rate
commitments to help facilitate
getting all the warehousing ca- at Montepuez.
pacity we need when we ship
the concentrate out of Pemba derful if we had an industrial zone where Battery Minerals appears to have been
and that is a significant oppor-
tunity for us and we very much we could produce Mozambique batteries endorsed by the Government and is
look forward to developing for
the community and our share- for the world.” seen as a company which can help the
holders,” Flanagan said.
Any commitments from the Govern- country achieve its policy ambitions for
“We have [also] continued to
learn about the opportunity to ment to access energy would encourage the mining sector.
access energy being developed
over time in those enormous gas Battery Minerals to consider how far to “The vision for mining policy in the
fields off the coast. If the com-
pany is able to get access to that take potential downstream opportunities country is to be a leader in the promo-
energy; it would create lots more
opportunity for downstream [op- in the country. tion of the economic, social and capital
tions] and we have also commit-
ted to the Minister that if energy The company continues to advance development of the country through a
is available, wouldn’t it be won-
pilot plant construction of its spheronisa- sustainable and concise development

tion demonstration plant in the US to pro- and exploration of resources,” general

duce spherical graphite. Flanagan said it director of the National Institute of Mines,

Mozambique, Adriano Senva-

no, said.

“We want to make mineral

resources one of the main con-

tributors to the country’s indus-

trialisation and development,

diversification and economic

transformation and improve-

ment of country’s balance of

payments.

“The Minister wants to ensure

institutional develpment through

adoption of a transparent, pre-

dictable and equitable fiscal

regime that encourages better

links between the mining sector

and other sectors of the national

economy.”

– Mark Andrews

David Flanagan

PAGE 64 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Celsius warms to hot cobalt

Work in the Chinese lithium space 41 assays received by to move to 95% owner-
left Brendan Borg convinced cobalt the time of Africa Down
was the commodity of choice for Celsius Under, including 19m ship of Opuwo recently.
Resources Ltd to pursue. @ 0.13% cobalt and
0.62% copper, includ- The company was
“A big driver that really got me inter- ing 7m @ 0.13% cobalt
ested in cobalt last year was the shift and 1.11% copper and earning into the project
in Chinese EV makers towards cobalt- 13m @ 0.14% cobalt
formulated batteries,” Borg, the Celsius and 0.51% copper, in- with JV partner Gecko
managing director, said. cluding 10m @ 0.17%
cobalt and 0.66% cop- Namibia, however, the
“This was something I wasn’t really per.
aware of until I was doing a little bit of agreement has devel-
work around lithium in China last year An initial explora-
and these companies who don’t use co- tion target of 33-41mt oped and Celsius now
balt were asking about cobalt projects, @ 0.13-0.17% cobalt
so that perked my interest.” and 0.45-0.65% copper – based on the has a 95% interest in the
first 20 holes drilled into an 11km zone
With the spot price at about and ranging from 150-250m depth – has project.
$US61,500/t at the time of print, cobalt been revealed by Celsius.
has been hard to ignore and it appears In return, Gecko Na-
interest in the commodity – largely pro- Mineralisation remains open in all di-
duced as a by-product of copper and rections, giving Celsius scope for expan- mibia is Celsius’ largest
nickel mining – will remain high for some sion.
time. Brendan Borg shareholder and will be
The company expected to receive re- represented at board
“There are some predictions that we sults from metallurgical testing at the
could be looking at the peaks of 2008 time of print, with resource drilling to start level by Pine van Wyk.
where prices were over the $US100,000/t this month.
mark,” Borg said. Van Wyk is an experienced metallur-
Key consultants have been appointed
Amid such bullish forecasts for co- and Celsius expects to release an initial gist, with his technical expertise and in-
balt, Celsius is seeking to capitalise on resource and scoping study for Opuwo in
the current heat in the market with some Q1 2018. country expertise welcomed by Borg.
significant announcements in the near
future. Having enjoyed immediate drilling suc- “We believe in projects such as ours,
cess and identifying a 15km cobalt-cop-
In August, a 56-hole drilling programme per-zinc mineralised zone from the initial metallurgists are always a crucial ele-
was completed at the Opuwo project, drilling programme, Celsius was happy
Namibia, with some highlights from the ment,” Borg said.

“Gecko has access to a lot of knowl-

edge about the geology of Namibia; they

hold a lot of licences around the existing

Opuwo project. We were able to secure

an additional three licences from Gecko

as part of this deal, which more than dou-

bles our land position [from 782sq km to

1,470sq km] in the Opuwo area and prob-

ably more importantly extends our pro-

spective horizon for copper and cobalt to

over 100km.”

– Mark Andrews

Niger seeks more than yellowcake

Uranium-rich Niger has als for the building sector, – all chasing gold nuggets,” Aboubacar
exported yellowcake alongside the likes of gem- said.

for decades however stones, gold and coal were “For about 40 years we have only been
exporting uranium, we have a lot of coal
prices for the energy com- priorities for the country. and gold, so the strategy for our govern-
ment is not to depend on the uranium.”
modity have remained at In addition to the three
Aboubacar said there was new coal
historic lows for some operating uranium mines, capacity within the country to provide up
to 600MW of power per year, with cur-
time, driving the Govern- Niger has a gold and coal rent coal production of 250,000 tpa from
reserves of 75mt.
ment to find new ways of mine the Government is
While expanding the coal and gold
attracting investment. keen to expand on. sectors remains a work in progress, ura-
nium production is forecast to increase
Uranium has hardly Annual gold production from 4,000 tpa to 10,000 tpa by 2021.

been an enticing platform of 1,142kg is from a re- Currently the world’s fourth largest
uranium producer, uranium accounts for
for Niger to promote its serve of 32t, however, the 70% of Niger’s exports, however, it con-
tributes to less than 10% of GDP.
mining sector to inves- Sekou Hassoumi Aboubacar heavy presence of artisa-
tors and the country is nal miners in the country – Mark Andrews

now developing a strat- suggests there is much

egy to diversify its offerings to the global more potential to be unearthed.

market. “We have a surface area of 3,000sq

Chief of staff for the Ministry of Mines km where many artisanal and small-

and Industrial Development for the Re- scale miners in the region come from

public of Niger, Sekou Hassoumi Abou- all over Africa – Chad, Sudan, Burkina

bacar, said developing industrial miner- Faso, Namibia and many other countries

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 65

AFRICA DOWN UNDER REVIEW

Vital in good company

It might be early days, but Vital Met- “The mineral endowment is incredible,
als Ltd is already drawing compari-
sons with another ASX-listed gold it’s still largely untested and we’ve been
explorer in Burkina Faso.
lucky enough this year to go there and
Vital’s tenements, including the
Kollo project, are hosted in the same give it a crack.”
Markoye fault corridor as West African
Resources Ltd’s 2.2 moz Sanbrado As well as prospectivity for gold, Vi-
project.
tal has managed to uncover a series of
West African is on the cusp of de-
veloping Sanbrado following the re- promising zinc targets.
lease of a robust feasibility study ear-
lier this year. Historical drill intercepts of 14.2m @

“It’s a great place to be and we 3.1% zinc from 44m, 6m @ 2.6% zinc
want to do a lot more work to find that
big multi-million ounce deposit. They from 30m and 10m @ 2.7% zinc from
[West African] are a bit further along
the timeline, but I think the opportuni- 59m (including 2m @ 8.3% zinc) have
ties are definitely there ahead of us,”
Vital managing director Mark Strizek said. been recorded at the Nabenia prospect.

“It’s still early days for us, but I think the Three RC holes were recently
signs are exciting because we’ve got gold
mineralisation dripping all the way along punched into Nabenia, with the com-
these structures.”
pany awaiting the results at the time of
Drilling at Kollo to date has returned a
number of encouraging intercepts, includ- print.
ing 5m @ 60 g/t gold from 75m, 3m @
56 g/t from 134m, 13m @ 9 g/t from 174m Mark Strizek “There’s no doubt that as we’ve been

working away looking for the shiny yel-

and 17m @ 6 g/t from 114m and 15m @ low stuff, we’ve also found not a bad

7.8 g/t from 105m. second prize in some zinc,” Strizek said.

Strizek said mineralisation remained “There’s a lot of potential there to make

open at depth and along strike, with pre- a discovery, whether it’s zinc or a zinc

liminary metallurgical testing returning re- system with gold.”

coveries above 95%. Last month, Vital raised $2 million via a

“We’re part of a corridor which is heavily oversubscribed placement to fund

changing people’s viewpoints and that’s an optimisation study on its Watershed

what makes me excited about doing ex- tungsten project in Queensland.

ploration here in Burkina Faso,” he said. – Michael Washbourne

Predictive’s progress in Burkina Faso

Predictive Discovery Ltd has ex- high-grade results in some places.
tended its union with Canada’s
Progress Minerals International Inc. The Nyangboue discovery is a

Progress had already started 1.2km-long gold mineralised sys-
investing $US1 million to earn a
30% interest in Predictive’s Bobo- tem; 30m @ 8 g/t in virgin discovery
sso gold project in Cote d’Ivoire but
last month the pair announced they in an unknown area of gold min-
were joining forces in Burkina Faso.
eralisation [is pretty impressive],”
Post-Africa Down Under, it was
announced that mine developer Predictive managing director Paul
Progress can earn a 70% inter-
est in Predictive’s eastern Burkina Roberts said.
Faso exploration permits for a total
of $US5 million spread over three “We have recently announced a
stages.
deal on the adjacent block, it is on
Predictive has demonstrated an
ability to attract reputable partners the same structure that hosts min-
in West Africa, with Toro Gold Ltd also
in five JVs with the company in Cote eralisation on Nyangboue.”
d’Ivoire.
Roberts said there was about
The Kokoumbo JV with Toro, near Ag-
baou and Bonikro, produced an intercept 20km along the Nyangboue struc-
of 7.5m @ 16 g/t gold from surface with
the first drill hole last year, while at Beri- ture which remained unexplored.
aboukro – 20-30km from Newcrest Min-
In total, Predictive has interests in

Paul Roberts 11 grassroots to advanced projects

in West Africa and as the wet sea-

ing Ltd’s Bonikro mine – drilling is being son dissipates in the region drilling pro-

planned. grammes will be rolled out, Roberts said.

Meanwhile, the Predictive/Toro JV at “We have a lot of drilling coming up,

Boundiali, south of Tongon, is producing which could be a catalyst for our share

excellent results. price improvement as we don’t sit on a

“We are seeing physical gold in pan- very large capitalisation today,” he said.

ning in virtually every hole that we have – Mark Andrews
drilled that’s produced results, with very

PAGE 66 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Guinea’s bauxite opportunity

Guinea hopes it can fill some of mine were exported late last year.
the void in the bauxite market
created by Indonesia’s uncertain Guinea is also home to the
stance on mineral exports.
world’s largest undeveloped iron
Although bans on exports of
nickel and bauxite from Indone- ore project, Simandou, with Rio
sia were relaxed slightly earlier
this year, significant doubt still re- Tinto plc attempting to offload its
mains over long-term reliable sup-
ply of both minerals. controlling stake in the controver-

Guinea hosts about one-third of sial asset to Chinalco.
the world’s bauxite reserves and
the Alpha Condé-led Government Other minerals Guinea is also
is sensing an opportunity to be-
come a major global supplier of prospective for include gold,
the industrial commodity.
diamonds, manganese, uranium
“We are looking at the oppor-
tunity left out there by Indonesia and some base metals.
not exporting bauxite,” Republic
of Guinea presidential advisor on Bangoura said his country’s
mining Alkaly Yamoussa Bangou-
ra told Africa Down Under. government wanted to position

“We think from our latest estimation Guinea as the top mining des-
that we have more than 40mt of bauxite,
with the alumina content at 40%. Most of tination in Africa and would im-
the bauxite mines in Guinea are easy to
extract and they are open pits.” plement a series of initiatives

Guinea’s annual bauxite production is to make that happen, including
growing at an exponential rate, having
funding of a broad geological

survey.

