Tag: Western Australia

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Morning News Bites – October 23

Dacian Hits High Grades at Mt Marven

Troubled miner Dacian Gold (DCN) has released drilling results from its initial drilling program along strike from the Mt Marven open pit at its 100%-owned Mt Morgans Gold Operation, located near Laverton in Western Australia.

The newly defined continuation of high-grade mineralisation is currently delineated over a length of approximately 800m beyond the limit of the current open pit design for Mt Marven, and remains open at depth and along strike.

Infill drilling to 40m x 40m spacing to assess the continuity of the structure will commence immediately with Mineral Resource estimate work to follow.

The Mt Marven open pit is situated in the Mt Margaret dome area and is currently in production. As part of a first-pass assessment into the prospectivity of the Mt Marven Shear Zone (MMSZ) south of the active Mt Marven open pit, a total of 44 Reverse Circulation holes were completed on an approximately 80m x 120m drill spacing.

The program was aimed at testing future open pit potential in the vicinity of an existing Ore Reserve. The drilling highlights a strong mineralised trend coincident with the strike of the MMSZ and linking with the active open pit.

This will be good news for Leigh Junk, who was brought in to turn the fortunes of the company around when it hit trouble about 18 months ago.

Gold Road Resources Paves the Way in Gold.

Gold Road (GOR) is still kicking goals with its Gruyere Gold Mine which it shares 50:50 with Gold Fields.  The mine approximately 200 kilometres North-East of Laverton produced 55,919 ounces of the precious metal which was in accordance with their guidance.

Average grade for the quarter was 1.03 g/t with a recovery rate of 91.5% which came from 1.9 MT processed ore.  AISC was higher for the quarter at A$1,488, but for the year to date sits at $1,276.  With average gold sales at A$2300 for the year the mine is a good earner for the companies involved.  Production for the year is still expected to be in the range of 250,000 to 270,000 ounces.

Although no exploration work was carried out on the joint venture tenements Gold Road was busy exploring other tenements it has around Gruyere.  There are 4,500 kilometres of tenements for Gold Road to explore at the Kingston, Hirono, Savo, Beefwood and Gilmour South sites.

The Gruyere joint venture has 6.6 million ounces in mineral resources with an ore reserve of 3.7 million ounces.  With a lot of exploration upside for Gold Road their current plans of 12 years of production will surely be very conservative.

King Island Scheelite Raises A$2.5 Million.

King Island Scheelite Limited (KIS) has received binding commitments for A$2,568,000, in its recent capital raising.

The Placement has been oversubscribed by a range of institutional and sophisticated investors including Director Chris Ellis and other large shareholders, including Elphinstone Holdings Pty Ltd.  The Placement will result in the issue of approximately 46.7 million new fully paid ordinary shares at A$0.055 per share, with one free attaching listed option for every two New Shares issued in the Placement.

Funds raised through the Placement will be used to further advance the Company’s 100%‐owned Dolphin Tungsten Mine located on King Island, Australia.  KIS is continuing discussions with the Critical Minerals Facilitation Office (“CMFO”) as well as other State agencies regarding support for the redevelopment of the Dolphin Mine, given its strategic and regional economic importance.

King Island Scheelite Executive Chairman, Johann Jacobs, said:  “We are delighted to welcome several new institutional investors to support KIS at an exciting stage of the Company’s story. Our strategy has positioned us well to move forward with our plans to redevelop King Island’s Dolphin Tungsten Mine. The capital we raise through this placement will empower us to see the project through to financial close.

“We thank our existing shareholders and incoming investors for their support and look forward to executing the Company’s growth strategy through what we expect will be a highly active FY21.”

TNT Mines Acquires Historic WA Gold Projects.

TNT Mines Limited (TIN) is pleased to announce that it has signed a binding share sale agreement to acquire 100% of Warriedar Mining Pty Ltd, which owns the Eureka Gold Project 50km north of Kalgoorlie in the Western Australian Goldfields and the Warriedar Gold Project in WA’s Murchison region.

Both Eureka and Warriedar have a history of gold production, are located close to established infrastructure including operating gold mills. Eureka, which is under granted Mining Leases will be the initial focus of exploration, containing an existing JORC2012 Indicated and Inferred Mineral Resource of 762,000 tonnes at 1.80 g/t Au for 43,100 ounces of contained gold.1

Further detail on the Eureka and Warriedar assets, the consideration to be paid for the acquisition, capital raising, proposed Board and management changes and next steps is provided below.

TNT Executive Director Brett Mitchell said: “Warriedar stands out as a unique opportunity to acquire two Western Australian gold projects with a history of production that are positioned with immediate access to infrastructure and operating gold plants. This presents a unique opportunity to join forces with a management team that has a very successful track record in the exploration and redevelopment of ex-production gold assets in WA. Given the outstanding value creation they delivered for Spectrum Metals shareholders, Alex and James have developed a strong and loyal following and we are excited by the possibility of recreating their Spectrum success with TNT.”

Aus Tin Mining to Acquire Mackenzie Coal Project in Bowen Basin.

Aus Tin Mining Limited (ANW) has signed a binding Term Sheet with Resources and Energy Investments Pty Ltd (REI) to acquire its interests in the Mackenzie Coal Project located in Queensland’s premier coal province the Bowen Basin. Mackenzie includes a previously announced Indicated and Inferred JORC Resource of 138.1Mt of potential low volatile Pulverised Coal Injection (PCI) quality coal, and is being acquired by REI from the liquidators of previous owner MRV Bowen Basin Coal Pty Ltd. The proposed acquisition of Mackenzie complements the previously announced proposed acquisition of the Ashford Coking Coal Project in NSW.

Mackenzie comprises Mineral Development Licence (MDL 503) and Exploration Permit Coal (EPC 1445) both located approximately 30km north-east of Blackwater in the Bowen Basin which is well serviced by road, rail and port infrastructure at Gladstone. Mackenzie is adjacent to producing coal mines at Jellinbah and Yarrabee  with collective coal production of approximately 8.4Mt in 2019, of which the quality is primarily a low volatile PCI for export markets. Mackenzie is also proximate to coal projects subject to notable transactions including Curragh (Wesfarmers sold to Coronado Coal in 2018 for $700M) and MDL162 (Peabody sold to Wesfarmers in 2014 for $70M).