“Guinea is in the strongest po-

Alkaly Yamoussa Bangoura litical and economic condition in

its history,” Bangoura said.

jumped 150% to almost 50 mtpa over the “A one-stop shop dedicated to mining

last three years, with forecasters predict- projects was launched in June 2016 and

ing exports will exceed 80 mtpa in 2019. is now fully operational and delivering li-

Local company CBG is currently un- cences.”

dertaking a $US1 billion expansion pro- – Michael Washbourne
ject at its main operations, while the first

samples from EGA’s new $US1 billion

Sudan awaits lift on trade ban

Sudan hopes its bid to become a re- Sudan produced were working through
spected mineral-based economy will
be aided by the impending lift of a trade 93t of gold last year legislation to legalise
embargo on the country.
from artisanal and some artisanal mining
Long-standing trade sanctions were
temporarily lifted by former US President small-scale mining practices.
Barack Obama in January. A decision on
the permanency of the embargo was to activities, making it “We want to be the
be made in July following a six-month re-
view period. the second largest next major gold min-

However, incumbent US President gold producer in Afri- ing destination in Af-
Donald Trump extended the review dead-
line by three months to October, claiming ca and 10th globally. rica,” he said.
that his government needed more time to
properly assess the situation in Sudan. Gold production in “Our geological en-

Speaking at Africa Down Under last Sudan has increased vironments are similar
month, Geological Research Author-
ity of Sudan director general Mohamed year-on-year for the to many large mineral
Abu Fatima was confident the US Gov-
ernment would lift the embargo perma- past decade and now deposits elsewhere
nently and open up the country to foreign
investment for the first time in 20 years. forms a significant globally. World-class

“We expect after the lifting of unilateral part of the country’s deposits [in Sudan]
sanctions from the US in October there
will be more opportunity for investment economy. remain undiscovered,
from different countries,” Fatima said.
Until 2009, Sudan’s Osheik Mohamed Tahir but we hope that will
mining sector con- change.”

tributed just 1% of the Fatima was joined

country’s GDP. Today it accounts for 4%. at Africa Down Under by Osheik Mo-

Sudan has formally awarded 152 gold hamed Tahir, State Minister for Sudan’s

exploration concessions to registered Ministry of Minerals.

mining companies. However, artisanal – Michael Washbourne
miners dominate the sector, with more

than 1 million believed to be active in the

country.

Fatima said Sudanese authorities

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 67

AFRICA DOWN UNDER REVIEW

Miners can take lead on
violent extremism

Australian miners can play a management of CSR pro-
leading role in preventing and
countering violent extremism in grammes can have a positive
Africa, according to head of inter-
national programme, Australian impact on PCVE.
Strategic Policy Institute (ASPI)
Lisa Sharland. Sharland said it was es-

The Australian Government de- sential that PCVE activities
fines violent extremism: “As the
beliefs and actions of people who were addressed as part of
support or use violence to achieve
ideological, religious or political mining companies’ CSR pro-
goals”. This includes terrorism and
other forms of politically motivated grammes, while mining min-
and communal violence, which
can occur in certain – but not all istries and departments also
– parts of Africa at different times,
targeting different groups for dif- had key roles to play in pro-
ferent reasons.
viding ways for companies to
Australian mining companies
are well spread across the conti- engage with communities.
nent and often operate in regions
“The potential of the pri-

vate sector when it comes

to PCVE remains underex-

plored and the mining sector

has an opportunity to lead by

example in this field,” Shar-

land said.

“In the context of the Aus-

tralian mining sector, there

Lisa Sharland is a real opportunity to show

leadership by engaging with

situated on porous PCVE and establishing a competitive

borders where his- advantage by highlighting that Austral-

torical grievances ian companies operate to the highest

simmer, govern- standards when it comes to community

ance is weak and and social responsibility. There is also

communities are considerable scope for the Australian

protected by un- Government to engage with the Austral-

trained and ill- ian mining sector to support that engage-

equipped security ment and also contribute more compre-

forces. hensively to efforts to strengthen security

“And, an overall on the continent.”

lack of economic Sharland said some drivers for violent

opportunity has cre- extremism stemmed from community

ated a favourable feelings of marginalisation, discrimina-

environment for ex- tion, poor governance and their socio-

tremist ideologies economic needs remaining unmet.

to grow,” Sharland Areas of action mining companies can

said. take to ensure local communities feel in-

ASPI and other cluded and are given an opportunity to

organisations are participate in mining activities include

currently work- providing education and skills devel-

ing on papers, to opment and empowering women and

be released in the youth.

coming months, “This will go some way to making sure

addressing the role all interests are shared, which can help

private sector can improve security, effectively enhancing

play in the preven- the business of a mining company and

tion and countering potentially providing win-win benefits

of violent extremism for company, country and community,”

(PCVE). Sharland said.

Preliminary find- – Mark Andrews
ings from research

conducted, highlight

how the effective

PAGE 68 OCTOBER 2017 AUSTRALIA’S PAYDIRT

PwC advocates an even
break in Africa

Anew report launched by PwC at the Ben Gargett
15th Africa Down Under looks at fis-
cal regimes and how they affect the distri- “This is despite
bution of project returns between miners the introduction of
and governments. an addition 1% im-
port levy in 2016.
The report – Two steps forward, one
step back – examines the impact that “The situation
different fiscal regimes can have on the in Tanzania has
operations and decision making of a min- pushed the [IRR]
ing company, especially the decision to from a 25% thresh-
begin mining. old [in a previous
analysis], down to
When PwC partner Ben Gargett just 18.3% this year,
stepped out on the stage in 2015, he which means there
called for a new way of thinking between would be no viable
governments and industry. project in that coun-
try. Egypt also has
“I reiterate that today,” he said. “A de- an IRR below the
posit left unmined presents no value to desired threshold.”
the host government, its people or the
mining company seeking to exploit it.” Gargett said that
while Namibia’s
Gargett said Africa was changing and share of revenue
governance had improved greatly over might at first appear
the last decade, with political environ- slightly lower than
ments stabilising in many countries. the other countries,
it was the only one
“The sovereign risk attached to oper- that was highly like-
ating in these countries has decreased,” ly to receive any tax
he said. revenue at all.

“The timing of this improvement is ide- – Jon Daly
al, as it coincides with the resurgence in
the mining sector that we are now expe-
riencing. We certainly are in a different
point of the cycle than we were two years
ago.

“Those are the steps forward, [but] we
are at times seeing African governments
increasingly looking for larger returns
for mining operations in their countries.
Most notable is Tanzania’s recent legisla-
tive changes, which … has already had
a detrimental impact on reputation and
investment across the board.”

PwC did its analysis based on a hy-
pothetical standard open-pit gold mine,
with a development capex of $US150
million, production of 200,000 ozpa and
a 10-year mine life. It extrapolated those
metrics across four different African
countries.

The report found Namibia had the
most favourable distribution of revenue
between miners and the Government
[54% and 46%], followed by Ghana [49%
and 51%], Egypt [39% and 61%] and Tan-
zania [27% and 73%].

“Namibia remains the only country to
generate a significant internal rate of re-
turn [25.3%] to allow a clear decision for
the mine to go ahead,” Gargett said.

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 69

AFRICA DOWN UNDER REVIEW

Nzuri Copper’s perfect patch

Nzuri Copper Ltd is Ivanhoe, some 334sq and local communities,” Smits said.
preparing to take km that is contiguous to Smits said the proposed open cut mine
the step from explorer our Kalongwe project.
to miner, with a fea- would produce 20,000 tpa of copper and
sibility study nearing “Exploration has been 700 tpa of cobalt through a 1 mtpa pro-
completion for its Ka- a key focus this year, cessing plant over a five to six-year mine
longwe copper project pursuing an aggressive life.
in the Democratic Re- drilling campaign, with
public of Congo. some 3,700m of explo- “We have the ability to produce 10-
ration drilling, 1,700m 20% copper concentrate, with grades of
Nzuri has defined a of it associated with the up to 2.5% cobalt,” he said.
resource of 300,000t feasibility study. We
of contained copper have been fairly active.” “We’ve got a modular power station for
and 42,700t of con- the plant and we’ve allowed for solar ar-
tained cobalt at Ka- Kalongwe is 15km rays in our design. Solar, as it currently
longwe and also has a Adam Smits from Ivanhoe’s Kamoa- stands, saves us about 9% on opex for
JV with Robert Fried- the power station.
land’s Ivanhoe Mines Ltd on adjacent Kuluka copper project,
ground. which ranks as the “In terms of the product, based on the
world’s largest undeveloped, high-grade test work we have done, it is very low in
“Given the current market for cobalt copper discovery, according to mining impurities. That means we should get
and copper, we have the right metals at consultants Wood Mackenzie. some upsides when it comes to negotiat-
the right time, in the right place,” Nzuri “In terms of Kalongwe, the key point is ing the final contracts for the concentrate
executive director Adam Smits said. that we have got all our permits in place, offtake, because you’ve got low phos-
and anyone who has worked in Africa phorus, low manganese and low iron.”
“We are finishing a plus-or-minus 15% knows that is one of your biggest hur-
accuracy feasibility study, which should dles. We have ownership of the project, Smits said Kalongwe’s acid consump-
be out in the next month. Secondly, we it is 85% held by Nzuri and we have got tion was a third of the average for DRC
have our JV exploration ground with great relationships with the Government projects, giving the project further up-
side.

– Jon Daly

PAGE 70 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Bullish Birimian bounces back

New Birimian Ltd chief executive Greg porately over the last few ium projects,” Walker said.
Walker could not be happier with months, I would suggest that “It’s fair to say the results
the market reaction to his company’s re- the clear message coming highlight the considerable
sumption from a trading suspension. out of this exercise has been potential to materially in-
that it’s not sufficient just to crease the scale and the life
Shares in Birimian were up 65% to 37c have a robust and, dare I say, of the project, compared with
in the four trading days preceding Walk- exciting resource project but what was envisaged when
er’s presentation to Africa Down Under it’s also critically important the initial scoping study was
delegates. to ensure that due attention undertaken earlier this year.”
is paid to all of the other as-
Birimian’s stock had been in a trading pects of the business in or- Birimian is expected to be-
halt for four months while the company’s der to avoid putting the busi- gin a DFS once the PFS is
new board and management completed ness and its owners at risk.” Greg Walker completed, with environmen-
an extensive review of corporate activi- tal and regulatory permitting
ties and governance. Walker, James McKay and Gillian to be progressed concurrently as the
Swaby now oversee the new-look Birim- company looks to start production by “no
Walker described 2017 as a “some- ian, which is planning to release a PFS later than” 2020.
what turbulent year” for Birimian before on its flagship Goulamina lithium project Drilling of three new targets – Yando,
taking a thinly veiled swipe at the com- in Mali this month. Danaya and Sabali – will also take place
pany’s former directors. before year’s end.
Goulamina was acquired as an ad- “While the thickness and the grade of
“It’s fair to say the review revealed a vanced exploration project in March the new zones will only be determined
range of quite serious corporate govern- 2016 and now hosts an indicated and once we’ve got the RC programme com-
ance-related issues that required further inferred resource containing 32.9mt @ pleted, we are highly encouraged this
assessment and while this review has 1.37% lithium oxide for 451,000t. has the potential to be a much larger sys-
now been completed and steps taken to tem,” Walker said.
rectify the issues involved, it was a very “Work to date is suggesting Goulamina
expensive, complex and at times frustrat- has the potential to emerge as one of the – Michael Washbourne
ing process,” he said. world’s highest quality, undeveloped lith-

“Reflecting on what’s gone on cor-

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 71

AFRICA DOWN UNDER REVIEW

Bass finds its pace at Graphmada

Bass Metals Ltd is pushing its Mada- Peter Wright all of those. For potential investors you
gascan Graphmada graphite mine up are joining the company at an opportune
to 6,000 tpa production of large-jumbo which will go into Germany. time,” he said.
flake concentrate by the end of the year “Our resources sit in a saprolitic host
and to 20,000 tpa in 2019. Wright said the company aimed to es-
unit. You can literally obtain the ore with tablish itself as a material producer of
Bass director Peter Wright said it was your hand, which is quite key. In graphite, large-jumbo flake concentrates by 2019.
an exciting time for the company. it is all about preserving your flake size.
The larger the flake size the better resis- Since chief executive Tim McManus
“We want to establish ourselves as a tivity and the high conductivity. It is more took the stage at Africa Down Under last
mid-tier producer of industrial concen- valuable.” year, Bass has completed an initial pass
trates, placed in Madagascar. In parallel, programme at the adjacent deposit of
Madagascar is a very prospective coun- Wright said Bass was a $20 million Mahefedok, where it has expanded the
try,” Wright said. company that had already endured the material resource.
challenges many of its peers with a simi-
“We want to take the cash flow from lar market cap would be contending with. Another deposit of interest is Andapa,
stage one and two and grow the com- where the company was conducting a
pany. We have in our own right a highly “Permitting, raising large amounts of drilling programme at the time of print.
prospective exploration portfolio.” capital for building; we have surpassed
“Both are in immediate proximity to the
Bass also has a hard-rock lithium pro- mine and in Andapa we think there is suf-
ject in Madagascar called Millie’s Re- ficient prospectivity to materially add to
ward, with exceptional grades of up to the resource inventory,” Wright said.
7% lithium.
“Andapa is not within commercial
Exploration projects such as Millie’s strike to truck back to Graphmada and
Reward will be developed from Graph- will potentially be a standalone project
mada’s cash flow, according to Wright. in its own right, but surface samples are
returning extremely encouraging grades
“Graphmada is our flagship project. to date.
We bought this at a substantial discount
to what the previous owners had pur- “A discontinued project [nearby Anda-
chased it for and we have operated the pa] was producing concentrates of 98%,
project since taking over,” Wright said. which was of real interest to us. We are
drilling that now and those results with
“We have existing sales agreements hopefully be out pre-Christmas.”
with the US, Europe and to a lesser de-
gree, India. We also recently signed an – Jon Daly
MoU for 50% of stage one production,

Mali pledges mining security

Mali Minister of Mines Speaking via a transla- Gold production represents 95% of
Tiemoko Sangare tor, Sangare said he was Mali’s total mineral output and is increas-
ing on an annual basis.
has attempted to quell not aware of any major
Sangare encouraged further invest-
concerns around the threats to his country’s ment in Mali, saying the country’s revised
mining code was among the most attrac-
security of the country’s mining industry. tive in Africa.

mining industry. “In spite of everything “Our mining code has been simplified
to make life easier for investors to ex-
Several national gov- that has been said about plore in country and advance to the min-
ing stage,” Sangare said.
ernments, including Aus- security in the coun-
“We have issued over 400 exploration
tralia and the US, have try, as witnessed by the permits at the moment, most of them are
for gold, but there are about a dozen oth-
warned citizens against companies present, min- er minerals to explore, including bauxite,
lithium and others.”
all travel to Mali due to ing security has never
Sangare also highlighted the construc-
ongoing terrorist attacks, been in doubt,” Sangare tion of a railway from Bamako to Dakar
port in neighbouring Senegal as a key
criminal violence and Tiemoko Sangare told delegates. piece of infrastructure which could ben-
risk of political instability. “Mining companies efit Mali’s mining industry.

A number of ASX-list- were present before and – Michael Washbourne

ed resources companies are currently after the 2012 crisis and I would like to

active in Mali, including Resolute Mining take this opportunity to thank all those

Ltd, Birimian Ltd and Oklo Resources companies for staying with us through

Ltd, and have been for many years. that crisis.”

AngloGold Ashanti Ltd and Mark Bris- Mining is a vital cog in the Malian econ-

tow’s Randgold Resources Ltd also have omy, accounting for 4% of the country’s

major operations in the landlocked West GDP, with gold exports totalling $US2.05

African nation. billion last year.

PAGE 72 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Modern look for Zimbabwe

Zimbabwe is applying the final its history of mining. It is time to
touches to a new Mining Act it
hopes will attract more foreign invest- move towards the use of modern ex-
ment into the country.
ploration technologies.”
During his presentation to Africa
Down Under, Zimbabwe Ministry Tahwa said the country also re-
of Mines principal director Charles
Simbarashe Tahwa said the exist- mained open to opportunities in the
ing legislation was being updated to
comply with modern mining practic- mining services sector such as pro-
es and techniques.
curement of the required technical
“The amendments will seek to es-
tablish a computerised mining ca- equipment for drilling and other ex-
dastre system to eradicate a lot of
the disputes that come from mining ploration work.
legislative framework,” Tahwa said.
Investment opportunities in benefi-
“The [proposed] new act will en-
force the ‘use it or lose it’ principle ciation are also available, particularly
for a win-win situation for both the in-
vestor and the nation. It will also rec- in platinum refining, chrome smelting
ognise and enhance the presence of
small-scale miners and provide for and lithium battery manufacturing
arbitration or dispute resolution.”
where the country sees the highest
Zimbabwe is prospective for gold,
lithium, iron ore, copper and some rare growth potential.
earths, but the country has not been sub-
ject to modern exploration due largely to Mining companies which invest
its restrictive foreign investment policies
and the Mugabe Government’s interna- more than $US100 million in Zim-
tional isolation.
babwean projects are eligible for a

special licence which, according to

Tahwa, carries favourable tax con-

cessions.

Charles Simbarashe Tahwa “There is no restriction on the

amount of foreign currency which

Much of the recent exploration work can be brought into Zimbabwe,” he said.

in Zimbabwe has focused on historical “Investors can remit 100% of their divi-

workings rather than greenfields discov- dends, subject to exchange control ap-

eries. proval. On divestment, 100% repatriation

“The potential therefore to discover of capital is allowed.”

new deposits remains high,” Tahwa said. – Michael Washbourne
“Zimbabwe is underexplored despite

Mauritius: Africa’s next regional hub

Mauritius is vying to become Africa’s vices and logistics are its main economic nomic, political and social stability that
next major regional investment and sectors. makes the country a competitive plat-
financial services hub, according to Chet- form for foreign investors, according to
narainsingh Guddye. Guddye said that by 2030 Mauritius Guddye.
would have risen from a middle income
Guddye is the head of outward invest- to a high income country and its region- “It is a 15% company tax in Mauritius.
ment for the country’s Board of Invest- alisation strategy was a key component Through the regional headquartering
ment, and he said although many people of this targeted growth. scheme and offshore centre you get an
thought of Mauritius as a tourist destina- additional 80% tax break, so your net
tion, in reality the industry only contribut- “The regionalisation strategy is about taxation is actually 3% when operating in
ed 7.7% to the overall GDP, and was eas- bringing the ecosystem to allow the in- Mauritius,” he said.
ily eclipsed by a growing financial sector. vestment to be structured in an efficient
safe, way for the continent,” he said. “This says Mauritius wants to pass on
“It is transforming very fast into a re- the savings to the investors.”
gional financial hub and a regional pro- “Last month, the OECD upgraded
fessional hub for the continent,” he said. Mauritius from being largely compliant There are already 123 Australian enti-
as a tax jurisdiction to a fully compliant ties using Mauritius as a financial centre
“We are shifting Mauritius from an off- tax jurisdiction. and the total for investment from Austral-
shore financial centre to a regional finan- ia is $US2.3 billion.
cial hub. Now we have the basis to tackle “I am glad that we have passed Aus-
our regionalisation strategy, which is to tralia when it comes to transparency in “You want safety. You want to mitigate
offer our expertise and services to the tax reporting and this gives the jurisdic- your risk, whether it is political, economic
continent. tion the substance and meaning that or social. When you look at Mauritius, we
investors need to make sure they have are top tier when it comes to international
“That is the message I want to pass on credibility in what they are doing and can transparency,” Guddye said.
to investors and mining companies want- maintain their investors’ support.”
ing to enter the continent.” – Jon Daly
Mauritius ranked first among African
Mauritius has a GDP growth rate of countries on the Democracy Index in
3.5% and manufacturing, financial ser- 2016, and 17th globally, and it is this eco-

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 73

AFRICA DOWN UNDER REVIEW

Kefi closes in on Tulu Kapi

As Kefi Minerals plc gets closer to mine design to produce a more com-
finalising funding for Tulu Kapi in
Ethiopia, it appears its prospects in pelling story to tell investors.
Saudi Arabia are in-line to be kick-
started. Oryx Finance SPV has come into

“The regime in Saudi Arabia is support the $US245 million Tulu
transforming from a mining regula-
tory point of view,” Kefi executive Kapi project through a bond raising
chairman Harry Anagnostaras-Ad-
ams said. and an “army of lawyers” are fever-

“All the evidence seems to be that ishly working to close the transac-
imminently there will be a quite pro-
found overhaul of the mining regu- tion before Christmas.
lations to make Saudi Arabia a bit
less obtuse to the mining industry, “[Oryx has given us a] nine-year
in a permitting sense, and allow the
world to enter to build what the Sau- tenure and 30 months grace for con-
dis now refer to as their third pillar;
the minerals sector. They are deter- struction. Those two facts alone in
mined to make it the third pillar [of
the economy].” the project financing space tells you

Kefi has maintained gold and that it is a more user-friendly method
VHMS copper-gold-zinc sulphide inter-
ests in Saudi Arabia for almost a decade, of start-up financing than most,” An-
and has been well guided by prominent
family and partners in the country Abdul agnostaras-Adams said.
Rahman Saad Al Rashid and Sons Ltd.
“We are down to the last $US24
While excited by the potential in Saudi
million financing syndication out of

the total task of $US245 million.”

Lycopodium Ltd and Ausdrill Ltd

have been awarded relevant con-

Harry Anagnostaras-Adams tracts at Tulu Kapi, which has the

potential to set the standard for min-

Arabia, immediately confronting Kefi is ing in Ethiopia.

development of the 115,000 ozpa Tulu Construction is expected to start after

Kapi gold project. Christmas, with production starting in

Since taking on the advanced project 2019.

in 2013, Kefi has undertaken a complete – Mark Andrews
overhaul, expanding the resource and

A new dawn for Ethiopia

Ethiopia’s willingness done since we have to promote the resources we have in our
to see its mining arrived four years country. We are trying to make an envi-
ronment conducive to investors coming
sector developed is per- ago; I cannot speak to Ethiopia and growing these resources
we have,” Mekassa said.
haps best demonstrated too highly in the
“We are using the best experiences
by its participation in the manner in which from other countries and working with
the good experience of other countries
Tulu Kapi gold project. we have been dealt to develop our mineral resources in the
country.”
Ethiopia’s entire min- with by the ministry
Ethiopia is well endowed with gold and
ing sector had suf- and at policymaker potash resources, both of which have
been identified as commodities “waiting
fered from the setback level,” Anagnosta- to be developed”, while work is under
way to bring to the fore other mining op-
of Tulu Kapi’s faltering ras-Adams said. portunities.

under previous owners The Ethiopian “We are trying to identify the mineral
resources we have as a country, but we
who reneged on com- Government’s in- are not 100% with this resource identifi-
cation which is why we are working on it.
mitments, putting into terest in Tulu Kapi is In fact, the geological survey is currently
working on resource identification for in-
question the trust be- 25% (5% free car- vestors to come and invest in,” Mekassa
said.
tween mining compa- Hon Ato Motuma Mekassa ried) and it hopes to
nies and the Ethiopian showcase the pro- – Mark Andrews

Government. ject as an example

However, under the leadership of Kefi of the mining potential in country.

Minerals plc executive chairman Harry Minister of Mines and Petroleum and

Anagnostaras-Adams, a level of trust Natural Gas for Ethiopia, Hon Ato Mo-

has been restored and the Government tuma Mekassa, said attracting private

is once again on board with developing investment to sustainably develop the

its mining sector. minerals sector was an immediate prior-

“Working with the Government to get ity for the Government.

this show on the road as a sector and the “The Government is giving good at-

relationship we have developed of mutual tention to the development of mineral

trust through having done what we have resources and that is why we are trying

PAGE 74 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Attitudes holding back Ethiopia

Australia’s Ambassador to Ethio-
pia has compared the investor
mentality towards the East African

country with the lukewarm vibe

which hovered around South East

Asia three decades ago.

Speaking at a luncheon on Ethio-

pian investment opportunities, Mark

Sawers said the only thing holding

back foreign investment in the coun-

try were misconstrued beliefs and

perceptions around its governance.

“I often describe Ethiopia as what

South East Asia was 30 years ago

for Australian business,” Sawers

said.

“Back then it was very hard to

get any Australian businessman or

woman to think about doing busi- Paydirt deputy editor Mark Andrews served up questions on Ethiopian investment to a panel of
ness in Indonesia, Malaysia or Cam- experts, including Lycopodium managing director Peter De Leo, Ethiopian Minister of Mines Ato
bodia, simply because we didn’t
Motuma Mekassa, Australian Ambassador to Ethiopia Mark Sawers, Kefi executive chairman
have a feel for the place or under-
stand how to do things. Harry Anagnostaras-Adams and Ausdrill managing director Ron Sayers

“Thirty years forward, Australian busi- established in 2010, with Sawers ap- “Over the years, we’ve trained 21,000

ness is heavily engaged in that region pointed to the head ambassadorial role nationals from West Africa to be able to
and all that happened was an attitudinal four years later. He said Ethiopia’s doors mine and they’ve generated $US6.2 bil-
change. It’s still a difficult and very com- were “wide open” to foreign investment lion of revenue for us.

plex place to work, but people have now and the country’s government was keen “We built an industry around what

developed a feel for the place and under- to work with mining companies to devel- we’ve done in West Africa, but we see

stand how to do things. op its hard rock industry. ourselves expanding to all parts of Africa

“Ethiopia is similar. The opportunities “Ethiopia tends to do its homework, it and Ethiopia is a big part of that. The only

are there, but it’s about working in the looks around the world and thinks who difference with Ethiopia is it sits on the

country to gain a better understanding of has what in terms of the know-how and other side of the continent.”

the connections required to get business experience and then focuses the rela- Lycopodium has been operating in

done.” tionship on that in terms of what can be various African jurisdictions since 1994

Sawers said the mining sector, albeit made through the process of interacting,” when it won an EPCM contract at Golden

nascent, was one of two key focuses Sawers said. Pride, Tanzania, with managing director

identified by the Australian Mission in “The thing about Ethiopia is getting Peter De Leo drawing comparisons be-

Ethiopia as being vital to the country’s over the information gaps, building all tween the experience and his country’s

economic growth, alongside agriculture. of that knowledge into place and under- recent entry to Ethiopia.