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Morning News Bites – October 22

Saracen Releases Quarterly.

Hot of the press is Saracen Minerals (SAR) quarterly report.  In brief the main points from the report are;

– Quarterly gold production – 154,388oz at AISC A$1,169/oz.

– At 30 September – Cash / liquids A$467m, debt A$321m.

– Quarterly cash build – A$98m.

– Record quarterly unaudited NPAT – A$70m to A$80m.

Growth projects: Carosue Dam mill expansion, Thunderbox Underground development accelerated, Thunderbox D Zone, KCGM Morrison and OBH open pits. A$14m invested in exploration, Group Reserves and Resources updated to 8.6Moz and 17.0Moz respectively. SAR FY21 guidance of 600 – 640koz at an AISC of A$1300 – A$1400/oz unchanged. Saracen will pay a special, fully franked A3.8cps dividend, conditional on the Scheme becoming effective and banking consents.

OZ Minerals Quarterly report.

It would seem that OZ Minerals (OZL) have kicked some goals in the quarter if the enthusiasm in their quarterly report is to be believed.  They reported that production was up in the quarter and as a result of that production guidance will be increased.

The quarter saw underground ore movement records at both Prominent Hill and Carrapateena, with further AISC and C1 cost guidance reductions assisted by an increase in the assumed 2020 full year gold price to US$1,758/oz and favourable exchange rates.

Projects have been completed including the 270 km Prominent Hill power transmission line, consolidation of our ownership of West Musgrave and safe resumption of exploration drilling. We’ve also advanced a number of our growth options with updates to come in this final quarter on Prominent Hill expansion and the West Musgrave project.

Managing Director and CEO, Andrew Cole said, “Our financial position remains robust with $18 million net cash at the end of the quarter after further investment in growth capital, as well as payment of US$50 million in deferred consideration following achievement of contractual milestones at Carrapateena.

“Further progress was made on accelerating our strategic aspirations through Project Beyond including advancing our organic growth pipeline with work starting on developing the accelerated decline at Prominent Hill and with resumption of exploration and resource drilling in Australia and Brazil.”

Metalicity Report Significant Drilling Results.

Metalicity (MCT) has announced the return of further assays from the Drilling Programme at the Kookynie Gold Project in the Eastern Goldfields, Western Australia, approximately 60 kilometres south southwest of Leonora.

They received assays for a further 14 drill holes from the McTavish Prospect of the expanded drilling programme currently underway at the Kookynie Gold Project. The drilling has confirmed significant high-grade gold mineralisation at the Leipold Prospect and that mineralisation at the McTavish Prospect continues at depth. McTavish is circa 2 kms to the north and is along strike from Leipold. Metalicity has defined a significant anomaly between the two mineralised prospects where there is essentially no drilling and which the Company plans to test shortly.

Metalicity Managing Director, Jason Livingstone said:  “The intercepts returned from McTavish are incredibly encouraging. The results from just north of the Leipold Pit were in line with observations from the drill chips, however the drilling to date continues to illustrate the well-endowed area that is the Kookynie Gold Project.”

“The end of the year is fast approaching, and we at Metalicity are working hard to ensure we finish the year off well and set ourselves up for further success in 2021.”

Warrawoona Gold Project Gains Momentum.

Calidus Resources (CAI) reported what they say is good progress in the development of its Warrawoona Gold Project in WA’s Pilbara, with some key early works already completed.

Orders have been placed for long lead items, including the SAG mill, in preparation for the commencement of the main Project construction in the March Quarter of next year.

The early works include the site access road, installation of the 240-room accommodation village, establishment of the communications network and installation of water bores that will be utilised for construction, dewatering and production.

The early works programme is designed to provide the backbone of infrastructure ahead of the Final Investment Decision and the completion of permitting to facilitate main project construction.

Calidus Managing Director Dave Reeves said: “Ordering the mill is a significant milestone for Calidus because it sets our construction schedule and with final project permitting and debt finance anticipated to be completed by early next year, we remain on track for commencement of main construction activities in the March Quarter of 2020.

“Our operations team is in place and supervising the current early works scope on site. A Marble Bar-based contractor, Hawkezone Contracting, has completed the 7km Access Road and the site village installation is underway. All water bores have now been completed which will provide water for both construction and production activities.”

Confidence by Investors and lenders Sees Money Pouring into Mining.

It would seem by the amount of money being raised at the moment that confidence is high amongst investors and lenders.  Could this be because of high gold prices and other commodities that are doing well, like iron ore and nickel and also speculation that minerals in the battery markets are set to go with more governments talking about a “green” future?

Late last year Saracen Minerals and Norther Star Resources each raised circa AU$1 Billion to buy 50% each of the Superpit in Kalgoorlie.  That is a lot of money in anyone’s eyes.  Admittedly it was for a first-class asset with lots of upside, but nevertheless it got done and showed others there was a bit of confidence around.

Mining companies have never been shy when it comes to putting their hands out to funds and shareholders, but at the moment there appears to be a bit of eagerness in those funds and shareholders willing to cough up.  As usual funds for exploration are high on the list as companies can’t make money until they found whatever they are looking for.

Funding for plant builds or upgrades seems to be on the up and a lot of explorers are starting to talk big about their projects with a view to going to the market to raise cash for the next stage.

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Today’s Top Story – Does The Corporate World and the Media Treat People Fairly Anymore?

Today I thought I would look at how the media and some corporations treat people and ask; Is that really fair?

For example, the media in the last day or two have been all over the case of Channel Nine News director, Darren Wick, who was charged with a high-level alcohol driving offence that occurred last Friday evening.  Mr Wick has since come out and said that he has realised he has a drinking problem and taking steps to address it.

Prior to this, if you had surveyed all of Australia and asked; “Who is Darren Wick?’ the vast majority would have said, Who?  Yet here he is having his personal life splashed across the media; and of course, it was their competitors doing most of the wailing.  Don’t get me wrong, I in no way condone drink driving and what he did was reckless.  But did he deserve the attention he got? He is not a public figure. He is not a prominent person even if he does influence how news is delivered by Channel Nine.

If the Prime Minister was caught doing the same, I can see the rationale behind it being a story, but the prominence given to Mr. Wick was disproportionate in my opinion. One thing I can say is good on him for being so candid.

I would like to talk about a footballer at AFL level now who has been banned from playing football for about 400 days and still no charges have been laid or an end in sight to when it will be resolved.  West Coast player, Willie Rioli, has been accused of tampering with a urine sample he was asked to provide in August 2018.  He was stood down in September 2019 after he received a second breach for testing positive to cannabis.

Neither of the two accusations have been tested at a tribunal or any other forum where he can try and clear his name or accept responsibility for what has happened. The AFL has wiped their hands of it saying that ASADA has responsibility for how and when the case will proceed. I thought the AFL controlled the AFL not ASADA.

Apparently because of the way the AFL is structured, and the agreements clubs and players have with the AFL, there is no legal recourse to make the AFL act quicker.  As for ASADA, they apparently don’t care that a player has literally been left on the sidelines for so long, that it could affect his future, not only with the club, but life after footy.

Surely ASADA isn’t inundated with cases to the point that a back log of such magnitude exits. Surely it doesn’t take 400 plus days to analyse a “B” sample and report back to the AFL. If this is the case, there is a case for AFL to move away from the ASADA regime and start their own testing facility that they can exercise their own timelines on.

On top of all this if the eventual charges are proved he could face a four-year ban that will effectively end his career.  I don’t know if time already banned from the game will be taken into consideration when issuing a ban, but I hope for Mr. Rioli’s sake it will be.

Because Mr. Wick is going through the court system, he will be dealt with quickly, even though it is a serious charge, he has publicly acknowledged the facts and the courts can deal with cases like this quickly. In most cases like this it is the defendant that causes delays, if there are any.

With Mr. Rioli, it is a case of not even been charged with an offence or offences and no prospect in site, as those responsible for carriage of the case drag their feet. No Charges – no play doesn’t sound fair to me.

These are just two examples of people being harshly treated by media and corporations, in my opinion, that have little empathy or sympathy for the people involved. There are countless others who have been in similar situations that have had their lives changed forever.

Written by Gary Brown.

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Morning News Bites – October 21

Red 5 Upgrade Mineral Resource for Satellite Pit.

Red 5 Limited RED) reported an updated Mineral Resource and maiden Ore Reserve estimate for their Great Western gold deposit, a satellite deposit located near Red 5’s Darlot Gold Mine in Western Australia, ahead of the planned commencement of open pit mining in January 2021.

The Great Western deposit was acquired by Red 5 in April 2020 for $2.2m and forms part of their Darlot Mining Hub strategy. Ore from the Great Western pit will be trucked to the Darlot Mill for processing.

The open pit mining operation will be underpinned by a maiden Open Pit Ore Reserve of 437,500 tonnes grading 2.5g/t Au for 35,424oz of contained gold. Based on a proposed mining rate of between 30,000 to 40,000 tonnes of ore per month, the open pit is expected to be completed over ~13 months, with plans to then access the underground orebody via a portal at the base of the pit.

Red 5’s Managing Director, Mark Williams, said:  “The Great Western deposit has emerged as a strong source of satellite ore feed for the Darlot processing plant, with the completion of an initial Open Pit Ore Reserve of 35,424 ounces of contained gold paving the way for the start of open pit mining planned for January 2021. Importantly, this will also provide a platform from which to pursue a potential longer-term underground mining operation.

CZR Resources to Complete PFS.

CZR Resources (CZR) has announced that the PFS on its Robe Mesa Iron Ore Project in WA’s Pilbara is progressing well and is set for completion in December this year.

The PFS is focused on a simple, low capex DSO iron-ore mine that aims to maximise the use of existing infrastructure and a trucking model for transport of product to port. Closer port options (within a 100km radius of Robe Mesa) between Onslow and Dampier may present an opportunity to reduce the haulage distance to port, as other companies look to develop new port infrastructure along the coastline.

Robe Mesa has a JORC 2012-compliant Indicated and Inferred Resource of 84.5Mt at 53.8% Fe using a cut-off of 50% Fe and calcining to Fe at 60.2% This includes a higher-grade resource component of 24.7Mt at 56% Fe (that calcines to 62.7% Fe) that is the focus of the PFS.

Given the current strength of the iron ore market, CZR is assessing a direct shipping ore (DSO) mining operation of 1.5 to 2.5 million tonnes per annum, utilising road-trains to haul ore approximately 400km from Robe Mesa to Port Hedland.

The strong outlook for Robe Mesa has been confirmed by the Company’s recent discussions with leading Asian steel mills and trading houses regarding the acceptability of the product and likely pricing points based on an indicative ore-specification.

Lynas Corporation Release Quarterly Report.

Lynas (LYC) released their quarterly report this morning and some of the information coming from it was: As a result of the the temporary shutdowns in both Malaysia and Mt Weld because of COVID-19 Movement Control Order (MCO) issued by the Malaysian government, production of NdPr was at 75% of Lynas NEXT production rates during the quarter (equivalent to original nameplate production rates). Lynas says it is currently sufficient to meet demand from their customers while COVID-19 uncertainty remains.

Total NdPr production during the quarter was 1,342 tonnes, up from 775 tonnes in the previous quarter and Total Rare Earth Oxide production was 4,110 tonnes, compared to 2,579 tonnes in the previous quarter. Sales revenue was A$87m during the September quarter, up from A$38m in the previous quarter.

The company remained cash flow positive during the quarter, as they captured efficiencies while running production at original nameplate. They expect to see an increase in expenditure related to Lynas 2025 projects in the coming months.

During the quarter they completed a A$425 million equity raising to fund Lynas 2025 foundation projects. One of those projects is the Kalgoorlie Rare Earth Processing Facility. They have now awarded the contract for the longest lead time item, the kiln, for facility, signed a sub-lease with the City of Kalgoorlie Boulder (CKB) for the industrial zoned site selected for the Kalgoorlie Facility and obtained a General Purpose Lease under the Mining Act.

BHP Shelve Olympic Dam Project.

In their quarterly report, yesterday, BHP (BHP) announced it will put on hold its planned multibillion-dollar expansion at South Australia’s Olympic Dam, after studies of the ore body revealed underwhelming prospects.

The plans were to spend up to $3.5B on the Brownfield Expansion but studies have shown that the copper resources in the southern mine area are more structurally complex, and the higher-grade zones less continuous, than previously thought.  This is despite BHP reporting the highest quarterly production since 2015.