Kefi Minerals plc is the leading resourc- standing how it all comes together. The “We built Golden Pride – Tanzania’s

es company based in the country and is other part is just simply coming to Ethio- first modern mine – at a time when that

close to securing development funds for pia and getting to know the country, un- country was just starting to open up to

its $US245 million Tulu Kapi gold project, derstanding the landscape and getting a mining for foreign investment,” De Leo

360km west of Addis Ababa. feel for the place.” said. “Even from just setting up in coun-

“We see the Kefi project as essentially Lycopodium Ltd and Ausdrill Ltd are try, it was very early days and so we were

a pathway project for the future,” Sawers two mining services companies which learning lots of different things from the

said. “If that project goes well, our sense recently set foot in the country for the outset.

is that others will come in. In fact, we’ve first time after taking up contract work “There is a sealed road within 15km

already seen some evidence of that with with Kefi at Tulu Kapi. of [Tulu Kapi], it’s a lot closer to Addis

Allied Resources [Inc] recently making Ausdrill managing director Ron Say- Ababa than Golden Pride was to Dar

an investment in oil and gas and we’ve ers revealed he had not yet visited Ethio- es Salaam. There’s a very enthusias-

also some got some lithium miners start- pia, but that did not stop him likening tic and supportive government…and

ing to show interest. the opportunity to the one his company there is certainly a high availability of la-

“It’s a marketplace that is relatively grabbed almost 30 years ago when West bour – maybe a bit down on experience

young still, but there’s quite a bit of poten- Africa was a big unknown. but highly educated – and regionally to

tial. For Australian companies, it’s a rela- “We went to Ghana 27 years ago and south, in Kenya, there’s good contracting

tively new place. There are other parts we’ve been there ever since. Further to availability for us to tap into.”

of East Africa which we historically have that, we’ve developed in all the West Af- – Michael Washbourne
much more connections with.” rican countries along the gold belt,” Say-

Australia’s Mission in Ethiopia was ers said.

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 75

AFRICA DOWN UNDER REVIEW

Finding new markets for Africa

Funds are flowing back into the mining BDO Australia corporate finance partner Sherif Andrawes directs questions on new
sector after a barren few years and in- sources of capital for African projects to SRK Consulting’s Mark Noppe, First Quantum
vestors are once again looking to Africa in global exploration director Mike Christie, Bannerman Resources chief executive Brandon
search of the next great opportunity.
Munro and PCF Capital managing director Liam Twigger
However, Africa still remains a high-
risk destination for many investors and vest in people and believe these people “We have also taken investments in
aspiring juniors have been forced to think have a sound strategy and track record. some juniors, often in combination with
outside the box when it comes to sourc- Sometimes I think we forget that takes an a JV, where we will kick in a couple of
ing capital for their projects. element of risk out of the equation.” million dollars as part of our commitment
to exploration expenditure. And, in many
Finding new capital markets for explo- Twigger said resource-based IPOs cases, we will allow the junior company
ration and development of African pro- were an “excellent barometer” for how to operate the JV and we will offer selec-
jects was the topic of a breakfast panel the mining industry was tracking, with 15 tive technical input to try and make sure
convened by BDO Australia corporate new floats launching on the ASX during it’s well driven.”
finance partner Sherif Andrawes. the first nine months of 2017.
Christie also bemoaned the current
Andrawes noted the emergence of However, none of those new entries lack of grassroots exploration, calling on
private equity funds as a new source of were for African-based projects, al- major companies to put cash on the table
capital for juniors in Africa, although PCF though DRC-focused Okapi Resources for an aspect of the industry he said they
Capital Group managing director Liam Ltd was seeking to raise $6.44 million to failed to support properly during the last
Twigger said the jury was still out on their list on the ASX at the time of print. boom.
role in the industry.
Twigger said investors will now typi- “The number of actual discoveries the
“I think it’s a good sign, but I don’t know cally shy away from grassroots explora- majors found during the last boom was
necessarily if it’s going to help juniors in tion plays, particularly those in high-risk not great,” he said.
that space,” Twigger said. jurisdictions, making traditional capital
raisings, such as an IPO, quite difficult. “Unfortunately, the juniors who were
“They’re probably more likely to be a making a lot of these discoveries 20
buyer that takes a project a fair way down “If you can’t get an IPO away, then years ago are not out there doing that
the track and then they will sell it to you or maybe you go to a major and see if they grassroots work anymore and this is
look for an IPO. It’s certainly a changing will back you,” he said. where I think the majors really need to
dynamic. pick up the slack and help the juniors.
TSX-listed First Quantum Minerals Ltd
“What we’ve recently seen in Zambia is one company which has extended an “And they shouldn’t just sign up for a
is EMR investing in a massive copper olive branch to cash-strapped juniors, 12-month JV, but in some cases probably
project; a private equity player coming in having signed more than 30 JV agree- even five or 10-year JVs to allow for that
and buying 100% of a project. It’s inter- ments over the last six decade. quality grassroots work to occur.”
esting to see groups like that prepared to
punt into Africa.” “It helped us go into a country like Na- – Michael Washbourne
mibia, where we had no background or
Bannerman Resources Ltd chief ex- facilities or administration,” First Quan-
ecutive Brandon Munro said some pri- tum global exploration director Mike
vate equity groups had different divisions Christie said.
which allowed for high-risk investments
such as those on offer in Africa.

“A number of big private equity groups
have got smaller funds that have a lot
more risk tolerance essentially designed
to be feeder funds for high quality as-
sets,” Munro said.

“However, they can be very picky on
management, but it’s another option. If
you’ve got a project where you’ve pack-
aged it well with good management be-
hind it, they will certainly take a look at
you.”

SRK Consulting corporate project eval-
uation consultant Mark Noppe agreed.

“When we’re asked to review potential
investment opportunities, it’s not always
the project itself we’re being asked to
look at. It turns out these funds are really
doing their due diligence on the team and
people who run that company,” Noppe
said.

“I found that really interesting because
there are large, large funds willing to in-

PAGE 76 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Sticking with convention

African law firm Herbert Smith and states tend to withdraw from
Freehills has cautioned
countries against removing min- these treaties.”
ing conventions.
According to the most recent
It is understood a number of
African countries are consider- Fraser Institute Mining Report,
ing axing or altering their re-
spective legal frameworks in the at least 10 African nations had
wake of the DRC abolishing its
mining convention and the in- “significantly amended, replaced
troduction of controversial new
policies in established jurisdic- or were in the process of replac-
tions South Africa and Tanzania.
ing” their mining codes.
Herbert Smith Freehills part-
ner Bertrand Montembault said Those countries include
conventions were vital for min-
ing policy frameworks to remain South Africa, Tanzania, Kenya,
both flexible and stable.
Senegal, Togo and the DRC.
“I know that some countries
are maybe considering removing the Herbert Smith Freehills direc-
mining convention from their legislation
and frankly I don’t think it is necessarily a tor Patrick Leyden said many of
good idea,” he said.
those jurisdictions were looking
“Mining conventions are a very efficient
tool to protect investors from changes in to gain a competitive advantage
mining policy…although it has been said
that sometimes mining conventions al- over their closet neighbours.
lowed mining investors to get excessive
advantages.” “In order to encourage invest-

Bertrand Montembault ment in mining, policies need to

recognise the characteristics of

Montembault also warned govern- mining and reduce the risk of investment

ments not to adopt mining policies which in long-term projects,” he said.

contradicted any existing contractual “Mining projects have long lead times

agreement with a mining company. from exploration through to actual pro-

“If you want to have efficient protec- duction and so policy needs to be certain

tion for the investment, the convention between those periods to encourage in-

provides probably the best legal tool,” vestor confidence.”

he said. “You have other tools like bilat- – Michael Washbourne
eral international treaties, but as you may

know they become less and less popular

Eveche has Vector singing

Vector Resources Ltd chief ex- upgrade the existing inferred re-
ecutive Simon Youds is having
difficulty keeping a lid on a potential source of 6.97mt @ 1.9 g/t gold for
new major discovery at the com-
pany’s Maniema gold project in the 422,000oz, based on a 20 g/t top
DRC.
cut.
Youds and his team have ob-
served visible gold in the main Vector recently boosted its man-
quartz vein of the Eveche pros-
pect, about 500m from the Mitunda agement team with the appoint-
prospect where the company has
previously reported visible gold ment of former Moto Goldmines
mineralisation.
executive Andrew Steers as chief
Eveche is comprised of multiple
quartz vein sets exposed by artisa- financial officer.
nal miners, with one main steeply
dipping quartz vein mapped over Youds said the company re-
an initial strike length of 600m.
mained open to further project ac-
Samples have been taken and dis-
patched for analysis. quisition opportunities in the DRC.

Eveche is 10km south of the Kabot- “We’ve got a team of people in
shome prospect where the company has
primarily been focused since acquiring a place now ready to go and deliver,”
70% interest in Maniema earlier this year.
he said.
“When you have a look at these [rocks]
and clean them up, there’s actually flecks Simon Youds “The DRC is certainly a coun-

try where relationships matter and

of gold through them,” Youds said. getting to know the right people is really

“We’re still yet to get the grades back important. I’ve actually found them to

on these, but we’re pretty confident it’s be very entrepreneurial and very self-

high grade.” sustaining and I put that down to the fact

Vector remains active at Mitunda that perhaps the colonial aspect is more

where a bulk sample of the top 10m of distant there, so they’ve had to start mak-

material will soon be taken for testing. ing decisions for themselves when other

Infill and diamond drilling is also countries still have a colonial hangover.”

continuing at Kabotshome in a bid to – Michael Washbourne

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 77

AFRICA DOWN UNDER REVIEW

Madagascar thaws to new miners

Asix-year freeze on mining tene- for locals. Next is the PR which is an
ment approvals has thawed in open exploration permit. Finally, there
Madagascar, and Carl Andriampa- is the PE permit, which is an exploita-
rany says its mining framework is of- tion permit for up to 40 years.”
fering a special regime for large-scale
mining investments. Madagascar’s most attractive re-
sources are gold and precious stones,
Speaking at Africa Down Under, such as sapphires and emeralds, ac-
Madagascar’s secretary general of cording to Andriamparany.
the Ministry of Mines and Petrole-
um Andriamparany said the special The Ministry of the Mines has re-
scheme (LGIM) guaranteed stability cently established a mining deal cen-
for large-scale miners with an invest- tre, which will act as a hub for miners
ment of $US16 million, and included a and investors.
five-year tax holiday once operations
began. “It is where sellers can bring their
stones and have them analysed and
Madagascar has up to 3,500 min- have a good price if the potential buy-
ing tenements, and the mining indus- ers are there. The mining business
try contributes 4.18% to the island na- centre is a one-stop shop for potential
tion’s GDP, employing a workforce of buyers and they can have their paper-
about 1.5 million. work done in one day,” he said.

“We also have large-scale and me- On gold, Andriamparany said Mad-
dium-scale mining operations like the agascar had previously had issues
Ambatovy nickel and cobalt project, with illegal exportation, which attrib-
with an initial investment of $US8 bil- uted to no ounces being officially de-
lion. There is also Rio Tinto [Ltd] at clared in 2014.
Kraomo with an investment of almost
$US1 billion,” Andriamparany said. “We addressed this by creating a
centre for gold and management.
“We have a mining cadastre system This year, in six months alone, they
that manages all mining tenements in have declared up to 60,000oz of gold,
Madagascar and it has three types of which was officially exported out of
certifications. The PRE permit is for Madagascar.
small scale exploitation and it is only
Carl Andriamparany – Jon Daly

Golden Rim goes all in on Kouri

Golden Rim Resources Ltd is planning put the project on hold and signed an Mackay said the drilling programme
to sell its Chilean zinc project to fund agreement with broker Acorn Capital, had recently located a new zone with a
work on the Kouri gold project in Burkina which will oversee a transaction on Pa- hit of 18m @ 5.4g/t of gold from surface.
Faso, where a maiden resource will be guanta.
delivered by the end of the year. “We have exceptional mineralisation
“The idea is that the funds from the there which we will follow up on during
Managing Director Craig Mackay said sale of the zinc project will be used to our next campaign,” he said.
the Paguanta zinc-silver-lead project boost our gold project in Burkina Faso,”
was a prospective asset but had failed to he said. Other drill result from the main deposit
attract the news flow it was due. of Banouassi include 21m @ 5.6g/t gold
Mackay said the company was about to from 13m, 10m @ 4.5g/t gold from 15m
“We put out a drilled resourced at Pa- start an initial exploration programme at and finally 10m @ 11g/t gold from 111m.
guanta a few months ago of 2.4mt at 8% Kouri with a target of 500,000-611,000oz
zinc equivalent; that is close to 200,000t of gold from 70m below surface. Mackay said there was also 13km of
of contained zinc equivalent. About 50% gold mineralisation just outside of Ban-
of that resource is measured and indicat- “A recent programme we completed ouassi, which had been poorly explored
ed, and open at depth,” he said. just before the wet season suggested the to date.
mineral resource was likely to be consid-
“What was interesting was our later erably larger than the exploration target. “When we arrived on site there was
drilling, which picked up high-grade We think this step is really important for considerable artisanal work, but most of
shoots of up to 20% zinc. The disappoint- our company and it will see an increase it had been abandoned. We were really
ing thing is that we had very little impact in Kouri and in the value of our company,” surprised by the fact that there was not
on the ASX in terms of the news flow. he said. one drill hole on the entire property,” he
We feel that this project would be better said.
suited in North America.” “We have now done about 30,000m of
RC drilling and we have got a number of – Jon Daly
Mackay said the company decided to nice intercepts and parallel zones.”