Part of the report said; Following more than 400 km of underground drilling associated with the Brownfield Expansion (BFX) project studies, we have improved knowledge of the ore body’s variability. This has provided challenges for the economics of the BFX project, and we have decided the optimal way forward for now is through targeted debottlenecking investments, plant upgrades and modernisation of our infrastructure.

It will be a blow to the SA economy, especially on the back of the damage done by the impact of Covid19.  There were hopes that the project would create 1,800 jobs on the construction side and once completed 600 permanent roles in the operation.

The company is still expected to spend about $1.5B on Olympic Dam over the next two years.  Whether this gives hope to the Brownfield Expansion being resurrected, only time will tell.

KIN Mining High-Grade Results.

Kin Mining (KIN) has released a report announcing significant new assay results from recent diamond and Reverse Circulation drilling at the Cardinia Hill prospect as part of the ongoing Phase 3 drilling program at its 100%-owned Cardinia Gold Project, located near Leonora in Western Australia.

The Cardinia Hill prospect, located 2km from the proposed processing plant site, is a recent discovery at the Cardinia Gold Project and has been the focus of a resource drill-out program designed to underpin a maiden Mineral Resource estimate as part of a project-wide update by year-end.

Commenting on the latest Cardinia Hill results, Kin Mining Managing Director Andrew Munckton said:  “Diamond drilling is continuing to deliver excellent results at Cardinia Hill, with high-grade gold associated with the pyrite mineralisation intersected at depth in the Southern Shoot and strong intersections also achieved within the Northern Shoot. This highlights the potential for good continuity of the mineralisation, with an improving grade profile, at depth within the recently completed resource drill-out.”

“While our main focus is on establishing a maiden Mineral Resource estimate for Cardinia Hill by the end of this year, the diamond drilling has given us a much better understanding of the geological controls on the mineralisation and also highlighted the potential for discovery of shallow additional zones and extensions to the existing mineralisation into underground mining positions in the future.

Some of the targets hit were 5.4M at 6.18g/t from 186.4M and 5.3M at 3.31g/t from 96M and they confirm the extension of the resource at depth.

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Tonight’s Top Story – Are We Over-Governed by Politicians and Bureaucrats in Australia and at What Cost?

File:Australian Senate - Parliament of Australia.jpg - Wikimedia Commons

We have a federal government; each state and territory have a government and there is a myriad of councils and shires in each as well.

Each level of government has its own responsibilities however there is a lot of crossover in some areas.  Take for example health and education.  The federal government provides a lot of the funds that each state and territory government need to operate these sectors.  Although the feds provide the bulk of the finances it is the states and territory governments that are responsible for them.

In health you have a bureaucracy at federal level determining what level of funding should be allocated where.  In particular the feds are responsible for funding hospitals, but the states run them.  You then have another bureaucracy at state level allocating the funding to each public hospital and of course another bureaucracy within each hospital allocating funding to the various departments.  That is a lot of money being spent from the allocated budget before one patient receives a benefit.

And for education the process is repeated, again with a lot of money being spent before one student lifts a pencil in a classroom.  Then there is the political argy-bargy that goes on between state and federal counterparts in the sectors.  Each minister in each sector would have a plethora of advisors, media and administrative personnel so the minister can be across their brief and take pot-shots at others over how their administration is better than the others.  More money out the door before it gets to be used on grassroot purposes.

At the recent Hotel Quarantine Inquiry in Victoria a complicated bureaucratic system of decision making has been revealed.  The end result was a disaster that no one is keen on taking responsibility for.  Now I am sure that this level of bureaucracy is not unique to Victoria and there will be other jurisdictions that have the same complexity of administration in various areas.  This again highlights the theme of a lot of money being spent before what is left over gets an outcome.

The public service juggernaut in Australia sailed through the Covid19 restrictions without a scratch.  While other sectors were laying off people, reducing hours or closing down, the fortnightly paycheque for public servants kept on being deposited into their accounts.  All hell broke out in NSW when the government put a freeze on public service wages during Covid19.  Unions threatened industrial action, not satisfied that they didn’t have to take the risks like those in the private sector.  Secure in their jobs and with no pay cuts it riled many that were suffering through no fault of their own.

At the local level the various shires and councils that look after their patches are too many in some states.  In WA there are 138 councils.  Yes, WA is a big area but some of these shires cater for a population of 300 ratepayers or less.  The WA government has flagged that they are amenable to reducing the number of shires to make it more practical.  Peppermint Grove Council in Perth’s leafy western suburbs covers an area of one square kilometre. (That is not a typo).  It has revenue of only $5M and at last count had 24 employees.  Surely it would be a candidate to merge with another council, in fact as part of a merger of a few councils in the area.  The government is also keen to reduce the number of councillors that sit around the table.

I suppose the point I am trying to make is that at all levels we have too many politicians and too many bureaucrats that waste money that could be going towards the myriad of projects that need the money more.

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Morning News Bites – October 20

Significant Assays at Bardoc’s Zoroastrian Site

Bardoc Gold Limited (BDC) has reported significant new assay results from recent exploration and in-fill drilling at the cornerstone 526koz Zoroastrian Deposit, part of its 100%- owned 3.03Moz Bardoc Gold Project, located 40km north of Kalgoorlie in WA.

New drilling results from the northern end of the Zoroastrian Deposit have extended the mineralisation further to the north outside of the current Mineral Resource model and have provided the impetus to expedite a diamond core rig to site to further evaluate this emerging area.

The drilling has identified a significant zone with a standout intercept of 89m @ 1.43g/t Au from 192m, which is interpreted as the development of multiple footwall lodes within the Royal Mint Lode.

This intersection is the broadest zone of mineralisation recorded at Zoroastrian and highlights that the cornerstone deposit still has areas that can yield significant widths of strong gold mineralisation, providing considerable upside for future mining and exploration activities.

Bardoc Gold’s Chief Executive Officer, Mr Robert Ryan, said the standout intercept of 89 metres at 1.43g/t, including several higher-grade zones, is the widest seen at Zoroastrian to date and one of the better exploration results to be generated across the Bardoc Gold Project.  He said, “Importantly, our recent drilling has shown that the northern end of the deposit is shaping up as an important growth opportunity for the Company. We are seeing broad widths of mineralisation rarely seen at Zoroastrian, with the recent results clearly demonstrating that there is significant potential to extend the Mineral Resource well beyond the current 526koz.

BHP Releases Quarterly Report

BHP (BHP) announced in their September 2020 quarter, Atlantis Phase 3 achieved first production ahead of schedule and on budget. Given this, the progress of Atlantis Phase 3 will not be reported in future Operational Reviews.

The Jansen Stage 1 project in Canada is expected to be presented to the BHP Board for Final Investment Decision in the middle of the 2021 calendar year. As a consequence of the challenges encountered earlier with placement of the shaft lining and then the more recent impacts from our COVID-19 response plan, the Board has approved additional funding of US$272 million for the completion of the shafts, resulting in a total budget of US$3.0 billion (previously US$2.7 billion).

Jansen Stage 1 remains well positioned with attractive medium to longer-term commodity fundamentals, and is set to be a high-margin, low-cost, long-life asset, with multiple, basin-wide, expansion opportunities. As always, we will be disciplined about our entry into the market and it must pass our strict Capital Allocation Framework tests.

At the end of the September 2020 quarter, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$10.9 billion over the life of the projects.

BHP Chief Executive Officer, Mike Henry:  “BHP has started the new financial year with a strong first quarter of safety and production performance. Group production rose two per cent from a year ago driven by solid results in metallurgical coal and iron ore, our major growth projects made good progress, and we secured more options in copper, nickel and oil.”

Vango Release Significant High-Grade Intersections at Marymia Gold Project.

Vango Mining (VAN) has released new, high-grade, drilling results. The new lode intersections both confirm and extend the recent K1 lode discovery, in the PHB Corridor, to potentially over one kilometre, open at depth.

The results are from the final eight of 11 broad spaced reverse circulation holes at K1, part of the current 36,000m drilling program on the Marymia Project, and are in addition to the previously reported 6m @ 8.66 g/t Au, incl 2m @ 23.8 g/t Au from 128m, that lies 500m to the southwest along strike within the targeted Mine Mafic unit.

Managing Director, Mr Andrew Stocks, commented: “These results are highly significant as they validate our approach to targeting mineralised structures where they intersect the highly prospective Mine-Mafic unit at what is still a relatively shallow depth. These results give us confidence that we will continue to expand our open pit and high-grade underground resource base at the Marymia Project.

Vango Mining is an exploration mining company with ambitions of becoming a high-grade WA gold miner by developing the 100% owned Marymia Gold Project (Marymia) located in the mid-west region of Western Australia, consisting of 45 granted mining leases over 300km2.  Marymia has an established high-grade resource of 1Moz @ 3 g/t Au, underpinned by Trident – 410koz @ 8 g/t Au3, with immediate extensions open at depth/along strike.

Estrella Shares Up ~50% on Release of Survey Result.

Estrella Resources Limited (ESR) released an update to the market with results of the highly anticipated Down-Hole Transient Electro-Magnetic (DHTEM) survey of diamond core hole CBDD030 which intersected significant massive Ni-Cu (and PGE) bearing sulphides deep below the T5 discovery zone at the Company’s flagship Carr Boyd Project. The T5 Prospect is located 1.1km NE of the historic Carr Boyd nickel mine and was identified in 2019 following successful RC drilling of a HP FLTEM anomaly.

Chris Daws, CEO stated “This has been an astonishing result for the Company and its shareholders who have all been rewarded through patience, persistence and belief. The results of the DHTEM now support the mineralised sulphides seen in the drill core, which is currently in the laboratories being cut, sampled and priority assayed. It is open in all directions and will be chased by immediate further drilling.

“The core was only recovered from the field by the Company’s consulting geologist Neil Hutchison last weekend and showcased the next day at the Diggers and Dealers conference. The results of the DHTEM have put to rest any of my concerns about scale and we are now eagerly awaiting the assay results to get a clear understanding of the potential of this discovery.

“Planning and scheduling of the next round of holes to further test this zone is well underway, as we await the completion of hole CBDD031 which is the final hole of the Stage 1 drill program. It is being drilled 600m north of the discovery hole into a blind basal contact position in the same manner as CBDD030 and will provide critical geological and geophysical data to assist in unlocking and understanding the potential of the T5 Prospect discovery zone”

Venturex Resources Gets Exploration Back on Track

After experiencing an unavoidable delay to exploration drilling Venturex Resources (VXR) has advised that the contactor is now on site and first hole will commence on the 21st October 2020.

The Sulphur Springs Project is located south-east of Port Hedland and includes the proposed Sulphur Springs and Kangaroo Caves mines, together with tenements covering ~27km of the Panorama trend that contains numerous advanced VMS-style exploration targets. The Sulphur Springs Project hosts a total Mineral Resource (Sulphur Springs + Kangaroo Caves) comprising 17.4 million tonnes grading 1.3% copper, 4.2% zinc and 17g/t silver.

The planned program is designed to follow-up on the exceptional results generated from 2019 drilling at the advanced Breakers Prospect as well as to test the Heli-borne Electromagnetic target XA8, where previous drilling intersected anomalous Ni-Cr mineralisation.

The program will commence at the XA8 prospect with two drill holes planned to test the down- plunge and along-strike continuation of a DHEM target and associated Ni-Cr mineralisation previously intersected at the XA8 Prospect.

Following XA8 they will target the Breakers prospect where four drill holes are designed to follow-up the along-strike and down-plunge continuation of massive sulphide mineralisation intersected at the Breakers Main Gossan, including the thick, high-grade intersection within (18m @ 7.75% Zn).

An additional two drill-holes will also be completed to follow-up zinc-rich mineralisation intersected in BKR007 (8m @ 3.37% Zn) at the Breakers North target, located approximately 1.1km NNE of the Breakers Main anomaly.

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Morning News Bites – October 19

Changes at the Top for Resolute Management.

The Board of Directors of Resolute Mining (RSG) have advised that, after five years with the Company as Managing Director and CEO, Mr John Welborn has stepped down from the role.

Resolute Chief Financial Officer, Mr Stuart Gale, has been appointed as Interim Chief Executive Officer while an executive search process is undertaken. Mr Gale will be well supported by Resolute’s executive team and the Board.

Resolute Chairman Martin Botha said: “John has worked hard to reposition and transform the business over the past five years, and the time is right to introduce a new CEO to take Resolute forward, to deliver improvement in operational outcomes and resilience, and to deliver the next phase of sustainable value for the company.