PAGE 78 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Solving Africa’s people puzzle

Management of community expecta- Globe 24-7 principal Lachlan Spicer hosted a discussion addressing the
tions should begin well before the challenges of managing people at African mining operations
first concrete pad is poured at a mine site,
according to Base Resources Ltd manag- “Even though we employ at the mo- benefits that we don’t lose sight of the
ing director Tim Carstens. ment somewhere around 1,000 people, fact our primary responsibility is to be
we could employ 10 times that number profitable.”
Speaking during a panel session con- of people and it’s still not enough in the
vened by Globe 24-7 principal Lachlan eyes of some. So getting people to un- Resolute is taking its long-standing Sy-
Spicer, Carstens said it was critical for derstand that a mining project coming in ama gold mine in Mali underground and
mining companies to address all percep- is not going to mean a job for everybody will need to upskill many of its workforce
tions of their planned operations before is absolutely crucial. with new technical capabilities to run a
committing to construction. sublevel cave operation.
“One of the other real challenges you
Base developed the Kwale mineral need to manage, from our experience, Welborn said striking the right balance
sands project – Kenya’s first commercial is that influx. As soon as there is a per- between upskilling local workers and
mine – five years ago and the operation ceived opportunity for mining, you will bringing in specialist expatriates was a
currently has another five years of mine find people gravitate towards the loca- difficult exercise.
life in front of it. tion and you’ve got to try and find ways
to manage that to ensure the benefits are “There’s no doubt the challenge for an
In the absence of further mine life ex- going to the people from that area.” African operator is moving away from
tensions, closure of the operation would this construct of having high-skilled ex-
leave about 1,000 people from Kwale Roxgold Inc commissioned the Yar- pats and a huge number of lowly skilled
out of work, as well as have an impact amoko gold mine in Burkina Faso last local workers,” he said.
on a number of other businesses in the year, with chief operating officer Paul
region. Criddle saying his company adopted a “Our approach towards a highly auto-
similar strategy to Base on managing mated, high technology mine has been
“Managing that expectation actually community expectations. making sure that matches our commit-
started before we started the operation in ment and our focus to have a locally
the first place,” Carstens said. “We made “Our mantra was to engage a lot and trained workforce and to also create
sure people understood the lifecycle of a engage early,” he said. “Being present pathways for people within our company
mine and that it’s not going to be there in the very early stages of permitting the and not just for skilled expatriates.”
forever. project certainly worked well for us. Get-
ting on the front foot with that stuff early Globe Competency Assurance chief
“Everything we do in the way we en- is pretty important.” executive Chris Gittens said mining com-
gage with the outside world in Kenya is panies needed to temper expectations
all about achieving a broad-based eco- However, Resolute Mining Ltd manag- on the length of time it takes to properly
nomic uplift that survives beyond the life ing director John Welborn disagreed with upskill a local worker.
of mine. One of the mantras in our com- the survey respondents, insisting the
pany is that if all we leave is a memory of most important thing for a mining com- “If you’re talking about very remote vil-
how good it used to be, we’ve not done pany was to be profitable. lages where people have very little lan-
our job well.” guage and literacy skills, it’s very unre-
“I challenge anyone to be more impas- alistic to think you can turn a person into
Globe 24-7 surveyed a sample of Af- sioned about the empowerment of local an electrician or a mechanic or a fitter in
rica Down Under delegates in the lead- communities than I am, but the number three months,” he said.
up to the panel session, asking questions one driver of the ability to be a positive
concerning mining company responsibili- influence on the local communities is to “In my experience, that’s a scenario
ties, local community expectations and actually run a profitable mine,” Welborn which has been presented to us to es-
workforce requirements. said. sentially replace an expat. That’s just not
going to happen. Don’t forget it’s a long
In response to a question on what “It’s important when we focus on em- process to develop the technical skills
was the most important responsibility of ployment, wealth, education, infrastruc- that mining operations need.”
a mining company with regards to local
communities, 75% of delegates said lo- ture and all the positive downstream – Michael Washbourne
cal employment was the highest priority.

Base was adamant from the day it
committed to developing Kwale it would
employ as many local workers from the
region as possible, with 38% of its mine
employees coming from the immediate
area and about 63% from the county
which hosts the operation.

About 96% of Kwale’s total workforce
is Kenyan.

“Community expectations start high
and they just get higher and a lot of work
has to go in, up front, to managing peo-
ple’s expectations about what is possi-
ble,” Carstens said.

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 79

15 YEARS OF ADU

2017

THANK YOU

TO ALL SPONSORS, SPEAKERS,
EXHIBITORS AND DELEGATES

JOIN US AT ADU 2018

PAGE 80 OCTOBER 2017 AUSTRALIA’S PAYDIRT

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 81

NICKEL PREVIEW

Nickel West
revels in role as
industry leader

The Australian nickel industry returns to the Pan Pacific Perth on Paydirt spoke with Haegel ahead of
October 17 for the annual Australian Nickel Conference. The the conference to find out how the un-
forum comes at a time of cautious optimism for a sector which has wanted division achieved such a dramat-
experienced more than its fair share of setbacks in recent years. ic rebound.

“We were clearly under significant finan-

cial stress when I came in so it was how to

The programme is headlined by local finery is decidedly non-core in the new- goaboutcreatinghopeforourpeoplegiven

producers Western Areas Ltd, Independ- look BHP Ltd. A key asset; the Kalgoorlie that the latest communication they had re-

ence Group Ltd and BHP Nickel West as nickel smelter, was on its last legs and ceived was that we were closing in 2019,”

well as an emerging set of explorers and reserves at the company’s West Austral- Haegel says. “If that was going to happen

developers. ian nickel mines were also dwindling. the way we would approach that is very dif-

The price has been far from kind for the It appeared he was taking on the job ferent to how you would approach the run-

sectorthisyearbutifanyofthejuniorsneed of closure or a tidy-up for sale but in the ningofthebusinessifyouweregoingtorun

inspiration,NickelWestassetpresidentEd- subsequent two years, Haegel has over- for a lot longer.

uard Haegel may provide it. seen a remarkable turnaround in per- “That was the critical reason for creat-

When Haegel made his first appear- formance, even in the face of a stifling ing the 10-80-10 strategy, to give clarity to

ance at the conference in 2015, it was as nickel price. The smelter’s life span has folk. We said there was a 10% likelihood

chief of a division with a “For Sale” sign been pushed out to the 2030s, reserves we would close immediately if something

placed on its door. Deemed not strong have been increased and mine lives ex- bad happened in the short term, an 80%

enough to be included in the South32 tended and the Kwinana nickel refinery chance it would close in the existing 2019

Ltd spin-off, Nickel West’s mix of nickel is about to enter the lithium-ion battery timeframe and I gave folk a 10% chance of

mines, concentrators, smelters and re- supply chain. us extending the life.”

What happened next could even-

tually go down as one of the great

resurrections in WA mining history,

particularly as it occurred during a

time of deflated nickel prices.

The first signs of the turnaround

came through small, but significant,

steps. Nickel West had already un-

dergone a major cost reduction pro-

gramme as part of a wider group

process but Haegel wanted to widen

the conversation. He spoke about

creating a junior mindset within the

division to create a resilient and flex-

ible producer that could navigate

the low part of the cycle but also be

ready for the upturn.

“We wanted to start looking to-

Operational improvements at the Kalgoorlie nickel smelter have pushed the asset’s life out to wards earnings increases,” he says.

2023. Nickel West is now investigating ways of expanding this out even further “You get earnings by reducing costs

PAGE 82 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Mt Keith remains a mainstay of the Nickel West portfolio

but also increasing revenue, getting bet- nine years beyond 2023, you could fund ness if nothing else than through en-
ter recoveries, etc.” through the earnings cash flow that you couragement because that’s what Nickel
generate over that time, you could pay West does for you, it brings out a very
The introduction of an enterprise man- for the $150 million smelter rebuild which strong spirit.”
agement structure, with single managers would be needed.
responsible for the financial state of in- Job security may have improved for
dividual assets, assisted this change in ”So, in getting to 2032 Venus and Yak- many of Nickel West’s workforce but the
approach, allowing them to make what abindie become even more important. division remains unwanted by the larger
Haegel describes as “value-based deci- But there is opportunity to go further still BHP group. Haegel knows the asset re-
sions”. and we have been progressively identify- mains on the market but rails at any sug-
ing other opportunities to fully populate gestion all the recent operational suc-
The company also sent for outside that plan.” cess has been about window dressing.
help, engaging the likes of Hatch and
Outotec on how they could think differ- The process begins to look self-per- “Non-core means ‘not core’ so it fol-
ently about the Kalgoorlie smelter’s op- petuating with the exploration group now lows that in some point in time you will
erations. considering extensions at both Leinster leave BHP, at some future day we will
and Mt Keith which are capable of filling have a different logo on our shirt,” he
“We also sent our people to many the production profile out to 2032 and says. “But we are not simply getting
more international conferences to find even beyond. ready for sale. Anyone who’s been to our
new mind sets and ideas. Almost invari- sites and seen the amount of money go-
ably, they discovered something which “We are pretty confident around 2032, ing into our asset integrity and going into
added value to our business.” then this year the work on the furnace long-term decisions about our business
has given us confidence we can push would know we are doing nothing to tidy
That work resulted in productivity gains that refurbishment out still further to up for sale, we are building the business.
and cost improvements but also afforded 2024-27. That means the full lifecycle is
the Kalgoorlie smelter another five years out to around 2040,” Haegel said. “The analogy I often use is renovating
of life, leading to a major switch in inter- a house. We are not painting the picket
nal strategy. Talking of mine lives to 2040 and be- fence and leaving the leaky roof, old
yond is a far cry from Haegel’s early days wiring and old plumbing and putting it
“Once you say the business is going to of preparing employees for closure. It is up for sale. We are redoing the kitchen
run to 2023, you need to feed it; you need obvious he is delighted the division has and bathrooms, rewiring house. We are
the resources to enable you to do that,” been able to provide more clarity about going to have something really special
Haegel says. the future employment of what is a tight when we leave BHP such as it is an at-
workforce. tractive thing which people want.”
The extension to the smelter led Nickel
West’s exploration team back to previ- “I found a lot of very experienced peo- Haegel speaks of “natural owners” of
ously neglected orebodies such as Ve- ple. When you reflect on that time, what the Nickel West business but will not be
nus and Yakabindie. really struck me was the loyalty of the drawn on who that would encompass.
folk when I came into Nickel West. I’m Given the success of the South32 spin-
Venus is 1,800m along strike from talking about superintendents, manag- out, there is even a possibility the divi-
the Perseverance orebody at Leinster. ers, etc. All of those people had been sion could be listed as a separate entity
Nickel West is driving development from with the company a long time and clearly but Haegel says no discussions have
Perseverance to the 7mt Venus orebody. knew Nickel West had been through a been initiated.
Yakabindie – 20km south of the Mt Keith great deal of challenges since the GFC.
operations – would be unlikely to support But to know you had very experienced, “The good news is we haven’t engaged
standalone development but its open pit capable, dedicated people, all of whom in a conversation about how we should
reserves of 96mt @ 0.61% nickel could had been with the company a long time, do that because we are so focused on
be considered an extension to Mt Keith still working hard to make the most of the making the business better.”
operations. business, was a massive advantage.
– Dominic Piper
“As we initiated those projects it was “Even today, there are many people
clear that 2023 was not long enough so not inside of Nickel West barracking on
we then asked what we would need to the sidelines and trying to help the busi-
believe in order to go past 2023,” Hae-
gel says. “We worked out, if we could go

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 83

NICKEL PREVIEW

Innovation game proves winner
for Western Areas

Western Areas Ltd is push- production and 80% of its fu-
ing ahead with its mill re- ture production will be of the

covery enhancement project nickel-heavy 300 series,” he

(MREP) as part of an innova- said.

tion drive designed to keep After three years of test-

the company competitive in a work on the Western Areas

changing nickel world. concentrate, Tsingshan is

Western Areas suspended confident it can handle nickel

work on the MREP last year concentrate in its roasting

due to budget constraints but plant to produce a high-grade

has restarted the strategy with oxidised product which can

construction beginning in the be blended with low-grade lat-

June quarter ahead of com- erite ore and fed directly into

missioning in January 2018. stainless steel converters.

The MREP circuit will recov- “We have been working on

er nickel extracted from West- this with Tsingshan for three

ern Areas’ patented BioHeap years,” Lougher said.

process, to be used on exist- The new offtake and the re-

ing tailings material. The pro- Western Areas produced 25,990t of nickel-in-concentrate in FY2017 start of the MREP have been

cess will produce 1,400 tpa of followed for a bright period

high-grade (45-50% nickel content) con- back end and further capital being sunk in the nickel market with the LME spot

centrate. The company will initially blend into the MREP.” price hitting two-year highs at the start

the material with its existing product from The MREP is just part of Western Ar- of September. That improvement coin-

the Cosmic Boy concentrator, improv- eas’ wider innovation programme which cided with the release of Western Areas’

ing overall recoveries by 3-5% over the has also seen it implement new mining FY2017 results which showed an $11.6

life-of-mine, but managing director Dan methods at its Forrestania operations, million increase in EBITDA to $84.9 mil-

Lougher told Paydirt other options were insert an ore sorter into the Cosmic Boy lion and a $4.9 million increase in net

also being pursued, including selling the flow sheet and strike new offtake agree- profit after tax to $19.3 million.

MREP product separately or using it to ments. The results and a more welcoming

produce a nickel sulphate (see page 20). Lougher believes such innovation price environment combined to push the

“The plan now is to produce the blend- will be integral to the company’s future company’s shares from 12-month lows of

ed product first until we can get the qual- growth. around $1.90 to as high as $2.87 in early

ity of the bagged product right,” Lougher “We need to continue to be innovative,” September.

said. “There is no offtake contract for the he said. “There has been a very good reaction

MREP material, so we have started to The new Forrestania offtake agree- to the results particularly as the nickel

send samples to potential buyers, includ- ments with BHP Nickel West and Chi- market has also been better,” Lougher

ing non-Chinese global companies who nese stainless steel producer Tsingshan said.

are well-entrenched in the EV market. may also come to reflect the changes “We have made money out of our non-

“It has become more and more obvi- taking place in the nickel market. The core assets [through the $25.6 million

ous that the battery manufacturers see deal with Tsingshan in particular demon- sale of its interest in BlueJay Mining plc

the MREP product as a good product strates the company’s willingness to pur- and a deal with Kidman Resources Ltd

which they could modify themselves to sue non-traditional markets in an effort to over lithium rights at Forrestania] which

produce nickel sulphate.” improve payability. has allowed us to return to dividends and

Separate bagging could be achieved Western Areas had previously sold the underlying loss will change as we

with only minimal additional capital – the 45% of its concentrate to Chinese cath- move into an upward price environment.

MREP is currently forecast to cost $17.5 ode producer Jinchuan but the contract “The market is growing now and while

million – but heading down the nickel sul- with Tsingshan will see the concentrate the inventories are still proving a damp-

phate route would require further invest- used in roasting. Tsingshan is lifting pro- ener on price, there is bullishness around

ment. duction of 300 series stainless steel, nickel thanks to the EV story.

“The problem is the MREP sulphate which uses significantly more nickel than “We don’t want prices to go crazy

is crude and can’t be applied directly 200 and 400 series products. again because we don’t want to see too

to the EV market; there is a lot of work Lougher said the offtake agreement many restarts but we are starting to see

required to take it to the correct purifica- allowed the company to position itself it move.”

tion,” Lougher said. “In the lab, we used within the stainless steel supply chain. – Dominic Piper
ion exchange and proved we could do “China is very bullish on nickel and

it but that would require changes at the Tsingshan is increasing its stainless steel

PAGE 84 OCTOBER 2017 AUSTRALIA’S PAYDIRT



NICKEL PREVIEW

A serious find beckons for Legend

Managing director Mark nickel, 0.06% copper and just until assaying and petrology results had
Wilson believes Leg- 100m away. RKAC068 re- been revealed.

end Mining Ltd’s Rockford turned a result of 37m @ 0.1% “Coupled with the EM surveys, this
will give us a better understanding of
project has the makings nickel and 0.01% copper from where we are and whether there is the
encouragement to drill further holes into
of another Nova-Bollinger 24m. that conductor.”

nickel-copper deposit. The “These intersects with the “If we have got a significant body,
have we put a hole through some fingers
company has caught the anomalous nickel and copper that are splaying off it?” Wilson asked.

scent of a similar deposit were interpreted as being the Wilson said the next step for Legend
was to plan and carry out another drilling
at Rockford, 120km north- up-dip projection of where programme if the assay and petrology
results were fortuitous.
east of Nova in the Fraser the conductor was,” he said.
“Petrology results will tell us if we are
Range. Buoyed by the results, Leg- in ultra-mafic rocks, along with the sul-
phides, which puts us in the right geo-
“The work that we are do- end drilled three diamond logical setting for that Nova-style nickel-
copper mineralisation,” he said.
ing in the immediate future Mark Wilson holes at the N1 conductor
is to develop the geological site. “In the case of the down-hole EM and
ground EM surveys, we want to be able
model and test that model “We intersected a chunk of to identify further high conductance tar-
gets to drill test before we go ahead with
to see if that is indeed where we are,” massive sulphide and some net textured the next iteration of drilling.”

Wilson said. sulphides, both in the hanging and foot – Jon Daly

Following an aircore drilling pro- wall of this interpreted metamorphosed

gramme and fixed-loop EM surveys in mafic rock.”

June, Legend confirmed a plus-300m In addition to sulphides, a down-hole

wide zone of anomalous nickel and cop- EM survey on hole RKD003 identi-

per values and a very strong conductor fied a very strong off-hole conductor of

of 6-12,000S, referred to as N1. 30,000S.

Aircore drill hole RKAC119 returned But Wilson said it was early days and

results of 31m @ 0.009% nickel, 0.03% that Legend would not know the true sig-

copper from 20m, including 4m @ 0.14% nificance of those intersects and surveys

PAGE 86 OCTOBER 2017 AUSTRALIA’S PAYDIRT

17 October 2017
Pan Pacific Perth

As Australia’s only dedicated nickel event, the Australian Nickel Conference serves up the very
best the sector has to offer.After defying market sentiment during the downturn, last year saw
the Australian Nickel Conference reflect growing interest in nickel, bringing together players
from across the industry spectrum to shine the spotlight on established miners and emerging
stories.This year’s edition will be held in Perth on Tuesday 17 October 2017. In addition to

offering nickel companies the chance to present their stories to the market, the conference
offers an opportunity to meet and network with industry players throughout the day.

Conference Sponsors:

To present, exhibit or attend as a delegate please contact
Christine Oelschlaeger (+61) 8 9321 0355 [email protected]

NICKEL PREVIEW

Rox rush on Collurabbie

Rox Resources Ltd man- Collurabbie is a stock-standard West Australian underground nickel mine, with only nickel
aging director Ian Mul- price issues standing in the way of production
holland believes exploration
success at the company’s that was valued at over $300 million at $20.8 million upfront capex to develop
newly acquired Collurabbie one stage, that’s not a bad price to be the project and produce nickel via toll
nickel project will garner in- paying for it.” treating.
stant market support.
Rox has since upgraded the resource “It’s one of those projects where if we
Collurabbie was added to at the Olympia deposit to 573,000t @ can see a sustained uptick in the nickel
the company’s portfolio ear- 1.63% nickel and 1.19% copper for 9,300t price, we can get back on the develop-
lier this year following the nickel and 6,800t copper and had just ment path pretty quickly,” he said.
sale of its share of the Teena completed a 6,000m aircore programme
zinc project in the Northern at Collurabbie at the time of print. Assay “It’s pretty tidy in terms of the work we
Territory to former JV partner results will be released this month. would need to do. The biggest thing we
Teck Australia Pty Ltd. would need to do to advance it to pre-
Fisher East hosts a resource of 4.2mt feasibility again would be to go back and
Previously held in a JV be- @ 1.9% nickel for 78,000t, with 95% do a more comprehensive metallurgical
tween Falcon Minerals and classed as indicated, across three sepa- test work programme.
Western Mining, Collurabbie rate deposits.
is 70km east of Rox’s flag- “The mineralisation we’ve seen in
ship Fisher East nickel pro- “We’re getting pretty close to the criti- every drill hole is the same, even though
ject. cal mass you need to get a project going we’ve only done test work in one drill
when you add that to what we’ve got at hole. So, by comparison, we expect all
“I think the market will re- Fisher East,” Mulholland said. the others to be similar.”
spond to some success at
Collurabbie, much more “Based on what we’ve seen at Fisher Rox retains a healthy cash balance of
than it will respond to contin- East and now at Collurabbie, I would $14 million, plus receivables of $4 mil-
ued success at Fisher East, be quite confident of having at least lion, but Mulholland has no intention of
purely because Collurabbie 100,000t of nickel in resource within the letting that money “fritter away”.
is new, it’s unknown and it’s untested,” next year or so.
Mulholland told Paydirt. “We’re pretty focused on finding a pro-
“The pace of our expenditure is very ject we think can add value to the compa-
“For whatever reason, the market much going to be depend on what the ny, so we’ll use that cash to get involved
looks at Fisher East as being around for nickel price does. Nickel is in a bit of an in another project which might have ap-
a while now and so the initial momentum upward trend at the moment, and that’s peal to the market,” he said.
and excitement we created from that pro- been encouraging, but we need to see
ject has fallen away. that sustained over a reasonable period. “It will need to be something at a pretty
All of the nickel guys will be telling you advanced stage, preferably in Australia,
“The market has a pretty short con- that because nickel has seen a false with a clear path to production. We want
centration span unfortunately, it likes to dawn so many times before.” the market to know this project is likely to
latch on to something new. So if we can become a mine in the near term.”
get some more good hits at Collurabbie, Rox aborted a PFS on Fisher East in
I think that will be a pretty positive thing early 2016, having completed a scoping – Michael Washbourne
for us.” study the previous year which flagged a

Mulholland’s reasoning appears valid
when you consider Falcon boasted a
market cap of $140 million in late 2004,
with the valuation largely attributed to its
minority interest in Collurabbie.

When BHP Ltd took over Western Min-
ing the following year, Collurabbie was
put on the shelf and has only been ex-
posed to one serious exploration cam-
paign – in 2011 when Falcon regained
100% control of the asset – since.

“Really the project has been sitting
dormant for 10 years,” Mulholland said.

“We could see there was huge poten-
tial there. We were at the bottom of the
market, so it was a great time to buy and
we took the opportunity because Falcon
was going into tech and looking to get
out.