“Under his leadership, Resolute has been active corporately to build its mining profile and dual-list on the London Stock Exchange. On behalf of the Board I would like to thank him for his valuable contribution and wish him well in his future endeavours.”

Interim CEO Stuart Gale joined Resolute as Chief Financial Officer in January 2020, having previously held senior executive positions at Fortescue Metals Group Limited and Wesfarmers.

The Board is commencing a comprehensive process to recruit a new CEO with the skills and industry experience to lead the executive team and deliver on Resolute’s strategy.

Legends Releases Quarterly Report

In its quarterly report Legend (LEG) says it has completed its busiest ever quarter of field activities at the Rockford project with diamond, RC and aircore drilling ongoing and geophysics and assay reporting playing catch up. There has been further success, with massive nickel copper intercepts in diamond holes 23 and 27 along with broader zones of nickel copper sulphide mineralisation.

The quality and scale of Rockford has been highlighted by the development of the Mawson 3D gravity model (with mag inversion, geochemistry and structural inputs) along with the regional MLTEM success at Hurley.

Legend’s Rockford Project is located in the highly prospective Fraser Range district of Western Australia and considered prospective for mineralisation styles including magmatic nickel-copper, VMS zinc-copper-silver and structurally controlled gold.

The Rockford Project comprises 14 contiguous granted exploration licences covering a total area of 3,088 square kilometres.

Exploration activities completed during the September 2020 Quarter at Rockford focussed on the Mawson prospect and included: diamond drilling, RC drilling, downhole electromagnetic (DHTEM) surveying, structural and lithogeochemical studies, and geophysical inversion modelling. Moving loop electromagnetic (MLTEM) surveying and modelling was also undertaken at the Hurley, Crean, and Worsley prospects at Rockford South.

Galena Mining Report High Grades at Abra Project.

Galena Mining (G1A) today announced the first assay results from the substantial ongoing drilling program at Abra Base Metals Project.

Managing Director, Alex Molyneux commented, “We’re astounded at the success of hole AB147 in targeting a potential ‘metal rich’ combination of grade and thickness on the northern part of the eastern limb of Abra’s Indicated Resource area, which is shallow and close to the current plan for early decline infrastructure.  We have added a number of follow-up holes around AB147 to the drilling program with the intention to bring this area into the early years of the mine plan as an optimisation.”

25 diamond core drill-holes (AB144 to AB168) for 10,646 cumulative linear metres of the 2020 Abra Drilling Program have been completed so far.  Albeit, this release only includes assays from the first five holes due to the slow progress in receiving assays.

The program was initially planned to consist of approximately 15,000 metres to 18,000 metres of drilling, with three objectives: lead-silver orebody infill; drilling into selected prospective ‘metal rich’ zones for potential life of mine plan optimisation; and gold-copper exploration.  The holes completed to date have been targeting the first two objectives, with the plan to address the third objective later in the program.

There are now three drill-rigs operating at Abra with the capacity to drill a cumulative 1,400-1,800 metres per week. Assays have taken some time because drilling initially commenced with one drill-rig only and it took some weeks to ramp-up to three rigs due to drill-rig availability.  Assays have also been slower to be received than for past programs due to capacity issues with sample logistics operators and lab backlogs.

Assays for five drill-holes (AB144 to AB148) are being reported in this announcement and assays for 20 completed holes remain pending.

Gascoyne Resources Pleased with Latest Drill Results.

Gascoyne Resources Limited (GCY) has released what it says are excellent results from the recently completed resource definition RC drilling at the Sly Fox, Gilbeys and Plymouth deposits at the Dalgaranga Gold Project near Mt Magnet, WA.

A 9-hole RC drill program targeting the down dip potential of the Gilbeys, Sly Fox, and Plymouth deposits was completed in September. Assay results have now been received for 8 of the 9 holes.

Gascoyne Resources CEO, Mr Richard Hay, commented “The success of this short drill program highlights that with further infill and extensional drilling, the strong potential for material additions to Mineral Resources and Ore Reserves, and with further drilling success, could lead to significant increases to mine life at Gascoyne’s flagship Dalgaranga operation.”

Four RC holes were completed targeting the Gilbey’s Main Zone below the southern end of the Gilbey’s 2020 Life of Mine pit design. These holes were designed to intersect below the previous drill hole program completed in April 2020.

Assay results from Gilbeys have now been returned from 3 drill holes (with the results of the fourth hole pending) which include the standout intersection of 11m @ 4.2 g/t Au from 227m including 6m @ 7.3 g/t Au.

At Sly Fox, four RC holes were completed targeting potential high grade zones between the base of the open pit and the historical intersection of 40m @ 2.0g/t Au. Drilling returned excellent broad high-grade intersections in 3 holes, of 26m @ 1.8 g/t Au from 184m including 13m @ 3.0 g/t Au, 21m @ 1.2 g/t Au from 198m and 19m @ 1.4 g/t Au from 175m. These drill results indicate a SW orientated plunging high grade shoot that remains open at depth and along strike.

A single RC hole was completed at the Plymouth deposit. Drilling targeted down dip extensions returning a strong gold intersection of 20m @ 2.6 g/t Au from 150m including 13m @ 3.8 g/t Au. The location of the intersection is 50m below the nearest drill hole. Plymouth remains open in all directions with grades increasing at depth. Due to Plymouth’s close proximity to the Sly Fox open pit.

Kalamazoo Resources Release Exploration Update.

Kalamazoo Resources Limited (KZR) released an update to the market on significant exploration progress made at its Victorian Goldfield Projects, as a result of a concerted campaign of regional and infill surface geochemistry programs, detailed field mapping, 3D structural modelling and drill program design and planning.

The outcome of these recent work programs is the commencement on 1st October 2020 of a minimum 2,700m (up to 4,000m) diamond drilling program at the Lightning Prospect within the Castlemaine Gold Project. A further ~7,000m RC drilling program is planned for the South Muckleford Gold Project which is currently awaiting final approval.

Kalamazoo’s Chairman and CEO Luke Reinehr said, “We are extremely pleased to have commenced our next Victorian drilling campaign at the Castlemaine Gold Project, with drilling to then move to our South Muckleford Gold Project soon after. We are fortunate that our project areas are located within incredibly rich historical goldfields which contain a combined past production of almost 8Moz of gold. Our strategy from the outset has been to utilise technologies and innovations previously not used on these projects to better assist us in our search for the next world class discovery in the Bendigo Zone and whilst these programs are extensive, we are confident they will assist us in identifying exploration targets with the potential to contain high grade gold resources.”

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Today’s Top Story – When Will The WA Bubble Burst?

Who would have thought six months ago that the words “travel bubble” would have been used so prolifically, yet alone anyone even thinking of it?  Yet here we are talking about it, hoping that these bubbles will open up between states and glory be internationally.

Western Australia has lived within its own bubble since almost the beginning of the Covid19 living regime.  Early on in this timeline the state was split into regions with travel restricted to within each region only, unless an exemption was given.  And exemptions weren’t given out easily as the government was determined to contain the virus.  Eventually those travel restrictions were lifted except for some remote communities and people were free to move around the state.

But restrictions still apply for people trying to enter the state and an exemption must be granted.  If, however you have been in Victoria you must have a more valid reason than just wanting to visit.

The travel restrictions in WA have had a significant affect on FIFO operations and workers.  Companies have started to employ people only living in WA and some have encouraged their interstate FIFO workforce to consider relocating to WA to avoid quarantining when returning home.  Decisions like this cannot be taken lightly and peoples’ livelihoods are being affected the longer it goes on.  Some people will be suffering economic losses for years to come – let alone the mental anguish that comes with it.

Conversely, those workers who travel from WA to other states for FIFO work are spending most of their time back home in self isolation, which for most of them means having no social interaction until the restrictions are lifted.  Some people have likened it to house arrest, and it is likely to stay in place until mid-next year if the premier sticks to his guns.

Not mining related, but WA people are now exploring more of their own state rather than taking cheap international holidays or flitting over east for a Gold Coast fix or to watch their favourite football team.

It is this writer’s opinion that some borders should be opened up without the onerous restrictions that are still in place even when coming from the Northern Territory or South Australia.  Their Covid19 transmission rate is the same as WAs, which makes them ideal jurisdictions to have free travel with.  All their recent cases have been from returning overseas travelers, the same reason for all the cases currently in WA.

Speaking of overseas, there is now talk from the federal government to looking at travel bubbles between some international locations.  New Zealand is an obvious location to allow this to happen and obviously places the likes of Brazil, USA and England would not be contemplated at the moment.  Other places that are up for consideration are Singapore, South Korea and Japan who all seem to have their Covid19 response well in hand.

But what the federal government wants and what the state and territory leaders allow could be two different things.  A staged process of opening up Australia to other nations needs to be considered now, otherwise restrictions good last for years if a vaccine is not found.

More businesses will flounder the longer restrictions are kept in place, whether that be interstate or international travel.  NSW, ACT and NT are opening their borders to New Zealand as of today, which is a positive step for those jurisdictions.

Australia is the lucky country, there is no mistaking that, but let’s not turn it into a basket case – let’s look for innovative ways we can open the borders.

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Morning News Bites – October 16

Carnaby Starts Drilling in Mallina, Pilbara.

Following our mention of De Grey Mining’s Hemi project in the Mallina Basin we follow up with this announcement by Carnaby Resources (CNB) of a 400-hole, 8,500 m aircore drilling program at its 100% owned Strelley project in the Mallina Basin, Pilbara of Western Australia.

The initial aircore drilling program will be completed on a nominal 320 x 80 m spacing across several priority targets including the Palisade target where a 300-500m wide bottom of hole gold anomaly is open in all directions.

Results from the aircore drilling will be prioritised and will be immediately followed up by a second drill rig which will initiate a 3,500 m RC program, for deeper drill testing of the high priority targets starting in mid-November 2020.

Carnaby has also locked in a 3rd RC / Diamond drill rig to commence diamond drilling targeting the highly prospective Tick Hill North offset target in Qld coupled with an RC program targeting the direct extension of the Tick Hill main lode into the northern wall of the historical open pit. The Tick Hill drilling is expected to commence in mid-November 2020.

The Company’s Managing Director, Rob Watkins commented:   “We look forward with high anticipation to completing the maiden Carnaby drilling programs at Strelley in the Mallina Basin of the Pilbara and homing in on the extension of high-grade Tick Hill gold deposit in Queensland, both of which have the potential to produce company transforming results”

Blackstone Minerals Releases Scoping Study.

A scoping study was released by Blackstone Minerals (BSX) for their Ta Khoa nickel project in Vietnam.  The Australian based company is bullish the project will deliver great outcomes for the company.  The key points to come from the study are:

Maiden Ban Phuc DSS indicated resource of 44.3Mt @ 0.52% Ni for 229kt Ni and Inferred Mineral Resource of 14.3Mt @ 0.35% Ni for 50kt Ni;

Annual production of 12.7ktpa Ni over 8.5-year project life; Gross Revenue of US$3.27 billion;

Net pre-tax cashflow of US$1.2 billion; Pre-tax cashflow of US$176mpa;

Pre‐tax NPV8% of US$665m and 45% IRR; www.blackstoneminerals.com.au

Capital Payback Period of 2.5 years;

Economically robust nickel sulphide project able to produce downstream nickel: cobalt: manganese (NCM) Precursor products for the Lithium-ion battery industry;

Downstream processing utilises existing well-tested technology;

Blackstone’s downstream NCM Precursor product significantly improves the pay ability of nickel, from ~70-80% to ~125-135% of LME metal prices;

Upside opportunities include staged capex, by-product credits (including copper, gold, platinum, palladium and rhodium), King Cobra Discovery Zone (KCZ), Ban Chang, Ta Cuong and 25 untested massive sulphide vein (MSV) targets.

SO4, Lake Way Project continues on schedule

SO4 (SO4) released an update to the market about its Lake Way project and the key points to date.  The site construction of the plant is running to schedule.  The process plant site concrete foundations poured by Flanco are 97% complete, installation of structural steel supplied by Metro Steel has commenced and first carbon steel tanks have been installed by Proweld.

The long lead procurement items have commenced arriving on site including the Veolia crystallisers with associated components and tanks, and transformers from Wilson.

The permanent village, construction village, warehouse, workshop, administration, reagents, laboratory, ablutions and crib rooms have all been completed and 4G communications has been installed across site.