“It took a bit of nerve and we ended up
paying about $150,000 for it – $25,000
cash and 7.5 million shares. For a project

PAGE 88 OCTOBER 2017 AUSTRALIA’S PAYDIRT

Preliminary programme Tuesday 17 October 2017

07.45 Arrival tea, coffee and registration

Session One
08:25 Welcome: Bill Repard, Executive Chairman, Australia’s Paydirt (5)
08:30 Opening Address: Hon Bill Johnston MLA, Minister for Mines and Petroleum,
Government of Western Australia (20)

08:50 Jim Lennon, Consultant, Macquarie Group Ltd (20)
09:10 Eduard Haegel, Asset President, BHP Nickel West (20)
09:30 Dan Lougher, Managing Director & CEO, Western Areas (20)
09:50 Peter Bradford, Managing Director & CEO, Independence Group NL (20)
10:10 Questions (10)

10:20 Morning Tea (30)

Session Two
10:50 John Prineas, Executive Chairman, St George Mining Ltd (20)
11:10 Warren Hallam, Managing Director, Metals X Ltd (20)
11:30 Mark Wilson, Managing Director, Legend Mining Ltd (20)
11:50 Ian Mulholland, Managing Director, Rox Resources Ltd (20)
12:10 Questions (10)

12:20 Lunch (60)

Session Three
13:20 Peter Muccilli, Managing Director, Mincor Resources NL (20)
13:40 Peter Harold, Managing Director, Panoramic Resources Ltd (20)
14:00 Jamie Sullivan, Managing Director, GME Resources Ltd (20)
14:20 Richard Bevan, Managing Director, Cassini Resources Ltd (20)
14:40 Matthew Painter, Managing Director, Ardea Resources Ltd (20)
15:00 Questions (10)

15:10 Afternoon Tea (30)

Session Four
15:40 Speaker TBC
16:00 Carey Smith, Senior Analyst, Alto Capital (20)
16:20 Brighton Gwavava, Managing Director, Suntech Geometallurgical Laboratories (15)
16:35 Questions (10)
16:45 Closing Panel Discussion (Convened by Dominic Piper, Australia’s Paydirt) (45)
17:30 Closing Drinks sponsored by GR Engineering Services

* This programme is subject to change without prior notice

australiannickelconference.com

NICKEL PREVIEW

Oz flying high with Cassini

Cassini Resources Ltd ex- 200 float tests at the end of
pects to know by the end
of the year whether Oz Miner- the DFS. That being said,
als Ltd will proceed to the next
stage of an earn-in agreement our orebody is a little bit
over the West Musgrave nick-
el-copper project. more complex than Nova-

A revised scoping study due Bollinger, but we’ve spent
for release this quarter will
mark the completion of the a lot of time de-risking the
first stage of a $36 million JV
the companies signed prior to metallurgy and I think that
Diggers & Dealers last year.
will be key to Oz’s next deci-
Almost 14 months on from
the partnership being sealed, sion on the funding.”
Cassini managing director
Richard Bevan could not be Cassini also appears to
happier with the support re-
ceived from the Andrew Cole- have identified critical water
led Oz.
supply via local paleochan-
“For us to find a partner that
has the financial strength and nels to support the larger
operational strength of Oz,
and who were focused on get- processing throughput and
ting the project into produc-
tion, it’s exactly what we were in turn will significantly re-
after,” Bevan told Paydirt.
duce the capex and opex
“It started off well and really
the last 12 months have pro- for the project.
gressed well. We were very
aligned going into it and now we’re just in Once the scoping study is
that process of finalising a lot of pieces of
work to end that first stage, with Oz hav- completed, Cassini is look-
ing a milestone in terms of progressing to
the next stage. ing forward to extending the

“Their decision should be made by the drill bit to other parts of the
end of the year. We’re really confident
they will continue because the project is West Musgrave project.
stacking up well and it’s showing many of
the characteristics that we believe make “One of the really key driv-
a really good project; long mine life, low
C1 cash costs and a reasonable scale of ers of value for Oz is the sig-
production.”
nificant exploration upside
Under the terms of the three-stage JV
agreement, Cassini will be free-carried within the project,” Bevan
to a decision to mine, with Oz also con-
tributing $8 million towards regional ex- said.
ploration in stages two and three.
A revised scoping study will be completed on Cassini’s “We know that if we can
Oz will earn up to 70% of West Mus- West Musgrave project later this quarter get that first operation up
grave, 120km east of Warburton, if it con- and running, there’s a num-
tinues through to the end of the JV. The
South Australian-based copper producer “Being a small company, we’ve been ber of opportunities to add ore to that
will hold a 51% stake at the end of the
first stage. very cognisant of the capital expendi- project and extend mine life. If you get

Cassini completed a scoping study on ture at the back-end, so in the original one operation up and running, suddenly
the flagship Nebo-Babel deposit in 2015
and updated the economics last year scoping study we looked at some staged something like the Succoth copper de-
prior to signing the JV with Oz.
models, what was the minimal capex we posit, about 13km up the road, becomes
Bevan said the revised scoping study
would focus on a larger processing needed to get up into production and a very low capital intensity project.
throughput.
then whether we could scale the project “There’s a lot of upside. We really think

up from there,” he said. we’re going to have a multi-decade min-

“Obviously with Oz that’s not such a ing operation out in the West Musgrave.”

big consideration and we’re now more Nebo-Babel ranks high among the

looking at what is the optimal size of the largest undeveloped nickel sulphide pro-

project in terms of maximising the value. jects in Australia, which plays nicely into

That’s likely to be a larger processing Cassini’s hands if momentum around the

throughput than we originally contem- electric vehicle market continues to build.

plated. “Our hope is that by the time we get

“To support that, you’ve got to go back this project into production, the nickel

and look at what your resource is. So price is starting to fly,” Bevan said.

we’ve done a lot of work around met test- “I don’t think nickel is going to get out

ing and been looking at a lower through- of control until we see perhaps those

put grade to make sure that we get the stockpiles start to come down, but it’s

mine life to support this potentially larger definitely ticking up so it just reinforces

processing capacity.” our decision to keep the West Musgrave

Metallurgical testing has produced a project funded as we look to develop it

number of encouraging results for Cas- over the next couple of years.”

sini and Oz, including saleable nickel – Michael Washbourne
concentrates grading 10-12% at 60-78%

recovery and copper concentrates grad-

ing 21-25% at 78-80% recovery.

“We’ve done 200 float tests to date on

about 18 different ore types,” Bevan said.

“By comparison, at Nova they had done

PAGE 90 OCTOBER 2017 AUSTRALIA’S PAYDIRT



NICKEL PREVIEW

IGO returns to its
exploration roots

With the Nova nickel mine officially best explored by a single group. Range exploration group will initially fo-
open and on track to hit FY2018 “There is a lot of methodical work to be cus on geochemistry and geophysics.
guidance, Independence Group Ltd
(IGO) is preparing the biggest exploration done at this stage of a new mineral field,” “We have always prided ourselves on
push ever on the Fraser Range. IGO managing director Peter Bradford our geophysics capability and we will fur-
told Paydirt. “There are a lot of studies ther build on that in 2018 with our goal in
Nova was officially opened on Septem- to show just how long it takes to make the first year to complete the systematic
ber 8, a little more than five years after discoveries; an average of seven years exploration,” Bradford said. “Out of that
the discovery hole was drilled by Sirius for gold and 20 years for copper. The fact we hope to generate targets. We will start
Resources. The discovery generated we haven’t found another deposit on the pursuing some of them in the first year
a surge in interest around the Fraser Fraser Range doesn’t make it infertile. but most of that work will be in FY2019.”
Range, a previously unexplored region Nova was only discovered in 2011/12.
of Western Australia. Since then we have gone through a com- IGO will continue to preach patience,
modities downturn which has meant jun- even if the early work proves successful.
More than 20 junior explorers picked iors have been unable to raise the money
up ground in the district but with sub- needed for this kind of exploration; it just “We don’t want to go off chasing the
stantial transported cover throughout the hasn’t been done justice.” first cherry we find,” Bradford said. “Let’s
Fraser, immediate success proved diffi- understand all the opportunities, rank
cult to come by. IGO plans to spend half of its $50 mil- them and then start going after them.
lion exploration budget on greenfields Ultimately, we envisage discovering a
IGO – having acquired Sirius and Nova exploration in the Fraser Range this year string of Novas up and down the belt.”
in 2015 – has spent the last two years but investors shouldn’t expect immedi-
consolidating its position along the belt, ate headline drilling results. Under the It may appear incongruent that an
doubling its landholding to 12,000sq km, leadership of Ian Sandel, IGO’s Fraser established miner with four operations
the rationale being a new mineral field is – Nova, Tropicana, Long and Jaguar –
should be pinning so much hope on a

PAGE 92 OCTOBER 2017 AUSTRALIA’S PAYDIRT

greenfields discovery but value of the asset.

Bradford believes the ul- “There is potential for the

timate prize will be worth- Long trend to the north and

while. we will be doing EM this

“The number one catalyst quarter to identify conduc-

for company growth is the tors. From there, we have a

Nova ramp-up; the second targeted drilling programme

is a material increase in the and will be doing more geo-

nickel price – and we think physical work.”

there is a lot more to come The focus will be on new

in that regard. The third is areas rather than extensions

putting in the discovery hole to mined orebodies, mean-

at the next Fraser Range dis- ing it will be unlikely IGO can

covery,” he said. leverage off existing under-

“If you look at IGO’s value, ground infrastructure.

two-thirds of it is in Nova. If Bradford does not believe

we can add another Nova it this will be an impediment

will result in a material jump and actually embraces the

in our enterprise value, per- IGO is planning to spend $25 million this year as it starts its pursuit of challenge.
haps $1.5 billion or more. the next Nova orebody on the Fraser Range “It would be a truly great
success story to demon-
“And, the impact goes be-

yond that because it will crystallise in cial year but will continue to explore the strate the next discovery on the Kam-

people’s mind the opportunity on offer in property for new orebodies. balda Dome because there has not been

the Fraser Range. It will dispel the idea “Long term we are bullish on nickel so much work done there over many years,”

that Nova is a one-off; it is our mission to we see merit in exploring the Long con- he said.

prove that idea is wrong.” cession,” Bradford said. “But rather than “All the exploration has been focused

Ripping up conceived notions is also focus on the mine extensions at depth, on the individual shaft heads and mine

part of IGO’s exploration ethos around we will focus on new discoveries which life extensions. There has been no new

the Kambalda Dome. The company is could potentially create a step change work since Western Mining was there.”

due to place its Long mine on care-and- on our understanding of the controls on – Dominic Piper
maintenance before the end of the finan- mineralisation and a step change on the

PROPURODLUYDPLOY SPIOTISOITNIOEDNEADS AANS AN
AUSATURSATLRIAANLIAMNINMEIRNER

pArdoidApvuredocridseviuref,icreasednirf,direeadbsnoodrauebsrstcooienausgrctcooienmngcepooaomnnfepyta,honAefyutw,hsAtoerurawlsdlitoa'rsr'aslldlaila'ars'grslgealesartsgrtgeuetsnitsndtueptnvirndeoeldpovurpeoceldeodurp,nceaeidcrtk,oneapilc--tkc1oeo0plb--Aca1oul0tbspAtarrulaotsljpitearrcnaotljsicea.ocnptscp.oeprper
• •LargLea,rgloen,glo-lnifge-lmifeinmesines
• •ExpEanxpdainngdipnrgodpurocdtiuocntion
• •GreGenrefieenldfisepldrsojpercotjeocptpooprtpuonrittuiensities
• •StroSntgrobnaglabnacleanscheeesht eweitthwnitohdneobdtebt

A DAIVDERIVSEIFRISEIDFIMEDINMININGINHGOUHSOEUSE

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 93

NICKEL PREVIEW

Panoramic seeks optimal off-take

Panoramic Resources Ltd is set to reo- “It’s attractive material because it’s got sons for initiating the optimisation study,
pen talks with potential off-take cus- the copper credits, it’s got cobalt credits, as well as a fresh set of eyes looking over
tomers at the end of the month. it’s got no nasties or penalty elements. the project economics.
It’s a quality product and as a result we
Although the company is no closer to think there’s going to be plenty of interest “Soon after we did the feasibility study,
announcing a restart date for the moth- when we do actually firm up negotiations we had a bit of a changing of the guard
balled Savannah nickel mine, Panoramic with the various parties who have shown and we had some new people look over
is keen to lock down off-take deals while interest in the material.” the project and they came in with some
interest in nickel sulphides remains high. different ideas,” Harold said.
Panoramic will reopen those offtake
Panoramic currently only holds an discussions once it has completed the “We sent some guys overseas to have
offtake contract with China’s Jinchuan latest round of optimisation work on Sa- a look at some different mining methods
Group for material from Savannah, but vannah, having recently updated earlier and a few other things, but I think ulti-
not Savannah North which is part of its feasibility estimates for a potential re- mately we just thought we could probably
restart strategy for the East Kimberley start. do it all a bit differently.
operation.
An optimisation study completed in “When we shut down the mine, the
“There’s no question there’s not much July confirmed a lower operating cash nickel price was $US3.50/lb and now
nickel sulphide material around at the cost of $US2.40/lb could be achieved it’s $US5/lb and has been as high as
moment and so we’ve had a lot of inter- from increased nickel and cobalt produc- $US5.50/lb. The other thing is cobalt
est from the usual suspects plus quite a tion of 11,000 tpa and 760 tpa respec- prices have nearly doubled and copper
few traders,” Panoramic managing direc- tively. is up 20%. When you run those numbers
tor Peter Harold told Paydirt. through the model, you will see that what
The original feasibility study released was a marginal project 12 months ago is
“We’re looking to lock in a contract or a in February flagged an operating cash certainly a lot better than that now.”
number of contracts and we hope we’re cost of $US3.30/lb and annual produc-
hitting the market at a time when there’s tion of 9,700t nickel and 670t cobalt. Operating and capital costs estimates
a shortage and that should feed its way are the subject of the latest optimisation
through to improved terms for the off- Harold said improved commodity pric- work on the project, with the numbers to
take. es, including copper, was one of the rea- be updated in line with current commod-

PAGE 94 OCTOBER 2017 AUSTRALIA’S PAYDIRT

ity pricing metrics. Those revised

numbers will be used to help the

company negotiate the necessary

finance needed to bring Savannah

back online.

According to the feasibility study,

it will only cost $20 million to restart

the mine.

“We’re reviewing the capital cost

numbers on things like refurbing the

plant and other work we didn’t do

when we shut, and we’re going to

get those quoted by third parties so

they’ll be firm numbers from a bank-

ing and due diligence perspective,”

Harold said.

“Obviously the last piece of the pie Panoramic continues to undertake optimisation work on the mothballed Savannah nickel mine
is the financing and we’ve had a lot

of people come to us on the basis of care-and-maintenance in late 2015. several Panoramic employees splitting

providing debt for the project. Given this “Lanfranchi is certainly a project that’s their time between work on Savannah

is a pretty easy project to restart, it will be got potential going forward, but we can and Gum Creek.

a very easy one to bank and as a result only do one thing at a time at the moment “The weather probably put us back a

there’s been a lot of interest.” with the limited resources we’ve got,” couple of months, but we’re right into it

No major exploration work is planned Harold said. now,” Harold said.

for Savannah or the suspended Lan- Meanwhile, Panoramic spin-off Ho- “We’ve had the RC rigs up there, the

franchi mine for the current financial rizon Gold Ltd is halfway through a aircore rigs will be up there soon, we’ve

year, with the company leasing the camp 12,000m drill programme at the Gum been going hammer and tong. We’ve got

at the latter to Tawana Resources NL. Creek project, near Wiluna, after a slow a lot of samples in for assaying so hope-

Panoramic has not run the rule over start to the year due to heavy rainfall in fully we’ll get some good results.”

restart options for Lanfranchi, near Kam- the region. – Michael Washbourne
balda, since putting the operation on Harold is chairman of Horizon, with

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 95

NICKEL PREVIEW

St George the survivor
still on track

Nickel players can take some viability. Investors get really ex-
heart from the opening of the cited when something like Nova
Nova nickel mine in Western Aus- comes along and they then try
tralia’s Fraser Range, according and pick the next Nova. No one
to St George Mining Ltd executive has turned up with the goods yet,
chairman John Prineas. but that is not a bad thing as it
does allow the quality of stocks to
“It is a really good milestone be- shine through once that euphoria
ing developed and now producing. drops away.
The discovery was extremely ex-
citing back in 2012, that really fired “St George was always going
up the market and seeing it into to survive throughout that pe-
production reiterates to people riod, it got better for us, we made
that these things do create a lot of discoveries in a tough market
value and reiterates that it is still and we have been able to shine
possible to find things, improve through. Most important of all is
costs and get into production,” high-grade nickel, which we have
Prineas told Paydirt. got.”

“That is a particularly good anal- High-grade mineralisation at
ogy for us with the Mt Alexander Mt Alexander, west of Leonora,
project. We have a new discov- St George executive chairman John Prineas and a major has kept St George on the radar
ery and we are in the process of shareholder of the company, Terry Streeter, revelling in high- of investors and attracted the at-
trying to prove up the economic grade nickel sulphides discovered at Mt Alexander tention of Western Areas Ltd.

PAGE 96 OCTOBER 2017 AUSTRALIA’S PAYDIRT

St George and Western Ar- while trading at 11c at the

eas are participating in 75:25 time of print, Prineas feels

JV in tenement E29/638 in there is currently a bet-

the Cathedrals belt at Mt Al- ter vibe in the nickel sector

exander. which he hopes the com-

At the time of print, a SAM- pany can capitalise on with

SON EM survey had just some exploration success.

been flown over the western “We have seen a slight

extension of the Cathedrals increase in interest. The

belt covering a 3km strike [nickel] market is not running

length and an area of the Ida hot by any means, but hope-

fault. fully the time is coming. The

Prineas said EM surveys price of nickel seems to be

had been extremely suc- edging up a little and hope-

cessful in identifying massive fully we are in the upswing of

sulphide mineralisation at Mt the price cycle,” he said.

Alexander and the company The nickel price –

was keen to get on with drill- $US5.06/lb or about

ing EM conductors at Anom- $US11,000/t at time of print

aly 11, Investigators, Strick- St George has been a shining light in the nickel exploration space – is well overdue for a run

lands and Cathedrals. and more talk about nickel’s

Prineas said drilling of several new if St George has proved anything during role in the make-up of batteries to power

conductors and extensional drilling of the downturn, it has been an astute abil- electric vehicles could be the catalyst.

known mineralisation was likely to start ity to stay relevant while fellow nickel ex- “Definitely the demand for traditional

around the time of Paydirt’s Australian plorers have perished. uses for nickel is still there in stainless

Nickel Conference. On the back of drilling at Mt Alexander steel products and consumption is still

“There are some really good targets and the Cathedrals discovery, St George going up. But, the talk of EVs has also

and hopefully the market will get excited defied sentiment in the nickel sector, been good for the nickel market,” Prineas

as much as we are,” he said. growing its market cap by 400% in 2016. said.

Investors have struggled to get excited The company’s share price reached – Mark Andrews
about nickel stories for a long time, but a high of 25c in April/May last year and

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 97

NICKEL PREVIEW

Quicksilver eyes starting gate

Western Australia’s South West re- Tim Putt Aircore drilling was completed by the
gion hosts world-class deposits in company recently, with resource drilling
gold, lithium and mineral sands – Bod- our ticket to be punched,” Putt said. expected to be completed at the time of
dington and Greenbushes included – “The nickel-cobalt exploration is not the Australian Nickel Conference.
however a nickel mine of such standing
has so far eluded it. expensive and the aircore/resource drill- “The infrastructure side of things is well
ing can be done for $500,000 total, which understood at Quicksilver, now it’s about
“We are pioneering this commodity in is of enormous value to shareholders if the metallurgy. Drilling is to be finalised in
this terrain. If you look at the South West, we get our 20-30mt exploration target. early October with a resource to follow in
it has produced Boddington, Greenbush- The potential value of that is huge.” November,” Putt said.
es, Katanning; a lot of world-class de-
posits but not a nickel one,” Golden Mile The exploration target includes nickel The company can then proceed with a
Resources Ltd chief executive Tim Putt grading 0.5-1% and cobalt of 0.1-0.2%. scoping study, a good effort considering
told Paydirt. it only listed in June with gold projects
also in tow.
Golden Mile is working on what it be-
lieves could be a company-making pro- With the gold sector firing, Golden Mile
ject and a significant nickel-cobalt play – has received attention for its work along
Quicksilver – 300km south-east of Perth. the Monarch trend at Leonora East.

Being located close to Perth means Monarch hosts a number of significant
there is available infrastructure like wa- historical mine workings, with more than
ter, power and road, plus rail connecting 70 gold nuggets discovered from a vari-
to the port at Albany to potentially tap ous areas.
into.
Leonora East is adjacent to Kin Mining
“We are really serious about develop- NL’s plus-1 moz project at Mertondale/
ing it. There is commentary around eve- Cardinia.
ry cobalt resource being economic. We
want to be at the starting gate waiting for – Mark Andrews

PAGE 98 OCTOBER 2017 AUSTRALIA’S PAYDIRT

GME taking measured
steps at NiWest

Costly processing is the bane of lat- single step approach to develop an effi- process, which removes any remaining
eritic nickel projects in Western Aus- cient flow sheet design for the process- iron-aluminium from the pregnant liquor
tralia, which is why GME Resources Ltd ing plant. solution (PLS) to produce high-grade
is taking a measured approach to a pro- nickel and cobalt streams which are
posed $1-1.2 billion processing plant at In May, a pilot plant was commis- passed through a centrifuge to produce
its NiWest nickel-cobalt project. sioned to replicate previous test work crystal sulphates.
that achieved solution neutralisation and
In July, the company began a PFS iron-aluminium removal at ambient tem- This is expected to reduce future capi-
on its Eastern Goldfields nickel project, peratures. tal and operating costs at NiWest and
which has a resource of 81mt @ 1.03% represents “a clear de-risking of the most
nickel and 0.06% cobalt, and potential to GME managing director Jamie Sul- critical stage in process flow sheet”, ac-
be one of “the largest undeveloped nickel livan said the neutralisation and iron-al- cording to GME.
and cobalt resources in Australia”. uminium removal process was the most
critical stage of the process flow sheet. The PFS will also investigate the viabil-
Slated for completion in Q1 of 2018, ity of producing scandium oxide.
the PFS will mainly focus on the deposits “The continuous pilot scale work has
at Mt Kilkenny and Hepi, and investigate confirmed initial batch testing results that Although scandium was not assayed in
the capital and operating costs of the this process can be undertaken at ambi- the original resource drilling, recoverable
processing plant at the former. ent temperature and by utilising a single quantities of scandium are being found in
stage approach,” he said. Mt Kilkenny PLS.
The study will test the efficacy of a
combined heap leach and direct solvent The first stage of testing used a heap – Jon Daly
extraction (DSX) processing operation. leaching process to produce a solution
with the capacity to be refined into bat-
Economic processing will underpin tery grade nickel and cobalt sulphates.
NiWest’s success and GME is taking a
The company then piloted the DSX

AUSTRALIA’S PAYDIRT OCTOBER 2017 PAGE 99

NICKEL PREVIEW

Nickel still in Mincor’s DNA

First gold is just around the corner June 30 – to cover plans for both
for Mincor Resources NL, but it is commodities.

hard to ignore the beaming grin on A feasibility study released earlier

managing director Peter Muccilli’s this year found Mincor could recover

face when the conversation topic 66,000oz gold from 10 shallow open

switches to nickel. pits for just $2.8 million of upfront

“We have a very exciting nickel op- capital, based on a gold price of

tion in a world-class district where $1,600/oz.

we believe we have a key piece of its Muccilli, an exploration geologist,

future,” Muccilli told Paydirt. hopes to restart serious nickel explo-

“Gold is clearly valuable, but our ration work on the company’s 500sq

long-term option is in nickel. There’s km ground package within the next

no doubt our ground has demon- 12 months.

strated a proven history for nickel, “Kambalda needs new exploration

both by us and Western Mining and to reset the whole district and we be-

Nickel West before us. We’re talking lieve our ground holdings have the

50 years of production and I believe biggest opportunities for high-grade,

there’s still a lot of more value to be Peter Muccilli Tier One discoveries compared to
unlocked.” our peers,” Muccilli said.

Nickel was a consistent source of cash tory in the industry. We were miners for “We have been actively building up

flow for Mincor out of the Kambalda re- over 16 years prior to [closing in] Febru- what we think is valuable geology and

gion for 16 years until base metal prices ary last year and I do believe we have a valuable ground holdings in a world-

slipped to unsustainable levels and the strategic piece of Kambalda’s future and class nickel district which has produced

company had no choice but to suspend I see many ways of unlocking value in the 1.6mt of high-grade nickel sulphides,

operations indefinitely. district with 47% of that – 742,000t nickel – com-

The decision coincided with Muccilli “There’s a lot of excitement when you ing directly out of our ground.

taking the reins from long-serving chief consider that we postponed the very “I certainly think we’re closer to restart-

David Moore, marking a new beginning highly successful drilling at our discovery ing exploration than where we were a

for Mincor as it embarked on a gold strat- at Cassini, as well as at Voyce and at Re- year ago and this recent rise in nickel,

egy which is about to come to fruition. publican Hill. These are new discoveries, which I think will be on a sustained level,

Pending final regulatory approvals and new targets which I think in the long-term should give our shareholders plenty of

confirmation from its board of directors will be key to redeveloping and opening comfort that any nickel exploration we

over the next few months, Mincor will up Kambalda again.” undertake is going to be highly valued.”

start production from Widgiemooltha, via Mincor has completed separate feasi- Muccilli is also keen to explore differ-

toll treating arrangements, in the March bility studies for potential restarts of the ent processing options for his company’s

quarter. Durkin North and Miitel/Burnett mines, nickel on the back of BHP Nickel West

“This is a genuine path to production based on flat nickel prices ranging from and Western Areas Ltd announcing

from a start-up reserve which I think will $US20,000 to $US22,000/t. plans to join the emerging electric vehi-

grow substantially over the next year,” Gold production will help fund future cle revolution.

Muccilli said. nickel exploration campaigns, although “There’s no doubt a broad discussion

“But what I am most excited about is Muccilli was confident his company had is happening because there are a num-

our nickel because we have a long his- enough cash reserves – $12 million at ber of avenues now for processing sul-

phides,” he said.

“We’re seeing roasted nickel sulphides

being sent to laterite furnaces and West-

ern Areas is clearly the leader on that

process. This is a just one of the new

markets that is opening up from people

looking at different tolerances and differ-

ent appetites for a process another con-

siders to be a deleterious element.

“Batteries are also opening up new

markets and the growth in nickel which

we’ve all wanted to see. So I think there’s

genuine grounds for optimism for new de-

mand and potential exponential growth,

hence, why we’ve seen investment from

both Western Areas and BHP into those

fields.”

Mincor is keen to resume nickel exploration work on its Kambalda tenements, – Michael Washbourne
including follow-up work at the promising Voyce target

PAGE 100 OCTOBER 2017 AUSTRALIA’S PAYDIRT