The development of On-Lake infrastructure continues to progress. Work commenced on the fourth pond train and 62km of trenches have now been completed. The Paleochannel drilling programme continues with the seventh bore completed. All bores have intercepted basal sands in line with the model prediction.

With finance in place the project is expected to continue on schedule with production of the first sulphate of Potash in the 2021 March quarter.

Rio Tinto Release 3rd Quarter Production Results.

Some key points to come from Rio Tinto’s (RIO) 3rd quarter production results are:

All Injury Frequency Rate (AIFR) of 0.35 has improved through 2020 versus 2019 (0.42). They have successfully adapted their assets and offices to the new operating conditions associated with COVID-19 and continue to closely manage this risk to protect our people and communities.

Pilbara operations are returning to more normal operating conditions with rosters back to pre-COVID-19 settings although controls to protect their employees, contractors and communities remain in place. Total material moved was a record for the quarter with Pilbara iron ore production of 86.4 million tonnes (100% basis), 1% lower than the third quarter of 2019. A recovery in planned maintenance activity in the port led to 5% lower shipments.

Aluminium production of 0.8 million tonnes in the third quarter was 1% higher than the third quarter of 2019 with stable operations across our smelter portfolio.

Third quarter mined copper was 18% lower than the same period of 2019 due to lower grade at Kennecott as a result of pit sequencing to accommodate the extended smelter shutdown. Refined copper was 57% lower, primarily due to delays in restarting the Kennecott smelter.

Rio Tinto Chief Executive J-S Jacques said “We have delivered a good operational performance across most of our assets catching up on planned maintenance activity, particularly in iron ore, and continuing to adapt to new operating conditions as we learn to live with COVID-19. We have maintained our capex guidance and our 2020 production guidance across our key products.

Emeco Repays 2022 Notes

Emeco has announce it has repaid US$142 million, representing 100% of the 31 March 2022 notes outstanding.

The repayment of the 2022 Notes was funded from the net proceeds of the recently completed underwritten A$149 million pro rata entitlement offer and existing cash on hand. The note repayment will reduce annual interest costs by $19 million per year.

As previously announced, Emeco recently completed the refinancing of US$180 million (A$247 million3) of the 2022 Notes, replacing them with notes with an extended maturity date of 31 March 2024 (2024 Notes).

The completion of the refinancing and repayment of the 2022 Notes activates an option for Emeco to extend the maturity of its $97 million revolving credit facility to September 2023. This secures the long-term liquidity of the Company.

Emeco Managing Director and CEO, Mr Ian Testrow, commented: “We are pleased to complete the package of initiatives that provide Emeco with the strongest balance sheet in our history as a public company with net leverage of 0.9×1. We are excited to now be in a position to have the flexibility to implement a complete capital allocation framework, including distributions to shareholders in the future, as appropriate.”

Mr Testrow, continued: “With longer tenor on significantly reduced total debt and lower interest expense, we are set to generate strong free cash flow in the years ahead. This allows the Emeco team to fully focus on running the business and continue our evolution to becoming a leading mining services solutions provider.”

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Tonight’s Top Story – Diggers Wrap Up, Award Winners and A Night To Remember.

Once again Diggers and Dealers is done and dusted and all that is left to do is shake off the hangover, process all the information that has spewed out and look forward to next year’s event.  This year Diggers nearly didn’t go ahead but the owners took a leap of faith and pencilled in the October dates and then worked their butts off to ensure it happened.  Congratulations to the organisers for bringing together a wonderful three days of presentations, displays and functions.

For me a couple of the outstanding presentations were from Mincor and De Grey who outlined really exciting projects that they are involved in.  They are two companies that people should keep an eye on as the projects advance.  That is not to say that all the other presentations weren’t good.  Quite the contrary as the quality of the presentations this year was high.

This year the forum seemed to have an extra buzz about it as people are very bullish on the mining sector at the moment.  The locals in Kalgoorlie Boulder are expressing more confidence in the sector as well and town is really humming at the moment.  There are many projects in the pipeline that the local council is working hard on and this is on the back of Lynas starting construction of their processing plant on the outskirts of the city.  If they all come to fruition Kalgoorlie and surrounds is in for a huge lift.

At the end of every Diggers they have a gala night and awards are presented in different categories.  The winners of this year’s awards are:

The prestigious GJ Stokes Memorial Award went to Ms Gina Rinehart.  The award is in honour of Geoffrey Stokes who started the forum in 1992, with 150 delegates.  Sadly, Geoffrey passed away in 1997 at an early age but his legacy lives on and also recognised in the naming of the award.  As an aside, on Thursday morning after Diggers, the City of Kalgoorlie Boulder laid a plaque in Hannan Street outside the Palace Hotel, the original home of Diggers, as part of their Walk of Fame program.

Ms Rinehart is the first women to receive the award, which is made to someone who has made an exceptional lifetime contribution to the mining industry.  Ms Rinehart took over the Hancock company in the same year Diggers started and has steered the company to be the behemoth it is now.  Her astute business acumen has seen her increase her privately owned assets immensely but has also allowed her to do successful joint venture projects that have increased the value of the company.

Another of the awards, Dealer of the Year, seemed to be a no brainer and was not a surprise when dual winners, Raleigh Finlayson’s Saracen Mineral and Bill Beament’s Northern Star, were announced.  This comes off the back of their respective companies each buying 50% of the famous Kalgoorlie Superpit within a month of each other earlier this year.  The purchase was a great boon to the local community and has instilled new confidence in the sector in the region.  Add to that their yet to be approved $16B merger and these companies have really set the pace in 2020.  They are both young and energetic, which augers well for the new merged company.

Ramelius Resources took out the Digger of the Year award after announcing a 420% increase in net profit.  This came from its operations in the mid-west around Mt Magnet, the Vivien Project near Agnew and in the Westonia Green belt, the Edna May mine.  Producing 230,00koz last financial year it was a great year for the diggers.

Exciting explorer De Grey Mining won the emerging company award for its work in the Pilbara and the discovery of the Hemi project.

Other awards were presented to Dominic Piper in the media category and Georgia Kerr who was presented with the Ray Finlayson prize for Leadership and Academic Excellence.

Congratulations to all the award winners and a big thanks to Myles Ertzen, Sharon Giorgetta and their team at Diggers for once again putting on a great forum and showcasing the great city of Kalgoorlie Boulder.